NO WAY OUT

　The estimates of the amount of the Federal debt this fiscal year exceed the sum of the discretionary budget (which includes the DoD) by $1.55 billion to $1.4 billion, and the estimated deficit is probably a minimum number. On top of this is any deficit in entitlements which will also add to the total, and Social Security will run a deficit this year. Anything that is done to decrease the deficit will hurt someone or, more likely many someones. In addition, most cuts will also hurt some business or businesses.

For example, firing Civil servants will put people out on the streets. Their income will be less and, in addition to any strain put on their lifestyle, they will have less purchasing power, hurting local businesses and perhaps even national businesses to some degree. The same can be said for Federal contract employees, and loss of a Federal contract may endanger the whole company. It is true that Presidents Bush-41 and Clinton fired more than one million Civil Servants without causing a recess, however, the economy was in an upswing which alleviated economic problems from the number of employees out of work, i.e. they could find other work. In contrast, this economic recovery is slow to add employment so firing more Federal employees or contract workers add to the unemployment picture.

A good example with the problem of making any budget cuts was the Obama administration wanting to shut down the manned mission return to the Moon. Now in these dificult times, it seems to me that if there is any program we could dispense with it is returning man to the Moon; yet screams were heard all over the country because NASA spreads contracts over as many congressional districts as possible hurting employment and business all over the country. Of course, savings from stopping manned missions to the Moon will be only a tiny part of the Federal deficit problem, though it is a start, but it can be a major hurt to many people and congressional districts, if not states. But, can’t we do without manned missions to the Moon?
Another seemingly good cut would be to stop the subsidy to corn based ethanol. You have to do an awful lot of calculating to determine that there is any benefit at all to carbon dioxide emissions from corn based ethanol, and, if you cut down a forest to make a corn field, you come out behind. A high duty has been put on imported sugar cane ethanol from Brazil to make it uneconomic. Corn based ethanol is really just a subsidy to agribusiness. Rather than cutting back on the subsidy to corn based ethanol, the percentage of corn based ethanol allowed in gasoline has been increased from 10% to 15%.

Yet a third good move would be to prohibit earmarks. The reason is that before earmarks are passed, the congressional districts have not gotten used to the money. The worst that can happen is that unemployment and local business in the district will remain unchanged. It is not that I am heartless about the condition of the unemployed in any congressional district, but you are not going to cut the budget without pain, and to leave things as they are may just be the least painful. However, earmarks are something an individual congressman can do to justify their existence so they are going to earmarks up with most reluctance. Just ask John McCain.
There is much anger over 47% of the tax payers paying no Federal income tax. This large sum is largely due to the Child Tax Credit when parents not only get to count a child as a dependent (and take $600 per child off their income), they also get to take $1,000 per child off their income taxes. President Bush-43 increased this tax benefit from $500 to $1,000. The reason for this benefit is to increase the birthrate of the country. I have not seen any information to show this benefit has the desired effect, so this subsidy, at the vary least, could be rolled back, at least to $500, if not eliminated. What are the odds that it will be?

Lastly, adding a dollar tax to a gallon of gasoline would be beneficial in many aspects. Not only would it increase Federal revenue to some extent but should decrease importation of foreign oil and reduce pollution of the atmosphere, a trifecta. This suggestion has even been proposed by some conservatives. After all, some revenues from imported oil help finance our enemies to fight us. I believe it is most unusual, and may be unique, for a country to finance its enemies, which is what we are doing in importing oil. I do understand, however, that such a tax is very regressive for the working poor. The working poor often live very far from their places of work and cannot afford to move closer. In addition they tend to own older, cheaper, less fuel efficient automobiles which consume more gasoline per mile traveled. The usual suggestion is to use some of the increased revenue to subsidize gasoline for the working poor. Of course this subsidy will decrease the net revenue and won't decrease opolooution or imported oil as much, but it is probably the humane thing to do.

Making the simplest and most logical Federal budget cuts or revenue increases are strongly opposed which shows just how difficult cuts in the Federal budget are going to be. Undoubtedly everything I have proposed above will total less than $300 billion reduction of the Federal budget, probably much less. Thus these are only a small step toward solvency, but they would be a start. I also suspect that if such small steps as mentioned above are accomplished to partially reduce the deficit, a recession could result at least, perhaps even a depression. However, even accomplishing any of the above items is doubtful. Addressing the Federal budget deficit seems likely to not occur but, if it is addressed, a painful process will be involved hurting many people and corporations and the general economy. I hope that I am wrong, but I see no way out.