Flim Flam

David Stockman (R), former Director of Management and Budget under President Ronald Reagan, calls the current negotiations on our nation’s budget and deficit crisis a "flim flam." He is further quoted as saying the process going on is a "cesspool of deceit." His assessment was based on the fact Congress has had no serious suggestions at reducing spending and that raising taxes is not a part of the resolution. He says, "Taxes must rise,” and they have to be a part of the solution.

President Obama's Debt Commission has issued its findings, which include serious cuts and adjustments to spending along with raising revenue through some tax increases and closing of some tax loopholes. This commission was co-chaired by Erskine Bowles (D), former president of The University of North Carolina and White House Chief of Staff under Bill Clinton, and Senator Alan Simpson (R), conservative former US Senator from Wyoming. This group, which also included both Republican and Democratic Congressional members, has essentially made recommendations that effectively cut spending and make tax adjustments to bring our federal budget in line with revenues.  Just last week, conservative U.S. Sen. Tom Colburn (R) of Oklahoma was quoted as agreeing that tax increases will have to be a part of the solution.

Here's the dilemma. If Social Security, Medicare, Medicaid, and the Defense budgets are left untouched, what's left in the federal budget isn't enough to balance the budget if you cut all of these programs which include education, environment, disaster funds etc. The economic recession is having a very serious negative effect on our federal budget. The high unemployment rate has caused more folks to be in need of government services, adding billions in costs to the budget. The lack of full or improved employment is depleting tax revenue.  All economic models that the experts have run still show serious issues with the federal budget when even the most exaggerated economic projections are used.

Here is our dilemma in a nutshell...We need to stimulate the economy, reduce spending, protect Social Security, Medicare, Medicaid, and maintain a strong national defense. We need to do all of this at the same time. As a nation we can't afford to fail on any of these fronts. Sound like mission impossible? Well it is impossible as long as our federal representatives fail to work together to solve our nation's crisis.

It becomes a necessity to spend on programs designed to improve job growth. We need to do some minor adjustments to our social security system in order to protect and extend those promised benefits. Medicare and Medicaid are great programs that have proven a true life saver to millions of Americans. There can be great savings in these programs by eliminating billions in abuse by health care providers and stopping the large amount of expenses through fraud.

There is as much abuse and fraud in our defense budget as in any other category. This needs to stop. We also need to redefine our military role as a nation. We can't afford to be the policemen to the world. The price is too high in dollars, lives and reputation.  

Lastly, let's look at our responsibility to fund the programs and items we have decided we want and need. Over the years the tax burden as a % of GNP has gone down not up. Our tax burden as a % of GNP is the lowest it's been since 1948.That burden during that time has shifted more to the middle class and away from our most wealthy citizens. The average America's salary adjusted for inflation has not risen in the past 20 years. During that same period the wealthiest of us have earnings that have grown dramatically. The gap between the rich and the poor has greatly expanded. This in itself creates frustrations and despair.

You see the remedies are not easily obtained in the political arena. There are items in the cure that have a negative effect on all of us. Politicians do not want to vote for things that they feel make people unhappy. I'm reminded of the following famous quote." These are the times that try men's souls" A quote by Thomas Paine noted revolutionary pamphleteer. We will see how many statesmen are left in our great nation.