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A Fiscal Alert: Why Federal Budget Cuts Are So Hard

Published in Blog on October 07, 2024 by Myrl Nisely

Since one of the three topics for our upcoming convention of states is imposing fiscal restraint on the federal government, a recent piece in the Epoch Times titled, "Why Federal Cuts Are So Hard" by Jeffrey A. Tucker caught my attention.  

Already good ideas have been put forth as starters by state convention advocates: demand single topic bills from Congress; assure transparent disclosure of our money flow by using standard accounting procedures and reporting to the public; and enforce the Constitutional idea that all spending must originate in the House. Hopefully there are others already proposed by thinkers looking into the fiscal challenges. 

In the immediate future, though, is the looming national debt. We need desperately to stop spending, and to actually cut costs of government: real cuts, not just a slowdown in the rate of spending that politicians hail as progress.

Imagine cutting out some federal government agencies, reducing staff sizes, identifying political graft, and even reducing program benefits. Jeffrey Tucker states that an across-the-board reduction of government equal to 1 to 2 percent of the Gross Domestic Product would affect everything in positive ways.

Jeffery Tucker lists:

1) the Federal Reserve would be relieved of unrelenting pressure to monetize the debt,

2) the flow of debt would abate and dry up funding to foreign central banks that are building huge industrial bases to compete with U.S. production,

3) with stable money, inflation would drop, giving rise to more purchasing power,

4) private investment would increase,

5) interest rates would eventually fall in line to match savings levels, which might increase,

6) budget cuts would reduce political polarization over how spending is to be deployed.   

We simply cannot continue generating more trillion dollar projects.

Ha! you say. Impossible.  

Yes, it is impossible for those in office, but maybe not impossible if citizens mobilize and make their viewpoints known. We Americans need to face reality and begin the difficult emotional shift in attitude regarding what we expect of federal spending.

The public needs to get the hang of financial restraint again, accepting a series of cuts that go further and further back toward earlier levels. We must demand an immediate stop to political spending insanity. 

Here is an example of attitude change needed: you have likely received in the mail petitions to Congress demanding there be no cuts or modifications in Social Security. Instead of mailing those petitions in, all Americans need to push back and say, “Without some kind of reduction in SS payouts, SS will go bankrupt.” Right now, candidate Trump is vowing to maintain SS. 

If we’d all accept a bit of pain right away, and a bit more later in small increments, we could escape falling off the cliff. Especially if we also demand the termination of payouts to illegal aliens and all sorts of other subgroups who have never paid into SS. Of course, none of us wants a cut in our monthly check, but patriotically done correctly, it would be the wise course to take. 

Imagine that we’d have a generation of public-spirited politicians who fly into action and do the right thing by slicing away at the preposterous expenditures. They would simply need to start at some designated time for a stated period of so many years and prepare the public for what is coming.  

The author points out that we need a true consensus on this, and someone somewhere needs to start the conversation so we can stop living the lie that the debt can rise forever with no consequences. 

We probably all agree “in principle,” but there is a rub. All talk of budget cuts runs into a thick wall of blockage. The author calls it the “public choice” school of economics. Every bit of government spending has a constituency that is hyper-focused on preserving its imaginary something for nothing. 

Anything but a freebie, government spending has an insidious formula protecting it. That is, each expenditure is spread throughout the population in ways that do not fire up passionate objections. This is expressed as “concentrated benefits vs. diffuse costs.”

In other words, the recipient sees wonderful immediate benefits and feels elated, while the cost of his government handout is spread throughout the entire country and seems trivial. But those seemingly trivial layouts pile up across the nation to become an unmanageable debt. 

Added to that, the recipients who benefit have pressure groups strongly intent on continuing feeding at the food trough. Example: the “Maintain SS Lobby” noted above. There is no benefit to any politician who votes for budget cuts. There is only political cost: lost donations, angry pressure groups, and a howling media.

So it will only be US citizens who can force the needed changes.


COSA, we need to be talking this up. We need to help the American public acknowledge the absolute necessity of budget cuts, and then cooperate and be willing to participate because of the overwhelming importance of taking action.  

We must begin to absorb the pain of reduced provision by our government via gradual reductions, or we will suffer traumatic financial loss and upheaval. Some experts are saying that a severe depression is just around the corner already. 

If nothing changes, a future blog could be titled: "Why We Watched Our National Debt Collapse Our Economy With No Effort to Avoid It."

Source: Tucker, Jeffrey A., "Why Federal Budget Cuts Are So Hard," The Epoch Times, September 4-10, No. 528, A15. 

You may read the entire newspaper article by Jeffery Tucker for free by providing your email address at: https://www.theepochtimes.com/opinion/why-federal-budget-cuts-are-so-hard-5714330 

Learn more about the fiscal restraints that can be initiated by a state amending convention: www.ConventionofStates.com. 
 

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