I propose the federal government impose an across board spending cut of 5%. Given the waste that everyone talks about eliminating, and given the duplicate efforts in terms of programs and departments, it should be easy to cut 5% in all areas.
This would prevent any one political group from claiming they are victims of budget cuts. It makes the process fair and easy to understand by all.
This act alone would stimulate the economy as business owners and consumers would both be more likely to invest and spend at work and at home.
Being given less to spend would necessarily force government workers and departments to find waste to eliminate, duplicate effort to eliminate, and economies of scale to take advantage of. This would streamline processes and downsize the government.
If they can cut 5% in one year, then do the same thing in another year. It could be adjusted to a 3% cut in year two. These percent cuts could be negotiable, but some cut is needed.
Before you know it, we develop a trend. Doing more with less is how America reached her position in the world, as the largest economy and highest standard of living ever known to man.
As the federal budget and flow of red ink recedes back within its banks, we become leaner and meaner and in the process improve the lives and business of all.
After two years of budget cuts, an amendment to the US Constitution could be passed that would limit federal budget growth to the rate of inflation plus population growth. The Cato Institute first proposed this formula here. As the budget grows at a controlled rate, it would grow at a slower rate than the combined growth of fedeal revenues (taxes) and GDP. That is approximately 3% in 2011.
Budgets would be controlled and become more manageable. Defecits and debt as a percent of GDP would shrink to more appropriate levels.
And perhaps most importantly, the citizens of the USA can understand this, and it would not be about which programs to cut, and who gets hurt more.
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