Monday, January 17, 2011

The Financial Sky is Falling…

Just like Chicken Little, the political class, bankers and investors are warning that fiscal responsibility will destroy our economy and send us into political chaos. We can’t maintain the borrowing ceiling or the government will default on our debt these people warn. We will have to bail out the municipal and state bond holders or the result will be a downgrade of the “full faith and credit of the United States” shout the Chicken Little’s to the uninformed minions.

The reality is there are many avenues to fend off bankruptsy beside more borrowing and spending. The simple fact is that the representatives of this country have chosen to expand government beyond sustainability. The solution is to cut the federal, state and local budgets to the level tax payers are willing to support.

Federal state and local municipalities need to end all union membership. Civil service is already protected by law and does not need a third party to represent them. The unions are simply a political tool used to increase taxes and spending to fund the employees in the government and their union coffers. The pensions and healthcare benefits need to be indexed to the private sector. The pay of beauracrats need to be tied to private sector wages and the police and fire fighters need to be scaled to a schedule similar to the federal wage system and the expectation of wage growth needs to be known so anyone entering these professions understand there is ultimately a cap on wages when a certain level is reached.

Every federal agency needs to be targeted for cuts of 40% over the next 5 years. The military and VA should be excluded but still need reform. We need to help the VA reflect the true values of our nation. It is one of the few constitutional responsibilities of the federal government, and we have failed miserably in our treatment of Veterans.

We give away our tax dollars to foreign nations, we encourage dependence, we subsidize failing and politically connected corporations, and pour billions into a failed education bureaucracy which all need to be slashed. There is so much waste fraud and abuse at the federal level and 40% may not be enough but it’s a start.

Social Security, Medicare and Medicaid all need to be reformed. We need to start with the SS accounts being out of bounds for our politicians. We need to transition the money leaving our pay checks and place them in accounts with our names on them. A percentage of the SS tax will need to support current retirees but each year more and more will go into our own accounts and the ponzi scheme will become history. Medicare needs to be market driven just like the rest of our healthcare needs a market based overhaul. Medicaid needs a complete overhaul and transitioned into a charitably supported non profit model.

By focusing and eliminating the waste, fraud, and abuse, the benefits that go to non citizens, foreign countries, and bloated corporations we can bring our financial house in order. By reducing government on all levels with clearly defined plans the market can plan for and understand, they will react to and reward this move to fiscal responsibility. The Chicken Little’s are the people making money off of our government tax dollars. Many of these Chicken Little’s reside and hide under a guise of free market private sector organizations but they have been siphoning off the treasure of the United States by electing officials and garnering political favor. They are the big corporations that have made bad choices and must be allowed to fail.

If the market and the people see a true move toward fiscal responsibility and constitutional government the sky will not fall, it will shine bright with hope. Hope that we have finally turned a corner to return the opportunity to all Americans to achieve the American Dream…. On their own without government interference…

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