Grand Fiscal Failure of The Debt Commission- A Debt Bomb

While a lot has been made about earmarks, that term doesn’t fully encompass the process that has led to excessive and wasteful spending.  One newly elected Senator from Wisconsin, Ron Johnson, stated to reporter Mike Gousha that he was not going to Washington to bring home the bacon.  If that reflects a new attitude in Congress, then it’s time to follow through with a plan that will eliminate the political jockeying for money.  

When you look at the disparity of what states get from Washington, it is clear that our system is doomed.  Some states get between $1.50 & $1.80 for every dollar they send to Washington.  This redistribution of wealth means some states contribute nothing to fund our federal government!  Fixing that imbalance will put the focus back on the states to stimulate growth, which is where it has to start if we’re serious about stopping the attempt to borrow or print our way to prosperity.

The first step is to identify the total amount of federal tax revenue, excluding social security, and cap the amount going back to the states at seventy-five percent of that total.  The next step is to require that states receive federal assistance based on population, which would make the process equitable and apolitical.  The third step is to identify what the states could use the money for.  Sixty percent would be federally mandated for health care, child care, education and infrastructure.  Congress would have to hash out what the priorities are.  States would no longer be required to match funds, and would have complete discretion over the other forty percent.

Many will object to the states getting that discretion, but it will make state government accountable for these spending decisions.  It’s a lot easier for people in Michigan to change their state government so it addresses their needs and isn’t wasteful, than for them to try to change Washington.  With the impending fiscal crisis, states need the leeway to figure out the best way to balance their budgets.  Allowing state capitols to allocate these funds increases local political relevance and therefore, inevitably, participation.

When you simplify things there’s a lot more transparency.  While I’m aware that twenty-five percent of federal tax revenue is insufficient to cover the cost of the federal government, all deficit spending would become questions of national priorities and how to get down to that twenty-five percent that would allow a balanced budget.  All state aid that results from a natural disaster would not be counted towards the seventy-five percent either. 

There are solutions, but is there the political will to act?  Please send a copy of this blog to your elected federal representatives in Congress if you think this is a reasonable plan.  To see more ideas check out my website www.politicsandjustice.com.