5 Ways to Change Our Fiscal Future

At this point, there is no doubt that something must be done to radically alter the fiscal trajectory of our government. Politics as usually will not solve our problems neither will meaningless cuts of a few hundred billion here or there. The Federal government must change the way it does business or else our standard of living may fall off a cliff.

1. Cut Foreign Expenditures

It is time to declare victory in Europe and bring our troops home. We have strategically placed our forces throughout the world to oppose a menace that no longer exists. Surely we can close some of our hundreds of bases in Europe without threatening our safety or severely impinging our military capabilities.

The wars in Iraq and Afghanistan have been foolish exercises in attempting to create American allies in lands we do not understand and cannot control; this nation building is exactly what President Bush campaigned against in 2000 and is something we would do well to be rid of.

Foreign aid also needs to be slashed. As evidenced by Osama bin Laden's well established presence in Pakistan, foreign aid fails in its objective. Countries to whom we provide aid are often hostile towards us, if not officially then certainly in practice. Additionally, foreign aid crushes local markets and helps keeps recipients dependent on donor nations.

We could maintain global military capabilities compatible with 21st Century realities while reducing our presence. By replacing aid programs with trade programs we could actually help foreign countries begin to develop their own economies while bringing them closer to the United States at a more individual level. These two steps would go a long way towards righting our fiscal ship.

2. End Farm Subsidies

The time is coming to end farm subsidies. Massive corporations have exploited this transfer payment from relatively poor consumers for decades. Ethanol is the biggest offender, as billions of dollars are paid to oil refiners to mix in required amounts of the corn product, and is on its last legs, however, all farm subsidies need to be significantly cut if not eliminated altogether.

Not only would it directly save the US government billions the reduction in prices and increased trade opportunities would impact household budgets. Coupled with a reduction in aid importing crops from developing countries would strengthen our ties, diversify our diets, and improve foreign relations. Ultimately, reforming our farm subsidy and control programs would make a big impact in our bottom line.

3. End the War on Drugs

The drug war has been an unmitigated disaster. The United States has the highest prison population on the planet due in large part to our irrational policy regarding narcotics. The United States should adopt the approach of Portugal and treat drug addiction as a public health issue rather than a criminal endeavor. Not only would this approach reduce billions spent on locking up, tracking, and other wise controlling non-violent addicts, it would assist them in becoming productive tax paying members of society.

This would also enable law enforcement to focus its resources, also threatened by the budget crisis, on violent offenders; saving prison cells for rapists and pedophiles instead of meth-heads. Acknowledging the fact that ruining lives in order to save them is not a successful policy will save us billions and improve the quality of life of millions of Americans.

4. Enhance Means Testing of Medicare and Social Security

It is totally irrational to transfer money from relatively poor workers to relatively rich retirees. Medicare and Social Security are insurance programs intended to provide assistance to those who retired less well off. By adjusting the means testing for these programs, and constantly adjusting for inflation, we could save billions over the long haul and buy time for more meaningful entitlement reform.

5. Balanced Budget Amendment

The President recently said, "We don't need a Constitutional amendment to tell us to do our jobs"; he is wrong. The President once touted "pay-go" legislation and was applauded by his Democratic allies but vehemently opposes a Balanced Budget Amendment. This is totally inconsistent and demonstrates the demagoguery surrounding the debate.

A sensible Balanced Budget Amendment, with provisions for emergency circumstances, is the only way to create a rational fiscal environment in Washington. It could also be used to restore Congress' place in the Federal government but tying the emergency provisions to Acts of Congress not the discretion of the President (such as securing additional funding for military engagement only with an official Declaration of War).

Additionally, such a measure would change the rules of the political game. Politicians still buy votes by promising goodies to various groups. This is calculated as the issues arising from such handouts will, hopefully, not come to fruition until after the politician is out of office. A Balanced Budget Amendment would give politicians unwilling to make such a compromise the backing of law when haggling for votes with potential political supporters; stating bluntly that though they'd love to help, they can not squeeze it in with the current funding for XYZ programs.

Conclusion

These five steps will not get done quickly. They are solutions for the long term which would take time to implement. Implementing them gradually now will allow those who benefit from the status quo time to adjust. If we do not get serious about reform and begin them gradually there will come a day when we are forced to make sudden and dramatic changes. This will result in greater suffering, particularly for the most vulnerable members of society, and could lead to a Greek-like crisis.