It’s all about the debt

I have chronicled in past writings how much heat we took for predicting 4% GDP growth if we would be able to get some form of tax reform in place. Larry Kudlow and Steve Moore took the campaign’s fiscal policy outline and refined it and got it passed through the congress. Recent stock market activity has folks a little spooked, but the stock market is not a good barometer of economic health. What we really need to focus on is managing the national debt. If we do not get our arms around fiscal responsibility, all of the tax cuts in the world are going to come to little consequence.

I think we ought to adopt something like the Connie Mack Penny Plan

I think we ought to adopt something like the Connie Mack Penny Plan. The former senator advanced the idea of cutting spending just one percent a year until such time as the budget comes into balance. This doesn’t seem like too much to ask, but I have not witnessed any desire or will to reduce spending at all. Right now, mandatory spending eats up most of the budget. Thus, spending cuts must now come from discretionary spending. There really isn’t much desire on the part of congress to mess around with their ability to redistribute your money to special interests. No, they have no desire to do that. And there is absolutely no will or desire to attack the destruction Social Security, Medicare and Medicaid are visiting on our economy. I am hopeful the President will champion spending cuts. I am also hopeful he will open the dialogue on changing the trajectory of our mandatory spending programs. Reducing the size of the federal workforce might be an interesting place to start. Imagine eliminating 5% of the three million federal employees each year for five years. That action alone might save as much as $50 billion a year over time (an easy 1+% spending cut without addressing a single program). Maybe next time I’ll address grants and subsidies. It’s $1.5 trillion or so each year that is lost.