So, the United States government has reached its legally allowed debt limit of $14.3 trillion, or $46,278 per US citizen. Despite reaching this "limit" the US is continuing to function with only a delay in paying government pension accounts being affected (after August 2, all hell will break loose). Both sides, Republican and Democrat, seem to be digging into their respective positions as if this is World War 1 and trench-style warfare was suddenly in vogue.
Both sides have played a role in this mess and an agreement by both sides (not one side forcing the other into an "agreement") will be the only way out of the constant deficit issue. Entitlements, as politically painful as they are to touch, will have to be changed. Whether that means extreme draconian methods, such as that proposed by Rep. Ryan, or a more reasonable approach, change needs to happen. The budget will not be fixed by giving more tax cuts (although a modified flat rate is intriguing) nor will it by raising taxes (closing existing loopholes should be looked at, however). Fixing the "little stuff", reducing financial aid, or reducing the size of the federal government workforce will shave only a fraction of the budget. The larger items, including Medicare, Social Security, Homeland Security and the Department of Defense, where we are continuing to spend more on defense than the next 43 countries combined, is where we will, in all likelihood, need to see a lot of the cuts. Even though the smaller line-items won't shave off much, we cannot exclude them either as eventually, they will add up.
All one needs to do is look through the current and proposed budgets for the federal government to see the lunacy in spending that currently takes place. When was the last time the President (who, in all fairness, only proposes a budget, it is up to Congress to pass it) or the Chairmen of the respective appropriations committees actually went through the budget line-item by line-item. Local government has to do this and so do some states. It is time consuming and tedious but it is necessary. If the department cannot explain the need for a program or a line-item expense then it goes to the bottom of the funding list. If you can make a strong argument for it, the priority goes up. As a personal request, please stop passing the budget in pieces (this year, there were 14 appropriation "Omnibus" bills, with only 2 actually making it into law before the recent budget agreement for the 2011 fiscal year). Work it out and then pass the budget as a whole. This will not save money, it is just something that ticks me off.
If we can accept some basic truths or simple facts, reaching an agreement will become easier. Three of these simple truths are: 1) you cannot and will not please everyone. Many people will be upset and will let their irrational side take control of their actions. Just accept this fact and try to do what is right, not what will piss the least number of people off. 2) Nothing can be off the table. As soon as you start putting restrictions on what can be discussed, the effort will quickly spiral into smorgasbord of restrictions and we will be right back here where we started and by then it may be too late. 3) While we have several years before the country would be in a similar situation as Greece or Ireland, delaying is not an option anymore. We cannot fix the budget in one year as fixing the budget will be a multi-year process and as such, delaying will only move fiscal Armageddon closer to reality.
