Balancing the Budget

I am joining Mark Grannis, our Congressional Candidate in Maryland’s 8th District, in proposing a true Balanced Budget.

Here’s how the Libertarian Balanced Federal Budget proposed to get the job done:

  • Over $900 billion in spending cuts.  Career politicians like to make ridiculously vague pledges to cut “waste, fraud, and abuse,” but they rarely get specific; and when they do, the cuts never amount to very much.  There was no such shilly-shallying in the Libertarian Balanced Federal Budget proposal.  We went through the entire federal budget, agency by agency and program by program, to identify the agencies that could be consolidated, the programs that could be privatized or devolved to the states, and the functions that are simply not authorized by any reasonably faithful reading of the U.S. Constitution.  We proposed to eliminate many programs we would want to end even if they were free, such as agricultural price supports and the federal “war on drugs.”  But we also proposed to eliminate some programs that might be wonderful to have if they were free, or if we could afford their costs.  We took no particular joy in proposing those cuts, but the fact is that no program is free and we simply cannot afford as much government as Congress has been authorizing.
  • No changes to Social Security or Medicare, with only minor changes to Medicaid.  Medicaid, which is largely funded by federal “block grants” to the states, was capped at 2010 levels under our budget, leaving the states fully in charge of deciding how much additional money to spend on that program—and also in charge of where to find the money.  But we left Social Security and Medicare untouched, not because we thought those programs should continue to operate as they do today, but rather because we wanted to show that the budget can be balanced without injecting difficult issues like comprehensive entitlement reform into the process.  (The same is true of comprehensive tax reform.)  Republicans and Democrats seem to want us to believe that nothing constructive can be done about the budget unless we either increase tax rates significantly or completely restructure federal entitlement programs.  That’s just not true.
  • Over $414 billion from the elimination of corporate welfare and other gimmicky tax credits.  These tax credits proliferate under Democrats and Republicans alike because they’re easy to hide in our sprawling 5.5-mllion-word tax code, and people don’t usually pay a price at re-election time for giving away tax breaks.  But the fact is that Congress routinely uses the tax code not just for the legitimate purpose of raising revenue, but for the less admirable purpose of throwing bones to politically connected interest groups.  One 2010 estimate said these “tax expenditures” amounted to about $1 trillion per year.  We cut out many of the worst offenders, adding $414 billion in revenues for 2012 even though we left current tax rates in place.  Because some of the tax credits had to be phased out over periods as long as ten years, these simplifications of the tax code would have continued to grow federal revenue after 2012, totaling more than $7 trillion over the next ten years.
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