How Do We GetThe Deficit To Zero?

Or, “There is no such thing as a free lunch.”

Paul M. JonesMid-South Tea Party General Meeting

Thursday, May 20, 2010

Who Cares?• Portugal, Italy, Ireland,

Greece, Spain (PIIGS)

• Deficit spending for decades

• Under Euro, cannot inflate

• Can’t borrow any more

• IMF bailout, austerity measures

• Strikes, riots in response

Greek Riots

2010 Federal Budget

• Revenues: $2,165,000,000,000

• Spending: $3,721,000,000,000

• Deficit: $1,556,000,000,000

• (source: http://www.whitehouse.gov/omb, table S-4; graphic from Heritage)

Big Numbers• Count to a million:

11.57 days

• Count to a billion:31.68 years

• Count to a trillion:31,688 years

• Count the deficit:49,306 years

Human-Scale Numbers• Revenues per household:

$18,276

• Spending: per household:$31,406

• Deficit per household:$13,130

• (source: http://www.tampabay.com/opinion/columns/washington-will-spend-31406-per-household-this-year/1086283, via Heritage)

Fiscal Responsibility

• Raise taxes by 72% per household,keep spending in place

• Cut spending by 44% per household,keep taxes in place

What To Cut?• Earmarks

• Foreign aid

• Farm subsidies

• Bailouts

• IRS

• ???

It’s Not EnoughPer HouseholdSocial Security/MedicareDefenseAntipovertyUnemploymentInterest on the debtVeteransʼ benefitsFederal employee retirement benefitsEducationHighways/transitHealth research/regulationMortgage creditEverything elseTotal spendingTotal revenuesDeficit

-$9,949.00-$6,071.00-$5,466.00-$1,640.00-$1,585.00-$1,052.00-$1,018.00-$914.00-$613.00-$550.00-$470.00

-$2,078.00-$31,406.00$18,276.00-$13,130.00

It’s Not EnoughPer HouseholdSocial Security/MedicareDefenseAntipovertyUnemploymentInterest on the debtVeteransʼ benefitsFederal employee retirement benefitsEducationHighways/transitHealth research/regulationMortgage creditEverything elseTotal spendingTotal revenuesDeficit

-$9,949.00-$6,071.00-$5,466.00-$1,640.00-$1,585.00-$1,052.00-$1,018.00-$914.00-$613.00-$550.00-$470.00

-$2,078.00-$31,406.00$18,276.00-$13,130.00

-$21,486

Draconian Example•Keep all taxes

• Cut everything except ...

• Social Security/Medicare

• Defense

• Antipoverty

• Debt Interest

• $4795 deficit

The (Hard) Solution

• Not enough to demand low taxes

• Not enough to cut spending “in general”

• Need to cut spending in the most popular (i.e., most expensive) programs

• By large amounts (44% on average)

Volunteers?

• Who will volunteer to take the hit?

• Social Security? Medicare? Food stamps?

• Reduced defense? Veterans? Retirees?

Social Issues• Sexy, emotional, compelling:

• Immigration enforcement

• Abortion

• Gay marriage

• Drug war

• “Others are doing wrong.”

Fiscal Issues

• Deficits spending is not sexy ...

• ... but with deficits, we follow PIIGS.

• After a debt crisis, social issues will pale.

• We are doing wrong.

What We Can Do

• Send back the free lunch

• Politicians do what they get rewarded for

• Tell politicians to cut spending 44% ...

• ... especially our favorite programs ...

• ... and re-elect them when they do!

• Cutting “billions”? Not serious.

The Things We LovePer HouseholdSocial Security/MedicareDefenseAntipovertyUnemploymentInterest on the debtVeteransʼ benefitsFederal employee retirement benefitsEducationHighways/transitHealth research/regulationMortgage creditEverything elseTotal spendingTotal revenuesDeficit

-$9,949.00-$6,071.00-$5,466.00-$1,640.00-$1,585.00-$1,052.00-$1,018.00-$914.00-$613.00-$550.00-$470.00

-$2,078.00-$31,406.00$18,276.00-$13,130.00

-$21,486

Truth ...

• Not fair; violates expectations

• 44% sooner, or 100% later

• Inflation, confiscation, collapse

• Constitution ignored now? Wait until US bankruptcy. (Argentina 2001)

... or Consequences

Conclusion

• Cutting spending is a true sacrifice

• Lives, fortunes, sacred honor

• A 44% reduction in spending now ...

• ... or Greece later

• Paul M. Jones

• http://paul-m-jones.com

• pmjones88@gmail.com

• @pmjones