Overview on the national budget

As the nation turned to watch Egypt, and then Libya, and Wisconsin, the national budget drifted farther and farther out of the minds of most Americans. Though the budget proposed by President Obama fails to adddress the rampant and non-stop Federal spending, most people have been caught up in with the question of whether unions should continue to exist.

Here is the quick thought on unions, in our opinion. They do not serve the purpose that they were created to serve. Conditions in business are far improved, children are not allowed to work. Like a genie, this too will never go back to the old conditions – especially with all the Government regulations that exist toady. So much of the reason for a union is no longer valid.

Unions are one of the primary sources of expense for many industries. Unions have long been known to be a thorn in the auto industry, as an example. In fact the firts $2000 of cost on every American car can be directly tied to the cost of unions – an increased expense that has no benefit to the consumer or corporation. Retirement packages, especially among federal unions, are beyond ridiculous. They make the golden parachutes of executives seem reasonable if not pale in comparison.

Should all federal union employees pay more into their retirement packages, and receive less for free? Yes. Should federal unions be able to strike and bargain for more benefits that are already far more than what the average citizen could ever hope for? Should federal unions be able to literally reap retirement benefits off the backs and taxes of citizens, just because of their size and close relationship to Democrat politicians? No.

Why?

Well back to the budget. America is broke. We owe $14 trillion dollars. That number is increasing by $400,000,000 per year (as long as interest rates do not move up). Again that is all the savings from the proposal by President Obama on freezing some spending for 10 years. Things are really that bad.

The money owed by the Government will skyrocket once interest rates increase. Interest rates must increase because the cost of goods is increasing. As much as the Obama Administtration wants to avoid mentioning it, inflation is here. The cost of cotton, coffee, wheat, staple foods are all bounding higher at rates that are astounding. Higher basic living costs generally means lower productivity and a slow down in job growth.

That last line really explains why the Obama Administration and almost all politicians don’t really want to discuss inflation. Because the current malaise of jobs can get far worse in very little time. Obviously the Stimulus has been about as productive as tissue paper for a bullet-proof vest. Increasing the cost of basic survival means more people leaning on the federal government for help, from money it does not have. Plus there are the home owners that still have variable rate mortgages, or are locked into higher rates. Fewer jobs and no raises tend to mean more foreclosures – part of the reason that for the 2 years of the Obama Administration almost every month has seen a new high in mortgage foreclosures and defaults.

It is the realization that people will not have enough money that compels some Democrats to insist on spending ever more money. That hope for compassion (with the lingering thought that constituents recall this help on election day) led to the 2.9 years of unemployment benefits that are now available – which is not helping those without work for more than a year (over 40% of the unemployed) to improve their lives. At higher levels, thing get no better.

Realistically the only smart answer is to cut spending. It’s what normal people do every day, what they have been doing for years now. Stop spending money you don’t have, and pay off bills one at a time so that you can use the extra money to pay the next bill faster. A logic that every parent tries to instill in their kids, and has completely escaped the elected officials in Washington, DC.

Nobody wants to have to say, no you can’t have that. Unions don’t want to tell their members that they might have just that little bit less in retirement, Government doesn’t want to say there is no help for that mortgage, or that people just have to accept that job sweeping floors. But the reality is that, those are the things we need.

If not at the end of this week, then shortly afterward Congress will approve the $1.6 trillion spent in fiscal year 2010 already. Congress will also prepare to spend another $1.1 trillion for fiscal year 2011, at least. By this time next year the national deficit will be NO LESS THAN $15 trillion and quite possibly far more. [Recall that by some estimates there is only $60 trillion in the entire world]

Republicans want to cut $61 billion, President Obama wants to freeze spending in areas that don’t matter while spending more in areas that do. Neither solution amounts to more than a spoonful of water out of a lake of debt. Especially if interest rates increase just 1.5%.

So what is the answer? We would say far more drastic cuts across the board. Removing entitlements, and ending programs that just don’t work (like the Stimulus which would repay $300 billion, repay the bank bailout for another $400 billion, and preventing the Health Care Reform and saving trillions going forward). Not everyone would agree.

Thus the eyes of the nation need to focus. Libya and Egypt will figure out what to do with themselves on their own, whatever wars are to come cannot be avoided. The Middle East will falter and stumble as it has for centuries.

Unions will gather together and scream for respect. They will support each other as union bosses get fat, and the coffers of politicians fill faster than from any other priovate organization.

But only when the public pays attention to the national budget will any potential for real improvement take place. Until the public asks for real answers, and a real cut in spending, politicians will keep going like a high school kid with their first credit card.

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About the Author

Michael Vass
Born in 1968, a political commentator for over a decade. Has traveled the U.S. and lived in Moscow and Tsblisi, A former stockbroker and 2014 Congressional candidate. Passionate about politics with emphasis on 1st and 2nd Amendments.

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