Sequester Pester: Why Debate about the Automatic Budget Cuts Is All Poppycock

President Obama signed the sequester cuts into law, and so far there are no signs that the apocalypse has begun. At the end of the day, the truth is that all of the histrionics on both sides of the debate have been nothing but political theatre. And not even Tony Award worthy political theatre. While minute across the board cuts in the increase of federal spending will not cause the seas to run red with blood, these cuts will also make no discernible dent in the national debt that stands at over $16.6 trillion. Politicians can debate a little cut here or a little cut there all that they want, but such debate is nothing but a waste of time.

In this LearnLiberty.org video, Professor Antony Davis of Duquesne University explains the sober facts about the federal budget and the national debt.

If cutting all discretionary spending – all spending except for defense spending, debt interest, and entitlement spending – would still not produce a balanced budget, then what is the point of all the sound and fury produced by debating miniscule specific cuts here or there?

Professor Davis states that “nothing short of a redesign of government will solve this problem.” This redesign, he suggests, must begin with the question “What is the proper role of government?”  Since the New Deal, the answer to that question has increasingly been “To provide for all Americans from cradle to grave.” Beneath the surface, the answer has also been “To protect powerful corporate interests through subsidies and bailouts.” It has been so long since the United States has had a Constitution-sized federal government that nearly nobody still living can remember it. 

Unless and until Congress and the President begin talking about ending the Federal Reserve, reforming entitlements, and cutting the defense budget substantially, watching talking heads debating the issue on cable news networks is a complete waste of time. Doing nearly anything else would be a better use of that time.

The Federal Reserve has eroded approximately 95% of the value of the dollar over the past century and threatens to eventually destroy the dollar completely. The Federal Reserve also enables the government to increase in size by "creating" fiat money out of thin air. Most alarmingly, the Federal Reserve, in redistributing wealth from average Americans to the government and crony capitalist corporations, makes many Americans more likely to require government assistance. 

Social Security is an unconstitutional Ponzi scheme that has become a ticking time bomb. The program currently has an unfunded liability of over $16.2 trillion. The ratio of workers paying taxes into Social Security to retirees receiving benefits was 16.5:1 in 1950. According to projections, this ratio will be reduced to fewer than 2:1 by 2030. In short, this program cannot be sustained. In order to prevent the debt from spiraling irreparably out of control, several reforms will need to be undertaken. The retirement age will need to be raised, means testing will become necessary, and benefits will likely need to be reduced. 

Medicare will need to be transformed into a block grant program in order to encourage states to administer it more carefully. The amount of these block grants will need to be reduced over time and perhaps ultimately discontinued. In the long run the federal government will need to get out of the medical care business entirely and leave it to the free market and to the states as per the Tenth Amendment.

The size of the military budget will need to be cut significantly. There is simply no need to be prepared to wage war against every other nation in the world at one time. The United States currently accounts for over 40% of all military spending in the world. Of the other nations in the top twenty of military spending, all are staunch allies of the United States except for China, Russia, and Iran. The United States currently has a military budget that is five times that of China, over ten times that of Russia, and over sixty-four times that of Iran. The main problem in reducing military spending will be the drastic effect that it will have on the economy. The government employs over 3.1 million military and civilian workers in thedefense sector while another 3 million Americans work for defense contractors. Perhaps the solution would be to finally “beat swords into ploughshares.” Some of the cuts in the defense budget could be employed to repair infrastructure or for other non-military purposes. However, the defense contractors will need to be gradually weaned from the public teat.

While these difficult but necessary budget cuts are being made, the federal government will need to simultaneously reduce taxes and regulations in order to spark economic growth in the private sector. The federal government will neither be able to cut nor grow its way out of its debt crisis. It will require less government spending and greater economic growth. Even then, there is no guarantee that the debt crisis will ever be solved.