Issue Position: National Debt
Issue Position
Our ever-increasing national debt is negatively impacting our society, burdening our children, and creating a concern for our national security. We need to make drastic cuts in our national spending, and we need to do so now!
We need to immediately stop spending more than the federal government takes in each year in revenue, and actually spend significantly less in order to pay-off the current national debt. Such fiscal responsibility can realistically be achieved by implementing the following approach
(1) Eliminate all unconstitutional and unnecessary federal bureaucracy, such as the Department of Education, federal level welfare programs, etc.;
(2) Drastically reduce and closely monitor spending in all areas of the budget;
(3) Eliminate all earmarks and multi-subject bills--each bill should only have a single topic, and the only funding approved in such bill should be for that specific bill; and
(4) Eliminate the Federal Reserve as an entity independent of the federal government, and put it under the direct control of our federal government as a true federal agency regulated and controlled by the federal government instead of a private venture.
Background
When the Congressional Budget Office closed out the 2011 fiscal year on September 30, it estimated that our federal government once again over-spent its budget by $1.299 trillion dollars. 2011 was the third consecutive year that our federal government has over-spent its budget in excess of a trillion dollars ($1.294 trillion in 2010, and $1.4 trillion in 2009). All told, in the last three years our federal government has spent almost $4.0 trillion dollars more than it earned in revenue, significantly adding to an already large debt.
http://www.cbo.gov
http://www.treasury.gov/Pages/default.aspx
Unless some drastic changes are made, the federal government is projected to have a $1.316 trillion dollar deficit in 2012 (and historically the actual dollars spent by the federal government consistently exceed preliminary projections).
Our country's debt as a whole did not exceed four trillion dollars until September 30, 1992. However, our current administration (Congress and the President) nearly equalled that four trillion dollar debt in a mere three-year period from 2009 through 2011.
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
The recent annual shortfalls have increased our total national debt to more than $15 trillion dollars (and this figure does not even include the trillions of dollars of unfunded liabilities for which Congress has already obligated us to pay, or the trillions of dollars lost from the federal reserve as shown by a partial audit for which we are also obligated to pay).
Spend Less than We Make
Our nation is currently on a reckless path of irresponsible spending that would not be permitted by any responsible household or business venture, and should not be tolerated by our federal government.
The simple concept of not spending more than you make has been lost on generations of politicians in Washington who seem to adhere to the fallacy that "I must still have money if I still have checks." Politicians have completely lost touch with reality and are ignoring the consequences of spending more money than they have available to spend; and it is the everyday citizens like you and me, and in particular our children, who will have to pay the consequences of such reckless spending.
In light of our already staggering national debt, reducing the amount of each current yearly deficit, or even balancing current year budgets, is simply not enough. The federal government has to immediately spend significantly less than it receives in revenue each year in order to have the funds available to pay-down, and eventually pay-off, our existing national debt.
It is indeed possible for Washington to spend less than it makes. Truthfully, some difficult decisions are going to have to be made in order to do so. Politicians have consistently lacked the desire and/or courage to make such tough decisions. However, if we fail to make those tough decisions now, catastrophic consequences for our nation as a whole are inevitable in the very near future.
Mere rhetoric and endless discussion of the need to reduce federal spending will not reduce our national debt--we need action, not more discussion. Calls for reform will never cure our national debt, and are a poor substitute for the necessary medicine of actual elimination of federal programs, agencies and spending.
I will flatly refuse to vote to raise the debt ceiling by a single dollar, but rather I will work to actually reduce the debt ceiling in conjunction with reducing, and eventually eliminating, our national debt.
For purposes of implementing a realistic and meaningful plan to reduce spending, the three major categories of the federal budget must each be analyzed: mandatory spending; discretionary spending; and interest payments.
Mandatory spending is not truly mandatory as politicians would like you to believe, but rather simply consists of spending that automatically continues each year without Congress having to approve it. We can indeed make substantial cuts in mandatory spending.
Discretionary spending is funding that Congress must re-appropriate each year. Discretionary spending accounts for more than 35% of our annual budget as a country, and is projected to be $1.043 trillion dollars in 2012. We can indeed make substantial cuts in discretionary spending.
As long as we have a national debt, we have no choice but to pay interest thereon. The only way to reduce, and eventually eliminate, interest payments is to pay-down, and eventually pay-off, our national debt. In 2011, our country paid more than $450 billion dollars in interest, accounting for approximately one-third of the overall 2011 deficit. The irony is that we are going further into debt in order to make the interest payments on our national debt, continuing the vicious cycle of destruction.
Eliminate All Unconstitutional and Unnecessary Federal Bureaucracy
The Louisiana State University Federal Agency Directory lists over 1,300 distinct organizations across all three branches of federal government: Legislative branch (Congress); Executive branch (President and departments and independent agencies); and Judicial branch (Supreme Court and Circuit Courts). Many of these agencies consist of sub-agencies further increasing the total number that exist.
http://www.usa.gov/Agencies.shtml
Some of these departments and agencies may have a legitimate purpose. However, the reality is that much of our federal budget has been squandered primarily to build a vast (and largely unnecessary) federal bureaucracy.
Not only has Congress created unconstitutional departments, agencies and programs, but Congress has put much of the funding for such matters on auto-pilot under the guise of "mandatory spending" (again, meaning that the funding for such matters is automatically provided in each year's annual budget with little or no discussion or review). Various laws commit the federal government to pay for various welfare programs such as Medicaid, Medicare, Social Security, etc. Medicaid, Medicare and Social Security collectively account for approximately 70% of all mandatory spending.
There is simply no provision in the Constitution that authorizes the federal government to meddle in such things as education, the environment, energy and/or social welfare, which matters should be left to the individual states as mandated by the Constitution.
We need to eliminate all social welfare programs at the federal level, and allow the states to handle the welfare of their respective citizens as contemplated by our Founding Fathers in framing the Constitution, and expressly setting forth the specific powers of the federal government, with all other powers reserved to the individual states.
Millions of Americans have already paid into the Social Security system, and it would be manifestly unjust to cut those individuals off from any future benefits. However, such injustice does not warrant the open-ended continuation of this unconstitutional program either. Difficult decisions have to be made, and some method of transitioning from the federal Social Security system has to be immediately implemented whereby people who have paid into Social Security over an extended period of time will still receive some benefit therefrom, but the program itself is actually discontinued on a federal level.
Each and every federal department, agency and program must be evaluated to determine:
(1) Is it even constitutionally permitted at the federal level?
(2) Even if constitutionally permitted:
(a) Is it still a good idea?
(b) Can it be done more efficiently?
At a bare minimum, the Departments of Education and Energy, as well as the Environmental Protection Agency, should be completely eliminated from the federal government, with some components of the Department of Energy and the Environmental Protection Agency being absorbed into the Department of Defense to the extent there are matters that affect our national security.
Drastically Reduce and Closely Monitor Spending in All Areas of the Budget
At least annually, each and every federal department, agency and program must justify its existence and the budget required for its operation, including a comprehensive accounting for all monies spent in the previous year.
While it will always be necessary for the federal government to raise revenue through taxes, and spend such revenue for the welfare of the United States as a whole, efficiencies should be actively sought out and rewarded.
Eliminate all Earmarks and Multi-Subject Bills
Each bill should only have a single topic. It is very common to throw completely unrelated matters into the same bill so that one can piggyback on the other. Each matter must stand or fall on its own merits.
Similarly, funding within a bill should relate specifically and solely to the single subject of the bill. Again, each funding request must stand or fall on its own merits.
Eliminate the Federal Reserve as an Entity Independent of the Federal Government
Reigning in the Federal Reserve is an absolute necessity if we are to ever control our burgeoning national debt. Surprisingly, the Federal Reserve is currently not even a true federal department or agency, but rather it is an independent entity that has a dramatic (and often negative) impact on our economy. We need to enact laws that bring the Federal Reserve squarely within the control of Congress, and make the Federal Reserve directly accountable to Congress.
In July 2011, the U.S. Government Accountability Office prepared a report to Congress regarding operations of the Federal Reserve from August 2010 through July 2011 that is available on-line at http://www.gao.gov/new.items/d11696.pdf. In that report, the following explanation is given of the Federal Reserve Act, which was signed into law by President Woodrow Wilson on December 23, 1913.
"The Federal Reserve Act made the Federal Reserve System an independent, decentralized bank . . . . The Federal Reserve System consists of the Federal Reserve Board located in Washington, D.C.; 12 Reserve Banks, which have 24 branches located throughout the nation; and the Federal Open Market Committee (FOMC), which is composed of the Board of Governors, as well as five Reserve Bank presidents, serving on a rotating basis. . . . Although the Federal Reserve Board is required to report to Congress on its activities, its decisions do not have to be approved by either the President or Congress. Unlike the Federal Reserve Board, the Reserve Banks are not federal agencies. Each Reserve Bank is a federally chartered corporation with a board of directors. . . . Federal Reserve System revenues contribute to total U.S. revenues, and deductions from System revenues thus represent an indirect cost to U.S. taxpayers."
In other words, while loosely labelled as a federal agency, the Federal Reserve Board is not accountable to the federal government and acts independently without the need for approval of its decisions and actions by either the President or Congress. The actual 12 Federal Reserve Banks do not even pretend to be federal agencies, but rather act completely independent of the federal government under the direction of each bank's own board of directors. Nevertheless, losses from the Federal Reserve System are passed on to U.S. taxpayers (even though such losses are not currently being included in the current calculations of our national debt, meaning our national debt is substantially larger than even being reported). Independent entities, such as the Federal Reserve Banks, should not be permitted to unilaterally distribute taxpayers' dollars without the consent or control of the federal government.
Some of the more notable aspects of the partial audit of the Federal Reserve for a single operating year have been summarized on the website for U.S. Senator Bernie Sanders from Vermont as follows.
http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
""As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,' said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else.'
Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,' Sanders said.
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.
For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.
In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.
To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed,' he said.
The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.
The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG."
Private bankers should not be permitted to continue lining their own pockets at taxpayers' expense. Immediate and dramatic changes need to be made to the Federal Reserve System to actually bring it under the control of, and make it truly accountable to, the federal government.
Warnings About Debt From Our Founding Fathers
Our Founding Fathers warned us about going into debt as a nation, but we have simply ignored their sage advice.
"There are two ways to enslave a nation. One is by the sword. The other is by debt."
--John Adams
"Think what you do when you run in debt; you give to another power over your liberty."
--Benjamin Franklin
"No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable."
--George Washington
"The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."
--Thomas Jefferson, letter to John Taylor, May 28, 1816
"The multiplication of public offices, increase of expense beyond income, growth and entailment of a public debt, are indications soliciting the employment of the pruning knife."
--Thomas Jefferson
"If we can prevent the government from wasting the labors of the people, under the pretence of taking care of them, they must become happy."
--Thomas Jefferson
"Allow a government to decline paying its debts and you overthrow all public morality--you unhinge all the principles that preserve the limits of free constitutions. Nothing can more affect national prosperity than a constant and systematic attention to extinguish the present debt and to avoid as much as possibly the incurring of any new debt."
--Alexander Hamilton
"It is incumbent on every generation to pay it's own debts as it goes. A principle which, if acted on, would save one half the wars of the world; and justifies I think our present circumspection."
--Thomas Jefferson
"The same prudence which in private life would forbid our paying our own money for unexplained projects, forbids it in the dispensation of the public moneys."
--Thomas Jefferson
"To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion [extravagance of expenditures] and servitude."
--Thomas Jefferson
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