It's Thursday morning. The stock market is down nearly 200 points. Why? Well the Greek economy is crashing and dragging the Eruo Zone with it. Bad for the European Union, but good for the American dollar. It's up and that means the price of oil will go down, at least for a day or two.
Yet, American retailers like Macy's are reporting strong earnings. That's good. So why is the stock market reeling in the face of good news.
THE NEW BUDGET - that's why. The budget proposes 3.8-trillion in spending at a time when the government expects to collect 2.4-trillion in taxes, a shortfall of 1.4-trillion.
The Obama Administration's road map to fiscal insolvency for this country is weighing on everyone and everything, which includes our 401k's and other retirement investments.
What to do? Here are few suggestions:
1. Freeze all new hirings by the federal government (except national security related hirings). The number of new employees at the Agriculture Department alone has ballooned 70,000 since Obama took office. There may now be more employees of that department than actual farmers!!! The administration is also stacking new hires in numerous other federal agencies, leaving government the only source of job growth - just what we don't need - bigger government. And if we end the billions in needless farm subsidies, we probably won't need those 70,000 new hires
2. Freeze federal spending at current levels and cut the budgets of all federal agencies (except NSA, CIA, FBI and other national security related agencies) by 10%. Eliminate all earmarks.
3. Freeze federal salaries top to bottom for five years to allow salaries of average Americans in the private sector to catch up. Recent studies found federal salaries and benefits far exceed those in the private sector for equivalent skills. Cut the operating budgets of members of Congress, the Supreme Court and the Executive branch by 10%. Eliminate all unnecessary travel, including providing Air Force planes for the use of the House Speaker and any other member of congress to fly back-and-forth from their districts. Limit the travel budget of the White House. The president has taken nearly 300 trips and delivered 417 speeches in his first year. That is excessive to say the least - both in miles and words.
4. Disband the Department of Education as I proposed in an earlier blog.
5. Cut corporate tax rates from 35% to 25% immediately, but only on the U. S.-based output of multi-national firms like General Electric, etc. Offer an additional 5% reduction for ten years to incentivize large businesses to return more of their off-shore manufacturing base to this country. This is the single best thing we can do to encourage business expansion and new jobs.
6. Keep the Bush tax cuts, set to expire later this year, in place. Keeping those tax cuts could encourage more investment if those investing know they are not facing a near doubling of tax on dividends.
7. Pass legislation to allow union members a secret ballot vote on how much their unions may donate to political candidates, parties and PACs. They should have a direct choice in how much of their union dues are spent in the political sector. Include a provision that prevents businesses from pressuring non-union and management employees to donate to PACs, candidates or parties.
8. Prohibit the current congress from using TARP repayment funds for other than the original intent of the TARP bill, which was to use such repayments to pay back the money borrowed to fund TARP. Obama's budget would redirect some of the TARP repayments to new federal spending. NO, NO, NO!!!!!
9. Cut discretionary spending and the purchasing budget of the Defense Department 10% and require the non-partisan Congressional Budget Office to approve all major contracts and expenditures to get a handle on profligate spending by DOD.
10. Extend the freeze on social security payment hikes one year. Seniors have lived through several economic downturns and should be willing to sacrifice to get our nation's fiscal house in order.
I'll stop at ten suggestions. I'm sure those of you reading this can add many more ways to cut the cost of the central government and insure that our children and grandchildren are not saddled with a national debt that now amounts to 40.000-plus dollars for every American household. And if the proposed budget is passed, that debt load per household will nearly double.
It is untenable. It is financially ruinous. It is insanity to continue down the path the Obama Administration is directing us.