Spending Cuts? You First

I’m sick of wasteful government spending. It’s time we throw the bums out!

You raise a fair point. A Congressional Budget Office brief says our growing debt could lead to a real fiscal crisis if investors lose confidence in the federal government’s ability to manage its budget.

There was a time investors had confidence in our government’s ability to manage the budget? I say we slash spending across the board!

Now there’s an idea. Why don’t we start with entitlement spending and the granddaddy of them all: Social Security! Social Security is the grandest Ponzi scheme in world history. The scheme worked fine so long as millions of baby boomers were young and working and paying into the system.

You can’t cut Social Security. My parents need that money. I hope to retire soon and I want my cut, too.

Which is precisely the problem. Reason magazine says that as baby boomers retire, millions will stop paying into the system and it will start paying billions out. Social Security will grow from $581 billion this year to $966 billion in only eight years!

I’ll hand over my Social Security check when you pry it from my cold, dead fingers.

How about Medicare then? It was projected to grow from $516 billion this year to $932 billion in 2018 — until Democrats created an independent panel to cut Medicare spending as part of their health care reform bill.

But my elderly mother just had her hip replaced. If Medicare didn’t cover the cost, she would have had to dip into my inheritance!

Not to worry, Democrats and Republicans alike have never been good at cutting spending. In fact, says The Hill, Senate Republicans unveiled legislation to kill the cost-cutting panel! Perhaps we can try to slash other popular government programs — such as your tax-free health insurance!

My health insurance?

Your employer spends $15,000 a year on your family’s health care policy. That’s tantamount to $15,000 in income, yet you pay no income tax on the money.

I don’t?

Nope. I’ll bet your federal income taxes average 30 percent of your gross income. If you had to pay 30 percent on that 15 grand, you’d owe $4,500 more in taxes. In a manner, you are receiving a nice government subsidy. Which brings us to your mortgage.

What about my mortgage?

You and your wife were able to buy your dream home with a minimal down payment and a fabulous interest rate. That’s because the Federal Housing Authority backed your loan. And you deduct your mortgage interest off your income taxes — another subsidy you are receiving from your government.

I don’t know why you’re getting so personal here. Our government is wasting our money. Look at all the pork-barrel spending!

I suppose you’d be happy to give up that new highway system that allows you easy access to the city? How about the Federal Deposit Insurance Corp., which protects your bank account in the event that your bank fails? What about the low-cost college loans and grants that will help you get your kids through school?

I’m talking about those earmarks the dirty bums in Congress slip into bills!

Fair enough, but such spending accounts for less than $20 billion a year — a paltry sum compared to our nearly $4 trillion federal budget.

What is your point?

More of us are on the government dole than we like to admit. If we want to get serious about getting our fiscal house in order, all of us have to pony up.

Can we hold off until next year? Mom was thinking of having her knee replaced, and I don’t want that coming out of my inheritance.

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  • SeanReynoldsNZ

    In general Tom makes great assessments of things, but he fell down in one place here: Tax breaks are not government expenditure. The government spends nothing when it cuts taxes. It just never got that income. Otherwise every business that offers a discount is spending money every time they do so.

    But US$15,000 per year for a family health policy! That is extortionate! Seriously, here in Australia for my family I pay a Medicare Tax of 1.5% of gross income (AU$1200 per annum) + $250 per month on a comprehensive health insurance policy. Total health plan bill is AU$4200, or US$3600 for the whole family. What you are paying there is outrageous! But still, the fact is that the government spends nothing on that health policy which your employer pays for you: Your employer spends that money.

    What you should find outrageous is that on a 30% marginal tax rate, you would need to earn US$21429 to pay for it if you were having to fund it yourself.

  • waynergf

    This is such a one-sided , biased article…why was it published?

    The points above by SeanReynoldsNZ are spot on. In addition, it was indeed the “dirty bums in Congress” who, over the years, expanded and extended Social Security benefits waayyy beyond its original intent – guaranteeing its eventual bankrupting. Likewise Medicare.

    Furthermmore, the waste in the federal budget far exceeds $20B. Let’s count up the money spent on illegal aliens: medical, educational, housing, food, … . How much of the money they’re paid is “under the table” and not taxed?

  • Because wayne, the editor thinks you are mistaken.

    Tom purposely writes humorously and provocatively, so let the Catholic exchange continue.

  • I think Tom’s point, and it’s a point I support, is that all of us benefit in some way from Federal government spending.

    If we want to have a principled debate about limited government in a Federal system–and a discussion on how all the things Uncle Sam now takes care of for us will get done if he no longer takes such a big role–then I think that such a debate would be fruitful.

    Myself, I am on Social Security Disability. I’m not proud of it, but it’s the solution I’ve found to support myself while living independently within my illness-imposed limitations. Needless to say, I don’t want Social Security to go away or be slashed. But we need to come up with real solutions. Would cutting income taxes and imposing a value-added sales tax be fairer and bring in more revenue? I don’t know, I think we should talk about it.

    Catholic citizens, with sound, Truth-based principles and the social justice teaching of the Church, have a LOT to offer the ongoing national discussion on where the government gets its money and how it spends it. None of us should be afraid to join the debate.

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  • liturgylover

    If I wanted to hear this kind of diatribe, I’d be watching MS-NBC. We all do benefit some way from government involvement in our lives. However, I have paid into Social Security and Medicare all my life only to see that money mishandled and while I know my parents received some benefit from these programs, they are far and away below what they needed to survive. And when I get old or disabled enough to partake, will these “helps” still be there? As a small-business owner, it looks really great on paper that the government has all these loan programs available, but to find a bank that is willing to administer these programs is the first hurdle. Then you have to be a member of that bank. Then you have to have had a loan in the past with them or else you won’t even be allowed to apply! Big help. And as far as tax-free health insurance, unless your insurance is one where you have a “health savings account”, you are most certainly taxed on your contribution to the premiums. And if you are unfortunate enough to be self-insured, count on a $1000.00 per MONTH premium paid out of your pocket, which, incidentally is shrinking minute by minute with the current non-spending in our sinking economy. Yes, indeedy, what a great thing this current government is!

  • Kevin G

    Tom, are you happy with the status quo? Have you ever considered that we could fix Social Security if those that made over $107,000 per year paid in at the same rate as those of us who don’t make $107K? Obviously social justice does not apply to social security. (Let the little people pull themselves up by their bootstraps – that’s the American way; until they become rich, then they can manipulate the rules to their advantage.)

    Medicare? Why not lump that in with health care and health insurance. Why doesn’t the government use the Commerce Clause to regulate competition and the free flow of insurance policies across state lines? Because the insurance companies would lose money. Insurance lobbyists are powerful and greedy.

    Home loans and student loans? How about the whole banking business that led to the current economic mess? Good old Freddie Mac and Sallie Mae – they have done wonders for us. Have you noticed who is in charge of student loans now? Guess what? The federal government now approves student and parent plus loans for unqualified people at a rate that far exceeds the home loan fiasco created by Freddie Mac and Sallie Mae. Just wait – that financial catastrophe is less than 10 years away. Yes, – but at least the next generation of poor people looking for a government bail out will be college educated. Won’t that be wonderful.

    Enjoy the status quo Tommy boy. Me, I’ll support anything that minimizes the government’s role in our lives and I’ll find peace through faith in Jesus Christ.

  • goral

    Small business is getting choked. The gov’t is taking money out of the private economy and wasting it.
    Sure Tom, next you’re going to tell us how the gov’t stopped the oil leak in the gulf.
    It all looks different from an internet cafe.

  • terrygeorge

    come on now. there’s only a gazillion federal agencies employing senators sons which do nothing more useful than make up regulations which prevent the rest of us from being productive. like the National Pressure Ulcer Advisory Panel which still reports that it is alright to allow a blackened lethery ulcer to persist rather than try to heal it! if you have read about socialist and communist countries, it was the impossibly onerous regulations selectively enforced which they used to control people.