SOME RIGHT IDEAS…SCUTTLED BY WRONG METHODS
(…much like throwing the baby out with the bathwater…)

No one can argue that our entire fiscal and budgetary system is not a mess, and, unless we quit playing political games about it, our country may soon become just another third world bit actor on the world’s stage.

Neither the President nor the Congress are blameless in this current situation because, like so many others before them, they continue to avoid facing the issue, preferring instead to kick it down the political road and leave it for others to deal with at some indefinite future. Unfortunately, that road is fast running out of paving and rapidly petering out into an unpaved, pot-holed, dirt track over which none of their luxury SUVs will be able to cruise.

Regardless of which party’s perspectives one might prefer to resolve the problem, about the only thing we’re seeing right now are perhaps some right ideas…being scuttled by wrong methods to do so, especially from those claiming to be acting like their namesakes…the original Tea Partiers. But, contrary to the mythology about that event, those originals also hid behind a smoke screen, by wearing Native American war bonnets and paint as they dumped all that tea in Boston’s harbor, while claiming to be sticking it in old England’s eye. Their action, just like those of today, was not to spark a revolution but simply a symptom of the discontent and malaise in the body politic of the Massachusetts Colony of those times against the misguided governance and policies of a distant and unresponsive royal authority.

Today’s Tea Partiers are a similar phenomenon. A reaction against the same sort of misguided governance and policies from an equally distant and unresponsive Federal authority, issuing endless onerous mandates of one kind or another from the splendor of its marbled halls of venality…back there… along the somnolent shores of the Potomac.

But, instead of tea…these latter-day heroes are hiding behind the red herring of getting rid of Obamacare to avoid having to face hard reality. A reality that now requires us to think in rational and pragmatic terms about our present situation (rather than in strictly ideological ones) as it relates to taxation, debt, and spending. Unfortunately, both parties are acting like the proverbial two asses braying over that one pile of hay instead of making any kind of serious effort to come up with a rational plan to resolve it. Worse yet, the electorate itself doesn’t help much either since it seems to have become not just a “nation of sheep”, but a nation of “panhandling” sheep as well, without the political will to hammer both parties to quit braying about the problem and get serious about fixing it.

 So what might some key features be to do that? They could include the following:

1)     Seriously consider replacing the existing tax structure (which has become an impossible concoction of exemptions, exclusions, and deductions) with a Flat Tax On Gross Income From All Sources, for both individuals and businesses, with few or very limited such exclusions, and perhaps 5-6 brackets for each, to keep the system progressive.

2)    Re-set the Tax Year to coincide with the Fiscal year, with everyone paying their taxes on a quarterly basis instead of on an annual one. In effect a “pay as we go” process. That would improve our government’s cash flow position thereby reducing its borrowing needs, further lowering pressures on our National Debt limits.

3)    Mandate a 5% Set Aside, right off the top, from whatever Gross Revenues come in during any Fiscal Year. The remainder would be the spending limit available for the budget requirements of that year. Since it would all be tied to annual GDP growth, there would generally be a corresponding increase, year to year, available for both the Set Aside and Budget requirements, with few programs or other needs negatively affected.

4)    Mandate that the Set Aside be used as follows:

a)    80% of it used to pay down on the National Debt. The important thing here is not the specific amount but that there would be a fixed mechanism in place year after year to progressively reduce it over time.

b)    20% of it used to buy gold and silver from our domestic producers to progressively replenish our reserves of these as “collateral” against our National Debt. This could be done by requiring domestic producers to sell half of their annual production to the Treasury at a 50% discount from open market prices. Their income from such sales to the Treasury being made tax-exempt. The rest of their production would be available for sale at market rates, but subject to normal taxation.

5)    Prohibit the inclusion of Social Security and Medicare funds as part of the General Revenues for budgetary needs. They are not part of it since both are funded from separate taxes. Further, their funds should be totally sequestered and made unavailable for any other purposes, unlike the current practice.

6)     Any deficits occurring in any fiscal year would be distributed PROPORTIONATELY between the three branches of government, and, in turn, each branch would distribute its share of it similarly down to its last budgetary unit. Example: If the Executive Branch accounted for 80% of the total budget, it would have to “eat” 80% of a deficit. Same thing for the other two branches. That would spread any deficit load throughout the entire government structure rather than impacting on any given requirement or program. The benefit of that approach being that it would be politically…neutral.

 This is just the bare bones outline for a rational way to get our financial affairs in order. So far, however, we have yet to hear anyone in Washington, even Tea Partiers, thinking in such terms. 

 We can only wonder…why not?

 CENTURION