It's Time to Trim the Fat

Let me begin with a disclaimer: I lack an MBA from the Wharton School and it’s been years since I stayed at a Holiday Inn Express. However, I have created and managed budgets for various nonprofit organizations for more than 35 years, so I know a little about balance sheets, profit and loss statements, and how to accurately forecast both income and expenses.

Because my financial expertise is almost exclusively in the non-profit sector, I also know how to stretch a dollar and make sure every penny counts. That being said, even the leanest 501 (c) (3) budget has a pound or two of fat in it that, when push comes to shove, can be eliminated.

Which brings me to the federal government… the ultimate “non-profit organization.”

No one exemplifies that phrase – or has mastered the art of spending more than it takes in – than the United States government. In recent years, the spineless wimps and drunken sailors in Washington have passed deficit budget after deficit budget, resulting in a record $31 trillion of national debt. But it wasn’t always so.

It’s hard to imagine, but for most of our country’s first 150 years, we managed a surplus. The most glaring exceptions were due to the Civil War and World War I. However, no sooner did those wars end, but the bean counters in Congress usually managed not only to balance the federal budget, but also to produce a surplus.

For example, following the end of World War I, the Republicans regained the White House and under Presidents Harding, Coolidge, and Hoover, America enjoyed 11 straight years of budget surpluses. After peaking with a $1,155,000,000 surplus in 1927 (adjusted for inflation in 2018 dollars), we slid into deficit spending in 1931 because of the Great Depression. Throughout the 1930s, President Franklin Roosevelt tried to spend us out of the Depression with mixed results. Then came World War II and the federal budget increased dramatically due to the war effort. However, credit Harry Truman, a Democrat, for restoring fiscal sanity and back-to-back budget surpluses before the Korean War created more deficit spending.

President Eisenhower managed three surplus budgets (1956, 1957, and 1960) during his eight years in the White House, and Bill Clinton recorded two (1999 and 2000) thanks to pressure from Newt Gingrich and a Republican House. No president of either party has come close since.

Washington D.C.’s inability – and unwillingness – to discipline themselves by voluntarily reducing spending in peacetime is why I am advocating we take some drastic steps to force their hand. Economists will gasp in horror and doomsday handwringers will have a heyday, but I propose that we cut federal spending by 3% each year for the next 10 years.

No one – not the eggheads in academia nor the titans on Wall Street – can accurately predict what will result from such financial belt-tightening. Why? Because it’s never been tried let alone done before. However, after a decade of exercising fiscal restraint, we will have accomplished at least one thing: reducing the federal budget by almost one-third.

Like many Americans, I often ask the same question every time there is a government shutdown. If non-essential workers can be temporarily furloughed until a new budget is adopted or the debt ceiling is raised yet again, why can’t their positions be permanently eliminated? I mean, doesn’t the name “non-essential worker” tell us something?

I would love to see our federal workforce drastically reduced in size and scope, thereby eliminating a lot of waste, redundancy, and patronage. Bye-bye slackers, hangers-on, and unqualified political appointees. Go find a job in the private sector where you either produce results… or are sent packing. And while we’re at it, how about lowering congressional salaries by the same 3% per year? After 10 consecutive pay cuts, some of these career politicians may think twice about running for re-election.

Along the same lines, let’s stop subsidizing the so-called arts as well as government programs that are outdated and/or unnecessary. Let them stand on their own two feet or die on the vine. No more Solyndras!

Finally, how about adopting a flat tax or a fair (national sales) tax? I’ll bet that tax revenues would increase because a one-page return doesn’t allow room for loopholes. Best of all, we could downsize the IRS workforce to a skeleton crew.

Are you with me, America?