We Need a Real Spending Freeze and Tax Cuts

Don’t you hate it when you go to a 50% off sale and then realize the store marked up all the prices in order to offer the big savings? Welcome to President Barack Obama’s spending freeze.

It’s hard to keep up with the shocking numbers under Obama. Federal spending was up 18% in his first year and the deficit was $1.4 trillion, almost three times greater than it was the previous year. That’s 9.9% of 2009’s GDP, more than three times the post World War II average. (Sorry, Barry, but you can’t blame it all on Bush. That budget was done under a Democrat House and Senate and signed by you. ) Depending on whose numbers you believe federal nondefense discretionary spending will increase another 7-10% for 2010.

The Congressional Budget Office says we’ll run at least another $1.35 trillion deficit. The average deficit for 2011-2020 will be around $600 billion per year. Even in Washington that’s a lot of money.

The spending boom has not stimulated the economy and unemployment has climbed to over 10%.

But don’t worry. Now that Obama has created “government gone wild” he wants a spending freeze to save your money. As my dad used to tell my mom after she bragged about all the money she saved while shopping, “We can’t afford to save anymore.”

How much will we save? It depends on what “spending freeze” means.

Here is the spending that won’t be frozen:

• The $787 billion stimulus – Whoops, it’s now $862 billion according to the CBO
• The new stimulus – sorry, “jobs program”
• Any new health care plan
• Medicare
• Medicaid
• Social Security
• Veteran’s Affairs
• Homeland Security
• Defense

Here is the spending that will be frozen if Obama’s plan gets passed:

• Discretionary, nonmilitary spending from 2011-2013 (with exceptions even to that, it look like it will save us about $15 billion for 2011 from a budget of more than $3 trillion)

This ice cube sized spending freeze will do almost nothing to help. It’s time to bring in Mr. Freeze Meister (see above photo) and the liquid nitrogen. Private businesses and individuals have had to cut back everywhere they can. It’s time for our federal government to do the same. Here’s the plan:

• No increase in spending in any program and all government salaries frozen for the next two years.
• All new hiring frozen except for defense for obvious reasons.
• All government pensions, including for the legislative and executive branches, will be phased out. If a 401k plan is good enough for the rest of us, it’s good enough for our government workers.
• All government employees, including our politicians, will be required to take one week off without pay as many in the private sector have had to do.
• Government employees will be monetarily rewarded for the savings they create in their departments.

Long term economic growth will come from capital and jobs. We must stop taking money from people to spend on an ever bigger government. It’s time to be bold. Cut income taxes across the board. Cut our corporate tax rate from the second highest in the industrialized world to the lowest at 10%. Cut the capital gains tax to zero for the next two years. Watch the world send money and jobs to America and existing American companies stay here, expand and hire.

The idea that these types of tax cuts explode our debt has been proven false by Coolidge, JFK, Reagan and George W. Bush. Every time these types of tax cuts have been applied our economy has improved markedly and tax revenues have increased. The deficits and cumulative debt have been created by the increased spending, not by letting Americans keep more of their hard earned money.

Obama and the Democrats won’t suggest any of these things. The question is, when will the Republicans?

To paraphrase the Clintons, it’s the spending, stupid.

(Don’t miss my new web show Recap with Greg Knapp segment one andsegment two. It’s a week’s worth of politics and current events crammed into about 7 minutes with a bunch of humor mixed in.)