Federal Budget Reduction - The GOP Recovery Plan

Think about this for a moment. The GOP is proposing reducing government with huge cuts in expenditures in all departments of the government. Since Social Security and Medicare are basically off the table for political reasons, that leave all the other departments that will have to have their budgets cut to come up with a trillion dollars in savings to reduce the deficit and national debt just in one year and trillions of dollars over the next decade to pay off the national debt.

What that really means is tens of thousands to maybe hundreds of thousands of federal, state and local public employees will have to be terminated. That will add to the unemployment problem and an increase in demand more federal expenditure for unemployment insurance payments. If no insurance payments, then you have a large group of citizens now totally dependent upon charity for survival.

This loss of employment also means less people able to buy things that make money for businesses and investors, so the recession will deepen. There is no other logical path that this action will take.

Many state and local governments survive on federal matching funds and grants to keep their systems running. A good share of police and fire fighters are paid with federal grants. This is also true of educators who get grants from the federal department of education.

State and local governments are already in financial crisis and loosing the federal money they receive could seriously impact the availability and quality of the services these governments provide. Less snow plows on the road during major snow storms, waiting longer for a police officer to respond to your need, watching your house burn because there is not enough fire fighters, longer lines at the DMV, waiting longer on the phone when you call your local government office, lack of new books at your local library, state and local parks closed due to lack of maintenance, roads not repaired, falling rocks and landslides not cleared off roadways, fewer inspectors checking our food sources for harmful bacteria, campgrounds closed for lack of maintenance, public recreational parks and lakes closed due to lack of rangers and support personnel, longer lines to get through security at the airport, fewer US Marshals and FBI agents to protect us, air travel being more deadly because of fewer air traffic controllers, fewer boarder patrols and inspectors allowing more to cross the boarder illegally, just to mention a few.

This whole idea does not produce jobs in the private sector, actually just the reverse. Yes we must be mindful of the deficit and national debt. We learned from the Great Depression that when funding for the recovery was reduced to reduce the deficit, we slipped back into a deeper depression. It took in today's dollars 30 trillion dollars spend on World War II to bring us out of the depression. And all of that was in direct public funded employment within the government and contractors supplying goods to the military. It was not self generated jobs by the private sector.

Anyone who has ever studied economic history knows that tax breaks for the very wealthy and debt reduction is always at the expense of jobs and consumption. It is the wrong process to end this horrible recession.

What we do need is huge infusion of money into new energy research and development to bring them to market quickly, regardless if you believe in climate change or not, it is just good economic sense. It will reduce are dependency on foreign oil. It can also create millions of jobs in a rather rapid rate.

We need huge infusion of money into public infrastructure. This is vital to replace our aging infrastructure and to be competitive with other countries who are investing in new infrastructure. Improved highways, bridges, power grids, water systems, sewage treatment, rail systems, internet system, etc.

One can set ups a structure that the new energy companies that materialize from the huge investment by government would repay the government with interest. Together when paid back would reduce the debt more rapidly than increases in taxes on the middle-class.

Infrastructure has a less visible return on investment. However, businesses that rely on quality infrastructure will see improved efficiency and costs reduction that will boost their bottom line. In turn they will be able to pay more in taxes from the increase in profits and thus aid in the reduction of the debt at a higher value than without the infrastructure improvements.

I fear that should the GOP achieve their goal of reducing the debt at the expense of the middle-class with continued high unemployment, stagnant or declining wages, loss of benefits, and a lower standard of living will greatly harm the country for decades, if not a century.