Yeah, We Want to Cut Government to the Bone!

As state and local governments begin bowing and breaking under the burden of $2.7 trillion of unfunded or under-funded pensions (when does the fed step in?), as our own government continues to give unsupportable defined benefit pensions itself, as government hires “contractors” at almost double the cost of the civil servants they replace, as farm “insurance” subsidies and our military’s addiction to mega-expensive weapon system (more than the military budgets of the next ten military budgets on earth… combined!) rolls with very few genuine program cutbacks, as we incarcerate more prisoners for longer terms per capita than any other nation on earth, as our medical healthcare costs are by far the highest in the world, as our under-constructed and heavily-worn infrastructure is not remotely prepared to prevent the budget-breaking damage from global-warming and as we continue to support a tax code that is designed to benefit the mega-wealthy at the expense of the average… the desire to cut government spending is a necessary and overwhelming need. Austerity! Austerity! Minimal government! Minimal regulation! Get the government out of our lives!

Clearly, in that nasty list above, there is lots of fat to be trimmed and lots of additional taxation to be generated. But do we really want that minimal government? Okay, Congress. Maybe you should have the same pension that the rest of us have from that loving government: live on social security when you retire. Try Medicare-level healthcare instead of the Cadillac policies you have!

Or adopt the austerity measures and government cutbacks that have generated 25-6% unemployment rates in Spain and Greece. Or perhaps you might prefer the pay cuts that have rolled through Europe! Austerity, the kind that Europe has tried and the Tea Party embraces, is the clearest failed policy of the attempt to “recover.” Only Germany has seen a modest wage increase. The rest of Europe continues its decline:

“Wages in the UK have seen one of the largest falls in the European Union during the economic downturn, according to official figures…Figures from the House of Commons library show average hourly wages have fallen 5.5% since mid-2010, adjusted for inflation, which is the fourth-worst decline in the 27-nation bloc….Across the European Union as a whole, average wages fell 0.7%.

“Only Greek, Portuguese and Dutch workers have had a steeper decline in hourly wages, the figures showed… Other countries that have suffered during the eurozone debt crisis also fared better than the UK. Spain had a 3.3% drop over the same period and salaries in Cyprus fell by 3%... French workers saw a 0.4% increase, while the 18 countries in the eurozone saw a 0.1% drop during that period.” BBC.co.uk, August 11^th. Too many big European banks are undercapitalized, carrying way too much bad debt on their books, and the system has yet to figure out how to solve its overall debt/growth conundrum, a threat that continues to worry global financial planners hoping that a real recover will happen soon. The “one true thing” is that the austerity mantra that swept Europe just a few short years ago – the German solution for too much debt – has failed for virtually all of Europe… except, of course Germany.

One of the most important differentiators of government cost allocations is the investment vs. expense paradigm. Expenses don’t grow your economy; investments do. Some expenses are necessary – a level of environmental and financial regulation coupled with legitimate public safety/national security – and they enable our continued existence.

But the costs that generate a value for the future – investments with a real rate of return – are focused primarily in three basic categories: research (finding those technologies that make us cutting-edge competitive, creating new jobs along the way), infrastructure (minimizing damage from nature and enabling the free flow of commerce) and education (creating and maintaining the skills for the future). Any cuts or failures to maintain programs in these three areas are automatic slams to our growth, our future values and global influence.

And so many elected officials are prepared to cut massively in each of the three critical categories above, allowing special interests exceptionally favorable tax breaks and loopholes and exemption from regulation, and refusing to deal with our simmering pension debacle, that they are sabotaging our future. These individuals have so little belief in their own country that they steadfastly refuse to invest in its growth!

I’m Peter Dekom, and while my life will be less impacted by our idiot legislators in office, the lives of my son and generations to come will suffer as a result of our stupid unwillingness to learn from the mistakes of others.