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How "Chicago Boyz" would cut budget

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Well-known member
Feb 14, 2005
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Southern SD
Didn't copy well, check link. I just thought that their views were interesting, but assume it will be turned into a Bush Bashing session.

September 23, 2005
Budget cutting

If we all agreed what "pork" was, there wouldn't be any of it in the budget. The "pork-busting" idea needs to be backed up by its backers with specifics on what should be cut and why.

With the National Budget Simulation, one can specify exactly where cutting should be - and see what the outcome is.

It's a static model, but it's a good starting point.

As one who thinks that taxes are plenty high enough, on the rich as well as on everyone else, and that budgetary problems should be solved by budget cutting, it's time to go to work.

Here's my first cut, which actually yields a $347.47 billion surplus:

I'm leaving out some "Hold even" line items in this table.

Also, on Social Security and Medicare generally, I'd like to see real-dollar benefits remain constant indefinitely, but that's not supported by the script, so I'm not going to fool with it except to take the opportunity to undo Bush's upcoming expansion of Medicare, which seems increasingly unpopular on both sides of the aisle. What would really be helpful is if we took away the FDA's enforcement powers and wound up with a cure for aging; that could reduce the resistance to killing that beast once and for all. Till then, I'll assume here that we're stuck with it, but I'm not going to accept the relentless long-term growth that current rules call for as desirable or inevitable.

I'm making an attempt to zero in on the cuts that will do the most good per unit of political resistance that must be overcome, both in terms of money saved and in terms of economic activity discouragement and redirection eliminated. Suggestions and critiques are encouraged.

Military Spending
Military personnel +10% The mullahs aren't going to overthrow themselves. We'll need a few more good men down the road, along with some of the guys currently babysitting Iraq.
Operation and Maintenance +10%
Procurement +10%
Research, development, test, and evaluation +10%
Military Construction, Family Housing and Other +10%
Atomic Energy Defense Activities Hold even We've probably got enough nukes for now.
Defense Related Activities Hold even
International Affairs
International development and humanitarian assistance cut 30% Individuals are eager to pick up the slack here if they're left with the means
International military aid Hold even Keep helping the good guys all over the planet.
Conduct of foreign affairs Hold even
Foreign information and exchange activities Hold even
General science, space, and technology
National Science Foundation programs cut 50% If you don't like politicized science, then maybe you shouldn't have politicians running science foundations and such. Free some brains for the private sector to use, while we're at it. But some basic science might pay off as long as we don't use it as an excuse for new restrictions on people.
Department of Energy general science programs Cut 50% We know where the energy is, and we know how to get loads of it. The problem is that people are afraid to let any idiot get his hands on too much energy, and people are afraid of commercial nuclear power for some crazy reason. The answer is to (a) get over our nuke plant phobia and (b) go to space and get more energy and more elbow room for idiots to win Darwin Awards without destroying cities while geniuses come up with safe, effective antimatter rocket propulsion.
Space flight, research, and supporting activities Cut 50% What's needed are property rights and massive deregulation so that the private sector can get the ball rolling. Then when craft are ready, a police presence in space using cheaper, more mature craft than we have now will help entice more private sector activity up there. Everything left in this line item should be redirected to prizes and, eventually, purchase orders of cheap, mass-produced vehicles
Non-Defense Energy Spending
Energy supply cut 30% Sell the TVA, ditch Federal power marketing, rural electric & telephone liquidating accounts, keep the rest for now
Energy information, preparedness, and regulation cut 50% Deregulation is needed for overall energy supply to increase. More refineries, more nuke plants, etc.
Natural resources and environment
Conservation and land management cut 70% Need to get rid of most of our public lands and let the private sector use them.
Recreational & Park resources Eliminate The best ones will be maintained as profit-making parks, the most valuable ones resource-wise will be used by the private sector for such without destryoing valuable capital (i.e., the land and its renewable resources) if sales and leases are at market rates and under market-determined usage restrictions for lessees.
Farm income stabilization & crop insurance Eliminate Stop screwing with the agricultural market. This is causing misery all over the world and boosting food prices here at home.
Agricultural research and services Eliminate
Commerce and Housing Loan Programs
Universal service fund Eliminate If you want rural telecom to get better and cheaper over time, don't subsidize current technology at current rates!
Other advancement of commerce cut 70% The notes suggest that this is where a lot of regulatory crap is hiding. Also good candidates for the chopping block within this item are "Small and minority business assistance", "Economic and demographic statistics", "International Trade Administration", "Spectrum auction subsidy" (huh? Shouldn't money come in from spectrum auctions?)
Highways and highway safety cut 50% Cut national highway and automobile regulations; eliminate money paid to states to encourage state regulations, projects that are primarily for state and local transportation, and so on. Leave some money for routes actually used primarily for interstate commerce, at least for now.
Mass transit Eliminate Not much interstate commerce going on here. Cities have their own budgets and tax collectors. The private sector can even run mass transit systems as they have in the past.
Railroads Eliminate Might in theory be useful in interstate commerce, if it wasn't so badly run. Sell it to the private sector.
Air transportation Cut 50% I'd like to see further deregulation to encourage more air traffic, especially among personal aircraft. This will lead to smaller population densities and less vulnerability to attack or disaster. Also, the Canadians seem to do okay leaving air traffic control to the private sector, so we should be able to do the same. If so, we can whittle this item down until all that's left is enforcement of a mandatory liability insurance rule for aircraft operators.
Community and regional development
Community development Eliminate
Area and regional development Eliminate
Disaster relief and insurance cut 50% Get rid of subsidized flood insurance and impromptu payoffs and let the market encourage people to live in the right place and take the right amount of risk for their resources, job description, etc. This is actually the perfect opportunity to do this, as people across the political spectrum gasp at the kinds of costs that our current habits demonstrably lead to. Keep some homeland security stuff and some resources to show off to the world how well our military and National Guard can handle the worst that nature (as well as human enemies) can throw at us.
Elementary, Secondary, & Vocational education Eliminate Public education doesn't work. It seemed to work at the beginning, but unlike market institutions, it hasn't evolved as needed. Even "good" public education leaves its students with a nearly worthless diploma after consuming their entire childhoods. For those inclined to scream with outrage over this cut, remember that this is Federal education spending; I'm not touching your state's education budget here, which along with the local school district is where most of your school's money comes from.
Higher education Eliminate Public higher education is following the same trajectory as public education generally, but hasn't deteriorated as much to date. Still, pull the plug and sell it all to the private sector before we flush progressively longer portions of our future generations' lives down the toilet.
Research and general education cut 50% Ditch PBS, and most education "research" activity, which has been a bust for quite a while. Keep the Library of Congress and the Smithsonian; it's good to preserve as much of our civilization's data and artifacts as we can as insurance against a new Dark Age, as well as an aid to individual self-education.
Training, labor, and unemployment
Training and employment cut 50% Much of it is crap for yesterday's jobs.
Labor law, statistics, and other administration Eliminate The best way to encourage employers to take a chance on people with sketchy credentials is to let them fire with impunity if it doesn't work out. Labor law just gets in the way of people finding, offering, and changing jobs. Unjust discrimination is also unprofitable discrimination and doesn't need to be outlawed; vigorous suppression of mob violence and domestic KKK-style terrorism will do the trick.
Unemployment compensation Hold even
Non-Medicare Health Spending
State Children's Health Insurance Eliminate Stop paying for state programs. That's what state taxes are for. Giving them free Federal money just encourages them to spend it without weighing costs and benefits.
Medicaid grants Cut 50% Block grants to the states and matching funds for state projects are some of the worst ideas to come out of the Republican party in recent years. State spending should be paid for with state funds. Federal money makes state governments behave quite a bit like individual welfare clients. I assume that there's still direct Federal benefits in here; if so, it's not worth the trouble of fooling with them for now.
Disease control, public health and bioterrorism Hold even There's some "public health" bullshit like anti-tobacco, anti-fat, etc. activity in here, but it can (and should) be replaced by more activity to study and prepare countermeasures for bioterror and naturally occuring epidemics (i.e., actual public health issues).
Food safety and occupational health and safety cut 50% Strip these guys of their enforcement powers, especially the FDA, so medicine can advance faster. They can stay in existence and keep inspecting if they get over their bias toward overprotectiveness; letting consumers use their own judgement and cheerfully ignore them if they blow their credibility should keep them more honest.
Prescription drug benefit Eliminate Democrats and Republicans alike are seeing the utter folly of this turkey. Hopefully Bush pushed it just to keep the Democrats from loading us with a bigger one. Now that Democrats are bitching about it, it's the perfect opportunity to kill this beast once and for all
Corporate Tax Breaks
Energy, Mining, and Timber Tax Breaks Eliminate When it makes sense, this sort of activity should pay for itself. It's not really an offset to "income" the way other business expenses deductions are, right? If it is, leave it alone.
Tax free bonds and charitable contributions Eliminate Why pay to encourage borrowing over other ways of getting capital, and why pay to encourage corporations to donate to approved charities (and get lawmakers in the business of approving charities)?
Other Corporate tax Breaks cut 30% There's probably some useless crap hiding in here. Some of it, though, is just offsets reflecting the fact that revenue spent on business overhead is not really "income" and thus shouldn't be used to compute an "income tax"
Personal Business and Investment Benefits
Lower tax rates on capital gains (excluding housing) Hold even Capital investment is really where wealth comes from. Without it, you can make mud huts and sharpened sticks. With it, you can make better and better tools, building progressively on previous tools, essentially forever as far as anyone can tell. No sense taxing it more than we have to.
Tax-Free Bonds Eliminate Why favor borrowing transactions over other methods of financing investments?
Enterprise and Empowerment Zones and New Markets credit Eliminate If it makes sense, the whole country should be an "Enterprise and Empowerment Zone". If it's just to move economic activity from one place to another, it's not very useful overall.
Other personal investment tax breaks cut 30% There's probably some useless crap in here. We shouldn't be favoring one sort of investment over another if we can manage it.
Pension & Retirement Deducations

Employer-paid pensions Eliminate Why reward employers for giving you an IOU instead of cash? I don't want my retirement income to depend on whether my employer continues to exist as long as I do.
401Ks & Keogh plans Eliminate Again, why reward employers for giving you investment services and investment contributions instead of cash? Retirement should be based on your decisions about your resources, without taxpayer-funded encouragement or discouragement.
IRAs Eliminate If it makes more sense in your situation to invest a given dollar for retirement than to use it now, you don't need us to pay you to convince you to do it.
Health Insurance Tax Benefits
Employer-paid Health Insurance Eliminate The health insurance market will work a hell of a lot better if people stop getting it through their employers. Stop paying employers to run a company store!
Self-employed medical insurance premiums Eliminate I don't see a good reason to subsidize this for people wealthy enough to pay taxes. Also, no sense in favoring one form of employment over another.
Medical Savings/Health Savings Accounts Eliminate Without the tax breaks above, there's no real reason for this to exist
Deductibility of medical expenses Hold even Not worth the trouble of fooling with it for now
Housing tax benefits
Mortgage Interest cut 10% This should end up at zero, but a lot of people have an awful lot of money tied up in property whose value factors this tax break in, so we can't do anything too drastic here. Over the long run, I don't want to pay to influence people toward buying or renting. Each has its advantages and disadvantages, and individuals should be left to make that decision on their own.
Deductibility of property taxes on homes Eliminate This just came out last year, so we can get rid of it right away without too much trouble. There's no sense in paying people to vote for higher property taxes than they otherwise would.
Capital gains exclusions on home sales Hold even We need a general rule that a capital gain that you can't spend shouldn't be taxed. This is a special case of that rule for houses that we can keep until then.
Exclusion of net imputed rental income on owner-occupied homes Hold even It's a "tax break" that you aren't being taxed on the "rental income" that you theoretically pay yourself for living in your own home? Why in the world would this imaginary income ever be taxed?
Housing bonds & low-income housing investments cut 30% This should also go to zero over time.
Exception from passive loss rules for $25,000 of rental loss cut 30% This should also go to zero over time
Other individual deductions and exemptions
Charitable contributions Eliminate Give away your own money to your own causes, and let the rest of us do the same. Also, I don't want lawmakers deciding what is and is not really a charity
State and local taxes (w/o home property) Eliminate Why should we pay you to vote for higher state and local taxes and more state and local spending than you otherwise would? If it's worth it to your state, your taxpayers should pay for it without our help; if it's not worth doing that, it's not worth spending the money period.
Child credit Eliminate We want more representation in the gene pool of people who don't notice a $1,000 per child tax credit.
Child care credits and deductions Eliminate If it makes economic sense to use childcare and get two incomes, do it. Otherwise, why should we pay to tip the balance of your decision in that direction?
Employee parking and transit expenses Eliminate We shouldn't favor one method of getting to work over another.
Adoption and foster care tax credits cut 50% We're paying for people to import children along with paying people to adopt needy American children. This should be rethought.
Other fringe benefits Eliminate If I'm correct in assuming that these are "fringe benefits" that employers offer, I'd stop paying them to do that; we'd be better off having employers pay people with cash overall

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