The Issue With The Budget

Returning to my post-State of the Union topics, I'll discuss my thoughts on the President's statement on balancing the budget. As I mentioned before, I believe that any time the government takes on this task, social services are hampered. They talk about reducing government spending, but truly, what does this translate to? Is this the best option?

Reducing social services in order to balance the budget is not the answer. What results is a multitude of people devoid of programs which are vital to their sustenance. However, managing these programs to reduce overspending and mishandling of funds may be the answer. I briefly touched on the fact that many people in our country abuse the federal assistance programs. For instance, the Welfare Program was established as a means to temporarily assist citizens who, due to the remnants of The Depression, needed monetary aid while they were able to get back on their feet. The program was never intended as a substitute for education and work. However, we are now raising the 3rd generation of Welfare dependants in this country. These same individuals also take advantage of programs like WIC, Food Stamps, etc. All meant to be used on a temporary basis. Auditing these programs is imperative to ensure proper compliance and control the associated costs.

Another area our government should be able to tap for funds are those individuals in the top 2% of the income bracket. These individuals should be taxed on their gross income and not on an adjusted, taxable income. This may sound like discrimination but is not. Consider all the tax shelter options available to these individuals. From multimillion dollar home tax deductions to overseas investment and accounts, they are able to keep a lot of money away from the government. Unfortunately, for most of us in the other 98%, our ability to safeguard our money is quite limited.

By increasing taxes on the "Super Rich" the government would be able to apply more funds to the task of balancing the budget. I will include our own politicians in this group. In 2001, the median household income in the US was $46,326 (See Chart). According to the University of Michigan Library, that same year, the President's salary was raised from $250,000 to $400,000.

If we consider the total salaries for The Congress and the Supreme Court, our politicians make more money per-capita than any average citizen ever will. Now, consider that most politicians live in a double income household, and that some of these households contain two such politicians, you can see that their household income is, by far, beyond what you or I will ever make. Because of this, I would suggest that our brave leaders and take one for the team and cut their salaries to match whatever the average household income is. The savings can be applied to the task of balancing the budget.

In summary, in order to effectively balance the US Budget, our government needs to properly manage the programs that are already in existence, tax those who have the means to provide more funds and, above all, stop talking out of the side of their mouths and look at themselves as a source of needed money for this task. Maybe then we can look at them and see a reflection of us, the average, hard working, not so well paid American.