1. How Do We Get
The Deficit To Zero?
Or, “There is no such thing as a free lunch.”
Paul M. Jones
Mid-South Tea Party General Meeting
Thursday, May 20, 2010
2. Who Cares?
• Portugal, Italy, Ireland,
Greece, Spain (PIIGS)
• Deficit spending for decades
• Under Euro, cannot inflate
• Can’t borrow any more
• IMF bailout, austerity measures
• Strikes, riots in response
6. Big Numbers
• Count to a million:
11.57 days
• Count to a billion:
31.68 years
• Count to a trillion:
31,688 years
• Count the deficit:
49,306 years
7. Human-Scale Numbers
• Revenues per household:
$18,276
• Spending: per household:
$31,406
• Deficit per household:
$13,130
• (source: http://www.tampabay.com/opinion/
columns/washington-will-spend-31406-per-
household-this-year/1086283, via Heritage)
8. Fiscal Responsibility
• Raise taxes by 72%
per household,
keep spending in place
• Cut spending by 44%
per household,
keep taxes in place
9. What To Cut?
• Earmarks
• Foreign aid
• Farm subsidies
• Bailouts
• IRS
• ???
10. It’s Not Enough
Per Household
Social Security/Medicare -$9,949.00
Defense -$6,071.00
Antipoverty -$5,466.00
Unemployment -$1,640.00
Interest on the debt -$1,585.00
Veteransʼ benefits -$1,052.00
Federal employee retirement benefits -$1,018.00
Education -$914.00
Highways/transit -$613.00
Health research/regulation -$550.00
Mortgage credit -$470.00
Everything else -$2,078.00
Total spending -$31,406.00
Total revenues $18,276.00
Deficit -$13,130.00
11. It’s Not Enough
Per Household
Social Security/Medicare -$9,949.00
Defense -$6,071.00
Antipoverty -$5,466.00
Unemployment -$1,640.00
Interest on the debt -$1,585.00
Veteransʼ benefits -$1,052.00
Federal employee retirement benefits -$1,018.00
Education -$914.00
Highways/transit -$613.00
Health research/regulation -$550.00
Mortgage credit -$470.00
Everything else -$2,078.00
Total spending -$31,406.00
Total revenues -$21,486 $18,276.00
Deficit -$13,130.00
12. Draconian Example
• Keep all taxes
• Cut everything except ...
• Social Security/Medicare
• Defense
• Antipoverty
• Debt Interest
• $4795 deficit
13. The (Hard) Solution
• Not enough to demand low taxes
• Not enough to cut spending “in general”
• Need to cut spending in the most popular
(i.e., most expensive) programs
• By large amounts (44% on average)
14. Volunteers?
• Who will volunteer
to take the hit?
• Social Security?
Medicare? Food
stamps?
• Reduced defense?
Veterans? Retirees?
15. Social Issues
• Sexy, emotional, compelling:
• Immigration enforcement
• Abortion
• Gay marriage
• Drug war
• “Others are doing wrong.”
16. Fiscal Issues
• Deficits spending is not sexy ...
• ... but with deficits, we follow PIIGS.
• After a debt crisis, social issues will pale.
• We are doing wrong.
17. What We Can Do
• Send back the free lunch
• Politicians do what they get rewarded for
• Tell politicians to cut spending 44% ...
• ... especially our favorite programs ...
• ... and re-elect them when they do!
• Cutting “billions”? Not serious.
18. The Things We Love
Per Household
Social Security/Medicare -$9,949.00
Defense -$6,071.00
Antipoverty -$5,466.00
Unemployment -$1,640.00
Interest on the debt -$1,585.00
Veteransʼ benefits -$1,052.00
Federal employee retirement benefits -$1,018.00
Education -$914.00
Highways/transit -$613.00
Health research/regulation -$550.00
Mortgage credit -$470.00
Everything else -$2,078.00
Total spending -$31,406.00
Total revenues -$21,486 $18,276.00
Deficit -$13,130.00
19. Truth ...
• Not fair; violates expectations
• 44% sooner, or 100% later
• Inflation, confiscation, collapse
• Constitution ignored now?
Wait until US bankruptcy.
(Argentina 2001)