Deficit Reduction 101:  for Inept Politicians

RANCHO SANTA FE, CA., February 9, 2011 – As we have blown past the $14 trillion mark in National Debt, it has become increasingly obvious that those who hold political offices in Washington, D.C. are living in their own versions of Fantasy Island.  You can almost see these intellectual midgets pretending they’re Tattoo … excitedly shouting, “De plane!  De Plane!”  We need Mr. Roarke to take them aside to tell them what we really need to hear is “De plan!  De plan!”  On the one hand, we have the Democrats, who haven’t quite figured out why they were drubbed in the November elections.  On the other hand, we have the Republicans, who think they had something to do with it.  The Democrats continue to believe that we can spend our way out of debt, and the Republicans apparently believe that two-tenths of a percent reduction is a good start.  It’s safe to say that Mensa won’t be opening a chapter on Capitol Hill any time soon.

On the Democratic side, we have a mixed bag of solutions.  In his recent State of the Union address (which he echoed in his speech to the U.S. Chamber of Commerce), President Obama said he would veto any bill with earmarks, have his Administration develop a proposal to merge, consolidate, and reorganize the federal government, and freeze annual domestic spending at its current level for the next five years.  With respect to the first two commitments, perhaps it’s the President’s way of saying that he would support a repeal of the Health Care Reform Bill.  After all, it was “larded up” with enough pork to scare away the construction of a mosque, and it created 159 new agencies that will apparently have to be vetted to determine how they can be merged, consolidated, and reorganized in a more efficient manner.  As for freezing annual domestic spending at its current level for the next five years, there are two challenges:  this would ensure that the government could continue to spend at the highest rate in history; and, it only pertains to “domestic” spending, so we could continue to dig a bigger hole by spending more money abroad … perhaps in hopes of securing another Peace Prize.

Then, there’s Nancy Pelosi’s strategy for achieving economic growth.  She recommends using food stamps and unemployment insurance to stimulate the economy.  “It is the biggest bang for the buck when you do food stamps and unemployment insurance,” according to Nancy.  In theory, she says that every $1.00 of food stamps (or unemployment compensation) generates $1.79 in economic return.  If that’s the case, let’s just give $57,166 in food stamps and/or unemployment compensation to the 310 million people in the United States.  Putting that $17.7 trillion to work under the Pelosi plan would generate $31.7 trillion, which is enough to cover the $17.7 trillion investment and wipe out the $14 trillion debt.  Just do the algebra (or ask an Asian third grader to do it for you).  Where would we get the $17.7 trillion to fund food stamps and unemployment compensation?  Well, there probably aren’t enough rich people to tax, so the government could just print it.  Don’t worry about inflation or the end of the U.S. dollar as the world’s reserve currency right now.  We’ll address those issues in one of the higher-level courses that follow Deficit Reduction 101.

In the event that these options don’t solve the problem, we can always rely on the Republicans to introduce sound fiscal conservatism into the equation.  After all, look at the great job they did from 2002 to 2006 when they had control of the House, the Senate, and even the Presidency.  Okay, bad example!

What are the Republicans suggesting?  For starters, they have proposed $32 billion in cuts to current 2010 spending levels ($74 billion relative to President Obama’s requested 2011 budget).  That’s a little over two-tenths of one percent of the $14 trillion debt … which, by the way, is growing by about $3.8 billion every day.  So, the Republican solution would cover the interest expense for almost 8.5 days.  If this is the best they can do, there’s only one way we can respond:  fire them … and put them on food stamps and unemployment!

Fortunately, John Boehner, Eric Cantor, and Kevin McCarthy had lunch at the White House today with President Obama, Vice President Biden, and new Chief of Staff Bill Daley.  After their “kumbaya” moment, they proclaimed they had reached “common ground” with respect to the need to work together to cut spending.  Unfortunately, Cantor added, “I guess the particulars and the details will be where the disagreements may lie.’’   Obviously, these men aren’t going to be much help in solving the problem.

So, let’s turn to Deficit Reduction 101.

Rule #1:  “Politicians must recognize that the government is a consumer of cash that does not contribute to the Gross Domestic Product in any way.”  Admitting this is the first step toward recovery.

Rule #2:  “The government can’t spend more than it takes in.”  It’s just like having to balance a checkbook if you don’t have access to PAC graft.

Rule #3:  “You can’t keep taxing a higher percentage of people’s income to support your spending habits … even if you limit such increases to an inconsequential number of people in a way that secures the votes of a more significant base.”   As Margaret Thatcher so eloquently said, “The problem with socialism is that eventually you run out of other people’s money.”

Rule #4:  “Start internally and eliminate all unnecessary expenditures.”  When companies are struggling, they cut costs.  It’s painful.  Get used to it.  No more extravagant travel; no more big parties; no more needless perquisites; lunches at the White House will be replaced by burgers at White Castle; and your entourages (otherwise known as staff) must be cut by immediately by 20 percent … 50 percent if you want to pretend you’re in the real world.  You’re not rock stars … they actually generate revenue.  If the President was serious when he told the U.S. Chamber of Commerce, “We’re trying to run the government more like you run your businesses,” then it’s time to “man up.”

Rule #5:  “When in doubt, call The Common Sense Czar.”  With 30+ years of turnaround experience, the Czar knows what it takes to “resurrect the dead.”  And right now, this country is on life support.  Don’t wait until our Nation has been pronounced dead, the toe tag is on, and the body bag is being zipped closed.  Leave your egos at the door and call upon people who know what they’re doing and don’t have to worry about being reelected.

The President is on the right track when he calls for running the government more like a business, liquidating unused federal assets, and consolidating federal agencies.  However, he is deluding himself if he thinks that freezing the federal budget at its record high will help solve the problem.  That’s like buying a teenager a brand new sports car and punishing them for something the next year by only replacing it with a new version of the same model.  This isn’t rocket science.  Then again, that’s probably a good thing since we’ve already scrapped NASA’s budget.  Rather than investing in Fannie Mae, Freddie Mac, AIG, GM, and Chrysler, maybe our government should invest more in “common sense.”  It seems to be in great demand and short supply, so the return could be significant.  Coming soon:  Deficit Reduction 102!


The National Platform of Common Sense addresses our Nation’s leadership issues and economic recovery in much greater depth.  Buy a copy to do your part to stimulate the economy.  It’s the least you can do to support your country!


T.J. O’Hara is an internationally recognized author, speaker, and strategic consultant in the private and public sectors. In 2012, he emerged as the leading independent candidate for the Office of President of the United States and the first nominee of the Whig Party in over 150 years.


This article first appeared in T.J. O’Hara’s recurring column, The Common Sense Czar, in the Communities Section of The Washington Times.