Readers of this column know I have been an avid proponent of balancing the federal budget. Our leaders simply refuse to turn off the money spending spigot, i.e., one has to only listen to the two presidential candidates and their promises to spend even more, with nary a mention that spending is out of control.
Simply put the current rate of government spending is unsustainable. Interest payments for the first 10 months of fiscal year 2024 are $763 billion. Just a year ago for the same time period they were $200 billion less. Interest payments for the year will amount to more than what the entire defense budget is. In fact, net payments on debt surpass every other federal spending category with the exception of Social Security.
One senator, probably the only one who takes this huge problem seriously is Rand Paul. He has offered a solution and it’s not all that foreboding. He calls it the Six Penny Plan and claims it will balance the federal budget in five years.
It works like this. In Sen. Paul’s words:
“Seven years ago, we could balance our budget with a freeze in spending without cutting anything. Since then, our national debt has grown to over $35 trillion with $6.6 trillion just in the past four years.”
$35 billion represents a huge number- a number that is double the amount of total bank deposits in the U.S. Between February and June of this year the government added $540 billion to the national debt. That represents $1600 additional in taxes per U.S. citizen.
Sen Paul continued, “Our greatest threat to our national security is our national debt.”
I might argue that it is also a threat to our children and grandchildren. They are the taxpayers that will be settled with this ever-increasing debt and unless we adults put a stop to it, their taxes will skyrocket, and be unaffordable to many because of the untenable position we have put them in.
Here’s how Sen. Paul’s plan would work:
First, he suggests we freeze spending at its current level. In Year 1 of his plan, he would demand the government cut a paltry 6 percent from their spending. His plan would cut another 6 percent in Year 2, and so on and so on until after 5 years if his calculations are right, the budget would be balanced.
Many of us in business have had to make drastic cuts to stay within our means. 6 percent per year is far from a drastic amount. In my opinion most government agencies operate with bloated budgets. For instance, the NIH funds all kinds of crazy experiments that have no value. Start making cuts there.
Maybe Sen. Paul’s solution needs some fine tuning. Many of his peers will not buy into it, they would rather the government spend more money to throw at perceived problems than tighten the fiscal belt. But at least Sen. Paul is addressing the problem. No one else seems to care. I hope I am wrong. I hope other lawmakers and our President will take a long hard look at the Six Penny Plan and vote it or some variation in to law.
