Mark Maynard: Stop the woeful money management in Washington
To the editor:
Budget cuts. I am concerned about the budget fight on Capitol Hill. Every household knows that if you don’t have the income, you shouldn’t keep spending like you do, otherwise you get yourself in big trouble with debt you can’t pay off. The U.S. has a budget of about $3.8 trillion. The sequester budget cuts total $85 billion. That amounts to just about 2.2 percent of the total budget. Any good manager can make a reasonable adjustment to a business or household budget to manage that kind of cut. The first thing a good manager does is to make most of those cuts in the non-essential areas so you protect the areas required to be safe and survive.
The U.S. government has enormous areas of non-essential spending which can wait until the economy turns around. The U.S. budget deficit is $900 billion. This represents 25 percent of total spending. If the U.S. keeps spending this much over our revenues we will never be able to pay off our debt, which has an interest payment of $250 billion annually.
The government is so concerned about cuts of $85 billion but is not concerned about $250 billion in interest payments. Any normal business would replace the managers with this type of reckless behavior.
It is true that the business of government is not as simple as a normal business, but it is not that far from it. Just like in a business, borrowing is a prudent strategy to improve future revenues, but always in the framework of paying off the debt.
A rule of thumb in business is that a payback period of six years is reasonable. If we cannot pay off our debt in about six years, we should not take it on.
We as a people should demand that our legislators do their jobs by making cuts in those parts of the budget that are not essential and protecting the parts that keep us safe and prosperous.