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Politicians cringe in fear of debt ceiling

Published July 09. 2011 09:02AM

We are just a few weeks away from the impending debt ceiling limit. Our government has borrowed in excess of the debt limit and will have to raise the limit to continue operations after August 2, 2011. Many Republicans, including those newly elected by the Tea Party movement, have been thumping their chests and stating that they will hold the line and will not increase the debt ceiling. As we get closer to the deadline, I noticed several of them are wavering. To save face, many Republicans are now talking about a "mini-deal" to raise the debt ceiling over the short-term. This is just political speak for increasing the debt limit. They can claim they opposed the increase in the debt ceiling but only agreed to a "mini-deal" to give them time to work on a long-term budgetary solution. The "mini-deal" will likely be in excess of a trillion dollars. The long-term solution can only be more debt piled on top of our existing fiscal obligations.

We the people are not stupid! Our congressmen and women are claiming to be fiscally responsible. Yet they are willing to increase the debt limit on the government credit card so they can continue their spending spree. I believe they lack the courage to draw a line in the sand on this issue and then hold that line against all opposition. They must believe that they can reduce the negative impact of this legislation by passing it in the summer months. The hope is that we will be too busy with our barbeques to notice that they are mortgaging our children's future. Politicians also may think that we will forget about their actions on the debt by the time the election rolls around. Raise the debt now! Raise the rhetoric later! Our elected representatives may not realize that we are watching them; we will remember their actions; and we will vote next November.

In another example of wordsmithing, our politicians are raising revenue by eliminating certain deductions. Eliminating a tax deduction is, in fact, a tax increase. Removing deductions only hurts corporations and businesses at a time when we need them to create new jobs. The President's comments last week on eliminating corporate jet tax credits is a good sound bite, but it could destroy the fragile recovery in the American small jet manufacturing industry. His plan is to eliminate the accelerated depreciation that he brought in last year as part of his economic recovery package. In my youth I would call him an "ersatzgiver" (a politically correct replacement for the term Indian giver). He gives you a credit in one breath then he takes it back in the next breath. Meanwhile, he and his wife use his corporate jet (Air Force One paid for by We The People) to go on a European vacation. Obviously, the use of jets for personal reasons does not apply to his Majesty and his family. Instead of removing tax deductions, we should remove the perquisites that our politicians give to themselves.

As part of the process of hoodwinking the American people into believing that we need tax increases, our administration is threatening to cut Medicare and Medicaid. How could the administration fail to understand that it is not the entitlements that are creating a massive spending deficit? It is the size of the government itself that is destroying any hope of an economic recovery. Business and industry streamlined their staff and processes to make themselves more competitive during the economic downturn. Meanwhile our government hired people to perform unnecessary tasks, creating a bloated administration. If our government were a boat, it would sink under the weight of its own bureaucracy. Clearly, it is time for us to issue pink slips to at least 40% of federal employees.

Before I retired, I ran a small consulting business for over 25 years. When times were tough, we had to mantras that we used to assist our clients in eliminating waste and ineffective processes. "Why are we doing what we are now doing?" was the question I asked to identify if processes were truly necessary. The second mantra was "What value does this process add to the organization? Successful corporations phase out redundant processes and trim excess staff as part of the normal business process. Meanwhile, the government continues to expand ad infinitum. As new civil servants are added to the payroll, they can look forward to a lifetime of employment. To solve this, we need to discover processes, projects, and entire departments in government that are no longer required. As an example, the space shuttle landed this week for the last time. America no longer has the capability to launch astronauts into space or to shuttle essential food and materiel to the space station. Yet NASA has over 40,000 employees and the plethora of contractors providing very expensive services to our government.

If there is no intent to continue manned space exploration, then let's get rid of NASA. It is obvious that our government is quite content to let the Chinese put a man on the moon by their stated goal of 2020. The Chinese have four space cities where they launch their heavy lift rockets into space. They will have their own space station within the next year and a half and plan to start Mars missions by 2033. Meanwhile, Congress has defunded the American space effort while continuing to employ a city full of scientists and administrators with no viable manned space projects. If America wants to succeed in manned space exploration, we can eliminate NASA. Then we can create a new, nimble, technically proficient space agency to enable Americans to have an equal footing in the race for the planets and the stars.

In past articles I have identified entire government departments that could safely eliminated. It is time for the administration to do what corporate executives have done. Examine all processes, streamline operations and reduce staff. This should become a continuous process over the next 20 to 30 years to ensure that our government remains innovative as well as cost effective. Stop creating excessive regulations that require large numbers of government employees. Less government is better government. Much less government is cost effective and will permit business to operate without the chains placed on them by excessive regulation and needless intervention into the economy. The government is like a weed choking our businesses. Remove the weeds! Let our businesses grow!

While our politicians are looking for ways to increase the debt limit and taxes, they continue to throw away our money. "Hurry hurry, step right up! HUD will pay your mortgage if you apply by July 22." With millions of homes currently in foreclosure, the administration feels the need to show that they are helping people to keep their houses. If a person has not paid his mortgage for over three months and is threatened with foreclosure, our government is willing to give them up to $50,000 to enable them to keep their houses. But time is running short. They can only grant 30,000 families this option. People are scampering to complete the application for government assistance. The deadline is July 22, so hurry up and get your application in. If the number of applicants exceeds the number the government can help, they will use a lottery to see who gets to keep their home and who loses it. Who dreams up this nonsense! The foreclosure process is necessary to clear out excess inventory during an economic downturn. If the administration truly wants people to be able to pay their mortgages, then unleash the power of business to create jobs. (

While many of us are focusing on the debt ceiling and the perilous state of our economy, our politicians are quietly moving behind the scenes to pass the DREAM act. This legislation will enable illegal aliens, who were brought to America by their illegal immigrant parents, to become American citizens. While I sympathize with their plight, I believe that they have broken the law and should be deported. Legal immigrants are the catalyst that builds our economy while conforming to the laws of the land. Illegal aliens not only take jobs from Americans looking for work, but some of them fill our prisons, flood our health care system, and drain our welfare funds.

This morning, Mr. Jose Vargas, a Pulitzer Prize winning journalist, admitted he was an illegal alien. While I laud him for his accomplishments, he should return to his country of birth and apply to come to the United States legally. According to ABC News he said: "You can call me whatever you want to call me, but I am an American. No one can take that away from me." I beg to differ. He is not an American. We cannot permit those who broke the law to have a "pathway to citizenship". We need to encourage them to return to their native land, apply for visas (H1B) or permanent residency, then return to our country as legal immigrants. I will be pleased to welcome them myself and shake their hands when they become citizens.

© 2011 Gordon Smith - All Rights Reserved

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