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Here are some of the things not covered by government revenue that we are currently borrowing to pay for: homeland security, unemployment compensation, job training, support for state and local governments, federal higher-education outlays, satellites and manned space missions, the National Science Foundation, the National Institutes of Health, the National Oceanic and Atmospheric Administration, community development, food stamps, low-cost housing, roads, bridges, environmental protection and conservation, emergency relief and reconstruction (like in New Orleans), the judicial and penal systems, international diplomacy and poverty reduction, renewable energy. These aren't temporary programs or things we can do without. They are core public services needed for an efficient and fair economy.
Indeed, many of these items are already deeply underfunded. Programs for the poor are often brutally squeezed. Shortfalls in education outlays are shortchanging young people, forcing many to leave college before they graduate because families are unable to cover college tuition. The conversion to clean energy is stymied by a lack of cash. Future NASA missions are being scrubbed. The list is long and perilous.
Until both political parties make a serious effort to improve the performance of government while shrinking its swelling deficits, Americans will watch both their quality of life and their country's standing in the world erode. Returning to fiscal responsibility while safeguarding needed public services and investments won't be easy, but it isn't impossible. Here's how it can be done.
Living Beyond Our Means
Some waste can surely be cut. Ending the wars in Iraq and Afghanistan, slashing pay to overpriced contractors and eliminating unnecessary weapons systems could perhaps save 2% to 3% of GDP each year. These are areas where the U.S. is squandering its income and blood, yet the President's proposed budget for fiscal year 2011 would actually increase military spending to more than $750 billion, from around $720 billion this year. Military spending dwarfs almost everything else. In the White House's proposed budget, military spending would be nearly six times the federal outlay for education and 26 times the outlays for development assistance and humanitarian aid — despite the fact that the Administration often promotes development as a central pillar of our nationalsecurity strategy.
Medicare and Medicaid could surely be made more efficient, but cost cutting would only partly offset the rising bills that are inevitable given our aging population. We're not going to find great net savings in the core entitlement programs even if we reform them. And eliminating the infamous earmarks would save around $11 billion, or less than 1% of the budget deficit.