How to Slash the State

14 ways to dismantle a monstrous government, one program at a time

Like sequels to Saw, the government just keeps coming, growing larger, more expensive, and moreappalling each year. In times of economic distress, even at the increasing risk of default, the size, scope, and cost of federal, state, and local governments continue to balloon, swallowing everything in their path. For 10 solid years, and especially since September 2008, spending has boomed, the Federal Register has exploded, and Congress altered American life at an accelerating pace. 

Yet loud critics of big government—especially but not only Republican politicians—are often reduced to an awkward stammer when put on the spot by the all-important question, “So what would you cut?” Well, stammer no more. 

Consider the following a Halloween-themed cheat sheet for explaining who, what, where, when, and why whole swaths of government need to be cut or euthanized outright, so that taxpayer money is spent more productively, the remaining government services perform better, and the United States can finally begin its long slow climb toward solvency. 

We’ve asked analysts from the nation’s capital and around the world to offer tips and tricks for fighting off the cold, cold monster that is the state. The suggestions below are intended not as a last word but as a starting point: As in any good slasher movie, the savvy viewer will soon see potential victims everywhere. 

Overhaul Medicaid

Imagine a government-run health care program that limits medical access for millions of patients, is racked by uncontrollably rising costs, and in many instances produces health outcomes demonstrably worse than having no insurance at all. The program exists, and it’s called Medicaid.

Created to provide aid to the country’s poorest and sickest individuals, the joint federal-state program was initially intended as a low-cost bulwark against further government intervention in the health care system. In 1965, its first year in operation, the program cost about $9 billion in inflation-adjusted dollars. But instead of heading off further government intervention, it became the vehicle for much of the government’s expansion into the health care sector. Between 1970 and 2000, the program grew from $29 billion to $250 billion in 2010 dollars.

This year the Department of Health and Human Services expects the total cost of Medicaid to top half a trillion dollars. And according to the National Association of State Budget Officers, it will account for more than 20 percent of total state spending. Medicaid outspends all other welfare programs combined, and, if not for the Medicare prescription drug benefit, it would already be more expensive than any other entitlement.

What do we get for all that money? Not much. Recent studies at the University of Virginia, the University of Pennsylvania, and Columbia University and Cornell indicate that in cases involving colon cancer, vascular disease, and several other maladies, Medicaid’s health outcomes are frequently worse or no better than the outcomes for individuals who lack health insurance entirely.  Yet 46 million Americans are enrolled in the program—a figure that is projected to increase by 16 million over the next decade, thanks to ObamaCare.

Shuttering the program remains politically infeasible, and ObamaCare’s reliance on Medicaid to expand health coverage has dimmed the prospects for reform. But states could opt out of the technically voluntary program, and the rapidly deteriorating fiscal outlook of both Medicaid and the country means an overhaul may become necessary long before politicians build up the courage to tackle it. 

The first step is to stop the matching grant funding process, in which states receive federal money for each Medicaid dollar they spend—creating an incentive for ever greater spending. Instead, the program should be funded by federal block grants indexed to the rising cost of health care. Better yet, scrap the program entirely in favor of a temporary assistance program that doesn’t create long-term dependency. That may sound radical, but the alternative is to perpetuate the ugly and unsustainable status quo, in which we devote ever more resources to a program that fails both taxpayers and patients.—Peter Suderman

Bring the Troops Home

You can’t make a serious dent in government spending without tackling the military budget. And the quickest way to reduce Pentagon spending is to end, as fast as physically possible, our ongoing occupations of Iraq and Afghanistan.

So far those two wars have cost well over $1 trillion—on par with this year’s federal budget deficit—almost all of it spent through off-budget, fiscally reckless “emergency” supplemental bills that smuggled in all sorts of nonemergency weapons pork and social programs. And if the wars had never been fought we could have saved something more precious than taxpayer money—tens of thousands of human lives.

We don’t know how long the wars will last if we don’t withdraw now, so we can’t say for sure how much a swift and total deoccupation would save. President Barack Obama has promised a wind-down in Iraq that would reduce troop levels to 50,000 by 2011 and zero by 2012, but there are already signs the timetable will be pushed back. If Obama lived up to his plans, Brookings Institution analyst Michael O’Hanlon reckons, they probably would save “$50 billion to $70 billion in fiscal 2011 and perhaps $80 billion to $100 billion a year in 2012 and beyond.”

According to the government’s back-of-the-envelope numbers, deploying one warrior for one year costs about $1 million. Congressional Budget Office projections for the 2012–2020 costs of both wars range from $274 billion to $588 billion—and both estimates assume we will be winding down troop numbers significantly, which may or may not happen.

Even if we stop the wars now, the expense won’t stop. As National Bureau of Economic Research economist Ryan Edwards noted in a July study, “Historically, the peaks in total benefits [paid to war veterans] have lagged the end of hostilities by 30 years or more, meaning the maximum effect on annual budgets…might not be felt until 2040.” It’s too late to do anything about that for our thousands of already wounded vets and their families. Given the dubious benefits and indisputable costs of these continuing occupations, we should immediately stop adding to their ranks. —Brian Doherty

Erase Federal Education Spending

In August the Obama administration gave the states a $10 billion bailout to save teachers’ jobs —even though the Bureau of Labor Statistics indicates that teachers aren’t losing them. After 30 months of recession, local education employment has suffered less than a 1 percent decline. In fact, education hires rose in 21 states between 2009 and 2010. By contrast, the private sector saw a 6.8 percent decline in employment.

In addition, the president has proposed a $78 billion education budget for 2011, a whopping $18.6 billion more than in 2010. Federal education spending has increased by close to 80 percent in real terms since 2001, but test scores in reading and math among 17-year-olds have been flat since 1971, according to the National Assessment of Education Progress.

Politicians have talked for a long time about eliminating the Department of Education. While this remains an excellent idea, there is plenty of low-hanging fruit that can be plucked immediately.

The feds’ largest education program, Title I, which costs $16 billion a year, has failed to come anywhere close to its goal of helping disadvantaged kids in high-poverty schools close the achievement gap. Head Start, at $8 billion annually, duplicates many other federal, state, and local early education programs without adding to their effectiveness; a January 2010 gold-standard study by the Department of Health and Human Services found that by first grade not one of more than 114 academic and behavioral tests indicated a reliable, statistically significant effect from participating in Head Start. The $1.2 billion in funding for 21st Century Community Learning Centers that provide after-school care should be eliminated too. There are many duplicative after-school programs, and these are not a high priority to improve educational achievement.

The $2 billion for various “adult education” programs should also be cut. Community colleges can serve adult education needs and are already funded through Pell grants and federal student loans.

These are just a few examples; the federal education budget is full of cuttable programs. If eliminating the entire Department of Education is politically impossible, then the programs with the most tenuous relationships to raising student achievement need to be the first to go.—Lisa Snell

Slash State Budgets

As usual, governments have been slower to adjust to harsh economic realities than the rest of us. The private sector shed nearly 8.5 million jobs during the recession, while governments at all levels actually added more than 100,000 employees, as of December 2009. This growth ensures that state governments will be struggling to balance budgets long after any private-sector recovery is under way. And it means that they will continue to come begging to the federal government—and their own taxpayers—to cover the shortfall.

In a July report, the National Conference of State Legislators determined that the states face a collective budget gap of $84 billion for fiscal year 2011, with 24 states reporting deficits of at least 10 percent of their general fund budgets. In a June report, the National Governors Association and the National Association of State Budget Officers estimated that the cumulative state budget deficits for fiscal years 2009 through 2012 would be $297 billion. Only $169 billion of that sum has been processed to date, leaving at least $128 billion in deficits that must be tackled over the next couple of years. Yet despite a decline in federal stimulus funds and continued lagging revenues, governors’ recommended budgets for fiscal year 2011 forecast a 3.6 percent increase in general fund expenditures.

States blame the recession for their fiscal problems, and the economy certainly did not help matters, either in tax revenues or in demand for services. But the correction merely revealed that lawmakers have been living way beyond their means for far too long. 

One useful metric of good fiscal stewardship is the comparison of spending growth to the increase in population plus the increase in the cost of living, as measured by the Consumer Price Index. During the comparative good times of 2000 to 2008 (the most recent date for which the necessary numbers are available), the national population increased 8 percent and CPI inflation rose 25 percent, for a baseline spending-growth number of 33 percent. Yet actual combined state spending skyrocketed 60 percent. Bringing annual spending increases down to the rate of inflation plus population growth is a minimal first step, although that probably will be impossible without defusing the public pension bomb.—Adam B. Summers

End Defined-Benefit Pensions

The funding shortfall of public employee pensions at the state and local level exceeds $500 billion. Annual pension contribution costs have grown exponentially in the last decade from coast to coast. There is a simple way out of this government-manufactured mess: bankruptcy. As the city of Vallejo, California, discovered in 2009, bankruptcy protection can provide an avenue for governments to renege on their crushing pension commitments.

Unfortunately, the bankruptcy option is available only to cities and counties, not states or the federal government. And public employee unions in California and elsewhere are working time-and-a-half to change bankruptcy laws to stop future Vallejos from declaring insolvency, or at least to rig the settlement terms to labor’s benefit.

So what are the realistic solutions? California gubernatorial candidate Meg Whitman has a good idea: end defined-benefit contributions—in which taxpayers, rather than the employees, fund retirement plans—for all new government hires. Instead, public servants of the future should be put into 401(k) plans like the rest of us, with responsibility to contribute to and manage their own retirement nest eggs.

What about existing employees? The payouts contractually promised to employees at the time of hiring are devilishly hard to roll back. But there is wiggle room at the front end, with the option of requiring public workers to fund more of their own accounts. This doesn’t get governments to parity with the private sector, where defined-benefit plans are all but extinct. But it takes some of the immediate pressure off taxpayers. As the American people grow increasingly angry at gilded public-sector compensation, California Gov. Arnold Schwarzenegger succeeded in getting a handful of unions to accept increases in the percentage that employees contribute to their own plans, and similar proposals are gaining a foothold around the country.

Neither of these solutions will solve the looming shortfall, which ultimately will be filled in with taxpayer bucks. But they are steps toward bringing the era of defined-benefit pensions to an end.—Tim Cavanaugh

Declare Defeat in the Drug War 

As Sting recently observed, channeling John Stuart Mill, the war on drugs by its very nature tramples on “the right to sovereignty over one’s own mind and body.” It also squanders taxpayer money while causing far more harm than it prevents. 

To enforce drug prohibition, state and federal agencies spend more than $40 billion and make 1.7 million arrests every year. This effort wastes resources that could be used to fight predatory crime. But the direct taxpayer costs are only part of the story. While imprisoned (as half a million of them currently are), drug offenders cannot earn money or care for their families, which boosts child welfare costs. After they are released, they earn less than they otherwise could have—roughly $100,000 less over the course of their working lives, according to Harvard sociologist Bruce Western. These losses add billions more to the annual drug war tab.

The Office of National Drug Control Policy estimated that Americans spent $65 billion on illegal drugs in 2000, the equivalent of more than $80 billion today. Comparisons between legal and illegal drugs suggest that as much as 90 percent of that spending is attributable to prohibition’s impact on drug prices, meaning that legalization would make tens of billions of dollars available for other purposes each year. Some of those savings probably would be sucked up by drug taxes, which Harvard economist Jeffrey Miron estimates could generate nearly $50 billion a year in government revenue.

Lower prices also would dramatically reduce the incentive for heavy users to finance their habits through theft. In a 1991 survey, 10 percent of federal prisoners and 17 percent of state prisoners reported committing such crimes. Since stolen goods are sold at a steep discount, the value of the property taken to pay for drugs is several times higher than the artificially inflated cost of drugs. 

Other problems associated with prohibition are harder to quantify in dollars, including official corruption, the erosion of Fourth Amendment rights and other civil liberties, interference with religious rituals and medical practice, terrorism subsidized by drug profits, deaths and injuries from tainted or unexpectedly strong drugs, and the prohibition-related violence that has claimed 28,000 lives in Mexico since 2006. The pervasive demands of the futile crusade against an arbitrarily selected set of intoxicants have made all of us, whatever our taste in psychoactive substances, less free, less wealthy, and less safe.—Jacob Sullum

Cancel the Federal Communications Commission

The Federal Communications Commission (FCC) oversees everything from TV and radio to wireless phones and Internet connections. But none of these tasks is a core government function. From regulating speech to subsidizing broadband, just about everything the FCC does is either onerous, constitutionally dubious, ineffective, or all three.

Take its role as broadcast censor: Under a policy that was recently overturned by a federal appeals court, the agency has spent decades enforcing an arbitrary, inscrutable code governing what speech and images are acceptable on the public airwaves. Are four-letter words forbidden or not? Which ones? And when? What about breasts or bottoms, or lower backs? Does it matter if the context is medical, accidental, or unattractive?

The FCC’s answer to all of those questions is yes, no, maybe, or all three, depending on whether the words and pictures in question meet its definition of “indecency.” But that test is performed using guidelines that are clear as mud: “An average person, applying contemporary community standards, must find that the material as a whole appeals to the prurient interest.” Naturally, judgments about who counts as an average person and what constitutes a “contemporary community standard” are left entirely to the commission’s whim.

Yet the FCC is bent on expanding its reach whenever and wherever possible. The agency’s recent actions include investigating the approval process Apple uses for its iPhone App Store, mulling whether and how phone companies might upgrade their networks, and passing regulatory judgment on various consumer devices of minimal importance. Many of its recent efforts have been focused on finding ways to regulate Internet traffic.

When the FCC was launched in 1934, backers argued that its existence was justified by airwave scarcity. In an age of information overload, with a wide array of media choices available to anyone with a mobile phone or broadband connection, no such argument can credibly be made. Yet rather than shrinking, the agency has ballooned, growing its budget by more than 60 percent between 1999 and 2009 in nominal terms. To what end? And at what cost to the private sector?

In addition to the agency’s $338 million budget, a 2005 study by economist Jerry Ellig estimated FCC regulations hit consumers with up to $105 billion a year in additional costs and missed services. Rather than facilitate communications technology, the agency has made America’s consumer electronics offerings substantially more expensive.

The best alternative is a world in which spectrum is freely tradable private property rather than a government-managed resource, interference is treated as a tort, and no one worries about whether their next on-air word will result in a seven-figure fine—in other words, a world with no FCC at all.—Peter Suderman

Uproot Agriculture Subsidies

Farm subsidies and price supports offer something for people of all political stripes to hate. They distort markets and spark trade wars. They make food staples artificially expensive, while making high-fructose corn syrup—the bogeyman of crunchy parents, foodies, and obesity activists everywhere—artificially cheap. They give farmers incentives to tamper with land that would otherwise be forest or grassland. They encourage inefficient alternative energy programs by artificially lowering the price of corn ethanol compared to solar, wind, and other biomass options. School lunches are jammed full of agricultural surplus goods, interfering with efforts to improve the nutritional value (and simple appeal) of the meals devoured by the nation’s chubby public schoolers.

Enacted in the 1930s as temporary emergency measures in a time of scarcity, subsidies of such staple crops as corn, wheat, and soy have managed to survive into the current era of abundance. Congress hands about $20 billion a year in direct farm support payments to a small group of powerful agricultural companies, while American consumers and firms double that amount in inflated prices at the supermarket, restaurant table, and even at the gas pump.

Challenge agricultural subsidies on Capitol Hill, and you’ll get a song and dance about America’s endangered family farmers. But farm welfare goes overwhelmingly to large corporations. (Those cuddly fruit and vegetable growers at the farmer’s market are virtually all ineligible for federal aid.) Congress reauthorizes the farm bill every five or six years, so in 2013 there will be another chance to set this wrong right. The only people harmed by phasing out farm subsidies would be a few big agribusiness firms and a bunch of congressmen who rely on their campaign donations. The beneficiaries would be farmers in less developed countries—and pretty much everyone else who eats.—Katherine Mangu-Ward

Unplug the Department of Energy

On April 18, 1977, four months into his new administration, President Jimmy Carter delivered a somber speech in which he declared the “moral equivalent of war” on the “energy crisis.” The centerpiece of Carter’s energy policy was
the creation of a new Department of Energy (DOE), which would implement sweeping proposals to transform the way Americans produced and used energy. Just four months later, the new department, centralizing some 50 scattered federal energy agencies, was approved by Congress.

One of the chief functions of the department was to administer price controls on oil and natural gas. The DOE would also dispense billions of dollars in research and development subsidies aimed at jump-starting alternative energy technologies such as coal gasification and solar power. 

So what about the DOE today? In 2010 more than half of the department’s $26 billion budget ($16 billion) was devoted to managing the federal nuclear estate, which consists mostly of facilities that make and dispose of materials used for nuclear weapons. The next biggest chunk of DOE funding, $5 billion, is targeted at that old standby, energy R&D. But payoffs on government-supported research have not been impressive. Three previous programs costing a couple of billion dollars failed to produce automobiles that ran on electricity (1992), hydrogen (2003), or gas at three times the efficiency (1993).
And despite a total of $16 billion in subsidies over the years, solar electricity still costs between three and four times more than fossil fuel electricity. 

Federal energy price controls were mercifully lifted in the 1980s. But the DOE continues to perform tasks better left to other players. Cleaning up after nuclear weapons is costly and will
be necessary for a long time. Why not let the Pentagon handle that problem? Private-sector energy R&D is moribund because energy production and distribution is the most heavily regulated segment of our economy, but federal R&D subsidies have utterly failed as a substitute for competition and the lure of profits. If Congress and the White House must pursue the development of alternative energy via social engineering, a far more effective alternative to allowing DOE bureaucrats to pick technology “winners” would be a tax on conventional energy. The boost in energy prices would at least encourage inventors and entrepreneurs to get to work.

In 1982 President Ronald Reagan called for abolishing the DOE. The Republican congressional “revolutionaries” in 1994 promised to end it as well. As late as 1999, bills were introduced in the House and Senate to eliminate it. And yet the beast lives on. Thirty-three wasteful years after Carter’s speech, we’re still wasting energy (and money) on the Department of Energy. Enough is enough.—Ronald Bailey

Dismantle Davis-Bacon

For nearly 80 years, contractors working on federally funded construction projects have been forced to pay their workers artificially inflated wages that rip off American taxpayers while lining the pockets of organized labor. The culprit is the Davis-Bacon Act of 1931, which requires all workers on federal projects costing more than $2,000 to be paid the “prevailing wage,” which typically means the hourly rate set by local unions.

Davis-Bacon was born as a racist reaction to the presence of Southern black construction workers on a Long Island, New York, veterans hospital project. This “cheap” and “bootleg” labor was denounced by Rep. Robert L. Bacon (R-N.Y), who introduced the legislation. American Federation of Labor President William Green eagerly testified in support of the law before the U.S. Senate, claiming that “colored labor is being brought in to demoralize wage rates.” The result was that black workers, who were largely unskilled and therefore counted on being able to compete by working for lower wages, were essentially excluded from the upcoming New Deal construction spree.

The legislation hasn’t come cheap for taxpayers. According to 2008 research by economists at Suffolk University, Davis-Bacon has raised the construction wages on federal projects 22 percent above the market rate. James Sherk of the conservative Heritage Foundation estimates that repealing Davis-Bacon would save taxpayers $11.4 billion in 2010 alone. Simply suspending Davis-Bacon would allow contractors to hire 160,000 new workers at no additional cost, something that should appeal to a jobs-obsessed Congress and White House.

Yet the Obama administration extended Davis-Bacon via the American Recovery and Reinvestment of Act of 2009, also known as the stimulus. Asked to clarify how the old rules applied to the new money, the Department of Labor declared that Davis-Bacon now applies to all “projects funded directly by or assisted in whole or in part by and through the Federal Government.”

In other words, even projects that are only partially funded by the stimulus must obey these costly requirements. With the economy floundering, the last thing taxpayers need is a rule that makes construction projects cost even more.—Damon Root

Repeal the Stimulus

Government inefficiencies sometimes pop up in surprising places. For instance, in spending money quickly. You’d think Washington bureaucrats, of all people, could figure out how to inject $794 billion in stimulus money into the economy, but as of early September, 18 months after the stimulus was passed, an estimated $301 billion remained unspent.

That money should be banked, not wasted. While more than half of those funds are already promised to specific programs, they could be rescinded because the projects haven’t begun yet.

If you believe the administration’s stimulus tracking website, Recovery.gov, stimulus projects had created 749,142 jobs as of June 30. In related news, unemployment has increased 1.3 percentage points since the stimulus was signed into law, from 7.7 percent then to 9.5 percent in July 2010. If you include underemployed workers, the overall rate of unemployment a year and a half after the stimulus was 16.5 percent, compared to 14 percent before. And a year and a half after approval of a stimulus that was supposed to create or save 3 million jobs, the labor force had contracted by nearly 850,000 people—individuals who aren’t counted in the unemployment numbers because they have given up hope of finding work anytime soon.

The president attributes much of the nation’s GDP growth to the stimulus spending. But there is no objective evidence to back up his claims. The only way you can tweak the numbers to show a significant stimulus contribution would be to assume, not demonstrate, a very high multiplier—the amount of economic activity generated by each government dollar. That’s what the administration does, but more honest economists do not.

Less partisan analysis shows that deficit spending has crowded out private investment. Harvard economist Robert Barro recently estimated that the $794 billion stimulus will shrink private investment in the economy by $900 billion. Whatever local benefits stimulus spending has created have been negated by a contraction of private-sector growth elsewhere.

Not only has the government largely replaced what the private sector could have done, but investors are cutting back on expenditures as they prepare for increased taxes. Given Obama’s declared intention to end the tax cuts of 2001 and 2003, plus various increases woven into health care reform, investors are justified in their
fears.

But all is not lost. A quick, merciful end to the dysfunctional stimulus program could save as much as $300 billion, taking a sizable chunk out of the projected $1.5 trillion deficit.—Anthony Randazzo

Spend Highway Funds on Highways 

Congestion causes gridlock on urban expressways, costing an estimated $76 billion per year in wasted time and fuel. The 50-year-old Interstate highways are starting to wear out and will need reconstruction costing hundreds of billions of dollars. The funding shortfall just to maintain the Interstate Highway System at a decent level is $10 billion to $20 billion per year.

The federal Highway Trust Fund was created in 1956 with a promise that all proceeds from a new federal gasoline tax would be spent on building and maintaining the interstate highways. But Congress reneged on the deal. First it extended federal aid to all sorts of other roadways. Next it allocated 20 percent of those “highway user taxes” to urban transit. Today a quarter of the total is used for such nonhighway purposes, including sidewalks, bikeways, recreational trails, and transportation museums.

So the Highway Trust Fund is effectively broke, spending more than what comes in from gas tax revenues. To some, the remedy is a big increase in those taxes. But why not revive the original deal?

Libertarians typically reject any role for the federal government in highways, urging a complete devolution to the states and the private sector. But even if you agree that a seamless national superhighway network should be federal, lesser highways should all be the states’ problem. And sidewalks, transit, and bikeways, needless to say, are local issues.

Simply reviving the original users pay/users benefit principle of the Highway Trust Fund could save the money spent on central planners’ pet projects while still allowing the authorities to maintain the system’s infrastructure. Indeed, the current federal fuel tax would permit an additional $10 billion a year in interstate highway investment. Combined with the selective use of tolling and other forms of road pricing, this change could slash urban traffic congestion as well, unlocking billions of dollars in economic productivity.—Robert Poole

Privatize Public Lands

The U.S. Forest Service owns more than 156 million acres west of the Mississippi River—an area nearly the size of Texas—making it one of the largest landowners in the West. Letting the states manage this land instead would take up to $5 billion a year off the federal books. It would also devolve decisions about how to use the land to officials who are more accountable to local citizens, be they environmentalists or businessmen.

Deficit-riddled states are certainly in no position to purchase this land outright today, but a payback period of 25 to 30 years (as with a standard home mortgage) could make these deals feasible. Once in state hands, some land could be sold off or put to better uses, though there would still be political pressure to keep large portions of it undeveloped. And states could choose to partner with the private sector.

Private companies currently operate the commercial activities—lodges, shops, restaurants, and the like—in such treasured national parks as the Grand Canyon, Yosemite, and Yellowstone. Similarly, the Forest Service makes extensive use of concessionaires to operate and maintain complete parks and campgrounds more effectively and efficiently than government.

States could use this model to take on new park lands without absorbing them into their budget. One Forest Service contractor in Arizona recently offered to take over six state parks targeted for closure amid budget cuts. The concessionaire would collect the same visitor fees the state charges today while taking the operations and maintenance costs off the state’s books entirely. Further, the company would pay the state an annual “rent” based on a percentage of the fees collected, turning parks into a revenue generator instead of a money eater.

Devolving federal land to states could begin with pilot programs in select states to test the model and refine best practices. Once perfected, the process could be extended throughout the Forest Service and then replicated in the Bureau of Land Management, which owns roughly the same amount of Western land and costs taxpayers another $1.1 billion a year.—Leonard Gilroy

End (or at Least Audit) the Fed

At the height of his 2009 P.R. offensive against the audit-the-Fed bill sponsored by Rep. Ron Paul (R-Texas), Federal Reserve Bank Chairman Ben Bernanke warned that opening the Fed’s books would diminish the central bank’s political independence and “could raise fears about future inflation, leading to higher long-term interest rates and reduced economic and financial stability.”

The audit-the-Fed and end-the-Fed movements have lost some steam since that time, and the Federal Reserve Transparency Act of 2009, which has 320 House co-sponsors, died a quick, quiet procedural death in the Senate. But the chairman’s words are worth remembering—because if there’s one thing that needs raising, it’s fear about future inflation.

The Fed more than doubled the monetary base in 2009. The depth of the deflationary spiral (primarily in real estate), a continuing “liquidity trap,” and a novel policy in which the central bank has begun paying private banks interest on their reserves have so far kept all that new money from causing significant price inflation. But the massive infusion of cash has also failed in its ostensible purpose of jump-starting economic activity. By keeping its foot on the gas, the Fed is already blazing a path toward a repeat of its disastrous behavior after 2001, when the central bank responded to the deflated tech bubble by creating an even more destructive housing bubble.

The Fed is the biggest bastion of central planning in the American economy, and eliminating it would both move us toward a freer market and remove history’s most powerful enabler of government waste. If that’s politically impossible, auditing the Fed would at least peel away the bank’s veneer of inscrutable wizardry to reveal the feckless dithering at the heart of U.S. monetary policy.—Tim Cavanaugh

Lisa Snell, Adam B. Summers, Anthony Randazzo, Robert Poole, and Leonard Gilroy work for the Reason Foundation, the nonprofit 501(c)3 that publishes this magazine. Versions of some of these pieces were originally published in The Washington Times.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    That chainsaw needs a way bigger bar on it.

  • ||

    Nothing will be cut. Much like Tobe Hooper's editing of the film.

  • Warty||

    All you need to cut is one item: waste, fraud, and abuse.

    Wait, is that one item or three? Or is each instance of waste, fraud, or abuse an item? Fucking Obama and his brainteasers.

  • Jack Bauer||

    I can easily think of hundreds of things to cut.

  • Wegie||

    But of course. Welfare and federal education programs.

  • Max||

    You assholes better hope the donations keep coming in because this shit will never do well in the free market place. It's just too fucking stupid for folks to buy.

  • ||

    Thus decreed Max, arbiter of the market.

  • Drax the Destroyer||

    But...donations are part of the free market you fuckface. People have freely chosen to give their money away to prop up Reason.

    Now the NYT on the other hand...well...you might have to force people to shell over their money for that worthless tripe of a rag.

  • Blind Bull||

    NYT trading at $7.83

    Common man, that's a growth stock! Everybody in!!!!

  • Brett L||

    Jesus. The physical plant and real estate must be worth $8/share.

  • Wegie||

    Obama has already thought of that.

  • Jorj X. McKie||

    You meant to post that here: http://www.pbs.org/

  • Wegie||

    Max...well not smart!

  • Max's Mom||

    Honey, you're tense. Come up from the basement and give Mommy some lovin'.

  • ||

    Is anyone else getting a little annoyed by this slasher flick stuff? Sure it's fun, but not exactly up to Reason's intellectual standards.

  • Max||

    Reason's intellectual standards? You're kidding, right?

  • Dave||

    I came here in the last month or so honestly looking to learn more about what Libertarianism is saying/defining itself today. Reading Hayek, Mises etc, in a true exploration of rethinking the corrupt system we are in.

    The tone of the posts here really reflects poorly on the Libertarian/Austrian economic community, IF that is what Reason is supposed to be a part of.

    Anyone have any other sites where people seriously discuss this stuff toward making an impact on the larger community?

  • ||

    Concern troll is concerned?

  • ||

    You will find some of the best arguments around with regard to public policy here. However, like any locker or chat room, it comes with a healthy dose of harsh commentary, trolls, spam, bots, and other stuff. Look past that and you can learn a lot.

    One thing I've found (at least here) about trolls: The more entertaining they are, the shorter their shelf life. And Max has been around forever.

  • Warty||

    Dude, the height of libertarianism is SugarFree's Nancy Pelosi slashfic. Stick around and be edumucated.

  • Drax the Destroyer||

    If you are disgusted by the harsh langauge, I know I am at least partially "at fault" for perpetuating it. But that's the nature of this horrible horrible place. We are pigs reveling in our own crapulence. Many of us can sense the FCC sensors willing to swoop down and turn this forum of filty langauge into a desert of white bread banality. So we are gettin' while the gettin's good.

    But for reference, you probably already know this, Mises.org has much more "informed" and less "gratuitous" discussion. Like I always say "Go to Mises if you want to intellectualism. Come to Reason if you want Sugarfree's Sarah Palin/Christine O'Donnell lesbian queeffest slash fiction".

  • -||

    The tone of the posts here really reflects poorly on the Libertarian/Austrian economic community, IF that is what Reason is supposed to be a part of.

    Reason (the magazine) is legit and worthwhile. But you're right about the commentariat. It's overrun with trolls and flamers and bored, frustrated, lowlife narcissists. Best bet is to read the articles and avoid the comments altogether.

  • Dave||

    I do find alot of comments informative and hilarious. And of course no FCC required. But my initial gut reaction, when looking for a like-minded community, and to learn more about it as a realistic alternative to the status quo, was, whoa, maybe this isn't the place. Just putting it out there.

    I definitely value a place to ask questions, whether pure, or devil's advocate-type, in response to Reason articles, to help flush out ideas and build cases to take elsewhere.

    Appreciate the comments.

  • ||

    Dave, you go find that place buddy. And when you get so depressed and sick and bored with the intellectualism and complete lack of hope it brings, we'll welcome you back with open arms.

  • Warty||

    This place is the most fun internet community I've ever found. We have discussions of varying seriousness, spew vile insults at each other, libel dickead lawyers, and I get a place to post metal links for you philistines to ignore. I'm sure the Reason Foundation is horrified at what this place has become.

  • Drax the Destroyer||

    Cyst-man, if I have a religion, Metal is it.

  • ||

    It's a great balance. After the hell that is Kos & the misery that is birth certificates & "muslins"- trying to find my way, this place is pret-ty comfy. I love this site.

  • ||

    I bailed out of HuffPo when I had to use terms like "@ss" and "h-e-doubletoothpicks".

  • LeSigh||

    You forgot one. Every once in awhile, someone figures out how to get around the image filter and we get to see lobster girl.

  • ||

    I want to see lobster girl!

  • ||

    "This place is the most fun internet community I've ever found. We have discussions of varying seriousness, spew vile insults at each other, libel dickead lawyers, and I get a place to post metal links for you philistines to ignore. I'm sure the Reason Foundation is horrified at what this place has become."

    Agree. I always get a good laugh out of what I read here from my fellow commenter's. And, believe it or not, I have actually learned something. I'll bet Reason is proud.

  • ||

    And the metal is always welcome.

  • DesigNate||

    +1,000,000 for metal

  • dave b.||

    Mises.org is #1 in my book for everything Austrian economics related, but Dailypaul is a close second.

  • ||

    Hey man, that's an open comment thread.

  • ||

    Reason is seeing the handwriting on the wall. Respected political analysts are talking about 100 seats going Republican and that is because of the Tea Party. Tea Party people will have no problem cutting crap from government even though some Republicans will, but back to Reason. Reason threw away all credibility when they sucked Obama off 2 years ago, and now they end up with the Kochs getting called out.

  • ||

    This is only slightly a threadjack but this just appeared at Huffington Post of all places:

    http://www.huffingtonpost.com/.....lide_image

    Myth: Herbert Hoover didn’t do anything to counteract the Great Depression (and FDR saved the day with The New Deal).

    Hoover tried many things, but sadly, America might have been better off if he hadn’t. But was the new guy— Franklin Delano Roosevelt -- really all that different? The truth is, most of FDR’s initiatives were simply continuations (or expansions) of Hoover-era policies. . . . their supposed differences are mostly the product of PR spun by both sides during the 1932 election.

    So why did a strategy that failed for Hoover work for FDR? Easy: it didn’t. In fact, the series of social and economic reforms enacted by FDR (collectively known as the New Deal) delayed recovery . . . .

  • Joe M||

    That entire article is a load of bullshit. The last sentence: "What really revived the American economy? War."

    Idiocy.

  • Drax the Destroyer||

    It would have been more accurate if it said "What really helped perpetuate the ever-increasing size of the state, while pulling the wool over the people's eyes as their money was devalued to kill barbarians abroad and entrench generations of bureacrats and government contractors? War."

    Idiocy indeed.

  • Jorj X. McKie||

    But, but, the Greatest Generation!

  • ||

    If it was war why did it not recover till after the war and after many of the most egregious market interventions were undone?

    That said at least it's not typical Keynesian progressive tripe.

  • JoshINHB||

    No, its much much worse.

    This reverence for the the economic salvation of WWII is becoming ever more popular to progs. Even Krugnuts has taken up the meme.

    Terrible times are ahead if the progs and establishment keep citing this myth.

  • Brett L||

    If we're gonna go after the Chinese, can somebody get us a Zombie MacArthur?

  • DesigNate||

    Zombie MacArthur would kick balls!

  • Krugnutz in 1946||

    But we have to keep the War Machine going! If we slash millitary spending aggregate demand will plunge, and we'll be back in the depression!

    Right Draco?

  • CrackertyAssCracker||

    It is impressive that they would ever admit any sort of similarity at all between Herbert-monocle-wearing-Hoover and Saint Roosevelt. However there is still lots of spin,straw men, and half truths spread throughout all the myths.

  • Venture Capitalist||

    From Bailey's DOE piece:

    federal R&D subsidies have utterly failed as a substitute for competition and the lure of profits

    Goddamn right! It is nigh impossible to get some wasteofspace scientist to fucking commit to a project. And why would they when the bulk of their salary is guaranteed by grant money. Fucking I've seen this disincentive closeup. It's maddening.

    You want innovation? You cut the funding balls off every scientist on the public teat. We'd be partying on Mars and every CVS would offer Compound-C™ OTC cancer balm in a decade.

  • IceTrey||

    There's a very simple way to fix the federal government. Repeal the 16th and 17th amendments (if they were even properly ratified) and get rid of the Fed (which is totally unconstitutional).

  • Dave||

    Can't we find some common cause here?

    http://www.truthdig.com/report....._20101005/

    If we are ever to move the debate forward, to win hearts and minds, don't we need to?

    While the author talks of taking care of the poor and unemployed, he also talks of dismantling the Corporate State. He is against the 2 party duopoly.

    Honest Libertarians do not want government favoring business, as it impedes the cause of true competition and thus true opportunity.

    Instead of preaching to the choir, why can't we find common subjects with others who think the status quo stinks, even if they are far from purists of our stripe, and show good faith by tackling some of the same corruption/failings we both see, using Libertarian principles and explanations, in good faith, and with patience. Waiting for everyone else to just jump onboard whole hog and come begging at our door for our wisdom, just doesn't seem productive.

    There is so much skepticism and outrage at the system out there. I bet we'll never see this opportunity again in our lifetimes for so many to be so receptive to new messages, alternative outlooks, now that the status quo is exploding in their face.

    We would be fools not to use this opportunity constructively, as opposed to burning bridges.

  • Dave||

  • ||

    I'm not sure you're cynical enough for these parts. Most of us have given up and are simply counting down to Armageddon.

  • Dave||

    lol

  • T||

    Not counting down, MP, stocking up: Bullets, spare parts, and canned food. You can't be an apocalyptic warlord without some prior planning.

  • Drax the Destroyer||

    Don't forget hookers, booker T washington. Sweet, non-english speaking, confused, lost, malnourished hookers. They also double as food.

  • Venture Capitalist||

    Food? Like dairy cattle? That would make their 'byproduct' veal.

  • ||

    Well, after one birth, they could produce milk indefinitely.

  • Nipplemancer||

    so we should stock up on bag balm as well?

  • Krugnutz in 1946||

    What MP said. Good luck with that. Really. You'll need it. I'm too far gone to even communicate with "those people" any more about anything political.

    For Example, education:

    'Normal' Person: "What do you think we should do about our education problem?"

    Me: "Ummm, I dunno. How bout this. Stop pointing a gun at me and making me pay for a unionized kidnapping and brainwashing apparatus.

    'Normal' Person: "You are insane".

    Me : "well, if not liking having my money stolen from me so that kids get kidnapped and brainwashed makes me crazy, then ya, I guess I'm crazy. Did you go to a public school?".

    Normal : "Of course I went to a public school, you Racist".

    -----

    Actually a whole series of debates like this in the vein of "Interview with a Zombie" would be fun.

  • Not Krugnutz in 1946||

    crap, forgot to change fake name.

    Oh well. This one will go down as anonyomus I guess.

  • ||

    If there's one thing that is clear in looking at this economy, it's that the people at the bottom, especially the sick and injured, are getting just too damn much. Kicking a bunch of people off of Medicaid so you can retrench to "block grants" -- what a great idea! That'll stimulate confidence and demand in an deflationary economy for sure. Thanks, brainiac!

    If there is a second thing that is clear about this economy, it's that we are not car-dependent enough, and our highway money needs to blacktop some more lanes to the exurban asteriod belt. Sidewalks? Bike paths? Good Lord! Next thing you know, some people might actually bike or walk instead of revving up the Escalade for a milk run.

    My oh my oh my. I just don't understand how these capital-L Libertarian geniuses can't get a foothold in the political process, even with their Koch money backing.

  • ||

    Put your titty back in, Adele.

  • ||

    "Kicking a bunch of people off of Medicaid so you can retrench to "block grants" -- what a great idea! That'll stimulate confidence and demand in an deflationary economy for sure. Thanks, brainiac!"

    Yeah, because if something is considered "stimulus" it can be justified warts and all.

    "If there is a second thing that is clear about this economy, it's that we are not car-dependent enough, and our highway money needs to blacktop some more lanes to the exurban asteriod belt. Sidewalks? Bike paths? Good Lord! Next thing you know, some people might actually bike or walk instead of revving up the Escalade for a milk run."

    When we have to appropriate additional funds for highway maintenance from additional taxes because the money that was supposed to go to highways is going towards local projects there is a clear inefficiency in the system. If you pulled your head out of your ass, you might realize that. Personally, I agree that the government over subsidizes auto transportation networks, but we at least have to raise the money to pay for maintenance in the short term until we can more radically alter the system. Why can't states that already have programs for funding sidewalks and bike paths just pay for such things on their own? You see, the issue is that the states get too many goodies from the Feds that make them complacent. If they were required to fund all of their own local projects without additional funding, the states would actually make smart choices based on cost and benefits. They might become a bit more efficient. If you really want bike paths, convince your local citizenry to pay more local taxes for such things.

  • ||

    +1

  • Venture Capitalist||

    My family member turned down a decent job b/c it meant having to pay for her own health insurance instead of staying on the dole. The cost of the private company's plan was greater than the salary difference between her current (dole-eligible) rate and the offered hourly rate. But yeah, keep disincentivizing the workers. It's really an awesome idea that positively impacts GDP.

  • ||

    So is your brood of bums and half-wits the standard of measurement for a nation of 300+ Million people?

    Is your your unverified anecdote rebuttal to broad national surveys showing seekers outnumbering openings something on the order of 5 to 1?

    How about this: I personally know somebody who wants a job but can't find one, dole notwithstanding. Have our little anecdotal assertions now cancelled eachother out? Are we back to zero?

  • Red Rocks Rockin||

    I'm amazed you actually seem to think that we can actually get out of this mess without experiencing quite a bit of pain first.

    Have you considered the possibility that deflation and cuts just might be inevitable, regardless of how long the government and the Fed try to play "extend and pretend"? What bullets do they have left in the gun other than QE2?

    And the bottom line is, unless you make cuts to more than one of the Big Five--SS, defense, Medicare, Medicaid, and/or unemployment/entitlements, we don't get back on solid fiscal footing. That's not conjecture, that's a mathematical fact--and if interest rates go back to 2007 levels, our debt obligation on the interest goes up another $600-800 billion/yr.

    What sort of economic engine is going to make up for 12% of GDP deficit spending? Are you really that eager to see the Shopping Mall Economic Model do another 35-year run?

  • Mr. FIFY||

    Danny has been snorting the Kool-Aid straight from the pouch again. Fuck that water and sugar, go for the pure stuff.

  • DesigNate||

    I don't even want to dignify your post with a comment, but I guess I just did.

    Libertarians can't get a foothold because douchebags like you think you know everything and that the government is responsible for taking care of every little fucking thing your pretty little head can come up with.

    The simple fact of the matter is that American's, on both sides of the aisle, are unwilling to make the tough decisions to cut their toes off so they don't lose the whole damn leg to gangrene.

  • Dave||

  • ||

    reduced to an awkward stammer when put on the spot by the all-important question, “So what would you cut?”

    Proper responses (take your pick):

    (1) "What have you got?"

    (2) "What would you like to cut? Is it OK with you if we start there?"

  • Dave||

    RE Privatizing Public Lands

    This was kind of interesting:
    http://www.ti.org/liberty.html

  • Dave||

    Nutshell:
    "Libertarians will be much better off if they work with, rather than against, environmentalists. To do so, libertarians must:

    Learn to think of the economy as an ecosystem;
    Not argue with environmentalists over technical issues;
    Instead, focus on the lack of property rights as the fundamental environmental problem;
    Play on environmental suspicions of big government; and
    In the case of federal lands, worry more about the incentives facing land managers than on who actually holds title to the land."

  • cynical||

    Sure, maybe when environmentalists learn to think of the economy as an ecosystem, and recognize that killing a displeasing corporate behavior through regulations may be the equivalent of killing an annoying pest that happened to play a critical ecological role. Also, when environmentalists learn to value human beings over abstract concepts like "the environment".

    Write me when that happens, k?

  • ||

    "environmentalists learn to think of the economy as an ecosystem"

    Actually I think most enviornmenalists not recongize that this is true. They just also know that the economy is a subset of the natural environement. So it needs to be containted so it doesn't over it, and thus kill the whole thing.

  • robc||

    Dude, you are going to burn yourself out preaching to the choir.

    Pacing is important.

  • ||

    One thing not mentioned in this article nor on C-Span this morning when this article was discussed is reducing or freezing federal salaries and benefits, including those for Congress. Government salaries at all levels have outpaced the private sector, especially at the upper end of the pay scale. If you look at the GS pay scale over time, you will see that it doubles about every 10 years. Without drastic changes, the current federal pay system is not sustainable in the long run.

  • Drax the Destroyer||

    But Paula, the Angels(Patent Pending) deserve a Lexus, BMW, and jail-bait mistresses!

  • ||

    If you supported the Bush tax cuts and/or the wars in Iraq and Afghanistan, kindly shut the fuck up about the deficit. Morons.

  • Demoshit||

    If you voted for a Democrat who went lock-step with Bush post 9-11 to start and continue pointless wars and voted for an adminstration that was cozily funded by corporations you claim to hate, shut the fuck up about the tax cuts. Penis Sheaths.

  • ||

    Seriously, kill yourself.

    If I vote Democratic, at least they can win a fucking election.

  • dunkel||

    YAY for you cuntpickle. Your team "who went lock-step with Bush post 9-11 to start and continue pointless wars and voted for an adminstration that was cozily funded by corporations you claim to hate" won an election. The giant douche beat the turd sandwich, and you see it as a WIN for you....

    ...not everybody can know anything...

  • ||

    YAY for you cuntpickle.

    LOL. Thanks for this.

  • Mr. FIFY||

    Libertaridan and Danny are now snorting the dry Kool-Aid. Be sure to recycle the pouches, guys.

  • Demoshit||

    Yes, convincing the deluded majority (you have kept deluded through your poor schools) to vote for your side by offering them free(read:stolen) shit is laudable indeed. Is winning a rigged game really winning? I suppose it is if you have no problem urging your opposition to simply die.

    If I vote Democratic/Republican, kill me, because I would have lost the ability to read AND breathe on my own.

  • ||

    I don't want to kill you; I said "kill yourself". It's in everyone's rational self-interest.

    No one's saying the Democrats are perfect, but they're clearly preferable to the GOP. Anyone who demands purity candidates like yourself doesn't live in the real world.

    And, by the way, if/when a Libertardian ever takes office, they'll fuck things up, too. Sorry to pop your little alternate reality bubble.

  • Demoshit||

    And sweet compromise has wrought what for us? Unsustainable policies? Perpetual dependents? Endless streams of pissed off vegenance-driven foreigners? Elected officials with no respect for the ideas that defined their positions in the first place? I think I'd rather shoot for perfection and fail, than shoot for whatever the fuck you call this bullshit and succeed.

    Oh, and FUCK everyone else's "self-interest". I've got a 6 O'Clock fuckfest with your mother that I can't be skipped (her checks finally stopped bouncing), and I'd like to see what is up with that Old Scallop smell.

  • ||

    LOL, psychopath

  • Demoshit||

    LOL, sadist

  • ||

    The intellectual prowess of progressives is truly awe inspiring.

    Obama: Singed PATRIOT act.
    Obama: Keeps gitmo open.
    Obama: Expanded war in Afghanistan.
    Obama: Bailed out his Wall Street banker buds.
    Obama: Is against gay marriage.

  • ||

    DERP

    I just lambasted someone for demanding purity from his political party, and you go and repeat the same dumb thing.

    Here's how party politics works (since none of you will ever get elected or vote for someone who will): it's messy. You have to make compromises in order to get things done.

    At least Democrats and Republicans are in the fucking arena. Libertardians just sit on the fence and throw stones. Assholes. Worthless human beings.

  • Translated Libertardian||

    At least Democrats and Republicans are willing to ruin people's lives across the planet for the sake of political "goals". Libertardians just want to be left alone and not intervene in other people's business. Assholes. Worthless Human Beings.

  • ||

    Yeah, right. I'm sure there are TONS of libertardians on Wall Street who "just wanted to be left alone" until they needed help.

    You're no more self-sufficient than anyone else in this culture. You rely on dozens, probably hundreds of people every day to prepare the food you buy, supply your power, police your streets, etc. etc.

    Whining fucks, all of you. Jesus.

  • Jordan||

    Somebody doesn't understand the difference between voluntary cooperation and coercion.

  • ||

    You have to make compromises in order to get things done. - Liberaltard

    What got done then? All those people who are can't afford their health insurance anymore? Big accomplishment that? Quadrupled deficit? Yeah that was ambitious. Massive monetization? (read tax on the poorest) That was sure a winner. Outrageous unemployment?

    You know you're right. Obama sure has accomplished quite a bit.

    Yeah, right. I'm sure there are TONS of libertardians on Wall Street who "just wanted to be left alone" until they needed help. - Liberaltard

    Citation needed.

  • Duopolist||

    Let him dick-ride Obama all the way off the cliff. There's nothing you can do with someone who buys beer and peanuts with food stamps, screams obscenities with his pants around his ankles, and believes that getting butt-raped by his own team is better then being skull-fucked by the other team.

  • 35N4P2BYY||

    Let's do a compare and contrast:

    Bush: Bailed out his Wall Street buddies.
    Obama: Bailed out his Wall Street AND Union buddies.
    Bush: Initialized two wars and expanded one
    Obama: Initiated the Afghan Surge
    Bush: Opened Gitmo
    Obama: Hasn't closed it.
    Bush: Is against gay marriage.
    Obama: Is against gay marriage.
    Bush: Expanded federal education spending with out any noticeable effect.
    Obama: Expanded federal education spending with out any noticeable effect.

    Yes, this two party system is sure giving the American people a wide variety of policy choices and options.

    But you go ahead and root for team blue or team red with the same intellectual depth and blind loyalism as that of a fan of a failed sports franchise, hope that it works for you. Guess so long as you do not have to think for yourself and reason your way through a complex issue then every things A-Okay. It probably is easier to barf up Maddow/Oberman/Rush/Hannity quotes than it is to actually gather and evaluate information for one's self.

  • ||

    My God. In an ocean of retards, you truly are Poseidon.

  • planodoc||

    Awesome. I will use this weekly or more.

  • 35N4P2BYY||

    Yes, you don't have that trademarked do you or is it public domain.

  • Raven Nation||

    OMG: this is my "fall out of my chair Reason laugh of the week." +100

  • Jorj X. McKie||

    In a world of assholes he's Uranus!

  • Greer||

    Unfortuately the article is titled "how to slash the state" but it nevers says how. It say What to cut not how to do it. (Which what most of this website it about, being outside looking in, bitching that if we only had the power...).

    Yeah, you cut Headstart program, and after school day care and you'd have every poor victim in the country crying about how the ONLY way they can have their kids in school is with Headstart, free lunch, and after school daycare. Then Jesse Jackson takes up the cause and even thinking this shit makes you a racist and a hater of the poor.

    Cut the DOE. Yeah, see how far you get with that.

  • Lord Ballsac||

    We either take the chemo or die from the cancer Greer. Unfortunately, most people don't recognize we have a "smoking" problem at all. Cancer it is then. See you on the other side.

  • ||

    Oh, you want a politically viable solution? That's the one we have now...spend 'til we're broke.

    Simply put, the voting populace will not accept the cuts that are necessary, and will continue to keep their collective heads in the sand until China phones in with a wake-up call.

  • ||

    Like sequels to Saw, the government just keeps coming

    Unlike the Saw franchise, it's actually scary.

  • COINTELPRO||

    But like Saw, it's a bloody mess created by sadists.

  • Matrix||

    unlike the bloody mess created by statists?

  • ||

    And the quickest way to reduce Pentagon spending is to end, as fast as physically possible, our ongoing occupations of Iraq and Afghanistan.

    Except, at least in theory, they are actually doing something there. Agree or disagree that they should be or are successful but at least there is some actual fighting going on there.

    If you want to reduce the military budget, end the 60+ year occupation of Germany and Japan. Remove our human 58,000 man shield from Korea. How many are policing the Balkans? There isn't ANY justification for our continued massive deployment in those areas.

    Afghanistan and Iraq remain a contentious position. Our forces in Europe should not be.

  • Raven Nation||

    Yeah, this is a point (in the original article) that needs to be thought through more. I'm ambivalent about both wars (which is a move away from supporting both originally). But you can't cut a military budget if the ONLY reason is to save money. Getting out of Germany, Japan, Korea, makes sense & can be explained both fiscally and strategically. Of course, if Obama were to promote this, the Repubs would immediately start screaming he was soft on defense. And given that he can't really be bothered explaining things to people...

  • ||

    Well, who's going to protect Germany from Germany?

  • ||

    overall some great ideas here, although I notice they didn't mention Medicare, or SS. Also, I'm not a fan of making the Federal parks state parks just to do it. Seems like it's just passing the buck. But overall a pretty good start.

  • ||

    Except where our troops are engaged in actual warfighting, they shouldn't be deployed in any countries right now.

    No troops in Europe, Japan, Korea, etc.

    Demobilize formations as they come home, with restructuring to maintain a skeleton cadre in case we need to remoblize.

    OK, I've cut the military. Can I start on entitlements and discretionary spending now?

  • ||

    +1

  • Brett L||

    Oy. I can hear the shrieking now. Not only are you opening us to invasion by Costa Rica, you're going to put millions of veterans out of work. Why not drive around with baby-skin leather in your oil burning '61 Caddy?

  • JoshINHB||

    Federal Reserve Bank Chairman Ben Bernanke warned that opening the Fed’s books would diminish the central bank’s political independence and “could raise fears about future inflation...

    I think big Ben is worried that an audit will limit his ability to create inflation.

  • dave b.||

    I'd just adopt the Rockwell30-day plan.

  • ||

    Why not drive around with baby-skin leather in your oil burning '61 Caddy?

    The baby-skin upholstery is in the Rolls, that's why. The one that runs on the tears of orphans.

  • Brett L||

    At least the fuel is renewable as long as there are evil libertarians.

  • Wegie||

    Not a bad list, but a pipe dream.

  • ||

    Another way we save money is by getting out of the U.N. I'm tired of us wasting time and money on an organization that expects the United States to be the world's welfare office.

  • 35N4P2BYY||

    +1ish

    The United Nation as it exists now is a complete waste of space, any body that counts the vote of despotic, autocratic states the same as liberal democracies has zero credibility with me.

  • ||

    Move the UN to Libya. Then require all the ambassadors will have to wear Sergeant Pepper's Lonely Heart's Club Band uniforms like Kha-Daffy. Then we'll see progress.

  • Orel Hazard||

    Method #15:

    Adopt nationwide the Obion County, TN free-market fire department response. Preserves negative rights AND saves on water!

    http://www.wpsdlocal6.com/news.....52668.html

    (Note: some conflagrations may occur).

  • ||

    1. Starting with the highway trustfund and going forward without room to change: All federal programs collecting money in a "trust fund" or similar purpose-oriented manner MUST operate to achieve that purpose only (highway funds for highways).

    Bikepaths are great, but they should be paid for by the users just as the interstates are paid for by the truckers.

    2. Ag subsidies should be canned except for the Conservation Reserve Program (which encourages people who own marginal land to leave it in wildlife condition and builds habitat.)

    3. The FCC should not be canned. It should be refocused on maintaining order in the RF spectrum. There are simply too many people who would ride roughshod over the smaller users (and used to do so before the FCC) to make the RF spectrum self-governing. The indecency issues should be regulated by a body composed of people living the central time zone for whom the problem is most acute.

  • ||

    Speaking as someone from the Central time zone, you don't want any Midwest goobers deciding what is and what is not indecent.

  • Some Guy||

    Yes, we need the FCC as a spectrum cop. But no, there should be no government power over the content. If you think something is indecent, change the channel.

  • ||

    Turning the channel works. It becomes a recurring pain in the butt in the Central Time Zone due to the difference between when primetime TV starts and when little kids go to bed.

    In the East and West Coasts, kids go to bed at 8. Primetime TV starts at 8. If NCIS wants to show a decapitated Navy officer at 8:15, no problem for the Coastals. Its every Tuesday for us. So we always get to play TV control cop. We always get to deal with the hassle. Thus my comment that the Central Time Zone people should be the ones that decide indecency. If we have to live with the biggest share of the hassle, then we should be the ones that determine how much hassle we will be willing to deal with.

  • ||

    The only way to fix any country's health care is to obliterate health insurance and government healthcare all togther.

    Unfortunately, without government intervention, that idea becomes rather impossible.

    With that being said, there should be no medical assistance from the government whatsoever. Not medicaid or Medicare or SCHIP, or anything of the such.

    In addition, employers should not subsidize health insurance, just as the government should not subsidize it.

    The idea is to create an explosion of free-market small-business insurance companies rather than giant corporate based insurances.

    This would force contracts to be revised, and force doctors to compete more in the market...

    The problem is basically healthcare is too expensive. Doctors deserve to be wealthy, sure, but they should get that way by selling commodities and services that people can trade real property/cash for. $500 for a consultation, and $3,000 for a pill of valium and an IV bag is absurd for one visit.

    The cost of medicine, procedures, consultations, exams, etc, etc is insanely inflated.

    Health insurance companies and government both caused this inflation to happen.

    get rid of them both.

  • Tony||

    What do you call someone who advocates for getting rid of both government and entire industries he doesn't like?

  • ||

    Do you think that having the government and a few large corporations running healthcare is better than thousands of competitors in the private sector all offering different levels of coverage?

  • Tony||

    Yes.

  • DesigNate||

    Your answer was obvious, but at least you are consistent.

  • DesigNate||

    Don't be his porn.

  • ||

    If we really want to "Slash" government, then we need to stop relying so heavily on government.

    What needs to happen is an invention of non-government based currency. Something that is widely recognized by companies, citizens, and groups of individuals as real currency but cannot be taxed by the government.

    In essence, we're talking about a complete revolution against the government and state. A pure seperation of business and state.

    Before this can be a reality, we must first start introducing alternative forms of cash and credit not authorized, produced or controlled by the government.

  • Coeus||

    It's been tried before. The government always shuts them down when they start getting successful.
    See: Liberty Dollars

  • COINTELPRO||

    I think Wired once did an article about how e-currency is like this. So it could happen, as long as the government doesn't get it's hands on the internet.

  • The Bearded Hobbit||

    Finally got around to reading the article. Very nice, folks. Instead of panty-wringing and pearl-clutching you actually offer real-world ideas (mostly).

    Minor nitpicking that in some cases you're shuffling from one government program to another. For example, moving nuclear weapons and waste programs to the Pentagon still means that they are still funded only this time from Peter instead of Paul.

    ... Hobbit

  • The Bearded Hobbit||

    Crap, take out the extra "still" as appropriate.

    Preview is your friend.

    .. BH

  • roguepatriot||

    "so that taxpayer money is spent more productively, the remaining government services perform better"

    after this, the article became TL;DR

    The existence of the state is the problem, rather than not be efficient enough. Remember, our government was once small. Make it small again, and it will grow back again.

  • ||

    Crybaby anarchist drivel.

  • roguepatriot||

    I like Libertarians and love this site. That said, calling me a crybaby is the pot texting the kettle "black".

    These days, anyone who's opposed to this monstrous federal government is a crybaby.

    So yes, I'm a crybaby and proud of it.

    :-)

  • ||

    awww, there there.

  • COINTELPRO||

    I occasionally flirt with anarchism, and it is a valid point. In fact, anarchism could possibly work with dealing with conflicting ideologies. Every political stance can create their own commune...things, which wouldn't need laws because everyone who moved there did so voluntary and would have the same attitudes towards problems. If you're a feminist who disagrees with Muslimville, you move to Femtown. Only problem is dealing with major infrastructure like roads and internet cable and defense against insurgence. But of course, this is why I only flirt with anarchism instead of taking it home with me.

  • 35N4P2BYY||

    Here is my issue with anarchy, while I do accept that it is a logical conclusion of libertarianism. I see it based on the same "if everyone plays nice it'll work" assumption that shit-canned communism.

  • COINTELPRO||

    Yeah, that's another reason why I'm not an anarchist. But it doesn't stop me from fantasizing about it when I get tired of listening to partisan douchebags on campus and in the media. If there wasn't a government, they'd all be out of a job. :3

  • 35N4P2BYY||

    I have the same gag reflex as well.. I have yet to be able to make intellectual peace with the idea of no government.. I think the concept of negative and positive rights is what I have gotten the most use out of in Libertarian philosophy.

  • roguepatriot||

    Am I a pure anarchist? Probably not. But I'm opposed to the IRS, wars, censorship, prohibition, subsidies, entitlements, and just about public anything. Anything can be privatized: roads, police, fire, schools, etc.

    I suppose you would need a commonality to protect God-given (natural) rights so that there aren't any pockets of tyranny.

    That said, nothing is perfect, not even ourselves.

  • ||

    "Anything can be privatized"

    Yes almost anything can be privatized. That doesn't mean it's the most efficeient way to do it. The economists definition of public vs private goods is usually a pretty good guideline.

  • The Bearded Hobbit||

    What's the difference between and libertarian and an anarchist?

    About two years if you're paying attention.

    ... Hobbit

  • COINTELPRO||

    I wish the article told you how to cut government instead of what to cut in government. If you've followed Reason for a reasonable (no pun intended) amount of time, you could have expected these items to be suggested. But unless some sort of libertarian rapture occurs, voting libertarian won't fix things. Not paying taxes or disobeying laws gets you arrested, expatriation is difficult and only prolongs the inevitable, and, as screwed up as things are today, I doubt the government will topple in my lifetime. Also, I'm pretty sure bloody coups go against the non-aggression principle.

  • Coeus||

    Also, I'm pretty sure bloody coups go against the non-aggression principle.

    Possibly, but at a certain point they can be justifiable self defense.

  • ||

    Protesting beyond the law is not a departure of democracy; it is absolutely essential to it.

  • ||

    Justifiable but futile.

  • Mr. FIFY||

    OT, but disturbing:

    http://www.news-leader.com/art.....pringfield

    Biden cannot be photographed during his visit to this Missouri city. It's like he won't even be here.

  • ||

    We can all do our part. Vow to cheat at least 10% on our state and federal tax returns this year. And every year thereafter. Makes little difference unless everyone does it, but it makes you feel better so it'd appeal to the libs and rinos. I'm up to about 20% now and feel invigerated. I get hard a lot more often too.
    Oh, and barter whenever, wherever you can.

  • ||

    I'm trying to find some reason to disagree with any of the suggested cuts but I just can't find one. Spot on once again, Reason Staff.

    I only weep because I know precisely none of them will be done in the next 2-6 years (and most likely beyond that)

  • Sharon Bach||

    Amen to scrapping Medicaid! My daughter was uninsurable due to asthma. She went from ER to ER and despite a "pcp" who could not order tests for her or see her in the hospital because of her lack of insurance, she got sicker and sicker. Finally her liver failed. Cedars social workers got her approved for SSI (only way to get MediCal in CA). When her liver again failed, the hospital to which she was taken "stabilized" her but did not admit her BECAUSE she was a MediCal patient!!! In other words, had she still been uninsured, they would have admitted her and she would be alive today! Instead they transferred her to an inferior hospital that ignored her condition until she went into a coma. After 2 days, they FINALLY transferred her to UCLA where she underwent an emergency liver transplant. Unfortunately the hepatic encephalopathy had caused too much pressure on her brain stem by the time she reached UCLA and hence after a week of watching and waiting, was declared brain dead. The staff seemed very eager to get their hands on her "other" organs. I agreed because Belinda was the kind of person who would want to share the gift of life with others but also felt pressured because it meant they would leave her on the ventilator for one more day so we could say our goodbyes instead of disconnecting her within the hour! Belinda Bach 1979-2007, sadly missed by family and friends. "Stand still in the moment - paint the canvas of your mind" Belinda Bach "Time"

  • Sharon Bach||

  • ||

    It is my understanding that there is a private audit of the Fed every year which is reviewed by the US Auditor General and a report is then presented to Congress. Am I incorrect on this point?
    Sincerely,
    TR Smith
    Star Valley, Wyoming

  • ken||

    For stories on what international Libertarians are doing, page down http://www.Libertarian-International.org

  • ||

    The occupation of Iraq and Afghanistan has been over for more than 5 years. We continue to support the allied Iraqi and Afghan governments. To leave our allies to fight our common enemies alone would be shameful, and should be avoided.

  • ||

    I suppose we could start the cutting with with the unconstitutional departments of Education, Agriculture, Health and Human Services, Housing and Urban Development, and Labor. Then we could move on to the real tough questions.

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    First, cut off any federal, state, or local social welfare programs to any legal immigrant and to all Illegal aliens, why should they have welfare when they are not citizens, especially the illegals. Next close down the office of refugee resettlement and cut out their welfare and close the borders. This will have a massive effect on the budget. It is a privilege to come to this country, not a right.

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