If any chief executive officer in the United States of America presented his board with a budget that was one-third unfunded, he would be fired and tossed out of the boardroom immediately.
President Obama recently revealed a $3.8 trillion budget for FY2011 that has a $1.3 trillion deficit. This budget short fall represents $4,000 for every man, woman and child in America. It is equivalent to a business CEO presenting his board of directors with a financial plan to have a 34 percent loss. This is on top of a $1.6 trillion deficit in FY2010 which is equivalent to a 40 percent business loss.
No bank in the world would finance a business with the losses (i.e. deficits that the U.S. government has had over the past few years.) The bankers would send the business executives back to the drawing board to restructure the company. This would include cutting personnel, reducing compensation and benefits, restraining travel and cutting commitments for services and capital expenses.
If the business executives could not eliminate the loss, the company would go into bankruptcy for the court to restructure or liquidate.
Unfortunately for our children and grandchildren, the U.S. government has another way to finance its losses. It transfers the payment of these losses to future generations of taxpayers by increasing the national debt. This deficit will increase the national debt to $15.7 trillion or 101 percent of the gross domestic product, or GDP. This is equivalent to $47,000 of debt for every American!
Mortgaging the future of American taxpayers should not be an acceptable option to the American people.
Our president has made anemic gestures to reduce spending in his budget in certain non-discretionary areas. However, these symbolic gestures take place after this fiscal year. If Mr. Obama truly and sincerely wishes to reduce the deficit, he must take similar actions that everyday U.S. corporations implement when confronted with huge losses.
Unfortunately, companies reduce their losses by cutting their workforce, reducing levels of employee compensation and eliminating all unnecessary spending to meet the shortfall. The U.S government, on the other hand, continues to increase its workforce in this great recession and is promoting and increasing the salaries of all government employees. It also has increased spending on new programs.