Smashing the “monsters”: It’s time to address the national debt

With the national debt rapidly approaching 20 trillion, it is truly remarkable how little attention the national deficit is receiving in the daily political debate between the Republican administration and the Democratic opposition but also by media and public. Everybody understands that at this rate the growing national deficit is not sustainable, and will bankrupt the country. But even maintaining the deficit at current levels burdens our children and grandchildren with unfair obligations, which we did not inherit from our parents and grandparents and, therefore, should not pass on to the next generations.

The almost uniform rejection of next year’s budget proposed by the Trump administration as “cruel” by Democrats and the left-leaning media, and as “unrealistic” by many Republicans and the right-leaning press, is, therefore, disturbing since even that budget proposal is likely inadequate, as it at best only maintains expenses at current levels.

Even more so than President Reagan after four years of Jimmy Carter’s presidency, President Trump, after eight years of Obama’s two administrations, must start rebuilding a by budget cuts devastated, U.S. military, likely at its weakest since before WWII, while facing the most dangerous geopolitical period since the end of WWII. Expanding the defense budget is, therefore, not an option but a must, even though waste and fraud at the Pentagon must also be eliminated concomitantly. Despite the universal sequester, few other federal government agencies have suffered as badly as defense since none of the other bureaucracies requires as quick replacement of used up resources as the military. Paradoxically, because of the ability to move funds between purposes, often at discretion of individual government departments, many agencies, even during the sequester, still succeeded in expanding staffing and raising salaries.

Since they were considered safer than jobs in private industry, government jobs used to offer lower salaries than the private market. Today, because of the political strength of government employees’ unions, government salaries exceed those of the private employment market, even though government employment is still considered a life-time job. Lacking therefore any motivation to innovate, the government bureaucracy has become a self-perpetuating steadily growing “monster” that consistently expands its political and economic clout. If the “monster” is not stopped soon, it will become unstoppable!

No private company could economically survive human and budget resource management like the government’s without adjusting growth, employment and salaries in accordance to market conditions, budget restraints, overall company performance and general economic circumstances.  Yet, even under Republican political hero and father of the last major tax reform, President Ronald Reagan, the size of government continued to expand, though at slower pace. Government cannot continue to grow unlimited just because it can. The expense is threatening to bankrupt the nations.

After decades of uninhibited bureaucratic expansion, every government department must be forced to radically cut expenses. Businesses attempting to cut cost to enhance productivity routinely cut budgets by 15-35%. The proposed Trump budget just mimics what is happening in private business every single day of the years, and, under Democratic and Republican administrations, has been overdue in government for decades. There simply is no reason why similar cuts and improvements in productivity should not also be possible in government, including the Department of Defense.

That Defense must receive significant additional funds does not mean that the rapidly expanding military bureaucracy at the Pentagon does not require drastic cuts, and that notoriously wasteful and overpaid acquisitions by the Pentagon do not have to stop. Neither defense nor health other “holy cows” within government can or should be excluded from radical budget reevaluations, with every useless program shut down and useful programs reassessed as to how they can be made even more productive.

Like in private business, these processes must become engrained in the routine DNA of government. Health care programs are timely examples, considering that the country’s health care system is, once again, under review, Health care represents between one-fifth to one-sixth of the national economy, with government and private industry currently still sharing responsibilities. Government influences have, however, steadily increased, whether through government offering health care coverage, for example through Medicaid, Medicare and the Veterans Administration, and, more recently, of course, via Obamacare.

But government influence on health care goes far beyond that: Nowhere has the outcry about proposed budget cuts been louder than at the National Institutes of Health (NIH), which with federal funds administer two gigantic, though separate research programs. The so-called intramural program employs hordes of scientists, mostly around Bethesda, Maryland but also in the Research Triangle in North Carolina and some other places around the country and, like other federal agencies, practically guarantees lifelong employment. In addition, employees of this intramural NIH program, however, also receive lifelong research support from the government. On paper, funding is reviewed by peers and, therefore, competitive; but, in truth, a scientist in the intramural program does never have to compete for research support a fiercely as scientists outside of the NIH, who applies to the second program administered by the NIH, the so-called extra-mural program. The funding rate for the extramural program has, indeed, so badly deteriorated that many excellent investigators, simply, no longer find it time-efficient to even apply because even highly rates proposals never reach the funding threshold.

This important because having a system that discourage smart young investigators from submitting applications, is self-defeating. But, instead of acknowledging this fact and reducing funding for the intramural program, the NIH bureaucracy, of course, has always been more concerned about themselves and their in-house staff than about investigators on the outside.

A recent visit to the NIH confirmed this all over again because, while everybody was “really upset” about the potentially impending budget cuts for the NIH, nobody was particularly worried about the intramural program. Everybody was, however, absolutely convinced that the budget cuts would be devastating for the extramural program. The bureaucrats and their cronies at NIH, of course, would be the last ones to suffer.

This is, unfortunately, exactly what has been happening in every government office for decades, whether at city, state or federal levels. We have become a country where the government bureaucracy no longer primarily works to benefit the citizenry but primarily for best interests of themselves, the bureaucrats.

This is not to mean that non-government organizations may not become equally corrupted. Have you ever tried to speak to somebody at Verizon’s corporate offices, and gotten a worthwhile response? But, in private industry, if a company for whatever reason fails to be responsive to its clients, it is only a question of time until the consumer will punish the company. Therefore, the private company will either straighten out or the economic losses to management and ownership will be substantial (look what happened to United Airlines!).

The not-for-profit sector in many ways increasingly mimics government and, indeed, often fully overlaps with government bureaucracy. Especially the enormous power of the teachers’ unions over the Democratic party is a good example: bureaucrats caring little about the school children but sparing no efforts to enhance the interests of teachers and administrators. The same can be said about the private college industry, which for decades has been defrauding college students with empty promises by inducing them to borrow exorbitant amounts of money to pay college tuitions, fully aware that most will never be able to repay the loans with the salaries they will draw following often sub-par education from often invisible professors with life-long tenure.

All of these self-serving bureaucratic “monsters” must, ultimately be smashed to release the inherent competitiveness that is required for efficient functionality of economic systems, whether in private business, the not-for profit sector or the quasi not-for-profit government bureaucracy. A good start would be allowing federal employees to be hired and fired like their counterparts in private industry. Colleges would also do well if they did away with the outdated concept of life-long tenure. If we get to the point where everybody, physically and mentally able, earns his/her upkeep, society’s efficiencies will be more than adequately capable of taking well care of those who do not have the facilities to do it for themselves.