Monday, October 7, 2013

Budget Solution - Draconian

Over at Market Ticker, Karl Denninger is proposing a more than slightly draconian solution to the budget problem:
Here's what Boehner should do as Speaker:
Bring the bills to the floor under regular order to fund government departments at the level of existing tax revenue and no more.  In other words, fund programs such that there will be a zero deficit.  Pass those bills and send them to the Senate.
Then adjourn "sine die" and go home!
He proposes the house not come back until the 2014 elections are over. I'm pretty sure there are at least a few things the House actually needs to vote on between now and than but there is the happy possibility that no further damage would be done for a period of one year. That alone should set the markets soaring.

Of course the next obvious thing would be to pass legislation funding each of the various departments at some percentage of actual tax revenues for the year, with the caveat that the total could not exceed 100% of available funds, and let it run like that. If someone wanted to increase funding for the Department of the Interior, the money would have to come out of some other departments hide.

In a good year, markets would surge, tax revenue would climb, and the government would grow. Of course this would cause the economy to tank and tax revenue to drop leaving the alternatives of either layoffs in government or massive borrowing from the Chinese.

If at the same time, borrowing was limited to times of declared war with active military operations, I could see a balanced budget happening fairly easily and no politician having to take the rap for big government layoffs as the circumstances would be out of his control.

1 comment:

Brad K. said...

One of the things the House should properly do is pass a 2014 budget.

But I hate to think what Obama might undertake, if the House were in long term recess. Recess appointments? What if the Senate approved the plan and also closed down? Would that result in recess "approval" of international treaties, including treaties that over-ride the Constitution on civilian gun ownership, already signed?

What about the President declaring a state of emergency, and adopting extraordinary powers akin to dictatorship -- and dissolving Congress?

I would *not* like to see any part of Congress cutting off watchdog responsibilities, even if they are lax about such requirements today.

Remember -- this is the President who "cannot wait".