Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Thomas Sowell: Another Spending-Cut Plan. Cut Subsidies to Billionaires!
National Review ^ | 04/12/2011 | Thomas Sowell

Posted on 04/12/2011 6:27:10 AM PDT by SeekAndFind

Since everybody seems to be coming up with plans on how to cope with the skyrocketing national debt, let me try my hand at it too.

The liberals’ easy solution is just to increase taxes on “the rich.” But, if you do the math, there aren’t enough of “the rich” to cover the huge and record-breaking deficit.

Trying to reduce the deficit by cutting spending runs into an old familiar counterattack. There will be all kinds of claims by politicians and sad stories in the media about how these cuts will cause the poor to go hungry, the sick to be left to die, etc.

My plan would start by cutting off all government transfer payments to billionaires. Many, if not most, people are probably unaware that the government is handing out the taxpayers’ money to billionaires. But agricultural subsidies go to a number of billionaires. Very little goes to the ordinary farmer.

Big corporations also get big bucks from the government, not only in agricultural subsidies but also in the name of “green” policies, in the name of “alternative energy” policies, and in the name of whatever else will rationalize shoveling the taxpayers’ money out the door to whomever the administration designates — for its own political reasons.

The usual political counterattacks against spending cuts will not work against this new kind of spending-cut approach. How many heart-rending stories can the media run about billionaires who have lost their handouts from the taxpayers? How many tears will be shed if General Motors gets dumped off the gravy train?

It would also be eye-opening to many people to discover how much government money is going into subsidizing all sorts of things that have nothing to do with helping “the poor” or protecting the public. This would include government-subsidized insurance for posh and pricey coastal resorts that are located too dangerously close to the ocean for a private insurance company to risk insuring them.

This approach would not only circumvent the sob stories, it would also circumvent the ideological battles over whether to cut off money to Planned Parenthood or National Public Radio.

The money to be saved by cutting off agricultural subsidies to the wealthy and the big corporations is vastly greater than the money to be saved by cutting off Planned Parenthood or National Public Radio, much as they both deserve to be cut off.

If spending cuts are to be done strategically, a good strategy to follow would be that of General Douglas MacArthur in World War II. General MacArthur realized that he didn’t have to attack every Pacific island held by the Japanese. He captured the islands that he had to capture, in order to get within striking distance of Japan.

In peace as in war, there is no point wasting time and resources attacking heavily defended enemy positions that you don’t have to take.

Social Security and Medicare are supposed to be among the most difficult programs to cut. However, it is not necessary to attack all the spending on these programs in order to make big savings.

Instead of attacking these programs as a whole, what is far more vulnerable is the compulsory aspect of these programs. If Medicare is so great, why is it necessary for the government to force people to be covered by Medicare as a precondition for receiving the money they paid into Social Security?

Many people with private health insurance would rather continue to rely on that, instead of being trapped in Medicare red tape. It is not a question of taking away Medicare but allowing people to opt out, saving the taxpayer from having to subsidize something that many people don’t want.

It is not a question of forcing people off Social Security either. But private retirement accounts can offer a better deal.

Even someone who retires when the stock market is down is almost certain to get a bigger pension from a decent mutual fund than from Social Security.

By giving young people the option, while continuing to honor commitments to retirees and those nearing retirement age, the sob-story defense of runaway spending can be nipped in the bud.

— Thomas Sowell is a senior fellow at the Hoover Institution


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: billionaires; sowell; spedning; spendingcuts; subsidies; thomassowell

1 posted on 04/12/2011 6:27:14 AM PDT by SeekAndFind
[ Post Reply | Private Reply | View Replies]

To: SeekAndFind

Left out the billions in welfare to worthless defense contractors. I would bet money someone somewhere is still making jeep parts for the army.


2 posted on 04/12/2011 6:31:43 AM PDT by org.whodat
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

The Federal Ponzi Scheme is collapsing. It resembles the Fukishima Nightmare. A smoking pile of toxic rubble with no solution. Massive inflation and money printing is the only way they will ever pay the bills.


3 posted on 04/12/2011 6:33:22 AM PDT by screaminsunshine (Democrats have spent...More than the Republicans have.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: org.whodat

Agree. I have stated many times on FR that you cannot have true fiscal sanity without cutting the billions in overhead, G&A and fringe costs the US government pays out to defense contractors. It is incredible that we allow the Lockheed Martin’s, Northrup Grummans, CSC’s, BAE’s of the world to charge 100 percent overhead


4 posted on 04/12/2011 6:37:43 AM PDT by MadIsh32 (In order to be pro-market, sometimes you must be anti-big business)
[ Post Reply | Private Reply | To 2 | View Replies]

To: SeekAndFind

Eliminate ethanol subsidies.

Let corn be corn


5 posted on 04/12/2011 6:38:59 AM PDT by y6162
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

Dr. Sowell is right, but I can’t see Congress kicking their big contributers off the gravy train.


6 posted on 04/12/2011 6:39:33 AM PDT by ComputerGuy (HM2/USN M/3/3 Marines RVN 66-67)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

Corporate welfare isn’t any better than welfare for the poor. In fact, it’s arguably worse. On the other hand, even though it should be a political slam dunk to cut off subsidies to billionaires, Mr. Sowell fails to mention the considerable political influence these special interests wield in DC. Senators, for example, get pretty touchy when one talks about cutting corporate subsidies in their states.


7 posted on 04/12/2011 6:43:13 AM PDT by CitizenUSA (Coming soon! DADT...for Christians.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

We should do what Sowell suggests and raise taxes on billionaires.


8 posted on 04/12/2011 6:46:11 AM PDT by edmund burke fan
[ Post Reply | Private Reply | To 1 | View Replies]

To: edmund burke fan

RE: We should do what Sowell suggests and raise taxes on billionaires.

Sowell suggested ENDING SUBSIDIES for billionaires, where in the article did he suggest raising taxes on them?


9 posted on 04/12/2011 6:48:26 AM PDT by SeekAndFind
[ Post Reply | Private Reply | To 8 | View Replies]

To: SeekAndFind

I think we should quadruple the taxes for:people in the movie, television entertainment and music industries, as well as professional basketball players and union leaders.

US life has been good to them. Let them contribute their “fair share.”


10 posted on 04/12/2011 6:53:30 AM PDT by eCSMaster (2012 - End of an error)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

Why don’t we put Thomas Sowell in charge of the Republican Party? It might revive with him directing it.


11 posted on 04/12/2011 6:58:27 AM PDT by RoadTest (Organized religion is no substitute for the relationship the living God wants with you.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

We should do what Sowell suggests as well as raise taxes on billionaires. That will get our debt paid down even faster.


12 posted on 04/12/2011 7:09:38 AM PDT by edmund burke fan
[ Post Reply | Private Reply | To 9 | View Replies]

To: SeekAndFind

IIRC, The Goreacle receives one such subsidy for a mining operation in TN.


13 posted on 04/12/2011 7:11:52 AM PDT by Cletus.D.Yokel (Islam is a violent and tyrannical political ideology and has nothing to do with "religion".)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SeekAndFind

The man just has so much common sense! Sarah Palin ought to ask him to be one of her Economic Advisors!


14 posted on 04/12/2011 7:23:21 AM PDT by SuziQ
[ Post Reply | Private Reply | To 1 | View Replies]

To: MadIsh32
It is incredible that we allow the Lockheed Martin’s, Northrup Grummans, CSC’s, BAE’s of the world to charge 100 percent overhead

They are not "allowed" to charge 100 percent overhead. They are audited on direct and indirect expenses and then SOME of the costs that otherwise commercial businesses would be able to recover in their cost of sales are allocated to overhead accounts. There are many "unallowable" costs that cannot be included in the overhead rates.

15 posted on 04/12/2011 7:40:11 AM PDT by VRWCmember (Veritas vos Liberabit)
[ Post Reply | Private Reply | To 4 | View Replies]

To: edmund burke fan

sniff...sniff


16 posted on 04/12/2011 7:52:39 AM PDT by stylin19a
[ Post Reply | Private Reply | To 12 | View Replies]

To: VRWCmember

I know DCAA, DCMA, etc all audit constantly. New rates are issued at random times throughout the fiscal year.

I have worked now for 2 multi billion dollar defense contractors inside the beltway doing proposal work. I know how the system works and its a major fraud to the American tax payer.

Unallowable costs typically end up being if you are stupid enough to put on your reciept “Bunny’s adult entertainment club”

All contractors low ball the hell out of their proposal and request change orders over the life of the contract to “get well.” Overworked and incompetent CO’s agree, and boom the tax payer is getting fleeced while the CEO’s of these contractors are making 10s of millions off the tax payer.

I view them (the CEOs and high levels of these contractors) the same way I view welfare queens-useless people living off the dole of the government


17 posted on 04/12/2011 7:57:21 AM PDT by MadIsh32 (In order to be pro-market, sometimes you must be anti-big business)
[ Post Reply | Private Reply | To 15 | View Replies]

To: org.whodat
"I would bet money someone somewhere is still making jeep parts for the army."

That's a pretty cynical view. How do you expect the B-17 mechanics and flight crews to get around the airfield?

18 posted on 04/12/2011 8:03:51 AM PDT by Joe 6-pack (Que me amat, amet et canem meum)
[ Post Reply | Private Reply | To 2 | View Replies]

To: MadIsh32

It is a bit more complicated than you are representing.

Unallowables are tracked very closely, and there are a lot of legitimate expenses in the commercial business world that are unallowable on government contracts.

A big part of the “overhead” and administrative costs that are factored in and recovered is the extreme cost of compliance with all the ridiculous and excessive regulatory costs associates with government contracts. Certifications, internal and external audits, and various other oversight costs mandated by the government impose significantly greater costs on governemnt contracts than all the fraud and greed and abuse that the executives could even dream up.


19 posted on 04/12/2011 8:12:28 AM PDT by VRWCmember (Veritas vos Liberabit)
[ Post Reply | Private Reply | To 17 | View Replies]

To: SeekAndFind

Similar stuff was presented in John Stossel’s documentary... “FreeLoaders”. Subsidies are a big issue and need to be curbed.


20 posted on 04/12/2011 8:17:45 AM PDT by ThomasMore (Islam is the Whore of Babylon!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: VRWCmember

I have been through several DCAA audits and in the end breezed through them all. Mainly because of the incompetence of the government auditors, and in part due to the incompetence of our own internal auditors.

You could cut half the “VPs” at these companies and still give the same performance. I am convinced it takes nothing more then a pulse, and sitting around for 10 years at a def contractor to become a VP or SVP, all of whom blow up the OH rate and contribute very little to the actual program, and are quite frankly not that bright either.

There is a reason people stay long term in the government contracting/defense contracting field and that is because they aren’t able to be hired by companies who actually make a product or have a real service and aren’t on the tax payers dole. Seeing this world on the inside the last 5 years, it truly is a fantastic form of welfare, disguised as “contracting”

My last day can’t come soon enough here, as I am tied for a few more months thanks to a bonus recieved last year.


21 posted on 04/12/2011 8:24:04 AM PDT by MadIsh32 (In order to be pro-market, sometimes you must be anti-big business)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Joe 6-pack

I read once they were still making 6 Cly. Motors for the old duce and a half, twenty years after it was fazed out. Hell they may still be making them to haul the bombs for the mustangs.


22 posted on 04/12/2011 8:29:13 AM PDT by org.whodat
[ Post Reply | Private Reply | To 18 | View Replies]

To: VRWCmember
Certifications, internal and external audits, and various other oversight costs mandated by the government impose significantly greater costs on governemnt contracts than all the fraud and greed and abuse that the executives could even dream up.

Met a guy recently who is a freelance contract consultant. He gets paid very big bucks to go into companies doing government business and showing them how to not only keep straight with all the convoluted government rules but also how to keep them from losing their ass on a contract.

23 posted on 04/12/2011 8:37:49 AM PDT by Ditto (Nov 2, 2010 -- Partial cleaning accomplished. More trash to remove in 2012)
[ Post Reply | Private Reply | To 19 | View Replies]

To: org.whodat
It is the nature of government to be wasteful and without a doubt there is tremendous waste that can be eliminated in military spending. We would likely have a much stronger military if somehow market driven mechanisms could be implemented that allowed obsolete programs/equipment to be quickly eliminated.

I had experience in the Military contractor field and it is indeed horribly efficient.

Our brave Warriors could easily be paid substantially more if all the inefficient and unneeded bureaucratic structures could be eliminated. It does seem impossible to change.

24 posted on 04/12/2011 9:23:56 AM PDT by sand88
[ Post Reply | Private Reply | To 2 | View Replies]

To: CitizenUSA
Senators, for example, get pretty touchy when one talks about cutting corporate subsidies in their states.

Which is why (1) term limits and (2) anonymity of donors need to be instituted. Two terms of five years in the senate, two terms of three years in the house, then out. Since subsidies go to big donors as compensation for donations, the source of all political donations should be anonymous. You can't sell influence if you don't know who is buying.

A congressman should represent the interests of the people in his district, and a senator of those in his state, but each should put the overall good of our country first. Only when it stops being a career will genuine public SERVANTS take the offices, instead of the self-serving.

25 posted on 04/12/2011 10:20:42 AM PDT by JimRed (Excising a cancer before it kills us waters the Tree of Liberty! TERM LIMITS, NOW AND FOREVER!)
[ Post Reply | Private Reply | To 7 | View Replies]

To: edmund burke fan; 50mm; TheOldLady; Allegra; darkwing104; Darksheare; Old Sarge
raise taxes on billionaires. That will get our debt paid down even faster.

Making a silly suggestion like that will get you ZOTTED faster.


26 posted on 04/12/2011 10:38:24 AM PDT by Arrowhead1952 (TX and MI - When the going gets tough, the dims run and hide.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: edmund burke fan; Arrowhead1952; 50mm; darkwing104; TheOldLady
We should do what Sowell suggests and raise taxes on billionaires.

Heeeere, kitty, kitty, kitty, kitty!

27 posted on 04/12/2011 10:46:10 AM PDT by Allegra (Hey! Stop looking at my tagline like that.)
[ Post Reply | Private Reply | To 8 | View Replies]

To: edmund burke fan

Welcome to FR.
Goodbye.
The top 10% pay 90% of the taxes.
You were saying?


28 posted on 04/12/2011 10:48:21 AM PDT by Darksheare (You will never defeat Bok Choy!)
[ Post Reply | Private Reply | To 12 | View Replies]

To: edmund burke fan

You sound like this moron:
http://www.freerepublic.com/tag/by:christusrex/index?tab=articles


29 posted on 04/12/2011 10:49:31 AM PDT by Darksheare (You will never defeat Bok Choy!)
[ Post Reply | Private Reply | To 12 | View Replies]

To: edmund burke fan; Arrowhead1952; 50mm; darkwing104; stephenjohnbanker; SunkenCiv; paulycy; ...
Soak-the-rich, redistributionist troll gets a hot ride outa the site.


Put some ice on that.

30 posted on 04/12/2011 10:51:10 AM PDT by TheOldLady
[ Post Reply | Private Reply | To 26 | View Replies]

To: Allegra; TheOldLady
I was going to jump on that reply, but clicked on the name and it was already a dead troll smell emitting from the name.
31 posted on 04/12/2011 10:55:50 AM PDT by Arrowhead1952 (TX and MI - When the going gets tough, the dims run and hide.)
[ Post Reply | Private Reply | To 27 | View Replies]

To: Arrowhead1952; Allegra

[nodding]

Looks like a retread, too.


32 posted on 04/12/2011 10:58:59 AM PDT by TheOldLady
[ Post Reply | Private Reply | To 31 | View Replies]

To: edmund burke fan; darkwing104; Old Sarge; 50mm; Viking2002; Daffynition; TheOldLady
Raising taxes on anyone is a bad, bad idea zotbait.

ZOT!


33 posted on 04/12/2011 11:14:57 AM PDT by paulycy (Islamo-Marxism is Evil.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: paulycy

34 posted on 04/12/2011 11:40:00 AM PDT by Daffynition (DBKP ~ Death By 1000 Papercuts)
[ Post Reply | Private Reply | To 33 | View Replies]

To: Daffynition

35 posted on 04/12/2011 11:45:06 AM PDT by paulycy (Islamo-Marxism is Evil.)
[ Post Reply | Private Reply | To 34 | View Replies]

To: MadIsh32

If you have direct knowledge, you should report it - there’s a 10% finder’s fee for any waste fraud or abuse you report.


36 posted on 04/12/2011 12:11:58 PM PDT by CharlesWayneCT
[ Post Reply | Private Reply | To 17 | View Replies]

To: MadIsh32

Gee, and I thought they all stayed there because they got exhorbitant pay and lucrative benefits that they charged illegally to overhead paid for by the government.

Now you say it’s because they are incompetent?


37 posted on 04/12/2011 12:19:15 PM PDT by CharlesWayneCT
[ Post Reply | Private Reply | To 21 | View Replies]

To: CharlesWayneCT

I never said what they do is illegal. Clearly its not since all of the rates I am talking about are audited by and approved by the federal government.

It is more so IMO absurd the amount of money spent on gov’t contractors, especially when looking at the indirect rates


38 posted on 04/12/2011 12:38:29 PM PDT by MadIsh32 (In order to be pro-market, sometimes you must be anti-big business)
[ Post Reply | Private Reply | To 37 | View Replies]

To: TheOldLady

Must be about Soros? No? How about Hollywood?


39 posted on 04/12/2011 4:01:12 PM PDT by SunkenCiv (Thanks Cincinna for this link -- http://www.friendsofitamar.org)
[ Post Reply | Private Reply | To 30 | View Replies]

To: edmund burke fan; Arrowhead1952; Babu; backinthefold; bad company; Bahbah; bamahead; barker; ...
Class envy idiot Zot

Please let me know if you want ON or OFF my Viking Kitty/ZOT ping list!. . . don't be shy.

40 posted on 04/12/2011 6:19:34 PM PDT by darkwing104 (Lets get dangerous)
[ Post Reply | Private Reply | To 12 | View Replies]

To: darkwing104

IATZ!


41 posted on 04/12/2011 7:28:03 PM PDT by DCBryan1 (FORGET the lawyers...first kill the "journalists". (Die Ritter der Kokosnuss))
[ Post Reply | Private Reply | To 40 | View Replies]

To: edmund burke fan

42 posted on 04/12/2011 8:12:48 PM PDT by MarineBrat (Better dead than red!)
[ Post Reply | Private Reply | To 12 | View Replies]

To: edmund burke fan
I think we should Tax Trolls at 200% of their gross worth.
Which includes your Pizza Box Fort in mommy's basement.


Zot!!

43 posted on 04/13/2011 4:53:00 AM PDT by Condor51 (The difference between stupidity and genius is that genius has its limits [A.Einstein])
[ Post Reply | Private Reply | To 12 | View Replies]

To: darkwing104

Great one, darkwing


44 posted on 04/13/2011 5:55:43 AM PDT by TheOldLady
[ Post Reply | Private Reply | To 40 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson