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Paul Light has long been one of the most respected authorities on how the federal government works.
The title of his WSJ column today, "The Easy Way Washington Could Save $1 Trillion," is almost depressing in its underlying theme: there's actually THAT much money we spend every year that we can live without spending. One trillion dollars. How big is a trillion? Going back in time one trillion seconds takes you back to around 29,000 B.C.
Here's the summary:
- Cut federal jobs: $100 billion
- Freeze all hiring of senior/mid-tier jobs and require Presidential justification for new hires: $250 billion
- Collect all money currently owed to the federal government: $500 billion
- Eliminate overlapping programs: $100 billion
- Implement a list of basic productivity-enhancing reforms: no dollar amount given
- Eliminate the phony "grade inflation" when giving employees raises: $100 billion
- Cut contract employees by 500,000: $300 billion
This seems so basic that it is astonishing that it has to be written as if it would be a bold set of reforms.
That is superb and they should bring it in the next full fiscal year to slash the deficit from $2.2 trillion to $1.2 trillion.This would get things going by boosting confidence.If that was coupled with a major deregulation drive for business while getting more credit flowing to private firms then you would get the USA economy would roar back.By boosting business by reducing its regulatory costs you make investment pay and thus help shrink dole queues.By getting credit flowing to small business you can fuel investment.
That along with signing free trade deals would spur recovery.Giving business freedom is key to getting job growth going.Tackling the federal deficit would help hold down long-term interest rates.Rising interest rates would kill a recovery.
So this big federal spending cut is good.But it is not a remedy on its own - but as a part of a pro-growth package it would be handy.
Posted by: Matthew Reynolds | July 08, 2011 at 03:36 PM