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How to Cut the 2011 Federal Budget by 2/3 and Have a $1.3 Trillion Surplus

Friday February 11th, 2011   •   Posted by David Theroux at 12:41pm PDT   •   22 Comments

In conjunction with its Government Cost Calculator, the Independent Institute is proposing cutting the 2011 Fiscal Year budget for the federal government by $2.5 trillion from the updated $3.7 trillion in spending projected by the Congressional Budget Office in January. The result would reduce federal spending by 67.6% with a surplus for the year of $1.3 trillion. This proposal includes reduction options in entitlements, defense, farm subsidies, and many other areas but in no way represents the entire scope of what could be ultimately done to rein in federal spending and debt. Here below is a breakdown of how the reductions options could be made.

Please click on image to enlarge (pdf file):



22 Responses to “How to Cut the 2011 Federal Budget by 2/3 and Have a $1.3 Trillion Surplus”

  1. David Shellenberger says:
    February 12, 2011 at 10:45 am

    I like the fact that this proposal represents thinking big. The mere tinkering proffered by most politicians will be ineffectual.

  2. Skipper Steely says:
    February 14, 2011 at 6:55 pm

    Nice dream, but let’s be real and American. Lets repeat 1993 and raise and lower at the same time. Plus, why kill off programs? Just cut every department the required percentage. All could live with that. And, in addition, learn to better manage.

    I want to be in a nation that progresses. And, quits blaming each side all the time. Both got us into this, so let’s work together. Okay?

  3. Visualizing the President’s Budget Cuts « MyGovCost | Government Cost Calculator says:
    February 15, 2011 at 9:06 am

    [...] that chart, without having to resort to using a microscope, the Independent Institute does have a starter list of suggestions that might be worthy of serious [...]

  4. Doug says:
    February 15, 2011 at 3:52 pm

    I too like the “think big” concept. Just wish it wasn’t so partisan. For example, if you want to repeal the 2010 health care law, why not do the same for the Part D plan?

    Also, why pander to the AARP by just changing the retirement age of medicare and social security, when you could work towards abolishing them? While working to phase them out over a period of years won’t give you the same one-year bang for the buck, it is a better long term solution. Besides, once you get ride of those program, you also add an 8% tax cut to the mix.

    Finally, rather than tinkering with DHS, why not get ride of it completely. And why isn’t TSA on this list. Their function used to be in the private sector, and could easily be privatized again. I would much rather keep the FAA/ATC as it is and get ride of TSA.

    Further, I would like to know how you derived the savings by getting rid of whole departments. Are you assuming that the entire departmental budget becomes savings? If so, then your math is likely off. Many of these departments administer programs that benefit large portions of the American population, and which would continue to incur costs elsewhere within the federal budget.

    Finally, why stop with reduction in personal at DOD. There are plenty of bloated and outdated programs that could be cut, which would yield much greater savings that eliminating the ACOE or cutting the Coast Guard.

    Either way this would be a good start to serious budget discussion, but still a lot of work to do.

  5. jpm3 says:
    February 16, 2011 at 10:23 pm

    Do you know how many jobs would be lost if this were to be enacted? Let’s be real here.

  6. David Theroux says:
    February 16, 2011 at 11:41 pm

    Doug, Additional cuts are of course all worth pursuing. Incidentally and to answer your questions:

    1. Part D indeed should be appealed, but what does this have to do with partisanship as these measures were passed with bi-partisan approval?

    2. There is no pandering to AARP as they oppose any change in the eligibility age for Social Security and Medicare. We can only hope that AARP members will pressure the leadership to change its views.

    3. We are proposing abolishing DHS and privatizing TSA, as is listed.

    4. Abolishing or cutting any program by XX dollars is indeed a reduction in such spending. Trying to calculate some undefined benefit to some portion of the population is irrelevant to the question of whether federal spending should be cut. If people want any particular program in order to create some outcome, they are free to voluntarily fund it.

    5. The cuts to DOD go far further than cutting personnel as is noted in the proposal to close U.S. bases outside the U.S., end U.S. military and aid involvement in Iraq and Afghanistan, and cut the remaining spending by 25%. Certainly, there are numerous weapons systems and much more that can also be cut, but our proposal goes far further than any other to date.

  7. David Theroux says:
    February 16, 2011 at 11:56 pm

    jpm3, The federal government does not create jobs on net, but instead creates unemployment on net for three major reasons: 1) taxes are taken from productive use and directed into spending on less economic and non-sustainable uses determined by interest groups, not economic productivity or consumer preferences, 2) bureaucracies consume internally vast amounts of the funding that is redistributed instead of investing these funds in productive purposes—consumption reduces the wealth of an economy while capital production expands wealth production, and 3) government bureaucracies are less able to make rational economic decisions because they are insulated from prices and consumer preferences—they receive their revenues regardless of how they perform and indeed if they perform poorly, the usual argument is that they should receive even more funding. The best single book on why government programs and spending are the major causes of unemployment is the following:

    Out of Work: Unemployment and Government in Twentieth-Century America, by Richard K. Vedder and Lowell E. Gallaway (New York University Press for The Independent Institute)

    Also, please see the following recent congressional testimony that critiques the binge spending by the Federal Reserve:

    “Can Monetary Policy Really Create Jobs?”, by Richard K. Vedder (Committee on Financial Services, Subcommittee on Domestic Monetary Policy and Technology)

  8. Vicky Coles says:
    February 18, 2011 at 8:27 am

    That is the most insane proposal I have seen yet! Let’s just dismantle our nation while we are at it!!!

    It is time to END CORPORATE WELFARE! Increase taxes on the rich because they need the defense more than I do and use more of the resources than I do. Tax corporations for infrastructure! They use it more than anyone else.

    Stop allowing money to make more money than the people who labor!

  9. David Theroux says:
    February 19, 2011 at 4:12 pm

    Vicky,

    1. You are confusing the country (civil society) with the federal government. In reality, with Big Government the “governing class” comes to live off of the productivity of the citizenry whose resources are then taken by force to fund programs pushed and supported by special interests. Reducing such profligacy is not just moral and constitutional, but is essential to overcome the inane spending and debt mongering coming from Washington.

    2. Ending corporate welfare is indeed essential, but this would also mean any subsidies for “green” businesses, agriculture, transportation, etc.

    3. Increasing taxes on the citizenry, including the wealthiest, is a “takings” of private property. But the kicker here is that over the past sixty years when taxes were raised above 18% to “soak the rich”, tax revenues do not increase! There is an upper level when people will not produce further, meaning that the federal government can’t spend more than 18% of GDP.

    4. Those with money who have obtained such wealth peacefully by honestly producing goods and services for others have performed a public service, but this wealth is also then invested in economic production to provide returns to the investor. It is this investment that creates businesses, employment and wealth for others, who in turn similarly invest. As a result, wealth production and investment in a free market expands the well-being of society, especially for the most disadvantaged.

  10. CLARENCE SWINNEY says:
    February 22, 2011 at 1:24 am

    Pay bills means revenue.
    Corporate Income Tax was 1% of gdp in 2009.
    Only year since wwii that low was 1982.
    S&P 500 in 2009 had over 200 of the top 500 paying no tax.
    Of that 79 got a refund some with revenue in billions.
    Top 400 Income paid 18%.
    Total Federal Reveneus in 2009 and 2010 were 15% of our gdp
    Total individual Income Taxes were 5% of gdp in fiscal 2010

    Since 1980 it has been Help The Rich-Help Wall Street.
    In 1980 top 1% got 10% of our Income
    In 2009 they got 24%
    In 1980 top 1% owned 20% toal financial welath
    In 2009 top 1% owned 43%
    120,000,00 workers owned 7%. Banana anyone?

    America is one of lowest taxed rich nations.
    America is now one of leaders amongst rich nations in Income Inequality.

    1990′s were Great Years with Help Wanted signs all over.
    Bush Adminstration finished Reagan Redistribution of Income and Wealth upwards. Instead of raising revenue to pay his way he borrowed and allowed the Rich to get Richer.
    Yes! Under Bush type administrations Government was not the solution it was the problem.
    FACT CHECK:Clinton left Bush an 1800B Budget
    Bush Left Obama a 3600 Budget

    Clinton left Bush a 250B Surplus
    Bush left Obama 1400B Deficit

    Clinton left Bush a 5700B of Debt
    Bush left Obama 11,800B of Debt

    Clinton left Bush a 237,000 net new jobs created per month
    Bush left Obama a 31,000 lowest since Hoover.

    Clinton left Bush Peace on Earth
    Bush left Obama Hell on Earth Two disastrous wars

    Clinton left Bush a President most highly rated of any peacetime President in Asia, Africa, Europe.
    Bush left Obama the most hated President in history
    Bush left Obama an Housing Tsunami and Financial Volcano
    Bush left Obama, in 2008, an 8500B Bail out commitment Yes! 8500 not just 700
    Bush left Obama his Takeover of Fannie/Freddie, AIG, and first bailout of Chrysler
     clarence swinney–political historian–lifeaholics of america burlington nc
    author-Lifeaholic–Life story of Workaholic failure to Lifeaholic success
    Best seller list at haw river gazette population 200
    comments welcome at cswinney2@triad.rr.com

  11. CLARENCE SWINNEY says:
    February 22, 2011 at 1:29 am

    excuse typos– 4:25 a.m. here sleepy back to bed happy old ugly mean honest
    I appreciate replies with facts and numbers not opinions.
    cswinney2@triad.rr.com burlington nc

  12. Patrick Dugan says:
    February 22, 2011 at 11:29 am

    In discussions with Coast Guard, Air Force and Navy personnel we found the duplicity in military assignments could be eliminated by utilizing personnel in each department as they were created. For instance, The Air Force would provide air support only, Army and Marines would supply ground forces, Navy would supply only water transport and carriers for Air Force detachments.
    Obviously the Coast Guard would contain its own American security forces.
    The savings from duplicating equipment and manpower would be substantial from the DOD budget.
    Why was Fannie Mae and Freddie Mac not mentioned for abolishing?
    What about auditing the FED? as part of budget cutting. We still have no idea how many dollars this outfit is sending out to various countries and friends around the world.
    But all-in-all this is a great start in returning to our roots of American Culture, the U.S. Constitution and Bill of Rights.
    God Save The Republic.

  13. Margaret says:
    March 1, 2011 at 11:01 am

    Be still my heart!

    Wow, someone who is really, really talking about making our government small! It’s a nice dream, and should be the reality, but it won’t ever happen. Too many people have their hands out waiting for or getting something from the government at all levels.

  14. GAO’s Latest Spending Report Identifies Duplicate Programs « MyGovCost | Government Cost Calculator says:
    March 1, 2011 at 2:01 pm

    [...] Independent Institute and MyGovCost.org have issued a budget analysis, providing clear-cut solutions that Washington would do well to [...]

  15. The Day the Debt Comes Due « MyGovCost | Government Cost Calculator says:
    March 28, 2011 at 1:41 pm

    [...] budget proposal MyGovCost has put forth includes measures that address these [...]

  16. Why Washington Only Cut $38 Billion from Federal Spending « MyGovCost | Government Cost Calculator says:
    April 23, 2011 at 5:12 pm

    [...] Fortunately, the general public is increasingly becoming aware of the reality of such abusive political power in the new grassroots movement against Washington’s profligacy. For the Government Cost Calculator’s alternative budget for the federal government that would reduce spending by 2/3 and produce a $1.3 trillion surplus for the current fiscal year, please go here. [...]

  17. Tom says:
    July 28, 2011 at 3:03 pm

    Please make a single-page version of this poster so we can use it as a flyer on campus!

  18. David Theroux says:
    August 8, 2011 at 9:14 pm

    Tom, Great suggestion! Please just copy the pdf file and you ware welcome to make copies.

  19. No Surprise: Lobbyists Rule the Deficit “Supercommittee” | The Beacon says:
    October 10, 2011 at 3:02 pm

    [...] you think the country can’t possibly survive on a budget less than $3,700,000,000,000, click here for example for “How to Cut the 2011 Federal Budget by 2/3 and Have a $1.3 Trillion [...]

  20. C says:
    October 11, 2011 at 9:02 am

    Why the Corps of Engineers?

  21. David Theroux says:
    October 11, 2011 at 8:11 pm

    C, Indeed so, but this budget proposal is not considered the final say on the matter, only one major step.

  22. Jonathan Taylor says:
    October 12, 2011 at 8:29 am

    Great economically – but, let’s face it, hopeless politically.

    While I will echo those who are happy to see someone thinking big, I would suggest a more realistic version of this list, with less ambitious goals, but the same basic idea of cuts across the board. While it would be great to slash the deficit completely and actually start paying off debt right now with surplus, I would be happy with steady, serious deficit reduction over more years. Perhaps when the economic benefits of shrinking government started showing up, political will would increase for greater cuts and privatizations.

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