It's Time to Gut, Not Cut, the Federal Government | Doug Bandow | Cato Institute: Commentary

It's Time to Gut, Not Cut, the Federal Government | Doug Bandow | Cato Institute: Commentary: 'But there is no line item in the budget for "waste, fraud, and abuse." Part of the problem is management, which has never been Washington's strong suit. A lot of money is lost due to incompetence or theft. Putting in place the right people and procedures isn't easy.

More basic, however, is the fact that one man's waste is another man's priority. The basic purpose of the national government today is to allow everyone to live off of everyone else. The intent is to give away trillions of dollars. What matters most is giving it away, not giving it away efficiently.'

'The big spending boulders are Social Security, Medicare, Medicaid, the Pentagon, and interest. Cuts here would cause much political pain, which is why politicians prefer not to talk about such possibilities. The people must decide not to have the government do certain things.'

'First, Social Security and Medicare should be narrowed to focus on the poor. No more middle class welfare. If you can afford to care for yourself, you collect no more federal checks. And the young should be allowed to opt out of the programs, putting money aside for their own retirement and health care. Over the long-term this will cut trillions of dollars in unfunded liabilities.

Second, Medicaid should be turned into a competitive voucher program that shares cost savings with frugal recipients. It will never be cheap to provide health care for the poor, but only by changing the program's underlying incentives can much money be saved. Reforming Medicaid is important for state governments as well as Washington.

Third, the U.S. government should focus defense spending on defense. No more social engineering around the world. No more subsidies for rich states and nation-building in poor ones. No more interventions here, there, and everywhere for no good purpose. Then military outlays could be cut substantially.

Fourth, take these steps and the government would borrow less, reducing interest payments naturally. That would create a "virtuous cycle" of falling outlays, deficits, and debts.

Fifth, toss in big reductions in domestic discretionary spending for good measure. Let people spend their own money for their families and communities. Then government would be left doing the few things that it really should do.'