An approach to the changes needed in government spending

We can all agree or at least most of us agree that government spending at the federal level and in some cases the state level is out of control. The economic downturn in our country and the world has affected us all but what approach should be taken to address the problems behind the present situation in some states and the federal government. There is no doubt that various segments of our society are hurting and have been hurting for some time but is government always the answer to solve all the problems. The answer is clearly a no.

Each state with financial problems must or should compare themselves with states that are on a sound financial status and ask themselves what is different and what can be or should be changed. Clearly there are differences in population backgrounds, location and sometimes weather but comparisons should be made as to where the income being received is allocated.

Clearly the federal government has an impact on required allocations of money the government provides and in some cases does not provide associated with government programs. Changing this allocation is not within the power of the state but the federal government.

One thing is certain money the government spends must come from somewhere. The first is the income being received through taxes or other entities. Some states have the advantage of being a popular location for tourists to provide an influx of money for the state economy. The logic of allocating funds to programs which are either not working or meeting the objectives should be considered for change or elimination. Granted there are some programs which are necessary to provide for the citizens of each state and sometimes the country and this is fine but funds need to be spent wisely.

It is also true that several government programs involve the fact that individuals have earned the right to receive funds from them. The problem is not the fact that individuals have earned these rights but that the income generated and received by the government have in some cases been allocated to other areas. This is a well known fact and while fixing this will not be an easy task the main change which needs to be made is to allocate funds being received by the government for the programs for which they have been intended. This would be a first step to ensure at least a portion of the necessary funds will be there when individuals need them in their future.

There are many government programs which individuals have developed the opinion they deserve the income they receive though they have not earned the right to the income. Granted there are programs which based on the principles of our country as it was established is taking care of individuals who cannot take care of themselves. This may be in a supplemental perspective or in some cases government funds are the only source of income. In the past wages were not as high as they are now but comparing percentage there appears to be not much difference. This fact often gets ignored when looking at the spending deficit which now exists.

In terms of government funds there needs to be some priorities established as to programs and the costs to keep them in existence. One key point to remember is that individuals should not be penalized for the spending habits of government. The security of our country is another area which should be a priority. The current situation with sequestration looming will greatly affect every segment of our country if it goes into effect. In reality it must not take place. The problem with government spending is not how much is received but how it is allocated. Government needs to create a balanced approach to current spending levels while not impacting critical programs for our country. This may seem like an impossible task but individuals who are elected need to balance the government spending like they balance their checkbook. Individuals must spend within their means or at least allocate funds to pay their debts.

One thing is certain government needs to have the capability of paying its debts whether it be at the federal government or state government level makes no difference. Clearly income levels needs to rise for the federal government but how that need is accomplished will be critical in turning our financial situation around. Increasing taxes is not the answer but creating an environment where individuals and businesses have the confidence and incentive in the financial soundness of our government. In relation to this it has been evident that there has been uncertainty in what government will do from year to year in terms of requirements within current laws and regulations. Uncertainty in government operations must be eliminated. This may be somewhat improbable to accomplish but it is not impossible.

One last point to make is in relation to our current tax system. The current system is both cumbersome and confusing. The fact that tax laws are constantly changing based current political winds is a condition which must be changed. Our tax system is in need of an overhaul to make it more efficient and simple. The tax brackets need to such that individuals and businesses are not penalized for earning more. Increasing the tax rate for individuals who have made the effort to be successful should be encouraged not penalized. This kind of change would increase the incentive for businesses and individuals alike to increase their efforts for success. In reality from past examples when taxes were lower revenues did not decrease but increased thereby providing additional revenue for necessary government expenditures. Let us hope the decisions to be made in relation to the upcoming sequestration will be the right decisions for individuals, businesses and our country.