Some people think that the budget cuts I'm making are draconian and unnecessary. After all, making cuts is only one way of balancing that budget. Raising taxes could achieve the same result. The problem is that, in order to raise taxes enough to plug a $620 billion hole in the budget, every man, woman, and child in the country would have to pay an additional $2,066 over and above what they're paying, right now. A permanent tax increase.
The thing is, who would pay that tax increase? Would the millions of poor and homeless pay it? Can you imagine what would happen to the finances of a family of four, whose annual income is $50,000, if they had to pay an ADDITIONAL $8,200 per year, in taxes? No, the poor won't be paying their per-capita share of that $620 billion. So let's look at the people who are making $100,000. If the poor aren't paying, the people who make $100,000 will have to pay possibly $15,000 to $20,000 or more, for a family of four. That's a 15% to 20% cut in salary, for those people. Think about it. What would you do, if you suddenly had to take a 15% pay cut? Money you'd been counting on, to pay your bills, would suddenly be gone. Suddenly, you'd be under-water, too. No, raising taxes isn't the solution.
Of course, there's the option of simply printing up more money. The United States is lucky, in that it really would be possible to do that. After all, all of our debt is denominated in dollars.
The problem with printing up more money is that doing so would send a flood of cash flowing through the economy, causing prices to rise, for everything. Just as cutting $620 billion out of the economy will cause financial hardship for millions, printing up an additional $620 billion would cause financial hardship for millions. The Government programs that I've been cutting would remain in existence, but the purchasing power that those programs provide would diminish. When it takes a bucket-full of $100-dollar bills to buy a box of copier paper, how much education will a typical student loan be able to buy?
As I see it, there is no way to avoid the suffering that is the result of decades of reckless over-spending. The debts we've been racking up have to be repaid. I will do less damage, by cutting the budget, than I would, if I were to raise taxes or simply print up money. So cut the budget I will.
Today, I'm closing down the Department of Housing and Urban Development. This is the last of the mega-Departments in the civilian side of the Executive Branch. The other Departments and Agencies are much smaller, so the savings that each will provide, when it's closed, will be minimal. That's why almost all of them will have to go.
For today, I'm ending the Federal Housing Administration, together with all of the home loans that it guarantees. Good-bye, housing boom. The loss of that $94.7 billion prop, in the real estate market, will cause housing prices to tumble. Good-bye, Federal rental assistance program. Poor people across the country are going to be thrown out on the street. All of HUD is being shut down.
That's $140 billion saved, $140.8 billion left to cut. What's next?