What Can We Cut to Balance the Budget?

In 2011, federal government spending significantly outweighed revenue. While the federal government spent $3.8 trillion, it collected only $2.2 trillion from various taxes, licenses, and fees. Professor Antony Davies breaks federal spending into five basic components. He further divides it into mandatory spending, which is an amount of spending automatically built into every budget by law, and discretionary spending, which must be approved by Congress every year.

Mandatory spending includes spending on entitlements—that is, on Social Security, Medicare, and Medicaid—net interest, and other things, such as food stamps, student loans, unemployment benefits and more. While many advocates of social welfare programs complain that economists look primarily to Social Security and Medicare for budget cuts, it’s clear why they do. Professor Davies shows that even if the government eliminated everything government does with the exception of social programs and the interest on the debt, we still wouldn’t be able to balance the budget.

Over the next decade, the U.S. government will face difficult choices. Weighing specific cuts is not enough, because there are no specific cuts that will enable government to balance the budget. Professor Davies says, “Nothing less than a redesign will solve this problem.” That redesign, he says, should begin by determining what the proper role of government is.


  1. Brian Phillips

    Without question we need to cut spending across the board, no sacred cows.  Entitlement spending is ballooning out of control and is going to get significantly worse with Obamacare.  We also need to reduce defense spending and make our forces more streamlined.  I would highly suggest getting rid of no-bid contracts in this arena.  

    In response to how do we go about fixing things and figuring out governments proper role?  I suggest referring to the constitution.  We haven’t tried that for quite some time.
  2. Spencer Long

    It doesn’t matter what is cut, our budget will still be in the trillions. What needs to happen however is the proper allication of funds.

  3. taschrant

    Hit the nail on the head right there.  I’m a fan of Ron Swanson’s mantra "Slash it, slash it!"

  4. John Galt

    Most convincing argument, well done

  5. Hunter Markson

    Cut the welfare state and the warfare state.  Get everyone reading Rothbard or Friedman the younger.  Stop teaching kids spending stimulates the economy.  

  6. Lukas Koube

    better yet, cut all discretionary spending and give the president 300 days off a year.

    in addition to this, we can repudiate the national debt since it was not built with the signatures of those who are now living. forcing me to honor the insane contract my father signed is a non starter. 
  7. Anonymous

    Nice alternatives…

  8. Gabriel

    If we (sorry the government) cuts any of the spendings whether it is Mandatory Spending or Discretionary Spending we are going to lose some sort of good or service which in my opinion will not help the economy

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