"I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion." ~ Thomas Jefferson
A Half-Baked Solution for the Federal Deficit
Exclusive to STR
February 6, 2008
President Bush's proposed 2009 budget has raised many eyebrows, and also no doubt the blood pressure of many readers of this space. Most notable is the staggering $410 billion deficit, which doesn't even include the cost of the wars in Iraq and Afghanistan , which we will charitably price at $150 billion, making the grand total $560 billion.
George Bush, the first 'CEO president,' must no doubt be wringing his hands over how to cover such a massive sum. After all, any private corporation or individual can't very well spend more than they earn without going into debt, which every red-blooded American naturally finds abhorrent.
Bake sales are the stalwart of churches, school bands, and Boy Scout troops that are a little short of cash. Honoring this venerable tradition, I have come up with two related proposals, either of which will solve the problem of how to fully fund the 2009 budget without running a deficit. Each plan has its respective strengths and weaknesses, which are analyzed below.
Plan A: Federal Employee Bake Sale
The federal government employs 1.8 million people, plus 800,000 in the Postal Service. The untapped potential of such a vast army of workers could be harnessed to vanquish the deficit in short order. Spreading out the $560 billion equally among these 2.6 million workers amounts to a piddling $215,380 each.
Pricing a cookie at 50 cents, a brownie at $0.75, and a muffin at $1.25, each federal employee could sell 430,760 cookies, 287,173 brownies, or 172,304 muffins to cover their share. Of course for variety's sake, one could instead sell some combination of cookies, brownies, and muffins that totals $215,380. (Alternatively, the average federal worker could simply sell their house and give the money over. With the median house price now at $217,000, you would even have a little cash to spare!)
Now, the keener economists among us will immediately point out the practical implications of putting this plan into action. Namely, one could expect the ensuing run on supermarkets to produce an immediate shortage of flour, sugar, eggs, vanilla, and butter. The ensuing panic would result in Katrina-like conditions in which the National Guard and Blackwater USA are deployed to quell the riots that 2.6 million angry federal workers would cause in their struggle to obtain enough baking powder and chocolate chips. The added expense of all the rubber bullets and tear gas would just add to the deficit, I'm afraid. Besides, a bag of flour is no good if it's been soaked by a water cannon, rendering it a pasty sack of mush.
Let's momentarily cast aside any petty worries over civil unrest and carry on with our analysis. After the initial stock of baking supplies vanishes from store shelves, we can expect the price of these commodities to skyrocket, sending flour to something in the range of $750 a bag, and likewise $420 for a bag of sugar. Individual chocolate chips might be sold for $50 - each! However outrageous this may seem, all is well in the eyes of the economist, as the market has quickly adjusted prices to accommodate the sudden jump in demand. However, as we all know too well, state and local governments would likely intervene to prosecute 'price gougers,' decrying those profiteering off of butter and baking soda. Imagine scenes of supermarket managers being 'perp-walked' in front of the television cameras for everyone to see! In a travesty of justice, lengthy sentences would be dished out for these heroic entrepreneurs, who were only trying to rationally distribute scarce goods.
In light of the economic calamity that would befall us if Plan A were to be implemented, I suggest we follow the second of my plans:
Plan B: The White House Bake Sale
Since this is Bush's budget, let him make up the deficit himself! After all, Andrew Jackson nearly paid off the national debt in 1835! At $9.21 trillion, the current federal debt is over 16 times greater than the projected 2009 deficit, so we're actually taking it pretty easy on the ol' Decider.
Instead of making poor George bake hundreds of thousands of cookies, brownies, and muffins, driving the price of butter to $100 per stick, etc., let's limit ourselves to a more reasonable array of baked goods. In a single afternoon, George could probably knock off 200 cookies, 100 brownies, and 50 muffins. Now, under our old pricing scheme, this bake sale would bring in a haul of $237.50, leaving us exactly $559,999,999,762.50 short of the goal. Regrettably, prices will have to be raised to compensate for this drastically smaller bake sale. Accordingly, each cookie will now cost $43,076, each brownie $64,614, and a muffin will run you $107,690. Understandably, most off us might have a hard time coughing up the loose change to afford even a small bite of a single cookie.
Fortunately, we can finally make the Federal Reserve's inflation machine work for us! The Great Inflator himself, Ben 'Helicopter' Bernanke, can quickly whip us up some extra money and shower us in a tsunami of greenbacks! In this way, the deficit practically pays for itself with new money that nobody had to actually work for. The deficit is zapped, safely monetized, and forgotten about. A very worried and fretful George Bush can finally declare himself to be the fiscal conservative he aspired to be way back in 2000. He'll surely sleep better at night, knowing that at last the budget is balanced and sound.