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US News: How Obama Can Fix The Government

12 February 2010 3 Comments

This was such a great article.  I couldn’t agree more.  The article compares GM to the Federal government.  While GM had massive sales in 2006, it still lost $2 billion that year.  Then, the next two years, it lost more than $30 billion in each year.  Insane.

Similarly, the U.S. government runs a deficit every year.  There is no change, no sustainability in sight.

“The government isn’t a business–but what if President Obama were to treat it that way? Obama has proposed a 10-year spending freeze in some government programs, which would save at most $25 billion per year. That represents 1.2 percent of the government’s 2010 budget. As trivial as that is, Congress has scoffed; like GM executives in 2006, the lawmakers aren’t interested in outside interference with their pet projects.

Having huge battles over incremental change is what doomed, dysfunctional institutions do. Imagine if Obama abandoned incrementalism and proposed that the government undergo the GM treatment: To forestall the risk of default on the gargantuan national debt, the government would cut spending by at least 25 percent. A consulting firm like McKinsey or PWC would rank the effectiveness of every government agency, and the underperforming divisions that land in the bottom quartile would be closed. The federal payroll would shrink by 20 or 25 percent. The millions who receive entitlement payments would have to sacrifice, just like autoworkers who thought they had a job for life and ended up without a career. And there would be a target date for returning the government to the break-even status.”

This has a .0001% chance of happening, but at least some main stream media outlets are proposing ideas such as this.  Good grief, do you understand the alternative?  I hope so.

3 Comments »

  • Mrs. Money said:

    Something needs to happen, and soon! I hope things get better this year. *sigh*

  • LeanLifeCoach said:

    Not only should everyone that benefits from the Government make some sacrifice but so should those employed by the government. The vast majority of Americans suffered from the impact of the recession whether we wanted to or not. Why shouldn't every Government employee from the President down take a pay and benefits cut until they prove they can manage our money responsibly?

  • 20smoney (author) said:

    Completely agree!