America has officially gone over the fiscal cliff but the Senate, led by Vice-President Joe Biden, stayed up after midnight to pass a new tax bill which will be voted on today or tomorrow by the House. The Senate solution raises taxes on all Americans while completely ignoring spending reductions. Taxes will go up for all Americans through the elimination of a FICA tax break, aggressive taxes as part of Obamacare and the increased tax rate of those earning more than $400,000 per year.
There are three spending cuts that would, if government were less political and more businesslike, could easily occur without appreciably reducing services to the country.
Cut redundant administrations
Eliminate federal departments that are redundant with state governmental departments. Education is the biggest carrot here. The federal Department of Education could easily be eliminated with powers shifted back to the state departments of the same name. At the same time states should look at their own educational set-ups. Does Michigan really need so many school districts? Each comes with a high price tag. States such as Florida have only one school district per county. Because we already have county-wide school districts in Michigan why not save big money by following the county model?
Odd-Even postal delivery
No other country offers the level of delivery available in the United States. Delivering to every home and business every day is very expensive – especially during a time when the Internet is more efficient and inexpensive. One way to reduce postal expense would be to deliver to even ZIP codes on even days and odd ZIP codes on odd days. Keep parcel and overnight service the unchanged to offer an alternative to UPS and FedEx for competition sake. Two additional possibilities could be enacted at the same time. First cut back on observed holidays to five or six of the most major holidays to match the private sector. Second, close post offices and shift those services to retailers such as Meijer or Walmart where they would do it as a customer service at no charge to the federal government.
Eliminate automatic budget increases
In the political world it is likable to eliminate voting on budgets, yet no business uses this format without heavy oversight. Budgets negotiations are an effective way for executive to evaluate their programs and how they deliver the services they are tasked with. As much as budgeting is hated it offers a big advantage to an organization in reducing expenses.
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Business development by the numbers