Letter: Federalist approach doesn’t add up

To the editor:

This letter is in response to Michael Hicks’ article entitled “Is U.S. on cusp of federalist approach?” appearing in the March 7 Daily Journal.

Within the first four paragraphs of Mr. Hicks 15 or so paragraphs, he throws out a $600 million number that the good citizens of Indiana might benefit from should the Trump administration be successful in advancing their version of federalism, thereby providing “the great opportunity before us!”

He suggested that a way to get our hands on that money would be to close the federal department of education. Heck, we could get a lot more (say 20 percent of the state’s budget) if we would close most federal agencies other than the military, entitlements and debt service! EVEN MORE if Indiana could get its hands on federal health care spending, according to Mr. Hicks! How can we resist, I ask you?

Turning down federal money should come easy for a state that recently refused $80 million over four years to help fund Indiana’s preschool education. This money would have been in addition to about $7 million a year already received from the federal government for all of K-12 education and would have lightened the burden of our current legislator’s dilemma of whether to honor the governor’s request for $10 million to fund preschool education vs. the $3 million favored by them.

But, I digress. Let’s take a realistic look at whether Mr. Hicks’ “federalist approach” would return ANY money to Indiana to help us with our $15 billion annual spending budget.

Using 2015 numbers, the federal government spends about $4 trillion per year… $3.2 trillion for the military, entitlements (Social Security, Medicare and health) and debt service. That leaves about $800 billion to play with. That just happens to be about the size of the annual deficit generated by the federal government over the last seven years ($839 billion per year on average).

Annual deficits ran from $I.3 trillion to only $438 billion over that period. Said another way, you could eliminate all federal government spending other than the military, entitlements and debt service and still not break even. I’m just talking break even, i.e. nothing returned to the states for the agencies eliminated. What would it take to actually begin paying down the debt?

The official debt of the U.S. government is $20 trillion — $160,000 for every household, 106 percent of U.S. GDP, five times its annual spending. Add another $70 trillion or so for other promised but unfunded obligations (Social Security, Medicare and federal employee retirement benefits) and the debt balloons to $90 trillion.

Looking at the federal government’s balance sheet, as both public and private sector entities are required to do, it is estimated that it has negative net assets of $84 trillion. That is almost $700,000 for every household in the U.S. and five times the U.S. GDP.

For Indiana’s 6.6 million inhabitants, its share of the debt would be around $1.7 trillion, or only $405 billion if you abandon those already promised benefits under retirement plans (Social Security and Medicare).

So, Mr. Hicks, just what is the chance of returning any money to Indiana — even if you eliminate the federal government?

Larry G. Davis