The Heritage Foundation published a symposium on cutting the budget in the Winter 1986 issue of its Policy Review (since 2001, published by the Hoover Institution). A number of excellent proposals were made, but I would like to focus on the gem contributed by the late journalist and columnist Warren T. Brookes.
Brookes began by stating that "conservatives need to understand that without basic monetary reform there is no way to balance the U.S. budget, with or without tax increases and budget cuts, and even with the most optimistic GNP growth projections." He then offered a 3 part solution:
(1) "the nation must return as quickly as possible to gold-based money and debt" (Heritage's Policy Review published another piece endorsing a return to the gold standard as a key component of balancing the budget, in the next issue, by the late Congressman, HUD Secretary and Vice Presidential candidate -- Jack Kemp, My Plan To Balance The Budget, Spring 1986)
(2) we should allow "free exchange of gold and silver, both public and private, setting up a parallel monetary system on a free market basis, allowing the public to choose," (Heritage's Policy Review published another piece endorsing the idea of Hayekian currency competition or privatization, also in the next issue -- Richard W. Rahn, Time To Privatize Money?, Spring 1986) and
(3) "the Federal Reserve would be phased back to its original role as a bank-owned clearing house, thus eliminating its huge and costly presence in the money markets where its open market operations now run as high as $1 trillion a year."
With all of the talk about the "fiscal cliff" and raising the debt ceiling yet again, it is clear that the problems of the Federal budget and debt, and especially the cost of servicing the Federal debt, have certainly not gotten any better since Warren Brookes's solutions were published (and ignored) in 1986.
In the opening days of the new session of Congress, a number of bills have been introduced that would partially enact these solutions:
(i) Congressman Paul Broun's H.R. 73 (Federal Reserve Board Abolition Act) and
(ii) H.R. 77 (Free Competition in Currency Act of 2013), both similar to bills previously introduced by Dr. Ron Paul. (Congressmen Broun and Steve Stockman have also introduced bills to audit the Federal Reserve, also similar to bills previously introduced by Congressman and Senator Paul -- H.R. 24 (Federal Reserve Transparency Act of 2013) and H.R. 33 (Audit The Fed Act of 2013)).
We’ll see just how serious Washington, D.C. is about the budget and debt crises.