Limiting Government

   The primary way to limit the size of the Federal Government is to limit its ability to tax and spend.  These limits must be incorporated into the Constitution.

   First, the Federal Government’s spending must be limited to say, 10% of Gross Domestic Product of the previous year, excluding government spending.

   Second, the Federal Government’s ability to tax must be limited.  The income tax must be specified as a flat tax of no more than 15% after a $10,000 standard deduction for each taxpayer. No other deductions or credits would be allowed except for an employment tax credit and a credit for banks who loan money within this country. The ability of the government to impose other taxes and tariffs must be specified in the constitution.  There would be no more hidden taxes. (See the section on taxes below.)

   Third, the Federal Government’s ability to borrow must be limited to, say, 10% of Gross Domestic Product, excluding government spending.  The only time this limit can be exceeded would be during a war which was legally declared by Congress. Then, all debt financed expenditures would have to be for military purposes. Then the debt would have to be paid down within, say 5 years.

   Fourth, the Federal Government’s ability to print money would have to be limited to its supply of gold and silver.  Banks ability to “create” money through issuing debt should be limited.  (See the section on Money & Banking.)

   Fifth, the Federal Government must be required to prepare an annual budget by, say March 31st.  The President and Congress should prepare separate budgets and they must be reconciled by June 30th.  If a final budget is not passed, then the prior year’s budget, less 10% across the board cuts, will be instituted.

   Sixth, the Constitution should specify items which the Federal Government is prohibited from spending money on.  The list should be long and include items such as loans or bailouts to businesses, welfare spending limited to 5% of the budget, political patronage, equal rights causes, etc.