Summary: “Never complain of that of which it is at all times in your power to rid yourself.” – Adam Smith quoting Greek Stoic philosopher Epictetus, chapter I, section II, and part VII of The Theory of Moral Sentiments, originally published in 1759. The national debt is a tremendous burden on our country, ourselves, and our posterity. In part one of this series, I provided a technical understanding of the debt, and in part two, I explained that we are much more likely to debase the currency (with all of the ruinous consequences such a drastic action entails) than to default on the debt. In part three, I claimed that the problem of the national debt is not insurmountable as long as people continue to lend to us, and I provided a few good reasons to believe that we have enough time to turn our dire fiscal situation around by addressing the debt. I begin this final part with a quotation from Adam Smith (and by extension, Epictetus) for one important reason: It is within our power to rid ourselves of the problem of the national debt. We are fortunate to live in a free society in which we can actively engage in the political process. It's not an easy task, and we admittedly suffered some painful defeats last November, but we still have the ability to elect fiscally conservative candidates who will stand firm against granting Washington D.C. more blank checks. We can still avert a debt crisis, but doing so will require difficult choices and a commitment to limited, constitutional government. Put simply, we must do two things in order to halt, and then reverse, the growth of our national debt: cut spending and encourage growth. Cutting Federal Spending This is the most intuitive solution to the national debt problem. If the government stops spending beyond its means, then it won't continue to rack up debt. However, we can do better than that. The Congressional Budget Office estimates that the federal government will bring in an impressive $2.913 trillion in revenue in fiscal year 2013. If we cut spending below that level, then we will generate a surplus and can begin to pay off the debt. The logic of lowering expenditures in order to avert a national debt crisis is simple and straightforward, but deciding what to cut can be more difficult. In order to make informed and prudent decisions about spending cuts, we must first have a basic grasp of federal spending. Federal spending is typically separated into two distinct categories: discretionary and mandatory spending. In fiscal year 2013, the CBO estimates federal outlays of $1.231 trillion in discretionary spending and $2.105 trillion in mandatory spending. What's the difference between these two categories? Discretionary Spending Even though discretionary spending constitutes barely one third of the estimated $3.554 trillion in federal spending this fiscal year, it remains the easiest place to cut. Why? Unlike mandatory spending, discretionary spending does not occur automatically. Every year, Congress is supposed to pass twelve categorized appropriations bills to authorize new discretionary spending. If they fail to do so, then they must pass a "continuing resolution" to maintain temporary spending until they can pass an appropriations bill. On this subject, it's worth noting that the Democrat-led Senate has failed to pass a budget since April 29th, 2009. What is included in discretionary spending? Well, for one thing, military expenditures. Of the estimated $1.231 trillion in 2013 discretionary spending, a whopping $644 billion goes to national defense. In other words, more than half of discretionary spending is defense spending. The rest of our discretionary spending goes to the Departments of Agriculture, Commerce, Education, Energy, Interior, Health and Human Services, Homeland Security, Housing and Urban Development, Justice, La
