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Posts Tagged ‘budget’

Let’s return to the golden years of the Clinton presidency

Posted by Richard on March 6, 2014

On Tuesday, President Obama unveiled his Fiscal Year 2015 budget proposal, for what it’s worth (not much, according to the National Taxpayers Union Foundation, which describes it as “[i]ncomplete, inconclusive, and indecipherable”). He proposes to spend $3.901 trillion (that’s $3,901,000,000,000), almost $1 trillion (33%) more than in 2008. The Obama administration describes this budget as ending the “era of austerity.” The “era of austerity” is apparently FY2012 and FY2013, when actual outlays declined by a whopping 4% from the stimulus-swollen FY2011 level.

Me, I’d rather look back at a different “era.” Remember Bill “the era of big government is over” Clinton? He’s revered by the Socialist Democrats, and his eight years in office are viewed as some kind of golden age. Let’s set the Wayback Machine to FY1999, the last full fiscal year of the Clinton presidency.

Actual FY1999 outlays were $1.702 trillion. According to this price deflator calculator, that’s $2.266 trillion in 2013 dollars. About 42% lower than Obama’s proposed FY2015 budget. Now that’s what I call austerity — or at least a good start.

My memory isn’t what it used to be, but I don’t recall children starving, bridges collapsing, and old people dying in the streets during the Clinton years.

If we had a decent opposition party in this country, it would demand a return to Clinton-era spending levels, adjusted for inflation. Heck, I wouldn’t even mind too much if they threw in an adjustment for the 14% population growth since 1999 (even though there’s no logical reason why all federal spending should rise with population). That would still leave the budget 28% lower than Obama’s proposal.

Actually, it’s pointless spending a lot of time on the Obama budget proposal since it’s going nowhere. The Senate’s Socialist Democrats have already made it clear that they won’t be considering a budget resolution this year. Doing so would force all those vulnerable senators up for reelection to choose between rebuffing their president or going on record supporting higher taxes, more spending, and an ever-growing debt burden. This budget proposal is purely PR and talking points.

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Embrace the sequester

Posted by Richard on February 24, 2013

I’m disgusted by the fear-mongering about the sequester by Obama and the Socialist Democrats, and I’m even more disgusted at all the Republican politicians who are joining the hysteria. Massive cuts, my ass. Jeez, by their own fraudulent “baseline budgeting” accounting, the sequester amounts to less than 3% of federal spending. And as Sen. Rand Paul has pointed out, that’s not even a real cut, but merely a reduction in the rate of increase.

The GOP leadership ought to be declaring over and over, “Mr. President, if you and your cabinet can’t cut spending by 2.5% without closing national parks, endangering the food supply, and inconveniencing air travelers, then you’re not competent to run the federal government.” They ought to embrace the sequester as at least a decent start.

Here’s another reason to embrace the sequester: According to DNC chief Debbie Wasserman-Schultz, it will delay action on gun control. Let’s hear it for the sequester!

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Spending problem? What spending problem?

Posted by Richard on February 12, 2013

On Fox News Sunday, Rep. Nancy Pelosi, who thinks that increasing unemployment benefits is the best way to grow the economy, insisted that we don’t have a spending problem, we merely have a “budget deficit problem.” In other words, the current spending level is just fine, but the federal government needs a lot more revenue. This is apparently the official Socialist Democrat position:

Pelosi’s motion was seconded by Sen. Dick Durbin (D-IL) on NBC’s Meet the Press, where Durbin laughably explained that the sequester was “designed as a budget threat, not as a budget strategy” – and stated that the only approach to solving the budget problem was to raise taxes again.

President Obama himself agreed with that perspective in his weekly online address. The budget sequester he signed off on – the sequester proposal he insisted upon – is now the Republicans’ fault. Obama claims that if the sequester goes through, “firefighters and food inspectors” will bear the brunt of the cuts, as well as cancer research and people with disabilities. It’s the usual liberal demagogic approach to any problem: world to end tomorrow, minorities hit hardest.

Obama’s solution: tax increases. Again. “Congress should pass a similar set of balanced cuts and close more tax loopholes until they can find a way to replace the sequester with a smarter, longer-term solution,” said Obama.

Of course, Obama has been on this “not a spending problem” kick for months. He infamously informed House Speaker John Boehner (R-OH) that there is no spending problem back during the fiscal cliff debate.

This morning on CNBC, House Minority Whip Steny Hoyer joined the “no spending problem” chorus and, when pressed on the issue, yelled “Bush!”:

“Sir, does the country have a spending problem?” Caruso-Cabrera asked.

“Does the country have a – the country has a paying-for problem,” Hoyer replied. “We haven’t paid for what we’ve bought.”

“Are we promising too much?” Caruso-Cabrera pressed.

“Absolutely,” Hoyer agreed. “If we don’t pay, we shouldn’t buy.”

“How is that different from a spending problem?” She followed up.

“We spent a lot of money when George Bush was President of the United States,” Hoyer replied.

At a press briefing, Hoyer reinforced the “we need more revenue” message:

“It’s not a question of a spending problem. Nobody has a spending problem if they have the resources to pay for what they spend. No family, if they can afford what it buys, has a spending problem. The problem becomes when you spend, buy and don’t pay,” the Maryland Democrat told reporters at a pen-and-pad briefing Tuesday.

Deficits, on the other hand, “are destabilizing to the economy and dangerous for future generations and rob generations,” he added. “When they say we have a spending problem — we have a paying problem.”

Expect to hear the word “invest” on multiple occasions during tonight’s SOTU speech. That’s the President’s code for “spend more, not less.”

The Socialist Democrats aren’t satisfied with a federal budget that’s almost 25% of GDP. They’re shooting for 30%, 40%, … I suspect that to the Socialist Democrats, the lowest acceptable level of federal spending is always more than whatever the current level is.

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The modesty of the Ryan budget plan

Posted by Richard on April 7, 2012

The President called the Republican budget plan put together by Rep. Paul Ryan “social Darwinism.” And he and his fellow Socialist Democrats have pulled out all the stops in denouncing it: children will starve, old people will die, our food will poison us, and the air and water will become toxic if these draconian budget cuts are enacted.

After a cursory look when it came out, I gave the Ryan plan two cheers. But after looking at the graphs and numbers Nick Gillespie put together (from Investor’s Business Daily and the Mercatus Center’s Veronique de Rugy), I’m taking back one of those cheers.

Under the Ryan plan, government spending grows slightly more slowly than under the Obama plan. I’m guessing that’s not entirely fair to Ryan — the Obama numbers are undoubtedly much more fudged than his, so the real difference is probably much greater than it appears.

Nevertheless, the Ryan plan is a pretty modest, timid, tentative start at addressing the impending fiscal catastrophe. That the Socialist Democrats are attacking it in such over-the-top fashion indicates either that they’re totally delusional and divorced from reality or that they’re cynically betting they can defeat the Republicans by scaring the bejeezus out of all the ignorant and stupid people.

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The Ryan budget: a step in the right direction

Posted by Richard on March 20, 2012

After a cursory look at Rep. Paul Ryan’s new budget proposal, I’m inclined to give it two cheers. It’s certainly in stark contrast to the President’s bloated and irresponsible plan. And maybe it strikes an astute balance between what really needs to be done and what’s palatable, for now, to the majority of Americans. But I agree with Investor’s Business Daily:

… It’s a good start, but we’d prefer a plan that cut spending more deeply, killed off a few needless Cabinet agencies and truly embraced the Founders’ vision of a limited federal government.

Despite the wailing from Democrats about draconian spending cuts, Ryan’s near-term cuts would still leave government spending 5% more in 2014 than it did in 2008 — even after adjusting for inflation.

It never gets federal outlays below 19%, which is still too high. And annual deficits worryingly start to rise again after 2018, although at a far lower level than under Obama’s budget.

But we’ll take Ryan’s responsible and perfectly reasonable plan over Obama’s recklessness any day.

And we suspect that when voters have a chance to see the two budget futures explained to them, they will too.

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Obama’s budget insanity

Posted by Richard on February 14, 2012

The Fiscal Year 2008 Bush budget (the year before Hank Paulson panicked Bush into bailout mode with warnings of impending economic collapse):

  • Spending: $2.9 trillion (that’s $2,900 billion)
  • Deficit: $455 billion
  • New taxes: None
  • Federal debt: $9.99 trillion

February 23, 2009 Obama speech to the National Governors Association:

“Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to next budget, the next administration, or the next generation,” he said. “That’s why today I’m pledging to cut the deficit we inherited by half by the end of my first term in office.”

Obama said he would reinstate the pay-as-you-go rule requiring any new expenditure to be set off by a cut in spending.

The Fiscal Year 2013 Obama budget:

  • Spending: $3.8 trillion (that’s $3,800 billion) in FY2013; $5.8 trillion in 2022; $47 trillion over 10 years
  • Deficit: $901 billion in 2013 (but AFP says “if we strip out the budget’s unrealistic assumptions, yet another trillion-dollar-plus deficit is nearly certain. … The past three years the nonpartisan Congressional Budget Office issued an analysis of the President’s budget.  They found the deficits were actually 20 percent higher than the President claimed.)
  • New taxes: $1.9 trillion over 10 years
  • Federal debt: $16.2+ trillion for 2013; over $25 trillion by 2021, according to ALG’s Bill Wilson

So how can the administration claim to be cutting the deficit by $4 trillion over 10 years and yet have annual spending grow from $3.8 trillion to $5.8 trillion (a 53% increase)? There’s the double-counting of last year’s “cuts” and a good helping of what AFP calls tricks and gimmicks. But mainly it’s the baseline budgeting scam, which I explained last August. ALG’s Bill Wilson has some numbers (emphasis added):

The Office of Management and Budget’s (OMB) baseline for 2013-2022 says outlays will total $47.053 trillion. Obama’s proposed budget takes that to $46.959 trillion. Since spending actually increases every year under Obama’s proposal, the only cut is off of the baseline — and that’s just $94 billion of so-called “cuts”.

Meanwhile, OMB says revenues over the next ten years will total $38.391 trillion. Under Obama’s proposal, that goes up to $40.274 trillion — an increase of $1.883 trillion in taxes, mostly on job creators.

By our count, that’s about $20 of tax increases for every dollar of “cuts,” and those are not even real cuts to the actual budget.  Spending would still increase every single year under Obama’s proposal. Meanwhile, the tax hikes are real.

The latest Obama budget would be laughable if the numbers weren’t so sobering and the consequences of continuing down this path weren’t so dire.

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Happy Dysfunctional New Year?

Posted by Richard on December 31, 2011

Mark Steyn doesn’t think much of how the U.S. spent 2011, and he’s less than optimistic about 2012:

… The year began with a tea-powered Republican caucus taking control of the House of Representatives and pledging to rein in spendaholic government. It ended with President Obama making a pro forma request for a mere $1.2 trillion increase in the debt ceiling. This will raise government debt to $16.4 trillion — a new world record! If only until he demands the next debt-ceiling increase in three months’ time.

At the end of 2011, America, like much of the rest of the western world, has dug deeper into a cocoon of denial. Tens of millions of Americans remain unaware that this nation is broke — broker than any nation has ever been.

Public debt has increased by 67% over the last three years, and too many Americans refuse even to see it as a problem. For most of us, “$16.4 trillion” has no real meaning, any more than “$17.9 trillion” or “$28.3 trillion” or “$147.8 bazillion.” It doesn’t even have much meaning for the guys spending the dough.

Look into the eyes of Barack Obama or Harry Reid or Barney Frank, and you realize that, even as they’re borrowing all this money, they have no serious intention of paying any of it back. That’s to say, there is no politically plausible scenario under which the $16.4 trillion is reduced to $13.7 trillion, and then $7.9 trillion, and eventually 173 dollars and 48 cents.

At the deepest levels within our governing structures, we are committed to living beyond our means on a scale no civilization has ever done. Our most enlightened citizens think it’s rather vulgar and boorish to obsess about debt. The urbane, educated, Western progressive would rather “save the planet,” a cause which offers the grandiose narcissism that, say, reforming Medicare lacks.

Read the whole thing.

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The baseline budgeting scam

Posted by Richard on August 5, 2011

A new CNN/Gallup poll shows most Americans disapprove of the debt ceiling deal, and CNN claims it's because of the process. Nonsense. It's the substance. An earlier CNN poll found that 2/3 of Americans favored the much tougher Cut, Cap and Balance Act, including a majority of every single demographic surveyed, even liberals.

Most Americans recognize a failure to honestly address the spending and debt crisis when they see it. If they knew just how the baseline budgeting scam works, they'd be even more disgusted by this sham "debt control" deal, which will increase the federal debt by at least $7 trillion (that's $7,000 billion) in the next 10 years. And that's assuming some pretty rosy projections for economic growth. 

Baseline budgeting proponents began with a seemingly reasonable suggestion: "Instead of starting each budgeting process from scratch [zero-based budgeting], why don't we use the previous budget as our starting point and make adjustments from there?" Then they added, "Of course, we'll need to adjust the previous budget numbers to account for inflation, population growth, increased demand for services, and a big fat dollop of 'What the heck, we can get away with it!' to create the baseline for next year." And they've been getting away with it for years.

The result of this process is that the starting point for each new federal budget — the baseline, which by bipartisan ruling class consensus represents "no spending increase" — is about 7-8% higher than the previous year's spending. Fiscal year 2011 spending is going to be about $3,800 billion. So, under baseline budgeting, if FY 2012 spending increases only to $4,066 billion, that's no increase at all! "Look how fiscally responsible we are! We held spending to the current level!" 

Of course, a 7% annual increase means the budget will double in 10 years to about $7,600 billion. But the baseline budgeters call that a 10-year spending freeze!

So let's put this "historic" Congressional compromise into perspective. They've agreed to $900 billion in "cuts" over 10 years, and their bipartisan committee is supposed to come up with $1,500 billion more in "cuts" this fall. If they really do (and Obama, Reid, et al, are already clamoring for the $1,500 billion to be mostly "revenue enhancements," i.e., tax increases), then the 2022 budget will be "cut" from its $7,600 billion baseline to a mere $5,200 billion. 

That's a 37% increase over 2011. They call that a massive cut. The establishment, ruling class Republicans are congratulating themselves for this monumental achievement. They're telling the Tea Party that they've won, that they've "changed the terms of the debate" and "turned things around."

Um, no. They've slowed the rate at which we're approaching the apocalypse. They've bought themselves another year or two (and maybe helped Obama buy another term) before the US turns into Greece. They've once again kicked the can down the road. And a significant proportion of the American people — far more than ever before — recognize this deal as the irresponsible charade that it is.

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