How to cut government spending

[Crafty_Dog]

Most of us here are quite clear on the need to cut government spending.  The next question is what to cut.  This thread is for a discussion of exactly that.  Please try to include an analysis of how the cuts will actually be achieved politically.

Suggested starting point:  The Glenn Beck show this week.  Excellent discussion last night to kick things off. 

[DougMacG]

Great category! Where to start?!  May I suggest that no program is too small for mention.  Chopping the small ones helps to set the can-do attitude for chopping the big ones. 

There was a federal study of the sexual habits of female college freshman.  We can get people do that for free, and when did that become an enumerated power?

A moratorium on UN dues.

Send NO ONE to the next climate change conference.  Let them meet without us and see if we can get the conference notes free on the internet.

Social Security ratios should be indexed back to where it was solvent.  In other words a floating retirement age that maintains a sustainable ratio of x workers for each retiree.  Means test Social Security.

End all paid brand advertising for food stamps. 

US government out of automobile manufacturing.

End insurance company bailouts, investment bank bailouts.

End all agricultural subsidies.  (Keep the Food Safety Inspection Service.)

No retirement packages for elected officials.

End all public unions.  If you work for 'we the people', there is no evil capitalist.

Privatize the mortgage business.

Strategic changes in military and defense:  Bigger sticks, shorter wars, cut 10% off the budget.

Repeal Obamacare. Repeal Obamacare. Repeal Obamacare. That was worth repeating.

Severely limit paid congressional staff.

Shorten the Census form to its original purpose.

End earmarks.

Switch to flat tax and send home 90% of the IRS.

End federal funding of local transportation systems such as light rail.

Identify all the programs that are not the federal government's responsibility, for the ones that you can't end instantly phase them out on a 7-10 straight line cut to zero.

Sell off 10% of federal lands over 10 years and reduce land management staff by 10%.

[Rarick]

Make welfare a saftey net rather than a cradle to grave program.  make the benefits dependant on "contributory to self support" actions, and time limited.
Phase out all the industrial/agricultural subsidies so a free market sets prices free of coercive Govt influences.
Flat tax, make everyone interested in the budget process instead of extorting "free money" for an apparently limitless budget.
Make that flat tax semi permanent- use the same standard to change the tax rate that you need for an amendment.
Cull the bureaucracy, there are many positions that are check the form is filled right type positions, let a computer check the form and save 20 overpaid jobs.

Reformat the armed services.  The only professional cadre for the services should be the "heavy units" like tanks, aircraft, SOF, and ships.  The other units like Logistics, Infantry and such can be left in Reserve and National Guard units.  Alot has been done in that direction, but more can be done.  Having less deployable units would force the politicians to be less adventuresome.  The Aircraft and new Drones are very capable of stepping on a major move severely enough to allow the infantry and tanks to get into place. (look how the balkans ended up immobilized by all of the bridge destruction, the Iraqi tank brigade taken out during OIF)  Our job is not to be policeman or peacemaker, but simple self defense.  The "world Police" and "arsenal for democracy" paradigms are not a crucial need anymore.  The SOF could handle brushfires just fine with the firepower of the heavy air units.  That would be a lot of money saved on wages/personnel. 

Reformat the political process.  Lobbiests should become the new RICO statute targets since they offer so much campaign funding that they drown out the real voice of the people.  Instead of the electorate being the power broker, it is the organized special interests that are.

[Crafty_Dog]

Glenn Beck made an interesting point last night concerning Social Security, and I paraphrase:

Its not a pension.  It is Social Security INSURANCE.  What is insurance for?  Unexpected events.  The unexpected event at the time SS was created was to outlive one's money.  IIRC what he said, the life span was 62 at the time, and SS kicked in at 65.  Now our life span averages 75 for men and 80 for women. 

Bottom line, the age at which SS kicks in needs to be moved upwards.  Certainly we should not change the rules for those close to 65, but overall the qualifying age needs to be moved upwards.

[Crafty_Dog]

TTT

[Crafty_Dog]

www.DownsizingGovernment.org

[Crafty_Dog]

Editor's Note: After years of cost increases that exceeded population growth and inflation, the budgets of many American states plunged into crisis during the economic downturn. We asked four governors to tell us how they are coping and how they plan to save money in the future.

• Ed Rendell: Try Smart Shopping

• Arnold Schwarzenegger: Pension Reform Is Key

• Deval Patrick: Invest During Bad Times

• Bob McDonnell: Ever-Higher Budgets Can't Be the Norm



Try Smart Shopping
By Ed Rendell

Pennsylvania now spends $2 billion less to run state government than it did eight years ago. This didn't happen by accident; it's a direct result of the smart management measures we put into place.

Pennsylvania had more than 2,000 contracts for buying office supplies when I took office in January 2003. Some agencies paid full retail price. We immediately began applying good business practices to every aspect of state purchasing. We saved $14 million a year by putting office supplies out to bid and selecting the lowest-priced single supplier. Applying that same model to computer purchases saved taxpayers another $19 million a year. We allow local governments and school districts to piggyback on these contracts. These are just two examples of the procurement redesign that is saving taxpayers nearly $30 million a year.

Today, the skyrocketing cost of providing health care is squeezing taxpayers. Here, we've applied more cutting-edge strategies. To give our state workers greater responsibility for their own care, I imposed the first-ever employee contribution toward premiums. We also require employees to fully engage in a wellness program or face 50% higher monthly premiums.

Our wellness plan specifically focuses on reducing the costs of treating chronic illness, and it actively pushes employees to stay healthy. This approach enables us to keep the state's cost increases to less than 7% a year, well below that of most other states in the recent past. This is a true "win-win" for our employees and our taxpayers.

To save even more money without cutting services to taxpayers, we've asked the state legislature to place all 500 of our school districts into one combined health-insurance plan. Districts would enjoy new leverage in the insurance marketplace, leading to improved benefits and cost reductions of up to 30%.

Each of our cost-saving measures has faced some opposition from legislative leaders of both parties. Fortunately, taxpayers stood with us—they understand that common sense, innovation and political will are what it takes to make government work for them.

Mr. Rendell, a Democrat, is the governor of Pennsylvania.


Pension Reform Is Key
By Arnold Schwarzenegger

For years now, I have been trying to get lawmakers to reform public employee pensions in order to benefit private-sector job growth. The problem is stark: Over the last decade in California, spending on state employees' compensation rose nearly three times faster than state revenues. This has squeezed resources for programs, such as higher education and job training, that benefit private-sector workers.

This year, for the first time ever, our state was forced to spend more on retirement costs ($6.5 billion) than on higher education. This prevented us from, among other things, investing in more transportation and other infrastructure projects that are needed to accommodate the world's fastest-growing and most innovative companies.

Last week we finally got some good news: The state legislature agreed to pass my pension reforms as part of a hard-fought budget deal. These reforms cut spending in significant ways:

• Current employees will now be required to contribute more toward their pensions, saving nearly $800 million this year alone.

• For new employees, we will create a two-tier system that rolls pension levels back to pre-1999 levels. This will reduce pension costs by $100 billion over time.

• We ended the ugly practice of pension "spiking," where employees manipulated their compensation in their final year at work in order to boost their lifetime retirement benefits.

• We brought transparency to the system by exposing the deceptive pension fund accounting practices that were hiding hundreds of billions in pension debt from the taxpayers.

These reforms are creating a pension system that is fair to both state workers and to the private-sector workers who pay their salaries and benefits. It will free up more money for investing in critical programs like higher education and infrastructure, and help reduce tax burdens on the private sector.

It saddens me to see Democrats and some Republicans who seem intent on raising business taxes and reducing infrastructure investment in order to protect spending on public-employee compensation and retirement benefits. We believe that, on the contrary, private-sector job growth will be enhanced if public-sector retirement benefits are brought under control. All it takes is some lawmakers who are willing to stand up to the special interests and do what's right.

Mr. Schwarzenegger, a Republican, is the governor of California.


Invest During Bad Times
By Deval Patrick

Even before we began to feel the effects of the global economic collapse, we chose investments and reforms that we believed would build a stronger, better Commonwealth for a generation. We stuck with that strategy through the recession—and it's working.

Massachusetts increased its investment in education—because education is our calling card around the world—and sustained it because second graders don't get to sit out the second grade until the recession is over. We invested in innovation industries (like biotech, IT, clean and alternative energy, and related manufacturing) because our highly educated work force is uniquely suited to such enterprises. And we invested in health care, because we see health as a public good, and because we believe that people should have health security, especially in tough times.

We paid for these investments with government reforms and deep cuts in other spending. We cut $4.3 billion from a variety of programs and agencies, reduced employee head count by 3,000, negotiated wage and benefit concessions from state employee unions, and increased state employee health-care contributions. We also capped pensions and ended loopholes that some employees used to boost their retirement benefits, such as by claiming an entire year of service for working one day in a calendar year.

At the same time, we consolidated more than 20 transportation, business development and other state agencies. Civilian flaggers instead of police details were assigned to construction projects. We cut the business tax rate to 8.75% from 9.5%. We closed tax loopholes that favored multinationals over small businesses, which make up 85% of the businesses in our state. We increased our sales tax to 6.25% from 5%, but food and most clothing remain untaxed. A large rainy day fund and federal stimulus funds have also helped. Through this blended approach, we delivered four responsible, balanced budgets—on time—leading all the independent rating agencies to reaffirm our strong bond rating.

We're getting results. Massachusetts's rate of job growth is the highest in the nation, having added nearly 65,000 jobs so far since December. The state economy is growing at 6.4%, twice the annual rate. CNBC rates us the fifth best place in the U.S. for business.

Mr. Patrick, a Democrat, is the governor of Massachusetts.


Ever-Higher Budgets Can't Be the Norm
By Bob McDonnell

When I took office in January, we faced two massive budget shortfalls. The first was $1.8 billion in the fiscal year 2010 budget. To get this under control we cut spending and provided a financial reward for state workers to generate savings and not spend their entire agency budgets by the end of the fiscal year. Six months later we announced a $403 million surplus.

The second shortfall was $4.2 billion in the current biennial budget. Again, we cut a wide variety of programs (including in education and health), reducing state spending to 2006 levels. As a result we closed that shortfall without a tax increase—indeed we threatened a veto if the legislature passed the previous governor's proposed $2 billion tax increase. The legislature rejected the tax unanimously.

Virginia's state budget grew by 73.4% from 2000 to 2009, much faster than the rate of growth in population plus inflation. This is unsustainable and unacceptable, and the budget cannot be seriously restrained without addressing its two primary drivers: personnel and programs.

As a result, we supported a significant overhaul of Virginia's pension system. All state employees hired after July 1 of this year will now, for the first time in a generation, contribute to their own pensions. With pension-system reform, we will save an estimated $3 billion over the next 10 years. Actuaries estimate that in the long run, our reforms will reduce the total cost of Virginia's pension system by 10%.

Our second major reform was an immediate, statewide hiring freeze. We obtained enhanced authority from the legislature for the governor to order a freeze that covers all noncritical areas of state government, not just a select few agencies. This strict freeze, together with reductions in full-time positions, will save over $20 million a year.

Looking forward, we've also created a commission on government reform that is evaluating over a thousand ideas to save tax dollars, by doing everything from cutting and consolidating boards and agencies to creating a one-stop shop where businesses can access every license, permit and registration they need to operate. For too long, state governments have operated on the assumption that ever-higher budgets are the norm. We intend to redo the way government operates.

Mr. McDonnell, a Republican, is the governor of Virginia.

[G M]

[youtube]http://www.youtube.com/watch?v=Ld05-5OOLRg&feature=player_embedded[/youtube]

The democrats, doing for America what they did for Detroit!

[ccp]

Yes indeed, hence the name of Savage's latest book:

'Trickle up poverty'!

[G M]

http://pajamasmedia.com/instapundit/107915/

DAVID BROOKS WONDERS WHY THE GOVERNMENT CAN’T DO ANYTHING ANYMORE:

    Why are important projects now unaffordable? Decades ago, when the federal and state governments were much smaller, they had the means to undertake gigantic new projects, like the Interstate Highway System and the space program. But now, when governments are bigger, they don’t.

    The answer is what Jonathan Rauch of the National Journal once called demosclerosis. Over the past few decades, governments have become entwined in a series of arrangements that drain money from productive uses and direct it toward unproductive ones.

That’s exactly right, and Rauch’s book, Demosclerosis: The Silent Killer of American Government, remains just as timely as in the 1990s, when it came out.

[Crafty_Dog]

http://townhall.com/columnists/DebraJSaunders/2010/11/30/you_can_stop_paying_for_al_gores_mistake/page/full/

In Greece earlier this month, Al Gore made a startling admission: "First-generation ethanol, I think, was a mistake." Unfortunately, Americans have Gore to thank for ethanol subsidies. In 1994, then-Vice President Gore ended a 50-50 tie in the Senate by voting in favor of an ethanol tax credit that added almost $5 billion to the federal deficit last year. And that number doesn't factor the many ways in which corn-based ethanol mandates drive up the price of food and livestock feed.

Sure, he meant well, but as Reuters reported, Gore also said, "One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."

In sum, Gore demonstrated that politicians are lousy at figuring out which alternative fuels make the most sense. Now even enviros like Friends of the Earth have come to believe that "large-scale agro-fuels" are "ecologically unsustainable and inefficient." That's a polite way of saying that producers need to burn through a boatload of fossil fuels to make ethanol.

Gore also showed that most D.C. politicians can't be trusted to put America's interests before those of Iowa farmers. But there is one pursuit in which homo electus excels: spending other people's money.

Beware politicians when they promise you "the jobs of the future." Last week, the Washington Post ran a story about a federal grant program in Florida designed to retrain the unemployed for jobs in the growing clean-energy sector. Except clean tech isn't growing as promised. Officials told the Post that three-quarters of their first 100 graduates haven't had a single job offer.

In May, President Obama came to a Fremont, Calif., solar plant where he announced, "The true engine of economic growth will always be companies like Solyndra." This month, Solyndra announced it was canceling its expansion plans. The announcement came after voters rewarded the green lobby by defeating Proposition 23 -- which would have postponed California's landmark greenhouse gas reduction law AB32 -- because voters bought the green-jobs promise.

Back to Gore. There is a movement in Washington to end Gore's mistake. Republican Sens. Tom Coburn of Oklahoma and Jim DeMint of South Carolina have proposed ending the 45-cent-per-gallon subsidy on corn ethanol, which is set to expire on Dec. 31 unless Congress extends it.

As DeMint explained in an e-mail to the Washington Post's Greg Sargent, "Government mandates and tax subsidies for ethanol have led to decreased gas mileage, adversely effected the environment and increased food prices. Washington must stop picking winners and losers in the market, and instead allow Americans to make choices for themselves."

That's what free-market types who oppose corporate welfare -- like me -- have been saying for years.

So the question is: Will this new batch of Republicans have the intestinal fortitude to buck the farm lobby and agribusiness by weaning them from the public teat? Or are they no better than the farm-lobby-pandering Al Gore?

[Crafty_Dog]

Every Republican member of Congress should sign the following pledge, being promulgated by Grover Norquist's Americans for Tax Reform:

"I promise not to vote for any expansion of the federal debt limit unless it is preceded or accompanied by significant cuts in federal spending."

We all know that the reason the federal government debt is exploding is the reckless spending policies of the Obama administration. From the time George Washington took the oath of office to the time Barack Obama did, Washington borrowed $9 trillion. Since Obama took office, two years ago, we have borrowed almost $5 trillion more!

Domestic discretionary spending (non-defense) has risen by an astonishing 41 percent in two years!!! Welfare spending, primarily Medicaid, has gone up by 54 percent in two years!!!! We must roll back these increases. (It is not increases in Social Security -- 14 percent -- or Medicare --16 percent that are the problem).

Obama will never allow spending cuts unless they are jammed down his throat, and his need for an expansion of his borrowing authority are the key chance to do so.

House Speaker John Boehner sounded an ominous note of possible capitulation even before the first shot was fired when he said: "We're going to have to deal with it (raising the debt limit) as adults. Whether we like it or not, the federal government has obligations, and we have obligations on our part."

Obligations? Sure. But don't we also have the obligation to stop the crazy spending even as we allow the debt limit to rise to pay for the spending that is already underway? Is this not the perfect time to demand spending restraint?

The American people will strongly support the spending restrictions as a precondition for raising the debt limit. Most don't want the limit raised at all. But almost everyone will see the wisdom of cutting the spending as we raise the debt limit.

Obama will resist and, if he vetoes the spending cuts, he -- not the Republican House -- will bear the onus for the ensuing government default. And he will blink just like he did over extending the George W. Bush tax cuts.

What spending cuts? Nothing complicated. The most important one is to roll back domestic discretionary spending to pre-Obama levels -- 2008 levels -- and freeze it there for three years. This step would cut the deficit by over $100 billion for each of the next three years (and, if we take the step now, for this year, as well). Let the federal agencies figure out what to cut. But force them to make these cuts.

We all lived pretty well in 2008 before the 41 percent hike in domestic discretionary spending (on things like transportation, Congress, EPA, Justice, Education, Energy, etc). Let's go back to those days and erase the legacy of the Obama stimulus package.

And we should also take two other steps:

-- Transform Medicaid into a block grant to the states, giving them the flexibility to spend it as they wish. Roll Medicaid back to 2008 levels, and include a modest annual inflator for increasing costs of about 3 percent.

-- And, we should only increase the debt limit by $500 billion (about three months' worth) so as to keep Obama on a short leash and make him keep coming back for more while we add restrictions and new cuts each time.

Republicans need to be smart to leverage their one-house control into real accomplishments, and there is no better place to start than with the debt limit vote next month.

[DougMacG]

Morris has it right.  I like the 3 month idea, if not 30 days.  Keep the heat on until something meaningful happens.  Don't need to raise the debt limit much if the budget gets balanced.

BTW, may I suggest for the category: 'Hot to gut government spending'.  It is not something superficial needed or a little trim job when we are bleeding a trillion dollars every 7 months now.  Redefine entitlements and put zero based budgeting on everything.  Justify every dollar, sunset it and start again from zero justifying again.  Increased spending on interest means decreased funds for something else.  Hold hearings on unintended consequences and negative behavioral affects of our social policies and put those on hold that have serious issues, which should be most of it.

Within the 3 months we should have a new, simple, lower, wider, flatter, fairer tax code passed through at least one house to match spending cuts as the way to stimulate the economic growth we so badly need.

[ragsbo]

Here is my list;

1. Cut the number of staff for congress as well as their pay. No more fancy offices with large staffs. Put them up in retired military posts so there will be no need for houses. Feed them in the chow hall. Bus them to and from work. Make congress a part time job not a full time career. Term limits= House 6 years; senate 12. And can not sit out a term then run again= limit is for life.
2. No retirement for congress except what they get on their own. No medical for congress except what they buy on their own.
3. Make congress adhere to all laws they pass and do not let them exempt themselves.
4. Do away with White house tsars and funding. If the job is not in the US Constitution; then don't pay for it. If the president wants them, he can pay for it out of his budget; and make that budget tight.
5. Kick the UN out of the USA and use that real estate for something useful. Stop paying them dues so they can blame us for everything.
6. Don't pay out any foreign aid until our bills are paid here at home. Then only give it to those contries who swear to stand by us not swear at us.
7. Do away with welfare as a career choice. Make it like unemployment= short term and make them actually get work.

[DougMacG]

Great list Ragsbo, great post!  My favorite:

"Kick the UN out of the USA and use that real estate for something useful."

Personally, I would scale it back instead, pay one share not the lion's share, offer them Peoria not NY, let countries bring about 3 people each, no UN staff, let them meet and pass all the non-binding resolutions they want while we turn more to OECD or an association of democracies to work on larger issues.

The full cost of UN incompetence, over-reach and counter-productivity is hard to measure. The facade of the UN resolutions Saddam accepted in 1991 caused the war we are still fighting IMO.  Now they seek carbon regulation and world taxes.

[Crafty_Dog]

http://www.downsizinggovernment.org/balanced-budget-plan

[Crafty_Dog]

Not exactly on point in that it addresses revenues, not spending but of interest nonetheless:

WSJ
It hasn't received much, if any, media attention, but there's some good budget news to report for a change. Federal tax revenues are rising briskly again, which should allow progress against deficits if the politicians can control their spending appetites.

The Congressional Budget Office reported last week that federal tax receipts climbed in December by $18 billion, following somewhat smaller gains in the previous two months. For the first quarter of fiscal 2011, revenues have climbed by $44 billion, or nearly 9%, to $531 billion. Especially encouraging is that these revenue gains came predominantly from individual income taxes, which rose 23% in the first three months to $256 billion. Individual tax receipts continued to fall in 2010 even as corporate receipts rose, so the current increase is a sign that wages and bonuses are rising again for workers who have a job.

It's true these increases come off historic modern lows, as receipts fell to a mere 14.9% of the economy in fiscal 2009 and 2010. The modern average is closer to 18.5%, which is the revenue the economy typically throws off when it's growing at a healthy clip. But the revenue increase is a reminder that the only sustainable cure for deficits is more rapid economic growth and the revenues that flow from it. We'll be fascinated to see if revenues continue to increase this year in the wake of the extension of the Bush-Obama tax rates and the one-year cut of two percentage points in the payroll tax. Payroll tax revenue will fall, but our guess is that individual income tax receipts will rise.

We should add that the deficit declined only modestly in the first fiscal quarter because spending rose by $26 billion to $902 billion. So the deficit remained a huge $371 billion. Spending is expected to be 25% of GDP for 2011, with a deficit of 10% of GDP. If Republicans in Congress can whittle away at spending while the economy throws off more revenue, the deficit should begin to decline again after the record chasms under Nancy Pelosi's Democrats. The keys are to cut spending and keep growth alive.

[Boyo]

Here is something by Walter Williams I found interesting...

A MINORITY VIEW

BY WALTER WILLIAMS

RELEASE: WEDNESDAY, JANUARY 12, 2011

 

What Our Constitution Permits

 

            Here's the House of Representatives new rule: "A bill or joint resolution may not be introduced unless the sponsor has submitted for printing in the Congressional Record a statement citing as specifically as practicable the power or powers granted to Congress in the Constitution to enact the bill or joint resolution." Unless a congressional bill or resolution meets this requirement, it cannot be introduced.

            If the House of Representatives had the courage to follow through on this rule, their ability to spend and confer legislative favors would be virtually eliminated. Also, if the rule were to be applied to existing law, they'd wind up repealing at least two-thirds to three-quarters of congressional spending.

            You might think, for example, that there's constitutional authority for Congress to spend for highway construction and bridges. President James Madison on March 3, 1817 vetoed a public works bill saying: "Having considered the bill this day presented to me entitled 'An act to set apart and pledge certain funds for internal improvements,' and which sets apart and pledges funds 'for constructing roads and canals, and improving the navigation of water courses, in order to facilitate, promote, and give security to internal commerce among the several States, and to render more easy and less expensive the means and provisions for the common defense,' I am constrained by the insuperable difficulty I feel in reconciling the bill with the Constitution of the United States and to return it with that objection to the House of Representatives, in which it originated."

            Madison, who is sometimes referred to as the father of our Constitution, added to his veto statement, "The legislative powers vested in Congress are specified and enumerated in the eighth section of the first article of the Constitution, and it does not appear that the power proposed to be exercised by the bill is among the enumerated powers."

            Here's my question to any member of the House who might vote for funds for "constructing roads and canals, and improving the navigation of water courses": Was Madison just plain constitutionally ignorant or has the Constitution been amended to permit such spending?

            What about handouts to poor people, businesses, senior citizens and foreigners?

            Madison said, "Charity is no part of the legislative duty of the government."

            In 1854, President Franklin Piece vetoed a bill to help the mentally ill, saying, "I cannot find any authority in the Constitution for public charity. (To approve the measure) would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded."

            President Grover Cleveland vetoed a bill for charity relief, saying, "I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit."

            Again, my question to House members who'd vote for handouts is: Were these leaders just plain constitutionally ignorant or mean-spirited, or has our Constitution been amended to authorize charity?

            Suppose a congressman attempts to comply with the new rule by asserting that his measure is authorized by the Constitution's general welfare clause. Here's what Thomas Jefferson said: "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated."

            Madison added, "With respect to the two words 'general welfare,' I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators."

            John Adams warned, "A Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever." I am all too afraid that's where our nation stands today and the blame lies with the American people.

            Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2011 CREATORS.COM

Boyo

[Crafty_Dog]

Boyo:

An excellent question deserving of quality conversation , , , please post it on the Constitutional Law thread on our SCH forum

Thank you,

[Crafty_Dog]

Dick Morris is a good pollster, but IMHO he is a mediocrity on substance and sometimes gets in over his head.  The piece that follows is adequate however for my purpose of bringing up an idea which, if I am not mistaken, was begun by Newt Gingrich: changing federal bankruptcy law to enable individual states to declare Chapter 9 Bankruptcy.
=================
Facing huge budget difficulties, New Jersey Gov. Chris Christie has been showing other states how to survive -- namely, by taking on the government-employee unions.

Christie's battles with the teachers unions over the past year have produced countless YouTube hits. And last month, he got a law passed to limit wage hikes from labor arbitrations between the state and public-employee unions to an average 2 percent annual increase.

As New Jersey, New York, California and Illinois -- the four with the highest insurance premiums on their bonds -- face life without a compliant Congress to approve their pleas for more cash, they'll increasingly have to follow Christie's example and rein in their unions.

As Margaret Thatcher famously said, the problem with socialism is that sooner or later "you run out of other people's money."

When the states come calling, the House must say, "No." What's more, it's time to amend the federal bankruptcy laws to create a procedure for state bankruptcies -- allowing states to abrogate their municipal-union contracts from the school-board level on up.

States, in bankruptcy court, should be able to reorganize their finances so as to put themselves back on a stable footing.

Initially, municipal-bond buyers will protest the lack of federal assistance and may even deny states and localities access to the bond market at any interest rate. But once the states reorganize, they should be able to proceed normally -- just as New York City did after its financial meltdown in the '70s.

Such reorganizations needn't require any ongoing federal involvement. The procedure would let the states help themselves, giving governors and legislatures a third way out of their financial mess. Raise taxes, cut spending or ... alter union contracts. Each state would face the choice of whether to wallow in overspending or take steps to correct it.

Initially, Democrats will oppose the idea of state bankruptcies. But when House Republicans make clear that no more aid will be forthcoming and that the stimulus spigot is turned off, at least some Democrats will realize this is their best option.

Then, fiscal necessity will have achieved what so many of us want -- a return of true local government.

No more will schools be run for the teachers and by the teachers -- nor will such unions as the Service Employees International Union and the American Federation of State, County and Municipal Employees dominate state legislatures. School choice, charter schools and even voucher programs will have a chance to flourish.

Some fear the U.S. Constitution prevents federal law from extending Chapter 9 to permit state bankruptcies because it would violate state sovereignty. Yet Chapter 9 is voluntary, so states would remain sovereign -- with merely the option of subjecting themselves to Chapter 9 constraints.

Giving insolvent states the power to break their union contracts would alter dramatically the balance of political power all across the nation. No longer would municipal unions have the financial ability to underwrite the Democratic Party. Gone from our politics would be $200 million that the American Federation of Teachers, the National Education Association, SEIU and AFSCME together spent on political action in the last election cycle.

Government would be returned to the people.

[DougMacG]

Excellent idea, Chapter 9 municipal bankruptcy for states.  Extending the ability to reorganize to the states makes perfect sense.  If they are already relying on federal subsidy, then they are already insolvent  There has to be a relief valve.  Union guarantees in the private sector mean nothing if they implode the company.

Just the option or threat of bankruptcy can be a powerful negotiating tool.

[Crafty_Dog]

Members of the conservative Republican Study Committee in Congress have introduced the "Spending Reduction Act of 2011," a plan that lays out specific budget cuts amounting to $2.5 trillion over the next decade. The number sounds big, but it represents less than 10 percent of annual spending. The bill, according to Paul Bedard of US News, "would reduce current spending for non-defense, non-homeland security and non-veterans programs to 2008 levels, eliminate federal control of Fannie Mae and Freddie Mac, cut the federal workforce by 15 percent through attrition, and cut some $80 billion by blocking implementation of Obamacare." It's a good first step, but it's also just that -- a first step

[Crafty_Dog]

By E.J. MCMAHON
As states struggle with enormous deficits and exploding pension costs, some analysts are urging Congress to enact a law enabling states to declare bankruptcy the way municipalities can under Chapter 9 of the federal bankruptcy code. This is a bad idea. A state bankruptcy provision could create more problems than it solves.

Bankruptcy proponents understandably worry that states such as California and Illinois are so deep in the hole they may end up petitioning Congress for federal relief. To forestall this possibility, the argument goes, even the threat of bankruptcy would give governors and legislators a powerful new weapon for forcing concessions from recalcitrant public employee unions.

Yet state officials committed to cutting costs already have options for putting the squeeze on their unions. One is the threat of mass layoffs, which most governors can impose unilaterally. Governors and legislators also can prospectively freeze wages or even cut them through involuntary furloughs, as California and several other states did over the past two years.

True, management (i.e., taxpayers) often starts from a weak position in contract talks with government unions. But governors and legislators have the power to change that, too—because the bargaining rights of state and local government unions are primarily a matter of state law.

By reopening their collective bargaining statutes, state officials can narrow the terms of future negotiations—restricting compulsory arbitration, say, or taking retiree health insurance off the table and making it a management prerogative. They can also pressure unions by revoking privileges such as the employer-collected dues checkoff. They can even eliminate future union contracts.

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Corbis
 .This is not as unlikely as it may sound. At least 18 states already outlaw collective bargaining with some categories of government employees; Virginia and North Carolina prohibit it for all public workers. Two newly elected Republican governors, Scott Walker in Wisconsin and John Kasich in Ohio, have threatened to dismantle their state bargaining statutes if unions fail to make concessions.

For constitutional reasons, any federal law enabling state bankruptcy would have to be voluntary, meaning states would have to invite federal judges to play tough with their unions. But if Gov. Jerry Brown and the California legislature are unwilling to rewrite their collective bargaining rules—signed into law by Mr. Brown himself, 33 years ago—why assume they would plead with a federal judge to do it for them?

It's more likely that a state like California would pursue bankruptcy if powerful unions and other budget-dependent interest groups saw this as a way to deflect some of the pain to bondholders. California is one of the states that constitutionally guarantees its general obligation debt, and whose bondholders are now seemingly untouchable. That could change with a bankruptcy option.

Such an option would certainly rattle the bond market—which bankruptcy proponents see as a good thing. Yet this ignores the potential for collateral damage and disruption. While bond spreads might get wider for the most troubled states, the enactment of a state bankruptcy law is likely to raise the cost of borrowing for all municipal issuers.

Much of the talk about state bankruptcy has centered on the solvency threat posed by unfunded public pension liabilities of as much as $3 trillion, according to an estimate by Joshua Rauh of Northwestern University. This is truly a significant concern, complicated in some cases by state constitutions that make it impossible to claw back unaffordable benefits for current workers.

However, while most public pension liabilities are pooled in statewide, off-budget trust funds, they largely reflect the cost of retirement benefits promised to teachers, cops and firefighters—who mainly work for municipalities, not state governments. This raises another complication: Could a judge in a state bankruptcy proceeding interfere with the pension obligations of localities?

A growing number of states are finally starting to get serious about pension reform. New Jersey Gov. Chris Christie, who confronts one of the nation's worst pension underfunding problems, is using the prospect of insolvency to push for significant pension reductions. Bankruptcy could complicate this task. If Mr. Christie somehow persuaded a Democrat-dominated state legislature to join him in asking a federal judge to reduce pensions, New Jersey's unions might be that much quicker to seek a federal bailout.

The focus of state bankruptcy advocates on employee compensation costs is somewhat misplaced. More than half of all state expenditures go to Medicaid, K-12 public school aid and other transfer payments. These are the areas—not current pension bills or debt service—that have been the prime source of unsustainable and unaffordable spending growth in state budgets.

The biggest state budget gaps will never be closed until politicians use the tools they already have to challenge the overweening power of public employee unions. Meanwhile, Washington can help by lifting some of the burdens it imposes on the states. Converting Medicaid into a block grant, for example, would remove one big excuse governors now have for failing to do more to control their health-care costs. By giving states more flexibility to deal with this program and other federal mandates, Congress will have greater justification for telling governors to fix their own problems.

Mr. McMahon is a senior fellow at the Manhattan Institute and its Albany-based Empire Center for New York State Policy.

[Crafty_Dog]

"We're glad to see House Republicans pushing the Spending Reduction Act of 2011, which would trim $2.5 trillion from the budget over the next decade. It's a nice start, but not nearly enough. It's great to see so many undeserving, wasteful programs finally face the ax. But that's just what the Republicans' new plan to return the U.S. to fiscal responsibility would do. ...

The GOP bill would lower spending on 'non-defense, non-homeland security and non-veterans programs' to 2008 levels. That includes Fannie Mae and Freddie Mac, the bankrupt mortgage giants, which would no longer be under government control. The federal work force would be cut 15% through attrition, another major saving. All good, we say. But let's do the math. In the last two years alone, we've put up deficits of $2.7 trillion. In perspective, the proposed $2.5 trillion in cuts over a decade come to $250 billion a year. Our deficit will average $1.33 trillion a year for the next 10 years -- $13.3 trillion, total, according to the Congressional Budget Office. So even with the GOP's cuts, we'll still have $1 trillion a year in deficits. Even with all this cutting, we come up well short. ...

The GOP has done yeoman's work, taking a first whack at bringing our budget back into balance. But without entitlement reform, spending will continue to soar -- and we'll watch our debts surge from about $14 trillion today to $23 trillion or more in just 10 years. Cuts won't come easy, but they have to be made. The GOP plan is a decent down payment, but more cutting remains to be done." --Investor's Business Daily

[Crafty_Dog]

Hamstrung by federal prohibitions against lowering Medicaid eligibility, governors from both parties are exercising their remaining options in proposing bone-deep cuts to the program during the fourth consecutive year of brutal economic conditions.

Gov. Jerry Brown of California, a Democrat, proposes cutting Medicaid by $1.7 billion.

Gov. Andrew Cuomo of New York is expected to propose at least $2 billion in cuts in his budget.
Because states confront budget gaps estimated at $125 billion, few essential services — schools, roads, parks — are likely to escape the ax. But the election of tough-minded governors, the evaporation of federal aid, the relentless growth of Medicaid rolls and the exhaustion of alternatives have made the program, which primarily covers low-income children and disabled adults, an outsize target.

In Arizona, which last year ended Medicaid payments for some organ transplants, Gov. Jan Brewer, a Republican, is asking the Obama administration to waive a provision of the new health care law so that the state can remove 280,000 adults from the program’s rolls. In California, the newly elected governor, Jerry Brown, a Democrat, proposes cutting Medicaid by $1.7 billion, in part by limiting the beneficiaries to 10 doctor visits a year and six prescriptions a month.

In the budget he will unveil on Tuesday, Gov. Andrew M. Cuomo of New York is expected to propose cutting even more — at least $2 billion from projected state spending on Medicaid, which totaled about $14 billion this year.

And Gov. Nathan Deal, the new Republican leader of Georgia, proposed this month to end Medicaid coverage of dental, vision and podiatry treatments for adults. South Carolina is considering going a step further by also eliminating hospice care.

The governors are taking little joy in their proposals. And many of them, particularly the Republicans, are complaining about provisions of last year’s health care overhaul, and of the stimulus package before it, that require the states to maintain eligibility levels in order to keep their federal Medicaid dollars.

“Please know that I understand fully the impacts of this rollback, and it is with a heavy heart that I make this request,” Ms. Brewer wrote this week in seeking a waiver, the first of its kind, from Kathleen Sebelius, the secretary of health and human services. “However, I am left with no other viable alternative.”

The shrinking of Medicaid programs, if approved by the state legislatures, would come at a tenuous moment for the Obama administration. Starting in 2014, the health care law calls for an enormous expansion of Medicaid eligibility that is expected to add 16 million beneficiaries by 2019.

Some states are now cutting benefits like prescription drugs and mental health treatment that will be required then. The federal government will cover the entire cost of the expansion through 2016, when states must gradually pick up a share, peaking at 10 percent in 2020 and remaining there.

Governors have known that this precipice was near for close to two years.

Medicaid, which covered 48.5 million people in 2009, up 8 percent in a year, is a joint state and federal program. The federal government provides the lion’s share of the money and sets minimum standards for eligibility and benefits that states may exceed if they wish.

In 2009, Congress provided about $90 billion for states in the stimulus package to offset the cost of surging Medicaid rolls. Last August, it extended the aid at a reduced level, adding $15 billion over six months. The relief raised the federal share to between 65 percent and 82 percent, depending on the state, up from between 50 percent and 75 percent.

While that money is widely credited with staving off catastrophe, deficits were so deep that 39 states cut Medicaid payments to providers in 2010, and 20 states pared benefits, according to the Kaiser Family Foundation.

On July 1, the enhanced federal aid will disappear, causing an overnight increase of between one-fourth and one-third in each state’s share of Medicaid’s costs. But because of the federal eligibility restrictions, the options for states are largely limited to cutting benefits that are not federally required; reducing payments to doctors, hospitals and nursing homes; and raising taxes on those providers.

“States have already cut payments to health care providers and scaled back benefits over the last few years, so these new proposed cuts are much more painful,” said Edwin Park, a health expert at the Center on Budget and Policy Priorities, a left-leaning research group.

A number of states, Texas and California among them, are considering further reductions of as much as 10 percent in payments to providers. Medicaid reimbursement is already so low that many physicians refuse to accept the coverage.

Several states also plan to raise co-payments for beneficiaries. And a number of governors, notably Rick Scott in Florida, are considering vast expansions of managed care plans in an attempt to control costs.

Mr. Brown’s proposed cap on doctors’ visits in California would affect only 10 percent of Medicaid recipients, said Toby Douglas, the state’s Medicaid director. But many of them would be among the sickest beneficiaries. Mr. Brown also has suggested eliminating an adult day care program that serves 27,000 people who might otherwise end up in nursing homes.

=============
“We are having to make proposals that are not the best choices for our most vulnerable beneficiaries,” Mr. Douglas said. “But given our limited resources, they are the best choices for the State of California.”

Lawmakers in a few states have discussed withdrawing from Medicaid, although Texas officials recently concluded that the loss of federal matching dollars would make it impractical. In at least one state, Minnesota, officials are expanding Medicaid eligibility to some childless adults before 2014, largely to win federal dollars for coverage that was being provided by the state.

Arizona’s waiver request will be a test of the new health care law’s flexibility, and of the White House’s disposition. Other states are watching. Twenty-nine Republican governors wrote Mr. Obama and Congressional leaders this month to urge repeal of the prohibition, which they called “unconscionable.”

Jessica Santillo, a spokeswoman for the federal Department of Health and Human Services, said the agency would not comment on Arizona’s pending request or the administration’s approach to waivers. “We want to continue our close partnership with the states and our nation’s governors,” she said.

Arizona is asking to remove 250,000 childless adults and 30,000 parents from Medicaid. They were granted eligibility by a 2000 referendum that made Arizona one of the few states to cover low-income childless adults.

The expansion was financed with proceeds from cigarette taxes and a tobacco lawsuit, but that money became insufficient in 2004. The state’s general fund has been making up the difference ever since. Eliminating the coverage would save $541 million, closing nearly half of the budget gap for the coming year.

In her letter to Ms. Sebelius, Ms. Brewer noted that Medicaid consumed 30 percent of her state’s general fund, up from 17 percent in 2007. And she emphasized that Arizona’s coverage was more generous than that in most states, a pointed reference to Kansas, where Ms. Sebelius was governor until two years ago.

[Crafty_Dog]

By JANET HOOK
House Republicans are debating whether to propose new limits on the growth of Medicare and other entitlement programs, weighing a gamble that voters are more concerned about trimming the federal deficit than holding on to promised benefits.

Some Republicans are warning that the party faces a backlash if it fails to produce a budget that limits entitlement growth, given the anger at federal debt that drove the party's mid-term election gains.

"I believe strongly that we have to act on entitlement reform, and we have to do it sooner rather than later," said Rep. Devin Nunes (R., Calif.), a member of the committee that oversees Medicare and Social Security. "The longer we wait, the worse it gets."

Bill Kristol, editor of the conservative Weekly Standard, said: "You'd look ridiculous after the 2010 campaign to go mum on 60% of the budget.'' The magazine has urged Republicans to propose an entitlement overhaul in this year's budget process.

Efforts to curb entitlement spending have long been an element of the budget debate—often discussed, but rarely acted on because of their political sensitivity. Rather than aim immediately at entitlements, leaders of the new House Republican majority have focused on fulfilling their promise to cut domestic discretionary spending to 2008 levels, which would require about $100 billion in cuts.
But even cuts of that magnitude would only nick a federal deficit projected to reach $1.5 trillion this year. Discretionary spending accounts for about 33% of the federal budget. Entitlements such as Social Security, Medicare and Medicaid make up more than 60% of the budget.

"You still cannot have a long-term budget fix without doing entitlement reform," said Rep. Jack Kingston (R., Ga.), a senior member of the House Appropriations Committee

The Congressional Budget Office estimates that annual outlays will grow an average of 5.4% for Social Security and 6.8% for Medicare through the end of the decade, compared with a 1% increase in discretionary spending.

Talk of trying to revamp entitlements is also taking on prominence because one of the GOP's boldest advocates of such a change, Rep. Paul Ryan of Wisconsin, has become chairman of the House Budget Committee.

Lawmakers in both parties have long believed that it would be politically foolhardy to propose changes in Medicare or Social Security without bipartisan backing in Congress and support from the president.

When Republicans last tried to slow the growth of Medicare, under House Speaker Newt Gingrich in 1995, the plan became embroiled in a budget stand-off with President Bill Clinton that was widely viewed as a lasting political liability for the GOP.

Some recent polling underscores the political dangers. In a January survey for the Kaiser Family Foundation and the Harvard School of Public Health, 68% of respondents said the country's budgetary problems can be addressed without reductions in Medicare, while 28% said reductions to the program should be on the table.

But some lawmakers sense growing public support for slowing the growth of entitlement spending, and a Wall Street Journal/NBC News survey in August found broad acceptance for some possible changes.

Asked about various options for dealing with the federal deficit, 74% of respondents said it would be acceptable to make Medicare more needs-based, so that low-income seniors received larger subsidies than higher-income seniors. Some 64% approved of capping payment increases to doctors and hospitals.

In the Senate, where Republicans are in the minority, GOP leader Mitch McConnell of Kentucky has said that no entitlement changes will be made without Mr. Obama taking the lead. Senate Budget Committee Chairman Kent Conrad (D., N.D.) is an advocate of entitlement curbs but has called for a bipartisan summit to get the ball rolling.

In the House, the larger fiscal battles will be fought in the Budget Committee when Republicans draft a blueprint setting spending and revenue targets for 2012. Mr. Ryan's allies say he will try to incorporate key elements of his "Roadmap for America's Future"—a deficit reduction plan that calls for, among other things, converting Medicare from a guaranteed-benefit insurance program into a voucher system for people who now are 55 or younger.

Mr. Ryan himself has tried to tamp down those expectations, saying he has to write a budget that can win broad support among Republican lawmakers.

[Crafty_Dog]

By MICHAEL J. BOSKIN
The old bromide that citizens elect presidents for protection from other people's congressmen was reversed last November when a Congress was elected for protection from the president. This week House Republicans have been debating how to cut the ballooning budget. After ramming through an expansion of federal spending to levels not approached since World War II, President Obama is now calling for still more spending, with a renewed emphasis on infrastructure, that he claims will create jobs and economic growth.

Let's put this in perspective: With the Congressional Budget Office (CBO) now projecting a federal budget deficit this year of $1.5 trillion, Mr. Obama is on course to add as much debt in one term as all 43 previous presidents combined. Not surprisingly, the rating agency Standard & Poor's is warning of a Treasury downgrade.

Yes, the president is calling for a freeze on nondefense discretionary spending (18% of the budget). But this would leave that spending more than 20% higher than already- elevated 2008 levels, where Republicans would like to return. The freeze also cements in place a huge expansion of government originally sold as a temporary, emergency response to the economic and financial crisis.

Mr. Obama's Budget Director Jacob Lew asserts that the president has made tough choices, pointing to $775 million of proposed cuts—but that's one-tenth of 1% of nondefense discretionary spending. The Obama administration and its supporters dubiously claim higher spending will quickly strengthen the recovery and generate jobs, and that any "draconian" cuts would derail the recovery. Higher spending, deficits and debt are future problems, they argue, and even then higher taxes (especially on "the rich") won't harm the economy.

But government spending generally does little to boost the economy. Exhibit A is the failed 2009 stimulus bill, the president's American Recovery and Reinvestment Act (ARRA).

The strongest case for stimulus is increased military spending during recessions. But infrastructure spending, as the president proposes, is poorly designed for anti-recession job creation. As Harvard economist Edward Glaeser has shown, the ARRA's transportation spending was not directed to areas with the highest unemployment or the largest housing busts (and therefore the most unemployed construction workers). Indeed, last September Wendy Greuel, the City of Los Angeles controller, shocked the country when she revealed that the $111 million in ARRA infrastructure money her city received created only 55 jobs—that's a whopping $2 million of federal stimulus per job created.

Why is this so? Modern, large-scale public infrastructure projects use heavy equipment and are less labor-intensive than they were historically (WPA workers digging ditches with shovels in the 1930s). Federal transportation stimulus spending was $4 billion in 2009, leaving two problems with claims of "shovel-ready" projects: shovels and ready.

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Chad Crowe
 .The nation certainly has public investment needs, but federal infrastructure spending should be based on rigorous national cost-benefit tests. Most local officials are happy to have the rest of the country pay for spending on virtually any project, however modest the local benefits. Even so, several states have rejected high-speed rail subsidies as requiring unwise state spending despite the subsidies. California's estimates, for example, have soared.

Moreover, how will we pay for all this new spending? The CBO's 10-year projection sees the possibility of the debt-to-GDP ratio rising to an astounding 100%. Several recent studies (detailed on these pages in my "Why the Spending Stimulus Failed," Dec. 1, 2010) conclude that: 1) such high debt would severely damage growth, so fiscal consolidation is essential; 2) fiscal consolidation is likely to be far more effective on the spending than the tax side of the budget; and 3) substantially higher tax rates and spending cause permanent drops in income that are many times larger than the temporary fall caused by the recession. Thus, spending control is vital before debt levels or tax increases risk severely damaging growth for a generation.

In the 1980s and '90s, federal spending was reduced by more than 5% of GDP to 18.4% in 2000—a level sufficient to balance the budget at full employment and allow for lower tax rates. It was a remarkable period of growth, and there's no reason we can't repeat that success. In addition to rolling back ObamaCare and rolling up remaining TARP and stimulus funds, spending control should include these major reforms:

• Consolidate, eliminate, defederalize and, where feasible, voucherize with flexible block grants. I pointed out in 2007 that 42% of federal civilian workers were due to retire in the coming decade. Replacing half of them (with exceptions for national security and public safety) with technology could improve services and save hundreds of billions of dollars. Beyond the savings, it would make necessary services more efficient. For example, the federal government's many separate job-training programs should be consolidated and voucherized to enable citizens to obtain commercially useful training.

• A dopt successful business practices where possible. For example, consolidating IT infrastructure, streamlining supply chains, using advanced business analytics to reduce improper payments, and switching from expensive custom code to standardized software applications could save more than $1 trillion over a decade while upgrading and improving federal support and information services.

• Gradually move from wage to price indexing of initial Social Security benefits. This would eliminate the entire projected Social Security deficit without cutting anyone's benefits or raising anyone's taxes. Also, raise the retirement age over several decades, preserve early retirement and disability, and strengthen support for the poorest. On Medicare, former Clinton Budget Director Alice Rivlin and House Budget Committee Chairman Paul Ryan propose gradually moving to fixed government contributions to purchase insurance, for large savings and more informed care.


The immense growth of government spending and soaring public deficits and debt are the major sources of systemic economic risk, here and abroad, threatening enormous costs by higher taxes, inflation or default. The problem is not merely public debt. A much higher ratio of taxes to GDP trades a deficit problem for sluggish growth. In recent decades, the large advanced economies with the highest taxes have grown most slowly. And the high-tax economies did not have smaller budget deficits. Rather, higher taxes merely led to higher spending.

Elected officials too often ignore long-run costs to achieve short-run benefits. But government policies can neither revoke the laws of arithmetic nor circumvent the laws of economics. The time to start reducing spending is now.

Mr. Boskin is a professor of economics at Stanford University and a senior fellow at the Hoover Institution. He chaired the Council of Economic Advisers under President George H.W. Bush.

[Crafty_Dog]

second post of day:

The Debt Bomb Showdown
112th Congress vs. Obama's Error of Big Government
"We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude." Thomas Jefferson

This bomb will "fundamentally transform America"There's currently a lot of talk about deficits and debt among the new House Republican majority; much of it is contentious intraparty debate about whether to raise the "debt ceiling."

For the purpose of clarity, let me reiterate a few definitions.

The national budget deficit is the difference between the total spending budget (including interest on debt) authorized by Congress for each year, and total tax receipts. For this fiscal year alone (October 1, 2010, to September 30, 2011), the shortfall is projected to be 1.15 trillion dollars.

The national debt is the total of all outstanding U.S. Treasury obligations held by domestic and foreign individuals, institutions and governments, and is currently 14.05 trillion dollars.

The debt ceiling is the self-imposed limit Congress sets for what it can legally borrow to pay for all the government services that it can't afford. A year ago, Congress increased that limit to 14.29 trillion dollars. But since Congress has authorized spending almost five billion dollars a day more than it takes in, that debt ceiling will be hit sometime between the end of March and mid-May.

Complicating matters further, the then-Democrat-controlled Congress failed to set a new budget for the current year, instead opting for continuing resolutions (CR) that authorize the prior year's spending levels. They utilized this budget ruse in order to avoid greater accountability (greater losses) in the midterm election last year. The current CR expires on 4 March, and House Republicans are using that expiration date to force Barack Hussein Obama into budget-cutting submission.

Here is how the key Republican players in this crisis -- and it is a crisis -- have positioned themselves on the issue of deficits and the debt ceiling.

House Speaker John Boehner notes, "We have to work our will in the House. We have to work with our colleagues in the Senate and put something on the president's desk. If the president is going to ask us to increase the debt limit, then he's going to have to be willing to cut up the credit cards. ... [Default] would be a financial disaster not only for our country, but for the worldwide economy. Remember, the American people on Election Day said we want to cut spending and we want to create jobs. You can't create jobs if you default on the federal debt."

Rep. Austin Scott (R-GA), president of the powerful freshman class of the 112th Congress, adds, "If there is a vote put forward to increase the national debt ceiling and that is all the legislation does, I think it will fail overwhelmingly."

Budget Committee Chairman Paul Ryan (R-WI) is advancing a budget plan with $32 billion in spending cuts for the current budget year (FY11), well short of the Republican Pledge to America's "$100 billion in the first year alone."

But House Majority Leader Eric Cantor (R-VA) explains, "It fulfills the pledge because we said in a year's time we were going to cut spending by $100 billion. As you know, we are five-twelfths of the way through the fiscal year by the time the expiration occurs. We will be proposing this again in the next fiscal year, and if you look at it on an annualized basis, I assure you it will be over $100 billion."

It better be!

Rep. Cantor adds, "We are simply not going to accept an increase in the debt limit without serious cuts and reforms. ... What we need to do and are committed to doing is making sure that we achieve spending cuts and effect real reforms so that the spending binge ends. We look at the debt limit vote as an opportunity for us to accomplish those goals."

In the Senate, Tea Party favorite Jim DeMint (R-SC) says that Obama administration claims that holding the debt ceiling at current levels would be "catastrophic" are true only if the administration elects to default on interest and debt obligations.

His Senate colleague Pat Toomey (R-PA) has proposed the Full Faith and Credit Act, which would "require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised." However, Toomey is not prepared to hold the debt ceiling, noting, "Congress should make increasing our debt contingent on immediate cuts in spending and effective reforms of the spending process that helped get us into this mess. We can do so without jeopardizing the full faith and credit of our country -- and we should."

Sen. Rand Paul (R-KY), who along with DeMint is a member of that body's Tea Party Caucus, has proposed a much more aggressive plan, which cuts $500 billion from the federal budget this year alone. This plan is something of a straw-man target, especially its proposed cuts to defense spending at a time when that budget has been trimmed to limits that increase threats to our frontline warriors.

However, the other domestic spending cuts in Paul's budget should not be discounted, as those cuts have the overwhelming support of the aforementioned Tea Party, a formidable movement that continues to pick up steam across the nation.

Additionally, Sen. Claire McCaskill (D-MO) and my friend Sen. Bob Corker (R-TN) have introduced a bill to cap federal spending at about 20 percent of the U.S. GDP. That is still a very big budget, but it cuts out more than $8 trillion in spending over the next decade. It is, I believe, an admirable first attempt to establish a cap in a Senate where Republicans are still the minority party.

Of course, for his part, Obama is banking on the assumption that the American people are just too dullard to understand the consequences of the debt bomb he's dropping on the nation. This bombing mission was launched with the politically fortuitous collapse of the U.S. real estate and securities markets, which Obama rode into office in order to launch "the fundamental transformation of the United States of America."

To that end, Obama and his Socialist bourgeoisie will blame Republicans for the hardships -- and there will be hardships -- associated with moving toward a balanced budget.

Sen. Kent Conrad (D-ND), chairman of the Senate Budget Committee, was the first out of the gate with the Obama memo tactic: "Basically what [Republicans] are saying is 'pay China first.' We're going to forget about the American public and the things that they need? Somehow they're secondary? And paying the Chinese and the Japanese is the first priority of this country?"

In the debate about raising the debt ceiling, expect Democrats to deploy a plethora of slight variations on that theme.

Continuing his faux charade to somehow appear "Reaganesque," Obama proposed a paltry $775 million in budget cuts. To put that into perspective, view this budget graphic.

In the coming months, the Obama administration and its Leftmedia sycophants will attempt to perpetuate this obfuscation of the hard facts.

Fortunately, there is a congressional caucus which embodies the Reagan mantle, a group of conservative lawmakers which we have applauded since its inception. That caucus includes most members of the Tea Party caucus.

To sort the wheat from the chaff in the coming budget battles, I recommend you rely on the Republican Study Committee for clarity about which legislation to support, and on the Heritage Foundation for why to support it. Long before the advent of the Tea Party movement, the RSC was dedicated to "a limited and Constitutional role for the federal government, a strong national defense, the protection of individual and property rights, and the preservation of traditional family values."

(If that sounds familiar, see The Patriot's mission statement.)

Currently under the chairmanship of Ohio Rep. Jim Jordan, the RSC is our last best defense against detonation of the Obama debt bomb. If more Republicans will honor their oath to abide by our Constitution, as the RSC members endeavor to do, then the nation will avoid the economic catastrophe that looms.

However, if the Left successfully uses their "pay China first and forget about the American public" propaganda to derail the RSC/Republican effort to enact massive deficit and debt reductions, then batten down the hatches. I can assure you that when Obama's debt bomb detonates, it will completely transform America by breaking the back of free enterprise. The result will be the collapse of the dollar and mass unemployment accompanied by civil unrest. Of course, as I have speculated previously, that scenario comports with Obama's subversive vision to convert the USA to the USSA.

First Principles and Rule of Law as enshrined in our Constitution must trump propaganda if Liberty is to survive the Obama regime.

In the timeless words of George Washington, "No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable."

I second that motion!

Footnote: The Wall Street Journal reports, "Governors around the U.S. are proposing to balance their states' budgets with a long list of cuts and almost no new taxes, reflecting a goal by politicians from both parties to erase deficits chiefly by shrinking government." Of course, most governors are required by their state constitutions to balance their budget. It is high time, then, for a balanced budget amendment to our federal Constitution, which the RSC also advocates.

[Crafty_Dog]

Times are tough, will you do your part?
 


--------------------------------------------------------------------------------

 

I HOPE YOU WILL PARTICIPATE AND DO YOUR PART!
 

The President has ordered the cabinet to cut $100 million from the $3.5 trillion federal budget.
 

I'm so impressed by this sacrifice that I have decided to do the same thing with my personal budget. I spend about $2000 a month on groceries, household expenses, medicine, utilities, etc, but it's time to get out the budget cutting ax, go line by line through my expenses, and cut back!
 

I'm going to cut my spending at exactly the same ratio -1/35,000 of my total budget.  After doing the math, it looks like instead of spending $2000 a month; I'm going to have to cut that number by six cents!   Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about.  I'll just have to do without some things, that are, frankly, luxuries. (Did he actually think no one would do the math?)
 

John Q. Taxpayer

[Crafty_Dog]

Much to disagree with here, but I sure like the idea of selling off Amtrak!  Extra points for the fact that to do so would really annoy VP Biden.
=======
Sale of the Century
The deficit debate remains fixed on tax hikes and spending cuts, but there is another option.
by Niall Ferguson
 
In my favorite spaghetti western, The Good, the Bad and the Ugly, there is a memorable scene that sums up the world economy today. Blondie (Clint Eastwood) and Tuco (Eli Wallach) have finally found the cemetery where they know the gold is buried. Trouble is, they’re in a vast Civil War graveyard, and they don’t know where to find the loot. Eastwood looks at his gun, looks at Wallach, and utters the immortal line: “In this world, there are two kinds of people, my friend. Those with loaded guns … and those who dig.”

In the post-crisis economic order, there are likewise two kinds of economies. Those with vast accumulations of assets, including sovereign wealth funds (currently in excess of $4 trillion) and hard-currency reserves ($5.5 trillion for emerging markets alone), are the ones with loaded guns. The economies with huge public debts, by contrast, are the ones that have to dig. The question is, just how will they dig their way out?

The conventional wisdom holds that, aside from resorting to inflation or default, debts can be reduced only through belt-tightening austerity measures—some mixture of higher taxes and spending cuts. And yet politicians are notoriously leery of proposing hikes or cuts big enough to make a real dent in the debt. President Obama’s latest budget proposal includes a five-year freeze on nondefense discretionary spending and tax increases on higher earners. But even if all goes according to plan, the gross debt will still rise above 105 percent of gross domestic product—and stay there.

The root of the problem is, of course, a lack of political will, extending down from the president himself to the lowliest Tea Party activist living on Social Security and Medicare. But a convenient excuse for ongoing borrowing is also provided by Keynesian economic theory, which states that a fiscal squeeze will tend to reduce economic growth, thereby widening the gap between revenues and expenditures. Fiscal hawks respond that a bond-market panic induced by excessive borrowing could be even nastier.

Yet there is another fiscal option that neither party seems to be considering. The U.S. needs to do exactly what it would if it were a severely indebted company: sell off assets to balance its books.

There are three different arguments against such asset sales. The first concerns national security. When Dubai Ports World bought the shipping company P&O in 2006—which would have given it control of facilities in a number of U.S. ports—the deal was killed in Congress in a fit of post-9/11 paranoia. The second argument is usually made by unions: private or foreign owners will be tougher on American workers than good old Uncle Sam. Finally, there’s the chauvinism that surfaced back in the 1980s when the Japanese were snapping up properties like Pebble Beach. How could the United States let its national treasures—the family silver—fall into the hands of inscrutable Asian rivals?

Such arguments were never very strong. Now, in the midst of the biggest crisis of American public finance since the Civil War, they simply collapse. First, standards of public safety and security are unlikely to be compromised by a change of ownership unless military technology is involved (and the U.S. has already sold a startling amount of that to foreigners, by the way). Second, the goal of public policy should not be to protect public-sector workers from market discipline that will raise their productivity. Finally, why is selling assets to Asians worse than paying them an annual rent called interest on the national debt?

The mystery is why freedom-loving Americans are so averse to privatization—a policy that has been a huge success nearly everywhere it’s been tried. From Margaret Thatcher’s Britain, where the word “privatization” was coined, to present-day China, selling off government-owned industries has not only improved the fiscal position of governments; it has usually enhanced the efficiency with which the sold assets are managed.

The figures are impressive. Since the 1990s, about 75,000 medium-to-large firms have been privatized all around the world, from Argentina to Zambia, as have hundreds of thousands of smaller enterprises. The total proceeds: $735 billion. The United States accounts for only a tiny fraction of that number. Other countries are miles ahead. On a visit to Beijing in November last year, I even heard a leading Chinese economist half-seriously recommend the privatization of the Great Hall of the People. Yet American fiscal reformers—including the boldest of them, Republican Rep. Paul Ryan—tend to steer clear of the P word.

So let’s get down to business. What can the U.S. federal government and the various bankrupt states put up for sale? No, not Yellowstone or Yosemite. Those natural wonders should always belong to the nation. And no, not Alaska, much as many moderate Republicans would love to sell Sarah Palin to the Chinese.

In fact, the U.S. government currently has about $233 billion worth of nondefense “property, plant, and equipment,” according to the Treasury’s Financial Management Service. That is almost certainly an understatement. The government owns somewhere between 600 million and 700 million acres of land, or about 30 percent of the country’s land surface, much of it in the Western states, where as much as half the land is federally owned.

Washington could also sell its stakes in the Southeastern Power Administration and related assets as well as the Tennessee Valley Authority’s electric-power assets. There’s Amtrak (which runs at a loss) and the extensive hydroelectric empire of the U.S. Army Corps of Engineers.

And then there are the assets that have the potential to be among the most lucrative of all: America’s highways. Plenty of other countries—Japan, Turkey, and even China, to name just three—have already privatized substantial parts of their transportation infrastructure, leaving private companies to manage both revenues and maintenance.

American highways sold to foreign investors? It may sound unthinkable, but it’s already happening. Indiana recently leased the operation of the state’s principal 157-mile highway to a consortium led by the Spanish company Cintra and the Australian investment bank Macquarie. For the next 75 years, the consortium will collect the tolls from motorists. Indiana got $3.85 billion upfront. The city of Chicago has done a similar deal, leasing out its Skyway toll bridge for $1.83 billion. A few other state governments have been moving hesitantly down this same path, usually by setting up public-private partnerships to manage stretches of highway.

But there’s so much more that could be done. California’s government has an estimated $103 billion in assets, including state highways with a book value of $59 billion. Are you telling me a sovereign wealth fund from, say, Singapore couldn’t do a better job of running those choked and often potholed roads? Yet one of Gov. Jerry Brown’s first acts since returning to office was to cancel a planned privatization of state-owned office buildings.

From sea to shining sea, American politicians are running scared from the only credible solution to the country’s fiscal crisis. Rather than publishing honest balance sheets with meaningful valuations of both their assets and liabilities, they’d rather maintain the fiction that it’s their job to invest billions in high-speed railroads and the like.

Let’s face it: if you want to see serious investment in America’s infrastructure—and the American Society of Civil Engineers estimates that a full upgrade would cost $1.3 trillion—it isn’t going to come from the likes of Governor Brown, much less President Obama. They’re broke, folks.

There are, remember, two kinds of economies in this world: those with guns and those who dig—those with piles of cash and those with mountains of debt. Sure, the debtors can keep on borrowing until their creditors revolt, or they can try to dig their way out with austerity budgets. But a better idea would be to get smart and start inviting bidders to what could be the sale of the century.

[DougMacG]

Selling off from our federal government assets is IMO the right answer to the wrong question.  It is what do we do next when we finish reducing the size and scope of government, balancing the budget, and find ourselves sitting on a mountian of debt - and a mountain of assets, literally.  Regulate the forest, not own all of it.

Also for government's role is so called in so-called global warming, pull every non-emergency government vehicle off the road before you curtails ours.  Fewer and smaller buildings with fewer employees less heat and air conditioning.  Sell the building, lease back only the space required, scaled back  - at all levels of government. Smaller foot print, smaller carbon footprint.

[Crafty_Dog]

By FRED BARNES
Republicans won a blockbuster victory in November's election after a campaign focused on cutting government spending and reducing debt. Then they got the bad news: Americans are leery of cutting specific programs.

These include Social Security, Medicare, Medicaid, national defense, veterans' benefits, education, highways, mass transit, unemployment benefits, agriculture and the environment. A post-election poll by YouGov/Polimetrix found that the public favors cuts only in foreign aid.

So since House Republicans decided that their 2012 budget, to be released in April, would take on a wide range of popular programs as well as entitlements, Democrats have been elated. They believe Republicans have foolishly walked into a trap.

Perhaps not. Republicans have a better chance of succeeding with an agenda of budget cuts than at any time since President Ronald Reagan pushed significant reductions through Congress in 1981. Yes, their task will be arduous—but they have grounds for optimism.

To be sure, Republicans will need to organize far more support for cuts—high-profile, high- decibel support—than they have. They must be persuasive in countering the Democratic argument that preserving individual programs is more critical to the well-being of Americans than is rolling back overall spending to keep the country from decline. And, like Reagan, they must sound positive and upbeat to offset the nation's anxious mood.

View Full Image

Associated Press
 
Rep. Paul Ryan (R., Wis.), left, and Sen. Jeff Sessions (R., Ala.)
.The situation Republicans are in has been compared to the 1990s. Back then, Republicans had a mixed record of cutting spending, and fiscal issues were not front-and-center in their campaign to capture Congress in 1994. But fiscal issues (including repeal of ObamaCare) were central to their midterm campaign last year. In 1994, state and local governments were not suffering as shockingly from mounting debt as they, and Washington, are today. "It's a different day," says Bill Paxon, a key House Republican leader in the 1990s. People realize there is a fiscal crisis, he says. "It's pervasive. They know you can't kick the can down the road."

Mr. Obama has acknowledged as much, although his 2012 budget scarcely deals with the problem. By keeping cuts to a minimum and ignoring entitlements, he's all but dared Republicans to move first. Once they do, they'll be criticized for imposing cruel cuts and impeding job creation.

This age-old Democratic strategy has worked before, which is why Republicans need a political juggernaut to overcome it. The worst that can happen is a repeat of President George W. Bush's bid to enact Social Security reform in 2005. His year-long crusade attracted little support, even from Republicans.

One can imagine Paul Ryan, the chairman of the House Budget Committee and the architect of the GOP spending cuts and entitlement reforms, making the same mistake this year. To avert that, Mr. Ryan needs a broad coalition to surround his spending initiative with visible support. That would give the cuts and reforms credibility. They would look not quixotic but achievable, as they indeed are.

 Sen. Ron Johnson (R., Wis.) on the budget battles in Washington and back home.
.House Republicans—having united behind spending cuts for the remainder of the fiscal year 2011 budget—are ready to back Mr. Ryan's 2012 budget. But the Senate is another story. The GOP budget should get strong backing from Jeff Sessions, the ranking Republican on the Senate Budget Committee, and Minority Whip Jon Kyl. Mr. Kyl believes a handful of Democrats may be ready to vote for "a certain number" of spending cuts. If all 47 Republican senators vote for the House Republican budget, or major parts of it, only four Democrats would be required for passage.

But for now Senate Republican Leader Mitch McConnell is not fully on board. He has said repeatedly that entitlement reform "will not be done except on a bipartisan basis with presidential leadership." Such a basis doesn't exist today, but that may change. A bipartisan group of six senators—Democrats Richard Durbin of Illinois, Mark Warner of Virginia, and Kent Conrad of North Dakota, and Republicans Tom Coburn of Oklahoma, Mike Crapo of Idaho, and Saxby Chambliss of Georgia—is devising a plan to impose mandatory spending caps and corral entitlement costs in a proposal similar to the $4 billion in debt reduction urged by the president's debt commission last year. The Democrats hope Mr. Obama, who declined to endorse the commission's recommendation, might sign on if they reach a deal.

An indication of where the Senate may be headed occurred on Feb. 1. Nearly 40 senators from both parties gathered in the Capitol Visitors Center to listen to two hedge-fund managers, one a Democrat, the other a Republican. Their message: Soaring debt threatens growth, job creation and America's preeminence in the world. Asked what single thing Congress could do to relieve the anxiety of financial markets, their answer was "fix Social Security."

Outside of Congress, it will be easy to recruit Republican governors to promote spending cuts and an overhaul of entitlements. Many of them, such as New Jersey's Chris Christie and Wisconsin's Scott Walker, are already involved with this struggle on the state level. But the GOP will also need the active support of its presidential candidates, movement conservatives, tea party folks, libertarians and political independents.

And their message is critical. Bragging about painful but necessary cuts to Medicare scares people. Stressing the goal of saving Medicare won't. Talking about the need for austerity is a loser. The idea here is to produce prosperity. Pain isn't the issue. Relief is.

Mr. Ryan insists that he won't be deterred by bad poll numbers. But better poll results, from asking good questions, would be reassuring. Instead of asking about Medicare cuts, ask if reforms rather than tax hikes and borrowing should be used to make Medicare sustainable. Ask if billionaires should get the same Social Security benefits as the middle class. Ask if bigger deficits and more debt should be incurred to protect every individual program.

Republicans have a second objective beyond restoring proper fiscal priorities: setting the stage for electing a Republican president in 2012. With Democrats in charge of the Senate and Mr. Obama in the White House, deep spending cuts and real entitlement reform may not happen this year or next. But a serious and very public effort to get them can improve the chances of Republican presidential candidates next year.

The Democratic strategy of bewailing cuts in every domestic program has become an anachronism. The public knows there's something larger at stake. Rarely has there been a better opportunity to do the right thing for the country. And Republicans have a chance to seize it.

Mr. Barnes is executive editor of the Weekly Standard and a commentator on Fox News Channel.

[Crafty_Dog]

By DAMIAN PALETTA
The U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.

These are a few of the findings in a massive study of overlapping and duplicative programs that cost taxpayers billions of dollars each year, according to the Government Accountability Office.

A report from the nonpartisan GAO, to be released Tuesday, compiles a list of redundant and potentially ineffective federal programs, and it could serve as a template for lawmakers in both parties as they move to cut federal spending and consolidate programs to reduce the deficit. Sen. Tom Coburn (R., Okla.), who pushed for the report, estimated it identifies between $100 billion and $200 billion in duplicative spending. The GAO didn't put a specific figure on the spending overlap.

The GAO examined numerous federal agencies, including the departments of defense, agriculture and housing and urban development, and pointed to instances where different arms of the government should be coordinating or consolidating efforts to save taxpayers' money.

The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances, according to a draft of the report reviewed by The Wall Street Journal.

Instances of ineffective and unfocused federal programs can lead to a mishmash of occasionally arbitrary policies and rules, the report said. It recommends merging or consolidating a number of programs to both save money and make the government more efficient.

"Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services," the report said.

There have been multiple efforts to cull the number of federal programs in recent years, but they often run into opposition from lawmakers in both parties who rush to defend individual spending provisions. In fact, GAO's recommendations are often ignored or postponed by federal agencies and lawmakers, particularly when they could require difficult political votes.

The report says policy makers should consider creating a single food-safety agency because of a number of redundancies. The Food and Drug Administration makes sure that chicken eggs are "safe, wholesome, and properly labeled" while a division of the Department of Agriculture "is responsible for the safety of eggs processed into egg products."

Spokespeople for the Department of Agriculture and FDA pointed to the Obama administration's creation of the Food Safety Working Group, which works to better coordinate the government's regulators.

The report says there are 18 federal programs that spent a combined $62.5 billion in 2008 on food and nutrition assistance, but little is known about the effectiveness of 11 of these programs because they haven't been well studied.

The report took particular aim at government funding for surface transportation, including the building of roads and other projects, which the administration has made a major part of its push to update the country's infrastructure.

The report said five divisions within the Department of Transportation account for 100 different programs that fund things like highways, rail projects and safety programs.

One program that funnels transportation funds to the states "functions as a cash-transfer general-purpose grant program, rather than as a tool for pursuing a cohesive national transportation policy," the report said. Similarly, it chided the government over encouraging federal agencies to purchase plug-in hybrid vehicles while having policies that agencies reduce electricity consumption. It said government agencies have purchased numerous vehicles that run on alternative fuels only to find many gas stations don't sell alternative fuels. This has led government agencies to turn around and request waivers so they didn't have to use alternative fuels.

A spokesperson for the Department of Transportation said the president's budget for fiscal year 2012 "proposes to cut waste, inefficiency and bureaucracy by consolidating over 55 separate highway programs into five core programs, and by merging six transit programs into two programs."

On teacher quality, the report identified 82 programs that often have similar descriptions and goals and are spread across 10 federal agencies, including the Department of Education, the Department of Energy and the National Aeronautics and Space Administration. Nine of these programs are linked to science, technology, engineering and mathematics. Fifty-three of the programs are relatively small, receiving $50 million or less, "and many have their own separate administrative processes."

The GAO highlighted 80 different economic development programs at the Department of Commerce, HUD, Department of Agriculture and Small Business Administration, that spent a combined $6.5 billion last year and often overlapped. For example, the four agencies combined to have 52 different programs that fund "entrepreneurial efforts," 35 programs for infrastructure, and 26 programs for telecommunications. It said 60% of the programs fund only one or two activities, making them "the most likely to overlap because many of them can only fund the same limited types of activities."

The report took aim at several military programs, which could prove thorny because many lawmakers from both parties are wary to cut defense spending. It said there were 130,000 military and government medical professionals, 59 Defense Department hospitals and hundreds of clinics that could benefit from consolidating administrative, management and clinical functions.

For example, it said the government "may have developed duplicate" programs to counter improvised explosive devices, with the Marine Corps and the Army paying to develop similar "mine rollers." The Marine mine roller costs $85,000, and the Army mine roller costs $77,000 to $225,000. "Officials disagree about which system is most effective, and [the Pentagon] has not conducted comparative testing and evaluation of the two systems," the report said. The Pentagon didn't immediately respond to a request for comment.

The GAO study was required by a provision inserted by Sen. Coburn into a law that raised the federal borrowing limit last year. This report is the first produced in response to the provision.

[Crafty_Dog]

Editor's Note: Steve Chapman is on vacation. The following column was originally published in October 2007.

Here's how the American free enterprise system works. You have an idea for a business. You find the money to start it up. You try to give customers something they want at a price low enough to keep them happy but high enough to earn a profit. Either your plan works, allowing you to make a living, or it doesn't, indicating you should find a different line of work.

Unless, of course, you are a farmer, in which case all this may sound unfamiliar. A lot of American agriculture operates in an environment where none of the usual rules apply -- where the important thing is not catering to the consumer, but tapping the Treasury. It's a sector that, ever since the Great Depression, has been a ward of the government, both coddled and controlled.

By any reasonable standard, federal agriculture policy is past due for a major overhaul. But judging from the latest farm legislation moving through Congress, not much is going to change.

Back in the 1930s, when the economy was a wreck, the survival of capitalism was in doubt and Oklahoma was blowing away, you could understand the impulse for Washington to intervene on behalf of farmers. But the days when agriculture meant a lifetime of toil for a meager living are just a memory. Today, farmers monitor soil conditions by computer, drive air-conditioned tractors and have a higher average income than nonfarmers.

Yet many of them continue to enjoy treatment other industries can only dream about. Imagine the government rigging the market to assure high prices to people selling concrete or cameras. Dairy farmers and sugar growers get exactly that, courtesy of the Department of Agriculture. Farmers who plant a host of other crops receive compensation anytime their prices fall below a fixed minimum.

That's not the strangest part. These days, you don't have to grow anything at all to harvest federal crop subsidies. Instead, Washington will send you a check based on the amount of a product you raised in the past, even if you don't feel like growing it anymore.

Homeowners in one Texas subdivision found themselves getting federal money because their land was formerly used to cultivate rice. Some farmers pocket the payments they get for one commodity but plant something else, enabling them to earn two incomes for the price of one crop.

All this is sweet for the lucky few who happen to be holding buckets when the federal cash falls out of the sky. But someone has to foot the bill, and that someone is anyone who 1) eats or 2) pays taxes. Government meddling raises the price of products at the grocery, while burning up billions of dollars in federal revenues. A study by Sallie James and Daniel Griswold of the Cato Institute, a free-market think tank, put the total cost of farm programs at $430 billion over the past decade.

Some farmers, and some urbanites, assume that agriculture would plunge into a death spiral if the government ever stopped furnishing all this help. In fact, the majority of people plowing fields would never miss it. In 2005, 85 percent of all federal payments went to just four crops -- corn, wheat, cotton and rice. Two-thirds of all farmers are locked out of the largesse.

"For most commodities (such as fruits and vegetables, hay, meat products, ornamentals), there is little government involvement or income support," report economists Bruce Gardner of the University of Maryland and Daniel Sumner of the University of California at Davis. Not only that, but the commodities that get no help are just as profitable as those that do.

Yet Congress shows little interest in ridding us of this extravagant waste. President Bush proposed to trim costs and reduce payments to the richest growers, but the five-year farm bill approved by the House of Representatives in July omitted these modest reforms. A more ambitious bill to significantly reduce the federal role in agriculture, meanwhile, was cut down like a weed. The Senate is currently considering its own version, but the Agriculture Committee has indicated it's quite content with the status quo.

The American economy has undergone radical transformation in the past 75 years, and the majority of farmers have shown they can prosper outside a government-run hothouse. Yet our leaders seem to think that what was good enough for Ma and Pa Kettle is good enough for us.

[Crafty_Dog]

 MARCO RUBIO
Americans have built the single greatest nation in all of human history. But America's exceptionalism was not preordained. Every generation has had to confront and solve serious challenges and, because they did, each has left the next better off. Until now.

Our generation's greatest challenge is an economy that isn't growing, alongside a national debt that is. If we fail to confront this, our children will be the first Americans ever to inherit a country worse off than the one their parents were given.

Current federal policies make it harder for job creators to start and grow businesses. Taxes on individuals are complicated and set to rise in less than two years. Corporate taxes will soon be the highest in the industrialized world. Federal agencies torment job creators with an endless string of rules and regulations.

On top of all this, we have an unsustainable national debt. Leaders of both parties have grown our government for decades by spending money we didn't have. To pay for it, they borrowed $4 billion a day, leaving us with today's $14 trillion debt. Half of that debt is held by foreign investors, mostly China. And there is no plan to stop. In fact, President Obama's latest budget request spends more than $46 trillion over the next decade. Under this plan, public debt will equal 87% of our economy in less than 10 years. This will scare away job creators and lead to higher taxes, higher interest rates and greater inflation.

Betting on America used to be a sure thing, but job creators see the warning signs that our leaders ignore. Even the world's largest bond fund, PIMCO, recently dumped its holdings of U.S. debt.

We're therefore at a defining moment in American history. In a few weeks, we will once again reach our legal limit for borrowing, the so-called debt ceiling. The president and others want to raise this limit. They say it is the mature, responsible thing to do.

In fact, it's nothing more than putting off the tough decisions until after the next election. We cannot afford to continue waiting. This may be our last chance to force Washington to tackle the central economic issue of our time.

"Raising America's debt limit is a sign of leadership failure." So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America's debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.

I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.

View Full Image

Chad Crowe
 .There is still time to accomplish all this. Rep. Dave Camp has already introduced proposals to lower and simplify our tax rates, close loopholes, and make permanent low rates on capital gains and dividends. Even Mr. Obama has endorsed the idea of lowering our corporate tax rate. Sen. Rand Paul, meanwhile, has a bill that would require an up-or-down vote on "major" regulations, those that cost the economy $100 million or more. And the House has already passed a spending plan this year that lowered discretionary spending by $862 billion over 10 years.

Such reductions are important, but nondefense discretionary spending is a mere 19% of the budget. Focusing on this alone would lead to draconian cuts to essential and legitimate programs. To get our debt under control, we must reform and save our entitlement programs.

No changes should be made to Medicare and Social Security for people who are currently in the system, like my mother. But people decades away from retirement, like me, must accept that reforms are necessary if we want Social Security and Medicare to exist at all by the time we are eligible for them.

Finally, instead of simply raising the debt limit, we should reassure job creators by setting a firm statutory cap on our public debt-to-GDP ratio. A comprehensive plan would wind down our debt to sustainable levels of approximately 60% within a decade and no more than half of the economy shortly thereafter. If Congress fails to meet these debt targets, automatic across-the-board spending reductions should be triggered to close the gap. These public debt caps could go in tandem with a Constitutional balanced budget amendment.

Some say we will go into default if we don't increase the debt limit. But if we simply raise it once again, without a real plan to bring spending under control and get our economy growing, America faces the very real danger of a catastrophic economic crisis.


I know that by writing this, I am inviting political attack. When I proposed reforms to Social Security during my campaign, my opponent spent millions on attack ads designed to frighten seniors. But demagoguery is the last refuge of the spineless politician willing to do anything to win the next election.

Whether they admit it or not, everyone in Washington knows how to solve these problems. What is missing is the political will to do it. I ran for the U.S. Senate because I want my children to inherit what I inherited: the greatest nation in human history. It's not too late. The 21st century can also be the American Century. Our people are ready. Now it's time for their leaders to join them.

Mr. Rubio, a Republican, is a U.S. senator from Florida.

[DougMacG]

Thank you Crafty for posting the Marco Rubio piece.  It is VERY significant.  Somehow he frames the entire issue in its correct context and importance where others just sound negative, divisive or wonkish.  His position is as extreme as anyone on the right, and more specific,  but his appeal includes winning a key swing state by more than a million votes.  I wish everyone in America would read this piece or hear him put this central question of our time in proper perspective.

He isn't saying any different than what people voted for in 2006, 2008 and 2010:

"Raising America's debt limit is a sign of leadership failure." So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America's debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.

http://online.wsj.com/article/SB10001424052748704425804576220670543010068.html -(full text in Crafty's post)

[Body-by-Guinness]

. . . Charlie Sheen or the federal gov?

[youtube]http://www.youtube.com/watch?v=dNsdwTbvV90&feature=player_embedded[/youtube]

[Crafty_Dog]

William H. Gross of PIMCO in the firm's April 2011 "Investment Outlook":


That adorable skunk, Pepé Le Pew, is one of my wife Sue's favorite cartoon characters. There's something affable, even romantic about him as he seeks to woo his female companions with a French accent and promises of a skunk bungalow and bedrooms full of little Pepés in future years. It's easy to love a skunk—but only on the silver screen, and if in real life—at a considerable distance. I think of Congress that way. Every two or six years, they dress up in full makeup, pretending to be the change, vowing to correct what hasn't been corrected, promising discipline as opposed to profligate overspending and undertaxation, and striving to balance the budget when all others have failed. Oooh Pepé—Mon Chéri! But don't believe them—hold your nose instead! Oh, I kid the Congress. Perhaps they don't have black and white stripes with bushy tails. Perhaps there's just a stink bomb that the Congressional sergeant-at-arms sets off every time they convene and the gavel falls to signify the beginning of the "people's business." Perhaps. But, in all cases, citizens of America—hold your noses. You ain't smelled nothin' yet.

I speak, of course, to the budget deficit and Washington's inability to recognize the intractable: 75% of the budget is non-discretionary and entitlement based. Without attacking entitlements—Medicare, Medicaid and Social Security—we are smelling $1 trillion deficits as far as the nose can sniff. Once dominated by defense spending, these three categories now account for 44% of total Federal spending and are steadily rising. . . . [A]fter defense and interest payments on the national debt are excluded, remaining discretionary expenses for education, infrastructure, agriculture and housing constitute at most 25% of the 2011 fiscal year federal spending budget of $4 trillion. You could eliminate it all and still wind up with a deficit of nearly $700 billion! So come on you stinkers; enough of the Pepé Le Pew romance and promises. Entitlement spending is where the money is and you need to reform it.

[G M]

We can't even get 1/3 of a french fry cut out of the Big Mac meal.

[Crafty_Dog]

The Ryan Plan.  Discuss.


http://www.redstate.com/dhorowitz3/2011/04/05/ryans-budget-a-conservative-view-the-excellent-the-good-and-the-need-for-improvement/

[Crafty_Dog]

"Well, so much for dodging entitlements. This year's trendy complaint, shared by the left and the tea party, that Republicans hadn't tackled the toughest budget issues was blown away yesterday with the release of House Budget Chairman Paul Ryan's budget for 2012. We'll now separate the real reformers from the fiscal chickenhawks. Mr. Ryan's budget rollout is an important political and policy moment because it is the most serious attempt to reform government in at least a generation. The plan offers what voters have been saying they want -- a blueprint to address the roots of Washington's fiscal disorder. It does so ... by going to the heart of the spending problem, especially on the vast and rapidly growing health-care entitlements of Medicaid and Medicare. The Wisconsin Republican's plan is a generational choice, not the usual Beltway echo. That choice is clear enough by comparing the Ryan blueprint with the 2012 budget that President Obama rolled out only two months ago. ... Mr. Ryan proposes to spend $6.2 trillion less, return spending to its modern average of roughly 20% of GDP, and add $4.7 trillion less to the national debt. Mr. Obama would keep spending at 24% of GDP even before ObamaCare fully kicks in, while running annual deficits of $600 billion a year or more despite trillions of dollars in tax increases. ... Since they only control the House, Republicans can't expect to pass all or even most of these reforms this year. But in rising to meet our main fiscal challenges, they are honoring their pledge to voters last year and offering voters a serious governing platform. Mr. Ryan is showing Americans that there is an alternative to Mr. Obama's vision of the U.S. as a high-tax, slow-growth, European-style entitlement state." --The Wall Street Journal

[G M]

The Ryan plan gives me hope that we might do the right thing, finally.

[DougMacG]

http://www.youtube.com/watch?feature=player_embedded&v=Xwv5EbxXSmE
longer comment when i get my computer fixed.

[DougMacG]

The Ryan plan is the only ship sailing in that direction. My advice if so inclined is get on board.  To the critics who (always) say this will instantly starve the weakest among us, I would point out this the only 'austerity' plan on the table still offers 995 billion in first year deficit spending (FY2012) takes only 0.16 trillion off of Obama's 2012 proposal and still offer26 more years of deficits.  Is that not enough compromise with big spenders?

I don't take much stock in 20, 30, 40 year projections for either side.

How do you negotiate with Obama in the executive branch or with Reid, Schumer, Durbin, Boxer, Franken, Klobuchar et al in the Senate?  You can't start with larger cuts than you are willing to stand by because they will be used against you politically anyway.  The numbers put out by Ryan should be the end point, not just the starting point to negotiations.  The funding of government should only be at the lower of the levels that those 3 bodies can agree on.  If the House passes the maximum they will fund and the others want more, let them propose and argue that AFTER the government is funded at agreed levels. 

Ryan block grants Medicaid back to the states, freezes so-called discretionary spending at 2008 levels, postpones the social security debate, reduces the corporate rate, reduces individual rates, frees up drilling, incorporates efficiency improvements in Defense advocated by Gates, and repeals ObamaCare lock, stock and barrel.

Usual suspects say the usual groups will be hit hardest.  I would argue the opposite.  This plan still funds a ginormous federal government and actually might save it so that these groups can continue to be funded for another generation, just as other governments and bloated organizations are falling.

The proposal to bring spending below 20% of GDP needs to be constitutional, not institutional, IMO.

Paul Ryan in WSJ: http://online.wsj.com/article/SB10001424052748703806304576242612172357504.html
Favorable critique by Kudlow, not surprisingly: http://www.realclearpolitics.com/articles/2011/04/07/paul_ryans_growth_budget_109477.html

Here are a couple of opponents of the Ryan Plan writing pieces, Bill Maher and Paul Krugman.  Of the two, I find Maher to be more sober and coherent, where Krugman just can't get past the word 'voodoo' or the fact that we grew the economy and the revenues to the Treasury the last 3 times tax rates were cut:
http://www.rollingstone.com/politics/blogs/national-affairs/bill-maher-on-paul-ryans-budget-bs-20110408
http://www.nytimes.com/2011/04/08/opinion/08krugman.html?_r=1

[ccp]

Wow,  Boehner has to go. He sucks big time frank and simple. This is a joke.  And bamster claims he asked for 78 billion knowing full well Reid would cover for him and get less.  Now bamster can claim he tried to be more aggressive towards the debt.  And naturally the big time liar every bit as obnoxious as Clinton is out there taking credit.  What a disgrace we cannot have an honest President. 

Reflubicans were to go for a lousy 100 bill and I thought the deal was going to be around 70 - even worse they couldn't even get half.  The Dems won this big time.  Again the joke on taxpayers.  Again the free loaders in America win.   

****Congress reaches deal to avert shutdown
House Republicans and Senate Democrats agreed on a deal late Friday night to pass a short-term funding bill to keep the government open through the end of next week. Senate Majority Leader Harry Reid, Nevada Democrat, holds a press conference following the democratic caucus at the Capitol in Washington, D.C., Friday, April 8, 2011. (Rod Lamkey Jr./The Washington Times) By Stephen Dinan, Seth McLaughlin and Kara Rowland
-
The Washington Times
With little more than an hour to go before a midnight government shutdown, President Obama and congressional leaders said Friday night they struck a tentative deal to give themselves more breathing space as they finalize a long-term bill to cut $37.7 billion in spending.

Early Saturday morning, when the government technically had run out of money, Congress passed and sent a short-term spending bill to the White House that keeps the government open until the end of next week. During that reprieve, the House and Senate are expected to pass a broader bill that funds the government for the rest of fiscal year 2011, which ends Sept. 30.

The leaders said the cuts are “historic,” and congratulated each other for reaching a deal, but a small rebellion was brewing among conservative Republicans who said it does not make the kinds of deep reductions they were seeking and that the House passed earlier this year.

“Tomorrow, I’m pleased to announce that the Washington Monument as well as the entire federal government will be open for business,” Mr. Obama said at the White House late Friday, minutes after House Speaker John A. Boehner announced the deal at the Capitol.

The Senate passed the short-term bill by voice vote, while the House passed it on a roll call vote.

“Like any worthwhile compromise, both sides had to make tough decisions and give ground on issues that were important to them,” Mr. Obama said. “That’s what the American people expect us to do. That’s why the sent us here.”

The spending cuts amount to $78.5 billion below what Mr. Obama had requested for 2011. The final number means discretionary spending will total $1.049 trillion this year, with $513 billion for the Defense Department.

Mr. Boehner reached the deal after weeks of negotiations with Senate Majority Leader Harry Reid, Nevada Democrat.

“I’m pleased that Senator Reid and I and the White House have been able to come to an agreement that will in fact cut spending and keep our government open,” Mr. Boehner said.

Mr. Reid, for his part, told colleagues on the Senate floor: “This is historic, what we’ve done.”****

[ccp]

I'll be interested to hear Dick's take about the 37 bill. deal. Here is his take prior to this "great dea". (Drudge is calling this a big win for cans???):

*** NO SURRENDER ON BUDGET CUTSA BUDGET DEAL: REPUBLICAN SUICIDE
By Dick Morris And Eileen McGann 04.8.2011
     
We all watched in amazement and horror as the Democratic Party led its minions off the cliff and made them vote to jam through Obama’s health care law. We knew it was mass suicide, but we watched with incredulity as they bravely stepped up to drink the Kool-Aid. Now it is the turn of the Republicans freshmen — the very people who inherited the seats of those who walked the plank — to march off a cliff of their own.


The electorate that impelled the GOP triumph in 2010 will not tolerate a breaking of the Republican promise to cut $100 billion from the budget. They will accept, of course, the pro-rated share of the advertised total — $61 billion over seven months — but not anything less. It is a simple matter of keeping one’s campaign promises.

Any freshman who votes for a budget deal below $61 billion will face a primary and likely defeat either for the nomination of in the general election. That is just the fact of political life.

The Tea Party supporters and the aroused Republican electorate will not stand for it. The myopia which obscures Boehner’s and Cantor’s view of this reality is as blinding as that which made Pelosi, Obama, and Reid sacrifice their majority over health care.

If Boehner comes to a deal below $61 billion, he will face the massive defection of his own party. A fundamental split between Tea Party and establishment Republicans will have opened up and will not heal for the balance of the session. If Boehner needs to cross the aisle to borrow Democratic voters to pass the deal, he will become a coalition speaker — a coalition of donkeys and RINOs. The real Republican conservatives will be in the minority. But they will have with them the vast bulk of the GOP electorate, a re-alignment which will become painfully clear in 2012′s primaries.

If senior Republicans back a deal of less than $61 billion, they need to pay heed to the fates of Utah Senator Bennett, Delaware Congressman Mike Castle, and Florida Governor Charlie Crist. And they need to note as well the legion of senior Democrats from seemingly invulnerable districts who lost their seats in 2010. That may well be their fate.

And why are Boehner and Cantor marching off the cliff? The Republican Party will win a government shutdown. It will be the defining event of the 2011-2012 cycle. Faced with a choice between more spending and less spending, the American people will back less spending. The lessons of 1995-1996 do not apply. Clinton won that shutdown (in which I was instrumental) because the fight was about Medicare. Had the battle been merely quantitative — as this fight would be — the Republicans would easily have prevailed.

When John Boehner and Eric Cantor sit down to decide whether to take a deal or not, here are the stakes:

If they take a deal below $61 billion, they will split their party, alienated their supporters, trigger a mass of primary fights, lose their ability to strike deals over the debt limit or the 2012 budget, and terminate the revolution of 2010. And Obama will be re-elected.

If they reject such a deal and shut down the government, they will galvanize their supporters, paint Obama into a liberal corner, force the Democrats to accede to their budget cuts, and win the fights over the debt limit, Obamacare repeal, EPA, NLRB, and the 2012 budget because the Democrats will be too petrified to weather another shut down. And Obama will be defeated.

Those are the stakes for the leaders.

For the members, the decision as to whether to follow their leaders off a cliff is simple: Do you value your seat in Congress you worked so hard to win?

[G M]

We "won" less than 1/3rd of a french fry.



Awesome.   

[DougMacG]

Elections have consequences.  I think we agreed last year this is a two election cycle opportunity to change the direction of the country.  In 2010 the people (as I see it) took back one chamber.  Yes Reid et al and Obama have to deal with Boehner and Boehner has to deal with his new members who actually meant what they ran on.  The 'deal' for this year was a third of a french fry.  The part they could have shut everything down for was another third of a french fry.  The question remains - who owns the issue going forward.  If an R wins the White House and if R's take 4-5 seats in the Senate for a small majority and hold the House - all that is possible - it will STILL be hard to cut much.  It always boils down to the will of the people and that still needs to shift significantly in the direction of limited government.

[G M]

http://www.nationalreview.com/articles/print/264288

April 9, 2011 4:00 A.M.
Ending America as We Know It
The Democrats’ solution to the problem is to deny there is one.





Hey, it’s the weekend, and everyone’s singing the same maddeningly catchy refrain! Rebecca Black’s “Friday”? Nah, that was last week’s moronic singalong. This week’s is even perkier! “Paul Ryan proposes to end Medicare as we know it,” sings former Clinton chief of staff John Podesta. “It would end Medicare as we know it,” sings Sen. Max Baucus of Montana. “It’s going to end Medicare as we know it,” sings Nadeam Elshami, communications director for Nancy Pelosi. “It does end Medicare as we know it,” sings Sen. Tom Harkin of Iowa. I drove all night to watch Paul Ryan e-e-end Me-edi-ica-a-are as we-e kno-o-o-o-o-o-o-o-o-w it, sing all 24 semi-finalists on the Céline Dion round of “American Idol.”
 
Sadly, Rep. Debbie Wasserman-Schultz, incoming chair of the Democratic National Committee, lost the sheet music and was forced to improvise. “This plan would literally be a death trap for seniors,” she ululated. Close enough!
 
Ending Medicare as we know it? Say it ain’t so! Medicare, we hardly knew ye! It’s an open question whether Americans will fall for one more chorus of the same old song from Baucus, Harkin, Podesta, and the other members of America’s wrinkliest boy band. But, if this is the level on which the feckless patronizing spendaholics of the permanent governing class want to conduct the debate, bring it on:
 
Paul Ryan’s plan would “end Medicare as we know it.”
 
The Democrats’ “plan” — business as usual — will end America as we know it.
 
Literally, as Representative Wasserman-Schultz would say. One way or another, Medicare as we know it is going to end. So, if you think an unsustainable 1960s welfare program is as permanent a feature as the earth and sky, you’re in for a shock. It’s just a question of whether, after the shock, what’s left looks like Japan or looks like Haiti.
 
My comrade Jonah Goldberg compares America’s present situation to that of a plane with one engine out belching smoke. But, if anything, he understates the crisis. Air America doesn’t need a busted engine, because it’s pre-programmed to crash. Our biggest problem is Medicare and other “entitlements”: They’re the automatic pilot of Big Government. Whoever’s in the captain’s seat makes no difference: The flight is pre-programmed to hit the iceberg, if you’ll forgive me switching mass-transit metaphors in mid-stream.
 
For some reason, Obama, Reid, Pelosi, Harkin, & Co. don’t seem to mind this. If you recall the smile on the face of Airplane!’s “automatic pilot” as he’s being inflated, that’s pretty much the Democrats’ attitude to binge spending as a permanent fact of life.
 
For a sense of Democrat insouciance to American decline, let us turn to the president himself. The other day, Barack Obama was in the oddly apt town of Fairless Hills, Pa., at what the White House billed as one of those ersatz “town hall” discussions into which republican government has degenerated. He was asked a question by a citizen of the United States. The cost of a gallon of gas has doubled on Obama’s watch, and this gentleman asked, “Is there a chance of the price being lowered again?”
 
As the Associated Press reported it, the president responded “laughingly”: “I know some of these big guys, they’re all still driving their big SUVs. You know, they got their big monster trucks and everything. . . . If you’re complaining about the price of gas and you’re only getting eight miles a gallon — (laughter) . . . ”
 
That’s how the official White House transcript reported it: Laughter. Big yuks. “So, like I said, if you’re getting eight miles a gallon you may want to think about a trade-in. You can get a great deal.”
 
Hey, thanks! You’ve been a great audience. I’ll be here all year. Don’t forget to tip your Democrat hat-check girl on the way out: At four bucks a gallon, it’s getting harder for volunteers to drive elderly voters from the cemetery to the polling station. Relax, I’m just jerking your crank, buddy! And it’s not four bucks per, it’s only three-ninety-eight. That’s change you can believe in!
 
Message: It’s your fault. The same day as the president was doing his moribund-economy shtick, my hairdresser told me that she’d bought her mid-size sedan second-hand in 2004. She’d also like to ask the president if there’s a chance of gas prices being lowered again. But he’d have the same answer: Buy a hybrid. Wait till the high-speed rail-link is built between Dead Skunk Junction and Hickburg Falls. Climb into the fishnets and the come-hither smile and hitch.
 


America, 2011: A man gets driven in a motorcade to sneer at a man who has to drive himself to work. A guy who has never generated a dime of wealth, never had to make payroll, never worked at any job other than his own tireless self-promotion literally cannot comprehend that out there beyond the far fringes of the motorcade outriders are people who drive a long distance to jobs whose economic viability is greatly diminished when getting there costs twice as much as the buck-eighty-per-gallon it cost back at the dawn of the Hopeychangey Era.
 
So what? Your fault. Should have gone to Columbia and Harvard and become a community organizer.
 
Another ten years of this, and large tracts of America will be Third World. Not Somalia-scale Third World, but certainly the more decrepit parts of Latin America. There will still be men with motorcades, but they’ll have heavier security and the compounds they shuttle between will be more heavily protected. For them and their cronies, the guys plugged in, the guys who still know who to call to figure out a workaround through the bureaucratic sclerosis, life will be manageable, and they’ll still be wondering why you loser schlubs are forever whining about gas prices, and electricity prices, and food prices.
 
What’s about to hit America is not a “shock.” It’s not an earthquake, it’s not a tsunami, it’s what Paul Ryan calls “the most predictable crisis in the history of our country.” It has one cause: spending. The spending of the class that laughs at the class that drives to work to maintain President Obama, Senator Reid, Senator Baucus, Senator Harkin, and Minority Leader Pelosi’s “communications director” in their comforts and complacency.
 
The Democrats’ solution to the problem is to deny there is one. Unsustainable binge spending is, as the computer wallahs say, not a bug but a feature: We’ll stimulate the economy with a stimulus grant for a Stimulus Grant-Writing Community Outreach Permit Coordinator regulated by the Federal Department of Community-Organizer Grant Applications. What’s to worry about?
 
I said the Democrats’ plan is to “end America as we know it,” but even that has been outsourced to others. The choice is between letting Paul Ryan end Medicare as we know it, or letting our foreign lenders determine the moment to end America as we know it. I would not presume to know Chinese or Russian or Saudi or even European inclinations in this respect, although certain shifts in the ratio between short-term and long-term debt holdings suggest foreign governments give more thought to the implications of U.S. government spending than the U.S. government does. But I do know their interests are not ours, and that there will come a day when Beijing and others, in the words of King Barack to his lowly subject, “may want to think about a trade-in.”

[DougMacG]

Mark Steyn has it right on the money.  How do you go about spending 4 trillion a year when you're already 14 trillion behind - just throwing money around, not pay for 40% of it, not be able to even borrow that part anymore, just print 70% of what you were pretending to borrow, devaluing what is already borrowed - and owned, propose continuing these trends out forever - only to get worse, and look us in the eye and say crisis? What crisis? Then they criticize Glen Beck and the tea party for getting all negative about it.  Good grief.

BTW, isn't "death trap for seniors" for a third of a french fry from the head of the DNC a little further over the top than anything about calling end of life consultations death panels? I am shocked at the lack of outrage.