Category Archive 'Federal Deficit'
24 Oct 2013

America’s Finances

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19 Oct 2013

End of the Shutdown Battle

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Jeffrey T. Kuhner observes that the left may be celebrating now, but reality is on the side of the Tea Party.

The conventional wisdom is wrong. The mainstream media — and their parrots in the Republican establishment — are claiming that President Obama decisively won the government shutdown battle. In fact, the narrative being peddled is that the GOP brand has been badly damaged, paving the way for a possible Democratic Party takeover of the House of Representatives in the 2014 elections. This is puerile nonsense. Tea Party Republicans, led by Texas Sen. Ted Cruz, may have lost the battle, but they are poised for a major victory in the larger Obamacare war. …

This is myth and propaganda masquerading as analysis. The legislative deal simply does one thing: kick the can down the road. Yet the same, enduring problems remain — the very problems identified by Mr. Cruz and Tea Party Republicans. America is sitting on a ticking debt bomb, Obamacare — the most destructive law in modern memory — is a disaster, and our ruling elites are incapable of reining in out-of-control public spending.

America is increasingly dominated by one seminal reality: We are the most indebted nation in history. The national debt is approaching $17 trillion. By 2016, the debt is expected to hit $20 trillion. That will be Greece-like levels, a debt load so crippling that Washington will have trouble simply paying the interest on the debt payments. Our creditors will realize we are sliding toward the United States of Argentina — a fiscal basket case unable to live within our means. The value of the dollar will plunge. Interest rates will soar. Taxes will have to be increased. The social safety net will be shredded. Unless Congress immediately confronts the reckless spending and near-record trillion-dollar deficits, the United States will go bankrupt. The question is no longer if, but when.

Mr. Obama’s massive health care overhaul is precipitating the impending economic collapse. Nearly every aspect of Obamacare has turned out to be a lie. The real price tag is not less than a $1 trillion; rather, it is a multitrillion-dollar entitlement program that America cannot afford. Rather than lowering premium costs for the average family, it dramatically raises them — sometimes by thousands of dollars a year. Millions of citizens have lost their health benefits or are unable to keep their doctor. People seeking to enroll in Obamacare’s marketplace exchanges are stunned at the high costs of the health insurance plans. In fact, the Congressional Budget Office acknowledges that the law will not achieve its stated goal: universal coverage. Instead, about 30 million Americans will still not have health care. Hence, one-sixth of the U.S. economy will have been revolutionized essentially to put only 17 million new recipients on the Obamacare rolls. The complex law also undermines economic growth and job creation, compelling employers to either slash employees’ hours or not hire new workers. In short, Obamacare is a cancer, slowly devouring our economic dynamism, individual liberties and medical care.

As the law is implemented, its devastating effects will be increasingly felt. By next year, the government shutdown will be a fading memory. What the public will remember, though, is that a band of Tea Party patriots sought to thwart the oncoming disaster. Mr. Cruz, along with Sens. Rand Paul of Kentucky and Mike Lee of Utah, represent the future. The question is no longer ideological — small government versus big government, free-market-based health care versus nationalized health care, or capitalism versus socialism. Rather, it is about something more simple — and profound: basic arithmetic.

The United States is a giant bus that is rushing toward an economic precipice. A few more years of Mr. Obama’s borrow-and-spend policies and America will crash upon the rocks of fiscal reality and national insolvency. The Democrats are keeping their foot on the gas pedal, full speed ahead. The Republican establishment thinks we may need to slow down — at least a little. The bus, however, will still go off the cliff. Only the Tea Party is saying — in fact, yelling — to hit the brakes. They’re right, and they will be vindicated. The only question is this: Will Americans wake up before it’s too late?

16 Apr 2013

Where Did Your Tax Dollar Go?

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13 Mar 2013

Obama: A Terrorist, Not a Professor

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Despite President Obama’s recent dinner with Republicans, it is increasingly obvious that Barack Obama has no real intention of compromising with the GOP in order to achieve the so-called “Grand Bargain” that would reduce entitlement spending, increase revenues, and begin balancing the federal budget.

Politico reports on one prominent Republican’s congressman’s encounter with the president.

House Majority Whip Kevin McCarthy (R-Calif.), the third-ranking House Republican, told us about an exchange he had with Obama at Saturday night’s white-tie Gridiron dinner. During a break in the program, McCarthy saw an empty chair next to Obama and decided to seize the chance. Surprised Obama wasn’t working the room, and thinking the president really is a loner, McCarthy walked up to the head table. He found the president was reading his BlackBerry. …

“I’m waiting for my dinner invitation,” the Republican joshed to Obama, referring to the president’s recent evening out with Republican senators. “I listen to Paul,” Obama replied, according to McCarthy, referring to House Budget Chairman Paul Ryan. Then, in what McCarthy took as a reference to a political charm offensive, he recalled Obama saying, “You guys give us too much credit. We’re not doing all that stuff you think we are.” As told by McCarthy, Obama then said that if Republicans are going to get entitlement reform, “You need me.” As McCarthy walked away, the congressman thought: “He’s still a law professor. He’d rather lecture you and put a red mark on your paper than talk to you.”

Rep. McCarthy’s aperçu appears to be reinforced by Obama’s subsequent interview with George Stephanopoulos, in which the President openly stated that he was not interested in balancing the federal budget “just for the sake of balance.”

Obama stressed that what matter to him was how the budget was balanced, not that it should be balanced. What he cares about is sticking to his left-wing ideological guns. Obama clearly intends to do nothing contrary to his class warfare agenda to restore economic confidence and avert fiscal disaster.

Really, though, Barack Obama is much worse than he appeared to Rep. McCarthy. His loyalty to theory obviously crosses the border dividing advocacy from action. And Barack Obama’s character is much more that of the fanatic than the contemplative intellectual. What has going on in Washington during the Obama Administration has not been a panel discussion or a colloquium. The administration has proceeded ruthlessly on every front simply to impose its will and get its way. What is most striking has been the absolute unwillingness of this President to subordinate his ideological agenda to economic reality.

Obama’s intransigence and complete indifference to consequences identify him really as a terrorist, rather than a mere theorist and professor. If Barack Obama is a professor, he is a professor resembling Peru’s Abimael Guzman, the founder of that country’s Shining Path guerilla movement. In the final analysis, President Obama has adopted a desperate modus operandi consisting essentially of holding a loaded gun aimed at the economic well-being of Americans and declaring himself perfectly willing to pull the trigger if his political opponents fail to surrender to his demands for an enormous payoff consisting of drastically increased taxes on businesses and upper income Americans.

We can only hope that Republicans recognize that nothing positive can possibly be gained by negotiating with terrorists.

27 Feb 2013

Obama’s “Catastrophic Cut” in Perspective

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Bastiat Institute (on Facebook)

04 Jan 2013

Greece Doesn’t Want to Reduce Entitlements and Neither Does America

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I missed the part about there being some democrat president who actually wanted to cut retirement programs, but that (flattering-to-his-own-side) detail aside, I think Mr. Yglesias is basically right. A kind of all-time first.

The welfare state has entropy, Original Sin, and Man’s Fallen Nature on its side. Opposing it, reducing it, reforming it is hard. Being a liberal is like ordering a second Martini or agreeing to have dessert, easy. That’s actually why there are so many liberal politicians. The guys determined to be elected, at any cost, figured out long ago which side has the easier task.

What we learned, in other words, is that even with a Democratic President in the White House who’s eager to cut spending on retirement programs they still don’t get cut. That’s how robust the welfare state is. Recall that the last time we had a Republican President in the White House what he did was make Medicare benefits significantly more generous. Recall also that Mitt Romney ran on a pledge to increase Medicare benefits for ten years and then offset that by cutting benefits for younger people in the future. That’s how robust the welfare state is. Concern trolling about Democratic senators’ willingness to blink on taxes is neat, but all we’re seeing again and again is confirmation of Paul Pierson’s thesis from Dismantling the Welfare State?, namely that dismantling the welfare state is incredibly difficult.

If you want to worry about something, worry about the United States of America. What we’ve seen time and again for the past five years is a breakdown of responsible party government in the United States. Nobody gets their way legislatively, so nobody has to take the fall when things work out poorly.

10 Nov 2012

If You Ain’t Got No Money…

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Mark Steyn measures the depths of America’s federal debt abyss.

In the weeks ahead, Democrats and Republicans will reach a triumphant “bipartisan” deal to avert the fiscal cliff through some artful bookkeeping mechanism that postpones Taxmageddon for another year, or six months, or three, when they can reach yet another triumphant deal to postpone it yet again. Harry Reid has already announced that he wants to raise the debt ceiling — or, more accurately, lower the debt abyss — by $2.4 trillion before the end of the year, and no doubt we can look forward to a spectacular “bipartisan” agreement on that, too. It took the government of the United States two centuries to rack up its first trillion dollars in debt. Now Washington piles on another trillion every nine months. Forward!

If you add up the total debt — state, local, the works — every man, woman, and child in this country owes 200 grand (which is rather more than the average Greek does). Every American family owes about three-quarters of a million bucks, or about the budget deficit of Liechtenstein, which has the highest GDP per capita in the world. Which means that HRH Prince Hans-Adam II can afford it rather more easily than Bud and Cindy at 27b Elm Street. In 2009, the Democrats became the first government in the history of the planet to establish annual trillion-dollar deficits as a permanent feature of life. Before the end of Obama’s second term, the federal debt alone will hit $20 trillion. That ought to have been the central fact of this election — that Americans are the brokest brokey-broke losers who ever lived, and it’s time to do something about it.

31 Aug 2012

Who’s To Blame?

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(click on image for larger version)

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(click on image for larger version)

Hat tip to Theo.

26 Aug 2012

The Budget Dilemma

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An accountant explains.

Hat tip to Theo.

01 Jan 2012

At the New Year: Nation Broke, Establishment in Denial

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Mark Steyn takes at look at America’s situation at the beginning of the New Year, and concludes that the welfare state is self-destructing, but the establishment elites would rather save the planet than balance the national books.

At the end of 2011, America, like much of the rest of the Western world, has dug deeper into a cocoon of denial. Tens of millions of Americans remain unaware that this nation is broke — broker than any nation has ever been. A few days before Christmas, we sailed across the psychological Rubicon and joined the club of nations whose government debt now exceeds their total GDP. It barely raised a murmur — and those who took the trouble to address the issue noted complacently that our 100 percent debt-to-GDP ratio is a mere two-thirds of Greece’s. That’s true, but at a certain point per capita comparisons are less relevant than the sheer hard dollar sums: Greece owes a few rinky-dink billions; America owes more money than anyone has ever owed anybody ever.

Public debt has increased by 67 percent over the last three years, and too many Americans refuse even to see it as a problem. For most of us, “$16.4 trillion” has no real meaning, any more than “$17.9 trillion” or “$28.3 trillion” or “$147.8 bazillion.” It doesn’t even have much meaning for the guys spending the dough: Look into the eyes of Barack Obama or Harry Reid or Barney Frank, and you realize that, even as they’re borrowing all this money, they have no serious intention of paying any of it back. That’s to say, there is no politically plausible scenario under which the 16.4 trillion is reduced to 13.7 trillion, and then 7.9 trillion, and eventually 173 dollars and 48 cents. At the deepest levels within our governing structures, we are committed to living beyond our means on a scale no civilization has ever done.

Our most enlightened citizens think it’s rather vulgar and boorish to obsess about debt. The urbane, educated, Western progressive would rather “save the planet,” a cause which offers the grandiose narcissism that, say, reforming Medicare lacks. So, for example, a pipeline delivering Canadian energy from Alberta to Texas is blocked by the president on no grounds whatsoever except that the very thought of it is an aesthetic affront to the moneyed Sierra Club types who infest his fundraisers. The offending energy, of course, does not simply get mothballed in the Canadian attic: The Dominion’s prime minister has already pointed out that they’ll sell it to the Chinese, whose Politburo lacks our exquisitely refined revulsion at economic dynamism, and indeed seems increasingly amused by it. Pace the ecopalyptics, the planet will be just fine: Would it kill you to try saving your country, or state, or municipality? …

What indeed? In September, the tenth anniversary of a murderous strike at the heart of America’s most glittering city was commemorated at a building site: The Empire State Building was finished in 18 months during a depression, but in the 21st century the global superpower cannot put up two replacement skyscrapers within a decade. The 9/11 memorial museum was supposed to open on the eleventh anniversary, this coming September. On Thursday, Mayor Bloomberg announced that there is “no chance of it being open on time.” No big deal. What’s one more endlessly delayed, inefficient, over-bureaucratized construction project in a sclerotic republic?

Barely had the 9/11 observances ended than America’s gilded if somewhat long-in-the-tooth youth took to the streets of Lower Manhattan to launch “Occupy Wall Street.” The young certainly should be mad about something: After all, it’s their future that got looted to bribe the present. As things stand, they’ll end their days in an impoverished, violent, disease-ridden swamp of dysfunction that would be all but unrecognizable to Americans of the mid–20th century — and, if that’s not reason to take to the streets, what is? Alas, our somnolent youth are also laboring under the misapprehension that advanced Western societies still have somebody to stick it to. The total combined wealth of the Forbes 400 richest Americans is $1.5 trillion. So, if you confiscated the lot, it would barely cover one Obama debt-ceiling increase. Nevertheless, America’s student princes’ main demand was that someone else should pick up the six-figure tab for their leisurely half-decade varsity of Social Justice studies. Lest sticking it to the Man by demanding the Man write them a large check sound insufficiently idealistic, they also wanted a trillion dollars for “ecological restoration.” Hey, why not? What difference is another lousy trill gonna make?

Underneath the patchouli and pneumatic drumming, the starry-eyed young share the same cobwebbed parochial assumptions of permanence as their grandparents: We’re gayer, greener, and groovier, but other than that it’s still 1950 and we’ve got more money than anybody else on the planet, so why get hung up about a few trillion here and a few trillion there? In a mere half century, the richest nation on earth became the brokest nation in history, but the attitudes and assumptions of half the population and 90 percent of the ruling class remain unchanged.

Read the whole thing.

23 Nov 2011

How the Political Class Thinks

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From Dan Mitchell.

12 Nov 2011

Rep. Mike Kelly Tells Congress Off

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09 Sep 2011

Game Over, Liberals

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James Lileks tells the liberals why their time on top is rapidly drawing to a conclusion.

Because that old world is over. . . .

A half-century experiment in draping steam­ship anchors around the necks of the productive class and expecting them to run a four-minute mile has ended in failure. The confiscation of rights and property, the moral impoverishment of generations caused by the state’s usurpation of parental obligations, the elevation of a credentialed elite that believes academia’s fashions are a worthy substitute for knowledge of history and human nature, and above all the faith in a weightless cipher whose oratorical panache now consists of looking from one teleprompter screen to the other with the enthusiasm of a man watching someone else’s kids play tennis–it’s over, whether you believe in it or not. It cannot be sustained without reducing everyone to penurious equality, crippling the power of the United States, and subsuming the economy to a no-growth future that rations energy.

To which some progressives respond: You say that like it’s a bad thing.

Hat tip to Bird Dog.

08 Sep 2011

US Downgraded to 5th Most Competive Economy

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The Obama Presidency by Winslow Homer

MSNBC records the passing of another landmark on the road to ruin for the current administration.

The U.S. has tumbled further down a global ranking of the world’s most competitive economies, landing at fifth place because of its huge deficits and declining public faith in government, a global economic group said Wednesday.

The announcement by the World Economic Forum was the latest bad news for the Obama administration, which has been struggling to boost the sinking U.S. economy and lower an unemployment rate of more than 9 percent.

Switzerland held onto the top spot for the third consecutive year in the annual ranking by the Geneva-based forum, which is best known for its exclusive meeting of luminaries in Davos, Switzerland, each January.

Singapore moved up to second place, bumping Sweden down to third. Finland moved up to fourth place, from seventh last year. The U.S. was in fourth place last year, after falling from No. 1 in 2008.

The rankings, which the forum has issued for more than three decades, are based on economic data and a survey of 15,000 business executives.

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