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Opinions/Editorials Title: Kindly Note the Impending Bankruptcy Previously on The Perils of Pauline: Last year, our plucky heroine, the wholesome apple-cheeked American republic, was trapped in an express elevator hurtling out of control toward the debt ceiling. Would she crash into it? Or would she make some miraculous escape? Yes! At the very last minute of her white-knuckle thrill ride to her rendezvous with destiny, she was rescued by Congress’s decision to set up . . . a Super Committee! Those who can, do. Those who can’t, form a committee. Those who really can’t, form a Super Committee — and then put John Kerry on it for good measure. The bipartisan Super Committee of Super Friends was supposed to find $1.2 trillion dollars of deficit reduction by last Thanksgiving, or plucky little America would wind up trussed like a turkey and carved up by “automatic sequestration.” Sequestration sounds like castration, only more so: It would chop off everything in sight. It would be so savage in its dismemberment of poor helpless America that the Congressional Budget Office estimates that over the course of a decade the sequestration cuts would reduce the federal debt by $153 billion. Sorry, I meant to put on my Dr. Evil voice for that: ONE HUNDRED AND FIFTY THREE BILLION DOLLARS!!! Which is about what the United States government currently borrows every month. No sane person could willingly countenance brutally saving a month’s worth of debt over the course of a decade. Advertisement So now we have the latest cliffhanger: the Fiscal Cliff, below which lies a bottomless abyss of sequestration, tax-cut-extension expiries, Alternative Minimum Tax adjustments, new Obamacare taxes, the expiry of the deferment of the Medicare Sustainable Growth Rate, as well as the expiry of the deferment of the implementation of the adjustment of the correction of the extension of the reduction to the proposed increase of the Alternative Minimum Growth Sustainability Reduction Rate. They don’t call it a yawning chasm for nothing. As America hangs by its fingernails wiggling its toesies over the vertiginous plummet to oblivion, what can save her now? An Even More Super Committee? A bipartisan agreement in which Republicans agree to cave and Democrats agree not to laugh at them too much? That could be just the kind of farsighted reach-across-the-aisle compromise that rescues the nation until next week’s thrill-packed episode when America’s strapped into the driver’s seat of a runaway Chevy Volt careering round the hairpin bends on full charge, or trapped in an abandoned subdivision overrun by foreclosure zombies. I suppose it’s possible to take this recurring melodrama seriously, but there’s no reason to. The problem facing the United States government is that it spends over a trillion dollars a year that it doesn’t have. If you want to make that number go away, you need either to reduce spending or to increase revenue. With the best will in the world, you can’t interpret the election result as a spectacular victory for less spending. Indeed, if nothing else, the unfortunate events of November 6 should have performed the useful task of disabusing us poor conservatives that America is any kind of “center-right nation.” A few months ago, I dined with a (pardon my English) French intellectual who, apropos Mitt Romney’s stump-speech warnings that we were on a one-way ticket to Continental-sized dependency, chortled to me, “Americans love Big Government as much as Europeans. The only difference is that Americans refuse to admit it.” My Gallic charmer is on to something. According to the most recent (2009) OECD statistics: government expenditures per person in France, $18,866.00; in the United States, $19,266.00. That’s adjusted for purchasing-power parity, and yes, no comparison is perfect, but did you ever think the difference between America and the cheese-eating surrender monkeys would come down to quibbling over the fine print? In that sense, the federal debt might be better understood as an American Self-Delusion Index, measuring the ever widening gap between the national mythology (a republic of limited government and self-reliant citizens) and the reality (a 21st-century cradle-to-grave nanny state in which, as the Democrats’ convention boasted, “government is the only thing we do together”). Generally speaking, functioning societies make good-faith efforts to raise what they spend, subject to fluctuations in economic fortune: Government spending in Australia is 33.1 percent of GDP, and tax revenues are 27.1 percent. Likewise, government spending in Norway is 46.4 percent and revenues are 41 percent — a shortfall but in the ballpark. Government spending in the United States is 42.2 percent, but revenues are 24 percent — the widest spending/taxing gulf in any major economy. So all the agonizing over our annual trillion-plus deficits overlooks the obvious solution: Given that we’re spending like Norwegians, why don’t we just pay Norwegian tax rates? No danger of that. If (in Milton Himmelfarb’s famous formulation) Jews earn like Episcopalians but vote like Puerto Ricans, Americans are taxed like Puerto Ricans but vote like Scandinavians. We already have a more severely redistributive taxation system than Europe in which the wealthiest 20 percent of Americans pay 70 percent of income tax while the poorest 20 percent shoulder just three-fifths of one percent. By comparison, the Norwegian tax burden is relatively equitably distributed. Yet Obama now wishes “the rich” to pay their “fair share” — presumably 80 or 90 percent. After all, as Warren Buffett pointed out in the New York Times this week, the Forbes 400 richest Americans have a combined wealth of $1.7 trillion. That sounds a lot, and once upon a time it was. But today, if you confiscated every penny the Forbes 400 have, it would be enough to cover just over one year’s federal deficit. And after that you’re back to square one. It’s not that “the rich” aren’t paying their “fair share,” it’s that America isn’t. A majority of the electorate has voted itself a size of government it’s not willing to pay for. A couple of years back, Andrew Biggs of the American Enterprise Institute calculated that, if Washington were to increase every single tax by 30 percent, it would be enough to balance the books — in 25 years. If you were to raise taxes by 50 percent, it would be enough to fund our entitlement liabilities — just our current ones, not our future liabilities, which would require further increases. This is the scale of course correction needed. If you don’t want that, you need to cut spending — like Harry Reid’s been doing. “Now remember, we’ve already done more than a billion dollars’ worth of cuts,” he bragged the other day. “So we need to get some credit for that.” Wow! A billion dollars’ worth of cuts! Washington borrows $188 million every hour. So, if Reid took over five hours to negotiate those “cuts,” it was a complete waste of time. So are most of the “plans.” Any “debt-reduction plan” that doesn’t address at least $1.3 trillion a year is, in fact, a debt-increase plan. So given that the ruling party will not permit spending cuts, what should Republicans do? If I were John Boehner, I’d say: “Clearly there’s no mandate for small government in the election results. So, if you milquetoast pantywaist sad-sack excuses for the sorriest bunch of so-called Americans who ever lived want to vote for Swede-sized statism, it’s time to pony up.” Okay, he might want to focus-group it first. But that fundamental dishonesty is the heart of the crisis. You cannot simultaneously enjoy American-sized taxes and European-sized government. One or the other has to go.
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#5. To: A K A Stone, mininggold, mcgowanjm (#0)
Until the three of you warfare/welfare worshipers and those of your ilk are told to go pound sand and a large across the board budget cut happens it is inevitable that the country go bankrupt.
Romney would have addressed the debt. But some people preferred to let some African that isn't even an American stay in office. Romney probably wouldn't have gone as far as I would like. But further then shit face.
Bullshit. He would no more have did anything about the debt or government spending than Bush did. The budget he and Ryan discussed was considered a joke by everyone outside of partisan Republican circles. At most he would have transferred spending from one part of government in order to increase spending in defense and the police state. That's called smoke and mirrors. He isn't and never was a small government conservative, as his record as Governor clearly proves. You cannot balance a budget or decrease spending by advocating perpetual war and a larger, more invasive police state. While his talk of decreasing taxes was nice, decreasing taxes while increasing spending does nothing but pass the burden on to my children and grandchildren.
Let's have a little dose of reality here... Post WWII Federal Spending and Taxes as a percentage of GDP: Obama's spending levels are very different than any President since WWII. Romney would have taken us back at historic Post WWII norms, with federal spending under 20% of GDP. You and I may believe that average Post WWII spending was too much. However, Obama's 4 year average is more than 20% higher than the average. There was a real difference in this election. You were just too stubborn to see it.
I have no doubt that Obama is spending more than Bush II. He's a Democrat. However, there is no reason to believe that Romney and the republicans wouldn't have spent even more than Obama. I do not understand your numbers. They don't seem to match up with Forbe's numbers. How it is that Clinton's numbers are worse than Bush II's? I received the following information from the Cato Institute via McClatchy Newspaper. During Bush's first term discretionary spending increased 48.5%, not adjusted for inflation, while Clinton's only grew 21.6% over two terms. Defense spending (including the cost of the WOT) increased 86% between 2001 - 2007. He invented a whole new agency and consolidated existing agencies, eating up $31 billion, more than 3x what these agencies were spending prior to 9/11. Adjusted for inflation, education under Bush increased 18% annually due to No Child Left behind. The 2002 Farm Bill doubled spending from 1990 levels. Then there is the cost of the 2003 Medicare prescription drug benefit. I'm no fan of Clinton but it seems to me that he was a hard core fiscal conservative in comparison to GWB. By the way, this will be my last post until next week. I have to drive back to Columbia tonight and I won't have the time to discuss the issues until next weekend. I'm telling you this so you don't think I've run away. I hope you have a good week.
They come from the White House Office of Management and Budget. During Bush's first term discretionary spending increased 48.5%, not adjusted for inflation, while Clinton's only grew 21.6% over two terms. The 8 year averages don't show a direction. Clinton started by spending 21.4% of GDP in 1993. When he left, he was spending 18.2% of GDP. Conversely, Bush started out spending 18.2% of GDP, but it rose to 21.4% when he left. Spending decreased under Clinton and increased under Bush, but their 8 year averages were almost the same. Spending leaped during Obama's first year because of the stimulus, but it hasn't come down. Obama has been consistently spending more than 24% of GDP each year. That's a whopping a 35% annual spending increase as a percentage of GDP from when Clinton left office.
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