Obama did NOT cut spending

There is a lot of hay over the fact that under Obama, spending has fallen. Except, you’d be wrong. It hasn’t fallen at all. We’re spending more money in the federal government than we ever have.

Let me break it down for you.

Go to the treasury website: http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

That’s the balance/debt of the government. It’s how much we owe or have on hand. It would be the equivalent of your all your debts. If it’s 0, then you don’t owe anyone anything.

Note that this does NOT take into account money owed to the entitlement programs. No one really knows how much we owe them. It is only how much money we borrowed.

Now, copy and paste that data into your favorite spreadsheet program. It’s not formatted particularly well, but that’s ok. It’s not rocket science to fix the numbers.

Add a column to the right that simply subtracts the previous number from the next number. That’s the surplus/deficit. It’s how much more we bring in than we spend. Notice that there is NO surplus in the 90′s. The last surplus was in the late 50′s, and then the 20′s. (Quiz: Who was president then?)

Now that we have the deficit, we can measure how much the deficit changed. If the deficit is reducing, thent that means we are slowing our borrowing, even though we are likely to still be borrowing. You’ll not that what Obama claims to have achieved is not remarkable. No president has ever increased deficit spending faster than him. On the other hand, several times President Bush achieved a slowing of the deficit.

Here’s a link to that in LibreOffice format: http://jonathangardner.net/balance.ods

President Obama has NOT reduced the size of government debt. He just slowed the pace of how fast the debt is growing.

Downgraded

Standard & Poor has downgraded the US Federal Government to one notch below the highest rating.

What does that mean?

It means that they think we may not pay back all of our loans.

And it makes sense,  too.

Instead of holding the line by not granting any extension of the debt, the Republican Party in the house and senate allowed the debt limit to increase by $1 trillion. In exchange, they got vague promises that the overall spending of the federal government ill be cut by $1 trillion—using baseline budgeting, which means we are borrowing money we can never pay back, not in a trillion years.

Our nation is about to go the same way as all the great empires, and for the same reason. There is a large group of people that have attached themselves to the federal treasury, like a baby to the bottle, and we do not have the political will to cut them off.

On the Budget: Default

Speaker of the House Boehner has moved heaven and earth to get a compromise bill, one that the president promises to veto and the house republicans refuse to agree to.

The issue before us is, shall we extend the debt limit? The answer is,  “No.” They have already had that vote in the house, and it failed.

Now the question is, what must the government do to get an increase in the debt limit? I believe the answer is and always should be, “Never.” We must start cutting, right now, and continue cutting until we can lower the debt limit all the way to 0. There is no reason why our country should be in debt, none whatsoever. As the wealthiest nation to ever grace the pages of history, we should, instead, have vast fortunes at our disposal, ready to spend should there be any who dare threaten our security.

Baseline budgeting says that government should increase spending every year. This is absurd. You can only increase expenses as you receive more income, and you should instead be looking at ways to cut expenses.

If the democrats in the senate and President Obama believe that the American people have an inexhaustible supply of money and wealth they can exploit, then it’s time to default. It’s time to show the democrats the absurdity of their ways. Let the country go bankrupt. Let all the programs they have built on the backs of the American people evaporate. Let us start over from scratch, financially.

As the wealthiest country on the planet, our burden will go away with a default, our burden being the idea that the American people have an inexhaustible supply of money.

This is Not How to Balance the Budget

Jim Geraghty at Campaign Spot at NRO makes an impassioned plea for the FLAP program, a federal budget line item among millions.

Before I even say what it is, let me explain the severity of our budget problems at the federal level. We are flat-out broke. We cannot balance the budget, not now, not in a million years. At this point, we are getting 70% of our federal dollars that are borrowed from the Fed, meaning we’re just printing money, just like 3rd world countries, and 1st world countries trying their best to become 3rd world countries are doing.

Our national debt is dwarfed by our liabilities. We are hundreds of trillions of dollars in the hole. That’s many, many times the size of our economy. And what’s worse is the liabilities increase in price over time, rather than diminish. In other words, its as if we cannot even make the interest payment on our homes, and the principal is increasing over time, much faster than we can reasonably expect our income to grow.

In light of this, teaching high school kids to speak Spanish is hardly a priority. In fact, maybe it’s time we let the upcoming generation feel, first hand, what “we can’t afford it” really means, and do so by shutting down federal funding for foreign language classes across the country today.

The federal budget process should work like this, and regretfully, not even the Ryan Plan even begins to work in this way.

Step 1: What is the optimum tax rate and regulation policy to encourage growth in the private sector? Tim Pawlenty is right. We should have a policy at the federal level of not setting taxes, borrowing or regulations so high that our economy grows less than 5% each year. 5% growth means we double our national income every 12 years.

Step 2: With the money that we get, and not a dime more, we must set a budget that (a) meets our highest priority spending items, such as the courts and national defense, (b) does not burden any future generations with spending that we cannot bear, even at 5% growth.

Step 3: If there is any money left over after Step 2, then we return it to the American people. The federal government’s job is not to educate the children, feed the poor, or invest in America’s infrastructure. That’s left to the states and to the people, so give them back the surplus and let them feed the poor, educate the children, and invest in America’s infrastructure according to what they feel is most important.

The above steps just make sense. Take honest stock of what you have and what you can get; take honest stock of what you need; and make the two meet, with the expenses coming in below revenues.

Sadly, the Paul Ryan plan, a plan I support even though it is woefully inadequate, works like every other budget in the modern history of the federal government.

Step 1: Start with last year’s budget, then increase everything by 5%.

Step 2: Poll the current body of congress, and throw in as much spending as you can to get a majority vote.

Step 3: Ask the president what he’d like to spend money on, and add that in too, completely disregarding whether or not America should be involved in the foreign conflicts the president has gotten us involved in.

Step 4: Bring in every office of government and ask them whether they’d like gold or platinum buttons on their uniforms, and then throw in an extra 25% just to be sure.

Step 5: Proclaim to the public that there just isn’t enough money and that the federal government must raise taxes to make ends meet.

Step 6: Ensure that every member of congress gets the best health care plan in the universe.

Step 7: Take a few millions dollars off the top and call it cuts to the budget.

What the Paul Ryan plan does do, however, is cap the costs of Medicare for future generations by allowing seniors to shop around. Of course, seniors 55 and older will get their platinum buttons at the expense of all the homeless and unemployed who can’t find work because money is being sucked out of the economy by the body we call congress; but never mind that, because we owe those 55 and older their medical plans because they’ve been dang sure to put us up as collateral to afford it, and heaven forbid their children and grandchildren have a say in whether they would like to be slaves to pay for every minor procedure and pill!

1.3 Trillion Dollars Missing

hat tip: The Right Scoop

See also: Michelle Malkin

I Owe My Soul to the Federal Government

Thanks, Iowahawk, for making this.

Budget Realities

Let’s suppose Rep. Paul Ryan, so far the only serious person on the budget in DC, proposed to cut my Social Security benefits by 75%. Question: How much is he cutting from my Social Security benefits?

Answer: Nothing. The Social Security Administration already admits that if nothing changes, I can only hope for 75 cents on the dollar when I retire.

Starting with that as a baseline, all cuts and allocations should be framed relative to the money we will actually have in the future. That means that anyone who proposes the radical idea of actually balancing the budget isn’t cutting anything. He’s only putting on paper what everyone already knows will happen in real life.

We are so far removed from reality in the federal government that no one even talks about the fact that our balance sheet is maybe more than a hundred trillion dollars in the red. That means that we are flat out broke, and anyone who loans the US government a dollar is a fool. We can’t borrow more money, and we must accept the fact that we are flat out broke.

When you realize you are in a financial hole, the answer isn’t to keep on digging to maintain the status quo. The answer is to give up expenditures, the sooner the better, and to stop digging. The answer is to restructure your debt, or to find new avenues of revenue.

In the case of the Federal Government, at no point in history did we ever collect more than about 20% of GDP. It just can’t happen. That’s an economic fact. No matter how high we rose the tax rates, tax revenues did not necessarily increase. People who propose raising tax rates, it doesn’t matter on who, are ignoring this reality, and live in some fantasy land where rich people are begging the federal government to take their money.

Today, more than ever, now that we have the highest income tax rate of any country for corporations, raising them even further would completely destroy our economy. What few corporations out of charity or obligation remain in our country will either fail or leave entirely.

If anything, any budget must take into account a dramatic tax rate cut, designed to show the world that (a) we’re serious about balancing the budget by cutting spending, not raising taxes, and (b) America is always the safest economic zone, and we intend to keep it that way even at the cost of cutting government expenditures.

Such a one-two punch would make the United States, once again, the economic center of the world.

Yes, that means giving up my future Medicare and Social Security benefits. But you know what? I don’t expect to see them anyway. So a cut would mean accepting reality.

Balanced Budget Amendment

The two Utah senators have proposed a balanced budget amendment. I support it. Yes, we can write a better one, but this one is good enough.

I think we need to change the name, though. It should be called, “Giving our children a chance amendment”. We should focus on the generational theft inflicted on us and how we want to leave a government free of debt or deficit for our children, grandchildren, and all future generations.