Wednesday, June 10, 2009

The stimulus and lack of entitlement reform

I know that the "Liberals" will somehow blame Bush for spending $190 Billion more than the government takes in each month, but, at some point they have to take responsibility for the deficit.

Pay-Go, is just another word for tax increases. Let me remind our lefties that when the "O" tried to reduce the budget by $17 Billion, there were howls of protest from his own party.

Conservatives did not support the stimulus, in fact, Conservatives did not even support the initial TARP program.

We are heading for insolvency or huge, overwhelming tax increases. There are no "adults" in charge.

The "O" is dismantling the most successful economy the world has ever known in an effort to redistribute to those more deserving.

Terry as you pontificate your disdain for those who wish to make a profit rather than critically (and much more importantly) look at the dismantling of our economy by the "O"-socialist you voted for, I hope you are ready to look your grandchildren in the eye as he bankrupts their future.

Rich, you can fabricate what ever lies you wish, but there are no plans to limit spending, there are no plans to grow the economy, how are we going to stop spending $190 Billion more each month than we take in?

3 comments:

Jim G. said...

A Red (Ink) Letter Day For Gov't: $1,000,000,000,000 In 8 Months
By KERRY N. WEEMS AND BENJAMIN E. SASSE | Posted Tuesday, June 09, 2009 4:20 PM PT

In September 1981, William Proxmire took to the Senate floor for a 16-hour filibuster. The Wisconsin Democrat's purpose was not to stop legislation — he spoke through the night but relinquished the floor at dawn.

Instead, he seized the chamber to focus attention on a momentous act that he was afraid his peers might take too lightly: Congress was considering legislation that would authorize the debt ceiling of the U.S. to exceed $1 trillion for the first time in history.

On Wednesday, we will likely learn that in the last fortnight, Sen. Proxmire's worries about popular numbness to a fiscally irresponsible government have been realized. We are passing through an even more dangerous threshold.

Proxmire was fretting over hitting $1,000,000,000,000 in debt — which is the total of all past annual deficits that we haven't yet paid off. This time, we are talking not about our cumulative debt, but about only this year's deficit.

Drowning In IOUs

Just since Sept. 1, when the federal fiscal year began, our leaders have written $1,000,000,000,000 in new IOUs for our children and grandchildren to struggle under. It took two centuries from the nation's founding until the early 1980s for Washington to overspend by a cumulative total of a trillion dollars. We have just accomplished the same feat in eight months.

We have never seen a number anything like this. Even amid the often irresponsible spending of the last decade, when the largest deficit ever was recorded, the high-water mark was $458 billion last year.

Under normal circumstances, average citizens should have no need to pay attention to bureaucratic reports in Washington.

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Jim G. said...

Wednesday afternoon at 2 p.m. Eastern time, the Monthly Treasury Statement — essentially the federal government's monthly accounting report — will be released. How much did we spend in May? How much did we take in in taxes? What was the shortfall (or surplus)?

This is a report usually noticed by only the bond markets and public finance nerds. On Wednesday, however, all vigilante citizens should pause to take note of the government's May numbers.

What will we learn? In April, which is always one of Uncle Sam's strongest months because of the flood of April 15 checks, the government still reported a monthly net outflow of $21 billion, and the deficit for the year stood at $802 billion.

The two previous months, which are more representative of the state of current overspending, the feds saw monthly deficits of $194 billion and $192 billion, respectively.

It is likely that today, when we add in another month of overspending, we will discover either that the annual deficit for fiscal year 2009 ticked beyond $1 trillion by May 31, or we will be able to project that it has done so some time in the 10 days since.

Proxmire worried that it was a ruinous path for government to pile up annual deficit after annual deficit into a cumulative debt so large that we might begin to think it normal. We might become numb to a Congress that has so routinized spending beyond our means. And indeed, with the financial crisis and the heavy interventionalist hand of government, we're becoming somewhat numb to very large numbers.

The amounts of money being dispatched to various quarters of the U.S. to reward bad behavior are equal to the GDPs of many countries. But from the perspective of the kitchen table, it is a sea of zeros often with less meaning than the next worrisome car payment or orthodontist's bill.

So, as we cross this threshold — which will crowd out future government spending on items other than entitlements and interest on the debt, and which will make interest rates more expensive for young families buying their first home or the small businesswoman seeking to expand — it is time to pause and reflect.

Questions That Need Answering

It is time to ask our politicians to answer some basic questions about the low fiscal estate to which we've fallen:

• What is the capacity, and willingness, of lenders to continue to drink from the red-ink fire hose?

• What is the long-term effect on the credit markets of having over $190 billion in new debt thrown at them each month?

• What does it mean for foreign countries — especially the Chinese — to have claims on our Treasury that are substantial fractions of our GDP?

• Can our national economy service $18.3 trillion in debt (projected by the president for fiscal 2014) and still meet the other fundamental demands of responsible government?

The Senate has a tradition dating back many years. On the occasion of George Washington's birthday, the only business is the reading of Washington's farewell address warning the young republic of dangers but also exhorting us to greatness. The Senate should undertake a new tradition:

With the passing of each trillion dollars of indebtedness, a day should be set aside not for discussing, but for voting on, measures that will preserve our republic from a rising tide of red ink.

It should be called Proxmire Warning Day

Baxter said...

Oh Jimmy, you are so right! Your man GWB was so smart when he tossed aside Pay/Go. The past eight years were supply side heaven, with tax cuts and ever growing deficits. Why did anyone want to change anything?

"Lies"? Give me a break. You are out of ideas when you use words like that. You should at least pretend you are a thoughtful, informed fellow.

As I have said for several months, the bond vigilantes are going to enforce discipline. It is already beginning. Yes, taxes will go up and they need to. Spending growth will need to go down - a lot. There is simply no alternative unless we want to take the Banana Republic, Latin American model - the path that GWB and GOP Congress charted.