“(T)he nation is not, in fact, ‘broke.’ … So there’s no need to scramble to slash spending now now now; we can and should be willing to spend now if it will produce savings in the long run.” — Paul Krugman
THE ABOVE ADVICE FROM KRUGMAN, Nobel prize winner and former economic adviser to Enron, as Wall Street Journal columnist James Taranto refers to him, reads almost like the punch line to the old joke in the headline above.
Krugman’s observation was made more than two years ago, and the hole we are in just keeps getting deeper — in part because of basic failures of leadership in Washington, D.C. Added to that you have Nancy Pelosi, who during the recent debate on the government shutdown displayed her own economic acumen: “The cupboard is bare. There’s no more cuts to make. We all want to reduce the deficit. Put everything on the table, review it, but you cannot have any more cuts just for the sake of cuts.”
Even as leadership simultaneously claims government to be a lean, mean economic machine, the thinking displayed by Krugman, Pelosi and their acolytes has contributed significantly to continued increases in government spending. Unfortunately, as the nation heads closer to financial Armageddon, we continue to send to Washington people who wish to revive the New Deal or who believe an open checkbook is the only solution to our problems.
Author Michael Snyder recently wrote a piece titled, “33 Stats That Prove That SOMETHING Desperately Needs To Be Done About the National Debt.” Here are a few examples he cites:
“(U)nder Barack Obama the United States will accumulate more debt than it did under all of the other presidents in U.S. history combined. …
“Since 2007, the U.S. debt-to-GDP ratio has increased from 66.6 percent to 101.6 percent. …
“At this point, the federal government hands out money to approximately 128 million Americans (41.3 percent of the population) every month. …
“The amount of U.S. government debt held by foreigners is about five times larger than it was just a decade ago. …
“If the federal government used the (accounting standards) like publicly traded corporations do, the real federal budget deficit for 2011 would have been 5 trillion dollars instead of 1.3 trillion dollars.”
I would encourage interested parties to read the entire list of 33 examples online, where supporting links are provided.
Unfortunately, too many politicians in D.C. are held in high esteem despite an inability to face reality in assessing both the magnitude of the financial situation and the potential for savings by reducing government waste. There are, however, those who more interested in the future of this country than in currying favor with special interest groups or pandering for votes.
Citizens Against Government Waste (CAGW) is one such group. It releases an annual report on budgeted items recommended for elimination or reduction. Before looking closer at a few recommendations, a quote from the report is in order:
“This year’s (report) contains 557 recommendations that would save taxpayers $580.6 billion in the first year and $1.8 trillion over five years. To date, the implementation of CAGW’s recommendations has helped save taxpayers $1.3 trillion.”
That in mind, consider the following:
• Eliminate the Rural Utilities Service (one-year savings: $9.6 billion/five-year savings: $48.1 billion). This program is a holdover from the days of FDR and it continues to drain resources with little discernible benefit.
• Eliminate the Sugar Subsidy ($1.2 billion/$6 billion). Another outdated program in which “the federal government establishes a minimum price for sugar in the U.S., which averages roughly double the world price,” according to CAGW.
• Eliminate the Food for Peace Program ($137 million/$685 million). This program was established in 1954 to send food to “impoverished countries to induce positive changes in governance.” Nations that failed to comply “were supposed to be denied further aid. Unfortunately, no such standard has been applied.” Like so many “feel-good” programs, the law of unintended consequences came into play: In 2011 a Government Accountability Office report stated the program was “discouraging food production by local farmers, which could undermine development goals.”
• Eliminate Unrequested Funding for Retrofit of the M1 Abrams Tank ($136 million/$3 billion). This boondoggle is opposed by senior Department of Defense officials, but quoting from the report, “The program has powerful allies: Senate Committee on Armed Services Chairman Carl Levin (D-Mich.) and House Armed Services Committee Chairman Buck McKeon (R-Calif.) both support the program. Although the tank plant is located in Lima, Ohio, its suppliers are spread across the country, which helps to explain the widespread support.”
• Repeal the Davis-Bacon Act ($512 million/$6.3 billion). Another Depression-era holdover enacted when the nation’s economic condition was used to justify excessive federal intervention. Today government waste has contributed to a dire economic situation of a different type. This act, when passed, appeased white union members while serving to, as Democrat Rep. Miles Algood said at the time, “keep out cheap colored labor.” A re-evaluation of this law is now in order.
Many good people put a lot of hours into developing the CAGW report, which as mentioned earlier contains more than 500 recommendations approaching $600 billion in savings in the first year. A reasonable person, looking at the above short list, might argue that one or the other warrants the expense; but only an extremist, tied to policies of ever-increasing government expansion, could make the ludicrous statement that the “cupboard is bare.”
What is really sad for our nation is that too many of our leaders can make statements like Pelosi’s, yet suffer no ill consequences. Indeed, her comments are believed by too many voters.
Our nation deserves leadership that is responsive to the needs of the nation, not leaders who simply encourage further government expenditures.
Today the only political force advocating for a reduction in expenditures and sound fiscal policy are tea party groups. Yet their members are openly ridiculed, mocked and held in contempt by many. Most of those doing so are those who are willing to allow the nation to be led to financial ruin, yet remain oblivious to this reality.
Dennis Lund is a mechanical engineer who lived in Benicia for more than 20 years.
Sharing is caring!
Krugman…yes, the Nobel Prize winner (but, clearly not in your class as an economist, eh?) suggested we spend because interest rates were/are low, so when better to spend? (Quick economics lesson: borrow when interest rates are low…it will cost less to repay. Try to digest that.) But, despite the dire need to repair our crumbling infrastructure and our losing battle to be a leader in new green technologies, the party of ‘no’ prevents such a thing from happening. You don’t come out of a recession via austerity. It has never worked. How much does it cost us not to fix our roads, bridges, schools, etc? A lot more than it would cost to fix them. As the old commercial said…’You can pay me now, or pay me later’. And, paying later = paying more. Much more.
Oh, and CAGW’s recommendations you cite? Wow, they lop a whopping $11 billion/year from the deficit. Yeah, that oughta eliminate the deficit. As an example of how puny a number that is, the Cruz/Whig shutdown cost the country $24 billion in economic activity and $2-6 billion toward the deficit. Please remind us of your outrage when we lost that money.
And this Snyder dude you refer to. You choose these from his 33 items…
“(U)nder Barack Obama the United States will accumulate more debt than it did under all of the other presidents in U.S. history combined. …”
Yes, the same old tired story. Bush runs up the deficit to record setting levels, and with his tax cuts, wars, etc., still on the books, it’s suddenly Obama’s fault. BTW, when Bush kept the cost of the wars off the books to keep the deficit numbers artificially low (well, not ‘low’, but ‘lower’ than reality), please remind us of your outrage at the time. Any links to columns you wrote that you can provide? We’d love to see it.
“Since 2007, the U.S. debt-to-GDP ratio has increased from 66.6 percent to 101.6 percent. …”
Actually, the CBO reported in September it’s at 73%. Further, the federal budget deficit has shrunk from > 10% of GDP in 2009 to 4.1% as of October of this year. Somehow, this fact conveniently eluded you.
“At this point, the federal government hands out money to approximately 128 million Americans (41.3 percent of the population) every month. …”
So…when the deep Bush recession destroys the economy and employment, you expected the need for government assistance to go DOWN? Wow. Oh, and quick trivia time…can you name the last president who EXPANDED the eligibility for SNAP benefits? Give yourself a pat on the back if you said ‘W’.
If the few items you chose from the 33 can be so easily debunked, the remainder must really be awesome stuff.
Great stuff Benician. Stay tuned for the usual argle bargle.
http://mobile.nytimes.com/2013/12/06/opinion/krugman-obama-gets-real.html
i>Oh, and CAGW’s recommendations you cite? Wow, they lop a whopping $11 billion/year from the deficit.
From the article: “This year’s (report) contains 557 recommendations that would save taxpayers $580.6 billion in the first year and $1.8 trillion over five years. To date, the implementation of CAGW’s recommendations has helped save taxpayers $1.3 trillion.”
It is very simple the local left leaning Liberals differ from the writer. That is all it is. I happen to be on the writer’s side. The local Liberals do not like President Bush they prefer the very left leaning President Obama. Just two sides to economic issues which at present the President and his regime are losing. Yes the unemployment is going down as it should be. Just wait till the bill comes in for Obamacare. You may then have a different story. The rest of this stuff is not new and will continue to be debated as it should. Have a very Merry Christmas and enjoy the Christmas tree lighting on First street and try to spread a little joy and make all very happy.
Who is Michael Snyder?:
“Like most doom-sayers, it doesn’t seem to faze Snyder one bit that every one of his past predictions of economic collapse were dead wrong. This horrendous track record would cause most people to reevaluate their beliefs in the effort to one day be right. Yet, he simply refuses to even address or acknowledge that he has been wrong thousands of times, especially if you count each numbered item of his massive lists. He seems to have explosive diarrhea of the mind that no amount of logic can slow or stop.”
http://rationalwiki.org/wiki/Michael_T._Snyder
Sounds like someone we know
It’s funny what it takes to be a DDL reliable source.
I did not know you feed DDL info. Now that is funny.
When they don’t like the message they go after the messager. Hank Harrison Nov. 2, 2013
No…when the track record is abysmal and the message is easily debunked, we go after the messenger…as well as anyone who cites the messenger as a quality source.
Your focus on Snyder is a distraction from the message delivered. Nice try but no sale.
BTW, you did not “debunk” him. He provides links to each of the claims made. Search those links, debunk those sources and you may have a valid point. Otherwise yours is the typical “argle bargle”
Little Bobbie Livesay’s opinion is near worthless, as usual. However, I believe in being even-handed where possible. Hence, Dennis, I think you are substantially correct that the five points you select are weak pieces of legislation that now can, and should be done without, though Benician is correct in noting that they add up to “small potatoes” compared to our national debt. I don’t agree with extreme Righties about the “hammer & tongs” approach to budgetary surgery. Gradual correction is in order utilizing gentle growth, by which I mean that which is least destructive to environment and least abusive to people (i.e., considerate of nature and conducive to people’s better motivation.) This is not rocket science! BTW, down with TPP!
they add up to “small potatoes” compared to our national debt.
580 Billion is ‘small’ potatoes?
Focusing only on a few examples misses the point being made.
Robert you are biased and have no clue. Stick with Peter and Harvey and you will be very happy. Robert no one pays any attention to what you have to say. But on the other hand they are all ears on what I have to say. Does that help Robert?
“If the federal government used the (accounting standards) like publicly traded corporations do, the real federal budget deficit for 2011 would have been 5 trillion dollars instead of 1.3 trillion dollars.”
The government seems to always have funny ways that they report the numbers. They spin them a hundred different ways to pull the wool over the eyes of the sheeple and make things sound much better than they ever are. Take for example the reporting of the unemployment number right before the last election that we later found out were false. Just so typical of this administration.
Actually, there was nothing funny about those unemployment numbers…unless you live in the right wing bubble. The administration has absolutely nothing to do with those numbers.
OTOH, what do you think of the Shrub administration’s choice to hide the cost of the wars from the budget…keeping the announced deficit numbers artificially low?
Denial of the truth does not change the facts. Sorry to be the bearer of bad news there Benicia.
Ahhh, life in the bubble. Further proof the more one watches Faux, the less they know. Tell me, what color is the sky in your world?
JLB,
What we are witnessing is a classic example ‘playing chess with pigeons’. We also have to recognize that the standards for Conservatives is set very high by the neo-progs who have no standards by which they abide.
Case in point by way of comparison:
0bama is absolved of all responsibility for actions (or lack thereof) of his subordinates, in this example it is Robert Grove who was the Census director when the books were possibly being cooked (this is still under investigation). Bear in mind Grove, while at the Census bureau (in a lesser capacity), openly advocated in favor of cooking the books by using statistical methodology to increase representation for minorities. His willingness to do this probably made him the perfect appointment in the eyes of the President.
Compare to Michael ‘Good job Brownie’ and hurricane Katrina. Bush was held accountable for the lack of action of subordinates despite his taking action upon request from appropriate people (Gov. Nagin). The neo-progs will not let go of this because the die has been cast and the ‘evil’ Bush has been permanently tainted with his ‘Katrina-Gate’.
But 0bama remains unaccountable for any actions of any subordinates, including the disastrous start of 0h-bummer-Kare.
Do you even follow politics? You really seem genuinely befuddled by what’s happening in the world around you.
Hank I would suggest you follow the polls and take a good look at Obamacare. Need I go any further. President Obama and his regime are lost in space without a parachute. Hank it does appear the local Liberals are the ones that do not see things as the eay they are. Hank try following politics a little closer it could help.
Thanks Bob but I only take suggestions from people who know what they’re talking about. Bob you are perpetually about a week behind. Obamacare is taking off like we always knew and you always feared it would. Jobs numbers look good, too, so I guess it’s not killing the economy after all. Poor Bob, married to a morally bankrupt and perpetually wrong and wrongheaded worldview. To be proven wrong at every turn must be tough.
Did I say a week behind? I meant 50 years
Hank you are in a dream world. Omabacare numbers are so far off it is never going to meet their estimates. What happened to the 40mil not insured? Did they just disappear and President Obama will settle for maybe 3/5 mil. President Obama has made the country a place of low wages and no growth. Please explain this mighty take off of Obamacare. It is flawed from the start and the President is taking mighty hits. We have such a strong recovery we must now extend unemployeement pay. I do not mind that but at the same time it is an indication of failurs of our President. Hank time to get with what is happening and admit failure rather than make personal attacks on me. Sorry Hank you just are not aware or just do not want to admit what is relly going on. Obamacare is just geginning to show that it was a failure. You know how that goes, you can keep your -0plan period. Or as Hank might say you are a week behind period.
But Bob, we have been told that the website has been fixed and all is well in the land of 0bama. Healthcare has now been brought to the masses. Does it really matter that a few million people have been dropped from their plans?
Since all but a fraction will end up with better plans (in many cases, actual plans), no, it doesn’t matter in the big picture.
Must be hard to root for misery and still be so wrong. But you are good at picking the worst argument. What does it matter if there are a few bumps in the road on the way to insuring millions — and if a plan to insure 40 million hits obstacles and only initially insures 5 million, why would you opt instead to insure none?
Or as Bob might say, fuck the poor. Bah humbug, you can’t pay your bills you lose your house. Merry fucking Christmas.
No Hank I say you can start over. Just what should the government do if you can not pay your bills. The government does give unemployment insurance. I am confused Hank. Just when does the government step out of guaranteed income, house payment, personal bills? Is there not a time that what the government offers is over and for a person to get back on their feet. Hank you confuse me. I assume you think the government should just pick up the bill. Hank then where is the incentive to get back om your feet and build a better place for yourself and your family. Hank you ARE LIVING IN a very out dated society that I do not want any part of. Hank it is yours and I hope you make the best of it on the governments dime. I chose not to..
Space parachute?
Try the Capsule
Hey, how about lost at sea w/o a dune buggy. Wait, up the creek w/o a monkey.