Simple and to the point, by economic professor Anthony Davies,
Out of control spending is the issue.
Doing some more travel today. Regular blogging will resume later.
“We estimate that if current laws remain unchanged, the budget deficit this year will be close to $1.5 trillion, or 9.8 percent of [gross domestic product]. That would follow deficits of 10 percent of GDP last year and 8.9 percent in the previous year, the three largest deficits since 1945. As a result, debt held by the public will probably jump from 40 percent of GDP at the end of fiscal year 2008 to nearly 70 percent at the end of fiscal year 2011.”
Here’s the truth: The government spending is totally unsustainable.
Israpundit reminds us,
The 111th Congress Added More Debt Than First 100 Congresses Combined: $10,429 Per Person in U.S.
It was historic.
Barack Obama tripled the national deficit in one year. When Speaker Pelosi took over Congress the national deficit was $162 billion. When she exited in 2011 as Speaker it was at $1.29 Trillion dollars.
Obama topped a trillion dollars his second year, too.
Spending was up 84% under Obama.
In today’s WSJ,
S&P, Moody’s Warn On U.S. Credit Rating
The U.S. currently has a triple-A rating with a stable outlook at both agencies.
“The view of markets is that the U.S. will continue to benefit from the exorbitant privilege linked to the U.S. dollar” to fund its deficits, Carol Sirou, head of S&P France, said at a Paris conference Thursday. “But that may change. We can’t rule out changing the outlook” on the U.S. sovereign debt rating in the future, she warned. She added the jobless nature of the U.S. recovery was one of the biggest threats to the U.S. economy. “No triple-A rating is forever,” she said.
The Heritage Foundation recommends, No Debt Ceiling Raise Without Spending Cuts
Just yesterday, The Heritage Foundation released the 2011 Index of Economic Freedom which showed that the irresponsible spending habits of the last Congress had once again pushed the United States down the international ranking to #9, behind nations such as Denmark, Canada and first-place Hong Kong. The Index showed that runaway spending posed the greatest risk to our economic freedom, and thus our ability to reduce poverty and create economic growth. The U.S. can turn things around and continue to be a leader of this prosperous free world, but first we have to get our own bad spending habits under control. The debate over the debt ceiling provides the perfect opportunity to put us on this path.
We have time, there are options available, but action is necessary. Raising the debt ceiling, without also addressing our federal government’s spending problem, would be, as one Senator once said, “a sign of leadership failure.”
That Senator, by the way, was Barack Obama.
The former Speaker of the House speaks lies,
At her final press conference as House Speaker, Nancy Pelosi (D-CA) said, “Deficit reduction has been a high priority for us. It is our mantra, pay-as-you-go.”
The numbers tell a different story.
When the Pelosi Democrats took control of Congress on January 4, 2007, the national debt stood at $8,670,596,242,973.04. The last day of the 111th Congress and Pelosi’s Speakership on December 22, 2010 the national debt was $13,858,529,371,601.09 – a roughly $5.2 trillion increase in just four years. Furthermore, the year over year federal deficit has roughly quadrupled during Pelosi’s four years as speaker, from $342 billion in fiscal year 2007 to an estimated $1.6 trillion at the end of fiscal year 2010.
Meanwhile, the Republicans are backtracking: Republicans Lower Goal for Cuts to Budget,
because the current fiscal year, which began Oct. 1, will be nearly half over before spending cuts could become law
Patterico asks, Do We Need a Third Party?
I’m starting to think we do. Because I don’t think the Republicans have the slightest idea what we’re all so pissed off about.
As evidence, let me cite a recent Allahpundit post about the GOP’s dithering about whether they can cut a whole fucking $100 billion from the budget:
Their excuse will be that the fiscal year, which began on October 1, will already be almost half over by the time the budgetary resolution that was passed during the lame duck runs out in March. That means they’ll only have seven months to work with this fiscal year; when they said they’d cut $100 billion, they meant the first full fiscal year that they’re in charge. But wait, you say! Shouldn’t it be fairly easy to find $100 billion to cut in an annual budget that exceeds $3.5 trillion? Well, yes — except that the GOP’s limiting itself to cutting discretionary spending (Social Security and Medicare are, as ever, completely off-limits) and even within discretionary spending they refuse to touch “security” budgets, i.e. Defense and Homeland Security. That leaves just $500 billion or so for this year to play with, and since, as Rich Lowry noted earlier at the Corner, a good chunk of that will already have been spent by the time the continuing resolution expires in the spring, they’d have to make huge cuts to what’s left in order to get to $100 billion in savings overall.
The point to ponder here, I think, is that even the highly touted $100 billion figure is just a small fraction of last year’s deficit. Even with a tea-party Congress, even with a gigantic pool of expenditures to cut from, political reality is such that not only can’t they reach that modest, largely symbolic target in seven months, they’ll actually have to move heaven and earth during the next full fiscal year to get Obama and the Senate Democrats to agree to it. This is what we’ve been reduced to — the suspense of wondering whether the new Republican majority can achieve cuts that will barely make a dent in our annual budget shortfall. Hugely depressing.
“Depressing” doesn’t begin to cover it. There really aren’t words for how absolutely infuriating this is. More and more, the temptation to leave the keyboard one is calmly typing on, and simply pound the fucking wall in frustration and dream of an armed insurrection . . . becomes something understandable rather than something we all know we should calmly denounce.
Say what you will about President Bush — whose memoir I am about 2/3 of the way through and enjoying immensely — but at least he tried to do something about Social Security. This ridiculous notion that everything that actually contributes to spending must be considered off the table — well, we have to take that notion off the table. We have to. No matter what it takes. We have to do it.
What does it take to wake these people up? Honestly?!
Does it take a third party?
It may take a third party. However, government spending, in most people’s minds, is an abstraction.
But before there is a viable third party, here’s a fact: More than half of income earners in the US do not pay federal income taxes. This means that a lot of people do not have their earnings directly decreased and seized by the government the way the earnings of the tax-paying minority are. Abstractions like federal deficits don’t hit you in the gut directly; having half (or more) of your yearly earnings taken away does. Until and unless each and every wage earner is taxed, nothing, and I mean absolutely nothing, is going to change.
Paul Krugman would have you believe that we are still in a recession because the government is not spending enough.
Take a look at this:
The 2010 Spending Record
In two years, a 21.4% increase. (emphasis added)
Once again domestic accounts far and away led the increases. Medicaid rose by 8.7%, and unemployment benefits by an astonishing 34.3%—to $160 billion. The costs of jobless insurance have tripled in two years. CBO adds that if you take out the savings for deposit insurance, funding for all “other activities” of government—education, transportation, foreign aid, housing, and so on—rose by 13% in 2010.
As for the deficits, the 2010 total was $1.29 trillion, down slightly from $1.42 trillion. That’s a two-year total of $2.7 trillion, or more than the entire amount during the Reagan Administration, when deficits were supposed to be ruinous. Now liberal economists tell us that deficits are the key to restoring prosperity. But all we have to show for spending nearly 25% of GDP for two years running is a growth rate of 1.7% and 9.6% unemployment.
You would think that, if spending was the key to prosperity, we would have what used to be called “full employment” back in the olden days when I was in college – the 5% employment rate of the GWBush years.
Another bad thing:
By far the biggest percentage-gain revenue winner for the taxpayer in 2010 was . . . the Federal Reserve. Thanks to the expansion of its balance sheet with riskier assets, the Fed earned $76 billion during the year, a 121% increase. The Fed’s windfall is a perfect symbol of our current economic policy. The government is making money because it now controls so much capital, but it is robbing that money from the private economy in the process. It is never a good sign when your central bank is a national profit center.
However, as Sweetness & Light points out,
On the contrary, it is a very good sign if you are a socialist who believes in running a command economy.
That is exactly what the Democrats are after.
The spendthrift 111th Congress is the Pelosi Congress, folks.
Every Democrat you vote for keeps it that way. Remember that on election day.
Don’t miss also Financial Briefing: The Road to Hell Is Paved With Good Intentions and taxpayer dollars.
Via The Corner.
Truth is scarier than fiction: