Assuming the accuracy of the polls discussed below, Americans are remarkably united on two points. One, our government should address the budget deficit only with spending cuts. Two, the time to start doing that is now. Specifically, Congress should not raise the debt limit.
A CBS Poll, released Friday, showed 77% wanted to reduce the federal budget deficit by only cutting spending. Only 9% supported raising taxes, and only an additional 9% supported a combination of spending cuts and tax raises. In a separate poll, 71% of respondersopposed raising the debt limit above its current $14.3 trillion, a ceiling we can expect to bump up against in March.
On 6 January, Treasury Sec. Tim Geithner sent a letter to Congress, positing that the Four Horseman of the Apocalypse would be unleashed upon the world if Congress didn't vote to authorize an increase in the debt ceiling above $14.3 trillion. Would it?
According to the WSJ, the total amount required to service our national debt is actually quite low at the moment:
Total net payments amounted to $197 billion, or 1.4% of annual economic output. That’s a bit more than what the government spent on unemployment insurance.
If that is the case, why is it necessary at all to raise the debt ceiling? That is the thought of Felix Salmon, writing at Reuters:
Greg Ip [writing at The Economist] makes a very important point today, which I haven’t seen made anywhere else*: even if the US debt ceiling isn’t lifted, that doesn’t mean the government will default.
In any given month, the government’s income dwarfs its debt-service obligations, which means that the government could simply pay all interest on Treasury bonds out of its cashflow. Greg hasn’t run the numbers on principal maturities, but I’m pretty sure that they too could be covered out of cash receipts—and when that happened, of course, the total debt outstanding would go down, and we wouldn’t be bumping up against the ceiling any more.
The point here is that the government has enormous expenditures every month, and debt service constitutes an important yet small part of them. If the debt ceiling weren’t raised, it stands to reason that just about any other form of government spending would get cut before Tim Geithner dreamed of defaulting on risk-free bonds.
With that in mind, perhaps serious consideration needs to be given to refusing to increase the debt limit and, instead, mandating immediate cuts to the budget. $197 billion ought not to be too had to find in a $3.55 trillion budget and it would put our government on a very different path - one to fiscal sanity. That is what the American people want, even if the left wing elite now in power considers that the end of the world.
To see Democrats at their most Orwellian, no need to go further today than StenyHoyer in the WSJ, shilling for Obama's "pay-go" legislation and blaming all deficits on a combination of profligate Bush spending and "reckless" Bush tax cuts. As the Wall St. Journal's senior economic writer, Stephen Moore, explained in a recent interview:
President Obama can read the opinion polls, and he is seeing what we've been talking about every night, which is the American people are absolutely incensed about the debt that's going on in this country. And so now President Obama is trying to sound like a born-again deficit hawk.
The difference between Obama's words and deeds is a vast and yawning chasm. It is true that the greatest sin of post-Reagan era Republicans has been to jettison fiscal discipline. It is a fundamental failure that has allowed the left to paint Republicans as hypocrites. But for the left to claim the mantle of "fiscal discipline" for themselves is to pass beyond the bounds of any reasonable definition of the word "hypocrisy" and enter into Orwellian space. But that is precisely where Hoyer, on behalf of Obama, takes us today.
The Hoyer article deserves a full roasting, so here goes.
In recent years, America's fiscal story has been one of steady decline -- from record surpluses to record deficits. In 2001, the federal government had a projected 10-year surplus of $5.6 trillion. Today, we are looking at a fiscal year 2009 deficit of $1.7 trillion.
"Steady decline?" In other words, today's multi-trillion dollar deficit is the natural evolution of the Bush years? The actual budget deficit in 2006, before Pelosi, Reid and the Democrats took control of the purse strings, was $248 billion. The only way you go from that to a $1.75 trillion deficit in 2009 and describe it as a "steady decline" is to redefine the word "steady" to mean "fell off a cliff."
Further, the Clinton surplus was the function of an accounting gimmick with Social Security enacted during the 90's. Social Security surpluses of those years - and continuing through today - were used to buy government bonds, thus making the annual revenues a part of the general funds of Congress (and that a profligate Congress spent wholesale every year). It was and is a vast Ponzi scheme. Our actual national debt increased every year under Clinton. Social Security is now a time bomb set to blow up because the left in Congress refused to do anything about it. The huge number of baby boomers who gave the government the illusion of surpluses in the Clinton years are starting to make claims on the system that will steadily grow and overwhelm the system in just a few years.
A number of factors have brought us to this cash-strapped point, including reckless tax cuts, the cost of two wars, entitlement programs that have grown on autopilot, and the necessary, though costly, efforts to get our economy out of recession.
Wow. There is not a shred of intellectual honesty in that sentence.
1. Bush's tax cuts not only raised tax revenues because of an expanding tax base, they did so at the greatest rate in our nations history.
2. The cost of the two wars we are fighting added to our deficit, but pale in comparison to real culprit, the growth in domestic spending. To put this in perspective, the total cost of the Iraq War from 2003 to 2008 was $551 billion dollars. Obama quadrupled that in his first hundred days with massive domestic spending - which, as an important aside, he did at the cost of our national defense. His budget reduces defense-related R&D, cuts major weapons systems, cuts missile defense, and holds defense spending below inflation, resulting in an ever-shrinking defense budget. As Michael O'Hanlon wrote in the Washington Post:
After three months of very impressive decisions regarding national security, President Obama made perhaps his first significant mistake. It concerns the defense budget, where his plans are insufficient to support the national security establishment over the next five years.
The truth of our deficits is ever increasing profligate spending above tax receipts on the domestic front - something Obama has just put on steroids.
3. The entitlement programs didn't grow on auto-pilot. "Auto-pilot" suggests that no one has attempted to curb the growth. The truth is that StenyHoyer and the left beat back every attempt at reforming Social Security. Does this look like "auto-pilot" to you.
4. The massive spending by Obama was not "necessary" to get our economy out of recession. It was a choice the left made to fund every liberal special interest program they could think of under the rubric of Keynesian economics. Other alternatives to stimulate the economy were equally viable, but none offered the left a chance to go hog wild at the public trough.
But by far the worst decision was the abandonment in the Bush years of the principle that our country should pay for what it buys. It's time to learn from that error and establish that principle in law. President Obama has made the pay-as-you-go rule -- a.k.a. "paygo" -- a central part of his campaign for fiscal responsibility. Under paygo, Congress is compelled to find savings for the dollars it spends.
This is a joke, right? True, Bush and the Republican Congress deserve opprobrium for their lack of fiscal discipline. But their lack of discipline is infinitesimal compared to Obama and the far left who control Congress and the purse strings today. In this instance, a WaPo graph is worth nine trillion words:
The truth is that this pay-go legislation is a penultimate act of political cynicism. Its the left trying to cover-up their Obama Gone Wild spending spree by turning reality on its head. There are two truths to this snake oil StenyHoyer is peddling. The "pay-go" legislation Hoyer is hawking specifically exempts Obama's multi-trillion dollar pet projects from its restrictions. It will provide cover for the largest planned expansion of spending and borrowing in our nation's history. It's only practical effect beyond pure propaganda for Obama will be to make tax cuts a thing of the past.
In the 1990s, paygo proved to be one of our most valuable tools for climbing out of a budgetary hole. As President Obama put it earlier this month, "It is no coincidence that this rule was in place when we moved . . . to record surpluses in the 1990s -- and that when this rule was abandoned, we returned to record deficits that doubled the national debt."
President George W. Bush and the Republican Congress set paygo aside, turning borrowed money into massive tax cuts for the most privileged. Borrowing made those tax cuts politically pain-free as long as Mr. Bush was in office, but it only passed the bill on to the next generation -- along with ever-inflating interest payments.
As I indicated above, a good part of the budget "surpluses" of the 1990's were nothing more than accounting changes that, in essence, made of Social Security a ponzi scheme. To the extent there was any fiscal discipline, it was the discipline imposed by Newt Gingrich and the House on the Clinton administration. As discussed in the quote below, pay-go legislation played little if any role in imposing fiscal discipline during the 90's as it was regularly ignored under House rules.
Pay-go was terminated in 2001 to allow for the Bush tax cuts - and you can see the result in the graph above. We didn't lose revenues, we gained them on a historic scale. Yet under pay-go, the math would have ignored this historical certainty and required massive cuts in spending to enact the tax cuts. Pay-go, since revived by Pelosi as a House rule in 2007, has been equally ineffective. It has been regularly ignored whenever convenient for Democrats - such as, for example, when passing Obama's massive 9,000 ear-mark strong "stimulus" package. This from Brian Riedl at the Heritage Foundation:
PAYGO has proven to be more of a talking point than an actual tool for budget discipline. During the 1991-2002 round of statutory PAYGO, Congress and the President still added more than $700 billion to the budget deficit and simply cancelled every single sequestration. Since the 2007 creation of the PAYGO rule, Congress has waived it numerous times and added $600 billion to the deficit.
Creating a PAYGO law and then blocking its enforcement is inconsistent and hypocritical. And given their recent waiving of PAYGO to pass a $1.1 trillion stimulus bill, there is no reason to believe the current Congress and the President are any more likely to enforce PAYGO than their predecessors were. And even if it were enforced, PAYGO applies to only a small fraction of federal spending (new entitlements). Consequently, PAYGO is merely a distraction from real budget reforms that could rein in runaway spending and budget deficits.
You can read the rest of Mr. Hoyer's Orwellian scratchings here. Pay-go legislation really is political cynicism taken to its zenith. And neither Steny Hoyer nor Obama display the least bit of intellectual honesty in pushing it as political cover for an experiment in deficit spending that could truly doom our economy.
Obamamania is sweeping the secular left in the form of a messianic cult. Here is a round-up and some thoughts. -------------------------------------------------------------------------------------
Charles Krauthammer weighs in today on the hopemongerer in chief:
There's no better path to success than getting people to buy a free commodity. Like the genius who figured out how to get people to pay for water: bottle it. . . .
And now, in the most amazing trick of all, a silver-tongued freshman senator has found a way to sell hope. To get it, you need only give him your vote. Barack Obama is getting millions.
This kind of sale is hardly new. Organized religion has been offering a similar commodity -- salvation -- for millennia. Which is why the Obama campaign has the feel of a religious revival with, as writer James Wolcott observed, a "salvational fervor" and "idealistic zeal divorced from any particular policy or cause and chariot-driven by pure euphoria."
"We are the hope of the future," sayeth Obama. We can "remake this world as it should be." Believe in me and I shall redeem not just you but your country -- nay, we can become "a hymn that will heal this nation, repair this world, and make this time different than all the rest."
. . . Interestingly, Obama has been able to win these electoral victories and dazzle crowds in one new jurisdiction after another, even as his mesmeric power has begun to arouse skepticism and misgivings among the mainstream media.
ABC's Jake Tapper notes the "Helter-Skelter cult-ish qualities" of "Obama worshipers," what Joel Stein of the Los Angeles Times calls "the Cult of Obama." Obama's Super Tuesday victory speech was a classic of the genre. Its effect was electric, eliciting a rhythmic fervor in the audience -- to such rhetorical nonsense as "We are the ones we've been waiting for. (Cheers, applause.) We are the change that we seek."
That was too much for Time's Joe Klein. "There was something just a wee bit creepy about the mass messianism," he wrote. "The message is becoming dangerously self-referential. The Obama campaign all too often is about how wonderful the Obama campaign is."
You might dismiss as hyperbole the complaint by the New York Times's Paul Krugman that "the Obama campaign seems dangerously close to becoming a cult of personality." Until you hear Chris Matthews, who no longer has the excuse of youth, react to Obama's Potomac primary victory speech with "My, I felt this thrill going up my leg." When his MSNBC co-hosts tried to bail him out, he refused to recant. Not surprising for an acolyte who said that Obama "comes along, and he seems to have the answers. This is the New Testament." . . .
. . . Obama has an astonishingly empty paper trail. He's going around issuing promissory notes on the future that he can't possibly redeem. Promises to heal the world with negotiations with the likes of Iran's president, Mahmoud Ahmadinejad. Promises to transcend the conundrums of entitlement reform that require real and painful trade-offs and that have eluded solution for a generation. Promises to fund his other promises by a rapid withdrawal from an unpopular war -- with the hope, I suppose, that the (presumed) resulting increase in American prestige would compensate for the chaos to follow.
Democrats are worried that the Obama spell will break between the time of his nomination and the time of the election, and deny them the White House. My guess is that he can maintain the spell just past Inauguration Day. After which will come the awakening. It will be rude.
Read the entire article. You can also find some more thoughts on the nature of the cult of Obama:
If you wish to see just how truly cultish and messianic the Obama campaign is becoming, do read through the thread on this forum discussing Obama and why the individuals on that site are for him.
Bookworm Room has a thoughtful post on this messianic effect Obama is having on his crowds:
I am not saying that Obama is Hitler. I am saying, however, that both his speaking style and the audience reaction to that style are typical of the connection between a demagogue and his audience. It’s not new, it’s been around for a while, but in an age of inarticulate politicians, we’re unused to it and have no resistance.
(A little historical note: my father, who escaped Hitler’s Germany in 1935, heard Hitler speak at a public rally. And my father, who was Jewish and therefore unlikely to be swayed by Hitler’s words, noticed exactly what Hillary’s friend said: His speeches were commonplace. It was his connection with his audience that was out of the ordinary.)
Read the entire post. She also sites to article by Daniel Henninger, deconstructing Obama's message and speaking style, and Dean Barnett, at the Weekly Standard, who compares the Obamamania effect of a full on teleprompter driven speech with the much less elevating permformance Obama gives when off the teleprompter.
As to the point Bookwormroom makes in her first paragraph, at the American Thinker blog, one individual wrote:
. . . Obama's speeches remind me of the sermons given by a preacher at one of those mega churches. They give feel good sermons using words like change and hope. Now a lot of conservatives go to church on a regular basis and they hear oratory like Obama gives all the time and they wonder what all the fuss is about. A lot of liberals on the other hand don't go to church and they have never heard "sermons" like this before and it really affects them emotionally. . . .
Part of the problem in dealing with Obama - a large part actually - is that he is an "identity politics" candidate. Thus, to criticize him or question him on any grounds whatsoever is to be challenged by his acolytes as an unfair attack on his identity.
I find myself more than a bit concerned at Krauthammer's prediction. Everything about Obama - from his plan to withdraw from Iraq, take pressure off Iran and engage in talks, his economic ideas, etc. - seem a disaster in the making. There are several people out there who seem to think the Obama cult cannot survive the reality of a campaign against McCain. I am nowhere near as sanguine on that issue. I think that the realities of that campaign would weigh not at all on the secular converts to the religion of Obama. He will outraise McCain by tons of cash, his meaningless speeches will be saturating television and radio in one minute sound bites, and I think there is a real chance McCain could lose the coming election to Obama.
Some people disagree with me, and make very reasonable arguments in the process. For example, you can see Richard Baehr at American Thinker, who has some contrary thoughts on how this will play out. Rick Moran thinks that Obamimania is more like the Crusades than a cult, and that it can be successfully challenged. Big Lizards thinks that the Obama campaign will be unable to compete with the reality of McCain, writing in How the Democrats Will Attack McCain... and Fail Miserably.
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