Tag: budget

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Accountability folly ideological culture national politics & policies responsibility

Politics as Painfully Usual

deficit, congress, budget, folly, Medicare, tax cuts, fiscal responsibility

The crazed nature of our leaders’ willingness to spend beyond revenue, and accumulate debt, is not limited to one party. Both Democrats and Republicans are responsible for their outrageously perverse fiscal policies. 

Their irresponsibility hides in plain view, and can be seen in most of the major policy discussions of our time. Take two: 

  1. the Democrats’ idea of putting every American on Medicare and 
  2. the Republicans’ current tax reduction bill.

Though the Republicans often pretend to be all about something called “fiscal conservatism,” their murky tax plan is not fiscally sound. Not yet, anyway — after all, it is “evolving.”

And I expect it to get worse, not better.

“The current plan proposes about $5.8 trillion in tax reduction offset by about $3.6 trillion in base-​broadening offsets, meaning that it would result in a $2.2 trillion deficit increase over the next decade,” Peter Suderman summarizes over at Reason.

They have a number of cuts in the works, but also plan to spend more on defense and the like. The debt would go up.

But if the Republicans are hypocritical and irresponsible, the Democrats add sheer insanity to their irresponsibility. 

“Medicare for All” is pushed by Senator Bernie Sanders, who serves Vermont, where a similar universal system was enacted, only to be repealed after it proved unaffordable even with huge tax increases. All single-​payer/​socialized medicine proposals would require whopping tax increases to work, and the increases in spending would inevitably yield greater deficits.

Besides, Medicare is heading for financial Armageddon. Adding more burdens to a system that they cannot (or simply will not) now make solvent? 

Only a politician could consider such a “solution.”

This is Common Sense. I’m Paul Jacob.

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Art by John Goodridge on Flickr

 

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Accountability folly general freedom moral hazard porkbarrel politics property rights responsibility tax policy too much government

No Rich No More

Connecticut, taxes, revenue, budget, tax and spend, wealth, common sense

Connecticut has a budget problem. There’s not enough money to spend.

WTNH-​TV in New Haven paraphrased the situation along with the response of Connecticut’s very progressive governor: “Income tax revenue collapses; Malloy says taxing the rich doesn’t work.”

The news story explains, “Connecticut’s state budget woes are compounding with collections from the state income tax collapsing, despite two high-​end tax hikes in the past six years.”

Hmmm. Despite the tax increases? Or … “because the state of Connecticut depends too much on its wealthy residents,” as the report continued, “and wealthy residents are leaving …”

A Yankee Institute report notes that “the exodus of wealth from the state as top earners and businesses relocate to more tax-​friendly states” is a major problem. Institute President Carol Platt Liebau calls it a “terrible cycle of tax increases followed by deficits followed by even more tax increases.” 

Yet, state legislative Democrats are back pushing more tax hikes on “the rich.” Senate legislation would jack up the tax rate — retroactively — on those with income of $500,000 or more. House legislation would slap a 19 percent surcharge on some hedge fund earnings. In response, the head of the Connecticut Hedge Fund Association testified that his “industry is populated by exactly that type of person that will move based on tax policy.”*

A song by Ten Years After comes to mind: 

Tax the rich, feed the poor
Till there are no rich no more

Doesn’t sound like a good idea even in song.

This is Common Sense. I’m Paul Jacob.

 

* It’s worth noting that Gov. Malloy is now “against raising taxes again to fill the deficits and is instead focusing on spending cuts …”

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Accountability free trade & free markets moral hazard national politics & policies political challengers porkbarrel politics responsibility subsidy too much government

Trump Proposes a Budget

Trump, budget, spending, big government, entitlements, welfare, cuts, pig

Will Donald Trump, infamously successful businessman, actually do something about the federal government’s out-​of-​control deficits and mounting debt?

Economist Pierre Lemieux, writing in the Financial Post, finds some reason for hope in President Trump’s “America First: A Budget Blueprint to Make America Great Again”:

The proposal to eliminate funding for agencies like the Corporation for Public Broadcasting, the National Endowment for the Arts, and the National Endowment for the Humanities is welcome. Artists should be able to stand on their own two feet with the support of private sponsors and organizations, of which there are many in America. Lovers of concerts should finance their own passion.

Though Lemieux gives good reason to want to cut “official arts and humanities” subsidies even sans their budgetary implications, imagine the backlash from Democrats, the media and the whole collegiate sector!

Actually, the backlash has already begun.

Can united government under the GOP cut even these most obviously least necessary aspects of government subsidy?

I’m not holding any pockets of air in my two lungs.

“Many monstrous bureaucracies would be reined in,” Lemieux goes on, listing proposed cuts to the Environmental Protection Agency (-31 percent), Department of Labor (-21 percent), and other departments of the so-​called “discretionary” budget. But this is all small potatoes. “Really cutting federal expenditures would require reducing the welfare state — which Trump has no intention of doing.”

And the fortunes Trump wishes to throw at the military? No knack for parsimony there.

Though we can expect a little exceptional hack-​and-​slashery from Trump, Lemieux remains skeptical of any overall major effect.

Get used to ballooning debt.

Like you haven’t already.

This is Common Sense. I’m Paul Jacob.

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Accountability government transparency national politics & policies responsibility

Overkill, Not Parsimony

defense, defense spending, war, budget, military, protection

Two truths: national defense is a necessity; national defense is a racket.

The latter is the case because the former is the case. Big spenders rely on “better safe than sorry” to always push the envelope, over-investing rather than under-investing.

So, we are trapped — and our new president knows this. Before Trump ran for office, he said that sequestration cuts to the Pentagon budget had not gone far enough. But when he threw his hat into the ring, he promised to “make our military so big, so powerful, so strong that nobody — absolutely nobody — is going to mess with us.”

President Trump now proposes over fifty billion dollars in new defense spending. More soldiers, more ships, more fighter jets.

John Stossel argues that Americans are not necessarily suckers for this game. At least, a majority does not support increasing military spending.

More importantly, Stossel challenges the whole “overkill always” strategy. “America is going broke, and our military already spends almost $600 billion dollars [annually],” Stossel says. “That’s more than the next seven nations spend — combined.”

Now would be a good time to not only rethink Middle East policy, but to re-​consider our expensive role as world policeman (speaking of “national” defense). During the campaign, Trump was criticized for questioning our alliances and demanding more of our allies. But he was right. I hope he’ll get tough in prodding our allies to ultimately provide their own defense.

Even more basic? Demand an audit of the Pentagon before new funds are thrown into the five-​sided money pit.

This is Common Sense. I’m Paul Jacob.

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too much government

The Budget Math Deficit

The White House once promised to answer any petition posted at its .gov site that garnered at least 25,000 signatures. (It has since increased the minimum.) Facetious persons urged it to build a Death Star like the planet-​destroyer in Star Wars.

Well, the petition got the necessary signatures, and the Obama administration responded: No, we shan’t build a Death Star. One reason given? Paul Shawcross, a budget official, noted the prohibitive cost.

“We’re working hard to reduce the deficit, not expand it,” he says.

Really?

Now consider a widely reprinted lesson in accounting offered a little more than a year ago by Laurie Newsom of the Gainesville Tea Party. Newsom suggested that to better understand the government’s spending antics, drop eight zeros from the budget numbers. Newsom cited annual tax revenue of $2,170,000,000,000, a federal budget of $3,820,000,000,000, new debt of $1,650,000,000,000, national debt of $14,271,000,000,000. And “budget cuts” of $38,500,000,000.

Delete eight zeros and pretend that the national government is just one household. So instead of federal revenue of $2.17 trillion, we have one household bringing in $21,700. But in the same year, its residents are spending $38,200 and adding $16,500 to a credit card with an outstanding balance of $142,710. One the other hand, the family has “cut” $385 from its spending.

Sound like a very disciplined effort to get the fiscal house in order?

Things that can’t continue forever, don’t.

This is Common Sense. I’m Paul Jacob.

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initiative, referendum, and recall tax policy too much government

Legislative Dreamin’

California voters love their state’s process for placing initiatives and referendums on the ballot. 

Legislators? Most take a much dimmer view. This year they’ve been blaming voters for spending the state into bankruptcy through the initiative. Additionally —  and please hold your laughter — they claim that initiatives have tied the hands of legislators who would otherwise have better managed the state’s finances.

Enter Bob Stern of the Center for Governmental Studies. At a recent public hearing of the Senate and Assembly Select Committees on Improving State Government, Stern told legislators, “Most of the ballot-​box budgeting has come from you.”

Stern was referring to a Center study that looked at all ballot measures over the last 20 years that required additional spending. Stern found that three out of four measures costing money were put on the ballot by legislators, not through the citizen initiative. He also found that the legislature’s own ballot measures cost the state $10 billion, while citizen initiatives cost only $2 billion.

Of course, an even bigger issue is the wild spending spree by California politicians with no ballot box input from voters at all. While state tax revenues have increased a whopping 167 percent over the last two decades, government spending shot up 181 percent.

Voters aren’t perfect, but anyone with a lick of common sense knows the answer to controlling government spending isn’t to free the politicians from voter restraint.

This is Common Sense. I’m Paul Jacob.