Guest Post by Willis Eschenbach
I don’t usually wander too far off of the climate reservation, but this excellent cartoon by Michael Ramirez deserves wider publication, as it addresses a critical problem. It shows the US Budget for 2011, along with the cuts proposed by the Democrats (liberal) and the Republicans (GOP, conservative).
The US Government is about to shut down because the two sides can’t agree on a budget.
Can the rest of us agree that despite all the posturing, neither side is actually serious about the problem?
w.
PS – Anyone who thinks that CO2 is more important to the US than the above pie chart is fooling themselves badly …
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
From what I understand almost half of the US population depends on government handouts to survive. The percentage is increasing. This is where the Dem’s get their votes. It can’t go on much longer.
Nothing being done about energy prices-time is running out to act. Drill.Quit fussing with windmills. Electric cars may work in the future but not now. Natural gas works.
If the Saudi government family falls we are all doomed. What a shame we depend on them so much. Our Mideast policies are failures. Alas.
We need a LEADER now.
“No man’s life, liberty, or property is safe while the legislature is in session.”
Mark Twain – 1866
We……(the United States) are in deep, deep trouble. This spending will never be brought under control.
No one……….not government, not you, not me, not Boehner, not Obama, not Reid can continue to spend more than they make.
Eventually, you’ll run out of other people’s money.
Total credit market debt stands at about 350% of GDP. This is both public and private debt. Public debt stands at about 95% of GDP. We have spent tomorrow’s income on yesterday’s consumption and it is not just the the government that must cut spending.
These debt loads can revert to the mean by depression like asset deflation where the debt is eliminated via default, hyper-inflation where it is inflated away, or the slow sensible production of more than we consume. I am aware of no society that has successfully completed the third option.
America is increasingly becoming like a frat party at which only liberals are welcome or comfortable, but which conservatives are expected to pay for. For example, schools all the way up through the universities are increasingly just propaganda machines of PC liberalism. And virtually every other area of society that the federal government funds is equally odious to us conservatives.
Frankly, I honestly would support a 2 trillion dollar per year cut in the budget. It would take something like that to get our financial house in order. But more than that, I would love to see all the non-Constitutionally mandated federal agencies disappear.
They didn’t take a dime from the EPA. Ergo, CapNTrade by bureaucratic fiat is just fine with the Rs too.
Hard decisions have to be made. If we don’t make them soon, they will be made for us. Let’s not talk hyper inflation as in Germany, not going to happen here because not nearly enough money is being printed, but we could easily end up with an inflation rate near , with little or no growth which is just as destructive, and with increasing fuel prices that will endanger the recovery, it will become even more difficult to act.
What astounds me Willis, is when people look at me funny when I tell them I’ll never vote republican or democrat. They look at me like I’m nuts and tell me I’m throwing my vote away.
It’s times like these I know for certain that they’re the ones who threw their vote away.
Lets be honest now, the military industrial complex is the major contributor to this problem. A country cannot spend more than the rest of the world combined on military programs which are overpriced and ineffective like the Joint Strike Fighter program and expect to not drown in debt. We’re talking about hundreds of billions of dollars for an aircraft that gets blown away by its cheaper european counterparts. It is time that military spending is rained in. The truly fiscally conservative have to acknowledge the military needs drastic cuts. Plus no more trillion dollar wars like Iraq.
The problem isn’t actually that the government is running a deficit right now when times are bad and the economy is in trouble. In economic hard times such as these government should be run at a deficit. To cut spending in the teeth of a recession simply makes the economy much worse and recovery a lot more difficult. Any economist will tell you that.
But the deficit you run in hard times is supposed to involve spending down the reserves you saved up when times were good. A responsible government should run a surplus when the economy is in good shape precisely in order that it is able to sustain deficits when times are bad. And most economists will tell you that too.
But when times were good, instead of running government at a responsible surplus, the republicans cut taxes. They actually ran the government at a deficit during good times. That was the true crime. But most people back then were only too happy to take the tax cuts and not think about the future. So maybe it isn’t the politicians who are totally to blame.
Now the bad times are here and we find that the cupboard is bare. Nothing was set aside in good times to cover for this, leaving no good choices. The size of the deficit is truly frightening. But cutting spending in the midst of a recession like this one will quite likely trigger a full blown 1930’s style depression and economic collapse. Rather than risk that the economists who manage things behind the scenes have decided to try to hold to a steady course and ride out the storm. They are hoping that the economy will pick up in time to prevent the debt from blowing out and becoming completely unsustainable. Are they right? I really hope so! It certainly is scary right now. But that decision has been made and there is no turning aside from it now. Cross your fingers everyone. We are committed.
In the meantime politics goes on, hence the staged circus about the budget. What the politicians are doing, as revealed in this graphic, is posturing about trivial amounts in order to position themselves and get their stories right for the next election. A pox on both their houses.
It is a struggle between those who think they can do anything they want and those who believe in representative government and political correctness has got both by the family jewels.
The republicans need new leadership and if the democrats were in the Garden of Eden they would be selling apples.
From Stephen Moore at the Wall Street Journal, we have this worrying report on the size of the tax eating public sector compared to the tax paying private sector in the USA.
http://online.wsj.com/article/SB10001424052748704050204576219073867182108.html
Draw your own conclusions.
David Falkner says:
April 8, 2011 at 10:00 pm
I certainly can agree Willis. Let’s end military spending now.
“One’s sovereignty is directly proportional to one’s ability and willingness to defend it.”
–Me
We disagree, robert. The military and national defense is about the only thing that benefits all citizens equally.
And it should be pointed out that if the enormous increases in spending since Obama was elected were rescinded, we really wouldn’t be in bad shape compared with the rest of the world. You have to ask yourself: are we better off with all that profligate spending? Or would we be better off without it?
Brute says:
April 9, 2011 at 6:37 am
Unfortunately, your “Eventually” is NOW, Brute. For a very telling example, take the price of silver. My boss tracks it daily and he’d say the current spot price is $40.66 per ounce. I counter that really the dollar is down to $40.66 per ounce of silver. My reasoning is that a troy ounce of silver hasn’t changed one iota–it is and will continue to be the same troy ounce forever at 31.1 grams. On the 15th of January, 2009, silver was $10.50 per ounce. Economic fears (because our economy isn’t demanding more silver in traditional end uses) has caused a 387% increase in just two and a half years.
So yes, a pox on both of the main political parties here in the US–and part of the reason I no longer identify with either of them. (Anybody for a nice cup of TEA?)
Great visual
Spending
$3.8 trillion/yr budget, $1.7 Trillion/yr deficit
2007 budget $2.8 trillion
2003 budget $2.3 trillion
1999 budget $1.7 trillion
Revenue
Total USA GDP $14.6 trillion/yr (CIA World Fact Book)
Total USA household incomes =$7.8 trillion/yr (US Census)
Total household incomes for households> $250,000/yr = $1.4 Trillion
Total of “Bush” tax cuts = $0.30 Trillion/yr
Total of “Bush” tax cuts for those earning >$250,000/yr = $0.07 Trillion/yr
When we fall everyone will fall. We are the world’s best customer-economies around the world are based on our appetite, when we are reduced to rice and beans they will too.
Vince Causey
It was not Bush regulations that caused the housing crisis.His government actually tried to do something about it.
I hope this is something that liberals, conservatives & moderates can all agree on & that all politicians here the message loud & clear – vote them all out of office as soon as possible
RockyRoad,
Of course, you’re correct.
I happen to buy gold and follow the spot price daily. When I first got started, I thought that it had peaked and I suspected I’d lose money. I was wrong…..it continues to climb. An ounce is an ounce……what changes is the value of the $…… which is (today) worth 74 cents.
http://www.quote.com/us/stocks/chart.action?s=DX+A0&chartUi.period=M&chartUi.bardensity=LOW&chartUi.bartype=LINE&chartUi.size=575×300&chartUi.minutes=
AusieDan says:
April 9, 2011 at 6:10 am
What about the EPA and their plan to control CO2 emissions by administrative fiat?
Was that defeated by withholding finance in that area?
Or are they free to attempt to damage the economy?
Surely that is known or does nobody care about the economy anymore?
=================================================
This is all part of it. Its a test of will. I don’t think the conservatives are up for it, I hope I’m wrong, but we’ll see. Without passing a law that overturns the ruling giving the EPA the authority to manage our CO2, (which will never happen with Obama and the current senate) the only way to thwart it, is to defund the EPA’s ability to administer their CO2 policies. This can pass the House, (where spending bills originate) but getting the senate to pass it and president to sign it, is a different matter.
This argument is tossed out a lot, and for a while I bought it myself. It is an easy target to point at. They have secretly funded programs that we the public know nothing of, they use this money to both fund research and perform missions we’ll never hear about.
There’s a major problem with pointing the finger at military spending though. The military (and NASA), both have to sit in front of Congress and justify their spending each year. They have to sit there and explain why program X is overdue and over-budget. They have to stand in front of the representatives of the citizens of the united states and justify continued funding of their projects. Military spending (depending a bit on who you ask) takes up a large percentage of the *discretionary* spending of this country. When I say discretionary, I’m speaking directly to that amount of money each year that can change what it is spent on. See this graph:
http://www.countercurrents.org/usbudget2.jpg
But the question you should be asking is, what percentage of the U.S. Budget is non-discretionary? Yes, when people say we spend too much on military, they like to point to graphs like that and say, “see, we spend too much on military.” But that is only one slice of the larger pie.
Here’s another pie:
http://2.bp.blogspot.com/_TcRS_M1n7Yw/TEObnYJHnkI/AAAAAAAAAAU/HX7Vutha4TE/s320/budget-pie.gif
Military — 22% of spending
and another pie:
http://www.oftwominds.com/blog-photos/fed-budget06.gif
Military – same spending as just social security
And still another pie:
http://electriccityweblog.com/wp-content/uploads/2008/11/800px-fy2008spendingbycategory1.png
Harder to read, but you can see that Social Security is spending more than the military
Now, when you bash military spending, you are bashing the people who get in a hot seat each year and tell your representatives they need to spend X amount to keep the U.S. safe.
Have you ever bashed social security? or medicare? or unemployment? or medicaid? Probably not, everyone just assumes that these organizations are there for the greater good. The problem is those programs *NEVER HAVE TO JUSTIFY THEIR EXISTENCE*. They never explain to the public with raw data and researched papers how they have helped society out. They never show their work and say, “please keep funding us.” So they themselves can lobby congress to increase their spending in one area, and that’s it, they’re done, they never have to justify that money expenditure again. What’s worse is when you consider that these non-discretionary spending blocks take up a much much much larger percentage of the federal budget. Non-discretionary entitlement programs are the biggest leech on your tax dollar, by far. They are much harder to attack politically which is why the military is always used as a whipping boy whenever everything else is overspending.
Yes, the U.S. spends a lot on defense compared to other nations, but a lot of that is simply a result of how wealthy this nation is. At the very least, military spending is justified to congress each year in some fashion. You cannot say the same about any social programs in this country, they get their money regardless.
When you consider also that military spending is often on new technologies that always eventually end up in the public’s hands, you can see there are major benefits to military spending. Ever hear of the GPS system? Maybe you’ve heard of this thing called the internet? Both of those are results of U.S. government spending on military. Has social security helped society as much as either of those two systems combined? One could make the argument it hasn’t and will not ever, and social security never stands before congress with justification for its very existence.
It is fine to dislike the military. If you don’t want America to be armed, fine, take that political position, that’s valid. But please don’t spread the nonsense of America’s military spending being “out of control”. Military spending has ALWAYS been under control in this country, because it has always had to justify itself before your representatives. Social entitlement programs just take your tax money and leave you with no say in the matter. Social entitlement programs are the tax on you without representation, not the military.
/end rant
Yes, RockyRoad, I’ve had the kettle on for about 5 years now. Where you been?
Anthony, today you have messed with my favorite line from Shakespeare. For some reason, people always say, “a pox on both your houses.” The line is, “A plague o’ both your houses!”
But it’s certainly a good choice. Mercutio is me, you, the taxpayer. He is sick of Romeo’s childishness – he’s a practical man, and he tries to tell Romeo not to get involved with Juliet. And then he gets made into worm’s meat! Just like the taxpayers!
There’s always room for Shakespeare. But today I’m watching this great Elvis movie – Follow That Dream! Remember – it’s about the gub’mint kicking the public off “public land”. It seems appropo given the news of late. Enjoy. There’s always time for an Elvis movie.
If anyone thinks that 4 Trillion over 10 years is a big deal, that is only 400 Billion per year – with deficit of 2+ Trillion per year, how is that any progress at all?
In less than 10 years (assuming our interest rates don’t rise – a BIG assumption) our interest on the debt will take almost the entire budget. If we have to raise interest rates, well the short term borrowing our Treasury is currently doing won’t look so smart.
Only massive cuts in our Government infrastructure will solve the problem. I don’t think anyone in either major party, other than perhaps Ron and Rand Paul are actually talking about this.
We need to stop letting them talk about one year’s budget in trillions, and “savings” of trillions over 10 years, i.e. billions per year. That’s the recipe for disaster.
I don’t know what Willis expects the repubs to do. Threaten to cut NPR and you can expect to see pictures of starving children on the tele before sundown. Stockman learned that during the Reagan administration. All he could do was marginally slow the growth of gov’t, and that was with a mandate. Even Reagan thought he went too far. I really believe that the tea party’s heart is in the right place. Unfortunately, there are enough rinos and dems to stop them, a media chomping at the bit to portray them as heartless philistines and a public only too willing to believe the media. The US started as a republic. That has now morphed into a democracy. Too few people pay federal taxes and too many people feel the gov’t owes them something. Unfortunately, that demographic doesn’t elect statesmen. You might as well put a fork in us. We’re hosed.