BrianGarst.com

Malo periculosam, libertatem quam quietam servitutem.

budget deficit Archive

Tuesday

8

February 2011

0

COMMENTS

Friday

10

December 2010

1

COMMENTS

Spending and Deficits

Written by , Posted in Big Government

Suddenly the likes of Bernie Sanders care about the debt. Republicans, he and the angry left claim, are being hypocritical by not raising taxes.  This is nonsense. Keeping tax rates the same is not, as he claims, adding anything to the debt. Sure, Republicans have agreed to Obama’s costly extension of unemployment insurance, but that’s a reasonable price to pay for not allowing the tax hikers to truly wreck the economy. The latter would, in the long run, result in less government revenues anyway.

We need to be honest about our fiscal problem. The debt is just a symptom, and it cannot be treated by increased revenues. Why? Because the real problem is spending. If politicians are given more revenues, they will just spend it. This principle has been demonstrated time and time again. Raising taxes will do nothing to fix the debt. The only way to reduce deficits is to reduce the burden of government spending. It’s not a 35% tax bracket instead of 39.6% standing in the way of fiscal sanity, nor a 15% capital gains tax instead of 20%. It’s the self-described socialist Bernie Sanders and his comrades on the left blocking us from doing what needs to be done.

Monday

4

October 2010

0

COMMENTS

Tuesday

6

April 2010

0

COMMENTS

Volcker Says Taxes Will Have To Rise To Fight Deficit

Written by , Posted in Taxes

Volcker suggests a European-style VAT (and why not, since we’ve already got a European-style, unsustainable welfare state):

The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax, White House adviser Paul Volcker said on Tuesday.

Volcker, answering a question from the audience at a New York Historical Society event, said the value-added tax “was not as toxic an idea” as it has been in the past and also said a carbon or other energy-related tax may become necessary.

Though he acknowledged that both were still unpopular ideas, he said getting entitlement costs and the U.S. budget deficit under control may require such moves. “If at the end of the day we need to raise taxes, we should raise taxes,” he said.

Something you will never hear anyone in the Obama regime say: “If at the end of the day we need to cut spending, we should cut spending.”

I preempted Volcker and explained why a VAT won’t eliminate budget deficits over 3 months ago.  Dan Mitchell has also been beating this horse for a while now.

Friday

5

February 2010

1

COMMENTS

No Deficit In Hypocrisy For Krugman

Written by , Posted in Economics & the Economy

Paul Krugman’s latest op-ed says deficits don’t matter.  It’s all just hysterics driven by politics:

These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

…So why the sudden ubiquity of deficit scare stories? It isn’t being driven by any actual news. It has been obvious for at least a year that the U.S. government would face an extended period of large deficits, and projections of those deficits haven’t changed much since last summer. Yet the drumbeat of dire fiscal warnings has grown vastly louder.

To me — and I’m not alone in this — the sudden outbreak of deficit hysteria brings back memories of the groupthink that took hold during the run-up to the Iraq war. Now, as then, dubious allegations, not backed by hard evidence, are being reported as if they have been established beyond a shadow of a doubt. Now, as then, much of the political and media establishments have bought into the notion that we must take drastic action quickly, even though there hasn’t been any new information to justify this sudden urgency. Now, as then, those who challenge the prevailing narrative, no matter how strong their case and no matter how solid their background, are being marginalized.

Krugman’s head is firmly in the sand on today’s massive, runaway deficit.  He’s clinging desperately to the Keynesian claptrap about spending our way to prosperity and one day, after government has grown so big and the economy is in stimulated utopia and we’re all millionaires, reigning in public spending.

But it wasn’t always so.  In 2003, when the 10-year deficit projection was a mere fraction of what it is today, Krugman was sounding the alarm:

Last week the Congressional Budget Office marked down its estimates yet again. Just two years ago, you may remember, the C.B.O. was projecting a 10-year surplus of $5.6 trillion. Now it projects a 10-year deficit of $1.8 trillion.

And that’s way too optimistic. The Congressional Budget Office operates under ground rules that force it to wear rose-colored lenses. If you take into account — as the C.B.O. cannot — the effects of likely changes in the alternative minimum tax, include realistic estimates of future spending and allow for the cost of war and reconstruction, it’s clear that the 10-year deficit will be at least $3 trillion.

So what? Two years ago the administration promised to run large surpluses. A year ago it said the deficit was only temporary. Now it says deficits don’t matter. But we’re looking at a fiscal crisis that will drive interest rates sky-high.

…But what’s really scary — what makes a fixed-rate mortgage seem like such a good idea — is the looming threat to the federal government’s solvency.

So smaller deficits under Bush are a “fiscal crisis” and part of a “looming threat to the federal government’s solvency.”  But today’s massive deficits under the Democrats just don’t matter, and anyone who says otherwise is a scaremonger promoting “deficit hysteria.”

Just another day in hypocrite paradise.

Friday

28

August 2009

0

COMMENTS

How To Expose A Hack 101

Written by , Posted in General/Misc.

Don Boudreaux should teach it:

Noting that “it’s important to have some perspective,” Paul Krugman argues that while Uncle Sam’s budget deficit is now large, “we also have a huge economy, which means that things aren’t as scary as you might think” (”Till Debt Does Its Part,” August 28).  Whew!  No cause for much concern, for the size of America’s GDP swamps the size of the budget deficit.

During the Bush years, however, Mr. Krugman preached a different gospel.  For example, in his February 11, 2005 column – devoted to condemning tax cuts – he insisted that “the deficit is indeed a major problem.”

So let’s take Mr. Krugman’s advice and get some perspective.  In 2005, when Mr. Krugman insisted that government’s budget deficit was “indeed a major problem,” that deficit was 2.5 percent of GDP.  Today, when Mr. Krugman no longer is very concerned about the budget deficit, that deficit will be about 11 percent of GDP.  Hmmmm….

Sincerely,
Donald J. Boudreaux

Wednesday

5

August 2009

0

COMMENTS

House Buys Jets Air Force Didn’t Want

Written by , Posted in Waste & Government Reform

Deficit spending is out of control.  At times like this, Congress should be looking everywhere for savings.  It certainly shouldn’t be forcing the purchase of items that haven’t been requested:

In the 2010 defense spending bill, the Air Force originally requested money for one C-37 and three C-40s as part of its effort to replace its aging fleet. But the House Appropriations Committee added an extra $132 million for two more C-37s and $200 million for two more C-40s, according to an aide to the panel.

…Though Roll Call reported Wednesday that two of the C-37s are to be assigned to units that routinely transport government officials and members of Congress, the aide disputed the notion that Congress was just awarding itself an upgrade, saying both types of jets can be used for “many purposes” including transport of military personnel and officials — not just elected officials.

“It’s not like there’s two planes assigned for flying members of Congress around,” the aide said. “It’s not like Congress is buying Congress planes here.”

But when asked about the addition, Pentagon spokesman Geoff Morrell said the military generally frowns upon any appropriations that are above and beyond what is asked for, adding the military only asks for what it needs.

…Tom Fitton, president of the watchdog group Judicial Watch, said members of Congress are abusing the military by using their jets too often for travel. He said that except for trips to war zones, members should fly commercial and expense it. He surmised the latest funding for more jets reflects members’ personal interest in being able to fly in style.

“Congress wants to be ferried around as if they’re kings and queens and they want to do it on taxpayer dime,” he said.

In addition to the self-interest apparently behind this particular case, Congress has a perpetual problem separating legitimate military needs and back-yard politics.  Every member of Congress wants money funneled to his or her district, and military projects are a favorite means to accomplish that goal.  Some are even open about it, arguing that we should support this or that allocation because it “creates jobs,” and not just because it’s necessary for the defense of this nation.  It doesn’t.  Every dollar spent must first be taken out of the private sector.

Frivolous spending is every where.  If we are ever going to get our fiscal house in order, we need to be just as serious about reducing unnecessary spending in the name of defense as we are all other kinds.

Tuesday

12

May 2009

0

COMMENTS

Higher And Higher

Written by , Posted in Big Government

Administration projects the deficit to be even higher:

The White House on Monday raised its forecast for this year’s U.S. budget deficit by $89 billion due to the recession, millions of new unemployment claims and corporate bailouts.

The new estimate predicted a deficit of $1.84 trillion, or 12.9 percent of gross domestic product, for the fiscal year ending September 30. It updated the White House’s February forecast of a $1.75 trillion deficit, or 12.3 percent of GDP.

No, it’s not because of the recession.  It’s because this administration is hell bent on vastly expanding the scope of government through corporate handouts, like the $80 billion pissed away at the auto industry, and new entitlement programs.

The White House’s projection for future years, that the deficit will return to 2.9% of GDP by 2013 (it’s at a frightening 12.9% at the moment) is not credible once you take into account the coming nationalization of health care, and the economically crippling legislation to pay back the unions (card check) and environmentalists (cap and trade).

With this spend-happy bunch in office, expect regular upward revisions to both spending and deficit projections.

Friday

8

May 2009

0

COMMENTS

The Low Hanging Fruit

Written by , Posted in Big Government, Waste & Government Reform

The great, fiscally responsible Barack Obama has finished scouring the $3.4 trillion budget line-by-line in search of waste, fraud and abuse. He announced completion of this task to the typical pomp and circumstance, acting the glorious hero returning from war despite finding a meager $17 billion worth of cuts. That’s 0.5% of the total budget, and just 4.25% of the increases Obama is already responsible for in the federal budget.

Far from a line-by-line, intensive search for failing government programs, this was nothing more than Obama sauntering up and plucking some low hanging fruit. Even then, the free spending democrats in Congress and their special interest supporters are already challenging the cuts.

A real return to fiscal sanity will require more than just symbolic cuts with one hand while the other is busy handing out record levels of new spending.  Real cuts will mean standing up to the special interests groups, yet Obama has only demonstrated an ability to pander to them.  I hold out no hope that Obama will stop playing pretend time with our budget and get down to real business.