Washington Speak

As has become more and more apparent in recent months, only in Washington can you continue to spend more and pass it off as a budget cut. I don't know about my fellow YAL members, but if I talked to my credit card company and told them that I couldn't stop spending more than my budget, but I could slow my increase in spending,  the answer would be "No, you have to pay your bills or your credit score will take a hit."

Speaker Boehner's plan is a sad excuse for the actual spending cuts our country desperately needs. An article by Chris Edwards at the CATO institute points this out with a chart of spending and a link to the letter from the Congressional Budget Office explaining that his plan in fact only cuts $850 million and not the $1.2 trillion the Speaker has claimed. 

A disturbing realization is found in the following statement, 

The “cuts” in the Boehner plan are only cuts from the CBO baseline, which is an assumed path of constantly rising spending. If Congress wanted to, it could require CBO to increase its “baseline” spending by, say, $5 trillion over the next decade. Then Boehner could claim that he was “cutting” spending by $5.9 trillion, even though his plan hadn’t changed. You can see that discretionary “cuts” against baselines don’t mean anything.

I wonder what the Founding Fathers would say if they were to come back and find Washington in the state it is today. 

Just for some added fun, check out this video by ReasonTV.

Budget Compromise Cuts a Minute $38.5 Billion

This post does not reflect the views of any organization. It is strictly my own opinion.

Near the stroke of midnight on Friday, House Republican leaders and the Obama administration agreed to a budget compromise to avert a government shutdown. Even though Democrats had full control of both chambers of Congress and the White House, they refused to pass a budget last year. We're now six months into the fiscal year without a long-term budget. The new budget compromise will keep the federal government operating until final details of the budget deal are hammered out by next week. The compromise leaves much to be desired. 

The deal only cuts $38.5 billion in spending. That may sound like a huge amount but let's put that into perspective. Our national debt increased by $54.1 billion in the past eight days while Congress was fighting over whether to cut $38.5 billion. Uncle Sam will spend $3.8 trillion this year. The U.S. deficit will run $1.65 trillion. The federal government spends way more than it actually takes in. The reality is that the budget deal cuts barely one percent of our budget and two percent of our deficit. The budget deal still leaves us with a record deficit. These measly cuts barely scratch the surface of our fiscal problems. 

The Republican Budget Will Harm the Economy

Or so says Goldman Sachs in a newly issued report. The Republican's measly $61 billion in cuts will cause a 1.5% to 2% decrease in economic growth according to Alec Phillips, a Goldman Sachs economist. Chuck Schumer (D-Wall Street) said of the report [emphasis mine]: 

This nonpartisan study proves that the House Republicans’ proposal is a recipe for a double-dip recession. Just as the economy is beginning to pick up a little steam, the Republican budget would snuff out any chance of recovery. This analysis puts a dagger through the heart of their ‘cut-and-grow’ fantasy. 

First of all, this study is by no means "nonpartisan." Goldman Sachs is the prime example of the revolving door between government and big business. A blog post at "The Spiderlegs Conundrum" provides a quick analysis of the complex web that binds the Obama Administration with Goldman Sachs. The interconnectedness of these two Too Big To Fails is mind-numbing and often makes me wonder who is really calling the shots. It is, therefore, absolutely preposterous to call this analysis "nonpartisan." 

Secondly, $61 billion in cuts is pitiful and a mere drop in the bucket given the soon-to-be-horribly-realized fiscal crisis. Also, diverting $61 billion away from the mismanaged and unproductive public sector back to the private sector would make most better off, except those receiving that funding of course. 

Phillips has offered a compromise that could be pursued rather than those devastating $61 billion cuts. How about a whopping $25 billion? Even better, it will only "lead to a smaller drag on growth of 1 percentage point in the second quarter." 

One percent, one and a half percent. What's the difference?

2053

That's the number of nuclear weapons that have been set off so far, and the United States accounted for fully half of those.  Over $5 trillion has been spent to date on nuclear weapon development, testing and cleanup.  There isn't a single federal budget item that is more entirely without merit than nuclear spending.

Nuclear weapons have no other application than total destruction.  They can't be used for defensive purposes, peacekeeping, or even "surgical strikes."  There are no excuses for them -- not even the bad ones the government usually uses to justify excessive military spending.  And yet, when you add it all up, nuclear weapons have cost us more in the past 50 years than any other single program except Social Security.

If congress is sincere about wanting to cut spending, this is a perfect place to start.

Read more about the fiscal implications of the nuclear program here.