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Political Hay
Thermonuclear Budget Politics
Even the Tea Party should be impressed.
While the battle over the 2011 budget and serial CRs (continuing resolutions) has been noisy, the amount of real money actually cut and to be cut from the federal budget is modest relative to its engorgement since 2008.
Writing in the Wall Street Journal, a Nobel Prize winner, a former Secretary of State, and a Stanford professor of economics point out that, if the House Republicans succeed in passing its budget plan, HR1, it would represent only a modest cut in spending in percentage terms.
Given the time lag between budget authorization and its translation into actual government spending, “outlays will only be $19 billion less in 2011 with HR1, meaning it would take spending to 24% of GDP in 2011 from 24.1% today,” write Gary S. Becker, George P. Shultz and John B. Taylor. This down payment on a ten-year schedule of budget restraint is a prudent, gradual approach to fiscal reform over time in their estimation.
Moreover, historically, when private investment is in the vicinity of 17% of GDP, unemployment is low, say, 4 to 5%. In 2010, in the midst of the Obama spending binge, private investment was down to 12% and unemployment was up to more than 9%. So the House GOP is doing the right thing by the unemployed, too.
Of course, God made the Tea Party movement to be impatient and a scourge to complacency. In this He and it succeeded masterfully. They, the Tea Party not God, will soon have little to grouse about going into the fight over the 2012 budget, the first one on which Speaker John Boehner and Budget Chairman Paul Ryan will be able to put their indelible mark. Compared to the 2011 budget fight, and given the complete no-show on fiscal and entitlement reform by President Obama, what is coming is without precedent in the history of modern American politics: thermonuclear budget war.
On Fox News Sunday Chairman Ryan indicated that his proposed package of entitlement and tax reforms will exceed $4 trillion over the coming decade.
“We are giving them a political weapon to go against us, but they will have to lie and demagogue to make that a weapon,” said Ryan. “Look, we don’t change benefits for anyone over the age of 55. We save Medicare. We save Medicaid. We save these entitlement programs. We repair our social safety net and we get our country a debt free country for our children and grandchildren’s generation. And we get jobs, we get economic growth.”
“They are going to demagogue us and it is that demagoguery that has always prevented political leaders in the past from actually fixing the problems. We can’t keep kicking this can down the road. The President has punted; we’re not going to follow suit. And yes, we will be giving our political adversaries things to use against us in the next election and shame on them if they do that.”
Ryan, a mild-mannered Midwesterner, seems to have about had it with the White House. He is throwing the first punch in what will be a brutal political engagement, prefatory to the 2012 elections, a kind of Spanish Civil War before the German invasion of Poland.
Ryan’s strong language is a measure of the strong feelings generated over the psychological warfare, still ongoing, in the fight over the continuing budget resolutions for 2011. As I say, we are heading into thermonuclear warfare, politically speaking that is.
Ryan has the better of the argument. He should keep his focus, though, on the independent voter rather than the White House. He will win this one by addition not subtraction.
About the Author
G. Tracy Mehan, III served at the U.S. Environmental Protection Agency in the administrations of both Presidents Bush. He is a consultant in Arlington, Virginia, and an adjunct professor at George Mason University School of Law.
Letter to the Editor View all comments (46) | Leave a comment
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Karl Lucider Marx| 4.5.11 @ 6:23AM
Personally, I think the public can handle the truth.
What we have in our midst is 20 million hard core terrorists who are incorrigible and go forth with their hands out because they are entitled. They are a greater danger to our sovereignty then Osama Bin Laden but not Barack Obama. Barack Obama is a greater danger to our nation then any other individual on the face of this earth.
That's because Lyndon Johnson left this earth after starting us on the road to perdition. Since the war on poverty was declared over 7 trillion has been spent and guess what, the poverty level has gone up!
Here's a good encapsulaton of the problem from Heritage. It's all Paul Ryan or any other politician needs to fight the bloat. It's called facts and reason:
From Heritage:
http://blog.heritage.org/2010/.....ssistance/
"One in six Americans now receives some form of government assistance, reported last week’s U.S.A Today.
Fifty million are on Medicaid, a record high and a whopping 17 percent increase since December 2007. Food stamp enrollment has climbed nearly 50 percent since 2008 and now stands at 40 million, or one in seven people. Ten million Americans receive unemployment benefits, and 4.4 million get direct cash assistance, an 18 percent increase from two years ago.
And these are the numbers from only four of the more than 70 welfare programs funded by the federal government.
While some of the growth in welfare can be attributed to the current recession, government-assistance programs were growing far before the economy began to decline in December 2007. In fact, welfare spending has been climbing since the 1960s, when Lyndon B. Johnson declared his “War on Poverty.”
However, President Obama’s increases have been the most dramatic of any President in the nation’s history. As he completes two years in office, he will have added roughly $260 billion to government welfare spending, a jump two-and-a-half times greater than any previous welfare increase in the nation’s history.
And don’t expect welfare spending to decrease once the recession ends. The Obama budget makes it clear that the majority of these spending hikes are permanent. As a result, beginning this year, taxpayers will contribute approximately $1 trillion every year to federal means-tested programs. (This amount will be even greater once Medicaid enrollment jumps in 2014 as a result of the health care bill.)
Needless to say, such spending will only add to the massive national debt. Yet even more detrimental perhaps, will be the growing culture of dependency it creates."
Dee See| 4.5.11 @ 6:37AM
-------UH, speaking of thermonuclear,
as Fukishima is massively deteriorating,
as radiation levels score 181X (18000%)
in rain and tap water in San Frnacisco
------where's American Spectator?
---and the rest of our media???
David W| 4.5.11 @ 8:33AM
Uh, stay on topic? If it was that bad don't you think the environmentally and progressive friendly media (except FOX of course) would be rattling their cages. Wouldn't Obama have declared a state of emergency (after all this could cut into his golf game).
Besides, what do you suggest we do if we get the "real" story? Demand that Japan cover that portion of their country with concrete? Shut down the world's nuclear reactors?
Drunken Sailor| 4.5.11 @ 11:31AM
David W,
Don't waste your time. You can't make any sense of even half of Dee See's post. His conspiracy theories get a little mixed up due to his tinfoil haberdasher being on a little too snug.
como enamorar a un hombre | 8.20.11 @ 3:28AM
is incredible that so much money intended for the arms race when the needs of the population are more than evident, surely move mountains and interests in this case, nothing can be done
RustyG| 4.5.11 @ 7:39AM
"We are giving them a political weapon to go against us, but they will have to lie and demagogue to make that a weapon," .........Lying and demagoguery comes easy to The One, Reid, Schumer and the rest.
"we will be giving our political adversaries things to use against us in the next election and shame on them if they do that." ......Shame?? They have none.
martin j smith| 4.5.11 @ 7:47AM
Here is what must be done--a national question : One question. Are we in Economic crisis or not ? ( that is part A ) now Part B. Who do you want to run the country ?.
Those people who are not aware of what is happening or don't care or what the US to go down will vote for you know hu.
But those people who pay taxes,pay at the pump and go grocery shopping etc. will vote for us.
vtwin| 4.5.11 @ 10:12AM
Yes, we are in an “economic crisis” but more precisely a budget crisis. A $14 Trillion budget crisis thirty plus years in the making whose origins lay in the free lunch stupidity of Reagan, that cutting taxes would generate more tax revenues.
Steve A| 4.5.11 @ 10:31AM
Um, cutting taxes did generate more revenue, then Congress just spent it all plus some. Is it possible you can be so consistently wrong?? I mean really, just try guessing & you should be around 50%. When you apply your liberal "thinking cap" you miss it every time.
Drunken Sailor| 4.5.11 @ 11:34AM
Vtwin is American Spectator's very own Bluto" Blutarsky . He probably also believe the Germans bombed Pearl Harbor.
skip| 4.5.11 @ 12:45PM
vtwin vtwin vtwin
Lower taxes have increased overall tax revenues every time.
If the stupid lies of liberals weren't the guiding force leading to the destruction of this nation liberals could assume their rightful place in society as laughing stocks.
Gordon W.| 4.5.11 @ 1:21PM
Wow. Do you guys even know what the supply economics theory behind lowering taxes leads to an increased revenue stood for? The laffer curve which you apparently do not understand is explained here: http://en.wikipedia.org/wiki/Laffer_curve
The point of the graph is to show if you tax too much companies at people will become less productive and through taxes the government will stifle growth. The theory doesn't actually purpose a maximum, just the premise there should be one. When corporations are taxed nothing because of loopholes and the many rich avoiding taxes through trusts, it pains me to understand how closing those options or raising the tax rate would decrease revenue.
Steve A| 4.5.11 @ 1:49PM
Gordon, I read your post 3 times & I am still not sure what the heck you are trying to say. Are you suggesting that raising taxes on the rich would have no net effect on revenues??
Gordon W.| 4.5.11 @ 2:07PM
I am suggesting that raising taxes on the rich will increase revenues. I do this through the theory which you are basing your point on. Supply side, reagonomics, what ever, is based on the laffer curve.
The other point I tried to make, but was unsuccessful, is that the tax rate is almost meaningless to the portion of society that would contribute the most: the rich. Most evade taxes, albeit legally, to not pay taxes. One example in the paper last week is GE; who payed no taxes...
skip| 4.5.11 @ 2:58PM
Lower taxes have increased tax revenues every time.
Provide me with a single exception to my statement, and for simplicity just use the United States over the last century so it won't be too taxing on you to prove me wrong.
The Bruce| 4.5.11 @ 1:39PM
In 1988, US GDP was double what it was in 1981. In other words, revenues to the goverment doubled.
But, as Steve mentioned, the government decided to spend all of that extra money, and then some.
jstwndring| 4.5.11 @ 4:55PM
"Who do you want to run the country ?"
-------------------------------------------------------
Preferably, adults, for once. The spoiled brats in the Democrat party have been getting their way for 80+ years. Everyone knew this day was coming. Time to pay up. Slash and burn the federal government. Sorry, Dims, we simply cannot afford your ideology anymore.
Restateboy| 4.5.11 @ 8:50AM
what's the shame..? So many Americans are now taking handouts with-out shame. You don't think there are people out there receiving food stamps who know they shouldn't but think.. "hey.. I pay taxes - what's wrong with it?" and they're using the benefit simply to subsidize their life-style, Not because they... "need" it. That's the shame.
LiveFreeOrDie| 4.5.11 @ 2:24PM
Few and far between, illegal aliens excluded.
Louis Jenkins| 4.5.11 @ 8:59AM
Bottom line is whether or not there are enough entitlement reciepients on the dole to vote the Chosen One for another four years. Forget about the people who are in the trenches, who toil and labor for their fare. They're the unlucky ones, but Obama couldn't give a rats rear end about them, they must don the bridle and the halter and pull with all their might. Meanwhile, those who won't work, or don't have to, are aboard for a grand ride. The New America folks. Where the privileged are those who are worry free, and workers must plod along.
JayDick| 4.5.11 @ 9:00AM
This will either work very well (politically) or it will be a disaster; there will be no in between. To make it work, the Republicans will need an intense publicity campaign the likes of which they have never conducted before. They have plenty of ammunition and are on the right side of the issue, but they have to convince the electorate. They haven't been very good at that in recent years.
Have you considered| 4.5.11 @ 9:06AM
I'm not sure I have this straight...CBO projected that the deficits will be approx. 9Trillion in the next 10 years, and Ryan's budget cuts that by 4T...Is this the correct way to interpret this article?
I would also point out from the Tea Party perspective that there are no Enumerated Powers in the Constitution for SS, Medicare or Medicaid....
Chalkdust| 4.5.11 @ 9:08AM
It's not just the economic tar baby that will take years to free ourselves from, lord knows thats bad enough, but combined with the two other tines of the trident coming straight at Americas heart may do us in as a country.
My dog says that the other two tines are potentially just as deadly as bankruptcy.
The American tax-payer funded, union-led, education system is cranking out little gimme, ignorant, me-firsters that will become millions one-worlders in time.
The demoncratic party (with the help of RINOs) has so-far turned 47% of the American population into non-taxpaying, drones, who give with little thought to the American political system beyond which demoncrat is offering the biggest hand-out.
It is my dogs opinion the American TEA Party is the only simi-organized group standing in the way (maybe some elements of the simi-organized republican party may help) of the demoncrat's juggernaut headed for the heart of America.
Anthony| 4.5.11 @ 9:17AM
Dear Mr. Ryan, This is what leadership is all about. Congratulations on your efforts, well done so far.
If indeed you have given the dispicable Ds a weapon to use against you, so be it, sorry, but you are here to serve the American people, not your political careers. America is in dire shape, sacrifices need to be made for the people, you'll get no sympathy from me, I don't believe in professional career pols.
That may indeed sound callous on my part, but Washington has long ago forgot its purpose in our Constitutional Republic.
Besides, you not only have facts and truth on your side, you have morons like Harry Reid, who can only talk about cowboy poetry, and political hacks who talk about 70,000 children dying as a result of budget cuts.
If you Rs can't make the case to the American people, with this pathetic, putrid demogogary coming from the Ds, you don't deserve to represent us.
So, glad to see you guys manning up, now learn how to talk to the people and make your case!!!
Mary Kochan | 4.5.11 @ 9:58AM
We can't do the economy in a vaccuum. Breakdown in the family is what hung the entitlement albatross aroud the neck of the US. Government is playing daddy to millions of fatherless children, hubby to millions of single moms, and dutiful child to millions of oldsters. A good part of "the truth" that the public has to handle is that we can't afford no fault divorces, contracepting and aborting the next generation, and a culture that worships sex.
Ken in Tyler| 4.5.11 @ 10:06AM
Sadly, the debate has been and will continue to be framed as a losing proposition. Government programs which take by force from those who produce and give to sloths must be eliminated. They cannot be reformed or "saved". Mr Ryan can propose whatever he likes but until the American people accept the necessity of limited Constitutional government (see Article I, Section 8) the self-destruction of the Republic may be slowed but not reversed. The outcome will be the same.
TL| 4.5.11 @ 10:09AM
Even in 10 years Ryan doesn't balance the budget. And the author has the audacity to imply that independent tea partiers are childishly impatient. Grow up pal. When someone actually balances the budget, and begins to pay down the debt in a serious way, then I'll be impressed.
Anthony| 4.5.11 @ 10:24AM
A corollary to the thermonuclear events in Washington are those events taking place in Wisconsin. If you didn't watch FOX last night, you missed a chilling preview of things to come.
The left/unions are running a dispicable, Justice Thomas like scorched earth campaign against a Supreme Court Justice up for re-election today, because they believe his defeat will tip the Court left, hence, rule the collective bargaining changes recently enacted by the legislature and the governor, unconstitutional.
Since Justices are elected in WI, this is part of the election process, dirty tricks and all. But the depth of depravity on the part of the left and the unions is unspeakable.
But more chilling are the intimidation tactics of the unions, as they send thugs out to visit private businesses and intimidate them into supporting the repeal of the legislation.
If a business doesn't have the green AFSCME pro union support sign in its window, violence will follow. The MSM has ignored this story completely.
Hitler used similar tactics during his rise to power as his brown shirts intimidated and engaged in acts of violence and property damage to those who would not go along, or at least remain passively quiet.
We now know who Obozo's community army are, he's been secretly funding them with stimulus money, our tax dollars, to the tune of BILLIONS.
This is truly frightening and dove tails with what Ryan and the Rs are up against in Washington. If you don't think that the left is playing hardball and will resort to any means necessary to achieve its goal, you got your head in the sand.
So Mr. Ryan, you are a beachhead in D.C. If you don't do the right thing now, there will be more Wisconsins. If there are more Wisconsins, what follows is a repeat of things best left on newsreels.
Enough said.
russel| 4.5.11 @ 10:47AM
Anthony , I think you're too hard on Ryan - we finally have someone doing the job they promised to do . Boehner the Wimp is the one who deserves a good kicking . And it's about time zero gets a good punch in the nose for getting away with a dictatorship and a trashing of our founding document .
Anthony| 4.5.11 @ 11:09AM
Ah russel, I think I praised Ryan for his efforts. My only other point was that I'm sick of professional pols who think they can/should run our lives better from D.C.
And even if they believe they know better, which they sure as hell don't, we as Americans are entitled to run our lives, mistakes and all, without their nanny help.
Politicans have long ago lost the art of restraint.
buckeyeman| 4.5.11 @ 11:44AM
Well I'll jump in and condemn Ryan. Not for being evil, but simply for being inadequate. He is McClellan and we need (desperately) a U S Grant.
Ken in Tyler| 4.5.11 @ 12:09PM
Grant simply played a numbers game in which he could replace his casualties with fresh cannon fodder and eventually bleed his opponent dry. We need a Stonewall who was audacious in the offense and absolutely fearless in the face of superior numbers.
daboss| 4.5.11 @ 11:00AM
this endless tax debate is getting rather tiresome.
since the end of WWII the federal revenue as a % of GDP has averaged 18.7% NO MATTER WHAT the tax rate was. Taxes were as high as 90% and as low as 28% - but the federal revenue still was around 18-19%.
So - federal spending must be below 18% of GDP in order to create a surplus and pay off the debt.
Federal spending under this administration goes to 35% in the out years. That is NOT sustainable.
Oldefarte| 4.5.11 @ 11:30AM
Great article Tracy, and equally great commentary, Karl LM and Anthony....THANK YOU to each! As Anthony proclaims, the line in the sand of Wisconsin will continue in DC over this budget/debt battle. D's want governmental welfare and will fight to preserve the Great Society programs initiated by Johnson [as proclaimed by Karl LM]. Conservatives have to make their stand now [or never], since this country will go either left or right in the near future. Bankruptcy or economic survival. There are no more middle grounds available!!!!!!!!
Timely Renewed | 4.5.11 @ 4:50PM
The GOP budget is a good start, but ultimately it is a retail solution to a wholesale problem. We also need to redress the underlying distortions of the Constitution which have allowed the federal government to expand far beyond its original constitutional powers. This can be accomplished by amending the Constitution to restore the original constitutional structure which limited the federal government's ability to expand to such a ridiculous size and power.
However, this is difficult to achieve when Congress holds a monopoly on initiating constitutional amendments. The solution is to start with an "amendment amendment" which gives the States the ability to initiate constitutional amendments without a convention. In this way, grassroots constitutionalists on the state level could enact amendments carefully drafted to achieve the restoration of the original constitutional structure without having to go through Washington. Only this will permanently constrain future federal overreach of the sort rejected by the people last November. See http://www.timelyrenewed.com
W| 4.5.11 @ 4:59PM
To all the economic illiterates:
Reagan did not cut taxes. repeat: Reagan did not cut taxes.
Reagan cut tax rates. Reagan cut tax rates. got that? Tax receipts increased when the rates were cut. Taxes receipts increased when the rates were cut.
To all who believe that we do not pay enough taxes, you can pay more than the legal minimum. Add an extra donation for obama. don't take the deductions and credits, if you believe taxes should be higher, then lead by example. Pay more, voluntarily.
jstwndring| 4.5.11 @ 5:12PM
Thank you Mr. Ryan! Thank you for taking a stand! This is what we want--a stand on the principles of what defines our Constitutional Republic. One of limited government. Let the Dims howl. It's what they do. It's all they do. Let's give them something to howl about. They'll think they have us. I'm sure going into this budget they thought they'd let the Republicans handle it, and take all the flack for proposing spending cuts and shutting the government down. Surprise, surprise! Americans agree with the Republicans. This is not a fight the Dims win as long as the Republicans stay tough and united on this. In fact, the only way the Dims win ever, is when Republicans go wobbely and start looking like the Democrat-lite party.
jstwndring| 4.5.11 @ 5:22PM
I don't know what happened to the 'Reply' button, W, but you are exactly right. When tax rates are cut, it expands the economy and therefore the taxable base. This is what brings in more revenue. Increase tax rates, and you discourage economic activity, shrinking the taxable base, and lowering tax revenue. Dims cannot wrap their heads around that simple concept. Of course, they also cannot understand how, say, 10% of $20,000 is proportionally the same as 10% of $20,000,000. And, as you accurately point out, if they don't feel tax rates are high enough, they can always send more money to the state and federal government. But, democrats are nothing if not hypocrites when it comes to taxes. They vote for candidates that promise to raise tax rates, then they proceed to take every-single tax deduction they can. Seriously, wtf?
Chalkdust| 4.5.11 @ 7:02PM
Ken in Tyler..."Stonewall" Jackson, who many thought was crazy, was a stone killer and it didn't matter what color of uniform the dead man wore.
Dispite what you might have read, Jackson was not will liked by his men even through he led them victory in battle. U.S. Grant operated on the theory of one man killed in victory today, saved 100 men if it shorten the war by one day. He would be a much better choice to patten after.
Anthony| 4.5.11 @ 7:36PM
Chalkdust, Thanks for the lesson about Jackson and Grant.
I kind of like Grant's thinking, and perhaps we as Americans should apply a similar approach to saving our society.
In other words, if we rid Washington of 100 less Ds in 2012, we will shorten the time to get America back on track, strengthen our economy, balance our budget, and rid America of its crushing debt.
Sounds like a plan. General Ryan, you have your orders!!! The troops are behind you.
George True| 4.5.11 @ 8:42PM
The Laffer Curve has been proven beyond all doubt to be the way the relationship between taxes and revenues actually work in the real world. Anybody who says otherwise (Vtwin?) is either fundamentally uninformed or is simply denying reality. There is an optimal rate of taxation above which revenues decrease. We are way above the optimal rate in this country, both on the corporate and the individual level.
I have an intelligent yet shockingly uninformed friend who has made comments to me about not believing in trickle down economics. I am not slow in reminding him and others like him that 1) It is not a matter of BELIEF, it is a matter of what is actually true. And, 2) So-called trickle down economics is the only economy there is in this world. There is no other. Like it or not, it is what is. Always has been, always will be.
Finally, regarding the comments about U.S. Grant. There is a reason he was Lincoln's favorite general. He accepted whatever assignments were given to him without complaining or asking for more reinforcements. He just figured out a way to get the job done with the resources and troops he had. In my mind, that is what a general is supposed to do.
Athanasius| 4.5.11 @ 10:00PM
Another key to Grant's success: he had thick skin to keep pushing on when things got tough (see the Battle of Shiloh) when flashier commanders (McClellan, Hooker) lost their nerve and quit. Let that be another lesson for Ryan and the Republican leadership.
Dee See| 4.6.11 @ 12:25AM
----FURTHER on the Japan disaster and
the skyrocketing radiation that's being
covered up in California
coming across just now a very recent sudden
loss of the ozone layer ----a signature of HAARP!
(SEE Yahoo banner news)
---SO get with the DE-program ----NOW!!!!
HUAC meets NUREMBERG
Christian Louboutin | 6.23.11 @ 4:08AM
While the battle over the 2011 budget and serial CRs (continuing resolutions) has been noisy, the amount of real money actually cut and to be cut from the federal budget is modest relative to its engorgement since 2008.
Creative Recreation | 8.10.11 @ 10:51PM
is good