Quote of the day...

"The evil of the world is made possible by nothing but the sanction you give it" - Ayn Rand

Thursday, January 25, 2007

A Tale of Two Budgets

"Together, we can restrain the spending appetite of the federal government, and we can balance the federal budget." -- George W. Bush

"While tax revenues continue to rise, entitlement spending is projected to drive the budget deficit to $367 billion by 2012 and $704 billion by 2017." -- Brian M. Reidl, The Heritage Foundation

In an article published by The Heritage Foundation, Brian M. Reidl presents a sobering look at how fiscally responsible the government would need to act to balance the federal budget by the President's target in 2012. In short, after years a spending growth near 50% , the Government would need to limit spending growth for the next five years to 2%.

This outlook presents an interesting challenge to Mr. Bush's plea that Congress impose spending discipline in DC. Like anyone else, members of Congress have great difficulty voluntarily limiting the money they spend, especially when they have been on a spending spree.

Obviously, limiting spending growth by the Government to 2% is highly unlikely. It would require, I believe, that spending on current entitlement programs be limited to below inflationary rates.

However, this forecast presents a terrific opportunity, though I doubt the President will take advantage of it. Here is his chance, and that of the entire Republican party, to show exactly what kind of discipline is required to balance the federal budget. It will not happen by 2012, but he could propose a budget that provides a balanced budget by 2014, or 2016, or 2020 (I am not certain why he chose 2012 -- a balanced budget is worth waiting for, if it is an honest assessment) and still keep his tax cuts and fund the wars at a steady rate of inclination.

To do so, he would need to stand firm and show Congress that a balanced budget is only going to be possible if they re-visit and FIX the mess of entitlement programs that are forcing every American to be an agent in his own doom! Explain to Congress and the American public in clear and concise language that these programs are going to bankrupt this country unless something is done to correct it. Force Congress to limit spending growth, not to 2%, but to 5%, or 7%, or 8%.

Such resolve would also expose the tax-and-spenders. For years even liberals have gloated how President Clinton balanced the budget and left Mr. Bush with a surplus. Never mind that doing so required a Republican Congress. No doubt, all of those Liberals who have been gloating would not stand for any reduction in spending. They do not really want to limit spending and balance the budget. They want to extract the money from the American people.

However, we have seen how fiscal discipline leads to vilification in today's mains stream media and left wing blog-o-sphere. When President Bush vowed to limit the growth of spending on the Education Department (a middle-man organization that prevents millions of dollars from reaching the local schools) he was accused of sacrificing our children's education in favor of small government (of course than fact that spending actually increased was largely ignored- it did not grow at the rate his critics wanted it to, so they attacked him).

Hence, no doubt Mr. Bush will continue on with his rose colored glasses and attempt to leave a fiscally conservative legacy of no substance. He is handing the Republicans a tool so they can say to the next Democrat President: "We left you with a plan to balance the budget, but you ignored it" with no reference to how unrealistic the plan was.

5 comments:

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GCL said...

I don't want to hear a PEEP out of W regarding fiscal responsibility. I can accept that taxes are an inevitable part of life, but the recklessness with which this administration handles our money is criminal. I don't want to see homeless people, I don't want to see schools falling apart in NY and I don't want to see people without access to health insurance. What is the goal of all this fiscal responsibility if not to put more money aside to invest in the interests of big business?

James Henry Bailey said...

the recklessness with which this administration handles our money is criminal.

Yes, the way W's adminstration has spent our money is criminal- one of the biggest expansions if the govt in U.S. history! And things will only get worse via Mitt & Arnold. [But I suspect that you, GCL, would find their healthcare proposals acceptable?]

What is the goal of all this fiscal responsibility if not to put more money aside to invest in the interests of big business?

I will accept that Liberals truly do not want to see homeless people, schools falling apart in NY (and Boston, and Chicago, and L.A.) and people without access to health insurance. Neither do conservatives, or independants (such as myself). However, too many citizens have been made vulnerable because of high taxes. It's a vicious cycle; Raise taxes to help the poor, and more citizens become poor.

The goal of fiscal responsibility IS to put more money aside for individuals to invest in the big, or small, business of their choice.

GayConservativeLiberal said...

I dunno JHB, you seem awfully smart to really believe that taxes are the problem. It's what govt does with the money that's horrible. Reagnomics didn't help most Americans and lead us right into the recession of the early 90s.

James Henry Bailey said...

Taxes are indeed a problem. The governemnt has no constitutional authority to tax some of its citizens for the charity of others.

It receives its authority to do so via the complicity of the people. The more money you give your government, the more power you give them. That is a problem.

However, the point of my post was to suggest, futily, that George Bush use the Heritage Foundation report as a chance to re-open the social security debate with Congress. My problem is with entitlements that stem from taxes.