The Mercatus Center’s Veronique de Rugy exposed, in the pages of the Los Angeles Times, many of the absurdities and dangers of Bush’s recently submitted budget — a $3.1 trillion monstrosity.
Must Uncle Sam really spend $10,333 annually for every man, woman, and child in America?
The opening paragraph of Vero’s excellent op-ed speaks volumes about the current occupant of the White House.
If President Bush’s budget for fiscal 2009 is approved in its current
form, U.S. government spending will have increased by more than $1.2
trillion since President Clinton left office; adjusted for inflation,
that’s a 35% increase. Bush has increased spending at three times the
rate Clinton did when he was president, and also has given us the
biggest defense budget since World War II — and that’s regularly
budgeted defense spending, not counting funding for the wars in Iraq
and Afghanistan.
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It speaks for itself.
That is an increase of about 4% per year, inflation adjusted. Almost all of it is in defense, social security and medicare.
If you remember Clinton's enormous cuts in defense spending, then you know that manpower, ships, planes, tanks, etc. still have not recovered to the levels America had before Gulf War 1. Hence, the real problem is on the social spending side of the budget.
chsw
Here is a little exercise, and hopefully my numbers show properly. Got these numbers from the CBO site. May need to widen the comments window for the columns to align properly in your browser.
Year____Revenue_____Outlays______Deficit- Splus___3% Outlay___Deficit-Splus
2001____1,991.4_____1,863.2_____+128___________1,8 63.2____128.2
2002____1,853.4_____2,011.2_____- 157___________1,919.1____-65.7
2003____1,782.5_____2,160.1_____- 377___________1,976.7____-194.1
2004____1,880.3_____2,293.0_____- 412___________2,036.0____-155.7
2005____2,153.9_____2,472.2_____- 318___________2,097.0____+56.8
2006____2,407.3_____2,655.4_____- 248___________2,159.9____+247.3
Revenue column is actual revenues
Outlay column is actual
Deficit surplus is actual
3% outlay column is a what if outlays are held to a increase of 3% each year. Last column is what the deficit or surplus would have been had outlays been held to 3% per year instead of running close to 8% per year. Looks like we would be in surplus. Hope I executed this exercise properly, and I pulled the CBO numbers right.
My excersise is not going to show properly on this site's comment section. Sorry.
"chsw": for the longest time, the US defense budget has outstripped any country's by a HUGE margin. Our vastly superior military strength over any other country shows that. So why do we need to go to pre gulf war levels as the benchmark to justify the huge increase in defense spending? There is no cold war so no arms race is going on. And even the current or forseeable future adversaries who are threats to us are no match militarily.
This is what I don't get: The conservatives want unlimited defense spending (even if we are the biggest military force in history) and the liberals want unlimited social spending (even if the standard of living in the country is among the best in the world and continuously improving). Each side pushes their agenda when in power.. and the budget goes down the toilet no matter what. It's pathetic.
Each side pushes their agenda when in power.. and the budget goes down the toilet no matter what. It's pathetic.
Posted by: Saum
No the budget DID NOT go down the toilet under Clinton. There's a BIG difference. Huge!!! The republicans have shown themselves for what they are by their actions. Self serving budget busting plutocratic corporate welfare hypocrites.
And our economy is in shambles like it's never been under democratic leadership.
If some one doesn't think government can work why in the heck would you put them in charge of it? Democrats aren't near perfect but they shown themselves to be superior to the republicans.
muirgeo – big Medicare prescription drug plan under the hated Bush. How do you explain that?
If some one doesn't think government can work why in the heck would you put them in charge of it? Democrats aren't near perfect but they shown themselves to be superior to the republicans.
Posted by: muirgeo | Feb 15, 2008 7:10:33 PM
Thanks for outing yourself as a paid DNC troll.
and also has given us the biggest defense budget since World War II
In inflation-adjusted dollars but not even close on GDP.
More criminally for an economist, it is horribly inaccurate to just look at budget accounting numbers when comparing defense spending during Korea and Vietnam, when we had a draft, to now, with a professional military. Drafts impose economic costs far out of line to the accounting costs.
The end of the draft made defense spending more expensive in another way, too; there is lots more spending designed to minimize casualties, both US and foreign.
Funny Muirgeo, seems to me the majority in congress are rubber stamping Bush's out of control budget. I also think your party controls both houses. Why aren't they stopping him?
NOTE: I dislike both parties.
Clinton was held in check by a Republican Congress. Bush was held in check by Harriet Miers.
Bush's spending is a fiscal mosquito bite on the impending Graf Zeppelin entitlement inferno.
FDR (and Democrats) have done easily the most economic damage:
1) 1935 Social Security Act
2) Vote Tallies for Passage of Medicare in 1965
3) US's triple-A credit rating 'under threat'
By Francesco Guerrera, Aline van Duyn and Daniel Pimlott,in New York
Published: January 11 2008 02:00 | Last updated: January 11 2008 02:00
The US is at risk of losing its top-notch triple-A credit rating within a decade unless it takes radical action to curb soaring healthcare and social security spending, Moody's, the credit rating agency, said yesterday.
The warning over the future of the triple-A rating – granted to US government debt since it was first assessed in 1917 – reflects growing concerns over the country's ability to retain its financial and economic supremacy.
It could also put further pressure on candidates from both the Republican and Democratic parties to sharpen their focus on healthcare and pensions in the run-up to November's presidential election.
Most analysts expect future administrations to deal with the costs of healthcare and social security and there is no reflection of any long-term concern about the US's financial health in the value of its debt.
But Moody's warning comes at a time when US confidence in its economic prowess has been challenged by the rising threat of a recession, a weak dollar and the credit crunch.
In its annual report on the US, Moody's signalled increased concern that rapid rises in Medicare and Medicaid – the government-funded healthcare programmes for the old and the poor – would "cause major fiscal pressures" in years to come.
Unlike Moody's previous assessment of US government debt in 2005, yesterday's report specifically links rises in healthcare and social security spending to the credit rating.
"The combination of the medical programmes and social security is the most important threat to the triple-A rating over the long term," it said.
Steven Hess, Moody's lead analyst for the US, told the Financial Times that in order to protect the country's top rating, future administrations would have to rein in healthcare and social security costs.
"If no policy changes are made, in 10 years from now we would have to look very seriously at whether the US is still a triple-A credit," he said.
Mr Hess said any downgrade in the US rating would have serious consequences for the global economy. "The US rating is the anchor of the world's financial system. If you have a downgrade, you have a problem," he said.
Moody's did once threaten to cut the rating of some of the US Treasury's debt when Congress refused to pass the president's budget in the mid-1990s. Other large economies, notably Japan in the 1990s, have had to suffer the symbolic blow of losing their top-notch credit rating.
Last year, David Walker, comptroller general of the US, caused controversy when he compared America's current situation with the dying days of the Roman empire and warned the country was on "a burning platform" of unsustainable policies.
Medicare and Medicaid spending, which has risen sharply over the past few decades and now accounts for about 45 per cent of total federal spending, up from about 25 per cent in 1975, has long been a source of concern.
Last month, Peter Orszag, director of the Congressional Budget Office, which advises Congress on the federal budget, said the issue was "the central fiscal challenge" facing the US.
Most presidential candidates have vowed to reform the healthcare system but many of them, especially on the Democratic side, have focused on extending coverage to the 40m-plus uninsured Americans rather than on cutting costs
Never mind defense spending, and never mind enormous future healthcare outlays, let’s extend healthcare benefits to everyone, and triple the coverage.
Signed,
Moron ObamaClinton
PS Expect your taxes to go up dramatically, quite soon.
A budget implies restraint.
Borrowing against future revenue streams implies extraordinary need and/or legislative fiat.
Constructing financial ponzi schemes designed to fail on the taxpayer dime, well, that’s illegal.
Muirgeo,
I think you're at the wrong site again.
You keep getting lost…
Go here:
http://www.redstate.com
Go tell them.
BTW, you really ARE a simpleton, a twit and a partisan….there! three insulting words I've always wanted to tell you. Nitwit.
BTW, chsw,
There's nothing to defend or rationalize on behalf of Bush or the GOP when it comes to this budget. It's disgusting….including military. Clinton was right to cut down the military.
All the fat, greedy American citizens want is their entitlements and they want them NOW and in huge quantities. They don't care about AAA credit ratings or economic health. They couldn't give a shit. Particularly those voting for Obamination.
John V:
I'd like to see some vitriol wrt to the entitlement programs. But I guess you don't have a problem with out of control SocSec, Welfare, Medicare, universal health care. Just eliminate the military so we can provide even more entitlements right?
Like the military doesn't entitle anyone …
Saum,
Not ready to really jump into this debate but:
"And even the current or forseeable future adversaries who are threats to us are no match militarily."
you might consider the wisdom of the statement that "they who standstill eventually fall behind." If one is talking about current and future enemies, we have no way of knowing what tomorrow brings, so it is wise to continue research, development, and implementation of advanced weaponry.
In a world where we do not know where the next enemy can come from I have no problem with our military being the toughest obstacle they'll ever meet.
My only worry, age old worry, is that too many of the military have been enculturated in muirduck's socialist propaganda and will follow state orders in prosecuting civilians. The wrong CIC in the White House is a frightening thing, as witness some of what went on with the previous administration and has accelerated with the current administration.
Anybody notice that muirduck doesn't claim to be trying to learn good economics anymore? He/she/it extolls all the same quackery which got us into this state.
Martinduck,
Now what kind of stupid ass comment was this; we went over this recently and you got it shoved up your ass.
"Like the military doesn't entitle anyone …
Posted by: Martin Brock | Feb 16, 2008 7:05:27 AM"
The village idiots, muirduck and martinduck, talking about the military is like me debating physics with Dr. Stephen Hawking. I know so damn little about physics, and the village idiots know so damn little about the military. Well, actually they seem to know damn little about anything except how to create vast quantities of pure bullshit.
The privileges and gifts thumbsuckers get, which are paid for by others, the only requirement on the thumbsucker is simply being alive with no obligation to actually do anything except breath, that is an "entitlement" as described by the Supreme Court's interpretation of the Constitution, in in the minds of any reasonably honest intelligent person. "Reasonably honest intelligent person" excuses martinduck and muirduck.
I am not now and never was particularly fond of the military, though I loved my job and mission, but my honesty makes me defend it against the stupidity of mindless jerkoffs who have no clue as to what the individuals do to earn what they get. They do what their contracts call for and they get the rewards the contracts stipulates; which is as straightforward market based as any contract made at any time, anywhere, and between two freely contracting parties. No foolish, stupid, ignorant or asshole definition of the word entitlement fits. No further discussion possible.
Going back to martinduck's last stupidity on this subject; yes it is true that what I did, or what others do in the military, is irrelevant; but what the stupid jerkoff misses is the fact that I, and they, do something. What is not important, the fact that they do is sufficient to earn the rewards.
Furthermore martinduck and muirduck,
What you two jerkoffs think about the military being justified or worthwhile is what is irrelevant to any discussion about how military men earn or receive their rewards under their invidiual contracts.
I, too, can say the contracts and rewards offerd to potential employees by Shell Oil are so overly generous as to be actual entitlements, and I have no more justification for doing so than you two jerkoffs do for saying the same about the military. To the contracted, where Shell Oil gets the money to reward contract employees is no more relevant to this discussion than where the government gets the money to reward contract employees.
No amount of socialist idiocy can alter the pure logic of that last paragraph.
I heartedly encourage you, martinduck and you muirduck, to keep writing because you just smear yourself with shit with each post and make it more clear each time who and what you are.
Correction:
What is not important, the fact that they do is sufficient to earn the rewards.
Posted by: vidyohs | Feb 16, 2008 10:19:32 AM
Should read:
What is important is the fact that they "do" which is sufficient to earn the rewards.
Pray tell vidyohs, could there be an argument that the military is a superior organisation to even the business world? In the business world you make a wrong move, you lose money – but in the battlefield you make a wrong move you're dead or severely wounded. Who knows maybe a militaristic society is the third way . . .
Going back to Don's post above, the subject of whether the government needs such a bloated budget has been discussed so thoroughly that anything further just consists of beating the dead horse.
We the people let it happen, we insist on no accountability (oh we talk and yak but we don't actually do anything), and we send to Congress and keep people who promise us leisure and privilege and turn out the ones who talk about sacrifice, hard work, and self responsibility.
Of course we have bloated budgets.
To paraphrase an old wise saying:
"Feed a man a fish and he'll look for another tomorrow; then teach him to fish and he'll still see no need to because you have already shown a willingness to feed him a fish."
Man of man! Have we been feeding a lot of people a lot of fish for a long time!
As some one above pointed out it is the social spending that is most excessive. Is that any wonder? Consider this frightening fact, muirduck professes to be employed at some wealth generating activity yet he is fervent in calling for "cradle to grave" security for "the poor" paid for by you and I; and, there are just so many more who demand the same thing and they have never been employed at anything in their entire lives. As scary as muirduck's devout beliefs are, at least he seems to be self supporting. Think of the huge numbers that absolutely refuse to learn to fish because they have taught that the fish come free for them.
Brer' Gil,
You may make any argument you wish for any structure of humanity, I'll read your proposals and give them respectful consideration unless, and until, you advance a theory that eliminates individual freedom of choice and action within the constraints of natural law.
At that point I would dismiss your theories as the same old stale tired crap we have today.
I think what Profs. Boudreaux and Roberts would argue here is that spending by any government body necessarily entails corruptive behavior, and usually results in negative economic consequences.
Vidyohs is arguing from a Keynesian perspective that “If we have to pay people, might as well have them do stuff.” That’s correct, but from a pure classical liberal economic standpoint, Russ and Don would ask “Why? Why should government pay them at all?”
Brer Gil,
My last was not an answer to your post, sorry.
Do I think that military organization is superior to that of the business world? If that is the question, then I would answer no, I don't necessarily think so though there are definite parallels worth looking at.
Which is exactly what businessmen have been doing in increasing numbers since globalization was seen as inevitable. As a matter of fact many large businesses hold seminars on the required reading of Sun Tzu's Art of War, as well as the doctrines of Atilla.
The parallels are also visible in that a young man's resume that includes military service in a position of leadership is seen as a great plus in the business world, the higher the rank the more power to the resume.
As I said in a previous post on another thread, in general our military learned from the Korean war prison camp experiences to teach and reinforce self responsibility and agressive flexibility in independent operations. I believe the British military does the same and for the same reason, our POWs in Korean prison camps behaved miserably under stress while the Turkish military performed extremely well. Our military looked at what kept the Turks together and unified and improved our training accordingly. Our troops broke in prison camps, the Turks did not; and it was their military discipline that did it. No matter what the Koreans did to try and disrupt the Turk chain of command and make them confused and disorganized, the next senior Turk stepped up and said, "I am in command and we will resist." (I apologize if you find this little tidbit of history boring and unnecessary.)
So I can only tell you that military organization and business organization are not so different and one benefits from learning the techniques of the other.
Sir mesa econoguy,
"Vidyohs is arguing from a Keynesian perspective that “If we have to pay people, might as well have them do stuff.” That’s correct, but from a pure classical liberal economic standpoint, Russ and Don would ask “Why? Why should government pay them at all?”
Posted by: Mesa Econoguy | Feb 16, 2008 11:04:12 AM"
Oh Wow! If that is the way it came across to you I can tell you that is certainly not what I intended.
I don't know what I said that caused you to think that. Help me out, please.
vidyohs,
"The wrong CIC in the White House is a frightening thing…"
Or the wrong party in power… and considering that the only party we have is the Progressive Idealist party, and given the history of military adventurism and willingness to use the military as a world police force demonstrated by the Progressive Idealist party, and given the fact that nuclear proliferation is inevitable, I think we need to seriously reconsider the wisdom of maintaining a massive military under the control of people whose defining characteristic is an extreme willingness to stick their noses into other people's business.
No worries, sir vidyohs, I was editing liberally (there was extensive other content), and was attempting to steer discussion.
Incidentally, I apologize for pushing the profanity envelope here, as I was (and currently still am) disgusted with many of the regular commenters on this fine blog.
That said, I believe Keynes himself did often employ the term “jerkoff,” pedophile that he was. My friend Ricky Perlstein could possibly shed some light on this, apparently having Jamie Keynes’ number on speed dial.
Perhaps he could also ask the Mont Pelerin Society about the Patriots failed season, too….
Thanks Mesa Econoguy,
As long as I did not distort my position. I certainly believe that contractual performace should be rewarded as per contractual stipulation; but, I do not and would not ever promote or accept "make do" work in order to redistribute wealth or ever to "give" money to people who are just doing nothing more than being alive. You and I agree that the "government" has no money, that money is mine and yours.
I thought I had become careless and laid out something I had no intention of saying. My economics are pure street level, and I thought I had stumbled off into a wrong position, so I defer to you guys who have the education when it gets beyond that.
I apologize for the crudities, but I can't say it won't be repeated under the right provocation from certain obtuse individuals whose postings deserve no respect. Tell if your lady reads my posts and I'll clean them up.
Randy,
I note your points.
Let me just say that it is not the founding father's plan that is the problem.
The problem is the people that exercise the plan.
I think we would agree that under careful consideration the plan has worked well over the years and the limits on the military and the CIC have held to balance that power and its use.
Our current dilemma can be traced to one overpowering fact. Under the FDR administration Congress voted to give the president the power of Executive Orders, the issuance of which can only be over come by a 2/3 majority. An extremely difficult thing to do, and to my sure and certain knowledge has not even been suggested or attempted in the intervening years.
So Executive Orders have the power of law and, unless canceled by a subsequent Order, stand as law until canceled by the President or over come by a 2/3 majority vote in Congress.
As Clinton's Press Secretary, Joe …., said in the waning days of Clinton's presidency as he issued Executive Order after Executive Order, "Kinda neat, stroke of the pen, law of the land."
Congress gave up its control of the war making process when they created the Executive Order for FDR. Furthermore the truth is to be drawn that they don't want to cancel that Executive Order program because it ultimately gives them excusability, a dodge of responsibility you might say.
Discussing the military purely as a budget consideration:
Military contractors know where to feed.
If there's a problem with the military, it's likely because it is run by the government.
Perhaps all military/security intelligence should be placed under military command.
Congress should retain the constitutional prerogative of declaring war.
We should give up on the U.N.
Even though they are mythical, we give governments life in our agreements and belief.
It is a natural fact that life is self serving first and foremost, it can be no different and remain alive.
As the prime instrument is self srving, all departments, agencies, and/or offices created by any government will also immediately become self serving first and foremost.
Just one of those natural laws that we have to recognize and learn to deal with.
This is not approval per se, just giving recognition to what is.
That's why we think a free market (not free for all) word best, it permits humans to profit through productive activity via trade with others similarly situated.
Agreed,
and thanks for telling me who dondero is/was. I hadn't run into him.
"works" best
The constant strawman.
Libertarians define a free market as one in which actors participate in transactions via voluntary agreement and impose no direct cost on non-participants.
Say that for a 'progressive' and they come up with stuff like:
So you think its OK for corporations to exploit the powerless?
So pollution is OK with you?
etc.
Always with the strawman argument.
Yes, exactly Sam, and vidyohs, I suspect you have more economic "training" than you let on.
But that's what's cool about economics: you can observe behaviors and develop a framework of rules, and predict future outcomes based on that information.
Physics is much the same.
No modern liberal understands this.
Guys the real problem is inherent to a big nation as America. US can only be compared to the Roman Empire, therefore if compared with the Roman history some insight can be found.
The Romans were vastly superior to any other nation in their time. They never had rivals that could match them.
This situation creates a feeling of superiority that enhances big expansion or unilateral policies. So unilateral they are that the citizens of the Republic are no longer consulted to support major decisions such as war or budgets or cap spendings.
Another reason, Washington becomes the beacon not of freedom but of power. To be more precise: the biggest power ever. And as the Romans their best citizens became currupt to get more power.
Corruptio optimi, pessima.
Therefore much of common sense is lost and policies become erratic and discunctional not to say crazy and insane. Only wise leaders can tame all these powerful lobbies that try to enjoy the might of America.
Clinton enjoyed the end of the cold war. He was summoned by Greenspan to stop the deficit. The pro war guys were far from the power at the time. So no wars and the defense lobby was put aside.
But with G. Bush all a team of ambitious polititians came to power to satisfy their sponsors and their own bank accounts. So guys what do you want? They brought as war and they thought that they would conquer the world. I mean all the world. The warfare was not that easy Rumsfeld was forced to resign, Wolfowitz became a joke in the IMF and Cheney is Dark Vador.
America is tired of the war, but it must pay the bill of the so called war on terror. Infrastructures are old and outdated. Poor American citizens can not be helped by their government.
So guys America is gonna suffer but we will be humble again and the world will love us.
Only one thing: bring to court Donald Rumsfeld, Dick Cheney, Paul Wolfowitz, Richard Perle and all the other crooks that came to serve their friends pockets.
These guys started all this big trouble AND THEY MUST ANSWER FOR IT.
WE ARE A REPUBLIC SO ALL CITIZENS ARE EQUAL AND ALL MUST ANSWER FOR THEIR MISBEHAVES!!!
GOOD LUCK AMERICA! WE WILL SURVIVE…somehow!
Ah, mis-spelling troll be gone.
I've been surprised recently that the people who criticize Bush for expanding the size of government don't mention that their candidate will expand it to levels Bush never even dreamed of.
Once you realize that politicians and voters respond to incentives like anyone else, the state of governance in American (or throughout history for that matter) isn't so surprising.
The terrible government we've had lately isn't any more shocking to me than Paris feeding itself without aristocratic planning. Voluntary exchange provides incentives which benefit all parties involved, while power's incentives don't reward behavior which respects the rights and desires of others.
Python:
I can't hear you! I can't hear you! I can't hear you! I can't hear you! *whistles*
NEOCON!!!!
NEOCON!!!!
NEOCON!!!!
/standard leftist troll
FreedomLover,
Your response to me above seems to imply that you think I play favorites with the budget or that I shilling for liberals.
You'd be wrong on both counts.
My disgust for the entire budget should be self-evident. Don't assume I secretly want more entitlement spending simply because it didn't spell it out in post above.
A a libertarian…not a libertarian-leaning Republican or a libertarian-leaning Democrat. Just a plain ol' libertarian.
Thus, I gleefully pull no punches toward anyone. Everyone is fair game. No remorse.
What is at issue here is that the government, both primary parties of it, are following Keynesian economics. They believe that if they spend enough money, it will revive the economy.
Consider the following summarized from a speech given at Mesa community college by economist Dr. Dwight Lee: Friedman, according to Dr. Lee, was said to have undermined Keynesian economics. Lee holds that Friedman certainly never intended this. In fact when he was 41, he even stated that he himself was a Keynesian economist. Over the years following this statement though, his position changed based on his research. It was not that he set out to destroy Keynesian economics, it just didn't match the results of his research. Keyne assumed that an increase in income meant an increase in savings. Stagnation Theory then says that the market is then bound to crash, because spending can't keep up as some of the money is saved. Friedman made an important distinction in researching this on the difference between transitory income (windfalls, etc) vs permanent income. Keyne had originally recommended deficit spending to cover the gap caused by stagnation theory. Keyne recommended that this liberal Fiscal policy in deficit would be greatly impacted based on the Keynesian multiplier: that as people spend money, it becomes income for someone else, is spent again, repeatedly. Friedman challenged this in the 'radio controversy' by noting that spending increases were offset by inflation.
In light of this it is obvious that their spending is based on 50 year outdated economic theory, if it is thought through at all.
Vidyohs –
I think your facts are wrong on executive orders — they date back to the 1700s. Executive orders are how the President exercises the executive power to make sure that the laws are enforced and are circumscribed by the Constitution and the laws passed by Congress.
The Congress in FDR's time certainly gave the President a lot of power, but that was largely by creating a number of agencies inside the executive branch and by delegating regulatory authority to those agencies.
John V:
What's the point in all this anyways. Just canvas any neighborhood and ask people about the budget deficit. They'll say "sure it's bad", but then ask them about their favorite entitlement program, and it's "yeah we absolutely have to have it". Most people are complete idiots who can't reason their way out of a paper bag. That I know pretty much from everyday observations.