A New Era of Responsibility?

“We will continue to go through the budget, line by line, page by page, to eliminate programs that we can’t afford and don’t work,” declared President Obama in his State of the Union address on January 27.

Five days later the president delivered his Fiscal 2011 budget to the US Congress. This he did to much fanfare, seeking to cast it as a product of fiscal prudence. In the message that accompanied the document, he stated:

“The Budget includes more than 120 programs for termination, reduction, or other savings for a total of approximately $23 billion in 2011, as well as an aggressive effort to reduce the tens of billions of dollars in improper Government payments made each year.”

At first sight this may look like the work of an earnest waste cutter. It is, however, nothing of the sort. The $23 billion of “savings” is actually only about one half of one percent of the $3.84 trillion total.

A question for the president: Is one half of one percent all the waste you can find in the federal government? After all, it is an institution whose financial profligacy is legendary. Should we assume, Mr. President, that all of the remaining 99.5 percent is spent wisely and un-wastefully?

It goes without saying that most of the meagre $23 billion will never be cut. Those involved with the agencies and programs slatted for reductions will make sure of that. Claiming that their work is indispensable for the well-being of the nation, they will make a hysterical run on Capitol Hill where their cause will receive much sympathy. When all is said and done most of their budgets will not only be restored, but many will walk away with increases.

But here is the larger point. By calling the proposed $23 billion of cuts “savings,” the administration makes it sound as if the government’s expenditures would go down by this amount vis-à-vis last year’s levels.  This, however, is not the case. The proposed $3.84 trillion budget represents a three percent plus increase over the 2010 total. So even as ordinary Americans are forced to cut back on their consumption, the federal government’s voracious appetite for spending continues to grow unabated. Needless to say, we can ill afford it. As a consequence, the government will post a deficit of $1.25 trillion, which will represent more than 8 percent of the nation’s GDP. These abysmal figures, however, have done nothing to detract from the president’s sense of humor. He chose to unveil his budget under the motto “a new era of responsibility.”

But all this is still apparently not enough for some of the president’s friends on Capitol Hill. Shortly after he introduced his 2011 budget proposal, Rep. James Clyburn (D-S.C.), the House majority whip, opined that looking for any more savings would only make things worse. “We’re not going to save our way out of this recession. We’ve got to spend our way out of this recession,” he said.

The insanity of this should be obvious to all. It is simply impossible to spend our way out of trouble when we are so deeply in debt already. Spending more will only make things worse. Having incurred astronomical debts, we are still able to borrow at low rates because of the dollar’s status as the world’s reserve currency. But this situation will sooner or later come to an end. In another sign that the day of fiscal reckoning is approach fast, Moody’s Investor Services warned that at some point it may be forced to lower America’s triple A credit rating. The reason for this? The unrestrained spending of the federal government. Steven Hess, senior credit officer at Moody’s, told the Financial Times that the budget outlook submitted by the Obama administration last week “did not stabilise debt levels in relation to gross domestic product.” It would be interesting to hear the spend-happy James Clyburn comment on that one.

Needless to say, losing the triple A rating would have a devastating effect on this nation’s finances as it would make servicing the national debt far more expensive. The only way to avert this outcome is by slashing spending and cutting deficits. Unfortunately, those in charge lack the political will to do so. Instead of offering real solutions, the president tries to posture as a fiscal hawk while proposing laughable savings of one half of one percent. As if this was not bad enough, the third most powerful Democrat in the House of Representatives thinks that cutting further would be outright harmful.

Even as Obama and Clyburn were talking up the proposed budget, House Majority Leader Steny Hoyer worked quietly behind the scenes to line up votes to raise the debt ceiling by another $1.9 trillion. The effort to pass the record hike was triggered by the Treasury’s warning that the national debt is on the track to hit $14.3 by the end of this month. If the Treasury’s estimate is correct, the national debt will have grown by more than one third in less than thirteen months of Obama’s term. This expansion of national indebtedness is as astounding as it is unprecedented. But if this should frighten you there is no need to worry, because we have just entered “a new era of responsibility.”

  • http://intensedebate.com/people/Rifleman Rifleman

    The $23 billion cut is a diversion from the extra $800+ billion the dp is blowing. The dp idea of responsibility is to spend 2 to 4 times as much as the GOP.

  • http://intensedebate.com/people/johncarens johncarens

    We have a rouge, out-of-control Federal Government, and worse, the Party of Government is in control. The modern Democrat Party is representative only of public-sector unions, Government Employees, and others who benefit from extorting money from the taxpayer's treasury. Thus, the budgets of governmental entities at all levels (states and localities are a fiscal disaster, too) grow inexorably. And year after year, governments are never satisfied, never slaked. And every year, taxpayers are treated to a slew of incalculable waste and fraud. Now, however, Uncle Sam seems to be one of those morbidly obese hospital patients whose organs are shutting down one by one, but whose mother keeps sneaking in the fried chicken and milk shakes. It is sick, truly sick. And the governments' sense of arrogance and entitlement to the taxpayers property is stunningly frightening.

    In good times, the Government grows. In bad times, the Government grows. There has never been a federal budget that was less in actual terms than the year before. And its amazing how quickly we accept the latest "normal": In 1993, Bill Clinton's "Stimulus" was a mere $47 billion dollars. And George HW Bush labeled "voodoo economics" Reagan's first budgetary proposal that, he felt, might generate a $40-billion deficit (which, of course, it didn't– it increased revenues as Reagan said it would).

    We are over the brink now, folks. We're just waiting for the math to catch up.

    • http://intensedebate.com/people/bubba4 bubba4

      So Reagan didn't create more debt? Come on!

      "voodoo economics" was the laffer curve…the idea that if you brought taxes down on the rich, then the economy would explode, driven by the trickle down of prosperity. I guess you can avoid any uncomfortable facts about these ideas by simply believing that it all worked out brilliantly.

      It didn't.

      • USMCSniper

        You are to the point that you need intellectual CPR!!

      • http://intensedebate.com/people/johncarens johncarens

        Arthur Laffer simply pointed out that neither 100% taxation, or 0% taxation yields long-term revenue, and that somewhere along that irregular curve is the point at which X% of taxation yields the greatest amount revenue to the treasury. This is not even debatable. Even John Maynard Keynes recognized this.Certainly that nexus wasn't at the higher levels of taxation, because year-to-year receipts to the government were down despite higher and higher rates and fees throughout the 1970's. Taxes had to be raised, people like Jimmy Carter felt, year over year just to keep up with inflation, not to mention systemic spending problems.

        There was nothing "voodoo" about the Kemp-Roth law: Despite bringing top marginal rates down from a high o 92% to as low as 32%, revenues in constant dollars to the treasury quadrupled though the 1980's. Also, 20 Million jobs were created, interest rates came down from 21% to under 8%, and unemployment, which had reached a high of 12% came down to under 7% by 1986. Best of all, the supply of dollars chasing out dollars came to a halt, when inflation, that was clipping along at 14% annually at its worst, came to a screeching halt to under 3% by 1987… And they call this current hiccup the "Worst Recession since the Great Depression". Hah. This is a piker compared to 1979-1981.

        The deficit problem under Reagan (which, throughout most of the 1980's remained below 18% of GNP) came from two places:

        1) The inability of congress to cut spending. By law (TEFRA 1982), they were required to make $3 in cuts to every $1 in new taxes. The new taxes came, but the cuts never did.

        2) Reagan had to rebuild the military after it was gutted under Jimmy Carter. Remember, we had entire fleets of jets, ships and armor that couldn't move for lack of spare parts, and vast swaths of personnel were on Food Stamps, and training without any proper equipment. Meanwhile, the Soviet Union was on the march in Latin America, the Near and Middle East, and Afghanistan, and we couldn't even help good friends like the Shah of Iran (a mistake for which we are still paying 30 years on).

        The Soviet Union is now dust, and we had nearly thirty years of prosperity, with constant growth in real earnings with fewer raw materials and greater productivity. Sounds like it worked pretty brilliantly to me.

        At least until Stretch Pelosi got a hold of things in 2006.

        • http://intensedebate.com/people/bubba4 bubba4

          "Arthur Laffer simply pointed out that neither 100% taxation, or 0% taxation yields long-term revenue…"

          Maybe I should have put quotes around it. He and his curve were often cited as evidence for "trickle-down" economics and he himself went around promoting Reagan's policies on television and other media. These boxes are very small…I use shorthand whenever possible.

          It's true that the eighties saw growth and recovery from the 70's but Reagan still added a tremendous amount of debt. The entire world was in recession during the 70's and then there was the oil crisis that started in 73. Your magic turn around credited to Reagan gives him all the credit and then any blame for debt is shifted elsewhere. If you can't look at Saint Rony without the halo, then what is there to talk about.

          We couldn't "help the Shah" because Jimmy Carter destroyed the military? Christ…you guys have your own bizarro world history that stretches back as far as you care to think. Who put the Shah in power? Who propped up his government?

          And I suppose that when Reagan was elected, the new Iranian leadership was so scared that they released the hostages so as not to enrage the God in charge of the United States. You're clearly older…but definitely not wiser for the effort.

  • http://intensedebate.com/people/bubba4 bubba4

    Vasko just barrels ahead without regard for truth or consequence….of which there is none for him. He can say whatever he wants. This is the latest in a string of articles that give new meaning to spin. The number keeps getting bigger. In another few months, Obama will be driving us to $ googleplex deficits…

    For Vasko, all this will become more reasonable once the darky is out of the whitehouse. When we get a Republican in there, then the deficits will be managable, and there will be plenty of excuses and good reasons to give the rich new tax cuts.

    • USMCSniper

      darky? I have not heard that one in while. A 3.3 trillion dollar budget? Explain that one away!!

  • Keithrage

    Ten years of union and leftist government have left Detroit as a third world city, that is what the U.S will be under this puppet/clown if he is to continue his new world agenda.

  • http://www.hyperinflation-schutz.com/ Clayton Luca

    Food inflation is real, and it is here. Just yesterday I compared my receipt from a grocery run to prices I have from the same exact store from September 15, 2009. Bacon? Up 52% to $13.69 from $8.99 for 4 lbs. Butter? Up 73% to $9.99 from $5.79 for 4 lbs. Pure vanilla extract up 14% to $6.79 from $5.95. Chopped dried onions up a mere 2% but minced garlic (wet) was up 32%. The ONLY thing that I have hard data from in both visits and went down is canned chicken that declined by 9% though there was a demonstration on that product so I am curious if the price will be higher next week.

  • http://intensedebate.com/people/bubba4 bubba4

    That's it Linda…just like they taught you. If you even get a whiff of race just start pointing and screaming racist! Give me a break. You're being offended is an act. Do me a favor…stop posting multiple times and reposting the same shit day after day. That's offensive for real.