Mo’ Money, Mo’ Money, Mo’ Money!

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Paul Krugman:

Dwindling Deficit Disorder

For three years and more, policy debate in Washington has been dominated by warnings about the dangers of budget deficits. A few lonely economists have tried from the beginning to point out that this fixation is all wrong, that deficit spending is actually appropriate in a depressed economy. But even though the deficit scolds have been wrong about everything so far — where are the soaring interest rates we were promised? — protests that we are having the wrong conversation have consistently fallen on deaf ears.

What’s really remarkable at this point, however, is the persistence of the deficit fixation in the face of rapidly changing facts. People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.

Start with the raw numbers. America’s budget deficit soared after the 2008 financial crisis and the recession that went with it, as revenue plunged and spending on unemployment benefits and other safety-net programs rose. And this rise in the deficit was a good thing! Federal spending helped sustain the economy at a time when the private sector was in panicked retreat; arguably, the stabilizing role of a large government was the main reason the Great Recession didn’t turn into a full replay of the Great Depression.

But after peaking in 2009 at $1.4 trillion, the deficit began coming down. The Congressional Budget Office expects the deficit for fiscal 2013 (which began in October and is almost half over) to be $845 billion. That may still sound like a big number, but given the state of the economy it really isn’t.

Bear in mind that the budget doesn’t have to be balanced to put us on a fiscally sustainable path; all we need is a deficit small enough that debt grows more slowly than the economy. To take the classic example, America never did pay off the debt from World War II — in fact, our debt doubled in the 30 years that followed the war. But debt as a percentage of G.D.P. fell by three-quarters over the same period.

Right now, a sustainable deficit would be around $460 billion. The actual deficit is bigger than that. But according to new estimates by the budget office, half of our current deficit reflects the effects of a still-depressed economy. The “cyclically adjusted” deficit — what the deficit would be if we were near full employment — is only about $423 billion, which puts it in the sustainable range; next year the budget office expects that number to fall to just $172 billion. And that’s why budget office projections show the nation’s debt position more or less stable over the next decade.

So we do not, repeat do not, face any kind of deficit crisis either now or for years to come.

There are, of course, longer-term fiscal issues: rising health costs and an aging population will put the budget under growing pressure over the course of the 2020s. But I have yet to see any coherent explanation of why these longer-run concerns should determine budget policy right now. And as I said, given the needs of the economy, the deficit is currently too small.

Put it this way: Smart fiscal policy involves having the government spend when the private sector won’t, supporting the economy when it is weak and reducing debt only when it is strong. Yet the cyclically adjusted deficit as a share of G.D.P. is currently about what it was in 2006, at the height of the housing boom — and it is headed down.

Yes, we’ll want to reduce deficits once the economy recovers, and there are gratifying signs that a solid recovery is finally under way. But unemployment, especially long-term unemployment, is still unacceptably high. “The boom, not the slump, is the time for austerity,” John Maynard Keynes declared many years ago. He was right — all you have to do is look at Europe to see the disastrous effects of austerity on weak economies. And this is still nothing like a boom.

Now, I’m aware that the facts about our dwindling deficit are unwelcome in many quarters. Fiscal fearmongering is a major industry inside the Beltway, especially among those looking for excuses to do what they really want, namely dismantle Medicare, Medicaid and Social Security. People whose careers are heavily invested in the deficit-scold industry don’t want to let evidence undermine their scare tactics; as the deficit dwindles, we’re sure to encounter a blizzard of bogus numbers purporting to show that we’re still in some kind of fiscal crisis.

But we aren’t. The deficit is indeed dwindling, and the case for making the deficit a central policy concern, which was never very strong given low borrowing costs and high unemployment, has now completely vanished.

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That’s the whole article. That’s still fair use because I want you to understand I did not edit, distort or selectively quote Krugman’s words. That’s his full argument.

Allow me to rebut:

If you didn’t know any better you might get the impression from Mr. Krugman that we currently owe less than we did a couple years ago. That is because most people don’t understand the distinction between “deficit” and “debt”.

“Deficit” refers to the annual difference between government revenues and expenditures. Since we spend more than government takes in, we have a deficit. During the Clinton years we actually had a “surplus” but then George Bush blew that all to hell. Then Obama took office and made Bush look like a penny-pinching miser.

“Debt” (or “national debt”) is the total amount we owe. It’s like the difference between how much you spent on your credit cards this month and the total balance.

This is our national debt:

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The Outstanding Public Debt as of 12 Mar 2013 at 12:49:01 PM GMT is:

$16,715,847,323,009.92

The estimated population of the United States is 314,578,050 so each citizen’s share of this debt is $53,137.36

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Some of you may recall that our national debt passed the $16 TRILLION mark about six months ago during the GOP convention. So everything after the first comma was added since then.

This is Connor:

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Connor is my grandson. He will be 15 months old next Saturday. Connor owes $53,137.36 to America’s creditors. So does his sister Kate. And so do his cousins Ben and Tommy. So do your grandchildren.

They each owe $53,137.36 to pay for OUR spending.

That’s immoral.

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Still Waiting For That Pony

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Daily Caller:

Republican activists laughed at President’s Barack Obama’s claim that his new laundry list of spending programs won’t add 10 cents to the deficit.

“Nothing I’m proposing tonight should increase our deficit by a single dime,” Obama told the nation during his 2013 State Of The Union speech.

His list of proposed programs include a national pre-school program, government aid in getting low-interest mortgages to millions of homeowners, a project to repair houses, more job-training programs and an increase in the minimum wage.

The GOP reacted promptly to Obama’s speech, which began at 9.00 pm. EST.

“FYI, Obama is right, he hasn’t added a single dime to the debt, he’s added 58.6 trillion dimes,” said a 9.41 p.m. message from Joe Pounder, the research chief at the Republican National Committee.

The committee quickly released a video showing Obama’s repeated claims that his policies would not cost a dime, and contrasting those claims with the $5.8 trillion in new debt created during Obama’s first four years.

However, Obama suggested that his extra spending will be offset by increased taxes, and should not increase the government’s near-$1 trillion annual deficit.

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{{Sigh}}

Obama is promising magic beans and unicorns covered in fairy dust. I’m still waiting for that pony he promised us the first time. Not that I ever believed him.

Unfortunately the Republicans threw away all their credibility on fiscal matters during the Reagan-Bush-Bush II years. I don’t think either party really wants to reform the federal budget, they just don’t want to be the ones left holding the bag when the fit hits the Shan.

You can hardly blame them. Telling voters the truth is not good for a politician’s career. Just ask Mitt Romney.

Both sides posture and pose, then cravenly kick the can down the road. Are they just postponing the inevitable or do they really think the damn horse will eventually learn to sing?

We need government. Correction: We need good government. We need cops and teachers and soldiers and sailors. We need inspectors and tax collectors. And bless their hearts we need bureaucrats too.

There are things that the government must do. There are things that government should do. There are things that government can do. And there are things the government has no business doing.

But nothing is free. Among the issues we need to discuss are how much government do we need, how much government do we want, and most importantly how much government can we afford?

Reasonable people can disagree. But there is a moral hazard problem when voters can vote themselves benefits and shove the costs off onto someone else. It’s kinda like going to a casino with someone else’s money and being told you can keep your winnings but don’t have to repay your losses.

“Real ponies don’t oink” – Patrick F. McManus

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Sequester Of Doom?

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Dan Pfeiffer at the White House blog:

Solving the Sequester: The Facts

With less than three weeks before devastating, across the board cuts – the so-called “sequester” – are slated to hit, affecting our national security, job creation and economic growth, we must make sure we are having a debate over how to deal with these looming deadlines that is based on facts- not myths being spread by some Congressional Republicans who would rather see these cuts hit than ask the wealthiest and big corporations to pay a little bit more.

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So we’re looking at “devastating” cuts, eh? I’ve also heard them called “cataclysmic” and “draconian.

Here’s the straight skinny:

The Sequester Explained

The Budget
Control Act (BCA) requires a cut of over $1 trillion in spending through a sequester. The Office of Management and Budget (OMB) is given authority to carry out the sequester. We do not yet know OMB’s interpretation of the Act, but the Congressional Budget Office (CBO) assumes that the sequester is intended to makecuts to discretionary appropriations and mandatory spending that add up to $1.2 trillion (less assumed debt service savings) over nine years, beginning in 2013.

[...]

Real level of program cuts is $984 billion. This is because $216 billion of the $1.2 trillion will come from assumed interest savings.

• Cuts are evenly divided between each of the nine sequester years. Therefore,each year, OMB must sequester $109 billion from projected spending.

• Annual cuts are split evenly between the non-­‐exempt portions of defense(function 050) and non-defense spending – an approximate cut of $55 billion to each. Cuts are spread among discretionary and non-­exempt mandatory spending. Defense and non-defense discretionary spending will be cut to lowest levels as a percentage of the economy in the modern era.

• Most mandatory spending is exempt from the sequester, including: Social Security, retirement programs, veteran’s benefits, refundable tax credits, Medicaid, the Children’s Health Insurance Program (CHIP), unemployment insurance, food stamps (SNAP), Temporary Assistance for Needy Families (TANF), and a host of other programs (mostly those benefitting individuals with low incomes).

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$109 billion a year in cuts? ZOMG! That’s like losing 200 Solyndras or 2 Sandy aid bills!

Actually, since the federal government spends approximately $3.6 TRILLION dollars a year, $109 billion is like 3% of the federal budget (according to my feeble math skills.) As a matter of fact, it’s less than 10% of the annual deficit.

IOW – if the sequester does kick in, we’ll just be going into debt a little slower.

BTW – Sequestration was originally Obama’s idea.

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Problem? What Problem?

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Pelosi: It’s really a false argument to say we have a spending problem

Well, I think that sequestration is a bad idea all around. … The fact is, we’ve had plenty of spending cuts. … What we need is growth. We need growth with jobs. … So, again, we have to make a judgment about how do we get growth with jobs, that’s where the real revenue comes from. You don’t get it by… cutting into education, cutting back on investments in science and National Institute of Health, food safety, you name it. … So, it isn’t as much of a spending problem as it is a priorities, and that’s what a budget is, setting priorities. … Nothing brings more money to the Treasury of the United States than investments in education of the American people. … So if you recognize that, which cuts really help us and which cuts hurt our future. And cuts in education, scientific research and the rest are harmful. And they are what are affected by the sequestration. So, it is almost a false argument to say that we have a spending problem. We have a budget deficit problem.

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I don’t have a drinking problem. I’m pretty good at it. I have a liver problem. I have a relationship problem. I have a driving problem. I have a money problem. I have a falling down problem. But my drinking is just fine.

BTW – Sequestration was originally Obama’s idea.

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Fix The Problem, Not The Blame

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The first step is admitting you have a problem. That is the foundation of all recovery programs.

We have a problem.

We spend money like Michelle Obama on taxpayer-funded vacation. Even worse, forty cents out of every dollar we spend is going on our national credit card. We’re up to our eyeboobs in debt.

Here’s an example of how we spend money:

Watchdog sees pork in Sandy relief bill

As Congress takes up the second slice of relief money for Superstorm Sandy, the influential Club for Growth said Monday it will seek to punish the lawmakers who support the $51 billion package because it includes wasteful spending and pork that have nothing to do with reconstruction efforts in the Northeast.

The dueling messages underscore the divisions within Republicans ranks over the relief package — a $17 billion bill and $34 billion amendment —- that the House is expected to vote on this week.

Earlier this month, Congress approved a $9 billion relief package to fund the Federal Emergency Management Agency’s flood insurance program.

But Mr. Christie, New York Gov. Andrew Cuomo, a Democrat, and other elected leaders from the Northeast — and both sides of the political aisle — have been waiting on Congress to approve more emergency funding and harshly criticized the delay.

The funding was expected to be voted on two weeks ago, but House Speaker John A. Boehner, Ohio Republican, changed gears and pulled a proposal after Republican lawmakers raised questions about some of the spending that was unrelated to the relief efforts.

Still, the Club for Growth and other budget watchdogs, such as Taxpayers for Common Sense, say the $51 billion package that Congress is expected to consider this week also includes millions of dollars for Amtrak upgrades, FBI salaries and road projects in states not affected by the storm.

[...]

In a letter to lawmakers on Monday, Andy Roth, the Club for Growth’s vice president of government affairs, said lawmakers should oppose the Sandy relief package — a $17 billion bill and $34 billion amendment — that Congress is expected to take up this week and said disaster relief legislation should be offset with spending cuts elsewhere and not larded up with what the groups calls pork projects.

[...]

“Congress shouldn’t keep passing massive ‘emergency’ relief bills that aren’t paid for, have little oversight, and are stuffed with pork,” Mr. Roth said. “Also, Congress shouldn’t use disasters like Hurricane Sandy as an excuse to spend billions on long-term projects that should be considered during the regular appropriations process.”

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$17 billion in aid and $34 billion in pork. That’s how you end up OVER $16 TRILLION in debt.

Denial is not a township in Ohio. Whenever someone on the right tries to discuss our spending problem, someone on the left inevitably responds with something like this:

Republicans didn’t give a damn about the debt during Dubya’s presidency. Or Poppy’s. Or Reagan’s. And it was always pretty clear that Romney didn’t care about the deficit except insofar as he could use it as an excuse to destroy entitlements.

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Personally, I blame The Gipper for starting this mess. He promised to cut taxes and spending but only cut taxes. So the debt started piling up. It kept piling up under Reagan, Bush, Bush II and now Bush III. The Clinton years (but not all of them) were the only time we were “in the black” on spending.

Classic Keynesian economics calls for deficit spending (going in debt) by government in times of fiscal slowdown to stimulate the economy. I’m not going to debate the efficacy of that policy on the economy except to say that correlation is not causation.

But Keynesian theory does not call for deficit spending during good economic times. Quite the opposite in fact – the good times is when you’re supposed to pay back the money you borrowed.

But it really doesn’t matter who ran up the debt or what we spent it on. What matters is the fact that we are now OVER $16 TRILLION IN DEBT. Whether we spent it wisely or foolishly irrelevant. We spent it and now we have to figure out how to pay it back. We need to fix the problem, not the blame.

We are in a deep hole, and the First Rule Of Holes is “When you’re in one, stop digging”. The Keynesians out there would tell us that this is the wrong time to stop digging, but they’re kinda vague as to when the right time will be.

As it’s a sure bet that when the economy finally turns around (and it will eventually) we’ll hear cries for tax cuts and increased spending under the theory that “now we can afford it.”

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Hurricane Relief

The Trillion Dollar Coin Trick

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If you’ve lost Stephen Colbert . . .

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Who Are The Crazy Ones Here?

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Kevin Drum, discussing the Trillion Dollar Coin Trick:

But put that aside for a moment. I want to ask something else: is this really the road liberals want to go down? Do we really want to be on record endorsing the idea that if a president doesn’t get his way, he should simply twist the law like a pretzel and essentially do what he wants by fiat? My recollection is that we didn’t think very highly of this kind of thing when we thought George Bush was doing it.

This whole thing is not just a ridiculous idea, it’s a bad idea too. Republicans seem willing to set the country on fire to please their increasingly fever-swampish base, and eventually they’ll pay a price for that at the polls. Sooner than that, they’ll pay a price with the business community. This is a problem that we should work out via politics and public opinion, not by pretending the law allows the president to do anything he wants.

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Gee Kevin, who are the crazy ones here?

We are currently OVER SIXTEEN TRILLION DOLLARS IN DEBT. On one side are the people who want to get a handle on government spending and set our fiscal house in order. On the other side are people who are asserting that there should be no restraints on the President’s power to keep spending money we don’t have.

Reasonable people can disagree, but the Vile Progs won’t accept that anyone who disagrees with them is being reasonable. That’s an article of their faith, not a negotiating ploy. Which, of course, makes compromise out of the question.

For the record, I am opposed to any radical ideas for achieving budgetary sanity. We have a moral obligation to take care of our children, elders and the disabled. I would not want to live in a nation that let people starve in her streets or let the sick and injured go untreated. On the other hand we cannot turn to confiscatory taxation as a solution to all of our financial problems.

But we are not facing such stark choices, at least not yet. We have been spending money we don’t have like crackheads with a stolen credit card. There is no painless solution to our problem. We cannot spend our way out of debt and we have a moral obligation to our children and grandchildren not to dump the cost of our extravagance on them.

Sooner or later there will be accountability. It took us years to get in this mess and it will take years to get out of it. The sooner we deal with it, the better for all of us.

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The First Rule of Holes: “When you’re in one, stop digging”

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Weimar Economics

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Paul Krugman:

Be Ready To Mint That Coin

Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.

For those new to this, here’s the story. First of all, we have the weird and destructive institution of the debt ceiling; this lets Congress approve tax and spending bills that imply a large budget deficit — tax and spending bills the president is legally required to implement — and then lets Congress refuse to grant the president authority to borrow, preventing him from carrying out his legal duties and provoking a possibly catastrophic default.

And Republicans are openly threatening to use that potential for catastrophe to blackmail the president into implementing policies they can’t pass through normal constitutional processes.

Enter the platinum coin. There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.

So why not?

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Why not?

How about because it’s completely insane? It’s the equivalent of saying “I’m not broke, I still have some checks left.” It’s also a violation of the principle of checks and balances. Remember when liberals had a conscience?

My respect for economists has dropped considerably the past few years and my respect for Paul Krugman has gone past zero and is in negative numbers now.

Just when you think Democrats can’t get any stupider they go and prove you wrong.

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Watch This!

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“The Rule Of Lawlessness”

Seriously – watch it!

This is an open thread.

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El Foldo Grande

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Like a bunch of cheap suits:

House passes fiscal cliff deal, tamps down GOP revolt

The House of Representatives late Tuesday easily approved emergency bipartisan legislation sparing all but a sliver of America’s richest from sharp income tax hikes — while setting up another “fiscal cliff” confrontation in a matter of weeks.

Lawmakers voted 257-167 to send the compromise to President Barack Obama to sign into law. Eighty-five Republicans and 172 Democrats backed the bill, which had sailed through the Senate by a lopsided 89-8 margin shortly after 2 a.m. Opposition comprised 151 Republicans and 16 Democrats.

Republican House Speaker John Boehner voted in favor of the deal, as did House Budget Committee Chairman Paul Ryan, his party’s failed vice presidential candidate. But Republican House Majority Leader Eric Cantor and Majority Whip Kevin McCarthy voted against it.

Obama, speaking from the White House briefing room shortly after the vote, praised lawmakers for coming together to avert a tax increase that “could have sent the economy back into a recession.”

“A central premise of my campaign for president was the change the tax code that was too skewed toward the wealthy at the expense of working, middle-class Americans. Tonight, we’ve done that,” the president said.

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The party transformations are complete. The Democrats are now the party of unprincipled sleazebags and the Republicans are spineless wimps. After weeks of tough talk the Congressional GOPers surrendered faster than the Iraqi army.

They could have given up weeks ago and spent the holidays at home with their families. I guess we should be grateful – this deal will only add $4 trillion to the national debt in the next ten years.

It’s gonna be a long year. So far it sucks.

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I Was Told There Would Be No Math

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Frank J. Fleming at Pajamas Media:

Math Is Coming
Math is remorseless, and it will eventually balance its numbers, not caring who is hurt in the process.

All the debate over spending is starting to remind me of the movie Jaws. We have some people who believe there is this big threat headed our way, but the authorities all tell us not to panic — but instead of the mayor of Amity Island telling us the beaches are safe, President Obama is telling us we’ll grow our way out of this deficit.

Right now the Republicans and Democrats are hotly debating which of their two wholly inadequate plans we should use to avoid the fiscal cliff, but looking at the size of the deficit, they’re proposing different-sized Band-Aids where a tourniquet is needed. If you point this out, you’re called a Tea Party extremist who wants to throw old people off a cliff and deny underprivileged Ivy League law students free birth control. “You silly person. Budgets don’t have to balance. That’s just a superstition.”

Everyone is so used to politicians treating our tax dollars with less seriousness than the average person treats Monopoly money that they just don’t get why people are suddenly talking about the need for spending cuts. But this isn’t some idea invented by the Tea Party or Paul Ryan or the Koch brothers while sitting in their hollowed-out-volcano Koch Lair. They only mention cuts because they fear the one truly insisting on them: Math.

Politicians have long ignored Math. And it’s no wonder: Math is unelected, unsympathetic, and highly biased toward the rich and keeps demanding cuts to spending and changes to entitlements that are politically infeasible. In a nation filled with obese poor people, we’ve discovered a long list of things everyone should be entitled to besides food, clothing, and shelter — things people need, like subsidized hybrids — but heartless, uncompromising Math keeps looking at our revenue and telling us we can’t have all of that.

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I never liked math. (To be completely honest, I hate it, but I never knew until recently that math is racist.) The reason I was never good at math is probably because I’m left-handed and us southpaws are creative and artistic but whatever the reason me and numbers never got along. They say that math is the language of science and guess what? I was never good in science classes either.

On the other hand I’m not any good at singing either, but I know what it is and I can make it through a church hymn or karaoke night without embarrassing myself. And you don’t have to be a mathematician to understand a profit and loss statement or to balance your checkbook. One thing I do know is that 16 trillion is a REALLY BIG NUMBER.

Now any Vile Prog will tell you (with sneering contempt) that the federal budget is not like a household budget. And that’s true. But money borrowed must be repaid because the books must balance. (That’s why they call it a “balance sheet”.) Right now we owe a shitload of money.

That’s why this “fiscal debt” kabuki is such a waste of time. The Republicans are talking about a fight to the death to avoid raising taxes on the richest Americans by a measly two percent. But even if the Bush tax cuts were completely repealed it would only reduce the rate at which we are going into debt.

The First Rule of Holes is “When you are in one, stop digging”.

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Merry F**king Christmas From Barack Obama

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Ace of Spades HQ:

What Is Your Share of the National Debt?

Short answer:

I don’t know. You are [fucked|screwed|pooched].

I Don’t Know

Why bother reading further when the author seemingly doesn’t know the exact figure?

One problem is that the number is a moving target. Can you guess which direction the number is going?

Taking a look

This has to be a relatively simple exercise in arithmetic. One could divide a 14 digit number by a 9 digit number by hand, but I’ll do it with a calculator, thank you.

Stopping by at http://www.usdebtclock.org I get the current debt figure of $16,395,173,356,211.

Divide that by 314,982,978 people in the US and I get $52,050.98 per man, woman and child. Got a spare $52K, Bunky?

That figure, however, is wrong. It includes the all Americans, the majority of whom are non-taxpayers. It includes my retired parents and in-laws, who are contributing very little to the national treasury at this point of their lives. Let’s run the numbers again.

Take the current national debt, now at $16,395,177,588,347, divide by a US workforce of 143,963,180 and we get $113,884.52 per taxpayer. You have a job, right? Sorry if you don’t. At this point, I would still rather be pulling the wagon than riding it.

So we have this nice ballpark figure of $114K, but it still isn’t correct. No matter how average a person may be, they are still (an) individual(s). Are you washing dishes 32 hours per week? Your share is going to be lower. Are you a fund manager or an investment banker? Your share will be higher. People with more income pay more income tax. But we knew that.

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To be fair, Barack Obama is not responsible for all of that amount. He is only to blame for half of it.

If this isn’t on your list of grievances it sure oughta be. But don’t worry too much. You’ll probably die long before you finish paying your share. It’s your kids and grandkids that are really screwed.

Meanwhile, Obama is on a $4 million vacay in Hawaii.

Merry Fucking Christmas. Happy Fucking New Year too!

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Well played, Agent Orange, well played!

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A very strong statement from Speaker Boehner:

“Tomorrow the House will pass legislation to make permanent tax relief for nearly every American — 99.81% of the American people. Then the President will have a decision to make. He can call on the Senate Democrats to pass that bill or he can be responsible for the largest tax increase in American history.”

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Your move, Mr. President.

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Two From Ace Of Spades

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Two posts by Ace encapsulate my recent thinking:

Unemployment Shoots Back Up Over 8%

I can’t believe TFG is still president.

Four more years. Think about that. America is serving a medium-term prison sentence.

This is part of the reason I’m encouraging people to look to other things for happiness. I know it’s going to be very difficult for me to get through this. For the past four years I’ve had a mindset of “Just get to January 13, 2013, and then it’s all smooth sailing.”

I’m having a difficult time ratcheting myself up for “Just get yourself to January 2017, and then we’re on easy street, baby.”

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Awwww, four whole years? I am currently closing in on TWELVE YEARS of waiting out a bad presidency. I’ve been doing it four years at a time – “Just get to January 2005″, “Hang in there until January 2009″, and “Just a little bit farther” is what I’ve kept telling myself.

Know I know it will be at least 2017 before I see another POTUS who isn’t a walking, talking clusterfuck of a miserable failure.

Should Rush Limbaugh Advocate a 77 Percent Tax Rate?

Karl argues he should at Hot Air, suggesting that the GOP might have to illustrate to the public how massive our spending is by actually ratcheting up taxes to finance all this spending.

At the moment, the public is not actually confronted with the cost of the expanding government because we’re currently borrowing from China to pay for it (and will do so, until China realizes we can’t cover our debts, in which case we’re going to try some hyperinflation (which, of course, has always worked in the past)).

Let it burn.

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I don’t really care what Disgusting Pigboy advocates, but I agree with the concept. The longer we delay in restoring fiscal sanity, the worse things will get. It’s called “compound interest.”

If you really want to destroy social spending and programs like Social Security and Medicare, don’t face reality. Then somewhere down the road reality will face us all. We might all be dead by then, but we have kids and grandkids that will be suffering the consequences. Neither side wants to tell us the truth because it won’t be easy or pleasant.

Once upon a time in this land natural fires burned out the underbrush on a regular basis. Sometimes those fires were set by people. When the Europeans arrived the commented on the park-like nature of the American forests.

Then for many years the government made firefighting a priority. Any and all fires were treated as foes to be fought. Our park-like forests became choked with underbrush.

Now when fires start they burn out entire forests.

Sometimes it’s better to let it burn. It causes less damage in the long run.

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UPDATE:

Howard Dean admitted today that everyone will have to pay more taxes, not just the rich. Let me be clear – I am not some Paultard Libertarian who wants to get rid of the government. It’s just that people need to face facts.

We can have low taxes or high government spending. But not both.

For several decades we have had an unholy alliance in Washington of big spenders and tax cutters.

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TANSTAAFL

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Mark Steyn.

I suppose it’s possible to take this recurring melodrama seriously, but there’s no reason to. The problem facing the United States government is that it spends over a trillion dollars a year that it doesn’t have. If you want to make that number go away, you need either to reduce spending or increase revenue. With the best will in the world, you can’t interpret the election result as a spectacular victory for less spending. Indeed, if nothing else, the unfortunate events of Nov. 6 should have performed the useful task of disabusing us poor conservatives that America is any kind of “center-right nation.” A few months ago, I dined with a (pardon my English) French intellectual who, apropos Mitt Romney’s stump-speech warnings that we were on a one-way ticket to Continental-sized dependency, chortled to me, “Americans love Big Government as much as Europeans. The only difference is that Americans refuse to admit it.”

My Gallic charmer is on to something. According to the most recent (2009) OECD statistics: Government expenditures per person in France, $18,866.00; in the United States, $19,266.00. That’s adjusted for purchasing-power parity, and, yes, no comparison is perfect, but did you ever think the difference between America and the cheese-eating surrender monkeys would come down to quibbling over the fine print? In that sense, the federal debt might be better understood as an American Self-Delusion Index, measuring the ever-widening gap between the national mythology (a republic of limited government and self-reliant citizens) and the reality (a 21st century cradle-to-grave nanny state in which, as the Democrats’ Convention boasted, “government is the only thing we do together.”).

Generally speaking, functioning societies make good-faith efforts to raise what they spend, subject to fluctuations in economic fortune: Government spending in Australia is 33.1 percent of GDP, and tax revenues are 27.1 percent. Likewise, government spending in Norway is 46.4 percent, and revenues are 41 percent – a shortfall but in the ballpark. Government spending in the United States is 42.2 percent, but revenues are 24 percent – the widest spending/taxing gulf in any major economy.

So all the agonizing over our annual trillion-plus deficits overlooks the obvious solution: Given that we’re spending like Norwegians, why don’t we just pay Norwegian tax rates?

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So, given that the ruling party will not permit spending cuts, what should Republicans do? If I were John Boehner, I’d say: “Clearly there’s no mandate for small government in the election results. So, if you milquetoast pantywaist sad-sack excuses for the sorriest bunch of so-called Americans who ever lived want to vote for Swede-sized statism, it’s time to pony up.”

OK, he might want to focus-group it first. But that fundamental dishonesty is the heart of the crisis. You cannot simultaneously enjoy American-sized taxes and European-sized government. One or the other has to go.

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As I have said many times before, there are only three ways to reduce the deficit – raise taxes, cut spending, or a combination of both. Lately we can’t even control the rate at which we are going deeper into debt – it has been accelerating.

On the other hand, read this letter to the editor of Barron’s:

A Warm Thank You

To the Editor:

This 50-something, white, conservative Republican wishes to thank America’s youth for sacrificing their financial futures and standard of living so that boomers, such as my wife and I, can look forward to a long and comfy retirement, which we could easily have afforded on our own. Now we have the youth as our guarantors and providers of a little something extra.

As reported by the national exit poll conducted by Edison Research, Americans aged 18 to 29 voted 60% to 36% for Barack Obama. Prior to Obama’s re-election, I believed that it was morally wrong for my generation to pass a crushing national debt on to the next one.

The debt will top $20 trillion before Obama moves out of the White House, and it will include spiraling retirement-related costs that the administration has shown zero interest in bringing under control, largely driven by baby boomers piling into the Social Security and Medicare systems.

With the president’s electoral crushing of Mitt Romney, my overriding sense of morality and guilt have vanished. Thank you, kids!

Edwin D. Schindler

Woodbury, N.Y.

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And here I used to feel guilty about spending my kids’ inheritance.

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Nobody Wants A Haircut

A little off the top?

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INFLUENCE GAME: Tax Them, Not Us, Groups Say

A big coalition of business groups says there must be give-and-take in the negotiations to avoid the “fiscal cliff” of massive tax increases and spending cuts. But raising tax rates — a White House priority — is out of the question, the group adds.

The homebuilding industry says it won’t tolerate even a nick in the mortgage interest deduction. It doesn’t matter, industry leaders say, if it’s part of a broad, spread-the-pain package designed to tame the soaring debt.

And there’s no ambiguity in the views of the top lobbying arm for retirees.

“AARP to Washington: No cuts to Medicare and Social Security in last-minute budget deal” the group’s Web site declares. AARP nixes the notion of slowing the cost-of-living formula for Social Security recipients, even if it’s part of a big, bipartisan compromise package. And President Barack Obama should drop his idea of raising Medicare’s eligibility age, AARP adds.

So much for the notion of shared sacrifice as Congress and the White House face a Dec. 31 deadline to craft a far-reaching deficit-reduction plan. If they fail, the government tips over the so-called fiscal cliff, at least for a time. Nearly everyone’s taxes will rise, and federal programs will be whacked. Financial markets might quake, and a new recession could begin, economists say.

In Washington, meanwhile, it’s virtually every group for itself, scrambling to protect 100 percent of each tax break and government payout it now enjoys.

America is split down the middle politically, as the last half dozen presidential races have shown. Aside from a few think tanks and civic-minded groups, there’s almost no talk of splitting the pain among interest groups, populations and professions in a manner that seems inevitable if lawmakers are to achieve the trillions of dollars in deficit-reduction both parties call for.

The old adage, “Don’t tax thee, don’t tax me, tax the man behind the tree” was never more in vogue.

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The nation debt currently exceeds $16 TRILLION dollars. (Divide that by 300 million to figure out your share.) We could raise taxes to 90% on every millionaire and billionaire in the country and it wouldn’t even put a dent in the annual deficit.

The problem is bipartisan – neither party is willing to tell the truth to the voters and make the hard choices necessary to fix it. Every candidate for president since John Adams has promised to cut waste, fraud and abuse. Some have actually succeeded, but that’s not enough to fix the mess we’re in.

Bill Clinton is the only president in recent history to run budget surpluses – we actually owed less when he left office than when he went in. Then Bush II and Bush III exploded the national debt.

Nobody wants to get their hair cut. They want somebody else to have to make sacrifices. Obama won reelection by promising to keep the gravy train rolling, so don’t expect fiscal sanity to sweep the nation any time soon.

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Borrowing from our grandchildren

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Mitt Romney said something that really resonated with me but then got lost in the noise caused by Obama’s Epic Debate Fail.

Let’s go back to that first debate:

LEHRER: … Governor Romney, you — you go first because the president went first on segment one. And the question is this, what are the differences between the two of you as to how you would go about tackling the deficit problem in this country?

ROMNEY: Good. I’m glad you raised that, and it’s a — it’s a critical issue. I think it’s not just an economic issue, I think it’s a moral issue. I think it’s, frankly, not moral for my generation to keep spending massively more than we take in, knowing those burdens are going to be passed on to the next generation and they’re going to be paying the interest and the principal all their lives.

And the amount of debt we’re adding, at a trillion a year, is simply not moral . . .

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I never heard a politician put it so bluntly before. He is correct too. It is simply wrong for us to bail ourselves out of trouble by putting our children and grandchildren into debt. I’m not saying that government should never incur debt, I’m saying that running up deficits year after year simply has to stop.

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The Big Dawg tells it like it is

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Politico:

Bill Clinton: Hike taxes across the board

Bill Clinton said Tuesday that President Barack Obama’s goal of hiking taxes on the rich alone is not enough to solve the country’s fiscal woes and suggested that middle class Americans must also eventually contribute more.

Clinton, who discussed a number of economic and political issues at the Peter G. Peterson Foundation’s third annual Fiscal Summit in Washington, D.C., prefaced his comments with the warning that he was giving his personal view and was “not speaking for the White House.”

“This is just me now, I’m not speaking for the White House — I think you could tax me at a 100 percent and you wouldn’t balance the budget,” said Clinton, who has earned tens of millions of dollars since leaving office. “We are all going to have to contribute to this, and if middle class people’s wages were going up again, and we had some growth to the economy, I don’t think they would object to going back to tax rates [from] when I was president” – before the Bush tax cuts.

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I know I’m committing blasphemy but government has to live within it’s means. That is not inconsistent with Keynesian economics – I’m talking about over time, not any one single budget. And yes, I realize that the budget of a sovereign government that prints its own money is not the same as a household budget.

But there are basic principles and one of them is TANSTAAFL – There ain’t no such thing as a free lunch. Sooner or later everyone has to pay their bills. The basic premise of Keynesian economics is deficit spending by the government in slow economic times to stimulate the economy. I agree with that theory.

The problem with the Obama Stimulus was not the idea it was the execution. It was a stimulus that failed to stimulate. The Hicks Rule says that “. . . money poured in at the top of the economic system tended to stay there, whereas money poured in at the bottom tended to rise through all levels of business and to strengthen the economy as a whole.” Guess where Obama poured the money?

The government has always run some deficits, especially in time of war. Running a deficit is simply borrowing money. If you want to pay as you go you either have to make purchases out of your current income or save up your money until you can afford to buy what you want.

Sometimes you can’t wait – you need something now. Sometimes you use credit to cover a temporary shortfall in your income. Other times it simply makes sense to finance your purchase, like when you buy a home. You can pay rent for a few decades while you scrimp and save to buy one, or you can get a loan and move in immediately. That way instead of rent you pay a mortgage and you get the benefit of the home immediately.

The problem with the federal deficit started with Ronnie Raygun. Old Ronnie promised to cut taxes and cut spending too. But he only cut taxes. In the 31 years since Reagan took office the government has run an annual deficit all but 6 years. The exception was during the last 6 years of the Clinton administration.

Guess what Bill did at the beginning of his first term? He raised taxes. Instead of wrecking the economy we enjoyed the longest peacetime period of economic expansion in history. Yes, the rich got richer, but so did the poor. For the first time in decades the gap between rich and poor shrunk.

But for some strange reason the Progs treat Bill like a war criminal (unless he’s campaigning for The Once).

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