Free Markets, Free People

Daily Archives: April 9, 2011

Fiscal reality–one step forward, two steps back

The averted government shutdown in which the budget for the remainder of 2011 has apparently been agreed too with $38.5 billion in spending cuts is better than one with no spending cuts, obviously. 

But we should keep the cuts made in context, because what is happening right now, beside the caterwauling by the left about grandma and cat food, is the ship of state is still filling with the water of increased debt faster than we can bail.  The context?

The federal debt increased $54.1 billion in the eight days preceding the deal made by President Barack Obama, Senate Majority Leader Harry Reid (D.-Nev.) and House Speaker John Boehner (R.-Ohio) to cut $38.5 billion in federal spending for the remainder of fiscal year 2011, which runs through September.

Yes, praise indeed for persevering and getting some manner of cut out of this deal with Democrats fighting the Republicans every step of the way.  Lord knows if the Democrats had actually passed a budget last year we wouldn’t even see the cuts they got.  And keep in mind that we’re talking about the rest of the year’s discretionary spending for the most part – entitlements can’t be cut until and unless the laws controlling them are addressed and that won’t be until later on in this year. 

Also remember, what you’re witnessing here is a mere skirmish.  The “war” comes when the president’s budget meets the Republican House’s budget (with the Senate thrown in to completely confuse the situation).  The real war takes place with the 2012 budget. 

So for those hollering that the GOP should have gotten more, I’m not so sure that’s a useful argument at the moment.  The fact that they’re in a mode to cut and have done so in this rump year “budget” where they can only have an effect on part of the spending is laudable.  Personally I think it is more important to make that point than to worry about how much we’d prefer they cut.  We need to keep them in that cutting mode and get the American people used to it (and on-board) as well.

The GOP also needs to get their message out there in a way which helps the American people understand the critical nature of cutting spending to our future long term solvency as well as getting government back under control and out of areas in which it doesn’t belong.  Believe it or not, numbers like the above help make that case.  Instead of using them as a downer, they help illustrate the problem and which side abets that problem.

Numbers like those above are startling for most –  their usefulness can’t be overstated. It puts an exclamation point on the argument Republicans have been trying to make.  As hard as the GOP had to work to wring that $38.5 billion out of the spending spree this administration is on, it still managed to spend more than was saved and add to the debt.

There’s a campaign advert in there somewhere.



In Egypt, “Arab Spring” begins to turn into winter

For those of us actually somewhat tuned into the region, the dynamics of the power structure there, grounded in reality and, well, basic human nature, what is now happening in Egypt comes as no surprise:

Demonstrators burned cars and barricaded themselves with barbed wire inside a central Cairo square demanding the resignation of the military’s head after troops violently dispersed an overnight protest killing one and injuring 71.

Hundreds of soldiers beat protesters with clubs and fired into the air in the pre-dawn raid on Cairo’s central Tahrir Square in a sign of the rising tensions between Egypt’s ruling military and protesters.

Armed with sticks and other makeshift weapons, the protesters vowed not to leave until the defense minister, the titular head of state, has resigned.

Meet the new boss, same as the old boss.  And the boss is now starting to exert control.

The troops dragged an unknown number of protesters away, throwing them into police trucks, eyewitnesses said.

The military issued a statement afterward blaming "outlaws" for rioting and violating the country’s 2 a.m. to 5 a.m. curfew, and asserted that no one was harmed or arrested.

"The armed forces stress that they will not tolerate any acts of rioting or any act that harms the interest of the country and the people," it said.

Sounds pretty, oh I don’t know, 2010 in Egypt to me.  The point, of course, is the military, who has essentially been in control of Egypt for the past 60 years was willing to trade Hosni Mubarak to retain control over the government.  It took a neutral stance during the riots, threw Mubarak under the bus, put itself in charge of the “interim government” and now is exerting control.

“Arab spring” has sprung and it is now turning into the usual totalitarian winter but this time with elections!  Well, at least one.



Quote of the Day–how screwed up are we edition

Actually we have a pair of quotes of the day.  First from Roger Pilon who is the VP for legal affairs at Cato”

Our tax system sucks the substance and spirit of entrepreneurs and workers alike, filters that substance through Washington, then sends it back through countless federal programs that instruct us in minute detail about how to use the government’s beneficence. Manufacturing, housing, education, health care, transportation, energy, recreation — is there anything today over which the federal government does not have control? A federal judge held recently that Congress can regulate the "mental act" of deciding not to buy health insurance.

Steel on target.  Key word?  “Control”.

Our next quote in this edition comes from Mark Steyn about our Sneerer in Chief who addressed the concerns of an American had about gas prices by telling him maybe he ought to get rid of his gas hog:

America, 2011: A man gets driven in a motorcade to sneer at a man who has to drive himself to work. A guy who has never generated a dime of wealth, never had to make payroll, never worked at any job other than his own tireless self-promotion literally cannot comprehend that out there beyond the far fringes of the motorcade outriders are people who drive a long distance to jobs whose economic viability is greatly diminished when getting there costs twice as much as the buck-eighty-per-gallon it cost back at the dawn of the Hopeychangey Era.

Bingo. Definitely  campaign advertising fodder.  A “let them eat cake” moment. The man defines “don’t care” and “out of touch”. One assumes he considers statements like that to be "leadership".



Federal government: It is not a revenue problem, it is a spending problem

Nick Gillespie and Reason do a good job of dispelling the myth that our problem is a revenue problem, the nonsense that always prompts the “tax the rich” mantra.

Taxes aren’t the problem, never have been – it is a spending problem.  We’re spending more than we take in.  Cut that difference and you cut the deficit to nothing.  Cut it enough and you begin to work down the debt.


Taxing the rich at a higher rate might make the class warriors on the left feel good, but it does nothing to address the real problem.

Spending addiction – something Michael alludes too below.  What we have are the addicted trying to handle their own addiction, and essentially their solution has nothing to do with the problem.

Big surprise.