Unsustainable Spending (Must Read)

RealClearPolitics ^ | 2/21/2010 | David Warren

[mojito]

A spectre is haunting Europe, and America -- the spectre of Keynesianism finally gone nuts.

What began, not very innocently, as a suggestion that governments should run deficits in bad times, and surpluses in good times, gradually "evolved." In the next phase, governments tried to balance at least the operating account during the best of times. In phase three, governments ran deficits by habit during the good times, but much bigger "stimulus" deficits during the bad times. We are now entering phase four.

[....]

The U.S. national debt now exceeds $12.3 trillion in a $14.2 trillion economy, and the U.S. government is now piling it on with unprecedented new deficits....

Little things, such as the heart of the U.S. space program, are being gutted to make way for metastasizing social security entitlements and debt service payments that will soon swamp the entire federal budget -- thus requiring the elimination of more little things such as the army, navy and air force. At some point the entitlements simply can't be paid, without hyperinflation.

[....]

While an optimist would say that we are witnessing the final demise of the welfare state, and good riddance, a pessimist would observe that everything must go down with it....

For our governments have created vast bureaucracies, employing immense numbers whose livelihoods depend entirely (whether they realize it or not) upon the capacity of profit-earning people to pay constantly increasing taxes.

It should have been grasped, decades ago, that the constant transfer of resources from the productive to the unproductive must eventually tip the ship. And when it does, real people go over the side, who get angry when they are thrown in the water. There are consequences to that anger.

[Screaming_Gerbil]

...While an optimist would say that we are witnessing the final demise of the welfare state, and good riddance, a pessimist would observe that everything must go down with it....

...It should have been grasped, decades ago, that the constant transfer of resources from the productive to the unproductive must eventually tip the ship. And when it does, real people go over the side, who get angry when they are thrown in the water. There are consequences to that anger...

Stockpile and Invest in (as much as possible) getting yourself in the best physical shape possible, needed medications, water purification, food that can be stored, camping and survival supplies, and precious metals such as brass and lead...

[Screaming_Gerbil]

I made your link clickable: How To Fix The Budget Death Spiral Problem

Many people have plenty of good ideas, but the simple truth is that the people in power are not listening and they don't care.

So, I am sorry to report that none of this is going to be easy, or painless.

In fact, it might entail quite a lot of pain (and blood and sweat and tears) in the coming years...

[RFEngineer]

“Return to the 2001 budget level then index for inflation. If you cannot afford it then you don’t get to have it.”

That won’t do it either. Medicare, medicaid, Social Security, federal retirements of all types (even military.....) will not be paid as expected.

The entire concept of a “dignified” retirement will go - unless you can figure out a way to pay for it yourself. Otherwise, you will not get to decide where and how you live - the folks providing you charity will decide for you.

The author gets it. The only thing worse than America’s demise will be everyone else’s. We’ve powered the worlds growth, and when the hill becomes too much for the train, we’ll disconnect the boxcars until we can make it.

[redpoll]

>>>0 will realize his dream: He will destroy the first American republic.<<<

I think you are correct. He and his cohorts probably think, like all good Marxists, that history is a trajectory pointing ultimately to communism, and that nothing stands in the way.

Except that the theory itself is badly flawed.

IMHO: Obama will destroy the republic. There will be chaos. Underneath the chaos, though, there are those of us who have read the Constitution, love liberty, and desire limited government. We may have to start over, and this time take a second look at how the Constitution was subverted by the left, and make efforts to prevent it. I can tell you already that my son, at the age of 11 years, already has in his heart a love for the country, a desire to live as a free man, and the will to defend his liberty. There are others like him in this little village who will stand with him, shovel in hand, to rebuild. And they will not forget who and what caused the mess in the first place.

Not every generation will have at sweet as I did, born in 1956 into the land of the weekend barbecue and a big Chevy in the garage. Not every generation will be a grim struggle, either, but sometimes we get the cards we’re dealt.

I don’t think this is the end of our country. It’s a huge problem that we will have to overcome, and I think we will.

[Arthur Wildfire! March]

Sounds good to me. Instead ...

Cash for Convicts? [Stimulus checks for first degree murderers]
http://www.foxnews.com/search-results/m/26044849/cash-for-convicts.htm

[Stimulus]
How Did John Stossel Get a Free Golf Cart From the Government ...
http://www.foxnews.com/story/0,2933,585395,00.html

Report: Taxes prop up ‘dying’ abortion industry
http://www.wnd.com/index.php?fa=PAGE.view&pageId=125372
[Could also call this ‘loony left’, but that would be too kind.]

[Arthur Wildfire! March]

Ron Paul Discusses The Greece Bailout
http://www.infowars.com/ron-paul-discusses-the-greece-bailout
[Greece is but a warning of what is yet to come?]

Yeah, I think we could do a heck of a lot worse than Ron Paul. I also think that Palin has some good ideas too, like “drill baby drill” and Reaganomics.

Another major idea is the fair tax, the only thing that makes Boortz stand out in a good way.

[Arthur Wildfire! March]

We can pick our RNC targets with care.

How about we start with McCain?

[gruffwolf]

Spot on!

[the invisib1e hand]

they probably thought goldman would help 'em hide the deficits with some off-balance-sheet swaps, like they did with greece.

anyhoo...paging paul volcker.

[the invisib1e hand]

nice thoughts.

We're headed to a soft dictatorship with some hard edges, and it will be global. No timetables -- either sooner than we think or later than we think.

[redpoll]

>>>We’re headed to a soft dictatorship with some hard edges, and it will be global. No timetables — either sooner than we think or later than we think.<<<

Sometimes I’ve thought the same thing - we could go the route of Rome, with the collapse of our Republic being replaced by an Empire - and the Roman Empire was just as you’ve described, as was Mussolini’s attempt to recreate the Empire, fasces and all, in the last century.

In which case, the United States lasts for a thousand years, sometimes lurching between bad despots, and our Constitution will remain in the history books for some future generation to read and think about, in the same way we read Cicero and Aristotle today and think about Periclean democracy. Maybe they’ll need a New World to recreate our experiment - and, fortunately, it looks like the universe is filled with those new worlds.

Then there’s part of me that thinks we’ll succeed in my generation and reestablish the republic.

I guess we’ll see.

[misterrob]

Are you kidding me?

Go back and look at the amount of deficit that had been amassed over the first 7 years of the Bush administration. Clinton’s budget (with a Repub Congress) in 2001 fell into a deficit due to falling revenue from the Tech crash and Bush’s spending and other gimmicks.

And, the laws of math will tell you that you cannot boost your spending, cut taxes and borrow the difference without it biting you in the ass hard later on.

[misterrob]

That won’t do it either. Medicare, medicaid, Social Security, federal retirements of all types (even military.....) will not be paid as expected.

Correct.

[expat_panama]

"...you kidding me?   Go back and look..."

You may have a great starting point there but without hard numbers you don't go anywhere.  Let's stay clear of a cheap pi$$ing contest and stick to facts; here're mine.   Show us which budget office figures you're talking about.

[Apogee]

How about a thread discussing fair tax.
I for one have a lot of unanswered questions, after browsing the website.
Can’t do it tonight, but I would love to have some dialog.
Thanks,

[the invisib1e hand]

Then there’s part of me that thinks we’ll succeed in my generation and reestablish the republic. I guess we’ll see.

Indeed. The biggest problem I have with the current trajectory is the seemingly unchecked aggregation of power (politcal, police, data and capital and * in case I've left out a biggie). People are fighting a thousand fires on a thousand fronts meantime the structure is giving way.

Anything that counteracts this perverse aggregation -- which, incidentally, I think would disturb the founders greatly, and should disturb everyone as greatly -- would be a good thing for the cause of liberty.

FWIW, I think things tend to climax in some disaster and then life goes on. But there may come conditions for which the climax will be so overwhelming to mankind (i.e. the interconnected world) that God Himself has to step in and then it's a whole new game with new rules.

The Divine "reset," if you will.

[misterrob]

http://www.heritage.org/research/features/budgetchartbook/federal-spending-growing-faster-than-federal-revenue.aspx

Spending grew tremendously during Bush tenure. In 8 years time spending went up a whopping 50%. Spending cannot increase on that scale while revenues are falling. At some point you are blowing a bubble and when it blows up God help us all.

[expat_panama]

You're absolutely right saying that spending "...grew tremendously during Bush tenure...", and that was good because the economy grew more.  

It's the old problem of surges in both incomes and expenses, that doubling expenses is OK when incomes triple, but doubling income is no good when expenses triple.  That's why federal budgets make more sense considered as a percent GDP.  Your link showed that Heritage knew this when they when brought up national defense.   Like I said back in post 18 that the 2001 budget had gutted defense and how most of the 'tremendous growth' in Bush's spending was defense.

National Defense Spending as a Percentage of GDP

Funny how Heritage first bad mouths Republicans and then switches to %GDP.  Heritage usually does a good job telling us what the US budget looks like, but it's really better to see things directly instead of letting others tell us what we're supposed to see.

[misterrob]

Deficits as a % of GDP is utter nonsense. You are still debting and in the end you have to pay it back with interest. The longer you debt the more interest increases as a share of the budget. That means more tax money being deployed to support what you have already consumed vs leaving it in the hands of people to utilize as they see fit.

And, it doesn’t matter what the spending is for. Tax Revenues must > Total Spending.

People want to talk about how important it is to have a strong military, take care of our seniors’ health in the golden years and make good on the promises of social security.

Where is the god damned money going to come from to pay for all of this?

[expat_panama]

Deficits as a % of GDP is utter nonsense

We're kind of stuck now because I'm not sure we can get together on say, how a $10 million debt during the Washington administration meant possible default while Reagan led the nation to prosperity with $5trillion in debt.

Been fun though, and thanks for the chat!