Speaking from the Rose Garden last week after Senate approval of the bill to raise the debt ceiling, President Obama said about the federal deficit,
And since you can’t close the deficit with just spending cuts, we’ll need a balanced approach where everything is on the table. Yes, that means making some adjustments to protect health-care programs like Medicare so they’re there for future generations. It also means reforming our tax code so that the wealthiest Americans and biggest corporations pay their fair share. And it means getting rid of taxpayer subsidies to oil and gas companies, and tax loopholes that help billionaires pay a lower tax rate than teachers and nurses.
Taking these statements in reverse order. First, tax credits are not subsidies. Second, both corporations and the rich are paying their share of taxes. Third, Medicare is one of the causes of our current deficits and debt. And fourth, yes we can.
Yes we can, Mr. President, yes we can. We can close the deficit with just spending cuts. Congressman Ron Paul recently explained how in language so simple that even a politician who never worked in anything but a government job could understand:
Our revenues currently stand at approximately $2.2 trillion a year and are likely to remain stagnant as the recession continues. Our outlays are $3.7 trillion and projected to grow every year. Yet we only have to go back to 2004 for federal outlays of $2.2 trillion, and the government was far from small that year. If we simply returned to that year’s spending levels, which would hardly be austere, we would have a balanced budget right now.
We are not even talking about paying down the national debt and eliminating unconstitutional entitlement programs — just cutting spending to the point where outlays don’t exceed revenues.
True, the spending of hundreds of billions of dollars by the government every year on Social Security, Medicare, Medicaid, SCHIP, unemployment benefits, and welfare (housing and energy assistance, food stamps, TANF, SSI, EITC) is illegitimate and should be cut completely. The case could be made that more than 90 percent of what the government spends money on is unconstitutional and illegitimate. But that is another topic for another article.
At issue is simply closing the deficit with just spending cuts. The deficit could be closed now, not in ten years, five years, or next year, but now, if Congress would just quit spending money instead of raising the limit on the government’s credit card by $2.4 trillion.
The president is just plain wrong. The government certainly can close the deficit with just spending cuts.
NASA just launched a Juno spacecraft on a five-year trek to Jupiter. The cost? More than a billion dollars. The craft will make thirty-three orbits of Jupiter over its operational life of a year, then be deliberately crashed into the planet.
It costs about $1 million per soldier per year to keep a U.S. soldier in Afghanistan. There are about 100,000 troops in Afghanistan. Do the math.
The president’s military adventure in Libya has already cost, according to the secretary of defense, more than $750 million.
Liberals should be outraged about this spending. Millions of Americans are unemployed, foreclosures of American homes are at an all-time high, record numbers of Americans are on food stamps, American infrastructure is crumbling — and the government is spending money to explore Jupiter, fight a senseless war in one county, and unnecessarily intervene militarily in another.
Not enough savings to close the deficit? Then, from the Heritage Foundation’s special report, “Federal Spending by the Numbers, 2010” I note the following:
- Washington spends $25 billion annually maintaining unused or vacant federal properties.
- The National Institutes of Health spends $1.3 million per month to rent a lab that it cannot use.
- The Conservation Reserve program pays farmers $2 billion annually not to farm their land.
Of course you can close the deficit with just spending cuts. You just have to want to do it. President Obama and the Democrats just don’t want to do it.
But even worse than Obama and the Democrats are the Republicans. How can I make such a statement, you ask?
The socialist and statist policies of the Democratic Party are well-known. Democrats openly and consistently favor a larger and more-intrusive government, higher taxes and spending, collectivism, and more redistribution of wealth.
Republicans may claim to be for free trade, free markets, free enterprise, smaller and less-intrusive government, and fiscal responsibility, but they show by their actions that they are merely using libertarian rhetoric to get elected. The only limited government Republicans want is a government limited to one controlled by Republicans. As Lew Rockwell of the Ludwig von Mises Institute has well said about the Republicans,
Economic liberty is the utopia that they keep promising to bring us, pending the higher priority of blowing up foreign peoples, jailing political dissidents, crushing the left wing on campus, and routing the Democrats. Once all of this is done, they say, then they will get to the instituting of a free-market economic system. Of course, that day never arrives, and it is not supposed to. Capitalism serves the Republicans the way Communism served Stalin: a symbolic distraction to keep you hoping, voting, and coughing up money.
For years Republicans talked about abolishing the Department of Education and railed against socialized medicine. And what did they do once they gained control of the House, the Senate, and the White House under George W. Bush? They increased federal spending on and control over education and greatly expanded Medicare. They also turned a budget surplus into a trillion-dollar deficit and doubled the national debt.
After the Republicans regained control of the House in the 2010 midterm election, Wolf Blitzer of CNN asked House Minority Whip Eric Cantor to name one specific program that the Republicans in the House were going to cut, now that they would have a majority. Cantor couldn’t name one. Blitzer then asked him the question a second time. Again, Cantor couldn’t name one. Not one.
Paul Ryan’s FY 2012 budget, H.Con.Res.34, which passed the House in April with only four Republicans voting against it, had a built-in trillion-dollar deficit. It was killed by the Senate. Total spending authorized in the bill wasn’t that much less than that proposed by the president in his budget.
The Republican congressman Connie Mack IV has proposed a plan, H.R.1848, to balance the federal budget by 2019 by cutting spending by 1 percent a year for six years and then setting an overall spending cap of 18 percent of GDP. What a bold plan: cutting 1 percent out of an extremely bloated budget.
And then there is the House Republican “cut, cap, and balance” plan, H.R.2560, which passed the House in July with only nine Republicans voting against it. It was tabled in the Senate. This plan would have cut spending next year by the sum of $111 billion, capped future spending to some level of GDP, and required that a balanced-budget amendment be submitted to the states for ratification. The $111 billion spending cut for a year sounds good until you realize that the national debt increases by more than $4 billion a day. No wonder the bill included a debt ceiling increase of $2.4 trillion.
The reason that Republicans can’t cut spending, cut it drastically, and cut it now is that philosophically there is no difference between the Left and Right, between Democrats and Republicans, and between liberals and conservatives. They may argue about the details of income redistribution, the level of income redistribution, the source of income redistribution, and the recipients of income redistribution, but they are all more than willing to continue to fund the welfare/warfare state by redistributing income from the productive in society to the nonproductive and to the state’s privileged contractors.
The deficit can be closed with just spending cuts. Even that, of course, is not enough. A balanced $3 trillion budget is still an abomination to liberty and limited government.
