Posted on 06/05/2013 3:06:51 AM PDT by Kaslin
Europe's struggles prove that "austerity" fails!
So say the Big Spenders.
With a condescending sigh, they explain that Europe made deep cuts in government spending, and the result was today's high unemployment. "With erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far," writes Paul Krugman in The New York Times.
One problem with this conclusion: European governments didn't cut! If workers pick through garbage, cuts can't be a reason, since they didn't happen.
That doesn't stop leftists from complaining about cuts or stop Europeans from protesting announced austerity plans. But if austerity means spending less, that hasn't happened.
Some European countries tried to reduce deficits by raising taxes. England slapped a 25 percent tax increase on the wealthy, but it didn't bring in the revenues hoped for. Rich people move their assets elsewhere, or just stop working as much.
If politicians honestly want to boost their nation's economies, they should look to what happened in countries that bounced back from economic slumps.
Iceland was hit by bank collapses -- but government ignored street protests and cut real spending. Iceland's budget deficit fell from 13 percent of gross domestic product to 3. Iceland's economy is now growing.
Canada slashed spending 20 years ago and now outranks the U.S. on many economic indicators.
Around the same time, Japan went the other way, investing heavily in the public sector in an attempt to jump-start its economy, much as the U.S. did with "stimulus" under President Obama. The result? Japan's economy stagnated.
The left now claims Japan didn't stimulate "enough."
In the U.S., politicians imply spending limits would be "cruel" because vital programs are "cut to the bone." But we are nowhere near bone.
Consider this family budget:
Annual Income ---- $24,500
Annual Spending ---- $35,370
New Credit Card Debt ---- $10,870
Existing Debt ---- $167,600
When I show that to people, they laugh and say the family is "irresponsible." They are dismayed when I point out that those are really America's budget numbers, with eight zeros removed:
Revenue ---- $2,450,000,000,000
Spending ---- $3,537,000,000,000
Deficit ---- $1,087,000,000,000
Debt ---- $16,760,000,000,000
Then people say: "That's terrible! We have to balance the budget."
Actually, we don't need to "balance" it. We just need to slow spending growth to about 2 percent a year, so the economy can gain on our debt. But politicians won't do even that.
I understand why. I ask people who say they are horrified by America's debt, "What would you cut?" Most have no clue. They just stare. Some say things like, "Don't cut education!"
C'mon. Federal bureaucrats spend $3.7 trillion! But most people can't think of anything to cut?
When businesses face budget shortfalls, they can't just give speeches about how much they care about fiscal responsibility -- at least not for long. They must make real cuts. When they do, they often prosper. Years back, IBM and GE each laid off 100,000 workers. People were furious. But thanks to those cuts, the companies survived.
If the politicians don't know what to cut, they should just accept Sen. Rand Paul's proposed budget. Among other things, he would cut four Cabinet-level agencies: Commerce, Housing and Urban Development, Energy and Education. Why not? We don't need a Commerce Department. Commerce just ... happens. Education is funded by the states. The Energy Department gives money to politicians' cronies.
I'd go further than Paul. Why do we need an Agriculture Department? Agriculture is done by farmers, not bureaucrats. Why do we need a Labor Department? And so on. All those things are better handled by a free market. I wish we had a real free market in America.
Government recently revised its dire forecasts about America's coming bankruptcy. The numbers are a little better than once thought.
But make no mistake: As people my age retire and demand Medicare, America will eventually go broke.
The first step toward a solution is just being honest about the deep hole we're in -- giving up on the lie that governments elsewhere failed with "austere" budgets. They haven't.
In 2010, Barack Obama called for fixing the public education system by giving us the Elementary and Secondary Education Act and “Race to the Top,”
which he said would fix the education system already fixed by the 2001 GW Bush and Ted Kennedy legislation called “No Child Left Behind,”
which was supposed to fix a system supposedly already fixed by a 1994 piece of federal legislation called “Goals 2000,”
which was supposed to fix a system already fixed by “America 2000,”
which was a 1991 response during the Bush administration to a 1983 federal report on education called “A Nation at Risk,
which was published a full four years after Jimmy Carter first fixed the nation’s public school system by establishing a cabinet-level Department of Education in 1979.
Translation: It still isn’t fixed and never will
I’m not sure I agree with cutting the energy department.
However, there are multiple federal agencies doing the same or similar jobs that could easily be combined and streamlined.
Every state has its own EPA and agriculture agencies. Could the federal level agencies scale back their operations so as not to duplicate functions being performed at the state level? Maybe the EPA could be scaled back to just investigating environmental problems—something they do very well—while leaving air quality standards to the states, who already have them?
As I see furloughs and cuts in the federal government, I begin to worry about something else. At what point does the entitlement spending consume so much of the budget that nothing is left for the government to fulfill its constitutional obligations? Is the politicians’ ability to buy millions of votes by keeping millions of people dependent on handouts really more valuable than making sure we have a safe and wholesome food supply?
cut across the board by 3% everything problem solved
No. At least not for long. The purpose of an agency is to grow, much like cancer now that I think of it.
At what point does the entitlement spending consume so much of the budget that nothing is left for the government to fulfill its constitutional obligations?
A few years ago. That's why we're borrowing so much now.
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