Posted on 02/04/2011 9:18:10 PM PST by Captain Kirk
Tea party-backed Sen. Rand Paul (R-Ky.) isn’t sure that congressional Republicans have the guts to make the big budget cuts they’ve promised and, he said, members of the movement are becoming frustrated.
“There’s a disconnect between Republicans who want a balanced budget but aren’t maybe yet brave enough to talk about the cuts to come,” the freshman senator said in an interview with ABC News, responding to the spending plan released Thursday by the House Budget Committee chairman, Rep. Paul Ryan (R-Wis.), which would cut non-defense discretionary spending by $58 billion for the rest of fiscal 2011.
“I go to a tea party, and you know what they say to me? ‘It’s not enough. It’s not enough. Where’s the other trillion you need?’” Paul said. He’s offered his own budget plan that would cut spending by $500 billion this year, including an end to all foreign aid and a dramatic reduction to the U.S. Department of Education’s budget.
Paul, son of libertarian Rep. Ron Paul (R-Texas), said he is a “true believer,” determined to stand by his tea party values and not get bogged down falling in line with the GOP.
“There are always problems in our nation’s capital that are more important than party affiliation, and I will always believe that,” Paul said. “It’s not necessarily tea party versus Republican Party, but I would say that if you ask me what’s more important — tackling our nation’s deficit, our nation’s debt problems or being a Republican — I would say tackling the debt.”
Paul also defended his calls to end aid to Israel, saying they’re just part of his bigger efforts at fiscal responsibility. “I’m not singling out Israel. I support Israel. I want to be known as a friend of Israel, but
(Excerpt) Read more at dyn.politico.com ...
Why would we take from our allies and keep giving to those that want us DEAD?Is the world up side down because every where I go it seems these morons are making some of the biggest, idiotic decisions ever..
For anyone who’s thought it through, cutting off US aid to Israel would put them at real risk of being overrun by their many enemies. Israel has extraordinarily large defense needs for a nation of their size. I hope the US continues helping with those needs, and I hate to see Rand Paul sounding like a nut so early in his senatorial career.
That’s one foreign aid program we should continue above all others, unless someone wants to see that nation overrun.
thanks - you provided my last laugh of the day!
Well, here is what bothers me deeply about the direction Israel herself is heading:
The Lebanon War
At one time the IDf and IAF would have made short work of the terrorists, this past time they did not show the resolve they had previously, they hung back and tried to use artillery and air strikes and it just did not work.
That was a wake up call for me, have the Israelis lost that sense of what it takes just to survive in that region?
Simple solution to the Education budget - ship all the illegals and anchor kids back to wherever they came from (not that that will ever happen). We still need to protect our foreign interests so instead of an all out end to foreign aid (again, will never happen) buta drastic cut to foreign aid.
Laurence Kotlikoff
Aug. 11 (Bloomberg) — Laurence Kotlikoff, an economics professor at Boston University, talks about the state of the U.S. economy. Kotlikoff speaks with Erik Schatzker on Bloomberg Television’s InsideTrack.” (Source: Bloomberg)
Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”
The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.
Double Our Taxes
To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.
Such a tax hike would leave the U.S. running a surplus equal to 5 percent of GDP this year, rather than a 9 percent deficit. So the IMF is really saying the U.S. needs to run a huge surplus now and for many years to come to pay for the spending that is scheduled. It’s also saying the longer the country waits to make tough fiscal adjustments, the more painful they will be.
Is the IMF bonkers?
No. It has done its homework. So has the Congressional Budget Office whose Long-Term Budget Outlook, released in June, shows an even larger problem.
‘Unofficial’ Liabilities
Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.
For example, our Social Security FICA contributions are called taxes and our future Social Security benefits are called transfer payments. The government could equally well have labeled our contributions “loans” and called our future benefits “repayment of these loans less an old age tax,” with the old age tax making up for any difference between the benefits promised and principal plus interest on the contributions.
The fiscal gap isn’t affected by fiscal labeling. It’s the only theoretically correct measure of our long-run fiscal condition because it considers all spending, no matter how labeled, and incorporates long-term and short-term policy.
$4 Trillion Bill
How can the fiscal gap be so enormous?
Simple. We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in today’s dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.
This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.
Herb Stein, chairman of the Council of Economic Advisers under U.S. President Richard Nixon, coined an oft-repeated phrase: “Something that can’t go on, will stop.” True enough. Uncle Sam’s Ponzi scheme will stop. But it will stop too late.
And it will stop in a very nasty manner. The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.
Worse Than Greece
Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.
Some doctrinaire Keynesian economists would say any stimulus over the next few years won’t affect our ability to deal with deficits in the long run.
This is wrong as a simple matter of arithmetic. The fiscal gap is the government’s credit-card bill and each year’s 14 percent of GDP is the interest on that bill. If it doesn’t pay this year’s interest, it will be added to the balance.
Demand-siders say forgoing this year’s 14 percent fiscal tightening, and spending even more, will pay for itself, in present value, by expanding the economy and tax revenue.
My reaction? Get real, or go hang out with equally deluded supply-siders. Our country is broke and can no longer afford no- pain, all-gain “solutions.”
(Laurence J. Kotlikoff is a professor of economics at Boston University and author of “Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking.” The opinions expressed are his own.)
Jorge was President back then, Like HUSSEIN is President now.
They rely on our aid and assistance and are reluctant to be overly aggressive if the Idiot-in-Charge in the Oval Office has a love affair with people like the Saudis.
They are stuck between a rock and a hard place with Obama as they were with his predecessor.
>To be fair he would cut ALL foreign aid.
And, you know, I really don’t have a problem with that stance.
Those who raise the issue of Israel being God’s people should consider what Paul said wrote:
1 Timothy 5:8 — But if any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel.
If this concept can be extended to a government whose “own house” would be its own Citizens, then they cannot legitimately argue that we-as-a-country should give monies {which we really don’t have} to Israel or anyone else.
Well ZULU, it wasn’t GWB who avoided close contact with the Terrs, that was the PM and the Generals, in fact iirc they sacked a General over the performance in that conflict.
The IDF did not wish to take the hit in terms of deaths and serious injuries among their soldiers, which was completely out of character for the IDF as they would use stealth when needed they also used brass gonads and aggression in past wars.
NOT cheerleading for fine young men and women in the IDF to suffer casualties, more pointing out that such sacrifices are what is required to survive as a State in that region.
I’m reminded of the change in the Romans tactics as the Empire aged, when they were successful they used short swords as they closed with enemies and defeated them, as the Empire aged, swords grew longer so they could fight at a distance.
YMMV
I’d rather give the money to Israel than Illinois.
Tea Party Caucus or no — Rand has lost credibility with this. I’m still waiting for my Senator, Jim Demint, to rebuke his fellow Caucus member for this stupidity.
The Scriptural case can also be made that Israel was rejected when they relied on foreigners instead of God.
However, there is also the reality that few, if any, nations would be willing to sell/grant advanced military tech to Israel and we also have Treaties with them that cannot simply be tossed overboard because they are inconvenient at the moment.
>I’d rather give the money to Israel than Illinois.
If the FedGov bails out States, there is a real chance for a civil war.
The argument “you have representatives” was given to the colonists [referring to the house of commons] as the excuse/invalidation of their claims of being taxed w/o representation; likewise, if the FedGov gives monies collected from other states to another state then the residents of those other states have NO say in how that money is handled.
We are close to “interesting times,” I think.
>One country shares are values and will not survive without our help.
Two nitpicks:
1 — ‘Our’ not ‘are.’
2 — That assumes that their God will not help them; as a Christian, and having read Revelation, I can’t see that as happening on the permanent basis that “kill all Jews” would result in (that is to say, God will ensure a remnant survives).
We also give billions to China. Why?
End foreign aid.
I’m not saying we should utterly ignore them; just that the priority of the US government can ONLY rightly be US Citizens.
{Look at the disparity between treatment of citizens and illegal-aliens and you tell me that the US government has ANY priority on the Citizen.}
Oy Vey......
The aid we send Jihadis if far greater than what we send Israel, especially since the jihadis leverage cheap, imprecise weapons like suicide belts and car bombs. Israel must use surgical precision for counter attacks.
Israel would come out ahead if we cut off all foreign aid.
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