Now that GOP controls Congress, hold onto your wallet, Libertarians say

lp.org ^ | 11/7/2002 | lp.org staff

[winner45]

November 7, 2002

Now that GOP controls Congress, hold onto your wallet, Libertarians say

WASHINGTON, DC -- Now that Republicans control both houses of Congress and the presidency, Americans should brace themselves for an era of skyrocketing federal spending and ballooning budget deficits, Libertarians say.

“Our prediction is that with a GOP Congress egging him on, George Bush is going to make Bill Clinton look like a fiscal conservative,” said George Getz, Libertarian Party communications director.

“Even when Republicans controlled only one house of Congress, Bush managed to sign the first $2 trillion-plus federal budget, throw more money at Clinton-era programs and propel the deficit toward outer space. With complete congressional control, expect Bush to go on an absolute spending rampage.”

As GOP officials celebrate their resounding victory in Tuesday’s elections, in which Republicans expanded their House majority and reclaimed control of the Senate, the White House is reportedly planning to “roll out an ambitious legislative agenda.”

Unfortunately for taxpayers, Libertarians say, that agenda won’t include a reduction in government.

“Bush’s $2 trillion budget is already scheduled to expand by 6 percent this year,” Getz said. “Moreover, social welfare programs under Bush have grown by $96 billion in just two years, versus $51 billion under six years of Clinton, according to economist Stephen Moore of the Club for Growth.

“Bush’s budget also includes a number of Clinton-era programs, such as Americorps and the ‘Gore tax’ on telephone service – not to mention more money for socialized medicine, government-run schools and farm welfare.”

Now that Bush has more members of his own party in Congress, Americans should expect the spending binge to continue, Getz said.

“Since no newly elected Republicans have pledged to eliminate any Bush programs, it’s clear that two more years of George Bush equals two more years of bloated federal spending,” he said.

Another predictable result of a Republican-controlled Congress, Libertarians say: higher budget deficits.

According to figures from the Office of Management and Budget, Bush is now running a $106 billion deficit, Getz pointed out.

“Since every government program has to be paid for somehow, the president has simply chosen deficit spending over outright tax increases,” he said. “In either case, taxpayers get stuck with the bill.”

That’s why the only thing that happened on Tuesday is that a few tax-and-spend Democrats were replaced by borrow-and-spend Republicans.

“Now that Republicans have won control over the federal government,” Getz said, “it’s time for Americans to start scrambling to regain control over their own wallets.”

[Scuttlebutt]

Even though I lean heavily in the small "l" direction, I can't help but think of the LP as strictly an out-of-touch political farce. When and if the LP ever sh*tcans Harry Browne and quits advocating the ridiculous stance of open borders and restricted National Defense, I will seriously consider switching my party affiliation.

As to the content of the article, I seriously doubt that most of the posters on this forum would honestly disagree that there is going to be an increase in spending by the federal government. The only argument that will ensue is that the increase will now be less than what we would see under a Democrat controlled congress. I tend to agree with that.

[coloradan]

You asked what will keep it from sinking to insignificance. When nearly half the population of a very liberal(/socialist/communist) state supports a proposal that both major parties oppose, the sinking to insignificance would appear to be prevented, no?

[antidisestablishment]

Now I am not a math major and I never took statistics, but it appears to me that two trends are quite noticeable on your graph:

1. The trend in each sector is upwards after 2000.
2. The trend in Social programs has been upward and larger.

I think we need to get a larger picture to see the real trends. After all every statistician will tell you that restricting the domain results in a distorted picture:

Quite a big difference and this doesn't even address the fact that using GDP as a measure really distorts the actual growth rate of government and the cost of compliance. Plus the CBO uses accounting procedures that make Enron accountants look like kindergardeners. If you or I fixed our books like the Feds, we would be in jail--no questions asked!

[general_re]

Now I am not a math major and I never took statistics, but it appears to me that two trends are quite noticeable on your graph:

1. The trend in each sector is upwards after 2000.
2. The trend in Social programs has been upward and larger.

That's not actually a very good graph to extrapolate from - CBO projections actually have federal outlays as a percentage of GDP declining until about 2020, and after that is when the pain of transfer payments and entitlements starts introducing itself into the national discourse.

As for #2, what can I say? You're right, of course.

Quite a big difference and this doesn't even address the fact that using GDP as a measure really distorts the actual growth rate of government and the cost of compliance.

How so? It essentially measures the goverment by comparing it to the economy as a whole, which is useful because it allows us a broad historical comparison of how big the government is. We can see that government is bigger than it was in 1925, but by comparing the outlays as a percentage of GDP, we can get a good sense of how much larger it is now than it was then.

It was 3% of GDP in 1925, BTW ;)

Plus the CBO uses accounting procedures that make Enron accountants look like kindergardeners.

Their accounting procedures aren't so bad, IMO, but I will readily admit that they play some pretty stupid games in formulating their projections...

[antidisestablishment]

That's not actually a very good graph to extrapolate from - CBO projections

Extrapolation is the entire problem with the feds. Ever since Carter, they treat extrapolation as reality. The only way they can ever get it to "balance" is by playing more games—keeping half the entitlements off the books, deficit spending or printing more money. (Did you hear X42s' treasurer comment on how they feds really make money on coins because it only cost pennies to coin the new quarters? Sheesh--what a maroon!)

How so? It essentially measures the goverment by comparing it to the economy as a whole, which is useful because it allows us a broad historical comparison of how big the government is.

If the definitions remained constant, it would be a good measure. However, both GDP and government spending have different historical measures, some interpolated and some extrapolated.

Using national icome presents a greatly different picture:

Why use National Income?:

Some of the reasons to require use of national income instead of GDP data are the fact GDP overstates economy size by such items as: GDP includes double counting - such as indirect business taxes & transfer payments. Further, GDP treats the consumption of fixed capital as something earned instead of consumed; the Commerce adjustments were used for capital consumption. Additionally, National Income takes into account net factor income payments to and from the rest of the world. [there is an increasing spread between National Income and GDP plots (from a 3 point difference in the 1950s to 10 points today), which is due to net factor income from rest of world going from positive to negative against America, and an increased ratio of fixed capital consumption].

Government growth must be stopped if we want our children to enjoy the same liberties we now squander.

[truth_seeker]

"...to point out that Browne's and the LP positions on 9/11 come from the notion that if the USA was configured in accordance with the LP paradigm then 9/11 would not have happened...

And if the USA was configured in accordance with the Communist Party or the Islamist paradigms, then 9/11 would not have happened...

My well spoken friend, the big, nasty world is as it is.
It is the task of realists to deal with reality, as it is presented.

Alternative "paradigms" make for sometimes interesting intellectual discussions, but not much more.

Another poster informs me that the LP distances itself, from Browne's remarks. Or visa versa. That is oh so easy to do, for the LP is for the most part a debating society.

The candidates of the major political parties don't have the luxury, of disavowing the statements of their presidential candidates.

Finally, I reject your entire suggestion that if the US simply followed a different path, that would be sufficient causation, for the muslim world to behave morally, and rationally, and in their own best interest.

To get into drug legalization, or wide open borders, in the aftermath of 9/11 is simply to far off topic.

Part of the maturation process is acceptance of reality. Libertarians write books, make speeches, the sum of which have failed to yet elect anybody to national power. There is a reason for this outcome.

I interest myself with world and national politics, the use of diplomacy, economic might, and as a last resort, military power and war.

[CaptIsaacDavis]

AgitProp from the LP we don't need. Nevertheless, they are close to the real point...


What some Rs don't get is that debt spending, easy money policies (boy do they love to chear "Mr. Bad Timing" Greenspan), grants and loan subsidies, even the basic structure of the Federal Reserve system and Fannie Mae (especially) are not truly FREE MARKET government solutions. They are statist, with a "capitalist face." Yes, they are definitely LESS destructive than socialist and LIBERAL DEM alternatives, but what animates me to write this is that so many Federalist Republicans have trouble grasping that every debt binge, credit bubble, "wage insurance" program (backed by President Bush to get the trade deal), year not dismantling in its entirety the social security program (even in the managed account form being proposed!), or home ownership grant/subsidy plan (also backed by the President as a key plank of his "compassionate" theme), are DESTRUCTIVE of prosperity and the stability of the Republic over the long run. They rationalize that they are the "good" guys because they aren't going to send the economy into a nose-dive like every two-bit socialist regime in the world, or into a period of "malaise" like Pres. Carter or any social democratic state (as in Europe). But neither are they going to get America back to the stunningly high -- by today's anemic standards -- growth and capital formation rates prior to WW1 and the creation of the modern Federal Reserve system. As ideological conservatives, the current playing at the fringes of the status quo is NOT ENOUGH.

Buchanan pointed out that AMERICA IS DYING, even as Republicans make short-term gains (you know this is short-lived, given immigration rates and demographics -- the Republicans need to GET RADICAL QUICK, WHILE IT LASTS). Many over 40 just don't "get it," because they are the primary beneficiaries of the Federalist Republican lobby. Most conservatives under 40 know exactly what I'm talking about. The economic environment -- created by Republicans and DEMs, has coerced Xers and Ys into delaying household formation and reduced birth rates sharply as a result -- those are MILLIONS OF potential conservatives and Republicans who will never see the dawn of liberty.

How? Corporate subsidies went to inflating earnings, stock prices, and income inflation (the older the worker the higher the inflation rate). Easy money, both at the Fed and Fannie Mae, created a HISTORICALLY UNIQUE economic environment favorable for capital accumulation by Baby Boomers and older folks who already had their degrees, homes, and stock portfolios. However, the massive credit bubble and easy money along with deficit spending and rising taxes resulted in pricing, rent, and real interest rates distortions of a scale not seen since WW2. Little wonder then that net capital FORMATION during that period has been anemic at best, while we have run a POTENTIAL GDP DEPRESSION (actual vs. where we would have been today if long-run norms had held up during the comparatively lagging period from the early 1970s through today).

Everyone under 35 bought in/or are buying in, at the TOP as it were, if they have gotten into the home market at all yet, paid the highest REAL entry costs into the workforce (to the point where it is now economically IRRATIONAL for many -- depending upon career choices -- to get 4-year degrees, let alone graduate degrees, a reality demonstrated by the huge surge in the % of women on campuses as more economically sensitive males substitute out), and paid the highest net tax rates, net real rental costs, and net REAL borrowing costs EVER IN THE HISTORY OF THE UNITED STATES. REPUBLICANS UNDER 40 ARE THE POOREST IN REAL GENERATIONAL TERMS OF ANY GENERATION IN OUR HISTORY. Richer than their DEM peers, yes, because they are brighter (degrees do not = intelligence) and harder-working, but nonetheless far poorer in purchasing power terms than their fathers were.

Little wonder then that business formation by those under 35 is at RECORD LOWS, while most are underemployed or unemployed. And now, we find that the current economic slowdown has been hitting under 35s harder as a % of layoffs than EVER before (very unusual, since a healthy free market would favor youth for a host of reasons).

And don't believe that circa 5.6% unemployment number -- the last time we had a downturn, in 1990, the govt. revised that number sharply upward when they got a good look at state tax returns. Unlike 1990, there are many true Republicans who refused to take unemployment insurance ON PRINCIPLE and are NOT counted on the roles even though they fit the traditional definition. They could afford to this time by drawing down on 401Ks (I know 2 who did so, even though they could have used the cash -- they made real sacrifices to BE FREE OF THE BONDAGE OF DIRTY SOCIALIST MONEY LOOTED FROM THEM IN PRIOR YEARS). In addition, this downturn's unemployment rate does NOT include the 1 million extra prisoners we have under lock and key this time vs. 1990 or the circa 2.3%!!! of the workforce taking DISABILITY (which saw a HUGE jump from under .2% before the Clinton era saw many states create programs that incentivized people to go out on disability rather than unemployment). Add it up! The real unemployment rate (compared to 1990) is closer to 9% (an economist colleague of mine thinks it is closer to 12% when you count the underemployed, as in ex-sales and finance guys doing construction or the circa 200,000 truckers with college degrees! [est. from a BLS study]).

Study after study has talked about the circumstances that Xers and Ys face, but it just hasn't dawned on elderly Republican leaders that they ARE THE FUTURE, AND ARE STRUGGLING TO SET THE STAGE FOR BATTLES IN 2020-2060. If Republican ideals are to have a chance in the fierce struggles you know are coming, we need to give younger Republicans the liberty they need to prosper today. Guess how old Madison, Jefferson, Smith, and a host of founding fathers were when LIBERTY dawned on earth -- 30s. That's why 35 was the age of reason for the presidency. Average age of Republican congressmen today?

OK, so things may change. But will they? And how much damage has already been done? The most tangible effect is on delays in household formation -- check your stats on the trend in average age for first marriage and home ownership -- now into the late 20s (that's the avg. of the distribution, many more than ever before are delaying into their late 30s!).

All of the issues cited above lead to fewer American children. Is it any wonder then that certain companies managed by globalizing elites BETRAY their countrymen by lobbying for H-1B visas and immigration?

It is NOT ENOUGH if we wish to save the Republic simply to prevent socialism and put troops on the border. Real Republicans need to address the impediments to household formation and the capital formation / power base formation of Xers and Ys -- and they are not what some Republican leaders think they are.

My recommendations, which target generational household and capital formation issues (TO START):
* The new SS savings scheme advanced by the Bush administration should NOT be structured as a gimmick to get the Federal government into stock ownership (socialistic) -- you control the allocation, but the Feds control the votes and get a direct mechanism for manipulating stock prices! Rather, the total burden of the SS/Medicaire tax (save us from Medicaire, TOO) should be cut in HALF, with resulting cuts in payouts for current recipients based on a NEEDS TEST (guys like Jack Welch should have the courage to refuse to take SS, if he doesn't -- THEN NEEDS TEST HIM), with the second half withheld to be directed into Retirement Security plans controlled entirely by the individual. Individuals should be allowed to draw on that money, and borrow against it prematurely like a 401K!!!! If we can do that starting at age 40, only the desperate will be without home, assets, or friends, family, etc. to help at 65, in which case put them on WELFARE and stop pretending the payouts are part of the SS system). The end-game should be the TOTAL ELIMINATION OF SS PAYOUTS FOR EVERYONE UNDER 40 TODAY WHEN THEY HIT RETIREMENT AGE IN 2028. THE SS SYSTEM DISAPPEARS THEN, IF WE HAVEN'T GONE BANKRUPT AS A COUNTRY LONG BEFORE THEN.

* TAX BREAKS FOR STUDENT LOAN INTEREST COSTS AND CREDIT CARD INTEREST. Homeowners (Boomers and Greatest Gen) get one, how about younger folks? The credit card deduction was removed in the mid-1980s, but how the younger consumer could use it now! Credit card debt is running up in large part because price levels have been artificially inflated by the generationally-biased income inflation (yes, boomer managers and older workers are taking a larger share of the company payroll than ever before [even though Xers and Ys are the most highly educated and over-qualified workforce in history]), credit bubble, asset bubbles, tax rate increases (Fed, state, local), subsidies, etc., etc.. Xer and ys have disposable incomes far less in purchasing power terms than any generation in the history of the US, while DEMs and REPUBs tax the tar out of them. Give them a break!

* Finally, and this one really gets me, the Republican Party, which is the Party of conservative Christians and business uber alles (spend, spend, spend, be good little consumerists even if that means buying Chinese), also REFUSES to be good Christians and regulate the tar out of banks and lending institutions that are guilty of CRIMINAL USERY. JC threw the money lenders out of the temple. So what do our Republican leaders do to the many predatory lenders targeting homeowners and young consumers -- with interest rates on some credit cards of 24% or higher? Takes their lobbying dollars! Prior to the inflationary 1970s, most states levied JAIL time, and not just civil liabilities on individuals and companies that charged interest rates higher than in the 15-18% range (only mobsters and unethical businesses would do that back then). Inflation, and Fed interest rates went way above that in the 1970s: prompting most states to bump the ceiling for CRIMINAL USERY to 24-30% depending upon the state. If you didn't know it already -- your credit card company would charge a LOT more than they do now, but they are prevented from doing so by state and federal laws. REAL profit margins on credit card debt were still below 10% in the late 70s into the mid-1980s. Then Congress wiped out the deduction, but most States NEVER CHANGED THE USERY LAWS. A clever game by the predators -- by eliminating the deduction they eliminated pressure on governments to keep CRIMINAL USERY ceilings reasonable (the more profitable the credit card companies have become, they no longer had to worry about tax revenues falling as people took higher deductions). This relationship helps to illustrate yet another DIRECT CORPORATE SUBSIDY. The entire credit card industry is a creature of the regulatory environment, and it always will be, because the "natural"/market interest rate for lending not based on tangible assets/receivables is the worst instinct of the lender (heck, most credit card companies don't even bother to look at net worth). Today, credit card companies have carrying costs of 2% on their funds, and are raking in fees at REAL avg. rates of 18-20%. No wonder their profit margins are are historic highs (though peaking, while the Fed is running out of room to drop short-term rates), while bankruptcy numbers are soaring!!!! It's the fault of the credit card companies!!! The Republican response -- the bankruptcy reform act. Talk about money buying politicians....How about civilizing credit card lending again? Dear Mr. President, if you want this economy to get a real KICK-START, just reinstitute the credit card interest deduction and bring sanity and morality back to interest rate caps!!!!!!! The Fed is almost out of bullets (it's starting to remind me of Japan) and we are heading into a war...give consumers, younger ones especially, a tax break they will LOVE you for (they will vote and send money your way for campaigns in numbers that will DWARF that offered by the credit card companies).

[Roscoe]

No magic, just hard work.

What hard work is that?

[Roscoe]

Here is the Libertarian recipe for unhappiness: "If only everyone thought as I do, then I would be happy."

The zealot's lament.

[Pistias]

stupidly naive

LOL, the very defenition of someone who votes Republican with a clear conscience.

[sneakypete]

Is this what "conservatives" want?

Oh,yeah! All that,PLUS a bag of chips. There is no such critter as a feral gooberment program pushed by Bubba-2 that these people don't approve of. After all,isn't Jorge Bush the new "Messiah" who can't do any wrong?

[karlamayne]

Many excellent points.

Certainly the Libertarians can't claim the taxing & spending issue as their own. However, in calling to light the bipartisan nature of tax & spend, big government types, clearly they're doing us all a favor.

Pork is pork, be it Democrat pork or Republican. Time to face up to the fact that BOTH parties are addicted.

[sneakypete]

Libertarians are just RINOs without the R.

WHY would a Bush-Bot be critical of a RINO? Are the elves now protesting against Santa?

Usually have nothing to add except to suck votes away from valid conservatives.

Define "valid conservatives". I'd be willing to bet you put Bubba-2 in this catagory.

Perhaps when GW does some real cutting the Liberalterian Party can throw there votes our way.

ROFLMAO! Just WHEN will Bubba-2 be doing this? Will it be after he secures funding for his new Office of Reich Security? It will surely be after he increases the size and budget of the Dept of Education,hires MORE feral gooberment union workers,promises instant citizenship to illegal aliens if they pay $1,000,and spends BILLIONS buying new houses for minorities. Not to mention after he pays for his "keep my poll numbers up" war with Iraq.

Pray for GW and the Truth

The truth is the one thing Bush-Bots are the most afraid of. To quote a movie line,"You can't handle the truth!"

[sneakypete]

No program eliminations are being proposed.

Or will even be tolerated. Remember the "take the issues away from the Dims by adopting their issues" strategy?

[bray]

Who gives a rip what you think? You throw your vote away every two years to your latest loser and then crow about how noble you are. Who was the last losertarian to give you a taxcut...huh??? Wasn't big enough??? Then crawl off your high/stoned horse and vote Repub. Truth hurt??

Pray for GW and the Truth

[bray]

You can think of a myriad of reasons to throw your vote away. Fact is there are two parties and now the good guys have control and you are still on the outside telling everyone how sour the grapes are. You are witnessing the greatest President in our times and you throw sand. Listening to Liberaltarians reminds me of reading Ecotopia, lots of platitudes and no real reasoning in reality. How do Libs think about Late Term Abortion? Should it be legal? How about murder?

Pray for GW and the Truth

[wcbtinman]

"...it's clearly not the historical record."

Your historical record conviently ends at 2001, and unless my eyes decieve me, about the year 2000, the line(s) start an upward trend. It's the period after Bush was elected that is subject to the claim of major increases in spending. And, your graphic indicates that very claim to be true.

The Bush administration will grant us "tax cuts" for political purposes, and then give us increased "user fees" to more than make up the difference. This subterfuge was started under the Clinton administration, and has continued unabated. It's the politicians version of the free lunch.

"User fees" are nothing more than a tax.

[wcbtinman]

"Both ways of viewing them are correct."

I think that would be true except that the budget deficit under Bush is increasing.

[wcbtinman]

To sneakypete you wrote:"...you are still on the outside telling everyone how sour the grapes are."

Well, at least he can see the forest for the trees.

[wcbtinman]

Sorry, you actually wrote that to "winner45".