Spending

Is The PAYGO Rule Fiscally Responsible?

On Thursday, the US Senate voted to restore pay go rules on a party line vote. President Obama praised the restoration of the PAYGO rule. Obama supporter Andrew Sullivan used the vote as a club to attack Republicans. Republicans opposed the restoration of pay go calling it a backdoor attempt to raise taxes. However, the PAYGO rule is at best a dual edged sword. While PAYGO is an excellent for controlling and limiting deficit spending, it does very little to limit the size and growth of the Federal government.

The PAYGO or “pay as you go” rule simply calls for any increase of mandatory spending or reduction in revenue (ie. taxes) must be offset by decreases in discretionary spending or increases in revenue (taxes). Mandatory spending is things like Medicaid, Medicare, Social Security, pay for Federal employees, paying debt, and other welfare programs such as Food Stamps and Veterans benefits. Mandatory spending is nearly 60% of the Federal budget. Discretionary spending is everything that Congress has to pass legislation to authorize.

How PAYGO Is Fiscally Responsible:

Obama proposes freeze on non-defense discretionary spending

Politico is reporting that President Barack Obama will call for a freeze on non-defense discretionary spending in the run up to his State of the Union address to Congress on Wednesday:

President Obama plans to announce a three-year freeze on discretionary, “non-security” spending in the lead-up Wednesday’s State of the Union address, Hill Democratic sources familiar with the plan tell POLITICO.

The move, intended to blunt the populist backlash against Obama’s $787 billion stimulus and an era of trillion-dollar deficits — and to quell Democratic anxiety over last Tuesday’s Massachusetts Senate election — is projected to save $250 billion, the Democrats said.

The freeze would not apply to defense spending or spending on intelligence, homeland security or veterans.
[…]
The move would likely be welcomed by Blue Dog Democrats and deficit hawks, but party liberals would likely bridle at baselining a wide array of popular domestic spending programs.

It sounds like a big deal, but this will only save $250 billion over the next 10 years. Non-defense discretionary spending makes up only a small portion of the overall annual budget. In the $3.5 trillion FY 2010 budget, only $477 billion is non-defense discretionary spending. That’s around 14% of total spending and less than half of total discretionary spending (including defense).

This freeze would not effect “mandatory spending,” including Medicare, Medicaid and Social Security, which accounts for over $2 trillion in spending.

United Liberty’s Top 10 Stories from 2009

It’s the last day of 2009. We made it through a crazy year that saw liberty put at risk on an all to regular basis. We decided the best way to recap the year was to take ten of 2009’s biggest stories and write a blurb about each one of them (we tried to keep it short and to the point).

Before you continue on, each of us here at UL want to thank you for a great 2009. We appreciate you reading. We’re planning for world domination in 2010 and hope that you’ll join in the fun.

So, here they are in no particular order, United Liberty’s Top 10 Stories from 2009.

Tea Party Movement (Brett Bittner): The wave of “hope” and “change” that swept Barack Obama into the Presidency of the United States closed out 2008 and opened the door to a new movement in American politics, the Tea Party movement.  I believe that his election was merely a catalyst for many groups of a conservative nature and strong views on limited government to unite to form one voice to stand up to the political status quo, calling out Democrats and Republicans alike for their affinity to grow the size of government to a breaking point.

Chart of the Day: Look at government grow

The folks over at Campaign for Liberty show us the explosion in government spending in the last two years, from spending just over 30% of gross domestic product (GDP) at all level of government combined to 40%.

With that, 19% of federal government employees make $100,000 a year or more, according to an article in USA Today, and that’s up 5% in the last 18 months.

While the economy continues to perform poorly and job losses are still racking up, the federal government continues to grow and consume more resources.

Government Growth

My Townhall Experience

After attending several Atlanta area health care town hall forums sponsored by legislators in support of HR 3200, I decided to participate in one hosted by MY Congressman, Representative Phil Gingrey (R-GA, 11th). I should note that I did not vote for or against Dr. Gingrey in 2008, as I lived in Georgia’s 13th Congressional District then. The convenience of the location of August 31st’s event could not have been better, unless it took place in my living room (the Cobb Civic Center is across the street from my neighborhood), however a 5:30 PM start time made it difficult for many constituents to attend.

Town Hall Atendee

I arrived at the Civic Center shortly after 5 PM to find a parking lot approximately half-full, some cars present as early as 3:30 PM. Outside the venue, there were a few individuals and groups handing literature to those entering, including members of GOP gubernatorial candidate, John Oxendine’s You Can Stop ObamaCare. I expected police-enforced restrictions that I encountered at previous town hall events, so my only tool to capture and share media of the event was my cell phone.

Once inside, I noted many of Rep. Gingrey’s older constituents in attendance, as I expected from reports of his previous forums on the subject. I also expected that most in attendance would be opposed to the health care reform bill known as HR 3200, also known as “ObamaCare,” like their Congressman, Rep. Gingrey. There were a handful of

The Failures of Central Planning

The talk of a second stimulus is beginning to pick up. It should go without saying that I do not support any additional “stimulus” - but, regardless of my views on the pros and cons, the whole debate needs to be viewed from a different perspective. Instead of Republicans and Democrats debating policy, or economists discussing multipliers and the GDP gap, we should focus on the failure of central planning.

Saving $1.35

President Barack Obama held his first cabinet meeting today. He “made clear that relentlessly cutting out waste was part and parcel of their mission to make the investments necessary for recovery and long-term stability.” The ruthless fiscal disciplinarian called for his cabinet to cut a collective 100 million dollars in the next 90 days. The White House blog has the story here and the fact sheet can be found here.

Now, Obama has admitted already that this is a drop in the bucket. However, he did say, “cumulatively they would make an extraordinary difference… $100 million there, $100 million here, pretty soon, even in Washington, it adds up to real money.” How long would it take to add up to real money?

Shaping the Debate

“Never doubt that a small group of thoughtful committed citizens can change the world. Indeed, it’s the only thing that ever has.” - Margaret Mead

The left leaning media outlets made much of the numbers at Wednesday’s Tea Parties. Keith Olbermann especially mocked some Tea Parties attended by less than recent sporting events. Understanding that Olbermann’s primary objective is not to inform (but rather to sell advertising), his observations (as well as those of his fellow travelers) avoid the important point.

Dissent is Not Unhealthy, It’s Patriotic

Dissent is “unhealthy”:

A top adviser to President Barack Obama takes a dim view of last week’s anti-tax “tea parties,” promoted by organizers in the spirit of the Boston Tea Party.

“The thing that bewilders me is this president just cut taxes for 95 percent of the American people. So I think the tea bags should be directed elsewhere because he certainly understands the burden that people face,” David Axelrod said Sunday.

The rallies coincided with the deadline to file income taxes, and gave people a chance also to voice frustrations about government spending and corporate bailouts.
[…]
Axelrod was asked on CBS’ “Face the Nation” for his opinion on what the show’s host described as “this spreading and very public disaffection with not only the government, but especially the Obama administration.”

Maybe Germans Did Learn Something From The Weimar Republic

When President Obama arrives in London this week he will meet with the leader of Germany, a nation where his election has brought newfound goodwill towards America; but will the goodwill be enough to force the hands of Germany to conform to Washington’s desires for additional stimulus and bailouts? If the latest media reports, which point towards an Administration attempting to dial down expectations, are any indication, then the answer is most likely a soft no.

The NYT is reporting that little ground is expected to be made in regards to additional German stimulus, with Chancellor Angela Merkel expected to cite fiscal discipline as a reason for German non-cooperation with President Obama’s Administration on the issue-


The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.