deficit spending

Plug the Damn Hole!

For months now, the American people have watched in horror as a dark, viscous fluid has hemorrhaged out of a well. It continues every minute of every day, day in and day out, with no end in sight. Even though we know it threatens the livelihood of everything and everyone in its path, we have been unable to stop it. We have elected officials that we have called upon to put an end to it, yet they have thus far proven completely incompetent, unable to get the job done and end the leak. Indeed, most of the time, despite the grandstanding and the bold talk, it seems as if the government is not only unable to end the leak, but unwilling. For, despite the rhetoric, the actions of government thus far have not been the kind that will end this disaster.

“Plug the damn hole!” our president cried in frustration. I agree. But…

As bad as the oil spill in the gulf most certainly is, the leak I am talking about is the unending gusher of red ink which comes from the “well” in Washington, D.C. This leak is doing far more damage to our country and will take much longer to correct than the leak in the Gulf of Mexico. Its effects are far more problematic for the health of our country, yet far less is being done to combat it. At least BP is making an effort to stop their leak, even if most attempts have proved futile so far. In our nation’s capitol, everyone talks about the need for fiscal responsibility, but few have shown they believe those words by allowing the danger to galvanize us into action.

Porkulus III Passes Senate With Republican Help

The Senate passed Porkulus III by a vote of 70-28 with 13 Republicans demonstrating their party’s new found fiscal conservatism by crossing over to vote with every Democrat present for the bill. Like the first Porkulus signed by George W. Bush in 2008 and the Porkulus II passed last year, Porkulus III forks over billions of borrowed dollars to fund various special interest projects and tax gimmicks in the name of “creating jobs”.

The gimmicks funded in this lastest round of Porkulus include a tax holiday for the remainder of the year on Social Security payroll taxes, but only if the company hires someone out of work for more than 60 days. In addition, Porkulus commits to billions in in more mass transit spending and more highway projects (ie. more pork barrel spending).

The Senate’s version of Porkulus must be sent over to the House where it must be reconciled with the House’s much more expansive $154 billion Porkulus bill. However, the Senate plans to pass more items in the House’s bill one at a time so that Senate Majority Harry Reid and other Democrat leaders can find out how much the prices of the votes of “fiscally conservative” Republicans are.

Included are proposed Senate bills giving away corporate welfare to ethanol producers, which is expected to be supported by farm state Republicans. In addition, there is another planned Senate bill to keep Americans out of work longer by extending unemployment benefits and COBRA.

The RINOs who supported Porkulus III today are:

CBO sees a bigger river of red ink under Obama’s budget

The Congressional Budget Office (CBO) projects that budget deficits will be nearly $1.7 trillion greater under President Barack Obama’s budget than the estimates released last month by the White House Office of Management and Budget (OMB).

The two agencies frequently conflict on budget projections. The OMB sort of takes a guess on what economic growth will look like over a 10-year period and scores a president’s tax and spending agenda based on those estimates. The CBO, however, is more restrained in its approach.

The discrepancy between the two reports is due to the CBO’s assumption that current law remains largely unchanged. The nonpartisan fiscal research agency also believes that tax revenues will be $1.8 trillion lower than the OMB, which is due to less rosy economic projections over the next 10 years (2015-2024).

President Obama’s budget estimates that budget deficits over the next decade will come in at approximately $4.93 trillion (Table S-1 of the OMB report). But the CBO estimates that deficits will be significantly higher, at $6.56 trillion (Table 1 of the CBO report), or $1.64 trillion greater than the administration’s estimate.

Here’s a look at the year-by-year differences:

Deficits to grow by $7.6 trillion over next 10 years

The Congressional Budget Office expects budget deficits to grow by $7.62 trillion between 2015 and 2024 despite a rise in tax revenue. That, according to updated budget projections released yesterday.

The nonpartisan fiscal research office expects budget deficits to hit $492 billion in 2014, or 2.8% of gross domestic product (GDP), and $469 billion in 2015 before beginning to rise again. By 2020, the budget deficit will hit $804 billion, or 3.5% of the economy.

The main drivers of federal spending are entitlements, known budget language as “mandatory spending” or “autopilot spending,” and debt service. These budgetary items will consume nearly 74% of the federal budget over the 10-year budget window.

Though tax revenues will eclipse $4.9 trillion, or 18.3% of GDP, by 2024, spending will continue to rise at an unsustainable pace. The federal government will spend nearly $6 trillion in that same year. The federal government will spend nearly $48.2 trillion over the course of this timeframe.

Added together, taxpayers will be hit with $7.62 trillion in budget deficits over the 10 year budget window. The share of the national debt held by the public will eclipse $20 trillion by 2024. This, despite higher than average tax revenues collected by the federal government.

The Congressional Budget Office warns of potentially dire consequences if federal lawmakers don’t act soon to deal with the threats to the United States’ long-term prosperity.

ID-02: Club for Growth targets Boehner ally in new ad

Club for Growth Action rolled out a new ad yesterday against Rep. Mike Simpson (R-ID), an ally of House Speaker John Boehner (R-OH), hitting him for backing the Wall Street bailout, votes to increase the debt ceiling, and support for a “bigger Obama stimulus bill.”

The Club for Growth endorsed Bryan Smith, who is challenging Simpson in the Republican primary, in July 2013.

“Career politician Mike Simpson is one of the most liberal, anti-taxpayer Republicans serving in Congress today,” said Club for Growth President Chris Chocola in a statement, “which is exactly why it’s so critical that Idaho voters replace him with a constitutional conservative like Bryan Smith.”

Obama and the Bong-Hit Budgeting Plan

It looks like Obama has reprised his role as the leader of the “Choom Gang,” the uber-cool, pot-smoking rebels of his college days. How else can one explain Obama’s latest budget proposal, in which he will, according to the Washington Post, call “for an end to the era of austerity that has dogged much of his presidency…”

Seriously? And end to austerity? That is like Rosie O’Donnell announcing an end to her era of starvation. That’s like Lindsay Lohan calling for an end to her strict sobriety, or Bill Clinton announcing an end to his marital fidelity.

The thought that the Obama presidency to date has been an era of austerity is so comical, so absolutely farcical, that when I first heard the comment I assumed it had to be from a Saturday Night Live skit. I mean, the utter disregard for spending restraint under Obama is legendary. Obama’s spending makes George W. Bush’s spending seem downright miserly by comparison, and that is quite a feat!

Obama had barely changed the drapes in the Oval Office before he signed off on the $830 “stimulus” bill, an orgy of handouts to Democrat special interests and labor unions under the guise of economic recovery. It was never intended to stimulate the economy, which is why unemployment increased to over 10% and stayed above 9% for his entire first term, and why Obama joked about “shovel ready jobs” not being as shovel ready as they imagined.

No, the United States isn’t in an “era of austerity”

President Barack Obama has frequently complained that the United States is in an “age of austerity,” decrying modest cuts to the rate of spending increases he once supported. This, despite the fact that taxpayers have seen the national debt grow by nearly $6.8 trillion since the beginning of his presidency.

The idea that we’re living in some “age of austerity” is just mindboggling, as A. Barton Hinkle sarcastically explained in his latest column:

The end of austerity cannot come soon enough, as far as your humble correspondent is concerned. And a quick look at the historical budget tables shows why: In 2008, the federal government spent just a hair under $3 trillion. After six years of President Slash-and-Burn, spending has shrunk to almost $4 trillion. If we keep cutting like this, it will be down to $5 trillion before you know it.

These savage reductions have taken place in nearly every major federal program. Take defense spending: The year before Obama took office, it stood at $594 billion. It’s now $597 billion. Back in 2001 it was almost $300 billion. Even if you adjust for inflation, it’s clear that defense spending has shrunk at an alarming rate.

Same deal for food stamps: Under President Barack Obama, spending on the Supplemental Nutrition Assistance Program has gone from $40 billion to $78 billion, in constant dollars. And that’s after it went from $20 billion to $40 billion under Obama’s predecessor, George W. Bush. Spending cuts like that are simply barbaric.

Failed $831 billion stimulus bill signed five years ago today

Believe it or not, folks, it’s been five years since President Barack Obama signed the American Recovery and Reinvestment Act, the 2009 stimulus measure spent $831 billion on infrastructure, tax credits, and other policies that largely served as taxpayer-funded giveaways to core leftist constituencies

Passed in the aftermath of the Great Recession, the stimulus bill was based on the Keynesian notion that the government, through spending on “shovel-ready” infrastructure projects and other purported economic multipliers, could drive aggregate demand and create jobs.

Christina Romer and Jared Bernstein, the economic advisors who developed the stimulus plan, argued that these policies would help bring the United States back from the brink of economic depression. In their January 2009 policy paper, the two economists claimed that the unemployment rate would not exceed 7.9% with the stimulus bill, while it would reach 8.8% without it. Because, you know, counterfactual.

They were wrong.

Even with the $831 billion stimulus bill, the unemployment rate rose from 7.8% in January 2009 to 10% in October of that same year, at which point Romer declared that the measure had already had its greatest impact. In fact, unemployment didn’t fall below 9% until October 2011.

The infamous Romer-Bernstein chart shows the unemployment rate falling to 5% in December 2013. In reality, the December 2013 unemployment rate was 6.7%, nearly 2 points higher.

Howard Dean worries that Obamacare subsidies will drive up spending

Howard Dean

It’s no secret that Howard Dean, the former Vermont government who served as DNC chair, isn’t a fan of Obamacare. He’s frequently criticized the law, once calling it a bailout for insurance companies.

But during an appearance last week on MSNBC’s Morning Joe, Dean expressed concern that the subsidies available for some who purchase coverage on the exchanges will increase federal spending. The comments came in an exchange with David Gregory about whether young people need to sign-up for coverage to make the math behind law’s promise of “affordable” coverage work.

“But, governor,” Gregory told Dean, “the White House officials who work most closely with this say what’s key to making it successful is to get the risk pools right.”

“David, I know they say that. I thought they were wrong from the beginning. This is the same consultants that put together Romneycare,” Dean replied. “They believed that, I don’t believe it. And I don’t believe it because I have 20 years experience in making this work. We can go into that another time.”

“The bottom line though is the next crisis here, assuming we get through all this is the tax subsidies,” Dean said. “It is going to make the federal budget more expensive.”

Big Labor may make entitlement reform more difficult to accomplish

The already small chance of Congress passing any sort of entitlement reform in a budget agreement before the mid-December deadline may have gotten a little smaller thanks to a prominent labor leader.

In a speech before the International Foundation of Employee Benefit Plans on Monday, AFL-CIO President Richard Trumka promised that Big Labor would “never stop working” to end the careers of congressional Democrats who support entitlement reform.

“Let me just say this one for the record. No politician — I don’t care the political party — will get away with cutting Social Security, Medicare or Medicaid benefits. Don’t try it. And this warning goes double for Democrats,” said Trumka, according to the Washington Examiner. “We will never forget. We will never forgive. And we will never stop working to end your career.”

For all the Democrats’ complaints about conservative groups and organizations making it difficult for Congress to get anything done, labor unions have long had a stranglehold on the party. Since 1990, Big Labor has given $751.8 million to Democratic candidates, which is 92% of their contributions. And in 2008, they worked heavily for then-candidate Barack Obama, who promised them their long-desired legislative goal, card check.

 
 


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