Fiscal Crisis

Paul Ryan: “We would have fixed this fiscal mess by now” under Clinton

During an interview on Sunday, Rep. Paul Ryan (R-WI) suggested that if Bill Clinton were president that the fiscal issues facing the United States could be worked out.

Ryan, who has served in Congress since 1999 and was the GOP’s vice presidential nominee in 2012, told David Gregory on Meet the Press that “if we had a Clinton presidency, if we had Erskine Bowles chief-of-staff at the White House, or President of the United States, I think we would have fixed this fiscal mess by now.” Ryan added, “That’s not the kind of presidency we’re dealing with right now.”

Noel Sheppard, who covered the story at Newsbusters, snarked, “one wonders if Ryan meant a Bill Clinton presidency or a Hillary Clinton presidency.” That aside, Ryan has a point that’s worth expounding upon.

Despite friction between then-President Clinton during the 1990s, Republicans in Congress were able to pass a balanced budget and enact welfare reform and pass capital gains tax cuts. While not all was perfect during these years as Republicans began their slide toward big government, a Democratic president and Republican-controlled legislature were able to reach a compromises that led to a largely prosperous era.

3 Similarities Between President Obama and Honey Boo Boo

If you are President Obama, somehow not yet familiar with Honey Boo Boo, or if you’re in therapy after watching “Here Comes Honey Boo Boo,” please accept my sincerest apologies for the post you are about to read.

I was blissfully unaware of the whole Honey Boo Boo craze/phenomenon until I saw this post on Peach Pundit, a Georgia-focused political blog. This little girl Alana (a.k.a. Honey Boo Boo) is the star of a reality show on TLC. As so brilliantly stated in that Peach Pundit post:

She has the outgoing kind of personality we like to see in children; children that belong to other people – other unrelated people – who live far, far away.

Yeah, that sums her up pretty well. So how could this 6-year-old beauty queen bumpkin be at all similar to President Obama? Here are a few ways:

1. They both outrank Republicans in TV ratings.

It’s more believable for him than for her, but he and she both topped the ratings earned by the Republican convention. And the GOP had Clint Eastwood. I don’t know if this is more of a statement about Americans’ TV preferences or Republicans in general, but either way, it’s an embarrassment.

2. They both landed a star role, despite obvious flaws.

Weighing the Paul Ryan Announcement

Paul Ryan

This weekend Mitt Romney announced that his running mate would be Congressman Paul Ryan from Wisconsin. Ryan gained a lot of notoriety recently with his better-than-Obama’s budget proposal, which aimed to balance the budget in the next 3 or 4 decades.

It’s a sad day for conservatives when the hero to save them from their budget woes needs 30+ years to balance the budget.

Still, Ryan is the latest non-libertarian making waves about balancing the federal budget, so I would like to believe that Romney’s pick of Ryan is more about sending a message that he is (or that he wants to be) serious about fiscal issues rather than a pick to appease the Tea Party folks who don’t really care for Romney.

I am, however, a bit confused over the Tea Party excitement of Ryan. Sure, Romney could have made a worse choice, but Tea Party leaders are acting like the problems with Romney have vanished now that Ryan is on the ticket.

Let’s remember this is the same Paul Ryan who not only supported TARP but went to the floor of the House to beg his colleagues to do the same. This is the same Paul Ryan who supported the auto bailouts. How do those positions qualify anyone as a fiscal conservative?

A Practical & Optimistic Approach to Cutting Big Government

Like a lot of libertarians and small-government conservatives, I’m prone to pessimism. How can you be cheerful, after all, when you look at what’s been happening in our lifetimes.

New entitlement programs, adopted by politicians from all parties, are further adding to the long-run spending crisis.

The federal budget has become much bigger, luring millions of additional people into government dependency.

The tax code has become even more corrupt and complex, with more than 4,600 changes just between 2001 and 2012 according to a withering reportfrom outgoing Senator Tom Coburn of Oklahoma.

And let’s not forget the essential insight of “public choice” economics, which tells us that politicians care first and foremost about their own interests rather than the national interest. So what’s their incentive to address these problems, particularly if there’s some way to sweep them under the rug and let future generations bear the burden?

Obama Borrows More than Americans Make

Democrats are completely out of touch when it comes to the national debt. Rather than look at the past four years of $1+ trillion budget deficits, they pretend like it didn’t happen. Take the comments of Sen. Tim Kaine (D-VA) and Rep. Chris Van Hollen (D-MD), for example. These two recent told Politico that Congress can’t make anymore spending cuts because it would hurt the economy:

But aided by a pile of recent data suggesting the deficit is already shrinking significantly and current spending cuts are slowing the economy, more Democrats such as Virginia Sen. Tim Kaine and Maryland Rep. Chris Van Hollen are coming around to the point of view that fiscal austerity, in all its forms, is more the problem than the solution.
“Trying to just land on the debt too quickly would really harm the economy; I’m convinced of that,” Kaine, hardly a wild-eyed liberal, said in an interview. “Jobs and growth should be No. 1. Economic growth is the best anti-deficit strategy.”

Some conserative groups, like the American Enterprise Institute, are in agreement that austerity could be hurting the economy. But let’s think about that for a second. It’s true that the economy is still lagging, yet to pick up steam in terms of post-recession job creation and growth. However, businesses are dealing with the effects of tax increases that took effect at the beginning of the year and increased regulation, including ObamaCare. It’s no surprise that economy is being as productive as it should be. Moreover, Congress hasn’t actually cut spending. They’re just cut the rate of growth in spending increases.That’s not austerity. That’s a joke.

Moody’s lowers United Kingdom’s credit rating

UK parliment

Moody’s Investor Service, one of the three major credit rating services, took a move last week that is sure to send some shockwaves across Europe. Moody’s lowered the United Kingdom’s credit rating due to the debt that will continue to weigh on the country:

Moody’s lowered the U.K.’s domestic and foreign-currency bond rating one notch to Aa1 and changed its outlook to stable. It is the first of the three major ratings firms to do so, though both Standard & Poor’s Ratings Services and Fitch Ratings have the U.K. on negative outlooks.

The move by Moody’s is a psychological blow to the United Kingdom, which is fiercely proud of its historical position on the world stage and keenly attuned to signs of its diminishment. It is also a political blow to Prime Minister David Cameron and his chancellor of the exchequer, George Osborne, who has long justified his painful government spending cuts on the grounds that he is maintaining the U.K.’s triple-A rating.
“We expect the country’s debt will continue to grow in coming years,” said Bart Oosterveld, managing director in charge of Moody’s sovereign ratings group, in an interview. “In our central scenario, we don’t expect the country’s debt burden to stabilize until 2016.”

Cameron had enacted a series of austerity measures, which were met with protests and derision from opponents, aimed at curtailing the United Kingdom’s sizable welfare state. Unfortunately, these measures weren’t enough to keep the country’s credit rating in tact.

Senate Democrats continue to abdicate their budget responsibilities

Patty Murray

It looks like Senate Democrats, who have not passed a budget since April 29, 2009, are once again falling down on the job. Over at the Washington Examiner, Conn Carroll notes that they’re blaming the sequester for their failure to perform one of the most basic functions of government:

Well that was fast. Less than a month after Senate Democrats passed a debt limit hike that included a provision delaying their pay if they failed to pass a budget this year, Senate Democrats are already signaling that no budget should be expected.

“Senator Murray is working on a budget right now and we hope we can get that done,” Sen. Jack Reed, D-R.I., told CNN yesterday. “But we need time. So the sequestration will prevent — preempt us from getting a budget done and other factors.”

So don’t blame the Democrats if they can’t pass a budget. It’s the sequester’s fault. Never mind that Democrats never had any intention of passing a budget anyway. Pressed to commit to a budget in November, Senate Budget Committee Chairman Patty Murray, D-Wash., told The Hill she “had no idea” whether Democrats could come to an agreement.

CBO: Long-term debt problems increase risk of a fiscal crisis

While President Barack Obama continues to twiddle his thumbs, a new report from Congressional Budget Office (CBO) shows that the nation’s fiscal outlook for the next 10 years remains bleak.

While the report, which was issued yesterday, estimates that the deficit for the current fiscal year will come in under $1 trillion for the first time since 2008, unsustainable spending will have deficits soaring once again by the end of the 10-year window:

The federal budget deficit will fall to $845 billion in 2013 before rising again over the next decade as an aging population and soaring healthcare costs lead to an explosion in entitlement spending, the Congressional Budget Office reported Tuesday.

The budget deficit would fall below $1 trillion under President Obama for the first time in 2013 and would drop to $430 billion by 2015, according to CBO’s annual fiscal outlook.

But CBO’s long-term forecast projects that budget deficits will near the $1 trillion mark again by 2023, when it forecasts a $978 billion budget deficit.

What’s behind these perpetually large budget deficits? The CBO attributes the spending growth to the “pressures of an aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt.”

More specifically, the problem is entitlements. Unless action is taken — meaning that President Obama actually puts forward a plan — the CBO notes, “The aging of the population, increasing health care costs, and a significant expansion of eligibility for federal subsidies for health insurance will substantially boost spending for Social Security and for major health care programs relative to the size of the economy.”

Sequestration Cuts Will Lead to Floods, Plagues, and Pestilence

Written by Tad DeHaven, a budget analyst at the Cato Institute. Posted with permission from Cato @ Liberty.

The odds that $85 billion in “unthinkable, draconian” sequestration spending cuts will go into effect in March as scheduled are looking better. The odds must be getting better because, as if on cue, the horror stories have commenced.

A perfect example is an article in the Washington Post that details the angst and suffering being experienced by federal bureaucrats and other taxpayer dependents over the mere possibility that the “drastic” cuts will occur. You see, the uncertainty surrounding the issue has forced government employees to draw up contingency plans. Contingency plans? Oh, the humanity!

From the article:

Sequestration, as the law is known, has sent agencies scrambling to buffer themselves, spending time and money that ultimately may be for naught. Even if cuts take effect, it might not be for long — making the hiring freezes, canceled training, deferred projects, and lengthy planning for furloughs and other contingencies an exercise in inefficiency.

Federal Money to the States Isn’t ‘Free’

Written by Tad DeHaven, a budget analyst at the Cato Institute. Posted with permission from Cato @ Liberty.

Richmond Times-Dispatch columnist A. Barton Hinkle recently made what should be a simple point to understand, but it’s unfortunately one that few people seem to appreciate. Writing about the supposed win-win situation whereby states expand Medicaid coverage and the federal government foots most of the bill, Hinkle reminds readers that the “free” federal money isn’t really free:

In Virginia, officials estimate expanding Medicaid would cost the state $137.5 million over nine years, while the state would receive $23 billion from Washington.

Other states report similar figures. California expects to enroll up to 910,000 residents for a cost beginning at only $46 million a year, while collecting $44 billion in federal funds over a six-year period. An Illinois study estimates that state would spend about $2 billion on expanded Medicaid over the next decade, while reaping $22 billion in federal funds. According to Danielle Holohan, who is in charge of New York’s insurance exchange, Medicaid expansion “actually works out to be an enormous savings” for the Empire State. And so on.

This all sounds great—if you are a state official. But if you are a lowly taxpayer, it leaves out one rather significant point: Where is all that federal money coming from?

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