politics

  • Federal Spending 1972-2011: What The?!?

    ByJohn Brown

    Last week a chart made the rounds, ranking the Presidents since Reagan on spending.  Look at Reagan.  That happy man is a freaking profligate. Obama, on the other hand, heck, he’s doing better than Bill Clinton.

    Except there are a few problems.

    First, I can’t tie this data out to the official CBO numbers.

    Second, it does a bit of apples and oranges because the numbers are based on each president’s whole time in office.  What does it mean when Obama increases the debt by 35% over three years, but it takes Bill Clinton almost EIGHT YEARS to increase the debt that much?  A better measure would be an average per year.

    Third, some have suggested this chart monkeys with the numbers, allocating the first year of each president’s first term to the previous president.

    Fourth, the president isn’t the only one in Washington. Senators and Congressmen also have responsibility.

    Finally, while a % increase in debt is a helpful measure, it’s not the only story. And it can be misleading if viewed on its own. For example, if we have $1 of debt, and I increase that to $10, I’ve increased our debt by 1000%. Holy Schnitzel!  But if we have $500 million of debt and I increase it to $600 million, I’ve only increased it by 20%. Which is worse?

    So I went out to the CBO and took their numbers from 1972 – 2011.  You may get the XLS file yourself: http://www.cbo.gov/publication/42911. Then I made sure to identify who was in charge when and marked it with spiffy colors (Red is Republican, Blue is Democrat). Here are the results. Click on it to see it in its full size glory.

     

     What does this tell us?

    First, there was only ONE four-year stretch in the LAST FREAKING FORTY YEARS where the folks in Washington did not spend MORE than they took in. That was the four year period from 1998 – 2001.

    What the?!?

    Look at that chart again. There is a serious and systemic spending problem in Washington.

    What happened in 1998 to change what had been going on for almost three decades? That was when the citizens got fed up with Washington, threw out a great number of the Senators and Congressmen, and bought into the Contract with America.  This was when Newt Gingrich was Speaker of the House. This was when Clinton was getting pounded for all sorts of stuff and worked with those particular Republicans in Congress to balance the budget.

    Second, the deficit, the purple line at the bottom, tripled when Obama took office.  And stayed!  Who put that first chart together? Oh, yeah. It was Nancy Pelosi.

    You might say, well, raw dollars is good.  But what’s really important is how big a percentage that spending is of our nation’s GDP. If you’re spending 100 billion when the nation is producing 1 trillion, that sounds big, but it’s actually not as big a deal as when you’re spending 100 billion and the nation is only producing 200 billion. Okay, let’s look at these numbers as a % of GDP.

    Again, 1998-2001 were good years. On a % basis, the folks in Washington during that time did better than anyone else in not spending the nation’s wealth.  There’s no doubt that Reagan, Bush 1, Clinton during his fist 3 years and the Congress during those times were all happy to be big spenders.  Look at the debt burden during their years. But Obama and the Democratic majorities in Congress since 2007–drunken sailors compared to those guys. And then the Republicans come in and it doesn’t change. Gridlock?

    Let’s look at our presidents since 1972 and see how well they do on an annual basis. Those numbers in the first list, BTW, are stated in billions.

    Seems to me the most fiscally responsible groups were those in charge during the latter part of the Clinton years, the Nixon years, and the year when Nixon resigned.  It appears that during that year the folks in Washinton were so busy with the Watergate scandal they forgot to feed their spending appetites.

    Bottom line: as I said before, Washington has a serious and systemic problem with over spending.

    And when I say “systemic” I mean it appears the whole thing is rigged to produce over spending. We don’t just need new people out there. We need a system that prevents the overspending. We need an ammendment that requires a balanced budget and caps the size of the government in relation to GDP.

    We also need to find a way to incentivize Congress to pass a budget each year.  No budget, no pay is a good idea. The current House has indeed passed a budget. But the Democratic Senate has not, preventing us from having a budget at all. Obama submits budgets, but not a soul in the Senate, Democrat or Republican, will vote for them. It’s only the Republican House who seems to want to actually do their job. How can that be? Read It’s Deja Vu All Over Again with National Fiscal Policy for more info.

    This November we need to get a bunch of folks like those in 1998 back in Washington. A President AND a Congress who will actually finally tame the nation’s out of control spending.  Let me suggest you look at your Congressman’s and Senators’ records.  How have they voted? As for President Obama, well, I’m looking at the numbers above.

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  • New Mandatory Two-question Test for Our Leaders in Washington

    ByJohn Brown

    This is not a Democrat thing. This is not a Republican thing. This is a Budgeting for Morons 101 thing. I think anyone who is sent to Washington needs to pass a test. The test will have two questions.

    Can you pass it?

    Big Hairy Test

    Question 1. Fill in the blank. Use your incredible subtraction skills to solve this equation: 2 – 5 = ?

    Question 2. Short answer. Let’s say you don’t have enough money to purchase everything you want; what do you do?

    Answers to Big Hairy Test

    Question 1.

    The answer would be -3 (yes with the little dash thingy in front of it). If you fail this, your name is taken off the ballot. I know it’s harsh. You’re a good person, but you’re just too dumb to be trusted with my money. Please repeat the first grade and run for office again later.

    Question 2.

    If you say borrow the money, your head gets painted orange so everyone knows you have brains that operate on the same wattage as a citrus fruit.

    If you say print the extra money, your head gets painted orange and then you go to jail for plotting to steal everyone else’s money by devaluing it.

    If you say, “Contact the Russians, they’ve got a source,” we send you to Russia to work in Siberia digging rocks.

    If you say, “But I had to spend more than I had because everyone else was doing it and they might be mean to me and not vote for my proposals,” then we assign you to follow a colony of lemmings in the Norwegian tundra for seven years. It’s okay. Lemmings are very cute.

    Awwww!

    The correct answer is you either (1) reprioritize, spending less on something else so you can spend more on the thing you really want, (2) eliminate waste in your operations so you have more to spend, or (3) go without, especially when it’s not your money to begin with.  

    A possible fourth answer is to go to the American people and make a business case for a new tax. The tax cannot be voted on until it has been presented to the American people, and they’ve been given 18 months to review the pros and cons.  You cannot use government funds for your dog and pony show to sell the tax. Then the people, NOT you or your cronies, vote on it. It must receive 70% of the popular vote in each state to pass. If it passes, the funds collected by that tax cannot be used for any other purpose than the one stated when it was passed.

    Is this really that hard?

    No, it’s not hard, but it actually kind of is because the numbers that are reported are so big they don’t mean anything. And the words are sometimes all mixed up. For example, is “deficit” the same as “debt”? When Congress says they’re passing a bill to reduce the deficit, does that mean we’re actually starting to pay down the debt?

    The Romney people recently created a chart that makes the numbers immediately understandable. I love this chart. It’s simple and straight to the point. Anyone can see what the current numbers show our very smart representatives in Washington are doing.

    Our leaders have a MORAL responsibility not to spend more than they take in. I don’t care what party they belong to–if they don’t have the brains or the morals to use our money wisely, then they should not be able to play with it.

    A Shocking Proposal: think like an accountant (horrors!)

    Our leaders should not have the ability to raise tax rates or create new taxes. They have abused the priviledge of raising taxes on our behalf. They now should lose that priviledge completely. But the fact is they never should have had that duty in the first place.

    Business learned this long ago. This is why it’s standard procedure to separate duties. It is always a VASTLY DUMB idea to have the same person collect the money, deposit it, authorize payments, and make the payments. It INVITES fraud, abuse, and error.

    It’s clear that it’s also an equally dumb idea to have the same people in government levy taxes and then spend that tax money.  But we knew that. The founders used the idea of separation of duties when they set up our government in the first place. They just called it “separation of powers” instead. The problem is we didn’t separate the duties enough.

    Our leaders should NOT have the power to levy taxes on us AND spend our money. We need to separate the duties, reserving the duty of establishing taxes to the people. If our representatives have a really nifty idea they want a tax for, they need to take the business case to the American people as described in answer four to question two in the Big Hairy Test above. And the American people can then vote on it.

    And now I’m off to Lowe’s to purchase some orange paint.

  • Conservative Republican Amnesia

    ByJohn Brown

    If you ask the “conservative” talking heads–Limbaugh, Beck, Hannity, etc.–who THE best conservative president of the last 100 years was, they will say Ronald Reagan. If you ask their dogs, they will bark “Ronald Reagan.” Their gerbils will say other things, but everyone knows you can’t trust rodents. Ask the regular conservative Wanda and Mack (Jane and Joe is so cliche), and they’ll give you the same response as the dogs and people. Ronald Reagan is the guy we conservatives and Republicans have been taught to worship.

    Except, when presented with a candidate as conservative as Reagan, no, probably more conservative (I’m talking Mitt Romney), many of these “conservatives” get out their inquisitional torches. Which is a big reason why the GOP primaries are as fluid as they are at this point.

    As a side note, have you noticed that these talking heads and the mainstream media either have a hobby horse they ride above all else (Rush Limbaugh and his anti global warming crusade) or they seem to promote some flavor-of-the-day litmus test for each election. In one election, they’re going on and on about homosexual marriage. The next election, it’s a talking head approved stance on Taliban bombing. The next, it’s the fact that budgets must be balanced. They line the candidates up and then start whacking them based on these flavor-of-the-day tests. It’s like going to buy a car and focusing all your attention on the steering wheel.

    Anyway, I think many of us have forgotten what THE so-called best conservative president of the last 100 years looked like. If Ronald Reagan were to run today as John Smith, the conservative talking heads would drop him like a hot potato.  You don’t believe me? Well, let’s see how he stacks up.

    1.      ILLEGAL IMMIGRATION

    1. Reagan signed in amnesty for 3 million illegal aliens. The south-west-east-north-of-the-border kind, not the ones with green antennas.
    2. Talking Head Response: After crapping a brick, they would proclaim that John Smith, aka Ronald Reagan, is a pro illegal immigration RINO and must be thrown out!

    2.      ENVIRONMENTAL REGULATION

    1. A few weeks ago Rush Limbaugh told a caller that Romney is not conservative because of his stance on man-made global warming (Romney says he doesn’t know, but there seems to be evidence men contribue; women, of course, never to contribute to such things–they’re too smart), which Limbaugh thinks will lead to big-government regulation of emissions etc.
    2. YET AS GOVERNOR, Reagan established the Air Resources Board to battle California’s worst-in-the-nation smog problem. In a 1984 radio address to the nation, Reagan took credit for the strong action he took in California to combat smog, saying: “I’m proud of having been one of the first to recognize that States and the Federal Government have a duty to protect our natural resources from the damaging effects of pollution that can accompany industrial development.”
    3. THEN AS PRESIDENT, he signed, with great pride, what many consider THE most successful environmental treaty of all time – the Montreal Protocol in 1987, which regulates emissions. Back in those days Ozone depletion was the Global Warming. Reagan believed it, despite folks questioning the science and was happy to regulate.
    4. In the 1987 State of the union he said: “We are also developing proposals that make use of market incentives to control air pollution caused by sulfur dioxide and nitrogen oxide emissions and the causes of acid rain.”
    5. What?! A cap and trade like program? Yes, putting Bush in charge. In 1990, the first Bush Administration successfully pushed through legislation establishing a cap-and-trade program to reduce acid rain—the program Reagan started!
    6. Talking Head Response: John Smith is a total pro-environmental regulation RINO, please queue Al Gore singing “Burning Ring of Fire”

    3.      ABORTION

    1. Reagan signed a permissive law that allowed abortions. Since that law went into effect more than 2,000,000 abortions have happened in the Golden State.
    2. Reagan says he failed to see how it would be abused. He blamed his own inexperience, stating that had he been in office longer he would have realized that the bill was wrong.  He blamed doctors for misinterpreting the bill. President Reagan stated his prolife position by saying: “Abortion on demand now takes the lives of up to one and a half million unborn children a year. Human life legislation ending this tragedy will someday pass the Congress, and you and I must never rest until it does.”  BUT he never introduced a bill to ban abortion or amend what he’d done. Not in California, nor as president.
    3. Furthermore, today’s conservative inquisitors would point to his Supreme Court appointments. He appointed the moderate Sandra Day O’Connor.  Anti-abortion groups were livid, fearing, rightfully as it turned out, that Mrs. O’Connor would not vote to overturn Roe v Wade.  He appointed Justice Anthony Kennedy who had a long history of supporting expanded rights of privacy, gay rights, and preserving a woman’s right to choose.
    4. Talking Head Response: actions speak louder than words–John Smith is a pro-choice RINO

    4.      UNIONS

    1. Reagan was a union president 8 times in a row.
    2. Reagan, aka John Smith, also had lots of troubling connections to the Teamsters, who endorsed him, and who suddenly saw less investigation of their leaders for corruption. This is during the Jimmy Hoffa organized crime years.
    3. Talking Head Response: choke, ack, sputter–Smith is a pro-union gangsta RINO!

    5.      GUN CONTROL

    1. It was Governor Ronald Reagan of California who signed the Mulford Act in 1967, “prohibiting the carrying of firearms on one’s person or in a vehicle, in any public place or on any public street.” Yeah, he aimed to stop the Black Panthers et al, but affected all gun owners.
    2. Twenty-four years later, Reagan was still pushing gun control. “I support the Brady Bill,” he said in a March 28, 1991 speech, “and I urge the Congress to enact it without further delay.” He was right with Clinton on that issue.
    3. The Brady Bill, for the first time ever, instituted federal background checks on firearm purchasers in the United States.
    4. NRA spent millions fighting it, when it pass they mounted cases in a number of states wanting to have it overturned as unconstitutional.
    5. Talking Head Response: anti-gun RINO!

    6.      FISCAL POLICY

    1. As Governor, Reagan signed into law the largest tax increase in the history of any state up till then. Meanwhile, state spending nearly doubled.
    2. As President he continued. While he did cut taxes his first year, he signed into law tax increases of some nature in every year from 1981 to 1987. Furthermore, the debt increased to nearly $3 trillion, roughly three times as much as the first 80 years of the century had done altogether.
    3. Talking Head Response: tax and spend RINO!

    7.      RELIGION

    1. Smith, aka Reagan, let Nancy’s astrologer affect his schedule
    2. Talking Head Response: troubling devilishness (scary for evangelicals everywhere!), even if he only did it to make Nancy feel peace

    Reagan the RINO? Are you kidding? And yet Reagan would be hounded out of the Republican party if he ran today. The talking heads would sound the warning long and loud, which is a shame.

    On the other hand, I’m not saying we need another Reagan. Clones never pan out–hasn’t anyone seen Multiplicty with Michael Keaton?! And despite the recent zombie craze, I don’t want one in the White House, even if the world would be a better place if said zombie should eat Vladimir Putin’s brains out. I tire very quickly of Reagan worship. Or any other politician worship. As good as Reagan was, I disagree with a number of things he did. What I am saying is that those who want to get another president “as good as Reagan” had better know what such a president looks like. And it ain’t the caricature that’s being held up today by many conservatives, especially the talking heads, who seem to gloss over the facts of history.

  • The Rocket Science of Overspending

    ByJohn Brown

    In July, I blogged some spending 101 for Congress and the President, including contigency planning for alien invasions.  I thought I made some good points.  However, through the whole spending debate that occured this last spring nobody in the media or elsewhere was able to make clear what is going on with the US government. Nobody except Dave Ramsey. He explained it on Fox and then on his website. If you take the big federal numbers and translate them to a size we can understand, here’s the situation:

    – Joe and Susie (the Federal government) make $55,000 a year
    – They spend $96,000 a year
    – At the same time, they have $366,000 in credit card debt

    Look at those numbers again. Every year those clowns in Washington are adding $41,000 a year to that massive debt total. Soon enough, our overspending will kill our ability to do anything else except pay the interest on that debt.  150 years after America abolishes slavery, we decide that debt slavery really is a good idea. Yea! Give us shackles! Give us shackles!

    No wonder our credit score as a nation (our bond rating) was reduced.

    So what did the government do this last Spring? They agreed to find some way to cut spending from $96,000 to $78,000. Meaning they’re still adding $28,000 dollars a year to the government’s massive credit card debt total. Which we have to pay!

    If the US Government was a family, they would be making $55,000 a year, they spend $96,500 a year, & are $366,000 in credit card debt. What’s the first step to get out of debt? Stop overspending! But that means a family that is used to spending $96,500 a year has to learn how to live on $55,000. That’s a tough pill to swallow. It works the same way for the government. You can’t borrow your way out of debt, whether you’re a typical American family or the entire U.S. government. At some point, you’ve got to say, “Enough is enough!” and make the hard cuts necessary to win over the long haul. – Dave Ramsey

    The answer is NOT to print more money.

    If you do that, you reduce the value of each dollar. It’s called inflation. As Ron Paul rightly points out, it acts effectively as a tax. Or as I like to put it–a PAY CUT. How many of you would like to get a nice fat 10% or 20% pay cut this year? Furthermore, instead of fixing the problem, the overspending continues, which means more pay cuts in the future. More fun!

    No, the thing we have to do is STOP SPENDING MORE THAN WE MAKE.  Here’s what has to happen.

    1. We must write into law that Congress balance its budget every year–they must not be able to spend more than they take in except in rare emergencies. This means they might need to build up a rainy-day fund.
    2. We must cut our spending. Now. I linked to an idea Ron Paul has for this in my 101 post where we just go back to 2007 levels of spending.
    3. We must work to increase our revenues. Not through hiking taxes to monstrous levels, but by providing optiomal regulatory conditions for economic growth. See my 101 post. 
    4. We need to make sure the taxes are visible, so the American people can easily see what’s going on. Congress has mandated that lenders provide clients an APR so they can clearly see the rate they will pay on a mortgage. Why shouldn’t we mandate that the IRS send out an ATR–annual tax rate (or maybe Annual Grab Rate or Annual Tax Burden or you come up with the name)–which includes all Federal taxes translated into one total rate?  
    5. We need to give everyone the opportunity to pay for the soldiers that defend them and the roads they drive on, even if it’s just $50-100 a year for the very poor.
    6. We must send people to the White House and Congress who are willing to do what it takes RIGHT NOW.

    I mentioned Ron Paul a number of times above. He’s not my choice for president. But he has added a number of good things to this discussion. Here are the Ramsey links:

    EDIT: Mark Holt makes an excellent point in the comments. Inflation isn’t just a pay cut. It’s a savings cut, a retirement cut, a 401k cut, a house value cut, an everything cut. Using that backdoor method, the DC Connivers institute a tax of everything, something they’d never be able to pass out in the open.

     

  • Some 101 for Congress and the President

    ByJohn Brown

    It’s not really rocket science.

    1. If you have loans outstanding and the payment is due, you owe the creditors a payment. Payables for Idiots 101.
    2. If you have received goods and services, then you owe your vendors a payment. Payables for Idiots 102.
    3. You pay your bills. End of story. That’s what grown ups do. If you have to float some debt for a few months, you do it. And you staple a note to your head to stop spending like a slot machine junkie. Payables for Idiots 103.

    The debts we have are for goods and services we’ve already received. So increase the debt limit and pay your damn bills. What about spending?

    1. You do not spend more than you take in year after year. If you do, that’s called running your business into the ground. In the case of the Congress (primarily Harry Reid’s Senate at this point, although many, but not all, of the Republicans were happy to go along with dumb spending earlier) and the President, it’s the country they’re running into the ground. Spending for Idiots 101.
    2. If you’ve got all sorts of cool things planned like Acorn subsidies for pimps and Antarctica Jell-O wrestling grants for scientists, but you can’t afford them—i.e. you have to go into debt to get them–you cancel those plans. Spending for Idiots 102.
    3. The problem is that Congress and the President buy all sorts of crap and expect to put it on a credit card when it comes due. And there’s nothing to prevent them from doing it.
    4. They’re like irresponsible teenagers. They need controls that won’t allow them to overspend. Kind of like putting limits on a teenager’s cell phone minutes. Or forcing them to use a debit card. When they’re out of cash, they get a card denied response from their vendors.
    5. So you set spending limits, debt limits, and force them to balance the budget each year, except in extreme emergencies like when space aliens try to wipe out humanity. Spending for Idiots 103.

    This means you pass Cut, Cap, and Balance and quit spending money you don’t have. Really difficult stuff. What about getting out of debt?

    1. You eat rice and beans until you’re debt is gone or down to a manageable level. That means you cancel crap you can’t pay for. Sorry earmarks, you’re gone. Sorry grants for nude artists in trees, you’re gone. Sorry subsidies for PBS, you’re gone.  Finances 200: How to Not Be A Money Moron.
    2. You figure out how to reduce your current cost structure. This means you figure out a way to reduce the costs of Medicare, Medicaid, Social Security, and every other service or product you provide, cutting those that aren’t essential. You hire someone like Mitt Romney who knows how to go through every line in a budget and turn a bloated ship around.  Finances 300: No, You Can’t Pay For Your Sister’s Hair Implants with My Money.
    3. You remind people this is the freaking U S of A. A place where a man or woman can make themselves. Not where the government changes your diapers and feeds you mush three times a day. Communism and socialism have failed. They were badly conceived utopias, much like multi-level soap and vitamin marketing schemes that are supposed to usher in the Second Coming.  Finances 400: The USA Buried the USSR for a Reason.
    4. You increase your revenues.
    5. However, if you raise taxes, you’re actually going to depress your revenues. Think about this. Which car company has bigger revenues–Lamborgini or Honda? Who is going to put out, if they’ve got Louie the Fingers and his buddy Jockstrap taking increasing amounts of their money in a protection racket? Don’t be a thug. Be an enabler.  Do what Wal-Mart does and go for volume.  Do what Ebay does–create the environment that entices tons of commerce, entices people to dramatically increase their transactions. Transactions go through the roof; you take only a tiny cut, and, shazam, you increase your revenues.  Finances 500: Um, Do You Want People to Work to Become Rich or Do You Want Them To Pick Up Torches and Burn the Houses of the Rich Down?

    Cut spending, reduce cost structure, and increase your revenues. That’s getting out of debt.

    Is this really that hard?

    EDIT: 8/1 Seems that “wacky” Ron Paul actually has a simple commonsense approach that doesn’t sound crazy. Why couldn’t we do this?