Category Archives: spending out of control

Cato Institute:Spending is our problem Part 5

March 14, 2012 – 6:29 am

Uploaded by on Feb 15, 2011

Dan Mitchell, Senior Fellow at the Cato Institute, speaks at Moving Forward on Entitlements: Practical Steps to Reform, NTUF’s entitlement reform event at CPAC, on Feb. 11, 2011.

People think that we need to raise more revenue but I say we need to cut spending. Take a look at a portion of this article from the Cato Institute:

The Damaging Rise in Federal Spending and Debt

by Chris Edwards

Joint Economic Committee
United States Congress

Joint Economic CommitteeUnited States Congress

Added to cato.org on September 20, 2011

This testimony was delivered on September 20, 2011.

Rising Spending Reduces Growth

Let’s take a look at how federal spending damages the economy over the long-run. Federal spending is financed by extracting resources from current and future taxpayers. The resources consumed by the government cannot be used to produce goods in the private marketplace. For example, the engineers needed to build a $10 billion government high-speed rail project are taken away from building other products in the economy. The $10 billion rail project creates government-connected jobs, but it also kills $10 billion worth of private activities.

Indeed, the private sector would actually lose more than $10 billion in this example. That is because government spending and taxing creates “deadweight losses,” which result from distortions to working, investment, and other activities. The CBO says that deadweight loss estimates “range from 20 cents to 60 cents over and above the revenue raised.”19 Harvard University’s Martin Feldstein thinks that deadweight losses “may exceed one dollar per dollar of revenue raised, making the cost of incremental governmental spending more than two dollars for each dollar of government spending.”20 Thus, a $10 billion high-speed rail line would cost the private economy $20 billion or more.

The government uses a “leaky bucket” when it tries to help the economy. Stanford University’s Michael Boskin, explains: “The cost to the economy of each additional tax dollar is about $1.40 to $1.50. Now that tax dollar … is put into a bucket. Some of it leaks out in overhead, waste, and so on. In a well-managed program, the government may spend 80 or 90 cents of that dollar on achieving its goals. Inefficient programs would be much lower, $.30 or $.40 on the dollar.”21 Texas A&M University’s Edgar Browning comes to similar conclusions about the magnitude of the government’s leaky bucket: “It costs taxpayers $3 to provide a benefit worth $1 to recipients.”22

The larger the government grows, the leakier the bucket becomes. On the revenue side, tax distortions rise rapidly as marginal tax rates rise.23 On the spending side, funding is allocated to activities with ever lower returns as the government expands. Figure 4 illustrates the consequences of the leaky bucket. On the left-hand side, tax rates are low and the government delivers useful public goods such as crime reduction. Those activities create high returns, so per-capita income initially rises as the government grows.

As the government expands further, it engages in less productive activities. The marginal return from government spending falls and then turns negative. On the right-hand side of the figure, average income falls as the government expands. Government in the United States — at 41 percent of GDP — is almost certainly on the right-hand side of this figure. In a 2008 book on federal fiscal policy, Professor Browning concludes that today’s welfare state reduces GDP — or average U.S. incomes — by about 25 percent.24 That would place us substantially to the right in Figure 4, and it suggests that major federal spending cuts would boost incomes over time.

19 Congressional Budget Office, “Budget Options,” February 2001, p. 381.
20 Martin Feldstein, “How Big Should Government Be?” National Tax Journal, vol. 50, no. 2, June 1997, pp. 197-213.
21 Michael Boskin, “A Framework for the Tax Reform Debate,” in Frontiers of Tax Reform, ed. Michael Boskin (Stanford: Hoover Institution, 1996), p. 14.
22 Edgar K. Browning, Stealing From Ourselves: How the Welfare State Robs Americans of Money and Spirit (Westport, CT: Praeger Publishers, 2008), p. 179.
23 Deadweight losses rise more than proportionally as tax rates rise.
24 See Edgar K. Browning, Stealing From Ourselves: How the Welfare State Robs Americans of Money and Spirit (Westport, CT: Praeger Publishers, 2008), p. 188

By Everette Hatcher III | Also posted in Cato Institute | Tagged , , , , | Comments (0)

Cato Institute:Spending is our problem Part 4

March 13, 2012 – 2:18 pm

Should we spend more federal money to help the poor?

Uploaded by on Oct 3, 2011

The so-called War on Poverty has failed. Making government bigger and creating more federal redistribution programs has been bad news for taxpayers. But the welfare state also has been a disaster for the less fortunate, creating a flypaper effect that makes it difficult for people to lead independent and self-reliant lives. This Center for Freedom and Prosperity Foundation video shows how the poverty rate was falling after World War II — but then stagnated once the federal government got involved. www.freedomandprosperity.org

People think that we need to raise more revenue but I say we need to cut spending. Take a look at a portion of this article from the Cato Institute:

The Damaging Rise in Federal Spending and Debt

by Chris Edwards

Joint Economic Committee
United States Congress

Joint Economic CommitteeUnited States Congress

Added to cato.org on September 20, 2011

This testimony was delivered on September 20, 2011.

Baseline Projections Are Optimistic

In support of building a large “fiscal buffer,” policymakers should recognize that both short-term and long-term CBO projections are optimistic in various ways. Perhaps the future will include some positive budget surprises, but the big risk factors seem to be on the negative side.

In CBO’s baseline, federal deficits fall substantially over the coming decade, partly due to changes under the recent Budget Control Act. However, spending will be higher than projected if:

  • Policymakers lift caps in the Budget Control Act.
  • Policymakers launch new spending programs or respond to unforeseen crises or wars.
  • Higher interest rates push up interest costs, which is a risk that gets magnified as federal debt grows larger.
  • A major recession causes large cost increases in programs sensitive to economic cycles, such as unemployment insurance.
  • Policymakers respond to another recession with costly new “stimulus” plans. The persistence of Keynesian policy ideas in Washington is an important risk to the outlook for federal debt.

There are likely to be negative shocks in coming years that we don’t foresee. Consider that in its January 2008 budget outlook, CBO projected that U.S. economic growth would slow in 2008 but then rebound fairly strongly in subsequent years.15 CBO discussed the risk of a recession, but didn’t foresee the calamity that was already starting. The upshot is that policymakers should take a conservative approach and build a “fiscal buffer” with large spending cuts now before another recession causes the deficit to soar again.

CBO’s long-range projections — such as the “alternative fiscal scenario” (AFS) shown in Figure 1 — are also optimistic. In its basic projections, CBO does not factor in the negative effects of rising spending, debt, or taxes on GDP after 2021, but it does do that in a separate analysis.16 If spending actually followed the course shown in Figure 1, CBO estimates that GDP in 2035 would be up to 10 percent less than shown in the AFS, and GNP would be up to 18 percent less. In turn, spending-to-GDP and debt-to-GDP ratios would be worse than usually shown in long-range budget charts.

Under the AFS, rising deficit spending could reduce American incomes. The CBO finds that real GNP per capita could stop growing in the late 2020s, and then start falling after that. In a historic reversal, future generations of Americans would become successively poorer.

The way to ensure our continued prosperity is to cut federal spending and reduce debt. In a 2010 analysis, the CBO compared the high-spending AFS with Rep. Paul Ryan’s “Roadmap” plan.17 The Ryan plan would restrain federal spending to roughly current levels for the next few decades, and then start reducing it. By the late 2020s, GNP per capita under the Ryan plan would begin rising above the flat and then falling levels under the AFS. By the late 2050s, GNP per capita would be 70 percent higher under the Ryan plan than under the AFS.18

15 Congressional Budget Office, “The Budget and Economic Outlook: Fiscal Years 2008 to 2018,” January 2008, Chapter 2.
16 See Chapter 2 in Congressional Budget Office, “Long-Term Budget Outlook,” June 2011.
17 Congressional Budget Office, Douglas Elmendorf letter to Paul Ryan, January 27, 2010, http://www.cbo.gov/ftpdocs/108xx/doc10851/01-27-Ryan-Roadmap-Letter.pdf.
18 Congressional Budget Office, Douglas Elmendorf letter to Paul Ryan, January 27, 2010, p. 16.

By Everette Hatcher III | Also posted in Cato Institute | Tagged , , , , , , , , | Comments (0)

Cato Institute:Spending is our problem Part 3

March 12, 2012 – 11:26 pm

Uploaded by on Feb 15, 2011

Dan Mitchell, Senior Fellow at the Cato Institute, speaks at Moving Forward on Entitlements: Practical Steps to Reform, NTUF’s entitlement reform event at CPAC, on Feb. 11, 2011.

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People think that we need to raise more revenue but I say we need to cut spending. Take a look at a portion of this article from the Cato Institute:

The Damaging Rise in Federal Spending and Debt

by Chris Edwards

Joint Economic Committee
United States Congress

Joint Economic CommitteeUnited States Congress

Added to cato.org on September 20, 2011

This testimony was delivered on September 20, 2011.

Harmful Effects of Deficit Spending

Federal deficit spending has exploded. Even with the recent passage of the Budget Control Act, the deficit is still expected to be about $1 trillion next year. The damage caused by this spending includes:

1. Transferring resources from higher-valued private activities to lower-valued government activities. With government spending already at 41 percent of GDP, new spending will likely have a negative return, which will reduce output.
2. Creating pressure to increase taxes in the future, which would reduce growth. Higher taxes impose “deadweight losses” on the economy of at least $1 for every $2 of added revenues, as discussed below.
3. Increasing federal debt, which creates economic uncertainty and a higher risk of financial crises, as Europe’s woes illustrate. Research indicates that economic growth tends to fall as debt rises above about 90 percent of GDP, as discussed below.

Economists in the Keynesian tradition dispute the first point. They believe that the demand-side “stimulus” benefits of spending are so important that they outweigh the problems of microeconomic distortions and misallocations caused by federal programs. However, it is very difficult to see any economic boost from the huge deficit spending of recent years.

The total Keynesian stimulus in recent years includes not only the 2009 stimulus package of more than $800 billion, but the total amount of federal deficit spending. We’ve had deficit spending of $459 billion in fiscal 2008, $1.4 trillion in fiscal 2009, $1.3 trillion in fiscal 2010, and $1.3 trillion in fiscal 2011. Despite that huge supposed stimulus, U.S. unemployment remains at high levels and the current recovery has been the slowest since World War II.5

The Obama administration claimed that there are large “multiplier” benefits of federal spending, but the recent spending spree seems to have mainly just suppressed private-sector activities.6 Stanford University’s John Taylor took a detailed look at GDP data over recent years, and he found little evidence of any benefits from the 2009 stimulus bill.7 Any “sugar high” to the economy from spending increases was apparently small and short-lived. Harvard University’s Robert Barro estimates that any small multiplier benefits that the stimulus bill may have had is greatly outweighed by the future damage caused by higher taxes and debt.8

John Taylor recently testified that deficit-spending stimulus actions “have not only been ineffective, they have lowered investment and consumption demand by increasing concerns about the federal debt, another financial crisis, threats of inflation or deflation, higher taxes, or simply more interventions. Most businesses have plenty of cash to invest and create jobs. They’re sitting on it because of these concerns.”9

As federal debt grows larger, the problems caused by fiscal uncertainty will get magnified. The CBO notes that “growing federal debt also would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates. Such a crisis would . . . probably have a very significant negative impact on the country.”10

Research by economists Kenneth Rogoff and Carmen Reinhart found that government debt burdens above 90 percent of GDP are associated with lower economic growth.11 After examining data on dozens of countries, they concluded that “high debt is associated with slower growth; a relationship which is robust across advanced and emerging markets.”12 High debt can also be associated with inflation crises, “financial repression,” and other problems. Furthermore, high public and private debt acts as a “contagion amplifier” in the globalized economy.

A new paper by economists at the Bank for International Settlements (BIS) similarly found that when government debt in OECD countries rises above a threshold of about 85 percent of GDP, economic growth is slower.13 As debt rises, borrowers become increasingly sensitive to changes in interest rates and other shocks. “Higher nominal debt raises real volatility, increases financial fragility, and reduces average growth,” the authors note.14

The BIS economists conclude that countries should build a “fiscal buffer” by keeping its debt well below the danger threshold. They note that without major reforms, debt-to-GDP levels will soar in coming decades in most advanced economies due to population aging. Thus, one more reason for the United States to cut its spending and debt is to help it weather future financial crises spilling over from countries that are in even worse shape than we are.
5 See Joint Economic Committee, “Uncharted Depths: Welcome to Barack Obama’s ‘Recover Bummer,'” Republican Staff, June 23, 2011. And see the comments of economists Robert Gordon and Robert Hall at http://www.cato-at-liberty.org/biggest-keynesian-stimulus-slowest-recovery.
6 See Robert J. Barro, “Government Spending Is No Free Lunch,” Wall Street Journal, January 22, 2009; John F. Cogan and John B. Taylor, “The Obama Stimulus Impact? Zero,” Wall Street Journal, December 9, 2010; John H. Cochrane, “Fiscal Stimulus, Fiscal Inflation, or Fiscal Fallacies,” University of Chicago Booth School of Business, February 27, 2009.
7 John Taylor, Testimony to the House Committee on Oversight and Government Reform, Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending, February 16, 2011.
8 Robert J. Barro, “The Stimulus Evidence One Year Later,” Wall Street Journal, February 23, 2010.
9 John Taylor, Testimony to the Senate Finance Committee, Subcommittee on Fiscal Responsibility and Economic Growth, September 13, 2011.
10 Congressional Budget Office, “Long-Term Budget Outlook,” June 2011, p. 22.
11 The authors summarize their findings in Carmen Reinhart and Kenneth Rogoff, “A Decade of Debt,” National Bureau of Economic Research, Working Paper 16827, February 2011.
12 Carmen Reinhart and Kenneth Rogoff, “A Decade of Debt,” National Bureau of Economic Research, Working Paper 16827, February 2011, p. 5.
13 Stephen Cecchetti, M.S. Mohanty, and Fabrizio Zampolli, “The Real Effects of Debt,” Bureau for International Settlements, September 2011.
14 Stephen Cecchetti, M.S. Mohanty, and Fabrizio Zampolli, “The Real Effects of Debt,” Bureau for International Settlements, September 2011, p. 4.

By Everette Hatcher III | Also posted in Cato Institute | Tagged , , , , | Comments (0)

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 138)

March 12, 2012 – 8:45 am

Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:

Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.

On May 11, 2011,  I emailed to this above address and I got this email back from Senator Pryor’s office:

Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner.  I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.

Here are a few more I just emailed to him myself:

  • Stop funding research that directly benefits private industry, by ending or shutting down:
  1. The Advanced Technology Program (2004 spending: $195 million, discretionary);
  2. The Manufacturing Extension Partnerships ($40 million, discretionary);
  3. The Cooperative State Research, Education and Extension Service ($1,082 million, discretionary);
  4. The Agricultural Research Service ($1,179 million, discretionary); and
  5. The Department of Energy research grants that displace private funding.

This is how bad it is getting:

Earmarks

The Number of Pork Projects Remains Near 10,000

  • Earmarks distribute government grants by political favoritism rather than merit. Rather than allow agencies to distribute grants based on merit, or let state and local governments decide how to distribute federal grant dollars within their own communities, lawmakers earmark government grants to recipients of their choosing.
  • Consequently, the distribution of government grants now typically depends on politics, campaign contributions, and the committee assignments of local lawmakers.
  • President Obama pledged to reduce earmark spending down to the 1994 level of $7.8 billion (in nominal dollars). Instead, he signed $16.5 billion of appropriations earmarks into law last year.
  • House Republicans have announced a one-year moratorium on all earmarks. House Democrats have announced a one-year moratorium on earmarks to for-profit companies. The Senate continues to earmark as usual.
  • In addition to regular annual appropriations earmarks, the 2005 highway authorization bill contained approximately 6,371 earmarks worth $25 billion in total.
By Everette Hatcher III | Comments (0)

Videos by Cato Institute on failed stimulus plans

March 9, 2012 – 7:43 am

In this post I have gathered several videos from the Cato Institute concerning the subject of failed stimulus plans.

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Government Spending Doesn’t Create Jobs

Uploaded by on Sep 7, 2011

Share this on Facebook: http://on.fb.me/qnjkn9 Tweet it: http://tiny.cc/o9v9t

In the debate of job creation and how best to pursue it as a policy goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t create new employment.

Video produced by Caleb Brown and Austin Bragg.

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Keynesian Catastrophe: Big Money, Big Government & Big Lies

Uploaded by on Jan 19, 2012

The Cato Institute’s Dan Mitchell explains why Obama’s stimulus was a flop! With Glenn Reynolds.

See more at http://www.pjtv.com and http://www.cato.org

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Keynesian Economics Is Wrong: Bigger Gov’t Is Not Stimulus

Uploaded by on Dec 15, 2008

Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

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Obama’s So-Called Stimulus: Good For Government, Bad For the Economy

Uploaded by on Jan 26, 2009

President Obama wants Congress to dramatically expand the burden of government spending. This CF&P Foundation mini-documentary explains why such a policy, based on the discredited Keynesian theory of economics, will not be successful. Indeed, the video demonstrates that Obama is proposing – for all intents and purposes – to repeat Bush’s mistakes. Government will be bigger, even though global evidence shows that nations with small governments are more prosperous.

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Big Government Is Not Stimulus: Why Keynes Was Wrong (The Condensed Version)

Uploaded by on Jan 13, 2009

The CF&P Foundation has released a condensed version of our successful mini-documentary explaining why so-called stimulus schemes do not work. Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

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Eight Reasons Why Big Government Hurts Economic Growth

Uploaded by on Aug 17, 2009

This Center for Freedom and Prosperity Foundation video analyzes how excessive government spending undermines economic performance. While acknowledging that a very modest level of government spending on things such as “public goods” can facilitate growth, the video outlines eight different ways that that big government hinders prosperity. This video focuses on theory and will be augmented by a second video looking at the empirical evidence favoring smaller government.

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Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, Not the Other Way

Uploaded by on Nov 29, 2010

Politicians and journalists who fixate on consumer spending are putting the cart before the horse. Consumer spending generally is a consequence of growth, not the cause of growth. This Center for Freedom and Prosperity video helps explain how to achieve more prosperity by looking at the differences between gross domestic product and gross domestic income. www.freedomandprosperity.org

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Deficits, Debts and Unfunded Liabilities: The Consequences of Excessive Government Spending

Uploaded by on May 10, 2010

Huge budget deficits and record levels of national debt are getting a lot of attention, but this video explains that unfunded liabilities for entitlement programs are Americas real red-ink challenge. More important, this CF&P mini-documentary reveals that deficits and debt are symptoms of the real problem of an excessive burden of government spending. www.freedomandprosperity.org

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Now that I have been critical of the Democrat President, I wanted to show that I am not concerned about taking up for Republicans but looking at the facts. President Clinton did increase government spending at a slower rate than many other presidents. Here are two  videos that praise both Reagan and Clinton for both accomplished this feat.

Spending Restraint, Part I: Lessons from Ronald Reagan and Bill Clinton

Uploaded by on Feb 14, 2011

Ronald Reagan and Bill Clinton both reduced the relative burden of government, largely because they were able to restrain the growth of domestic spending. The mini-documentary from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to show how Reagan and Clinton succeeded and compares their record to the fiscal profligacy of the Bush-Obama years.

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Spending Restraint, Part II: Lessons from Canada, Ireland, Slovakia, and New Zealand

Uploaded by on Feb 22, 2011

Nations can make remarkable fiscal progress if policy makers simply limit the growth of government spending. This video, which is Part II of a series, uses examples from recent history in Canada, Ireland, Slovakia, and New Zealand to demonstrate how it is possible to achieve rapid improvements in fiscal policy by restraining the burden of government spending. Part I of the series examined how Ronald Reagan and Bill Clinton were successful in controlling government outlays — particularly the burden of domestic spending programs. www.freedomandprosperity.org

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It seems that liberals will never wake up. On 3-8-12 a Arkansas Times blogger pointed out that Obama’s stimulus in 2009 was not made up of just increased but also tax cuts. That is true but the real truth is that there have been about 1/2 dozen stimulus efforts by President Obama and all of them have failed.  Over and over they have tried stimulus plans but they don’t work. Take a look at this excellent article from the Cato Institute:

Keynesian Policies Have Failed

by Chris Edwards

Chris Edwards is the director of tax policy studies at the Cato Institute and the editor of Downsizing Government.org.

Added to cato.org on December 2, 2011

This article appeared on U.S. News & World Report Online on December 2, 2011

Lawmakers are considering extending temporary payroll tax cuts. But the policy is based on faulty Keynesian theories and misplaced confidence in the government’s ability to micromanage short-run growth.

In textbook Keynesian terms, federal deficits stimulate growth by goosing “aggregate demand,” or consumer spending. Since the recession began, we’ve had a lot of goosing — deficits were $459 billion in 2008, $1.4 trillion in 2009, $1.3 trillion in 2010, and $1.3 trillion in 2011. Despite that huge supposed stimulus, unemployment remains remarkably high and the recovery has been the slowest since World War II.

Policymakers should ignore the Keynesians and their faulty models, and instead focus on reforms to aid long-run growth…

Yet supporters of extending payroll tax cuts think that adding another $265 billion to the deficit next year will somehow spur growth. That “stimulus” would be on top of the $1 trillion in deficit spending that is already expected in 2012. Far from helping the economy, all this deficit spending is destabilizing financial markets, scaring businesses away from investing, and imposing crushing debt burdens on young people.

For three years, policymakers have tried to manipulate short-run economic growth, and they have failed. They have put too much trust in macroeconomists, who are frankly lousy at modeling the complex workings of the short-run economy. In early 2008, the Congressional Budget Office projected that economic growth would strengthen in subsequent years, and thus completely missed the deep recession that had already begun. And then there was the infamously bad projection by Obama’s macroeconomists that unemployment would peak at 8 percent and then fall steadily if the 2009 stimulus plan was passed.

Chris Edwards is the director of tax policy studies at the Cato Institute and the editor of Downsizing Government.org.

 

More by Chris Edwards

Some of the same Keynesian macroeconomists who got it wrong on the recession and stimulus are now claiming that a temporary payroll tax break would boost growth. But as Stanford University economist John Taylor has argued, the supposed benefits of government stimulus have been “built in” or predetermined by the underlying assumptions of the Keynesian models.

Policymakers should ignore the Keynesians and their faulty models, and instead focus on reforms to aid long-run growth, which economists know a lot more about. Cutting the corporate tax rate, for example, is an overdue reform with bipartisan support that would enhance America’s long-run productivity and competitiveness.

If Congress is intent on cutting payroll taxes, it should do so within the context of long-run fiscal reforms. One idea is to allow workers to steer a portion of their payroll taxes into personal retirement accounts, as Chile and other nations have done. That reform would feel like a tax cut to workers because they would retain ownership of the funds, and it would begin solving the long-term budget crisis that looms over the economy.

Related posts:

Stimulus plans do not work (part 2)

Dan Mitchell discusses the effectiveness of the stimulus Uploaded by catoinstitutevideo on Nov 3, 2009 11-2-09 When I think of all our hard earned money that has been wasted on stimulus programs it makes me sad. It has never worked and will not in the future too. Take a look at a few thoughts from […]

Stimulus plans do not work (Part 1)

Government Spending Doesn’t Create Jobs Uploaded by catoinstitutevideo on Sep 7, 2011 Share this on Facebook: http://on.fb.me/qnjkn9 Tweet it: http://tiny.cc/o9v9t In the debate of job creation and how best to pursue it as a policy goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t […]

Dumas thinks we don’t need Balanced Budget Amendment but should balance it on our own

In his recent article Ernie Dumas sticks to his guns that we should balance the budget without being forced to with a “Balanced Budget Amendment,” but I wonder how well that has worked so far? I have made this a key issue for this blog in the past as you can tell below: Dear Senator […]

Maybe the “Occupy Wall Street” crowd should be angry at Obama

(Picture from Arkansas Times Blog) When I think about all the anger and hate coming from the Occupy Wall Street crowd, I wonder if they have read this story below? Solyndra: Crooked Politics or Just Bad Economics? Posted by David Boaz Amy Harder has a good take on the Solyndra issue in National Journal Daily […]

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 13 Thirsty Thursday, Open letter to Senator Pryor)

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 13 Thirsty Thursday, Open letter to Senator Pryor) Office of the Majority Whip | Balanced Budget Amendment Video In 1995, Congress nearly passed a constitutional amendment mandating a balanced budget. The Balanced Budget Amendment would have forced the federal government to live within its […]

Mark Pryor not for President’s job bill even though he voted for it

Andrew Demillo pointed this out  and also Jason Tolbert noted: PRYOR OPPOSES THE OBAMA JOBS BILL THAT HE VOTED TO ADVANCE  Sen. Mark Pryor has been traveling around the state touting a six-part jobs plan that he says “includes a number of bipartisan initiatives, is aimed at creating jobs by setting the table for growth, encouraging new […]

Is a lack of money the problem for our public schools?

Is a lack of money the problem for our public schools? Everything You Need to Know About Public School Spending in Less Than 2½ Minutes Posted by Adam Schaeffer Neal McCluskey gutted the President’s new “Save the Teachers” American Jobs Act sales pitch a good while back, as did Andrew Coulson here. Thankfully, it seems […]

By Everette Hatcher III | Also posted in Cato Institute, President Obama, Taxes | Comments (0)

Cato Institute:Spending is our problem Part 2

March 8, 2012 – 3:09 pm

But we also know that it is difficult to convince politicians to do what’s right for the nation. And if they don’t change the course of fiscal policy, and we leave the federal government on autopilot, then America is doomed to become another Greece.

The combination of poorly designed entitlement programs (mostly Medicare and Medicaid) and an aging population will lead to America’s fiscal collapse.

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People think that we need to raise more revenue but I say we need to cut spending. Take a look at a portion of this article from the Cato Institute:

The Damaging Rise in Federal Spending and Debt

by Chris Edwards

Joint Economic Committee
United States Congress

Joint Economic CommitteeUnited States Congress

Added to cato.org on September 20, 2011

This testimony was delivered on September 20, 2011.

America Has a High-Spending and High-Debt Government

Some analysts say that America can afford to increase taxes and spending because it is a uniquely small-government country. Alas, that is no longer the case. Data from the Organization for Economic Cooperation and Development (OECD) show that federal, state, and local government spending in the United States this year is a huge 41 percent of GDP.

Figure 2 shows that government in the United States used to be about 10 percentage points of GDP smaller than the average government in the OECD. But that size advantage has fallen to just 4 percentage points. A few high-income nations — such as Australia — now have smaller governments and much lower government debt than the United States.

Historically, America’s strong growth and high living standards were built on our relatively smaller government. The ongoing surge in federal spending is undoing this competitive advantage we had enjoyed in the world economy. CBO projections show that without reforms federal spending will rise by about 10 percentage points of GDP by 2035. If that happens, spending by American governments will be more than half of GDP by that year. That would doom young people to unbearable levels of taxation and a stagnant economy with fewer opportunities.

American government debt has also soared to abnormally high levels. Figure 3 shows OECD data for gross government debt as a share of GDP.3 (The data include debt for federal, state, and local governments). In 2011, gross government debt is 101 percent of GDP in the United States, substantially above the OECD average of 78 percent.4

3 Organization for Economic Cooperation and Development, “Economic Outlook Database,” September 2011, Annex Table 32.
4 This is a simple average of OECD countries. The OECD publishes a weighted average, but that figure is, of course, heavily influenced by the United States.

By Everette Hatcher III | Also posted in Cato Institute | Tagged , , , , | Comments (0)

Obama’s March 16, 2006 speech against raising debt ceiling

March 8, 2012 – 6:39 am

Obama’s March 16, 2006 speech against raising the debt ceiling is here:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.

And the cost of our debt is one of the fastest growing expenses in the Federal budget. This rising debt is a hidden domestic enemy, robbing our cities and States of critical investments in infrastructure like bridges, ports, and levees; robbing our families and our children of critical investments in education and health care reform; robbing our seniors of the retirement and health security they have counted on.

Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans–a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.

Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

I therefore intend to oppose the effort to increase America’s debt limit.

Sen. Barack Hussein Obama, Jr., (Senate – March 16, 2006)

_______________

3 Reasons Why The Debt-Ceiling Debate is Full of Malarkey

Uploaded by on Jul 15, 2011

All anybody in Washington can talk about these days is the debt limit or debt ceiling — the total amount of money the federal government is authorized to borrow at any given time. After a decade in which spending increased by more than 60 percent in inflation-adjusted dollars and the debt limit was raised no fewer than 10 times, the government is about to max out its $14.3 trillion credit line, leading to fears that Washington is going to default on its bonds, stop cutting Social Security checks, and destroy the economy more than it already has.

But the current debate over the debt ceiling is full of malarkey for at least three reasons.

1. August 2 is a phony deadline. Treasury Secretary Timothy Geithner has pushed back the drop-dead date when the U.S. finally reaches its limit a bunch of times already: March 31, April 15, May 31 were all cited as deadlines before August 2 was inked in as Armageddon. But this time, he means it, man, really.

2. Reaching the debt limit is not the same as defaulting on our debt — which would indeed be catastrophic.

Think about it: You can max out your credit cards but as long as you keep paying the minimum amount due each month, your creditors don’t go crazy. Interest on the debt is a small fraction of total outlays and the government has a series of tools — from using cash on hand to selling assets to scrimping on nonessential payments — to make sure interest payments are made and seniors aren’t put on an all cat-food diet.

3. Legislating-by-Panic is no way to run a country. The reason we’re in this mess is because government can’t stop spending. And the government can’t even pass a budget on a year’s notice. But we’re expecting them to come up with a good plan for the country’s borrowing in a couple of weeks? Trying to force through an expansion of the country’s credit line by promising cuts in spending down the road is exactly why we’re in this situation to begin with.

It makes far more sense to do something like sell some TARP assets — the government is sitting on $320 billion in outstanding direct loans and equities investments — to cover interest payments through the end of the fiscal year then force Congress and the president to come up with a budget that cuts spending — and borrowing — for real, next year, not is some distant future.

For more information, check out Nick Gillespie’s 5 Uncomfortable Facts About the Wonderful, Horrible Debt-Limit Debate: http://reason.com/archives/2011/07/08/five-uncomfortable-facts-about

And Mercatus Center’s Jason J. Fichtner & Veronique de Rugy’s The Debt Ceiling: What is at Stake: http://mercatus.org/sites/default/files/publication/Debt%20Ceilling.deRugy.Fi…

About 2.35 minutes.

Produced by Nick Gillespie and Meredith Bragg, edited by Joshua Swain.

Go to Reason.tv for downloadable versions, and subscribe to Reason.tv’s YouTube Channel to receive automatic notifications when new material goes live.

Related posts (these posts show how much study I have down on this issue before, frankly all 66 of these representatives are my heroes!!):

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 49) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31)

Congressmen Tim Huelskamp on the debt ceiling Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 25)

Uploaded by RepJoeWalsh on Jun 14, 2011 Our country’s debt continues to grow — it’s eating away at the American Dream. We need to make real cuts now. We need Cut, Cap, and Balance. The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 25) This post today is a part of a series […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 15)

Sen Obama in 2006 Against Raising Debt Ceiling The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 15) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 14)

Today I read a post by Max Brantley on the Arkansas Times Blog concerning the falling poll numbers for the Tea Party.   Wednesday, August 17, 2011 – 06:54:18 The Tea Party: is the fun over An interesting New York Times op-ed reviews the plunging poll approval numbers for the Tea Party and delves into the […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 7)

Duncan Hunter at San Diego Eagle Forum.MP4 The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 7) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 6)

Rep Himes and Rep Schweikert Discuss the Debt and Budget Deal The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 6) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 5)

Rep. Quayle on Fox News with Neil Cavuto   The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 5) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 2)

“What good is a debt limit that is always increased?” The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 2) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 1)

This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal. Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon […]

Michele Bachmann voted against Debt Deal (House Roll Call)

Bachmann Explains “No” Vote on Raising the Debt Ceiling Uploaded by RepMicheleBachmann on Aug 2, 2011 On Monday, August 1, 2011, Congresswoman Michele Bachmann appeared on “Hannity” to explain why she voted “no” on the plan to raise the debt ceiling. _______________________________________ Full House roll call By: Associated Press August 1, 2011 08:46 PM EDT […]

By Everette Hatcher III | Also posted in President Obama | Comments (2)

Raising the debt ceiling again so fast?

March 8, 2012 – 6:15 am

It seems to me that we should stop raising the debt ceiling so much or we will end up like Greece. Below is some great information from Reason Magazine:

Uploaded by on Mar 1, 2011

[Editor’s Note: Go to http://reason.com/blog/2011/03/01/raising-the-debt-limit-it-just for details, charts, and links]

Some say the world will end in fire and some say in ice.

But in Washington, a lot of people say it will end if we don’t continually raise the debt ceiling.

The statutory debt limit, or debt ceiling, represents the maximum amount of debt the federal government can carry at any given time. The limit was created in 1917 so that Congress wouldn’t have to vote every time the government wanted to increase the amount of debt (which was becoming a more and more frequent occasion). Since then, the Treasury Department has had the authority to issue new debt up to whatever the limit is to fund government needs. Last year, the limit was raised to $14.3 trillion, an amount that is about to reached.

As it approaches, Federal Reserve Chairman Ben Bernanke has said failing to raise the limit would likely mean the U.S. would default on its debt, creating “real chaos” in place of the fake chaos that’s out there now. Treasury Secretary Timothy Geithner has said that failing to raise the limit would be “deeply irresponsible” and and Austan Goolsbee, President Obama’s chief economic adviser, has said that not raising the limit would create “the first default in history caused purely by insanity.”

Eh, maybe.

As Reason columnist and Mercatus Center economist Veronique de Rugy, has pointed out, we’ve maxed out the nation’s credit card in the past without such dire results. In the mid-1980s, the mid-1990s, and in 2002, for instance, the debt limit wasn’t raised for months at a time and the government got along just swell. The government has a big bag of tools it can use, ranging from playing around with the amount of spending that is liable to the limit to prioritizing interest and debt payments over other outlays. Interest on the debt for this year is projected to be about $225 billion and government revenue is expected to be around $2.2 trillion, so the government can easily pay the vig and avoid defaulting.

What it shouldn’t do is simply keep piling on the debt. The limit has been raised no fewer than 10 times in the past decade. When Republicans ran the White House and the Congress, they voted overwhelmingly to charge it and Democrats, including Sen. Obama, hollered bloody murder. In 2006, he called the need to yet again increase the debt limit “a sign of leadership failure.” Now that Dems run the show, the GOP has suddenly rediscovered its inner cheapskate.

So it goes.

The boldest plan to rein in spending and debt comes from newcomer Sen. Mike Lee (R-Utah), a Tea Party favorite who dispatched Republican incumbent Bob Bennett in the primaries before coasting to victory in the general election last fall. Lee has vowed to block passage of a debt-limit increase unless Congress signs on to his balanced-budget amendment which would cap annual federal spending at 18 percent of Gross Domestic Product (GDP). The amendment would require a super-majority of two-thirds in the Senate and House of Representatives. Lee’s bill is competing with another Republican proposal from Sens. Hatch (Utah) and Cornyn (Texas) to cap spending at 20 percent of GDP. The Hatch-Cornyn bill has weaker rules on its higher cap as well.

In 2010, spending came to about 24 percent of GDP and it’s expected to come in around 25 percent of GDP in 2011. Since 1950, total federal revenues have averaged 17.8 percent and have reached higher than 20 percent exactly once. Spending over the same time has averaged just under 20 percent.

Whether Lee’s proposal carries the day — and there’s a strong case that its passage would do more to calm financial markets than simply bumping up the federal credit line — neither the Democratic nor the Republican leadership has yet to advance a serious proposal to cut spending and reduce outstanding debt. Indeed, both the president’s budget proposal for 2012 and the generally non-existent Republican response are not only deeply irresponsible but clear signs of insanity.

That ain’t right. But it does help explain why a government that has increased spending over 62 percent in real dollars can no longer get by on a $14 trillion debt ceiling.

For more info, go to http://reason.com/blog/2011/03/01/raising-the-debt-limit-it-just

By Everette Hatcher III | Also posted in President Obama | Comments (0)

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (“Thirsty Thursday”, Open letter to Senator Pryor)

March 8, 2012 – 6:11 am

Dear Senator Pryor,

Why not pass the Balanced  Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion).

On my blog www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, I did not see any of them in the recent debt deal that Congress adopted. Now I am trying another approach. Every week from now on I will send you an email explaining different reasons why we need the Balanced Budget Amendment. It will appear on my blog on “Thirsty Thursday” because the government is always thirsty for more money to spend.

You asked for ideas to cut spending, but you voted for the 800 billion dollar stimulus that did not help the economy at all. I have included an article below that makes a very good point about the Balanced Budget Amendment and the stimulus:

Lee believes there are several key components to a balanced budget amendment which he outlines in his book, including making tax increases contingent on a two-thirds vote in Congress so that the option to increase taxes is not the default maneuver to balance a budget. He believes the amendment should require Congress spends no more than it takes in, and in fact should cap the spending at a fixed percent of GDP (the proposal submitted in the Senate caps it at 18 percent of GDP, just about the historical average). There would also be a supermajority vote required to raise the debt ceiling.

And for those who argue that stimulus packages wouldn’t have been possible under the amendment, Lee sees little difficulty responding.

“That’s exibit A for why we ought to have it,” Lee said of the Obama stimulus package.

That is a very good point in favor of having a balanced budget amendment in my view. I have been critical of you for supporting the stimulus in the past.

Thank you again for your time and for this opportunity to share my ideas with you.

Sincerely,

Everette Hatcher

Lee Makes His Case for a Balanced Budget Amendment

By Elisabeth Meinecke

7/18/2011

As Washington spends the summer arguing over its spending addiction, GOP Sen. Mike Lee of Utah has a solution to help prevent the same crisis for future generations: a balanced budget amendment.

The House made news last week when, in the heat of negotiations over raising the debt ceiling, they announced a vote on a balanced budget amendment this Wednesday. Though the Senate GOP introduced a one earlier this year, President Obama has stated emphatically otherwise, telling Americans last week during a press conference that the country does not need a balanced budget amendment.

“Yes, we do,” Lee told Townhall when asked to respond to the president, adding later when talking about simultaneously raising the debt ceiling and cutting spending, “We can’t bind what a future Congress will do. We can pass laws that will affect this year, but there will be a new Congress that takes power in January of 2013, and then another new one that will take power in January 2015. And they will make their own spending decisions then — we can’t bind them unless we amend the Constitution to do so.”

Lee points out that the American people support the idea of a balanced budget – 65 percent, according to a Sachs/Mason Dixon poll from this year – but politicians have been reluctant to wade into the debate.

“The fact that we’re in this debate, the fact that we’re sort of deadlocked, or we’ve reached a point of gridlock in the discussions, is indicative of the problem that we have,” Lee said.

In fact, Lee thinks a balanced budget amendment is so important to the future of the country that he’s written a book on it: The Freedom Agenda: Why a Balanced Budget Amendment Is Necessary to Restore Constitutional Government.

Lee even takes the argument a step beyond fiscal issues, saying a balanced budget amendment safeguards individual liberties.

““The more money it [Congress] has access to, whether it’s through borrowing or through taxation, either way, that’s going to fuel Congress’ expansion, and whenever government acts, it does so at the expanse of individual liberty,” Lee said. “We become less free every time government expands.”

Lee believes there are several key components to a balanced budget amendment which he outlines in his book, including making tax increases contingent on a two-thirds vote in Congress so that the option to increase taxes is not the default maneuver to balance a budget. He believes the amendment should require Congress spends no more than it takes in, and in fact should cap the spending at a fixed percent of GDP (the proposal submitted in the Senate caps it at 18 percent of GDP, just about the historical average). There would also be a supermajority vote required to raise the debt ceiling.

And for those who argue that stimulus packages wouldn’t have been possible under the amendment, Lee sees little difficulty responding.

“That’s exibit A for why we ought to have it,” Lee said of the Obama stimulus package.

Lee also pointed out that his balanced budget amendment includes an exception to the spending restriction in time of war – “not a blank check, but to the extent necessary.” Congress would also be able to supersede the amendment with a two-thirds vote.

“We wanted to make it difficult, but not impossible, for Congress to spend more than it had access to,” Lee said, citing as an example a massive or immediate crisis created by a national emergency or natural disaster. “What this is designed to do is to make it more difficult – to make it impossible – for Congress to just do this as a matter of course.”

Elisabeth Meinecke

Elisabeth Meinecke is Associate Editor with Townhall.com

By Everette Hatcher III | Comments (0)

Federal government spending money so fast they will pass debt ceiling before election

March 8, 2012 – 5:12 am

Sen Obama in 2006 Against Raising Debt Ceiling

Uploaded by on Jun 20, 2011

Rep. Stearns on the House Floor cites Sen. Obama’s opposition in 2006 to increasing the debt ceiling, 6-14-11

________________________

It has greatly troubled me for sometime that the federal government spends so much over their budget every year. That is probably the number one reason I started my blog (www.theDailyHatch.org ) a little over a year ago. The results have been overwhelming. I have had over 170,000 hits and have even been quoted in a national magazine.

Back in the summer of 2011, 66 brave souls in the Republican party voted against the debt ceiling compromise in the House of Representatives and I actually took time to put up 48 different posts praising those 66 tea-party type conservatives. One of them was Cliff Stearns. Representative Stearns actually went on C-Span and mentioned President Obama’s March 2006 vote against raising the debt ceiling and he quoted him directly. The funny thing is I agreed totally with every word of his speech.

Why do we have to keep spending money like this? Here is an excellent article from the Cato Institute that reflects my views:

Hitting the Ceiling

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on March 7, 2012

This article appeared in National Review (Online) on March 7, 2012.

If you liked last year’s battle over raising the debt ceiling, just get ready for the fight to come.

Last summer’s agreement, you will recall, raised the federal government’s debt limit from $15.194 trillion to $16.394 trillion in exchange for promised future reductions in spending. Until recently, the consensus has been that federal borrowing will bump up against the new limit sometime between late November of this year and early January 2013.

But buried in President Obama’s 2013 budget was the news that the national debt will hit $16.334 trillion by the end of fiscal year 2012, or September 30, 2012. This is just $60 billion below the current debt limit. Since the federal government is continuing to borrow at a rate of over $130 billion a month, we will likely reach the debt ceiling by mid-October — before Election Day.

From a budgeting perspective, there will not be an immediate crisis. The Treasury Department could, if it chooses, employ “extraordinary measures” to enable the government to keep paying its bills until well after the elections. Despite their name, these measures are not all that “extraordinary,” involving such things as delaying contributions to the civil-service pension fund or suspending sales of certain nonessential securities. In fact, the Treasury used such measures last year from May until the final debt agreement in August, and no one really noticed.

Can Republicans really be trusted to fight for spending cuts just weeks before the election?

But as a political matter, it will be a very different matter.

Suppose that instead of using such measures to push off the day of reckoning until after the election, President Obama threatens default. Suppose he insists on a tax increase as part of any deal to raise the debt ceiling, and threatens international economic chaos and a collapsing stock market if Republicans fail to go along. Can Republicans really be trusted to fight for spending cuts instead, just weeks before the election?

And regardless of what happens before the election, another fight over the debt ceiling will be coming shortly thereafter. Every Republican candidate will have to go on record about whether or not they would raise the debt ceiling and what concessions they would demand.

Republicans, of course, will have a good argument to make about how the president’s spending has driven up the debt. The fact that a $1.2 trillion increase in the debt ceiling barely lasted a year could be powerful. But Republicans would have a better time making this argument if they were actually doing something to reduce spending. After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined.

And Republicans continue to talk about undoing the sequester that is responsible for more than half the projected savings to come out of the 2011 deal. In particular, Republicans want to undo cuts to the defense budget, and may be willing to give up domestic-spending cuts in exchange.

Meanwhile, what of Mitt Romney, the presumptive Republican nominee after last night’s primaries? Can anyone think of a single major spending program that Romney would eliminate? (Cutting funding to Planned Parenthood doesn’t count, especially given the way Republicans mishandled the contraceptive-mandate debate).

President Obama’s reckless spending could be a godsend to Republicans. It was, after all, debt and spending that energized the Tea Party and led to the 2010 election wave. Not only is it an issue that unites all factions of the Republican base, it is also of importance to independents and suburbanites, including those suburban women who have been turned off by the Republican-primary debate.

But if Republicans don’t want to be blindsided by President Obama come October, they need to start preparing for this debate now.

Related posts:

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 49) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48)

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31)

Congressmen Tim Huelskamp on the debt ceiling Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 31) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 25)

Uploaded by RepJoeWalsh on Jun 14, 2011 Our country’s debt continues to grow — it’s eating away at the American Dream. We need to make real cuts now. We need Cut, Cap, and Balance. The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 25) This post today is a part of a series […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 15)

Sen Obama in 2006 Against Raising Debt Ceiling The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 15) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 14)

Today I read a post by Max Brantley on the Arkansas Times Blog concerning the falling poll numbers for the Tea Party.   Wednesday, August 17, 2011 – 06:54:18 The Tea Party: is the fun over An interesting New York Times op-ed reviews the plunging poll approval numbers for the Tea Party and delves into the […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 7)

Duncan Hunter at San Diego Eagle Forum.MP4 The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 7) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 6)

Rep Himes and Rep Schweikert Discuss the Debt and Budget Deal The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 6) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 5)

Rep. Quayle on Fox News with Neil Cavuto   The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 5) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 2)

“What good is a debt limit that is always increased?” The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 2) This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not […]

The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 1)

This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal. Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon […]

Michele Bachmann voted against Debt Deal (House Roll Call)

Bachmann Explains “No” Vote on Raising the Debt Ceiling Uploaded by RepMicheleBachmann on Aug 2, 2011 On Monday, August 1, 2011, Congresswoman Michele Bachmann appeared on “Hannity” to explain why she voted “no” on the plan to raise the debt ceiling. _______________________________________ Full House roll call By: Associated Press August 1, 2011 08:46 PM EDT […]

By Everette Hatcher III | Also posted in President Obama | Comments (0)