Category Archives: spending out of control

Republicans need to tackle runaway entitlement spending

November 18, 2011 – 1:51 pm

Republicans need to tackle runaway entitlement spending

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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I am disappointed in some of the Republicans who do not want to take the bull by the horns on this issue.

GOP Needs an Entitlement Plan

by Michael D. Tanner

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

Added to cato.org on September 28, 2011

This article appeared on National Review (Online) on September 28, 2011

There was telling moment during the CNN Republican presidential debate: Asked about the possibility of repealing George W. Bush’s Medicare prescription-drug benefit, which is adding some $17 trillion to Medicare’s unfunded liabilities, every one of the candidates pledged varying degrees of fealty to the program. No one came out for significantly cutting this vestige of Bush-style big-government conservatism, let alone repealing it. This put the current crop of Republicans to the left of John McCain, who at least campaigned in favor of means-testing the program in 2008.

The failure to stand up against one of the Bush administration’s most obvious mistakes is not just a case of hypocrisy; it is part of a disturbing trend toward ducking the tough decisions on budget cutting among the Republican aspirants. For all the sound and fury, and the charges and countercharges surrounding entitlement reform, the GOP candidates have been remarkably reluctant to put forward actual proposals.

Former Massachusetts governor Mitt Romney, for example, has been attacking Texas governor Rick Perry over Social Security from the left, praising the program as “an essential federal program,” that has been a “success” for more than 70 years. But for all his criticism of Perry, Romney has been much vaguer about his own plans for reform. At times he has sounded almost like Obama, suggesting that there are lots of reform ideas — raising the retirement age, means testing, changing the wage-price indexing formula — that are “on the table,” but not actually endorsing any of them. One reform that Romney has taken off the table is allowing younger workers to privately invest a portion of their payroll taxes through personal accounts. In his book, No Apology, Romney endorses so-called “add on” accounts, allowing workers to save in addition to Social Security, but not carving out a portion of their current taxes. “Given the volatility of investment values that we have just experienced, I would prefer that individual accounts were added to Social Security, not diverted from it,” Romney wrote.

The Republican candidates all talk about reducing government spending. But they cannot do that unless they commit to real entitlement reform.

On Medicare, Romney has avoided specifics as well, praising Paul Ryan’s proposed reforms for example as “taking important strides in the right direction,” but not endorsing them.

For his part, Governor Perry has been forthright about the flaws of Social Security but has offered nothing in the way of a proposal for reform. As Romney has pointed out endlessly, Perry suggested in his book that Social Security might be returned to the states. But Perry has since disavowed that idea, claiming that he was only referring to state employees, some 7 million of whom are currently outside the Social Security system. Perry has also praised the privatized system for public employees in Galveston and two other Texas counties, suggesting that he might be open to some type of private investment option. But “suggesting” is as far as he goes.

On Medicare, Perry has been equally murky. At times, he has suggested that we should “transition away from” the current Medicare system, but without saying what we should transition to. His aides point out that Perry has only recently joined the race and hasn’t had time to develop specific proposals. But given his fiery talk on the issues, until he does he will seem more hat than cattle.

Rep. Michelle Bachmann has also largely tried to have it both ways on entitlement reform. She voted for the Ryan plan in Congress but promptly put out a statement distancing herself from it, claiming that her vote came with an asterisk. On Social Security, Bachmann once called the program a “monstrous fraud,” but has now joined Romney in attacking Perry’s “Ponzi scheme” description. She says that a key difference between her and Perry is that she believes Social Security “is an important safety net and that the federal government should keep its promise to seniors.” But with Social Security currently facing more than $20 trillion in unfunded liabilities, the question is how it will keep that promise.

Second-tier candidates, with less to lose, have been more willing to spell out their proposals. Businessman Herman Cain, for example, supports both the Ryan plan and Chilean-style personal accounts for Social Security. Former Pennsylvania senator Rick Santorum takes similar positions, as does former New Mexico governor Gary Johnson. Former Utah governor Jon Huntsman has endorsed the Ryan plan but has not spelled out his views on Social Security reform. Newt Gingrich, on the other hand, has focused on cutting “fraud, waste, and abuse,” rather than fundamentally altering the structure of those programs. Ever the iconoclast, Rep. Ron Paul opposes both the Ryan plan and personal accounts for Social Security, since he opposes a federal role in either health care or retirement on principle.

The facts are both simple and frightening. The unfunded liabilities of Social Security and Medicare run between $50 trillion and $110 trillion. Those two programs, along with Medicaid, are the primary drivers of our future indebtedness. In fact, by 2050, those three programs alone will consume 18.4 percent of GDP. If one assumes that revenues return to and stay at their traditional 18 percent of GDP, then those three programs alone will consume all federal revenues. There would not be a single dime available for any other program of government, from national defense to welfare.

The Republican candidates all talk about reducing government spending. But they cannot do that unless they commit to real entitlement reform. There’s time, and lots of debates, to hear specifics from them. But so far, the omens are not auspicious.

By Everette Hatcher III | Also posted in Social Security | Tagged , , , , | Comments (0)

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 16 Thirsty Thursday, Open letter to Senator Pryor)

November 17, 2011 – 12:23 am

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 16 Thirsty Thursday, Open letter to Senator Pryor)

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.

Congressman Walsh Issues Statement on His Vote Against Debt Deal

08/01/11

WASHINGTON–  Today, Congressman Joe Walsh (IL-08) voted against the latest debt ceiling deal brokered by President Obama and Congressional leaders.

“Last night’s deal shows how far the debate has moved in just a few months,” said Congressman Walsh. “At the beginning of this debate President Obama demanded a blank check increase in the debt limit with no spending cuts attached.  When that didn’t work, he insisted on huge tax increases on American families and job creators. The Republican Party, however, stood strong and refused to pay for reckless spending withmoretax increases.”

“While I give my Republican leadership all the credit in the world, I cannot support this latest deal: it spends too much and cuts too little.  While this deal will cut $2.4 trillion from the national debt over the next 10 years, Washington will still add another $7 trillion to the national debt over that same period.”

“The fact that there are only $7 billion in cuts next year, an election year, shows how blatantly political this bill is.  We need to be slashing reckless spending now and in the future, not just when it is politically convenient for the President.”

“Democrats still don’t get it and refuse to make the spending cuts necessary to avoid a credit downgrade. I have made it clear from day one that I will never vote for an increase in the debt ceiling unless it fundamentally and structurally changes the way Washington spends money. I believe that the way to do that is through statutory spending caps and a Balanced Budget Amendment to the Constitution.”

Uploaded by 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.

By Everette Hatcher III | Tagged , , , | Comments (0)

Brummett on Wall Street Occupiers

November 16, 2011 – 9:20 pm

Below is a portion of an article by John Brummett published in the Arkansas Democrat Gazette and my response to it.

Speaking for the occupiers

By John Brummett

…But it seems to me that, while they surely vary, these occupiers don’t necessarily protest anybody’s greed. That’s a personal flaw. Nor do they protest anyone’s success. That’s a personal victory.

Instead they rise against unfair and destructive governmental policy that inordinately favors the already-rich at the expense of everyone else, thus fashioning and exacerbating an unhealthy, unsustainable and undemocratic gap between the rich few and the other many.

How big a gap is too big? If the gap is bigger than it would be naturally, essentially and inevitably without political favoritism and artificial political enhancement—that’s when it is too big.

By wealth-favoring political practices and public policies, I cite:

Across-the-board tax cuts that lavish the richest with most of the manna.

Concessions to a global economy by which American corporations pay no price for abandoning American workers and by which corporations are judged by a stock price or dividend instead of local community responsibility. Many of our job losses result from a pattern by which corporations secure themselves against another American economic meltdown by hoarding record profits generated in partnership with compliant, moneyaddicted politicians.

An incestuous Washington culture in which you can hardly tell the elected politicians from the corporate policy advocates. The only thing voters accomplished by defeating Blanche Lincoln was to make her more money and perhaps more influential. Now she spouts her banal platitudes for pay from the National Association of Independent Business.

Campaign finance laws that enable the richest and the corporations to remain anonymous as they contribute unrestricted sums to the U.S. Chamber of Commerce or other propagandizing front groups inundating us with cynical mailers and television advertising to perpetuate the pro-rich government.

Generally speaking, the occupiers’ complaint is not that there are spectacularly rich people in America. It is that some among these richest people can ruin the nation’s economy with irresponsible wagering on a scheme drawn from inflated American home mortgages. It is that these offenders can then get bailed out by the rest of us via the government, which permitted and even encouraged the abuse in the first place. It is that these offenders can then enjoy the government’s blessing as they traipse right back into their big-bonus bonanzas. It is that regular people, mere innocent pawns, find themselves paying the real price—foreclosed on and laid off.

It becomes tactically essential to the perpetuation of these pro-rich policies to miscast this uprising by portraying it in political terms as irresponsible poor people warring resentfully against noble rich people. So “class warfare” becomes the right wing’s hollow and dishonest charge.

Arkansas Democrat-Gazette. Email him at jbrummett@arkansasonline.com and read his blog at brummett.arkansasonline.com.

This article was published November 15, 2011 at 5:25 a.m.

I think that unlike the Tea Party which is focused on just a full issues, the Occupy Wall Street crowd really is not sure about what direction is heading yet. Nevertheless, there are some statements and actions of their members that I would like to comment on.
 
First,  I wonder how peaceful this movement is. Jim Lendall is one of the organizers and back in April he stood on the steps of the state capitol at a “Make Them Pay Rally” and called for erecting guillotines and placing them in front of corporations like Bank of America to remind these business leaders that the rich leaders of the French government of the 1700’s were beheaded during the French Revolution because of their greed. Also the downtown branch of Bank of America reported that a large brick was thrown into a glass window near the first floor entrance of the bank.
 
Second, how big is this movement compared to conservative movements? Every year I take part in the “March for Life” which is a pro-life march that takes place every January. Last January we had over 5000 marchers, but the Occupy Little Rock March had only 300 marchers.
 
Third, both the Occupy Little Rock crowd and the Tea Party both are mad that the bailout was available because of cronyism. This is one area that I have in agreement with the Occupy Little Rock group, but we must take the next step. The Tea Party has done that by discouraging the larger role the federal government has been taking in recent years by controlling our lives with increases spending. The Tea Party has correctly condemned the federal deficit spending of the politicians in Washington D.C. as the primary problem. The Occupy Little Rock crowd never mentions that issue because their answer is to spend more money. If the USA is to avoid the fate of Greece.  Why does the federal government think it has the money to bail out anybody?
 
Fourth, the Occupy Little Rock crowd thinks we need more regulations and taxes on the big bad corporations.  There are two points here. If we raise taxes on those corporations then they will raise their prices on their products and we end up paying the higher prices at the retail stores. Also more regulations will hurt upstarts like Steve Jobs who started as a poor teenager in a garage with an idea. Steve Jobs later grew his company to over  350 billion dollars in sales and the  company  made a lot of money for lots of Americans who worked for him. Furthermore,  Steve Jobs also provided various products to the public that changed life for billions across the globe. Is that the type of progress that the Occupy Little Rock crowd is opposing?
 
Fifth, the Occupy Little Rock crowd talks about the system in our country that punishes the poor and helps the rich, but the facts clearly show that  the ability to move from poor to rich is more abundant here than any other country in the world.  Just consider Steve Jobs who was mentioned in the point above.
 
I have enjoyed Mr. Brummett’s articles, and they are very good at engaging the main issues of our day from the liberal perspective. As a conservative his articles have always challenged me to be able to defend my own views. His praise of the Occupy Little Rock crowd overlooks the fact that their answer is to tax the “rich” more, but  once the government is through with the rich then they come looking for you and me. I am not happy about them trying to occupy my wallet more than do now.  
By Everette Hatcher III | Also posted in Taxes | Tagged , , , , | Comments (0)

The Cato Institute: The state of the economy under Obama

November 16, 2011 – 1:43 pm

The Cato Institute: The state of the economy under Obama

It is truly said how far to the left our country has gone.

Happy Fiscal New Year (with an Unhappy Obama Hangover)

Posted by Daniel J. Mitchell

Today, October 1, is the first day of the 2012 fiscal year.

And if you’re wondering why America’s economy seems to have a hangover (this cartoon is a perfect illustration), it’s because politicians had a huge party with our money in FY2011.

We don’t have final numbers for the fiscal year that just ended, but let’s look at the CBO Monthly Budget Report, the CBO Economic and Budget Update, and the OMB Historical Tables, and see whether there’s anything worth celebrating.

o The federal government spent about $3.6 trillion in FY2011, more money than any government has ever spent in a 12-month period in the history of the world.

o The FY2011 budget is nearly double the burden of federal spending just 10 years earlier, when federal outlays consumed “only” $1.86 trillion.

o The federal budget in FY2011 consumed about 24 percent of national output, up sharply compared to a spending burden in FY2001 of “just” 18.2 percent of GDP.

o Defense spending is too high, and has increased by about $400 billion since 2001, but the vast majority of the additional spending is for domestic spending programs.

o Federal tax revenue in FY2011 will be about $2.25 trillion, an increase of 7-8 percent over FY2010 levels.

o Economic stagnation has affected tax revenues, which are lower than the $2.6 trillion level from FY2007.

o Federal receipts amount to about 15.3 percent of GDP, below the long-run average of 18 percent of GDP.

o The Congressional Budget Office does predict that revenues will rise above the 18-percent average – without any tax increases – by the end of the decade.

o Record levels of government spending, combined with low revenues caused by a weak economy, will result in a $1.3 trillion deficit.

o This is the third consecutive deficit of more than $1 trillion.

o The publicly-held national debt (the amount borrowed from the private sector) is now more than $10 trillion.

With budget numbers like these, no wonder America has a fiscal hangover.

And let’s be blunt about assigning blame. Yes, Obama has been a reckless big spender, but he is merely continuing the irresponsible statist policies of his predecessor.

Fortunately, there is a solution. All we need to do is restrain the growth of federal spending, as explained in this video.

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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.

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

Lessons for the Super Committee

November 15, 2011 – 9:10 am

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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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I wish the Super Committee would read this article below:

 

A Short Econ Quiz for the Super Committee

Why an extra trillion in ‘irresponsible’ deficit spending can’t become ‘responsible’ if paid for by higher taxes.

By STEVEN E. LANDSBURG

Suppose that year after year, you spend more than you earn. You are worried that you’ve become fiscally irresponsible. Which of the following could be paths back to fiscal sanity for your household?

A) Spend less.

B) Earn more.

C) Stop at the ATM more often so you’ll have more cash in your pocket.

Do we all understand why C is a really bad answer? Good. Now let’s try another one.

Suppose that year after year, your government spends more than it collects in taxes. You are worried that it’s become fiscally irresponsible. Which of the following could be a path back to fiscal sanity for your government?

A) Spend less.

Dan Henninger discusses the supercommittee’s deliberations on Opinion Journal. Photo: AP.

B) Collect more tax revenue.

Spending less—at least spending less on things you don’t need—can be a first step toward sanity for a government just as it can for a household. So A is a pretty good answer. What about B?

As the deadline looms for the congressional super committee, there’s seems to be a growing sense that tax revenue for the government is like income for the household. That’s wrong. Raising taxes is nothing at all like earning income. Instead, it’s a lot more like visiting the ATM.

The government’s debt is the American people’s debt. If we pay down that debt through higher taxes, we will, for the most part, pay those taxes by drawing down our savings. That’s no more “responsible” than drawing down those savings to finance overconsumption within the household.

If you buy a kayak you don’t need and can’t afford, you’re unlikely to placate your spouse by saying “Don’t worry, dear, I withdrew the money from our retirement account.” If your government insists on maintaining social programs we don’t need and can’t afford, nobody should be placated by a congressional agreement to finance that program with money withdrawn from those same accounts.

Here’s another way to say essentially the same thing: The government’s chief asset—in fact, pretty much its only asset—is its ability to tax people, now and in the future. The taxpayers are the government’s ATM. Make a withdrawal today, and there’s less available tomorrow.

Now the ability to tax is a pretty huge asset and the government has not (yet!) come close to depleting it. In that sense, there’s a lot of money in the bank. But no matter how much you’ve got in the bank, a policy of ever-increasing withdrawals is nothing at all like a decision to earn more income. It’s important to get the analogy right. And it’s clear from the blogs and the op-ed pages that not everybody gets this.

Instead, the notion persists that an extra trillion in federal spending can be converted from “irresponsible” to “responsible” as long as it’s accompanied by an extra trillion in tax hikes. That’s like saying a $500 haircut can be converted from “irresponsible” to “responsible” as long as you withdraw the $500 from your bank account. If the super committee loses sight of this fundamental truth, it is doomed to fail.

Mr. Landsburg, an economics professor at the University of Rochester in New York, is the author of, among other books, “The Armchair Economist” (Free Press, 1995). He blogs at TheBigQuestions.com.

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

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 121)

November 14, 2011 – 12:53 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.

Therefore, I went to the website and sent this email below:

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

Senator Rand Paul on Feb 7, 2011 wrote the article “A Modest $500 Billion Proposal: My spending cuts would keep 85% of government funding and not touch Social Security,” Wall Street Journal and he observed:

Here are some of his specific suggestions:

Reduce Federal Vehicle Budget: Saves $600 million
The federal government owns approximately 652,000 cars and trucks in their fleet of vehicles. General maintenance
on these vehicles is an annual expense of $4 billion. Since 2006, the amount of vehicles owned by the government
has increased by 20,000 and operating costs have increased by 5.4 percent.
It is not unreasonable to ask all agencies to slow down acquiring new vehicles and decrease the number of miles
driven to help drive reduce cost of general maintenance.

By Everette Hatcher III | Tagged , , , | Comments (0)

If nothing is done families across the USA will experience tremendous tax increase in 2013

November 11, 2011 – 6:59 am

The federal government is spending like a drunk sailor (my apologies to sailors in this comparison) and you knew the tax increases were coming at some point.

Why Your Tax Bill Might Surge Next Year

by Bob Jennings
Tuesday, November 8, 2011

In a recent tax planning meeting with one of our clients, we shocked them with what their income tax future looked like for 2013 if Congress continues to do nothing to provide a long-term permanent set of tax laws (and it looks as if lawmakers are headed down this track).

They had no idea what tax breaks were expiring this year and next year, and how much it would cost them personally in extra income tax. But they aren’t alone, many Americans and even tax professionals aren’t aware that their tax bill could rise dramatically next year.

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These clients are your average American family and their situation is a good example of the law changes that will affect all of us. Here’s their tax situation with a table summarizing the expiring tax laws that are scheduled to occur in 2011 and 2012.

Meet the Smiths: 26-year-olds Bill and Joan have been married for five years and have two young children. Bill earns about $65,000 a year in sales and Joan has gone back to work and earns about $35,000 annually. Bill owes quite a bit on his college student loans and will pay about $3,000 in interest on them in 2013. With Joan working again, they are paying $3,000 for year-round child care. Joan inherited some AT&T stock from her grandmother, which pays her $1,000 in dividends every year. Finally, counting home mortgage interest, they have about $20,000 in itemized deductions.

The first big change affecting the Smiths will be a combined increase in income tax rates, and a tightening of tax brackets as a result of the expiration of the Bush tax cuts. We estimate this will cost them $960 in 2013.

Bill will lose the complete deduction of his student loan interest in 2013, costing about $840. The pair’s allowable deduction for child care will drop to $2,400 from $3,000, and they will also see their credit for children drop in half, costing another $1,000.

The marriage tax penalty will come roaring back to hit the Smiths in 2013, costing an estimated $500. The tax on their dividend income will go increase to $280 from $150, adding another $130. Finally, although we did not calculate the effect, without Congressional action to once again “fix” the alternative minimum tax, the Smiths could owe this ugly tax as well!

Luckily for the Smiths — but not for many Americans — other major changes for 2013, which do not personally affect them, include a phase out of itemized deductions and personal exemptions if their income starts to climb.

In summary, because of tax laws expiring this year and next, we estimate that the Smiths will owe $3,598 more in income tax in 2013 than in 2011 with no change in their income.

Major Individual Income Tax Benefits Expiring 12/31/2011:

• Personal tax credits applied against income tax no longer apply

• Higher alternative minimum tax exemptions revert back to extraordinarily-low thresholds

• $250 school teacher expense deduction ends

• Mortgage insurance premium deduction expires

• State and local sales tax deductions expire

• Tuition and related fees deduction end

• IRA to charity tax-free transfers stop

• 2% Social Security tax reduction ends

Major Individual Income Tax Benefits Expiring 12/31/2012:

• Marriage penalty equalization ends

• Dividends taxed at capital gains rates removed, taxed at regular rates now

• Capital gains low tax rates expires

• Removal of itemized deduction phase out for higher income Americans

• Removal of personal exemption phase out for higher income Americans

• Child care deduction limit of $3,000 reverts to $2,400

• Child credit reduces from $1,000 per child to $500 per child

• Low 10% tax bracket for low income Americans is eliminated

• Lower income tax rates and smaller brackets expires

• Refundable adoption credit and reduced deduction

• American Opportunity college education credit expires

• Major reduction in earned income credits and refunds

• Income tax exemption for debt forgiven on home foreclosures and repossessions

• Deduction for student loan interest ends

• Education IRA limit drops from $2,000 to $500

Bob Jennings is a CPA, EA and CFP and author of “Understanding Social Security & Medicare.”

Taxes per Household Have Risen Dramatically

Though the economic downturn has temporarily lowered overall tax revenues, the tax burden on Americans is still high.

INFLATION-ADJUSTED DOLLARS (2010)

 
 
Download

Taxes per Household Have Risen Dramatically

Source: U.S. Census Bureau and White House Office of Management and Budget.

Chart 12 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

    The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

  • Authors

    Emily GoffResearch Assistant
    Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
    Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor

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With Govt Spending at 41% of GDP should President Obama try to raise taxes?

Cato Institute: Government spending is 41% of GDP I love the Cato Institute because they give us the facts that liberals just can’t refute. Instead of trying to raise our taxes, President Obama should be cutting spending. American Government Spending: 41% of GDP Posted by Chris Edwards My good friend Kathy Ruffing at CBPP takes […]

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

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 15 Thirsty Thursday, Open letter to Senator Pryor)

November 10, 2011 – 12:16 am

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 15 Thirsty Thursday, Open letter to Senator Pryor)

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.

Burton Opposes Sham Deficit Reduction Deal

Posted by Joshua Gillespie on August 1, 2011

FOR IMMEDIATE RELEASE                                                                        CONTACT: Joshua Gillespie
August 1, 2011                                                                                                      (202)225-2276

Burton Opposes Sham Deficit Reduction Deal

WASHINGTON, D.C. – Representative Dan Burton (R-IN-05) issued the following statement after the House of Representatives’ approved the deficit reduction deal negotiated with President Obama and Senate Democrats:

“Our nation has never defaulted in its history and we must take action to continue to meet our financial obligations.  However, in good conscience I could not support the deficit reduction package worked out this past weekend.  I have said repeatedly that Washington does not have a revenue problem, it has a spending problem and this bill does nothing to change the spending culture ingrained in Washington. 

“First, A Balanced Budget Amendment is the ONLY way to finally force Washington to live within its means.  However, unlike the Cut, Cap and Balance Act or the Boehner proposal passed by the House of Representatives, the deficit reduction deal does not require a Balanced Budget Amendment be sent to the States for ratification before the President is granted a debt ceiling increase; it merely requires a vote on a Balanced Budget Amendment.  Passing a Balanced Budget Amendment requires a 2/3rds vote in the House and Senate and a majority of Democrats have already expressed opposition to a Balanced Budget Amendment, so obtaining the necessary votes without significant leverage – such as the threat of default – is highly unlikely;

“Second, the deficit reduction deal does not prevent future tax increases or reduce the size of government.   In fact, the deficit reduction deal assumes that all the Bush tax cuts expire in December 2012.  In other words the additional revenue is already built into the bill which would make it difficult if not impossible to meet the deficit reduction targets AND extend the Bush tax cuts beyond 2012.  In addition, the suggestion that it is impossible for the Joint Committee to raise additional tax revenue simply is not accurate, it’s false;

“Third, the automatic spending cuts placed in the deal to force Congress to maintain fiscal discipline are unrealistic and unworkable.  Half of the proposed automatic cuts would come from defense programs which will undermine our ability to project power, strengthen our adversaries, and weaken our alliances.  Additional automatic cuts will come from Medicare providers; already underpaid by Medicare.  Historically Congress has rolled back any proposed cuts to Medicare providers and there is no reason to believe Congress won’t do so again.  It is also unrealistic to believe Congress will allow substantial cuts to defense spending while our troops are engaged in three wars (Iraq, Afghanistan, and Libya);

“Finally, the deficit reduction deal may be unconstitutional.  The deficit reduction deal allows the President to unilaterally raise the debt ceiling subject to a resolution of disapproval by the Congress (which the President can veto).  The debt limit is a statutory requirement and must therefore be changed by law.   ONLY Congress has the power to make law not the President; and Congress cannot, and most importantly should not, surrender this power to the president.

“The American people want a solution to this crisis, not a deal that allows Washington to kick the can down the road once again. Regrettably, the deficit reduction deal is not that solution.”

By Everette Hatcher III | Tagged , , , | Comments (0)

Milton Friedman discusses government spending

November 7, 2011 – 8:28 am

Milton Friedman – Do-Gooders And Special Interest

Uploaded by on Nov 4, 2011

An effective alliance to grow government. http://www.LibertyPen

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Great article that quotes Milton Friedman:

‘Government Efficiency’: Trying to Turn Cats into Dogs

Posted by Tad DeHaven

I’ll have more to say later on Mitt Romney’s speech on federal spending, but his banal call for making government more “efficient” gave me an opportunity to share some good commentary on the subject. In a recent piece criticizing Indiana’s Republican-led state government for not doing “anything substantive to improve Indiana’s budgetary, fiscal or economic position,” Craig Ladwig, editor of the Indiana Policy Review, nails it:

Most troubling of all is that few in the leadership of either party share our belief that government must be kept small for smallness’ sake. The goal is not to run it “like a business” or make it more efficient (consolidate), but to ensure that government is simple enough that average citizens can understand and monitor its workings. The constitutional ability to do that and a passion for self-government (governing one’s self), thereby reaping the rewards and accepting the consequences, are what is meant by American exceptionalism.

Nor does the current leadership appreciate that government cannot by nature be proactively involved in prosperity, that it cannot create wealth but only refrain from taking it away or destroying it. Even Republicans busy themselves in such neo-mercantile schemes as tax rebates for politically favored companies and industries, or training programs to win more contracts from the federal government. At the same time, they slap a tax on entrepreneurial activity as soon as it finds success, most recently in Internet commerce.

Look, Democrats already work tirelessly to extract from us the revenue to support a bloated, systemically flawed and misguided state government. Do they need Republican help?

Milton Friedman famously described those trying to reform government without changing its makeup as being engaged in an attempt to transform a cat into a dog. This General Assembly may learn to bark, but it will still be a cat.

The “government efficiency” snake-oil salesmanship from politicians has become tiresome, especially when it comes from high-profile Republicans like Mitch Daniels and Mitt Romney. Unfortunately, I don’t see too many people “on the right” taking these people to task for it. So kudos to Craig.

By Everette Hatcher III | Also posted in Milton Friedman, Taxes | Tagged , , , , | Comments (0)

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 120)

November 7, 2011 – 12:49 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.

Therefore, I went to the website and sent this email below:

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

Senator Rand Paul on Feb 7, 2011 wrote the article “A Modest $500 Billion Proposal: My spending cuts would keep 85% of government funding and not touch Social Security,” Wall Street Journal and he observed:

Here are some of his specific suggestions:

Sell Unused Federal Assets: Saves $19 billion
Currently, the government owns or leases 3.87 billion square feet of property. In addition to the property, the federal
government owns or leases 55.7 million acres of land. For every 40 acres of land in the United States, 1 acre is
owned by the government. Citizens Against Government Waste estimates these holdings to be worth $1.2 trillion.
Of that property the Office of Management and Budget (OMB) claims more than 21,800 federal properties are
abandoned assets, which could be sold for approximately $19 billion.

By Everette Hatcher III | Tagged , , , , | Comments (0)