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Washington's fix to spending problem? Spend more
January 9, 2012 - Ron Hart
January 8, 2012 -
By Ron HartWhen Ronald Reagan was president, he had to raise the debt ceiling to $1 trillion. Obama is currently trying to raise it to $16.3 trillion, up $1.2 trillion from last year when he raised it the last time and caused our first-ever credit downgrade.
To put Reagan's total debt of $1 trillion into perspective, in 2009 the Democratic Congress and Obama spent $1.4 trillion more than the government took in, which was 40 percent more than our total debt back then.
Obama thinks he solves our spending problem when he raises our debt limit. He is like a police chief saying he solved his town's drunk driving problem by raising the allowable DUI arrest blood alcohol level from .08 to .12.
Republicans took back the budgeting process when they won a majority in the House in 2010. The last year Democrats had the checkbook (Enlarge) , spending went from $ 2.98 trillion in 2008 to $3.52 trillion in 2009. In 2010 it seems spending leveled off at $3.45 trillion – not great, but it is the trajectory we should worry about.
Political spending is always cloaked in some grand rhetoric. Bush had his "slam dunk" wars, and Obama touts "helping the middle class." But they all breathlessly come to us with the conjured-up imperative of the day to spend money. Obama bellows from swing state pulpits, "Pass my bill now!" Here's an economics lesson for the kids out there: Never buy a Rolex from a man who is out of breath.
Democrats cry that some 825,000 non-essential government employees will not get paid if the debt ceiling is not raised. Perhaps that is our problem; we are paying 825,000 non-essential "workers."
Washington takes money by force (taxes) from the most productive part of society, the job creators (business), and redistributes it to the least productive part of society.
Almost all of our bubbles are created by Washington. The Community Reinvestment Act and Fannie Mae mandated that mortgage loans be made to those who could not repay them. Congress pushed sub-prime loans, which went from 7 percent of Fannie Mae's total loan holdings in 2003 to over 20 percent in 2006. With implicit federal backing, Fannie and Freddie, government sponsored enterprises (GSEs), were by far the largest buyers of the sub-prime loans. Before the collapse, they owned $1 trillion in these risky mortgages. Competing with Fannie Mae in that market was like wrestling with a gorilla: You don't quit when you want, you quit when he wants.
Ever the imperialist, Obama spent $4 million of taxpayer money to take a two-week vacation, again flying separately from his family 5,800 miles to a $5.9 million, rented, Hawaiian beachfront home. Upon arrival, he played golf. To be fair, we cannot expect him to break his normal Washington routine on his first day of vacation.
Christmas vacations left only 12 out of 535 members in Congress when the payroll tax cut was extended last week. It was a productive week; how much better off would we be if none of the 535 members was in Washington? It would kill business in D.C., especially bail bondsmen, hookers and liquor stores, but it would be great for the rest of the country. To paraphrase P.J. O'Rourke, the mystery of government is not how it works, but how to make it stop.
With the (still) Democrat-controlled Senate unwilling to put forth a budget for more than 900 days now, and Obama acting above it all and offering no concrete proposals other than class-envy, "eat the rich" rhetoric, gutsy leaders like Paul Ryan step up. Yet, when he offered sensible budget-cutting solutions, he was vilified, predictably by Obama and the Left, but inexplicably by Newt Gingrich. Paul Ryan and Ron Paul are right, but people just do not want to hear the truth. When Ron Paul and others correctly warn about spending and offer solutions, they are universally mocked by the Left, the media and Hollywood (which are one in the same).
Most cognitive people long for the days when Ronald Reagan and Margaret Thatcher ran the U.S. and Europe. Keen interest and Oscar buzz have preceded the opening of "The Iron Lady," with Meryl Streep as Prime Minister Thatcher. She should win the best actress award, because a Hollywood liberal playing a tax-cutting, anti-union, free-market, right-wing woman whose policies led a nation to economic growth deserves the highest award for "acting."
2011 Benjamin Franklin Award Winner!
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