Did you ever wonder why when the government decides to increase spending it happens next week but when they talk about reducing spending it’s always in budget cycles five to ten years out? Does that really make any sense?
I really only care about what they will cut in their next budget and the one after that because there is some likelihood those same elected officials will still be around to be held accountable.
The Super Committee is agonizing about reducing spending somewhere in the neighborhood of $1.2 trillion over ten years. Considering the fact that federal spending increases 8% per year and that is considered a “no growth” budget. So what are they cutting the $1.2 trillion from?
Where else in the world could that happen?
If the budget is $2.4 trillion per year in 2011, then a no growth (8%more compounded) budget for 2012 would be about $2.6 trillion; $2.81trillion for 2013, $3.02 trillion for 2014 and on up to a total of about $37 trillion over the next ten years.
Remember, that is how much cash the federal government will spend over the next ten years when they consider an 8% increase in spending a no growth budget. They say they are trying to reduce spending by $1.2 trillion during that ten year period which amounts to about 3.2% of the $37 trillion. And they are agonizing?
I’d settle for a no growth budget being a zero percent increase year over year and no cuts. If they just capped spending at $2.4 trillion per year then over ten years we would only spend $24 trillion instead of $37 trillion.
Then if you consider that the government only takes in $1.8 trillion per year at the current level and that is not subject to the 8% growth rate. Generally a revenue growth rate of 3-4% is considered good and 5% is great. Let’s assume for this simple analysis a growth in revenue of 3.5% per year over the next ten years. Revenue received totals only $21.8 trillion when compounded.
Our current national debt is about $14 trillion and without reducing spending but actually increasing spending 8% year over year and experiencing 3.5% growth in revenue each year our national debt increases by another $15 trillion to about $29 trillion.
And the Super Committee is agonizing about cutting $1.2 trillion. There is also word that they are trying to make a “really big deal” and cut $4 trillion over ten years or slightly more than 10% of the $37 trillion total.
Could this discussion be any more absurd?
We need real spending cuts not a slowing of the growth rate.
If that weren’t bad enough, consider how you react when you are elected to Congress in 2016 and someone trots out this agreement to cut spending in some future budget cycle. Do you feel obligated to cut spending or kick the can to the next guy?
What happens if no future Congresses agree to make the cuts promised in 2011? What obligation does a future Congress have to honor agreements made by the Super Committee?
In a word; NONE.
It would be a good start to adopt a budget because that would indicate that the Senate finally came to the table. It would be better if we capped spending. It would be great if we could actually reduce spending.
I’m thinking I hear a kicking sound!
No Loss for Words 
Sequestration or Castration; You Pick!
by Steve DanaWe have just under a week for the “Super Committee” to complete the work outlined in the Budget Control Act of August 2011 and the progress reports are not encouraging. Characterizing the committee as “Super” may have been a mistake considering every aspect of their work plan has been anything but super.
In my view, when the Budget Control Act was passed, Republicans gave away the farm. They gave the President and Congressional Democrats the ability to raise the national debt by 20% over 16 months without one meaningful concession; not one!
Politicians talk about cutting spending by thirty or forty or a hundred billion out loud then follow that with “over the next ten years” in a muffled voice. I’m not sure it really matters what they say since they don’t adopt and follow budgets anyway. But that was the deal. They would reduce spending in budget cycles starting in 2013 out into the future when many of them will be long gone and out of office.
I can only imagine how good it felt standing up to the microphone and looking into those TV cameras telling viewers how we negotiated hard and got the best deal we could for not just our side, but for the American people. “We agreed to increase the national debt by another 20% between now (August 2011) and January 2013 (just before inaugurating the next President) in exchange for spending cuts totaling $1.2 trillion over the next ten years to be determined by a “Super” Committee made up of twelve members of Congress; half from the Senate and half from the House; half Democrats and half Republicans before Thanksgiving of this year. Failing in that mission, a process called Sequestration will be implemented where every department will suffer equal percentage budget cuts to achieve the stated goal.”
For the Democrats on that podium, that was a euphoric feeling, knowing they had bent over the Republicans again. Don’t you remember a sly smile from Harry Reid as he talked about slashing $1.2 trillion, knowing full well it would never happen?
For the Republicans on the podium, I’m not sure what they felt. I know they should have felt like a kid in Jerry Sandusky’s shower room.
I guess I’m too damn stupid to see how that agreement was in any way good for Republicans; on any level. And frankly for the American people either. But what do I know, I’m just a fry cook?
Number one, we authorized increasing the debt when we said we wouldn’t.
Number two, we agreed to a spending reduction process that had no meaningful reference points and no down side for the Democrats. Sure, cutting some of those social programs would cause the Dems to wince a little, but considering the hurt it would cause for R’s it was a hit they felt was well worth it.
If the Super Committee cannot negotiate a deal with the Republicans they just punt and allow the “Sequestration” to cut the budget which will target Defense spending at a time when we have already cut their budget significantly.
Now as we approach the drop dead date for the committee to finish their work, we’re still hopelessly deadlocked. No, wait, the Republicans are starting to talk about some tax increases as being okay. The Speaker is warming up to the idea of a tax increase for those rich bastards just so we never have to face the prospects of SEQUESTRATION.
How can the Republicans be afraid of Sequestration at this point? What they should have been afraid of was the CASTRATION they went through when they voted for the Budget Control Act at the start of this process. Were they just stupid or is the fix in?
The National Debt will increase to $16 Trillion, tax rates will be raised for rich bastards and spending will not change one iota.
I’m beginning to believe Jack Abramoff was right when he talked about how lobbyists own our elected officials. It may not be Jack pulling the strings, but someone with interests different than mine certainly is.
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