Saturday, October 05, 2013


Inability to See What's Right In Front of Your Nose

My apologies to Eric Blair for screwing up his quote. I notice that a lot of my stories now start with, "When I was a young man..." Such is the way of 60-year-olds, which I am, so suck it up.

When I was a young man, we used to have a federal budget process. Elected officials and their clever staff would look at the leviathan spending as the blind men examined the elephant and would debate in committee and on the floor some very slight fine tuning to the ever increasing spending, much of it completely wasted.

But even that modest effort ended with the Obama Administration. Although required by law to present and pass a budget, the Democrat controlled Senate refused. They did so for political reasons, for to reveal to potential voters their tax and spending desires would have hurt them in election years. There was no budget for 4 years and therefore certainly no discussion or debate about any of the several Trillion dollars of federal spending. The President has to present a budget by a deadline as well. President Obama rarely completed his task on time and most of his budgets were bad jokes; the 2013 fiscal year received not a single favorable vote in the Senate, not even one from yellow dog Democrats.

So we've been running the federal government for a half decade by continuing resolution, the CR. It's a vote to keep going or stop. We keep going. We keep going with ever more spending and we outspend even that increase.

Since any rational person with this historical knowledge would put the blame for this sad state of affairs on the people who caused it, the Democrats, that's whom I'll blame. I know that the Democrats finally did what the law requires last Spring and put together a bad joke budget which went nowhere but I argue, with no small amount of reason and fact behind me, the Democrat-caused reliance on the CR allowed them to pass a Potemkin Village budget which was never intended to be presented to the President for his signature and which understated the actual spending and overspending. They now rely politically on the CRs through which the Democrats "sneak" their massive spending past the voters.

Having an all or nothing outcome is not optimal. We sucked at keeping the budget cut nearer the bone (we rarely exfoliated a few dead skin cells) even when we had a working budget process, but without one, our increase in spending and borrowing shifted into high gear. See chart below.

The all or nothing nature of the CR also caused the loyal opposition (Republicans) to try to slow spending and borrowing by attaching some restraint to the wording of the CR. The House is Constitutionally required to start all spending bills. But now the President and Senate say the CR is some kind of constitutional Scapular and it must continue to be all or nothing, otherwise something bad will happen. They long ago wouldn't allow the normal give and take of building a budget and now they won't even countenance any political opposition to the overspending being contained in the CR. They call the Republicans, responding to their constituents and trying to slow spending and borrowing by the only method left, bad names. Typical Democrat argument, go ad hominem early and often, because nothing can convince an opponent to agree with you like calling him or her a terrorist or other criminal. I'm no big fan of the Republican leadership, but my contempt for the Democrats is growing exponentially.

So are the largely made-up government shut down horror stories recently in the media putting the blame for the deadlock primarily on the Republicans. Yes, as usual. Is it working to hurt Republican election chances next year? At this point, I don't think so. Unless you are employed by the Government, nothing much bad is happening with the partial shut-down. The non-essential part of the Government is wholly foregoable it seems. We see the silly horror stories being shopped by the media more as liberal vindictiveness than Republican extremism or, gasp, anarchy. I guess that could change. I'm hoping, but not betting, that the Republicans hold firm and the Democrats cave. Might be wishful thinking there.

As a closing thought, please know that because of tax and FICA withholding of part of nearly every American paycheck each week or two weeks or month, the federal government takes in a couple hundreds Billion dollars each month. This amount of withheld tax money is much greater than the monthly debt service, (about $40 Billion/month). So there is no possibility of a debt default. Even the shut-down government can pay the vig. So if anyone says the Republicans in the House are risking debt default by our federal government by their not presenting a "clean" CR, as the Democrats demand, that person is lying to you. Default on the debt is not yet remotely possible for lack of a budget, CR or debt ceiling raise. Please remember the people who are lying like this and don't trust them to tell you the truth. Things will be slightly clearer to you in the future.

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