Mail 686 Tuesday August 2, 2011 – 1
I had Hollywood Bowl tickets tonight. Rachmaninoff Third Piano Concerto, and Tchaikovsky’s Fifth Symphony. I’ll deal with more mail tomorrow, but this one indicates that I haven’t been entirely clear on a subject that’s not easily understood in the first place.
federal spending
just wondering where you got this:
"The most important thing to understand is that if the Congress were to freeze government spending: pass a Bill that says that we will next year spend precisely the same amount as we did last year, same salaries, same payments to pensions, same purchases, same veteran benefits, same payments to Bunny Inspectors and SWAT teams, same amount to Food Stamps and Free Lunches – if we froze government, the result would be called a $9.5 Trillion cut."
The fed budget is only $4 Trillion. With off budget spending, the highest I’ve seen is around $6 Trillion.
yves
If the budget is only 4 Trillion, how can a freeze be a $9.5 Trillion cut? But note that the Congressional Budget Office scores the effects not on next year, but on the effects over ten years. And do not forget the magic of compound interest. Exponentials are exponentials.
In CBO’s March 2011 baseline, total outlays over the ten-year period from 2012-2021 are $45.8 trillion. If annual outlays throughout that period instead stayed at 2011’s level ($3.6 trillion), they would sum to $36.3 trillion over the ten years — a difference of $9.5 trillion. That’s the apparent basis of Limbaugh’s figure. [Center for Budget and Policy Priorities, email to Media Matters, 7/28/11] http://mediamatters.org/mobile/research/201107280029No
Note that the freeze discussed here is a total freeze on everything: a continuing resolution, in which the Congress says that no department of government may spend more next year than it did in the preceding year. That means social security, Medicare, military salaries, Bunny Inspector pensions.
The “Pournelle Plan” couples the one year freeze with a 1% reduction in the next year, along with permission and encouragement of Federal managers to eliminate needless activities such as Bunny Inspectors. And adjust Social Security by raising the age of eligibility one month every month until the age of eligibility is 68. Consider 70. Adjust ages of eligibility for other entitlements; the total outlay is already limited by the freeze. The goal is real cuts, to levels of expenditure approaching those of the mid 1990’s after the end of the Cold War. When we get there and pay off the National Debt, we can consider again the question of do we have enough government, or should it be reduced more?
My inclination, incidentally, is not necessarily automatically to less government, but it is to less Federal government. If Government should do more, let it be through the states. Massachusetts experimented with something like ObamaCare. Let others see if they want to copy that. Leave welfare to the states, and get the egalitarian courts out of that picture. I suspect that would lead over time to less government in most places. Investors would flee some states and seek others. Let them all compete for smart people who create jobs. But that’s my proclivity.
If something cannot go on forever it will stop. We cannot continue to go another trillion a year in debt.
But that is how a freeze becomes a massive cut.
Rush Limbaugh proposed that the government institute a "spending freeze," which he claimed would be demagogued as a "draconian cut." In fact, according to federal budget experts, such a proposal would lead to "a massive reduction in the services provided by government to a growing population" and would mean that "no new person could retire on Social Security until a current beneficiary dies."
No. It means that the department can’t pay out more this year than it did last year. That might mean a cut in payments in the first months of the year until it is clear what the total payments for the year will be. If so, then there will be a cut in payments to individuals.
