What Should We Do? View 685 20110727

View 685 Wednesday, July 27, 2011

Everyone is talking about Draconian cuts to the budget. The President won’t sign the Boehner Plan because of the cuts. Yet there are no cuts in that plan or in any plan proposed.

There are no cuts. None. Zip, Nada, Bupkis, Zero. None.

We need to understand how “budget cuts” are measured. The base line budget projects a $9.5 Trillion Dollar increase in spending over the next ten years. Any reduction in this increase in spending is officially a “cut.” Thus the Republican Deficit Plan mandates an approximate “cut” of $1 Trillion over the next decade in exchange for a rise in the Deficit Limit of $2 Trillion. Note that the $1 T “cut” isn’t assured, since it takes place in the future, and one Congress cannot bind another. (Note that. One Congress cannot bind a future Congress. It might be well to remember this.) But even if the $1 Trillion “cut” is faithfully carried out, the effect is that there will be an $8.5 Trillion increase in spending (and thus in Debt) over the next decade.

Put it this way. If Congress were to freeze spending: we will spend next year precisely what we spent this year on each project, none of them increased and none decreased – if Congress were to do that, the result would officially be a $9.5 Trillion cut. It would be a cut in government pay, in school lunches, in Medicare and Medicaid, to the Army and Navy, to the DOE SWAT team and the Department of Agriculture Pet Bunny Inspectors, a cut to Head Start, a cut the FDA, a cut to – well, you get the idea. Not spending more money every year is a cut, and a freeze on spending is a $9.5 Trillion Cut in Federal Spending. Cuts to school lunches, Medicare, Medicaid – well, we’ve said all that. Not spending more is a cut.

It hasn’t always been this way. Back in the 1960’s a “cut” was actually a cut; if a department’s budget got cut it meant that it got less money. But since the budget acts of the 70’s Federal spending automatically increases year after year and any reduction in that increase is scored as a cut.

So: if we adopt the Boehner Plan, we get what amounts to a $10 Trillion increase in spending over the next decade. And that, we are told, is the best we can hope for, and we ought to wheedle the Democrats and the President graciously to concede to give it to us good and hard.

Let me repeat that because while most of you know it, some don’t, and those who haven’t thought of it will find it hard to believe. A freeze in spending: a mandate that no department of government spend more next year than it spent this year; will be reported as a $9.5 Trillion cut. If Boehner gets all he asks for and then some, say a $1.5 Trillion cut over the next decade, he will have locked in an $8 Trillion increase in government expenditures (and thus the Deficit) over the next ten years. And the Democrats will decry the Draconian cuts in school lunches, education spending, Medicare, etc., etc. And at the moment the “non partisan Congressional Budget Office” believes that Boehner Plan would only “cut” $0.85 Trillion over ten years, meaning $850 Billion, meaning $85 Billion/year. The United States borrows $100 Billion a month.

There are never any actual cuts in spending. No one is proposing any. There are only temporary reductions in spending increases. No Plan by either Party contemplates any actual cut in spending. We are arguing over how much more we will let the deficit rise: $8 Trillion or $10 Trillion. If it only rises by $8 Trillion that will be counted a great victory with a $2 Trillion cut. Be prepared to pay.

Salve, Sclave.

The Limited Debt

A brief history: the debt limit in 2006 was $8.2 Trillion.

It is now (2011) $14.3 Trillion.

When this Dance is done the debt limit will be $16.3 Trillion

In 2021 it will have to be somewhat more than $23.0 Trillion, and will continue to rise.

The Pournelle Plan

The Republican leadership proposes at best a $8.5 Trillion increase in federal spending over the next ten years. That is advertised as a Trillion Dollar Cut.

I propose that we not only freeze Federal spending, but impose a 1% reduction in all payments. That’s all of them. Welfare, Medicare, Medicaid, school lunches, whale watchers, game wardens, and the rest of it. No adjustments. That will be hard on military families, and I know it, but that’s only for a year while the various departments readjust their budgets.

The following year each department other than the military is subject to a 2% budget cut, to be allocated as they see fit: reducing payments, laying off people, reducing pension obligations, whatever has to be done. At that time we reset the conditions for getting Welfare and Social Security: raise the automatic age by one month per month until it is 68, not 65. Adjust the non-retirement payments – disabilities, dependents, everything that people get who have not paid into Social Security to get it – by some small amount per year as we raise the qualification requirements for getting into those programs.

And we search through all the government programs to find those which we simply cannot afford so long as we have to borrow money to do them. This includes not only the obviously silly ones like Pet Bunny Inspectors, but much more importantly, the various regulations: is the economy strong enough to afford this kind of regulation? The assumption is that it is not: that we cannot afford it. As for example the FDA testing of “effectiveness” of drugs. Safety is fine. Testing for safety is fine. Accumulating data is fine. Certifying “effectiveness” is controversial to begin with, and interferes with people’s right to be damn fools. Freedom is the freedom to do things without your permission. Drugs will carry, in large readable letters, the warning that the effectiveness of this product has not been tested by the FDA. The FDA can enforce truth: if this says it contains snake oil it does in fact contain oil squeezed out of a snake – but makes no commitment about its effectiveness for any purpose. Take at your own risk. That’s freedom.

That sort of thing. Find things the government is doing that may or may not be a good idea, but which we can’t afford when we have to borrow money to do it. We can borrow money for investment, but most of that infrastructure investment is better made by the states anyway. We have already built the Federal Highways and the Interstate Highway. There are other essentials, but they need to be done in priority with the understanding that we have to borrow the money to do them.

Those can and should include genuine investments in technology development including space technology. Now that Shuttle is no longer eating NASA alive to feed the standing army it might be possible to have some genuine manned space development that isn’t built to pay 22,000 development scientists and technicians. We had that chance after the Challenger disaster, when the Citizens Advisory Council – Chairman J. E. Pournelle. PH.D. – urged that we not rebuild Challenger, but build a genuinely reusable manned ship, no tiles, no wings, lifting body, Shuttle Main Engine to run at 95% of maximum thrust instead of 103% thus meaning it is refillable not rebuildable, etc. This was endorsed by the whole Council which included the top space scientists and developers in the country; but instead they rebuilt the old bird, because the mission of Shuttle was to employ the standing army.

I am rambling. I haven’t the authority to propose anything. I may even be off my head, but I continue to insist that it is time to have a genuine prioritization of federal expenditures. Get rid of the stuff we can’t afford. And shared sacrifices must include the recipients of entitlements and government employees.

What Should Boehner Do?

We have to get through this. We will probably do it with some variant of the Boehner Plan. I hate that, but the one thing Boehner must not do is pretend he has made cuts. He should be honest. “I have got an agreement to raise the deficit $9 Trillion instead of $10 Trillion over the next decade, assuming that the Democrats actually agree. We have cut nothing. We will raise the Debt Ceiling because the President gives us no choice.” Say that, not that you have “compromised” and made budget cuts.

Be honest with us, Mr. Boehner. I understand that forcing the President to shut down the government would be a very dangerous thing, and most Americans do not want to see that happen. Just be honest with them: make it clear that this is no cut, that spending continues, that borrowing continues, and we have not got rid of any of the things we can’t afford. Tell us the blinking truth.

Whale Watch

Today’s LA Times tells us of a Federal program involving research ships and research aircraft: it studies whales and how they are being killed by ships colliding with them in the Santa Barbara Channel. In the past decade about 6 whales/year have been killed (that we know of. The number may be as high as 100, although that is unlikely).

It doesn’t give the cost of the program, but I’d guess about $10 million a year. It’s certainly worthwhile. It’s something I’d like to see done. And we can’t afford it. Or can we? If you have to choose, free school lunches or research on accidental deaths of whales in the Santa Barbara Channel, which would you choose?

It is that sort of choice that needs to be made when you have to borrow the money for these programs. And it is that sort of choice that no one is making.

Subscribe!

Information and Links

Search View or Mail