Thursday, January 3, 2013

Are the Republicans Serious??? Let's Focus on SPENDING.

Spending.  What does it mean?  Why do we do so much of it?  This post is about spending.  I've gone through and tried to highlight all instances of this word.  You'll see why later in this post.  I guess I'm going to pay special attention to this word, to this concept, because the Republicans sure as hell don't.  And you know the Democrats certainly don't.

I'm still bothered by the "deal" that passed the Senate, then the House, and was then signed by the President.  I still can't believe that we got a tax increase, and no spending cuts.  Amazing.  Here are the details, along with some discussion:

First, from the Wall Street Journal:
"Obama's Tax Bill Comes Due"

Let me focus on one quote from the article, which I'll come back to later in this post. 
But we hope the GOP has learned, after two failed attempts, that Mr. Obama is not someone with whom it can do a "grand bargain." Even as the Senate deal was taking shape, Mr. Obama gave a speech literally taunting Republicans for agreeing to raise tax rates. He also made clear that the price of any future spending cuts or entitlement reform will be another tax increase. He doesn't want to reform government. He wants to expand it and destroy GOP opposition to his agenda in the bargain.

And then from the Patriot Post:
"Raw Deal With Silver Linings"

Here's what all of the above means, though, why it really bothers me.  This speaks directly to the quote from the Wall Street Journal above.  The Democrats, from what I can tell, are probably laughing at the Republicans for raising taxes, for completely abandoning their stated goal, their party platform, to reduce spending.  Consider this comment from a co-worker:
Also, good to see that Republicans were never ever ever even a little bit serious about deficit reduction -- this was, and remains, about their fixation on lower taxes.
And that's the problem right there.  By caving, in the Republicans make it look like they only want to give tax breaks to the rich, that tax breaks are all they care about; they play right into the Democrat narrative.  There are actually two ways to interpret this statement, depending on your assessment of of the Republicans.  Are the Republicans incompetent or are they liars?  If they're incompetent, well, that would explain their total collapse in these negotiations.

But I fear that the problem is much deeper.  I think that they are liars.  (Well, maybe they're both.)  And that what my co-worker said was true, that they really do only care about tax cuts, but not larger economic issues.  If you agree to a deal that raises taxes, without getting ANY spending cuts, what exactly does that say about Republican priorities?  This is why I simply do not respect the Republican Party in general (yes, there are individual Republicans I do respect, of course).  They simply don't care about reducing spending.

Obama and the Democrats have succeeded in crushing the Republicans.  Not just by winning on this issue, but by skillfully exploiting a Republican weakness.  You see, they realize that the Republicans are not serious about reducing spending.  They have seen the Republicans raise the spending limit over and over again.  They know that Republicans, just like the Democrats themselves, don't give a damn about government spending. Once the Democrats realized that, they knew, beyond the shadow of a doubt, that they would win.

I think it came down to two camps within the Republican party.  There are those who are more concerned about taxes.  And those who are more concerned about spending.  I count myself in the latter camp.  I think spending is the root cause of the problem, and thus I think that is much more important to address.  Every bit of spending will eventually have to be paid for, if not by taxes then by debasing our currency.  Looks like many Republicans are okay with that.  I'm not.

For some better perspective on what happened, let's hear what Ron Paul had to say about it. Notice that the so-called "fiscal cliff" wouldn't have actually cut spending.  Seriously, you probably didn't know that if you listen to the mainstream media.  Two links for this, in case one goes stale.

From, posted on January 2, 2013:
"Ron Paul: We Are Already Over the Fiscal Cliff"

From Ron Paul's Facebook page, posted on January 2, 2013:
"Statement on the Motion to Concur in the Senate Amendments to H.R. 8"
"We Are Already Over the Fiscal Cliff"

I'm going to just quote the article in full because it's full of great points.
Ron Paul
Statement on the Motion to Concur in the Senate Amendments to H.R. 8

We Are Already Over the Fiscal Cliff

2 January 2013

Despite claims that the Administration and Congress saved America from the fiscal cliff with an early morning vote today, the fact is that government spending has already pushed Americans over the cliff. Only serious reductions in federal spending will stop the cliff dive from ending in a crash landing, yet the events of this past month show that most elected officials remain committed to expanding the welfare-warfare state.

While there was much hand-wringing over the “draconian” cuts that would be imposed by sequestration, in fact sequestration does not cut spending at all. Under the sequestration plan, government spending will increase by 1.6 trillion over the next eight years. Congress calls this a cut because without sequestration spending will increase by 1.7 trillion over the same time frame. Either way it is an increase in spending.

Yet even these minuscule cuts in the “projected rate of spending” were too much for Washington politicians to bear. The last minute “deal” was the worst of both worlds: higher taxes on nearly all Americans now and a promise to revisit these modest reductions in spending growth two months down the road. We were here before, when in 2011 Republicans demanded these automatic modest decreases in government growth down the road in exchange for a massive increase in the debt ceiling. As the time drew closer, both parties clamored to avoid even these modest moves.

Make no mistake: the spending addiction is a bipartisan problem. It is generally believed that one party refuses to accept any reductions in military spending while the other party refuses to accept any serious reductions in domestic welfare programs. In fact, both parties support increases in both military and domestic welfare spending. The two parties may disagree on some details of what kind of military or domestic welfare spending they favor, but they do agree that they both need to increase. This is what is called “bipartisanship” in Washington.

While the media played up the drama of the down-to-the-wire negotiations, there was never any real chance that a deal would not be worked out. It was just drama. That is how Washington operates. As it happened, a small handful of Congressional and Administration leaders gathered in the dark of the night behind closed doors to hammer out a deal that would be shoved down the throats of Members whose constituents had been told repeatedly that the world would end if this miniscule decrease in the rate of government spending was allowed to go through.

While many on both sides express satisfaction that this deal only increases taxes on the “rich,” most Americans will see more of their paycheck going to Washington because of the deal. The Tax Policy Center has estimated that 77 percent of Americans would see higher taxes because of the elimination of the payroll tax cut.

The arguments against the automatic “cuts” in military spending were particularly dishonest. Hawks on both sides warned of doom and gloom if, as the plan called for, the defense budget would have returned to 2007 levels of spending! Does anybody really believe that our defense spending was woefully inadequate just five years ago? And since 2007 we have been told that the wars in Iraq and Afghanistan are winding down. According to the Congressional Budget Office, over the next eight years military spending would increase 20 percent without the sequester and would increase 18 percent with the sequester. And this is what is called a dangerous reduction in defense spending?

Ironically, some of the members who are most vocal against tax increases and in favor of cuts to domestic spending are the biggest opponents of cutting a penny from the Pentagon budget. Over and over we were told of the hundreds of thousands of jobs that would be lost should military spending be returned to 2007 levels. Is it really healthy to think of our defense budget as a jobs program? Many of these allegedly free-market members sound more Keynesian than Paul Krugman when they praise the economic “stimulus” created by militarism.

As Chris Preble of the Cato Institute wrote recently, “It’s easy to focus exclusively on the companies and individuals hurt by the cuts and forget that the taxed wealth that funded them is being employed elsewhere.”

While Congress ultimately bears responsibility for deficit spending, we must never forget that the Federal Reserve is the chief enabler of deficit spending. Without a central bank eager to monetize the debt, Congress would be unable to fund the welfare-warfare state without imposing unacceptable levels of taxation on the American people. Of course, the Federal Reserve’s policies do impose an “inflation” tax on the American people; however, since this tax is hidden Congress does not fear the same public backlash it would experience if it directly raised income taxes.

I have little hope that a majority of Congress and the President will change their ways and support real spending reductions unless forced to by an economic crisis or by a change in people’s attitudes toward government. Fortunately, increasing numbers of Americans are awakening to the dangers posed by the growth of the welfare-warfare state. Hopefully this movement will continue to grow and force the politicians to reverse course before government spending, taxing, and inflation destroys our economy entirely.
Amen!  Very sad to see the perversion of the language, where people refer to a slight reduction in the rate of spending increases as a "cut."  Very sad to see that this is a bipartisan problem.  Sad to see Republicans using Keynesian economic language when it comes to their own pet interests.  Hypocrites.

Incidentally, the whole discussion above is symptomatic of a larger issue.  Republicans, like Democrats, do not care about excessive spending because the American people don't care about excessive spending.  We have the seen the enemy, and it is us.

Just for fun, now I'm going to dig into the Republican Party platform from 2012.  Enjoy the following links and quotes, and let me know whether you think the Republicans ever believed a word of this crap as they were writing it.

2012 Republican Platform

Download the PDF of the platform, and do a search on "spending".  Here is what I found.
Many Americans have experienced the burden of lost jobs, lost homes, and lost hopes. Our middle class has felt that burden most acutely. Meanwhile, the federal government has expanded its size and scope, its borrowing and spending, its debt and deficit. Federalism is threatened and liberty retreats.
Except the Republicans don't stop the expansion of government when they have the opportunity.
The best jobs program is economic growth. We do not offer yet another made-in-Washington package of subsidies and spending to create temporary or artificial jobs. We want much more than that. We want a roaring job market to match a roaring economy. Instead, what this Administration has given us is 42 consecutive months of unemployment above 8 percent, the longest period of high unemployment since the Great Depression. Republicans will pursue free market policies that are the surest way to boost employment and create job growth and economic prosperity for all.
Except the Republicans don't pursue those policies.
In all the sections that follow, as well as elsewhere in this platform, we explain what must be done to achieve that goal. The tax system must be simplified. Government spending and regulation must be reined in.
Except the Republicans don't rein in spending and regulation.
Reining in Out-of-Control Spending, Balancing the Budget, and Ensuring Sound Monetary Policy
The massive federal government is structurally and financially broken. For decades it has been pushed beyond its core functions, increasing spending to unsustainable levels. Elected officials have overpromised and overspent, and now the bills are due. Unless we take dramatic action now, young Americans and their children will inherit an unprecedented legacy of enormous and unsustainable debt, with the interest alone consuming an ever-increasing portion of the country’s wealth.
Except the Republicans don't take dramatic action now.
In fiscal year 2011, spending reached $3.6 trillion, nearly a quarter of our gross domestic product. Adjusted for inflation, that’s more than three times its peak level in World War II, and almost half of every dollar spent was borrowed money. Three programs—Medicare, Medicaid, and Social Security— account for over 40 percent of total spending. While these levels of spending and debt are already harming job creation and growth, projections of future spending growth are nothing short of catastrophic, both economically and socially. And those dire projections do not include the fiscal nightmare of Obamacare, with over $1 trillion in new taxes, multiple mandates, and a crushing price tag. We can preempt the debt explosion. Backed by a Republican Senate and House, our next President will propose immediate reductions in federal spending, as a down payment on the much larger task of long-range fiscal control. We suggest a tripartite test for every federal activity. First, is it within the constitutional scope of the federal government? Second, is it effective and absolutely necessary? And third, is it sufficiently important to justify borrowing, especially foreign borrowing, to fund it? Against those standards we will measure programs from international population control to California’s federally subsidized high-speed train to nowhere, and terminate programs that don’t measure up.
Except the Republicans don't propose immediate reductions in federal spending (pass a bill and make the Democrats in the House vote on it, don't just talk about it!).
Cutting spending is not enough; it must be accompanied by major structural reforms, increased productivity, use of technology, and long-term government downsizing that both reduce debt and deficits and ignite economic growth. We must restructure the twentieth century entitlement state so the missions of important programs can succeed in the twenty-first century.
Except the Republicans don't restructure the entitlement state.
We must also change the budget process itself. From its beginning, its design has enabled, rather than restrained, reckless spending by giving procedural cover to Members of Congress. The budget process gave us the insidious term “tax expenditure,” which means that any earnings the government allows a taxpayer to keep through a deduction, exemption, or credit are equivalent to spending the same amount on some program.
Except the Republicans' don't change the budget process.
Far worse, the process assumes every spending program will be permanent and every tax cut will be temporary. It refuses to recognize the beneficial budgetary impact of lower tax rates, and it calls a spending increase a cut if it is less than the rate of inflation.
Except the Republicans don't change the assumptions.
Republican Members of Congress have repeatedly tried to reform the budget process to make it more transparent and accountable, in particular by voting for a Balanced Budget Amendment to the Constitution, following the lead of 33 States which have put that restraint into their own constitutions. We call for a Constitutional amendment requiring a super-majority for any tax increase, with exceptions for only war and national emergencies, and imposing a cap limiting spending to the historical average percentage of GDP so that future Congresses cannot balance the budget by raising taxes.
Except the Republicans don't try to reform the budget process or vote for a balanced budget amendment.
Securing sufficient funding for the Highway Trust Fund remains a challenge given the debt and deficits and the need to reduce spending. Republicans will make hard choices and set priorities, and infrastructure will be among them. In some States with elected officials dominated by the Democratic Party, a proportion of highway funds is diverted to other purposes. This must stop. We oppose any funding mechanism that would involve governmental monitoring of every car and truck in the nation.
Except Republicans don't make hard choices and set priorities.
Nothing matters more than getting the American people back to work. In addition to cutting spending, keeping taxes low, and curtailing bureaucratic red tape, we must replace outdated policies and ineffectual training programs with a plan to develop a twenty-first century workforce to make the most of our country’s human capital.
Except the Republicans don't cut spending or curtail bureaucratic red tape.
Living Within Our Means: A Constitutional Budget
Republican Members of Congress have repeatedly tried to reform the budget process to make it more transparent and accountable, in particular by voting for a Balanced Budget Amendment to the Constitution, following the lead of 33 States which have put that restraint into their own constitutions. We call for a Constitutional amendment requiring a super-majority for any tax increase with exceptions for only war and national emergencies, and imposing a cap limiting spending to the historical average percentage of GDP so that future Congresses cannot balance the budget by raising taxes.
Except the Republicans don't try to reform the budget process, or make it more transparent.
Federalism and The Tenth Amendment
We support the review and examination of all federal agencies to eliminate wasteful spending, operational inefficiencies, or abuse of power to determine whether they are performing functions that are better performed by the States. These functions, as appropriate, should be returned to the States in accordance with the Tenth Amendment of the United States Constitution. We affirm that all legislation, rules, and regulations must conform and public servants must adhere to the U.S. Constitution, as originally intended by the Framers. Whether such legislation is a State or federal matter must be determined in accordance with the Tenth Amendment, in conjunction with Article I, Section 8.
Except the Republicans don't examine federal agencies to eliminate wasteful spending.
With every right comes a responsibility. A few States and their political subdivisions are currently in dire fiscal situations, largely because of their spending, debt, and failure to rein in public employee unions. In the event those conditions worsen, the federal government must not assume the State governments’ or their political subdivisions’ financial responsibility or require the nation’s taxpayers to pay for the misrule of a few State governments. Nor shall the States assume the federal government’s financial responsibility.
Except the Republicans, with some very notable exceptions (e.g. Scott Walker in Wisconsin), don't try to rein in public employee unions.
Government reform requires constant vigilance and effort because government by its nature tends to expand in both size and scope. Our goal is not just less spending in Washington but something far more important for the future of our nation: protecting the constitutional rights of citizens, sustainable prosperity, and strengthening the American family.
Except the Republicans don't stop the expansion of government or protect constitutional rights of citizens.
Medicare spent more than $520 billion in 2010 and has close to $37 trillion in unfunded obligations, while total Medicaid spending will more than double by 2019. In many States, Medicaid’s mandates and inflexible bureaucracy have become a budgetary black hole, growing faster than most other budget lines and devouring funding for many other essential governmental functions.
Except the Republicans don't try to limit spending or limit out-of-control government programs.
The current Administration has been frozen in the past. It has conducted no auction of spectrum, has offered no incentives for investment, and, through the FCC’s net neutrality rule, is trying to micromanage telecom as if it were a railroad network. It inherited from the previous Republican Administration 95 percent coverage of the nation with broadband. It will leave office with no progress toward the goal of universal coverage – after spending $7.2 billion more.
Except the Republicans also try to micromanage aspects of our economy and don't realize that the best market is a free market.
A far better approach—protecting consumers and taxpayers alike—is institutional transparency. Banks need to know that they could be at risk, and investors need clear rules that are not subject to political meddling. The same holds true for the equity market regulated by the Securities and Exchange Commission. We propose reasonable federal oversight of financial institutions, practical safeguards for consumers, and – what is crucial for this country’s economic rebound – sound spending, tax, and regulatory policies that will allow those institutions to once again become the builders of the next American century. We strongly support tax reform; in the event we do not achieve this, we must preserve the mortgage interest deduction.
Except the Republicans don't believe in transparency (the Federal Reserve is one example) nor do they believe in tax reform.
We believe that taking care of one’s health is an individual responsibility. Chronic diseases, many of them related to lifestyle, drive healthcare costs, accounting for more than 75 percent of the nation’s medical spending. To reduce demand, and thereby lower costs, we must foster personal responsibility while increasing preventive services to promote healthy lifestyles.
Except the Republicans don't believe health care is an individual responsibility.
Since 1965 the federal government has spent $2 trillion on elementary and secondary education with no substantial improvement in academic achievement or high school graduation rates (which currently are 59 percent for African-American students and 63 percent for Hispanics). The U.S. spends an average of more than $10,000 per pupil per year in public schools, for a total of more than $550 billion. That represents more than 4 percent of GDP devoted to K-12 education in 2010. Of that amount, federal spending was more than $47 billion. Clearly, if money were the solution, our schools would be problem-free.
Except the Republicans don't limit federal education spending.
In sum, on the one hand enormous amounts of money are being spent for K-12 public education with overall results that do not justify that spending. On the other hand, the common experience of families, teachers, and administrators forms the basis of what does work in education.
Except the Republicans don't stop excessive education spending at the federal level.
The Dangers of A Hollow Force: The Looming Sequestration
Sequestration—which is severe, automatic, across-the-board cuts in defense spending over the next decade—of the nation’s military budget would be a disaster for national security, imperiling the safety of our servicemen and women, accelerating the decline of our nation’s defense industrial base, and resulting in the layoff of more than 1 million skilled workers.
Except the Republicans don't realize that cutting defense spending CAN be done if we stop trying to police the world and require other nations to defend themselves.
Limiting foreign aid spending helps keep taxes lower, which frees more resources in the private and charitable sectors, whose giving tends to be more effective and efficient.
Except the Republicans don't limit foreign aid spending.

There you have it.  If you think that I'm wrong with my "Except..." statements, think back to when George W. Bush was president, the early years when the Republicans controlled the Presidency and both houses of Congress.  What did they do?  Republicans don't address any of these spending issues.  Republicans talk a good game, but they don't deliver.  Because they really don't care about spending.

Honestly, I don't even know why they bother publishing this drivel they call a "platform."  The Platform says, "In all the sections that follow, as well as elsewhere in this platform, we explain what must be done to achieve that goal."  But then they don't actually try to DO any of those things!

Still don't believe me?  Okay, one more link, from the Wall Street Journal.
"Crony Capitalist Blowout"

Notice that more Republicans in the Senate Finance Committe voted FOR corporate welfare than voted against it.  And there wasn't a single Democrate that opposes corporate welfare on this committee, despite their calls for "fairness."

From the article:
The great joke here is that Washington pretends to want to pass "comprehensive tax reform," even as each year it adds more tax giveaways that distort the tax code and keep tax rates higher than they have to be. Even as he praised the bill full of this stuff, Mr. Obama called Tuesday night for "further reforms to our tax code so that the wealthiest corporations and individuals can't take advantage of loopholes and deductions that aren't available to most Americans."
One of Mr. Obama's political gifts is that he can sound so plausible describing the opposite of his real intentions.
The costs of all this are far greater than the estimates conjured by the Joint Tax Committee. They include slower economic growth from misallocated capital, lower revenues for the Treasury and thus more pressure to raise rates on everyone, and greater public cynicism that government mainly serves the powerful.
Republicans who are looking for a new populist message have one waiting here, and they could start by repudiating the corporate welfare in this New Year disgrace. 
Exactly.  Especially the part about "greater public cynicism that government mainly serves the powerful."  That's certainly what I believe at this point.