We Are Out of Money

American governance won’t begin to inch forward until the political class faces basic facts.

American conservatives, particularly the fiscal variety, tend to hold up the European Union as a model of irresponsible, big-spending economic policy. But consider this: According to E.U. rules, member countries cannot maintain budget deficits above 3 percent of gross domestic product; nor can their total debt rise above 60 percent of GDP. As Veronique de Rugy points out in this issue, the U.S. budget deficit in 2009 was three times the E.U.’s limit, and total debt will zoom past the 60 percent threshold sometime this year. Washington makes Paris look frugal.

In March the federal government created the most expensive new entitlement in four decades, even as the bond rating company Moody’s Investors Service warned that debt levels could soon precipitate a downgrade in U.S. Treasury bonds. The main opposition party fought the bill by decrying “cuts” to Medicare, and it has kept itself at arm’s length from one of the few politicians talking seriously about long-term reform.

Today may be terrible, but tomorrow is going to be much worse, at least as measured by such metrics as deficits, debt, and entitlement spending. In an April speech, Federal Reserve Chairman Ben Bernanke laid out the misery that awaits us. “The arithmetic is, unfortunately, quite clear,” he said. “To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.”

Yet in the very next paragraph, Bernanke displayed the kind of cowardice that got us into and has helped extend our awful economic mess: “Today the economy continues to operate well below its potential, which implies that a sharp near-term reduction in our fiscal deficit is probably neither practical nor advisable. However, nothing prevents us from beginning now to develop a credible plan for meeting our long-run fiscal challenges.”

States, counties, and municipalities, lacking Bernanke’s ability to print money, do not have the luxury of “beginning now to develop a credible plan” for the future. They are flat out of money in the present. But they too refuse to face reality.

The housing bubble, with its tax-generating wealth, was already bursting in 2007. Yet as recently as 2009, Montgomery County, Maryland, decided to make “phantom” cost-of-living increases to the pensions of government workers, linking contributions to salary increases that did not occur. This sweetheart deal, which added more than $7 million to the county’s annual budget (according to The Washington Post), tasted rather bitter at a time when the county’s revenue was falling short of projections by more than $24 million. Yet after one Montgomery County Council member proposed eliminating this sop to the public-sector unions, four of his colleagues joined a rally on the rooftop of the council’s parking garage, leading a crowd of 400 government employees in chants of “We’ve had enough!” and “No justice, no peace.”

In Los Angeles, former labor organizer and once-rising political star Antonio Villaraigosa, now a second-term mayor who has fallen so far that the local glossy city magazine made him a cover boy last year under the headline “Failure,” announced in April his intention to shut down “inessential” city services two days a week, after the city controller had declared that the municipality would “run out of money” by June 30. Villaraigosa’s deputy chief of staff, Matt Szabo, told The Wall Street Journal the city’s public-sector unions “have priced themselves out of a job.”

Yet those unions received significant raises from the tough-sounding mayor as recently as 2007. The city’s labor force grew by more than 9 percent from 2000 to 2009, and annual pension contributions tripled, according to the Los Angeles Times. In a March interview with National Public Radio, Villaraigosa lamented that “California cities are constrained by various propositions which limit your ability to raise revenues” (though he managed to raise the city’s sales tax from 8.25 percent to 9.75 percent) and portrayed renegotiating union contracts as an unlikely last resort. “There aren’t a lot of options here,” he said. “We have contracts with our employees that we have to abide by. So unless they agree to sharing in the sacrifice in these tough times, I won’t have a lot of options.”

Even bankruptcy isn’t necessarily a harsh enough reality check. The city of Vallejo, California, went bankrupt in 2008, largely due to impossible-to-meet pension obligations. Although the bankruptcy judge declared that pension contracts were fair game in the reorganization process, the city last December cut just about everything except pension contributions for government employees, according to a Wall Street Journal piece by Steven Greenhut. In March of this year, Vallejo agreed to a new contract with firefighters that again left pensions unchanged. “The majority [of council members] did not have the political will to touch the pink elephant in the room—public safety influence, benefits, and pay,” Vice Mayor Stephanie Gomes told Greenhut.

California, it cannot be stressed enough, isn’t necessarily worse than anywhere else; it’s just bigger (and louder). A Reason Foundation study of state spending increases during the comparatively good times of 2002 to 2007 found the Golden State to be in the middle of the pack on a percentage basis. And even after two-plus years of crisis, with unrelenting headlines about “annihilating” cuts, state bureaucracies remain bloated.

Surveying the fiscal wreckage at the end of 2009, BusinessWeek’s Joe Mysak found that the 50 states had cut their combined payrolls that year by a minuscule 0.25 percent. Mysak’s conclusion: “Politicians everywhere are talking about layoffs, of course. They have been talking about eliminating jobs, often in threatening tones, since at least January. As the numbers show, for most, it’s just talk.”

Such talk has created a feedback loop in the media, where budget cut horror stories—which never mention how much state and local government spending skyrocketed in the years before the recession—mix seamlessly with editorial-page calls to spend still more money we don’t have on government jobs we can’t afford. “Upcoming budget cuts by recession-battered states will lead to more job losses,” The New York Times editorialized in April. “As states cut spending, there is less business for private-sector contractors and more layoffs of government employees.” Meanwhile, the Times argued, the federal government needs to be spending more “on infrastructure and clean energy” and the creation of “public jobs, especially summer youth jobs.”

When we’re still talking about government make-work, it’s a sure sign we haven’t recognized the sinkhole we’re in. A smattering of summer jobs for teenagers is no consolation for jacking up the cost of borrowing for everyone during an economic downturn. Yet that’s what the White House’s best economic minds are proposing. “Failure to take additional targeted actions to jump-start job creation,” Christina Romer, chairwoman of the Council of Economic Advisers, said in March, “would lead to slower recovery and higher unemployment for an extended period.”

With policy philosophy like that, it’s no wonder that governors, facing nearly $200 billion in budget deficits, are descending upon Washington for another round of stimulus funding. As long as there’s still one greater fool left willing to chase diminishing returns with more cash, politicians can keep putting off the day of reckoning. If they’re lucky, they’ll be long out of office when the gong strikes midnight. Unfortunately for most of us, we’ll still be here. 

Matt Welch (matt.welch@reason.com) is editor in chief of reason.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Helicopter Ben||

    But we can always print more!

  • James Galbraith||

    Ben's right! The Government can create money and wealth and blaarrggghh Sorry I just vomited all over myself.

  • ||

    A group of pseudo religious "seeers" or more commonly known as Keynesian economists, really do believe our only flaw is the unwillingness to just print more money.

    Today: ice cream sundae and sloth
    Tomorrow: two ice cream sundaes, with chololate sauce, and a remote control refrigerator that makes the ice cream sundaes!
    Ooooo! Ooooo! and a hot chick in a French maid outfit to deliver the sundaes, who gets hot at the thought of lazy fat guys.

  • ||

    The Federal Government cannot run out of money. It does not own any money. It's a scorekeeper.

  • JoshInHb||

    What's Mugabe's score?

  • ||

    I actually would like to see a Keynsian explain how their theory is superior to supply side economics. If there are any reading this right now, than by all means defend your theory!

  • ||

    In the world of supply-side economics it is said that increases in taxation both reduces economic activity and investment. The suggested outcome of higher taxes is lowered levels of economic efficiency. The US has been an experiment in supply side economics and has experienced a significant reduction in taxes with little benefits other than a series of asset ‘bubbles’, a hollowing out of its manufacturing capacity and a greater disparity between rich and poor rather than increased economic participation.

    Supply-side economics theory postulates that deficits will be tackled by ‘rational economic actors’ buying bonds which in turn leads to a reduction in long term interest rates, or alternatively and a more probable outcome (as critics of this outcome comment) is the devaluation of the currency if exchange rates are allowed to free float, but this has not occurred.

    In the US economy investment demand has exceeded investment supply and the result has been asset inflation. According to supply side theory this should not occur. Monetarist and Keynesian economic theory suggests alternatively that there will be a point where increased asset prices will result in no new supply and instead asset inflation will occur – a bubble. The evidence of an asset bubble, or series of asset bubbles, leads the impartial observer to conclude the US experiment with supply-side economics is an abject failure, which has been exacerbated by the inability to have free floating currencies to correct the trade imbalance between the US and China.

  • ||

    Thank you for the explanation. Stating that the US is an "abject failure" in supply side economics is a stretch, considering we have the highest corporate tax rates amongst developed countries. Further, another aspect of supply-side would be reducing government spending, seeing as in a low tax, high spending environment the government will finance its debts by leeching money out of the private sector either through bonds or inflating the currency. Government spending has never receded by any significant amount since after WWII, but instead has grown.

    Point to a Keynsian success story. The benefits are only short term, as increasing aggregate demand will stimulate supply short term, but raise overall prices in the long term leading to high long term unemployment. This can be seen in the high tax / high spending countries in Europe, which typically have "normal" unemployment in excess of 10%, and Singapore which has essentially no government regulation and few taxes, where the average unemployment of 1%.

    I think it is more reasonable to conclude that the asset bubbles you refer to are caused by misguided monetary policy rather than lower investment taxes. Keeping the interest rate artificially low is the hallmark of Federal reserve policy in the 90s and even currently.

    Though we may be getting off topic, explain who would lend their money out at these artificially low interest rate in a booming economy?

    To me, it seems you are attempting to obfuscate the big picture by focusing on a couple of minor points. Again, point me to a long term Keynisan success story, and bear in mind I will use Signapore as a counter example.

  • ||

    Oh BTW, manufacturing capacity has only increased with the notable recent exception of the recession. Manufacturing jobs have decreased due to increased efficiency, necessitated by powerful unions encouraging more capital investment in manufacturing to counter increased labor costs.

    I would argue that decreased disparities between rich + poor are caused by government regulations that limit social mobility by creating a class of dependents.

  • Steven||

    Supply side a failure? Please, government revenue more than doubled in the 1980 and 1960 following tax rate reductions. Supply siders understand that beyond a certain rate lost productivity and cheating actually reduce revenues. A good study by Art Laugher late last year concluded that the optimal tax rate for maximizing REVENUES is 10.5% on both personal and corporate income. Why on Earth are "progressives" so terrified of low taxes?

  • ||

    I actually would like to see a Keynsian explain how their theory is superior to supply side economics.

    It's possible true Keynesian economics might actually work. However, the way this theory works is merely to give politicians a rationale for increasing spending. They don't have the discipline or incentive to cut it back again. Keynesian economics might sound nice in theory, but it's simply not practical given human nature.

  • ||

    ...first you would have to define "supply side economics".

  • دردشة عراقنا||

    agree with u

  • MrGuy||

    Thats the plan!

  • Lord Keynes||

    I'm dead and the long run has arrived.

  • ||

    You promised that in the long run we'd all be dead. Liar.

  • ||

    There is no way that the political class will face the facts in time to prevent a catastrophe.

    And, unfortunately, if they did have the guts to take appropriate action, they would be voted out of office in favor of a new band of pols who would promise people that they could have their magic unicorn.

    Talk to people on the street, they will say the deficit must be cut, but don't touch their sacred program or entitlement or raise their taxes.

    The fault lies not in our politicians, but in ourselves.

  • ||

    We truly do get the government we deserve, it seems.

  • ||

    Who's "we" Kemosabe?

  • ||

    Fair enough.

    But being opposed to stupid policies won't save libertarians from the consequences of those policies.

  • ||

    Oh no, not at all.

    After civilization falls after the economic crash and as the rape gangs close in on our street, I at least want to have the ability to honestly exclaim to my Obama-loving neighbors, "This is all YOUR fault!"

  • ||

    Yeah, because things were running so smoothly until January of 2009.

  • ||

    If I had any neighbors that voted for Bush, I'd blame them too.

  • Stripping for Bureaucrats||

    BARBEQUE RACK OF LAMB WITH MINT
    VINAIGRETTE

    For the lamb:

    1 each rack lamb (full rack, split, chine off - 18 bones)
    1 T. cracked black peppercorns
    2 T. olive oil, extra virgin

    Asian Barbecue Sauce:

    4 c. red wine
    6 c. rice wine vinegar
    3/4 lb. golden brown sugar
    2 c. sake
    2 each cinnamon sticks
    1 each star anise
    1 pinch chili flakes
    1 each bay leaf
    2 oz. ginger
    Soy sauce, to taste

    Mint Vinaigrette:

    1 each egg yolk
    1 T. dijon mustard
    1 t. chopped ginger
    2 cloves fresh garlic, peeled
    1 c. safflower or other vegetable oil
    1/4 each lemon, juice only
    1 bunch mint, (1-1/2 cups leaves only)
    6 sprigs cilantro
    salt and pepper to taste

    Soy-Ginger Vinaigrette:

    1 T. finely chopped shallots
    1 t. finely chopped ginger
    1 t. finely minced garlic
    1/2 c. soy sauce
    1/2 c. freshly-squeezed lime juice
    1 c. peanut oil
    1-1/2 T. sesame oil
    Salt and fresh pepper to taste

    For the Crispy Potato Sticks:

    2 each baking potatoes, peeled and cut into julienne
    2 qts. peanut oil
    Salt and fresh pepper to taste
    2 c. mixed baby lettuces (radicchio, endive and arugula)

    Preparation:
    1. To prepare the Asian barbecue sauce, heat 2 cups of the red wine, all of the rice wine vinegar and the brown sugar in a saucepan. Simmer slowly until reduced to a syrupy consistency. In a second saucepan, combine the remaining 2 cups of red wine, the sake, cinnamon sticks, star anise, chili flakes, bay leaf and ginger. Bring to a boil then simmer until reduced to about 1/4 of original volume. Combine the contents of both pots and add soy sauce to taste. The total volume should be about 2 cups.

    2. Prepare the mint vinaigrette, In a food processor, add the egg yolk, mustard, ginger, garlic, vinegar, salt and pepper. Process well to chop garlic and ginger finely then slowly add the oil until it is all incorporated. If the sauce becomes too thick, thin with water. Add the mint and finish with the lemon juice. If it is still too thick add more water and adjust the salt and pepper to taste.

    3. Prepare the soy-ginger vinaigrette. Place the shallots, ginger, garlic, soy sauce and lime juice in the bowl of blender or food processor. Process for 1 minute. Strain mixture into a bowl. Slowly whisk in oils. Season to taste with salt and pepper.

    4. Prepare the crispy potato sticks. Heat the oil to 350 degrees and fry the potatoes until golden brown. Let drain on paper towels. Season with salt and pepper.

    5. To prepare the lamb, make sure that all fat cover and bone fragments are removed from the lamb racks. Rub well with the olive oil and season well with salt, pepper and rosemary. Allow to come to room temperature. Heat a roasting pan or large sauce pan, very hot. Add a few drops of oil and sear the lamb racks on all sides until brown. Baste the racks with the barbecue sauce and place the lamb racks , bone side down, into the hot pan and roast at 400 degrees for ten minutes. Remove from the heat, brush with sauce and return to the heat until medium rare or to desired doneness. Totally cooking time should be 10 to 20 minutes depending on how heavily seared and how done you want them. When they are fully cooked, brush them one more time with the barbecue sauce on both sides. Allow the lamb to rest at room temperature after roasting for about 15 minutes.

    Presentation: Toss the mixed baby greens in a small amount of the soy-ginger vinaigrette with the french fries. Spoon the mint vinaigrette around the outside of the plate well. Place the greens/French fries in the center of the plate. Cut the lamb into chops and brush lightly with the barbecue sauce. Place the chops in a triangle around the greens.

    Yield: 8 portions

  • ||

    And whom shall be the sacrificial lamb?

  • MRK||

    "The fault lies not in our politicians, but in ourselves."

    Which is why we elect politicians in the first place. To make those hard decisions.

    The politicians' failure is they are more concerned about being reelected (and furthering their own power) than making decisions that benefit the people they represent.

    Eventually someone needs to put on the daddy-pants and tell the children (the unwashed electorate) that they need to eat vegetables, not chocolate.

  • ||

    If someone does, the electorate will vote them out.

  • ||

    Blame the 16th Amendment, maybe. That's what allows 50% + 1 of the population to rob the remainder at the ballot box. I suspect if everyone voting FOR government folly knew he would have to pay for it, we'd get a lot less of it.

  • Wegie||

    Any society that allows everyone to vote will end as a socialist society.

  • ||

    That's pretty astute. Did you come up with it yourself or read it somewhere? I only ask because I'd like to read whatever it came from... if it isn't your own invention.

  • Electorate||

    I'm eating sand.

  • Jeffersonian||

    Only two things give me hope: Chris Christie and Mitch Daniels.

  • ||

    Indeed. It can be done, folks.

  • I ronic||

    I prefer their brothers Jesus and Jack

  • ||

    To knowingly take the country off of a cliff--what greater indictment can be made of our political class or of our increasingly unlimited government? See why these guys have to be shackled? See?

  • ||

    Hold on - much of the problem is due to the "small government" policies of the last few decades.

    Who would have guessed that "voodoo economics" would not have worked? When are those Bush era tax cuts going to start producing jobs? Why did financial system deregulation result in fraud and failure on such a massive scale?

  • Flyover Country||

    Jambalaya


    Amount Measure Ingredient -- Preparation Method
    -------- ------------ --------------------------------
    2 Tablespoons Olive Oil
    3 Garlic Cloves
    1 Cup Onion -- chopped
    1 Celery Rib -- chopped
    1 Bell Pepper -- chopped
    1 Cup White Rice -- uncooked
    2 Cans Stewed Tomatoes -- large cans
    1 Teaspoon Tabasco® Sauce
    1 C Cooked Ham
    1 Lb Italian Sausage
    1 Tsp Dried Thyme
    Salt
    Freshly Ground Black Pepper
    1 Lb Shrimp

    In large pan heat oil and saute garlic, onion, celery and bell pepper
    just until softened. Add rice, tomatoes, hot sauce, ham, sausage
    (crumbled), thyme, salt and black pepper. Bring to boil. Cover. Reduce
    heat. Simmer 8 minutes. Add shrimp. Cover. Cook until shrimp have
    turned pink and rice is tender. Approximately 6-8 minutes.

  • ||

    Wow, no gumbo file in that?

  • ||

    Man, I love New Orleans cuisine.

  • Stripping for Bureaucrats||

    Then you'll love this place:

    http://www.pelicanclub.com/

  • blueGrass||

    Yea! It was definitely a failure of the "free market" economics of Bush. That's it. Or something.

  • Joshua||

    What small government policies?

    Show me one example of deregulation under GW Bush. Just one. HE ADDED REGULATIONS!

    They're all the same you idiot!

    None of them give a shit about any of us - they're in it for the power.

  • The Libertarian Guy||

    Not adding enough new regulations = deregulation.

    Didn't you get the memo?

  • ||

    Factually, Pro Lib, I think these guys have double-thinked themselves into complete denial that their actions have consequences.

    In their minds, "things will work out."

  • ||

    It's because they don't understand that, yes, the magnificent engine of the American economy could carry lots of dead weight and still function, but that there is a fucking LIMIT. And we're approaching it fast.

  • ||

    Public debt has been at a much, much higher % of GDP than it is now. See WWII for example.

  • Tyler Florence||

    Apple Charlotte with Cinnamon Sabayon

    Ingredients

    For the filling:

    1/2 stick unsalted butter
    4 medium Granny Smith apples
    1 vanilla bean, split and scraped
    1 lemon, juiced
    1/2 cup packed light brown sugar
    1/4 teaspoon ground cinnamon

    For the batter:

    2 large eggs
    1/4 cup whole milk
    2 tablespoons sugar
    1 tablespoon ground cinnamon
    2 tablespoons unsalted butter, for greasing ramekins
    2 tablespoons sugar, for ramekins, plus extra for top
    20 slices brioche bread, crust removed

    Cinnamon sabayon, recipe follows

    Directions

    Begin by making the filling. Set a large saute pan or roasting pan over medium heat and add butter. Peel and cut cheeks off apples then cut into 1/2-inch chunks. Once butter has melted and just starting to foam, add apples, scraped vanilla bean and pod, lemon juice, and brown sugar and cinnamon. Toss to coat well and cook for 20 to 25 minutes until apples are just tender and liquid has evaporated. The sauce will caramelize slightly and should be a nice, rich dark color.

    In a shallow dish, make the batter by combining eggs, milk, sugar, and cinnamon. Stir with a whisk until fully combined.

    Preheat oven to 375 degrees F and generously butter and sugar 4 (1-cup) ramekins.

    Invert a ramekin, or use a round cutter, on half of the bread slices to use as a guide to cut out circles. These will be the bases and top of the charlottes - you should have 8 in total. Cut the other slices of bread in half lengthwise.

    Working with the circles. lightly coat in the batter and place in the bottom of each ramekin. Lightly dip the other rectangles of bread in batter as well, then use them to line the walls of each ramekin - standing them upright around the perimeter leaving an overhang that you will later use to fold over and seal the charlotte. It should take about 6 strips per ramekin. Fill each mold with apples and some of the caramel from the pan. Fold over the edges to seal it up completely and sprinkle the tops with a little sugar.

    Bake in the center of the oven for 20 to 25 minutes. If the tops brown too quickly, cover loosely with foil. When done, the bread will have puffed up slightly, the edges will be brown and the sugar on top will have caramelized. Allow to cool slightly, then run a knife around the edges and invert onto individual plates. Serve with cinnamon sabayon.

    Cinnamon Sabayon:

    6 egg yolks
    1/2 cup lightly packed light brown sugar
    1/3 cup calvados or apple liqueur
    1 teaspoon ground cinnamon
    1 vanilla bean, split and scraped
    Splash water

    To make sabayon, combine ingredients in a large mixing bowl and set over a pot of boiling water on low heat, i.e. a double boiler. Whisk (you can use an electric whisk to make it easier) until the mixture becomes light and fluffy and the volume almost doubles.

  • E||

    It comforts me to know that we are in the same economic position as we were in WWII.

  • Jersey Patriot||

    WW2 ended. The entitlement obligations will not. Christ you're stupid.

  • kev||

    Neither will the war in Afghanistan, apparently. Curious how this article mentions the "defense" - or more accurately "offense" - budget only in passing, by quoting Bernanke (unironically).

  • ||

    kev|5.7.10 @ 2:00PM|#
    "Neither will the war in Afghanistan, apparently. Curious how this article mentions the "defense" - or more accurately "offense" - budget only in passing, by quoting Bernanke (unironically)."

    One reason for that is that the 'common defense' is specifically a function of government.
    Second, if you cut it to zero, it wouldn't cover the deficit:
    http://www.usgovernmentspendin.....pie_gs.php

  • Jeffersonian||

    The big difference, Danny-boy, is that WWII had a beginning and an end. The cause of all this debt is due to programs that are open-ended, growing and even expanding.

    Or have you finally rented a clue long enough to realize that scaling back Medicare, Medicaid and Social Security are necessary to good fiscal hygiene?

  • kev||

    The entitlement programs are at least (inadequately) funded by contributions. The so-called "defense" budget has become 95% money down the drain, at best utterly pointless and often counterproductive.

    They might as well, for instance, take a stack of $12 billion in paper currency and scatter it in the wind... as the Bush administration actually DID in Iraq once, apparently quite literally.

  • ||

    Good point: money is wasted on the "so-called defense budget" and therefore multi-trillion dollar entitlement programs won't bankrupt us.

  • kev||

    The entitlement programs are not even part of the budget.

    Multi-trillion dollar military programs - part of the regular budget - can bankrupt us too.

  • ||

    kev|5.7.10 @ 4:57PM|#
    "The entitlement programs are not even part of the budget."

    Uh, step away from the comic-book racks:
    http://www.usgovernmentspendin.....pie_gs.php

  • ||

    The entitlement programs are at least (inadequately) funded by contributions.

    Huh? Since we tax for "entitlements" they are "funded", even though trillions upside down? It is this type of belief that has us where we are today. It isn't just any one thing, it is a combination of spending too much on everything. Eliminate the entire defense budget and we are still trillions in the hole.

  • kev||

    "It isn't just any one thing, it is a combination of spending too much on everything."

    Agreed.

    "Eliminate the entire defense budget and we are still trillions in the hole."

    Agreed - and 3 trillion of that because of Iraq. It works the other way around too, of course: eliminate the entitlement programs and we are still trillions in the hole.

    So I wonder if most of you guys are all that serious about this. The entitlement programs offend your sense of propriety, but you do realize Congress doesn't vote on those every year like they do with everything in the regular budget? No one here even mentions the counterproductive, British Empire-style wars, the still mostly anti-Soviet military apparatus and the financial drain they cause. Why not?

    I realize that generally, libertarians are blithely unconcerned about accomplishing anything in real politics, and most of you guys seem content to just bitch here about how everything is hopeless. But it seems to me, if you ever wanted to get any traction in real-life politics, it might be a winning political issue at least to MENTION the cost of the pointless wars. It might get you even further than talking about pot all the time!

  • ||

    kev|5.7.10 @ 5:35PM|#
    "...It works the other way around too, of course: eliminate the entitlement programs and we are still trillions in the hole...."

    Look, you *really* need to stop spouting lies and do some research:
    http://www.usgovernmentspendin.....pie_gs.php

  • kev||

    OK, the pie chart shows Defense - I'll refrain from the quotes this time - as 24% of spending. That slice is one-quarter of the pie! So how am I spouting lies? Thanks for proving my point.

    How often does Reason have an article on waste (alone) in defense spending... never mind the long-term pointlessness of most of it? How often do Reason commenters bring it up, even in passing? No, we'll have a hundred more articles bitching about the postal service (also not included in the budget, most years) and Amtrak and other such trivia and the usual "cultural" targets before there's one about that.

  • kev||

    Gates: runaway military spending may affect war plans
    Reuters – By Adam Entous –
    ABILENE, Kansas (Reuters) – Defense Secretary Robert Gates told the U.S. military on Saturday it must rein in spending that he called out of sync with today's tough economic times, and said budget woes could be a factor in deciding whether to use force against Iran and others.

    Promising to play a hands-on role in wringing out savings, Gates held out the possibility of axing headquarters, merging whole agencies and culling the officer corps, taking on entrenched interests sure to put up a fight.

    Sticker shock from wars in Afghanistan and Iraq also mean President Barack Obama and Congress may be more cautious about committing U.S. forces to another costly military engagement, he said.

    "I do think that as we look to the future, particularly for the next couple of years or so while we're in Iraq and Afghanistan, I think the Congress and the president would look long and hard at another military operation that would cost us $100 billion a year," Gates told reporters.

    "If there's a real threat out there..."
    [!!! - comedy apparently unintentional; standard boilerplate follows]

  • Joshua||

    At least you don't seem so willingly ignorant as Dan T.

    Nobody mentions the wars, because most of us take it for granted that they need to end. right now. & even if they did, we're not going to save all that much money.

    We don't talk about the defense budget because it's shifting sand, ever changing.

    The entitlements are a structure, like a mechanical beast coming ever closer, growing ever larger, eating more and more of my labor, my wealth, my effort.

    The structure must be re-configured, or (preferably) burned to the ground. Then we can worry about defense spending.

  • kev||

    You should take a look at Ron L's pie chart too.

    "Then we can worry about defense spending."

    Yeah, yeah, moot point -- like you guys are gonna do anything about anything.

  • Libertarian No 1||

    kev - you're new here, aren't you

  • troll feeder||

    Nah, whoever subjugates us will waive the debt.

  • ||

    They might as well, for instance, take a stack of $12 billion in paper currency and scatter it in the wind...

    Just let me know which way the wind is blowing on the day that you do.

  • ||

    WW2 was a good reason. This isn't.

  • ||

    Yes, and we dealt with it through massive spending cuts. The Keynesians were screaming that cutting the spending would destroy the economy, but instead it led to a massive boom.

  • ||

    See WWII for example.

    Oh. You mean when the rest of the world was flat on its back after WW2 and we were the only game in town with P of world GDP? I don't think we have quite as much to room for error now.

  • ||

    with P of world GDP?

    That should be 50% of world GDP. (Need to preview more.)

  • Lord Keynes||

    In the long run we're all dead.

    "Things will work out." For a first-hand account of how this has been the real attitude in the West Wing of the White House, check out http://lewisspellman.com/video.....nment-debt starting at about 6:30 to about 10:30.

    Actually this whole lecture is worthwhile for anybody interested in just how deep the fiscal hole is from an honest mainstream academic economist.

  • ||

    See why these guys have to be shackled? See?

    I do. We tried that once. In the 1780's I believe. We've learned of some structural flaws in the limited government framework erected back than.

    It is time for another constitutional convention. Any state legilative or gubernatorial candidate who campaigns for calling one gets my vote.

  • ||

    It sounds good until you think about who would be at the convention. Limited government, which has such excellent historical and practical justification, just isn't on the radar.

  • ||

    It's on the radar, but only as a target.

  • Jeffersonian||

    I shudder at what a New Bill of Rights might include today. Frying pan ==>> Fire.

  • ||

    I shudder at what a New Bill of Rights might include today.

    Yep, all you have to do is look at the Universal Declaration of Human Rights and you get a pretty good idea. Positive rights as far as the eye can see. How those rights are actually guaranteed, the authors never bother to consider.

  • blueGrass||

    You mean I might be able to get my vacation entitlement rights like they're doing in Europe?

    Count me in.

  • Liberty_Equality_Solidarity||

    “A little government” is like “a little cancer.” Once the state establishes a foothold in the body politic it invariably metastasizes, shutting down vital cultural organs and devouring every living thing in its path. The speed and directions of its spread varies from society to society, but the end result is never in doubt: If the cancer is not cut out, it will eventually kill its host.

  • Sniktpool||

    I wouldn't say that it's structural flaws so much as an incredibly inflated interpretation of Congress's powers to regulate interstate commerce.

  • PAULTARD||

    GOLD STANDARD BLARGHAHAHAA RON PAULZ!!!1!!!

  • Marc||

    Morris? Is that you?

  • OMG||

    If it was him, there would be a bunch of "hmmm … scrrmmmm ….. rmmmmm" sounds mixed in between the words (the sound of him munching on Obama's cock, of course.

  • ||

    What's funny about this is that trolls run around yelling about "deregulation" being the problem, when regulations have done nothing but increase. Talk about blinders.

  • ||

    The regulating agencies are asleep at the wheel. BP contributes more to Obama than any candidate in the past 20 years. MMS takes BP at their word that their equipment is in tip top shape and they have safety standards in place in the case of an accident. SEC employees are watching naked boobs instead of naked short selling during the financial crisis. It's not a lack of regulation, but a lack of accountability and a failure in our leadership.

  • JT91||

    The only politician out there that seems to get it and, this is the key part, is actually willing to act on that understanding, is Christie in New Jersey. It will be interesting to see if he survives.

  • ||

    "It will be interesting to see if he survives."

    We are really trying to support him here. He is a battler and he's not pulling any punches.

    I feel like it is this way Christie survives=Jersey Survives.

    Otherwise it's over and all this state will be is a little tiny less beautiful version of California.

    The NJ State Motto is: Liberty & Prosperity. What a disgrace we've abandoned both those concepts and are in a thrall to corruption and public employee unions.

    The Newark Local of the CWA which includes most state employees actually has on it's home page "25 years of militancy".

    This shows you what the rest of us are up against.

  • ||

    Good luck NJ. The rest of the country is rooting for you all. We want to see if a brave man can reverse the tide.

  • Tony||

    Yeah our fiscal situation is mostly the fault of people who believe in your guys' fiscal fairy tales. Mr. Norquist has basically gotten what he wanted and what he openly advocated for: fiscal calamity, which he hoped would result in painful cuts to government by dire necessity rather than honest policymaking.

    It's only via standard issue denial that Reaganomics champions manage to sleep well at night.

  • Tyler Florence||

    Ingredients

    4 cloves garlic, roughly chopped, plus 2 cloves, minced
    Kosher salt and freshly ground black pepper
    Extra-virgin olive oil
    1 sprig fresh rosemary, leaves removed
    1 large sprig fresh thyme, leaves removed
    3 pounds beef short ribs, cut into 2 ribs apiece
    1 1/2 pounds cremini mushrooms
    1 1/2 pounds white button mushrooms
    1/2 cup chopped shallots
    1/4 cup cognac
    2 cups heavy whipping cream
    1 tablespoon Dijon mustard
    1/2 cup sour cream
    1 pound egg noodles
    3 tablespoons unsalted butter
    2 tablespoons freshly chopped flat-leaf parsley
    2 tablespoons freshly chopped green onions

    Directions

    Preheat oven to 300 degrees F.

    Place the chopped garlic, salt and pepper into a bowl. Add enough extra-virgin olive oil to create a paste. Add the rosemary and thyme leaves to the bowl and stir to combine.

    Set short ribs out on a roasting tray and cover with herb paste. Roast in the oven for 2 hours and 30 minutes until they are falling apart.

    Heat a large saute pan over high heat and add a 3-count of olive oil. Add mushrooms and cook for 3 minutes until brown. Add shallots and minced garlic and toss to combine. Season with salt and pepper. Cook for a further 2 minutes until garlic and onion become fragrant. Remove pan from heat and carefully add cognac to deglaze the pan. Return to heat and add cream. Reduce heat and simmer until reduced by half. Turn off heat and stir in Dijon mustard and sour cream. Season with salt and plenty of freshly ground black pepper

    Cook egg noodles in salted boiling water according to directions on package. Drain and toss with butter while still hot.

    To serve: Pile the noodles high on a plate, top with stroganoff sauce and finish with rib slices. Garnish with fresh parsley and green onions.

  • Tyler Florence||

    By the way, this is for my ULTIMATE Beef Stroganoff with Buttered Noodles.

  • But||

    you really are feeding the trolls

  • Jeffersonian||

    That looks super, Tyler.

  • ||

    Substitute venison for that beef, and you'll have something.

    None that skanky trophy ten-pointer venison, though. For good eating, burn your doe tag on a fat yearling, or, better yet, a fawn.

  • Stripping for Bureaucrats||

    And serve it on mashed potatoes.

  • critic||

    I would add more garlic

  • Jersey Patriot||

    Except that this is exactly what didn't happen on the state and municipal level. Taxes weren't cut supply-side style at the state level. Instead, the states blew up their spending.

  • ||

    Tax cuts have to go with spending cuts, because Government spending is the societal cost of government. Taxes are the personal cost.

    Governments who try to hide the personal costs by borrowing, cause more harm by inflating a deficit.

  • ||

    Tony|5.7.10 @ 12:41PM|#
    "Yeah our fiscal situation is mostly the fault of people who believe in your guys' fiscal fairy tales. Mr. Norquist has basically gotten...he hoped would result in painful cuts to government by dire necessity rather than honest policymaking."
    You bet! Why our taxes are so low, I'm planning on double-paying what I owe this year! Hey, Chony! Reality calls!

    "It's only via standard issue denial that Reaganomics champions manage to sleep well at night."
    It's such a pleasure knowing brain-dead socialists don't sleep well.

  • CJ||

    I wish I knew where to find people who believe in my "fiscal fairy tales" so I could support them.

  • The Libertarian Guy||

    We NEED those "painful" cuts, Tony. Otherwise, it keeps growing until it collapses in on itself. Like a black hole, minus the actual gravity.

  • Wegie||

    Black hole....that's racist!

  • Paul||

    Starve the beast! Government is sooooooooooooooooooooo small!

  • ||

    But of course the west Europeans and other nations (Japan, et al.) that rejected Reaganomics (and have defense spending levels of almost nothing) don't have the debt problems we do.

    It's only in the US where that evil Arthur Laffer reined supreme.

  • Tim||

    Our economic future is about as grim as the ending of (the original) Planet of the Apes.
    "You blew it up!"

  • Jeffersonian||

    RACIST!!

  • ||

    True infrastructure work, such as roads, bridges, waterworks is not makework and is needed. Summer jobs for youth however is not. Right now, only about 20% of the stimulus funds was actually spent on infrastructure improvement, and nearly all of that was granted only to union operated jobs.

  • ||

    only about 20% of the stimulus funds was actually spent on infrastructure improvement

    Not here in OKC. They actually built dozens, maybe hundreds of wheelchair sidewalk ramps where no sidewalks exist. One down the street led into a 10 foot embankment that washed over the ramp the first time that it rained. They also repaved streets that didn't really need it. So "improvement" is highly questionable. I would say that they pissed the money at infrastructure and perhaps a couple of pennies actually struck the mark.

  • Beezard||

    Too bad public sector unions aren't as useless as grocery store unions.

    Giant of Landover just laid off every part-time meat cutter under it's employ. (Everyone's part time at Giant unless they've gone through a limited management program or are picked by a sort of lottery, so some of these guys have worked 30+ hours a week there for ten years).

    Thanks to the union, a worthless employee can't get fired until he's been written up a dozen times in a year, but when corporate just decides to get rid of an entire occupation, all the union did was sheepishly give the part-timers a list of other union stores they might be able to apply at.

  • ||

    Yet after one Montgomery County Council member proposed eliminating this sop to the public-sector unions, four of his colleagues joined a rally on the rooftop of the council’s parking garage, leading a crowd of 400 government employees in chants of “We’ve had enough!” and “No justice, no peace.”

    Outlawing collective bargaining for public employees is the moral thing to do.

  • Beezard||

    Outlawing collective bargaining for public employees is the moral thing to do.

    I've heard this proposed before and I understand the basic logic behind it (government employees are different than private), but I'm still not sure about whether I can agree.

    I can think of no libertarian argument to outlawing collective bargaining in the private sector.

    And I'm not sure I can think of one in the public sector either.

    The problem with unions is that the state and feds (illegally) act like a legal strong arm, and propagate unions when they wouldn't survive on their own. I think this is the problem that needs to be addressed, and if it can be, there'd be no reason to outlaw anything.

  • ||

    And I'm not sure I can think of one in the public sector either.

    I can't think of a libertarian argument for allowing collective bargaining (as currently practiced in America) for public sector employees.

  • Jersey Patriot||

    Public sector employees also have freedom of association?

  • ||

    Sure. They're free to associate with a company that offers a union job. At least that's how the line goes around here when you have unions infesting workplaces in a state that is *not* a "right to work" state, and you want to work for a company that is unionized.

  • ||

    Public sector employees also have freedom of association?

    They can still party together all they want. They can still pool their money to elect sympathetic candidates. The law would just forbid the government from negotiating with them and extracting money from employees paychecks to support these now fraternal organizations. If they don't fucking like it, there's a whole private sector out there.

    I spent 20 years and 4 days working for the government and was prohibited from joining a union. Some of my fellow servicemen with rugrats were eligible for fucking food stamps.

    C'est la vie.

  • Joshua||

    Just get rid of their antitrust exemption & you've got competing unions. Full of win!

  • Beezard||

    I can't think of a libertarian argument for allowing collective bargaining (as currently practiced in America) for public sector employees.

    Humor me here, it's an honest question and I'm open to conversion...why wouldn't libertarians allow collective bargaining in public sectors,neigh, defend their right to do so to the death!(or whatever)..?

    As far as I know, no state or federal constitution specifically empowers or limits bargaining powers, wages, and/or benefits of public sector employees. I see no classical liberal basis for making it illegal for Post Office workers or bureau clerks to have the freedom of association to work together to try and get better pay and benefits, just like anyone else. ("to Try" being the operative word here).

    Obviously, in reality they don't seem to need to. But again, I put this down to the government overstepping it's power in granting unions leverage as well as bureaucracy's natural tendency to expand.

    I can see the lure for fiscal conservatives to ban public unions, but as far as I can tell, you're banning a right instead of limiting a power.

  • James C. Bennett||

    How about this: Government employees remain entitled to form labor unions, but we amend the constitution to deny the government the power to enter into contracts with labor unions. Freedom of association and limited government--what could be more libertarian than that?

  • ||

    [I see no classical liberal basis for making it illegal for Post Office workers or bureau clerks to have the freedom of ....(unionization).]

    The long held standard has been that collective bargaining for governmental workers is different because there is no where else you can go for the employees service. There is no free (private) market for Post Offices, Motor Vehicle Bureaus, County Clerks, etc., hence you are a captive customer of that necessity which government offers.

  • Beezard||

    It's captive for the customer, but customers are not the focus of a union.

    Would making it mandatory that public employees use private unions make any difference? Is there even such a thing?

    I honestly don't know, but it's all speculation anyway. Nothing's going to change until society collapses anyway.

  • Jeffersonian||

    I think the strongest argument against it is the one we're seeing right now in places like CA, IL and NJ: Elected officials allying themselves with unions, who then use the violent power of the State to extract more and more money from the populace.

  • Beezard||

    But do you make it illegal for an elected official to travel because he might lie about his mileage?

    Real problems, wrong solutions.

  • Jeffersonian||

    I really don't see the comparison, sorry.

  • Beezard||

    I don't see (from a libertarian standpoint) how you can support ban public employees (who are still free citizens) from freedom of association anymore than you can ban them from free movement.

    The problem with unions is that government guarantees union demands. THAT'S the problem, not giving people a CHANCE to better their lifestyles, no matter how they choose to do it.

  • Wegie||

    "I can think of no libertarian argument to outlawing collective bargaining in the private sector."
    Maybe libertarians don't have all the answers.

  • Beezard||

    I was specifically debating within the confines of the libertarian political philosophy and its principles. So the answer must definitely lie within it. But thanks for trying.

  • ||

    Just as a follow-up to this, the council voted unanimously, preliminarily, to remove the ghost payments.

    The Montgomery County Council on Tuesday unanimously declared its intent to break the terms of contracts with public employee unions by freezing pay and ending controversial benefits arrangements known as "phantom" cost-of-living increases.

    The collective bargaining agreement with the police union, backed by a recent arbitrator's decision, called for a 3.5 percent raise for members in the fiscal year starting July 1. The contract with the firefighters union called for a 10.5 percent raise for most members.

    The council votes, which were required by law, are preliminary. Final decisions will come later this month. But they mark the beginning of a series of difficult decisions after weeks of pained rhetoric, and they signal the council's direction.

    http://www.washingtonpost.com/.....05233.html

    10.5%!!! Of course, anything could happen between that vote and the final vote. Still the council members who joined the protest are reprehensible and should be bounced from office. Fat chance.

  • Wegie||

    "Outlawing collective bargaining for public employees is the moral thing to do."
    Outlawing collective bargaining....would be the intelligent thing to do.

  • Paul||

    Outlawing collective bargaining for public employees is the moral thing to do.

    All public sector contracts should be voted on by the people. I'm their employer, not some unelected bureaucrat.

  • Jeffersonian||

    Walter Williams' put his steady finger on it a couple of weeks ago: It's like trying to fill a swimming pool up by taking money out of the shallow end with a pot and dumping it in the deep end.

    We're led by idiots, cretins and maniacs.

  • Wegie||

    "We're led by idiots, cretins and maniacs." How'd that happen?

  • Jersey Patriot||

    BTW, Strogonoff is disgusting.

  • ||

    You lie!

  • Marc||

    Clearly, Tony is spoofing Jersey Patriot. Stop it.

  • Mike M.||

    ...and total debt will zoom past the 60 percent threshold sometime this year.

    60 percent? It's already over 90% now!

  • Wegie||

    "It's already over 90% now!" See he is right!

  • Max||

    If Reason relied enturely on market principles (no donations from loser suckers), it would have been bankrupt longs ago. This shit works as a cult, but it doesn't sell well

  • Jeffersonian||

    What makes you think voluntary donations aren't part of the market economy, bright boy?

  • ||

    Max|5.7.10 @ 1:30PM|#
    "If Reason relied enturely on market principles (no donations from loser suckers), it would have been bankrupt longs ago. This shit works as a cult, but it doesn't sell well"

    Thanks, max, like we needed confirmation of your ignorance.
    BTW, you might try something other than Donald Duck comix to study econ.

  • Wegie||

    What the fuck does "enturely" mean????

  • ||

    Donations are part of the market.

  • Jersey Patriot||

    BTW, Marshall Auerback gives us the classic Keynesian bullshit line in his Counterpunch article today. He mentions that Japan is okay despite 200% debt-to-GDP ratio, but neglects to mention that Japan ran up that debt trying to stimulate its economy like he proposes, to no avail. Oddly enough, he cites the counterexample as proof, like a creationist trying to prove the six-day creation by citing whale evolution.

  • ||

    I'd love to see a Reason write-up on the Chartalists. There's a whole online squadron of them which launches into full alert whenever someone writes an article like Matt's here. Every single one of them reads like this:
    a.) The government cannot run out of money because it is a sovereign issuer of currency
    b.) We, the Chartalists, are not making a political argument in favor of this system, simply pointing out accounting identities and operational truths of the monetary system
    c.) The government should print and print to guarantee jobs for everyone

  • ||

    Weimar.

  • EscapedWestOfTheBigMuddy||

    I can't think of a libertarian argument for allowing collective bargaining (as currently practiced in America) for public sector employees.
    Public sector employees also have freedom of association?

    That is an argument for allowing the employees to form whatever clubs they want, and for allowing those clubs to approach the government body with a deal they'd (collectively) like to make.

    It is not, however, an argument for forcing the government to deal with the club.

    The basic problem with organized-labor-as-we-know-it is the idea that "once the employees form a club, the employer must deal with the club and can be sanctioned if they don't". The idea is intrinsically coercive.

    And yes, I have some grasp of the historical conditions under which these laws were passed, and no, I don't have any good suggestions for improving the lot of the interchangeable worker vis-a-vis large employers. But what we've got right now is deeply broken.

  • ||

    Like most of the pinko pro-union catechism, "freedom of association" is viewed a a strictly one-way relationship. The freedom of workers to collectively bargain for a higher wage is the best thing ever, but the employer's freedom to find other workers willing to take the job at the wages he is willing to pay is strictly verboten.

    And- why should some parasite in Washington/ New York/ Chicago be able to dictate the wage paid by a business enterprise in South Dakota?

  • blueGrass||

    We don't even need to go that far to find their hypocrisy.

    Public Unions = Teh Best Thing Eva
    Tea Parties = A Threat to National Security

    Though I will say that we'd all be better off without the leftover McCarthy era slurs. It sounds stupid and puts us in a bad rhetorical position from the get-go.

  • ||

    [ The freedom of workers to collectively bargain for a higher wage is the best thing ever, but the employer's freedom to find other workers willing to take the job at the wages he is willing to pay is strictly verboten.]

    The differences of uniting for the collective good goes much further. The workers can collectivize and they call it a union. The industries can colectivise and they call it price fixing.

  • OMG||

    +8 (flipped on its side - damn standard non-English character discriminating filter)

  • Wegie||

    Excellent! But I prefer to outlaw unions just to piss off the commie cocksuckers

  • Brian Defferding||

    Krugman says we have been in worse debt before, and we had more progressive tax brackets back then to pay it off! So there! BLEH BLEH BLEH BLEH!

  • OMG||

    "Krugman says" … stop right there. Usually those words are followed by shit emitting from one's mouth

  • Brian Defferding||

    That's what the BLEH BLEH BLEH BLEH part was.

  • ||

    Krugman is a partisan hack, and it really astounds me that anyone respects his economic "acumen". After 9/11 he opined that it would be good for NY's economy because jobs would be created to rebuild the structures. Never mind Bastiat completely destroys this idiotic argument in the 19th century with the "Parable of the broken window". War-time destruction does not "create wealth." If a laymen made this mistake that's one thing... but Krugman making such a mistake is akin to a surgeon confusing a heart for a liver.

    Seriously, whenever someone mentions his name, I instantly lose all respect for said person, except if they are ridiculing him.

  • Brian Defferding||

    I was ridiculing him, hence the tone in my post. :) Yeah, I despise and loathe Krugman, but not as much as I despise his dittoheads.

  • Stripping for Bureaucrats||

    Hey you fucking server squirrels, why can't you block Pingback?

  • We need another Republican!||

    # 2009 United States federal budget - $3.10 trillion (submitted 2008 by President Bush)
    # 2008 United States federal budget - $2.90 trillion (submitted 2007 by President Bush)
    # 2007 United States federal budget - $2.77 trillion (submitted 2006 by President Bush)
    # 2006 United States federal budget - $2.7 trillion (submitted 2005 by President Bush)
    # 2005 United States federal budget - $2.4 trillion (submitted 2004 by President Bush)
    # 2004 United States federal budget - $2.3 trillion (submitted 2003 by President Bush)
    # 2003 United States federal budget - $2.2 trillion (submitted 2002 by President Bush)
    # 2002 United States federal budget - $2.0 trillion (submitted 2001 by President Bush)

    (spending increases by year - excluding wars)

  • Joshua||

    For some reason the best combo seems to be repub congress with dem president. We'll see next year (at least in the House)

  • OMG||

    Or Democratic president (with a snake advisor) and a Republican Congress

  • ||

    Completely off topic, but I have to vent somewhere. I was just thinking how much more efficient it would be if I could buy my heart medication in bulk and put it in a massive bag next to my morning oatmeal. But NO, I have to jump through all the BS hoops at the pharmacy and get chewed out if I refill my prescription one day early.

    Is this really a free country? I'm disgusted with the onerous regulations that intrude upon every part of our life.

  • ||

    Can someone turn off the freaking pingbacks?

  • The Bearded Hobbit||

    Way to kill the thread!

    Jebus Kraut, I'll put up with the leftists, the trolls and even the recipies but wtf with the pingbacks and trackbacks? Just trying to get the comment count up?

    ... Hobbit

  • ||

    So, is there some sort of award that comes with X pingbacks?
    If so, we have a winner!

  • ||

    “Socialism is a system where the government directly owns and manages businesses. Corporatism is a system where businesses are nominally in private hands, but are in fact controlled by the government. In a corporatist state, government officials often act in collusion with their favored business interests to design policies that give those interests a monopoly position, to the detriment of both competitors and consumers.”

  • ||

    In fact Gov. Code,sec 20487 prohibited the bankruptcy judge in the Vallejo case from touching Vallejos pension contract. Vallejo filed in spite of section 20487 because it had binding arbitration and the arbitrator ruled vallejo could not reduce employee compensation and man power minimums. Here in Pacific Grove we are bankrupt from Calpers losses but can't get relief because of sec. 20487. We do not have binding arbitration,but the council has been in the pocket of the safety unions,even giving the police a 30% raise by shutting down citizens services like the library.It's shamefull

  • ||

    Vote....with your feet.

  • ||

    These government employees and their unions are the modern-day Praetorian guard. They control the apparatus of government and are using their position to extort it and it's citizens, and would drive this country to ruin if it meant a few more Denarii in their purse.

    They need to be told "no", and if they don't accept the answer "no", they should be treated as a grave as threat to our republic as slaveholders and fascists of old. I know it sounds harsh and extreme, but that's what happens when you insist on making yourself--on the spreadsheet of how the producing class' tax dollars are allocated--more valuable dead than alive.

  • ||

    Maybe basic house and repair costs are skyrocketing.Create start up funds for poverty stricken. regional bus trans, that will help dis abled and poor. Also suspected gov maybe after outspoken christians against aristo protestants. And new cell, genetics! A new Person!! Babys are a blessing! Some politicians caught!! Thanks. rev 12:9kjv. rom 12:2kjv. col 3:11 kjv

  • ||

    Money is supposed to be a store of value. If your don't create any value, it does not matter how much money you print. It will not have any value.

  • ||

    Unfortunately, it seems people simply have not [yet] felt the leading edge pain of the major shock waves coming, and they are coming. We here in MO just passed a bunch of bonds and another sales tax hike for the light rail (that was sold to European bankers, and is in default).

  • John Ray||

    Bernanke: "We need to go on a crash-diet really really soon, but not today."

  • cost||

    It turns out that allowing the bank to confiscate goods, and lend them back to the public does not lead to prosperity. It only leads to debt slavery for the private sector, and subsequently for the public sector as well.

    Turn off the printing press. Then citizens will be able to buy what they produce without debt. Citizens won't become so utterly dependent upon the government for their retirement. Banks won't need public sector bailouts, because citizens won't owe more to the banks than they can collectively repay.

  • Chad||

    Too bad I wasn't around this weekend to point out the obvious:

    We won't move forward until libertarians and conservatives realize that there is no realistic way to solve our budgetary problems without tax increases.

    Grow up and get over it.

  • ||

    Except that tax receipts increase when taxes go down. Reveling in the ignorance of one's own sophistry does not make one "grown up."

  • Chad||

    Citation, please. Peer reviewed only.

    The idea that with a 16% net tax rate, that we are on the right side of the Laffer curve is laughable. rofl lol lmao

  • Chad, simplified||

    Even if we weren't at war, and weren't trillions in debt... I'd still call for tax increases on evil rich people.

  • Ernie the Bear||

    A pingback or three isn't so bad, but this is completely ridiculous. Kill the spammers.

  • Werner Patels||

    But consider this: According to E.U. rules, member countries cannot maintain budget deficits above 3 percent of gross domestic product; nor can their total debt rise above 60 percent of GDP.

    What does it matter when the rules are not complied with or enforced? So, the conservatives you refer to are right -- even more so: it's bad enough when such rules don't exist, but even worse when the rules are in place and still disregarded the way they are in stinkin' Europe.

  • Peter Jensen||

    And the political class will only come to grips with the realities you describe when the American voters will.
    So the question then becomes, where shall we cut?
    The biggest budget items are:
    - military
    - Medicaid & Medicare part IV

    -

  • ||

    great article, well written- thank you

  • ||

    Mr Welch clearly isn't reading Paul Krugman at the NYT or the other radical left wing economist that have suddenly been coming out of the word work to tell us that the massive corrupt spending and debt of Obama and the Democrats is NO PROBLEM! Get with the program Mr. Welch. Obama, the Democrats, and Paul Krugman are on the same page. The problem isn't too much corrupt spending and debt, its not enough! We have nothing to worry about. The more debt the merrier! Don't worry be happy!!! Spend, borrow, spend, borrow, spend, print!!!! That's the motto of Obama and the Democrats! Stop being a wet blanket...and lets party!!! We're not Greece!!!!!!

  • Gene in LA||

    Villaraigosa's telling comment about being a mayor rather than a union organizer: "Before I signed the back of the check but now I have to sign the front."

  • ||

    Absolutely correct, of course. But to no avail. The Barack-whisperers, Freidman and Krugman, et al, forge ahead.

    The administration will keep smoking Paul "Kremlin" Krugman's Crypto-Keynesian Crackpipe until they can't anymore, at which point deforestation commences to feed the government printing pressmres.

    BTW, I hereby copyright the above alliterative phrasing...

  • ||

    How about we hang the rich from lampposts. Oh I forgot, that's what we all want to be, rich!

  • ||

    The deficit poses no problem to anything or anyone except people prone to hysterics, like Republicans, who didn't mind deficits when Bushadmin was handing US money to international corporations, but do mind deficits when US money is used to improve the health of US citizens.

    James Galbraith in The Washington Post:

    EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

    JG: No, I think the danger is zero. It's not overstated. It's completely misstated.

    "The way people suggest they can cut spending without cutting activity is completely fallacious. This is appalling in Europe right now. The Greeks are being asked to cut 10 percent from spending in a few years. And the assumption is that this won't affect GDP. But of course it will! It will cut at least 10 percent! And so they won't have the tax collections to fund the new lower level of spending. Spain was forced to make the same announcement yesterday. So the Eurozone is going down the tubes."

    "Since the 1790s, how often has the federal government not run a deficit? Six short periods, all leading to recession. Why? Because the government needs to run a deficit, it's the only way to inject financial resources into the economy. If you're not running a deficit, it's draining the pockets of the private sector. I was at a meeting in Cambridge last month where the managing director of the IMF said he was against deficits but in favor of saving, but they're exactly the same thing! A government deficit means more money in private pockets."

    http://voices.washingtonpost.c.....ed_by.html

  • ||

    Keynsian economics is a lot like Communism: It sounds great in theory, but in the real world, it never works. And never will.

  • ||

    I suspect you mean socialism. I don't know many people who think communism even sounds good on paper.

  • ||

    Where were you when Bush was cutting taxes on th upper 1%, getting us into two wars, blowing the surplus, and making deregulation decisions that caused the current fiasco? This is all a facade and disengenuous. Pure politics. Yes, let's bring the debt down. But be real...and truthful.

  • ||

    All Democrats love to throw up GW Bush as the "Face of Republicanism." I think every time people ask me what Democrats are all about, I'm going to start whining endlessly about Jimmy Carter. Truth is, real, intelligent, conservatism (aka True Republicanism) is what this country needs to climb out of debt and be fiscally healthy again, to grow a stronger economy, and to add real, long-term, private sector jobs. I challenge all the Dems out there to speak of the ills of conservatism without bringing up GW Bush once. Half of them would have nothing to say.

  • ||

    As to Bernanke's comment: " ... the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.”

    The problem is that the party in power continues spending on the things it wants while moving to enact modest cuts to things it does not value. But there really needs to be a bipartisan, across-the-board look at spending.

    Neither party seriously looks at defense spending, where each spending bill numbers in the hundreds of billions. I couldn't help but note last December that on the same weekend the Senate vigorously debated a $787 billion health care bill, it rubber-stamped a $677 billion defense bill (and will rubber-stamp another one this year.) I can't fathom that there are no cuts to be made there.

    Similarly, entitlements like Social Security are viewed as sacrosanct. Remember, they call Social Security the "third rail" for the perceived political fallout attached to any attempt to change it.

    Both parties have also adopted what I would call an extremist view to raising taxes -- they believe tax hikes are never justified under any circumstances. That is borderline insane fiscal policy.

    Once you put all these things off the table, there simply is not much left to seriously reduce the deficit.

    I'd like to say I have hopes that the deficit commission's work will be given a chance to lead the way, but I suspect it will fall victim to partisan politics. Already, before the commission has even seriously started, Republicans are calling for tax increases to be put off the table.

  • ||

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  • Mark||

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    Point to a Keynsian success story. The benefits are only short term, as increasing aggregate demand will stimulate supply short term.

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