Broke U.S. Resumes Spending

Will the government ever fix its errant ways?

What would you think of a person who earned $24,000 a year but spent $35,000? Suppose on top of that, he was already $170,000 in debt. You'd tell him to get his act together -- stop spending so much or he'd destroy his family, impoverish his kids and wreck their future. Of course, no individual could live so irresponsibly for long.

But tack on eight more zeroes to that budget and you have the checkbook for our out-of-control, big-spending federal government.

Yet when Congress and President Obama agreed on a deal last week to raise the debt ceiling and resume government spending, people reacted as if a disaster was averted -- instead of reacting as if a disaster had resumed. It has. And it continues.

Congratulating ourselves for raising the debt ceiling once again, the way we do every time this drama plays out, is like congratulating an alcoholic for talking the bartender out of cutting him off.

As with alcoholics, there's a deeper problem here. It's not just that America is addicted to debt. Everyone agrees we should pay our bills, just not when or how. The deeper addiction is to government.

For most of the history of America, federal spending never took up more than 5 percent of the economy. Spending increased during wars, but after World Wars I and II, spending dropped back to prewar levels.

Then came Presidents Johnson and Nixon and the "great society." From then on, spending rose even in peacetime. Now, if you include local government, government spending makes up more than 40 percent of the economy.

"Government has exploded in size," warned economist Dan Mitchell of the Cato Institute. It happens because of "politicians promising things they cannot deliver and imposing tax burdens that are crippling private sectors."

Politicians from both parties criticize spending when they're out of power. But then they increase spending once they're in power.

I'd forgotten that when Obama campaigned for the presidency, he was very upset about his predecessor's deficits. Sen. Obama complained, "The way Bush has done it over the last eight years is to take out a credit card from the bank of China. ... We now have over $9 trillion of debt that we are going to have to pay back. ... That is irresponsible."

I agree! $9 trillion in debt is totally irresponsible. That makes it all the more remarkable that just a few years later, under President Obama, debt increased to $17 trillion. But now, suddenly, this vast debt is no longer irresponsible. Today the president says what is irresponsible is for Congress not to constantly raise the debt ceiling.

The problem isn't just politicians. I showed people on the street a chart that documented America's unsustainable spending. People were horrified and said government "should make cuts." But when I asked, "What programs would you cut?" most could not name a single significant program.

So let me make some suggestions: Eliminate NPR and PBS funding. Cut foreign aid. End the war on drugs. Kill Fannie and Freddie, which financed America's mortgages and helped cause the financial crisis. Eliminate cabinet departments like Commerce, Energy, Agriculture and Education, all activities that happen without any need for the federal government. (Education is a local function, and the department spending $100 billion a year hasn't raised test scores one bit.)

Shrink the military by reducing our overseas commitments. Reform Social Security by raising the retirement age. And instead of increasing government involvement in health care, turn Medicare into a self-sustaining insurance program.

But to save America from bankruptcy, we don't even need to make all those cuts. We could grow our way out of debt if Congress simply froze spending. They won't do that either, but if they limited spending growth to 2 percent per year, we could balance the budget in just three years.

Limiting government growth is politically difficult, but if we don't do it, America is doomed.

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  • sarcasmic||

    Doooooooooooooooooooooooooooooomed!

  • SQRLSY One||

    Hey Man, don’t be SOOOO gloomy!!! We are NOT all DOOOOOOMED, Ah says! Cheer up now! I personally volunteer to put ALL of Guv-Mint Almighty’s debts on MY personal credit card, and declare bankruptcy (Scientology-style) for my next ten billion years worth of future lifetimes, and serve in debtor’s prison for said ten billion years… Yes, my fellow humanoids, Ah will Dew that fer YOU… An’ we’ll ALL be done with this mess!!! Done deal, over with!!! WHERE do I sign up, WHERE do Ah volunteer?!?! Ah WILL “dew” fer mah fellow humanoids, jus’ tell meh where to sign on them thar dotted line…

  • Pro Libertate||

    It's quite simple. We stop spending more than we can handle, or we bust the economy. It will happen.

  • WTF||

    Anything that can't go on forever, won't.

  • Pro Libertate||

    The Forever Whore.

  • Austrian Anarchy||

    Of course this can go on forever. They don't even need linen and ink to make money anymore.

  • ||

    If you don't understand where money comes from, you don't understand the national debt.

  • Juice||

    The converse is also true.

  • AlexInCT||

    HOW CAN I BE OUT OF MONEY? I STILL HAVE CHECKS I HAVE NOT USED!

  • BakedPenguin||

    When I was a teenager, I went out with a girl who actually said this seriously.

    In my defense, she was pretty hot.

  • Pro Libertate||

    Then she'll have all the funding she needs.

  • AlexInCT||

    Until she is no longer young and hot, you ProL...

  • Pro Libertate||

    All enterprises must take advantage of their earning years. Rising whore to cash cow, you know.

  • AlexInCT||

    You have a way with words sir...

  • WTF||

    This is kind of like getting an alcoholic who owns a liquor store to stop drinking.

  • Brian||

    There can be no sugar coating it: there's a discrepancy between revenues and outlays.

  • Certified Public Asskicker||

    That household analogy doesn't work Stossel, because really smart economists say so:

    http://mediamatters.org/blog/2.....era/195644

  • sarcasmic||

    It's true. The household analogy doesn't work because households can't pay bills with money they print in their basements, and households can't steal from other households. So yeah. It totally doesn't work because governments while can engage in fraud and theft, households cannot.

  • sarcasmic||

    *while governments*

  • rts||

    I've never understood that "it isn't like a household budget" criticism, for exactly the reason you point out. The analogy does fail, but not in some flattering way for the statists... so why do they keep bringing it up?

    (Also, although this might go under the "fraud" category, they can jiggle with the interest rates that they pay as well).

  • sarcasmic||

    When you don't understand the distinction between wealth and money, it's easy to believe that governments can create wealth by printing money. When you're a liberal shill pretending to be an economist, it's easy to feed that misconception.

  • AlexInCT||

    Krugnuts!

  • Juice||

    Pop quiz. Who said this?

    I say, imagine in your private life if you decided that, I’m not going to pay my mortgage for a month or two. First of all, you’re not saving money by not paying your mortgage; you’re just a deadbeat. And you can anticipate that will hurt your credit, which means that in addition to debt collectors calling, you’re going to have trouble borrowing in the future. And if you are able to borrow in the future, you’re going to have to borrow at a higher rate. Well, what’s true for individuals is also true for nations -- even the most powerful nation on Earth.

    And this?

    "Families across this country understand what it takes to manage a budget. Well, it's time Washington acted as responsibly as our families do."
  • trshmnstr||

    Spiro Agnew?

  • Will Nonya||

    Damn, that was on final jeopardy last night...

  • hotsy totsy||

    If you had some terminal illness, and didn't have anyone you cared about to inherit your estate, it'd be smart to go a couple or three months without paying your mortgage.

    When Keynes said in the long run we are all dead.....

  • JD the elder||

    I knew people say that, but holy crap, do they really think "the federal government is able to roll over debt and issue its own currency" are answers to the problem?!

    Also, their "actual economists say" bit is unintentionally funny. I'd never heard of L. Randall Wray, so I looked him up. One of the first pieces of writing by him I found said

    Economic Terrorists in Washington hold our government hostage. These terrorists do not care that government is largely shut down.


    Another piece is titled "HOW WALL STREET’S RENT-SEEKING VAMPIRE SQUID SUCKS ALL LIFE OUT OF THE ECONOMY".

    Oh yeah, that guy totally doesn't look like a screaming partisan shill...

  • ||

    As a drastic solution, which we are close approaching emergency levels, implement an emergency manager. Or at least publicly elect a temporary group on a national level budget managers. Make it known it will only exist for two years and will be then gone forever. Then you will not have careerists or people bent on popularity. Force every spending bill through this board make every roll of toilet paper be justified not just tanks and buildings. Forcing a Congressmen to explain why Miles city, Montana needs $20 million dollars for an airport 12 people a year will use, would be entertaining for us all, like the bloopers from the American Idol try-outs. Maybe then when these congressmen are personally held accountable to the other 300 million Americans they do not represent that paid for their votes, they would not be so quick to spend other people's money

  • sarcasmic||

    A temporary dictator? Can we call him Caesar?

  • Pro Libertate||

    To be sure, the dictator was a constitutional office for six months. Caesar left the reservation by extending it.

  • prolefeed||

    Because it is totally in accord with human nature to give someone absolute power for six months, and the ability to use that power to make the absolute power permanent, and to walk away from all that power.

    And the sort of people who apply for that temporary power will totally not be the kind who will try to make it permanent.

  • Pro Libertate||

    I'm not advocating that we do it, I'm just saying how it worked for the Republic. They had a good number of dictators over the years.

    They were often appointed for a specific purpose--"Go and rid us of those turbulent Sabines"--which may have helped keep the office from turning into something permanent. And, of course, they had a built-in aversion to kings, which helped keep things in check for a while.

  • The Heresiarch||

    I believe Sulla beat him to the punch.

  • Pro Libertate||

    Sulla extended his time in office and seized pretty much absolute power for a time, but he also took Lord Humungus' advice and just walked away. Not that Sulla was a good guy, but it looks like he tried to reform the system so no one could do what he did, as odd as that sounds. Didn't work, of course, and his precedent was a deadly example to later generations.

  • Square||

    Didn't Sulla "walk away" because he went voices-in-the-head insane? Or am I misremembering?

  • Pro Libertate||

    I think it was something like that, at least health-related. I've come to bury Sulla, not to praise him, though,

  • Square||

    I would never expect you to be here defending Sulla - I was just curious because it would be interesting to hear that he came to his senses and gave up his power, nevertheless laying the groundwork for later tyranny.

    Knowing what I know of him, I actually wouldn't be surprised either way - seems like he was an unpredictable type.

  • Square||

    Wouldn't this "emergency manager" exactly be Wesley Mouch from Atlas Shrugged?

  • Christophe||

    Mouch was an emergency manager for the entire economy, with absolute administrative power.
    The above suggestion is more of an office with line-item veto power over the budget, and nothing else.

  • pcolsen||

    Nice idea, but out of touch with reality. Proof that people will hang onto power until their last breath can be seen in our own Congress. Congressmen will do whatever they must to retain that sliver of power they have. If you want a more ghastly example, the Enabling Act that gave Hitler plenary power was temporary for four years.

  • pcolsen||

    There's a straight-forward way to start doing this --- require that Congressional Districts be drawn by a non-partisan commission. Right now Districts are drawn so that they're sinecures. Breaking that up will force Representatives to do things such as justify their spending.

  • Hyperion||

    The only way you are getting the federal government to stop spending, is if we have enough libertarians in DC to be able to stop it. Otherwise, spending will increase exponentially. 50 trillion in debt is just a few years away, and that still will not stop them. They will create more and more new agencies and create new entitlements and all of those will seek to grow as much as possible. When it all falls apart, the team purple establishment hoes will be seen getting on flights out of the country will bags full of dollars to exchange for some currency that still has value, and the rest of us will be living in a 3rd world rat hole.

  • Rob||

    I not sure who among the H&R commentariat coined the term, but I find Team Be Ruled* a more apt description of our current gaggle of pols than Team Purple.

    *For those not in the know, Team Red + Team Blue = Team Be Ruled.

  • Pro Libertate||

    I think it was me, during my anagram phase. I was known then as Patriot Rebel.

  • Rob||

    It was a good line. Sums up my feelings about how both parties are basically offense and defense for the same team.

  • Pro Libertate||

    Or maybe it was El Top Arbiter? Bare Otter Lip? I forget.

  • Francisco d Anconia||

    Have I mentioned I like Stossel?

  • Francisco d Anconia||

    What would you think of a person who earned $24,000 a year but spent $35,000? Suppose on top of that, he was already $170,000 in debt. You'd tell him to get his act together -- stop spending so much or he'd destroy his family, impoverish his kids and wreck their future.

    Governments are not housholds. Households can't print money.

    /Prog Congress anyone in the federal government

  • Rob||

    Governments are not housholds. Households can't print money.

    Households also need to produce some sort of value to someone else in order to earn that income.

  • Pro Libertate||

    Not if they just run a protection racket in their neighborhood and operate a counterfeiting operation.

  • Rob||

    Ok, ok, ok...

    Non-libertarian households also need to produce some sort of value to someone else in order to earn that income.

    The libertarian households are all flush with money gained by their lucrative monopoly of the slave tears market.

  • prolefeed||

    They won't do that either, but if they limited spending growth to 2 percent per year, we could balance the budget in just three years.

    W. T. F?

    Are you projecting explosive economic growth -- double digit growth per year -- in the next three years?

  • juliamulroy||

    my buddy's step-sister makes ==$82== an hour on the computer. She has been laid off for ==8== months but last month her payment was ==$19918== just working on the computer for a few hours. Here's the site to read more
    ==========================
    http://www.works23.com
    ==========================

  • coma44||

    "Will the government ever fix its errant ways?"

    Not until we make them.

    The progressive "liberals" love the idea of spending especially when they think it costs everyone else and "not them".

    Maybe we should just give them the whole bill they have created.

  • NotAnotherSkippy||

    That wouldn't be fair.

  • Thomas O.||

    That "Article V Convention" sounds pretty good right now.

  • ||

    This has probably been posted before but somehow it just seems appropriate.

    Obama Tries to Explain ObamaCare.

  • Habeas Dorkus||

    Under the fiat system -- the Federal Reserve system -- money is only valuable if its production is tightly controlled.
    It can only live so long on trust and future notes.
    This fucking shit is fucking out of fucking control.
    The dollar -- and the U.S. economy -- will fail. They have to.

  • Habeas Dorkus||

    And it didn't start with this president, though he has ramped it up.
    Every time I hear Sean Hannity praise George W. Bush, I want to fuck him in his tight little Catholic ass with a branding iron.

  • NotAnotherSkippy||

    Yup. Bush II gets credit for one thing though. At least he tried to talk about privatizing SS. He wimped out in a hurry and the thundering sheep of America couldn't wait to stampede the idea, but I'll give him credit for at least bringing it up.

  • Habeas Dorkus||

    As I recall, Bush was serious. But even the thought of privatizing a small part of the Social Security scam was pilloried by the public, and the Congress.
    We have become such an entitled nation that rationality has no place at the table.
    People want theirs, and they want it now, foresight, planning and rationality be damned.
    Again, we are doomed. Fucking doomed.

  • Habeas Dorkus||

    Disabuse yourself of the notion that progressives don't understand money or markets.
    They do. All too well.
    And that's what makes them so fucking dangerous.

  • pcolsen||

    You can't just take an axe to these Departments, For example, Commerce contains the National Weather Service and NOAA (who make nautical charts). Energy maintains nuclear weapons and the Nuclear Regulatory Commission. It's highly unlikely that Medicare could survive as a self-sustaining insurance program. Older people need more medical care and that means higher premiums. For that to work you'd need to include younger workers to absorb some of the risk. That brings you mighty close to the fundamental bases of Obamacare.

  • RussianPrimeMinister||

    Oh my GOD, the HORROR!

    Government workers, out on their asses? Workers without jobs, trained to do something important that has just opened up as a lucrative and fast-growing business opportunity?

    Every job we axe in government can and will be taken up by the private sector. At least, as long as it was worth having in the first place.

  • juliajuli875||

    my roomate's mom makes $73 an hour on the computer. She has been unemployed for seven months but last month her pay was $18333 just working on the computer for a few hours. pop over to this website

    http://WWW.Works23.com

  • petarmark4||

    like Walter explained I am taken by surprise that a single mom able to profit $5487 in four weeks on the internet. visit their website
    http://WWW.JOBS72.COM

  • Mauser||

    Disgusting-Both parties are obviously to blame for this mess.

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