Perpetuating Fiscal Excess

Our disastrous status quo is a bipartisan problem.

In ending the rancorous impasse that led to the shutdown of much of the federal government, Democrats and Republicans agreed they need to sit down together and address the budget to avoid a repeat of the debacle next year. And they probably will reach agreement -- to do as little as possible.

That's not because the budget picture is bright or suffers from problems that will subside on their own. On the contrary, the fiscal forecast is straight out of a Stephen King novel: scary, with every assurance it will grow ever more terrifying.

The federal debt is now equal to 73 percent of gross domestic product -- the highest since just after World War II. The only good news is that the annual deficit has been declining. But it's a brief respite. After 2015, the Congressional Budget Office figures, it will resume its upward trajectory.

Given current trends and policies, CBO said, "By 2038, the deficit would be 6.5 percent of GDP, larger than in any year between 1947 and 2008, and federal debt held by the public would reach 100 percent of GDP, more than in any year except 1945 and 1946. With such large deficits, federal debt would be growing faster than GDP, a path that would ultimately be unsustainable."

At some point, the two parties may have to take painful steps to stave off disaster. But that point is way off in the future. For now, we can expect them to perpetuate the status quo as long as they can.

Balancing the budget is never easy for our leaders, which is why the federal government almost always runs a deficit. But a glimmer of hope can be found in the four-year string of surpluses from 1998 through 2001. Maybe the solutions employed then could be revived.

But a closer look at that experience offers cause for even greater gloom. The balancing of the budget came about through events and circumstances that bear no resemblance to the present.

Back then, says fiscal analyst Chris Edwards of the libertarian Cato Institute, "politicians in both parties were afraid of deficits" -- worried they would bring on high interest rates, rising inflation and economic stagnation. Since then, it's become apparent that most economic indicators do not rise or fall on the tide of red ink -- not in the short run, anyway.

The Clinton administration also benefited from the "peace dividend" generated by the end of the Cold War. The collapse of the Soviet Union allowed us to cut defense spending to the lowest level in decades.

In the 1990s, a booming economy (and stock market) meant more people were paying taxes and fewer were collecting benefits. The baby boom generation was in its prime working years.

Today, however, the economy is in a never-ending slump. Costs for social programs, such as food stamps and Medicaid, have risen sharply, while tax receipts have not. Many boomers have reached their golden years and started to collect from Social Security and Medicare on an unprecedented scale.

So the budgetary environment is much tougher than it was then. Meanwhile, politicians have gotten more comfortable with fiscal laxity. Spending ballooned under George W. Bush and again under Barack Obama.

"Few members of either party want to cut spending," laments Edwards, who notes that among the Republican attacks on Obama is that his health care plan would cut Medicare, whose growth happens to be "the biggest single problem in the federal budget."

Today, Democrats won't tolerate new cuts in Social Security and Medicare unless Republicans agree to boost revenue. Republicans think no spending cut can justify a tax increase. Each party kindly lets the other off the hook.

Last week, The New York Times reported House and Senate budget conferees "largely agreed at a closed-door breakfast on Thursday that a deal involving significant new tax revenues and large-scale changes to Medicare, Medicaid and Social Security, whose growth in an aging population is driving long-term projections of growing debt, is not going to happen."

Nor is it a sure thing that Congress will stick with the automatic cuts mandated by the 2011 budget deal. Democrats complain they shortchange vital domestic programs, while Republicans fear they weaken the military. It's not hard to imagine a solution that would satisfy both parties.

Avoiding fiscal responsibility would mean continuing to run up huge debts and court economic ruin. But that's never stopped them before.

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  • entropy||

    In ending the rancorous impasse that led to the shutdown of much of the federal government

    Wasn't it apx. 18%? Is 18% 'much'?

  • Almanian!||

    Rounding up*, that's basically 100%.

    *CBO rounding method

  • Mike M.||

    It's Chapman, a virtually endless fountain of dishonesty and bad faith arguments.

  • Fist of Etiquette||

    Well, the other 82% spent all of their time talking about how the non-essential personnel were total losers, so not much work was being done.

  • Snark Plissken||

    The Clinton administration also benefited from the "peace dividend" generated by the end of the Cold War. The collapse of the Soviet Union allowed us to cut defense spending to the lowest level in decades.

    Well I'd argue it benefited more from the social security dividend, but for Chapman, pretty good stuff.

  • tarran||

    The national debt has grown every year since 1957.

    The notion that there were surpluses in the 90's is based on misclassifying money loaned to the social security trust fund as income. You know, kind of how Enron did to artificially boost their income figures.

  • Almanian!||

    Psuly Krugnuts approves! Two thumbs up!

  • NotAnotherSkippy||

    Why is it so damn hard for people to understand this? Just because the gov't claims it had a surplus while every year Treasury showed an increase in debt is hardly reason to believe the former.

  • Pro Libertate||

    It's not murder when government kills people without justification.
    It's not fiscally irresponsible when government spends more money and takes on more debt than it can handle.
    It's not stealing when the government takes money from some and gives it to others to buy votes.

  • Almanian!||

    Once again, Reason denies me my most-treasured, seven-word string....

    "Steve Chapman is on vacation this week"

  • Swiss Servator, Climb Eiger!||

    +1

  • sarcasmic||

    Any cuts in government mean people lose their jobs and/or checks that they depend upon. That's why not giving is taking. When government cut things and doesn't give someone a job or a check, then government is taking away that job or check. At least from the point of view of the victim of the cut.
    This is why cuts are politically impossible. All cuts in government will result in victims, victims who will moan and complain and possibly get the politicians responsible for the cuts removed from office.
    So there will be no cuts. No cuts at all.
    It's politically impossible.

  • RG||

    Exactly. The gov't has slithered its tentacles so far into every day life and the economy, that any cuts will be met with screeching and howling. With the added bonus that they can point to falling GDP as a result of any significant cuts.

  • John||

    Why do politicians keep spending? Because cutting spending is not that important to many voters. I think most people want spending cut. And it is not that they are just greedy and want everyone else' spending cut. I think they are at least in theory willing to cut it all. But, it is not the most important issue to many people. The most important issue to most people left and right is culture war. And that is what they vote on. Look at the VA governor's race. Everyone knows Mcauliffe is a crook and is going to loot the state. But when it comes down to it, the fact that Cuccini even hinted that sodomy should be illegal is the more important issue. For better or for worse that is what matters to people.

    Politicians love to spend money. Given that, it is no surprise that politicians on both sides spend a lot of their time getting people to fight about culture war issues. If you are voting on birth control, sodomy and porn, you are not going to be voting on cutting spending. So both sides get to spend away and it doesn't matter that the majority of the public wants it to stop. Who cares what they want if they vote on other issues?

  • John||

    Think of it this way, who are the two biggest spending Presidents of the last 50 years? Bush and Obama. What did each of them base their re-election campaigns on? The culture war. Both sides do it. And people of all stripes and voters for each side fall for it. And it perpuates itself. If you are a politician, why would ever base your campaign on cutting spending? Sure people might like you. But it is not the issue that is going to decide how they vote. So why do it?

    Contrast spending with gun control. Gun owners vote on gun rights. They will vote for a communist if said communist is pro gun rights and his opponent isn't. And sure enough, politicians, despite incredible pressure from the media and popular culture, tend to respect gun rights when push comes to shove.

  • Killazontherun||

    Lucy is now engaged in a debate with an Internment Camp Denier:

    https://twitter.com/LucyStag

    ʁɕ⩝ᘓ⩝ᴎGUNZ ‏@reagangunz 46m

    @WilliamFreeland @LucyStag I take issue w/ the insinuation that FDR bears sole moral responsibility or that it negates accomplishments.

    ʁɕ⩝ᘓ⩝ᴎGUNZ ‏@reagangunz 20m

    @LucyStag @WilliamFreeland The failure was social and institutional. There was broad support for internment, sadly.

    I shouted out who imprisoned the innocent Japanese, after all, it was you and me. Not FDR.

    And then he goes on to claim that the internment was proof that bad things can happen even in weak states.

    ʁɕ⩝ᘓ⩝ᴎGUNZ ‏@reagangunz 16m

    @LucyStag @WilliamFreeland Which indicates coercion can occur w/o a strong state.

    They live in a reality free zone.

  • John||

    I think Freeland has a point. There was another side to the internments. They were seriously worried about vigilantism against the Japanese. I wouldn't describe FDR as a victim of circumstances. But at the same time, he wasn't doing anything that a majority of the country didn't support.

    And the US was hardly the only country in the world to intern people whose loyalty it considered suspect. Doesn't make it good. But in the grand scheme of the giant crime against humanity that was the 1930s and 40s, Japanese internment is a fly on a gnats ass.

    We firebombed all of Japan and Germany for very little actual military gain. People bitch about dropping the atomic bomb. But dropping the bomb actually ended the war. In contrast, all of the strategic bombing in Europe and Japan killed millions of people and did very little to hinder either country's war machines. Hell, we fire bombed cities in Germany when all we had to do was bomb Germany's oil fields and we could have shut down the entire country.

  • Killazontherun||

    FDR is the only man responsible for the internment camps. If he did not want them, we would not have had them. As Commander-in-Chief, he was given a broad set of powers to act on at his discretion when we declared war, and that was one path he chose. As angry as Americans were at the Japanese, we did not go all LA Riot upside their heads. Violence was sporadic and did not justify their imprisonment For THEIR ON GOOD. That's just the usual uppity, noblise oblige liberal moral sanctimony that characterized the shitweasel FDR.

  • Calidissident||

    ^This. And relativism doesn't justify it either.

  • Killazontherun||

    FDR's accomplishments? The world's greatest pickpocket, there's that.

  • John||

    He thought Joe Stalin was a great guy.

  • Pro Libertate||

    It would've cost FDR almost nothing to have protected Eastern Europe and Germany. Not like the Russians wanted to try and fight the U.S., especially after we, I dunno, nuked Japan.

    Instead, he decided that hell on Earth for millions was simply peachy.

  • John||

    Some of Eastern Europe. There was no saving Poland and Romania and the Balkans because the Red Army occupied it. We were not going to go to war with Russia. But we could have saved the Czechs because the US army was there.

    FDR had this idiotic obsession with getting the Soviets to join the war with Japan. We didn't need the Soviets. The Japanese had lost their navy and thus had no way to pull their troops out of China to defend the home islands. So it didn't make any difference if the Soviets attacked. Moreover, the Soviets wanted the land Russia had lost in the Russo Japanese war back anyway. For that reason Stalin would have eventually attacked on his own, no incentive needed. FDR kissed Stalin's ass and didn't stand up to him on eastern Europe out of a nonexistent need to get Stalin to attack Japan. It was one of the great diplomatic fuck ups in American history.

  • NotAnotherSkippy||

    Japan could have pulled its troops back home any time they wanted. They stayed in China and Korea because of the resources. Of course the resource they were most short of was oil and there they were pretty well fucked after the fall of the Philippines (and even before that too).

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