Budget Insanity

We're always one massive spending bill away from having a better economy.


Last year, Congress agreed to $1.2 trillion in automatic spending cuts, unless politicians find other things to cut. They didn't, of course. So now, with so-called sequestration looming in January, panic has set in. Even the new "fiscally responsible" Republicans vote against cutting Energy Department handouts to companies like Solyndra and subsidies to sugar producers. Many claim that any cut in military spending will weaken America and increase unemployment.

It's another demonstration of the politicians' addiction to spending—and how we are complicit. "One more infrastructure bill" or "this jobs plan" will jumpstart the economy, and then we'll kick our spending addiction once and for all.

But we don't stop.

For most of American history, government was tiny. But since Lyndon Johnson's Great Society and the promise that government would cure poverty, spending has gone up nonstop. This is not sustainable.

Progressives say: If you're so worried about the deficit, raise taxes! But it's a fantasy to imagine that taxing the rich will solve our deficit problem. If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That's only a third of this year's deficit.

It's the spending, stupid.

Even if you could balance the budget by taxing the rich, it wouldn't be right. Progressives say it's wrong for the rich to be "given" more money. But money earned belongs to those who earn it, not to government. Lower taxes are not a handout.

That's the moral side of the matter. There's a practical side, too. Taxes discourage wealth creation.

Even if you think—despite all evidence—that government spends money more usefully than people in the private sector, there is a limit to how much government can tax before people work less or flee.

Progressives claim a small increase in tax rates won't stop the wealthy from producing. But some would stop. When the top marginal rate was 90 percent, actor Ronald Reagan worked just half the year. He said that woke him up to the damage that high taxes impose.

Higher taxes give rich people and politicians more reasons to collude. The rich make contributions, and politicians pay the rich back by giving them tax loopholes.

That's a big loss to America. That money and creative energy spent on figuring out taxes might have gone to build new products, make music, cure cancer or … who knows what?

Politicians promise to balance the budget by getting rid of what is wasteful, redundant or unnecessary. There's plenty of that, but they have promised to eliminate it for years. They cannot. It's just in the nature of the beast. Centrally planned monopolies do things that are wasteful, redundant and unnecessary.

What will bankrupt us first are the wealth transfers to my generation: Medicare and Social Security

When FDR started Social Security, most people didn't even live to age 65. Today, we average 78—and we baby boomers demand all the cool new stuff that modern medicine invents: anti-cholesterol drugs, hip replacements, etc. And we don't want to pay for most of it because we've been trained by government to assume that we're entitled to these things for free, or nearly free. We paid into Social Security and Medicare for our entire working lives, and damn it, we're entitled to get our money back!

Few of us realize that most of us get back up to three times what we paid in, that politicians have promised Social Security and Medicare recipients an impossible $46 trillion more than will exist and that our sense of entitlement will ruin America much faster than foreign aid, subsidies for NPR or foreign wars ever will.

Amazingly, we could grow our way out of debt if Congress simply froze spending at today's levels. That would balance the budget by 2017. If spending growth were limited to just 2 percent per year, the budget would balance by 2020!

But the politicians won't do even that.

It's depressing writing this. But it's not hopeless. There are examples of fiscal sanity we can follow—if we have the will.

John Stossel (read his Reason archive) is the host of Stossel, which airs Thursdays on the FOX Business Network at 9 pm ET and is rebroadcast on Saturdays and Sundays at 9pm & midnight ET. Go here for more info.

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  1. You’re wrong again Stossel.

    It is hopeless.

    1. Indeed. When I propose freezing spending just for a few years to slow down the growth, the progressives I argue with do not seem to understand the concept of spend the same as you did last year. I guess they assume their team is already doing so, but regardless my efforts are futile.

      1. Spend the same? SPEND THE SAME? Are you nucking futs?!???!?!?


        1. Is that a spaghetti pizza?

        2. Basically, I get something along the lines of “more is fair.”

          1. I’m surprised Moore allows people to photograph him during his between-snack meals.

    2. That line stopped me too. It is hopelessly hopeless.

    3. if we have the will.

      Where there’s a will, there’s a won’t, and so far, the won’t seems to be winning.

      1. Very nice. Too nice to leave unstolen.

  2. I think Stossel wrote this for Tony.

    1. Stossel never mentioned that it is the GOP who wants to renege on the $1.2 trillion cuts in the 2011 budget deal.

      1. Yep, just the republicans. Those dirty renegers.

      2. Stossel’s always been very upfront about saying both parties are involved.

      3. Did you read the article O’ stick of shit?

        From the article; “Even the new “fiscally responsible” Republicans vote against cutting Energy Department handouts to companies like Solyndra and subsidies to sugar producers.”

        I think he covered the republicans just fine shitstick. You hate Stossel because of the clarity, honesty, and straightforward advocacy of freedom in his articles.

        I have noticed that you lefty trolls and lefties in general despise people of good character. I wonder what that means?

      4. Even the new “fiscally responsible” Republicans vote against cutting Energy Department handouts to companies like Solyndra and subsidies to sugar producers. Many claim that any cut in military spending will weaken America and increase unemployment.

        First paragraph. Try reading the fucking article, shitstain.

        1. And I should refresh the page before posting. Oh well, it needed to be said twice and it probably still didn’t stick.

      5. You know perhaps you should not automatically assume everything is a partaisan hit piece or that libertarians are pot smoking Republicans.

        1. For shrike, that is unpossible.

      6. Gonna take more than a trillion in cuts, shrike.

        But you knew that, and voted for Obama anyway.

  3. He always plays up the supply-side stuff, but that argument will never work on the new liberals. As soon as they see that they will tune out his other arguments. I wish he would focus solely on the fact that there isn’t enough money out there to fund our current level of spending. No matter how hard to tax the rich, and even if you assume they won’t change their behavior, they still don’t have enough.

    I think we would be better off fighting the spending before we worry about the taxes.

    1. I wish he would focus solely on the fact that there isn’t enough money out there to fund our current level of spending. No matter how hard to tax the rich, and even if you assume they won’t change their behavior, they still don’t have enough.

      I’ve tried that. It doesn’t work. They stubbornly insist that “we’re the richest nation in the world” and that there’s plenty of money, especially since government spending–unlike that evil selfish private spending–has the power of Teh Multiplier Effect.

      Go ahead, try it on Tony when he gets here. See what happens.

      1. There is indeed a government-induced multiplier. It’s just that it’s something like $0.31 on the dollar.

      2. Should we wait for Tony to show up (supply side) or wait til he asks for it (demand side)?

        Either way is a waste.

        1. Tony’s too busy getting his trickle down.

          1. I see what you did there, SF.

    2. Actually we should give in on the taxes and let the liberals pass whatever tax increases they want and then pointedly remind them of the revenue predictions they are failing to meet.

      First off none of the seriously discussed taxes to date are likely to have any measurable impact on either the economy or tax revenues because they are just too small so it is not like allowing the Bush tax cuts on the rich to expire is the end of the world and since there is no evidence whatsoever that they caused tax revenues to decline when they passed there is no reason to suspect that allowing them to expire will actually result in anyone paying a dime more in taxes.

      Then in a couple of years when taxing the money into existance can be proven to have not worked and our credit rating is down to a B or lower maybe we can get a few liberals to be serious about tackling spending.

  4. We paid into Social Security and Medicare for our entire working lives, and damn it, we’re entitled to get our money back!

    Every time I hear someone say this I struggle to keep my mouth shut. What I want to say:

    “The money isn’t there. They already spent it. They spent it on stuff for you! They said they were taking your money and saving it for when you get old. But then they spent it on roads and schools and wars and other bullshit. Now it’s gone. The only way they can give that money back to you is by stealing it from your children. Do you like stealing from your children?”

    1. Not to mention that they promised these people larger payouts than what they paid into it. Its how pyramid schemes work.

      1. But they promised! I voted for them and they promised! He said he would leave his wife!

      2. Don’t you read The Washington Post? Social Security is not at all like a pyramid scheme because it’s, um, a government-mandated pyramid scheme. Yes, that does make sense. Somehow.

      3. You just want old people to die in the streets!


        1. I love how its so easy to anticipate what tony would say.

  5. Which is more stroke inducing?….people saying social security is not a Ponzi scheme OR Pelosi saying that questioning the constitutionality of Obamacare is not a serious question

    1. Pelosi’s face is stroke inducing.

  6. Overspending is the inevitable result of top-down structure in government. As we become more and more top-down structured, the overspending will get worse until the whole system crashes.

    To make matters worse, the private sector is suffering from top-down syndrome as well.

    My son is in retail management. I have been watching the companies he has worked for for the last three years.
    The first was a family owned business in Baton Rouge with 5 locations. Each location was a convenience store, carwash, oilchange and gas station. The managers of each location had great leeway in making decisions and were rewarded with bonuses for increased sales. Even during the recession my son was able to top 14 million per year in sales.

    1. He is now an operations manager for Old Navy. The company is strictly top-down . The store management has zero say about sales strategies, merchandise, or hours of man power. Basically he just fills out forms all day. There is breathtaking inefficiency and waste. The floor employees stumble around like zombies, doing nothing.

      The location barely brings in 3 million per year. The company is doomed. He is getting out before it tanks and going into another local family owned business with multiple locations.

      1. But if Old Navy folds, where else are tweens going to go to buy clothes that make them look like 80’s rejects?

      2. I forgot to mention, the his store alone spends a zillion man-hours per week pricing items in an extremely inefficient manner. He worked out the numbers and sent a report up the chain detailing a simple, elegant fix for this problem. Would have saved them millions company-wide. The response from the Top Men was a letter of reprimand.

        1. I’ve noticed this phenomenon in all of the business that my wife has worked for. I blame MBA’s.

          1. Bullseye DesigNate. MBAs. Suits in an office a million miles removed from the action and zero hands on experience. Top Men dontcha know.

    2. The ironic thing is that capitalism, communism, the state, and large non-state institutions all suffer the same problems, from the same group of assholes. Useless deadweight middle management. The managerial revolution was victorious, and society has been paying the price ever since.

  7. As the cliche goes; if you can’t beat them then join them. I give up. I surrender. I am being crushed by BIG government. So to join them I now call for free Legal care. It should be my right to have free time from my lawyer and the government should pay for it. After all don’t we all have to live in the legal system. Why should just the wealthy few get to enjoy all the legal representation they can afford when us little folk should be able to sue the hell out of someone for nothing important.

  8. The answer isn’t either cut spending or raise taxes. We need to do both. We need a Congress with the guts to make the hard decisions. But as long as our legislators keep getting elected via the corporate contribution gravy train, they won’t fix the contribution/corruption problem. Some congresspeople wrote up a “People’s Budget”. http://cpc.grijalva.house.gov/the-peoples-budget/ Why don’t they use that to negotiate with? Reforming healthcare the rest of the way, to Medicare for All Americans of all ages, could save money over the current for-profit system; the law would have to mandate price controls for medical costs to keep them down. It’s hard, but do-able. But our corrupt system won’t do much of anything until campaign finance changes, and perhaps it will not change.

    1. How is it a “hard” decision to forcibly make innocents pay for your mistakes?

    2. Price controls are distortive. A price cap to keep costs down will create artificial shortages, which would actually serve to defeat your goal of free stuff for everyone.

    3. Don’t raise taxes-CUT spending!!!!!!!!!!!!!!!!

  9. If you’re so worried about the deficit, raise taxes! But it’s a fantasy to imagine that taxing the rich will solve our deficit problem. If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That’s only a third of this year’s deficit.

    1. To just raise taxes to solve the deficit is the fools way out. While a small increase on the wealthy seems like a step in the right direction nothing could be farther from the truth. Do you remember the SSI lockbox? The extra revenue was supposed to be set aside to provide for the baby boomers and all would be well. Except that they spent all the trust fund money and then some and now SSI is at the point where it needs those trust funds. So when ever I hear some fool say that we have to raise taxes I know that I am being conned.

  10. Young relative to you, Stoss. Burn!

  11. Greenhouse works for the NYTimes, and agrees with the Obama idiocy. Color me surprised.


  13. Boom, Stossel nailed him.

  14. Mark Cuban? Yuck. But he’s right.

  15. Wow, Greenhouse is exposing himself pretty clearly as a class warfare douchebag.

  16. O’Reilly’s first job taught him to fuck it, do it live!

  17. Why does FoxBiz insist I have prostate problems?

    1. Is your urine the color of gold?

      1. Sting made a song about it, but changed the words at the last minute.

  18. CHILD LABOR! Get them, Greenhouse!

  19. Stossel laughs at $10 million a year. He wipes his free government golf cart riding butt with ten million dollar bills.

  20. Reasonable! Shout out to the chrome plugin.

  21. First thing I look for in a restaurant: puns.

  22. Okay, this segment is going to be pure common sense on minimum wage laws. Congress can commence placing its fingers in its ears.

  23. Hire nerds, they’re used to cleaning toilets.. with their heads!

  24. His employees react to pandering. That’s what I just heard him say.

  25. The end of child labor tyranny.

  26. In a world of employers the employee is king.

  27. S.E. Cupp in the audience didn’t find that amusing.

    1. Larry Flynt is more interested in what’s in the man’s pants beside her.

  28. “Kraut lady”, you can say it.

  29. I remember when I accused kid Geraldo of not delivering my paper one day and he said he put it in my mailbox so we went out and looked and it wasn’t there. I told him to not forget the lesson of this day. I hope he listened.

  30. Little Shop of Harlems: the sequel to The Wiz.

  31. Why are so many of them saying “dish warsher”?

  32. Geraldo’s first job was in counterfeiting?

  33. Gillespie finds a way to hit at public sector work in his story. LIKE WORKING PRIVATE SECTOR UNION JOBS IS ANY DIFFERENT.

  34. Commence backpeddling, Greenhouse.

  35. Everyone knows the most important party in any contract is the state.

  36. Work for no pay? Sounds like slavery to me. And not can’t-celebrate-in-the-end-zone slavery, either.

  37. That’s my boy! wait, what did he say?

  38. Stoss wasn’t smiling like that lady, nor did he fill the dress out like that.

  39. They have cheese shops in Jersey?

  40. Stossel in mentoring his audience on give-me-a-breakology.

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