Debt and Deficits

How to Balance the Budget in One Easy Step

It's like a real life easy button no one who can wants to use.

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A few weeks ago in this space I wrote about Rep. Dave Brat (R-Va.) sounding the alarm on federal spending. Like many others, Brat points out that in only a decade or so, only four programs, Medicare, Medicaid, Social Security, and interest on the national debt—will devour every single dollar Washington collects in taxes. Everything else, from education to national defense, will be funded by further borrowing.

Reports from the Congressional Budget Office show that while the annual deficit has shrunk recently, it will soon inflate to more than $1 trillion a year, and stay there. America's debt is now bigger than America's economy, and still growing. Interest on the debt is now the fastest-growing part of the federal budget. This is a recipe for Greece-like disaster.

Admitting you have a problem is the first step to recovery. But it doesn't do much good if you stop there. Some readers wanted to hear less about the problem, which has been well-known for many a year, and more about possible solutions. How do we avoid the iceberg up ahead?

There are several possible ways. Many Americans have long favored a balanced-budget amendment, and by Ronald Reagan's first term a resolution to convene a constitutional convention for that purpose was just a few states shy of sufficient ratification. Then the momentum died.

The idea has two obvious shortcomings. First, it can tie Washington's hands at a moment when deficit spending is urgently needed, e.g., during a war for national survival. Second, it can become a vehicle for raising taxes rather than constraining spending.

Then there's sequestration. Like it or not, sequestration has helped slow the growth of the federal government. Before it took effect, federal spending was on track to consume one-fourth of America's GDP. By last year, Washington sopped up only one-fifth of America's wealth.

Unfortunately, sequestration is a meat-ax. Half of its spending cuts come from defense, which is the federal government's first and most important duty. That might have been politically necessary, but it warps national priorities. Fifty years ago defense accounted for 7.2 percent of GDP; now it's 3.5 percent. Mandatory social-welfare spending, meanwhile, has grown from 5.7 percent of GDP to 14.3 percent during the same period.

But there's a third option that could put America in the black and reduce the national debt without raising taxes, hog-tying Congress in an emergency, imposing painful spending cuts, or short-circuiting rational policy with Procrustean brutality. It's even comparatively simple… simple enough, in fact, to be summed up in a single sentence.

Ready?

Hold the growth of government spending to 2 percent per year.

That's it. If Washington did only that, the federal budget would be balanced within six years.

Hold the growth of government spending to just 3 percent per year, and balancing the budget would take slightly longer: nine years.

Two or 3 percent growth a year is fairly rapid, but by historical terms it is also quite modest. During the past two decades, federal spending grew 63 percent faster than inflation; mandatory social spending doubled, even after adjusting for inflation. But as the Cato Institute's Daniel J. Mitchell points out, many other advanced democracies have held their spending in similar check. Sweden, Canada, the Netherlands, and Italy did so during the 1990s; Germany, Switzerland, Israel and Taiwan did so in the 2000s. And because their economies grew somewhat faster, their government debt burdens shrank.

Mitchell advocates the "Swiss debt brake." In 2003, a voter-approved initiative took effect that required Switzerland to raise spending no faster than revenue grew. Before it took effect, Mitchell notes, Swiss government spending grew at an average annual rate of 4.3 percent. Since then, it has increased by an average annual rate of 2.6 percent. The actual rate of growth is tied to the growth in government revenue. Because that fluctuates depending on economic conditions, the government uses an average for a multi-year period.

And it works: While other European nations' government debt was growing, Swiss debt shrank. But unlike a balanced-budget amendment, the debt brake does not preclude deficit spending. Nor does it create an incentive to raise taxes. What it does do, generally speaking, is allow the economy to grow faster than the government, rather than vice versa.

Granted, the idea also has downsides. It does little to address wasteful spending, except to the limited extent that it requires a modest degree of fiscal discipline. If Congress wants to lavish hundreds of billions of dollars on a new weapons platform of dubious worth to please defense-industry lobbyists or create jobs building it in every congressional district, Congress can. If Congress wants to eliminate the Defense Department and reallocate all of its funding to a newly created Department of Rainbows, Unicorns and Butterflys, it can do that too.

But then, the proposal is not designed to usher in a golden age of wisdom. Its aim is much more modest: altering the fiscal trajectory of the federal government just enough to avoid the iceberg dead ahead. Given current trends, that alone would be a marvelous achievement.

This article originally appeared at the Richmond Times-Dispatch.

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  1. But then, the proposal is not designed to usher in a golden age of wisdom.

    In case of emergency, be less unwise.

    1. I was going to suggest euthanizing all the progressives, but we could try this too.

      1. “Hold the growth of government spending to 2 percent per year.”

        If this is the best insight the libertarians at Reason can provide, then no wonder there are no libertarians.

        Holding the growths of government spending to x percent does not work because:

        1) Every time there is a recession or crisis, an exception will be made to jump spending. That constantly resets the growth upwards

        2) Most of the government’s spending on entitlements is fixed and based on “need” not budgets. Social security, medicare, wellfare, obamacare, etc. will continue to increase spending BY LAW at the rates they’ve been promised. You could say “let’s mandate 2% reductions in spending each year” and entitlement programs would still grow.

        The ONLY way to reduce spending is when the dollar finally collapses taking the Federal Government’s source of funding along with it. Economy, tax rates nothing else matter because the government just prints what it needs. When the individuals finally walk away from the dollar, that will be the action that starves the Federal government of funds and force reduced spending.

        Nothing else will stop it at this point.

        1. So……we’re back to my suggestion. Once progressives are gone, things can finally change. And so we’re clear, I don’t care which party the pros are from. Put them all down.

          1. It won’t matter if someone is a program or not, anyone dependent on the government and not themselves will have a hard time if/when the money runs out

            1. Stupid autocorrect thinks prog = program…

              1. Except I believe pro’s was short for progress. You should have stayed with your original spelling. It was equally relevant.

                1. progressives. grrr.

            2. Being in the throes of a gritty smack battle is never easy. And it will get harder the longer we wait.

          2. There are a lot more people than just the progressives that are completely dependent on the scam of central planning.

            Many conservatives, especially those in the defense industry, are hyper-dependent on the “government picking winners and losers” strategy.

            Really, libertarians would have to euthanize just about everyone in the USA to get liberty here thanks to the pervasiveness of individual and group (that includes corporations, churches, and unions, among other groups) welfare.

            Luckily, they won’t have to actually perform the act of killing everyone off–the coming economic crash will wipe out most of the leeches since they are precisely the least self-sufficient. Sure, they will fight tooth and nail to have the gov’t steal from the taxpayers on their behalf, and they will succeed somewhat at this, but there will ultimately be no saving them.

      2. I endorse Suicidy’s plan

  2. Talk about naive. 🙂

    Hint: you cannot reason with/ or limit/ or change a 100% corrupt system funded purely via theft and/or fiscal forgery.

    All governments are necessarily 100% corrupt, as all rely on theft and forgery to finance their objectives.

    You cannot somehow reform/change it/them into something “good” with supposed limits on growth, be it 2% per annum, or whatever.

    Ain’t gonna happen- never has, never will.

    Dream on, or not? As always, your choice dear reader. 🙂

    “Dreams[ Hormegeddon Blues]”:
    http://www.youtube.com/watch?v=w0o-C1_LZzk

    Regards, onebornfree.
    Personal Freedom Consulting
    onebornfree.blogspot.com

    1. Fuck off, spammer.

    2. ‘Personal Freedom Consulting’? Who the fuck pays this faggoty douchebag for anything?

  3. A fiat currency scold should be along any moment now to point out that the fed can print as much money as it wants. Therefore, talking about scarcity with respect to the government is meaningless, or something, and the real threat is hyperinflation, or something.

    Of course, one might be worried about hyperinflation in a scenario in which all current income taxes are being piped directly into social welfare spending and debt interest, the government is borrowing everything it can to pay for everything else, including the military, the roadz, the FDA, etc., and if the fed is having to kick in and print money to help make all of that happen.

    But hey: fiat currency implies post scarcity, and you’re just an idiot for talking about dollar scarcities. Boom, bitches.

    1. Correct. Government spending is only limited by real resources.
      See my comments below (right at the bottom) detailing this 🙂

    2. http://heteconomist.com/exerci…..nstraints/
      Treasury operations in detail (and hypercolour :b )

  4. OT: A former US Pardon Attorney has proposed moving the Office of the Pardon Attorney from the DoJ to the Executive Office of the President, believing it could reverse the drop in Presidential pardons/commutations we’ve seen over the past few decades. http://www.slate.com/articles/….._less.html

    It personally never made sense to me that the DoJ had any power over the pardon process to begin with. The DoJ’s main mission is to prosecute crimes and to support the US Attorneys in their prosecution of crimes; recommending a pardon is essentially accusing a DoJ prosecutor or a US Attorney of making the wrong call.

    1. Putting the pardon office within DoJ makes no sense. If Justice believed someone should be pardoned, they could just decline to prosecute. The DoJ isn’t going to spend all of its time and resources securing a conviction only to turn around and pardon the guy.

    2. It has personally never made sense to me that the President has any power over the DOJ. What a fucking easy way to corrupt the system.

      1. You prefer that DOJ (the decision to prosecute and actual prosecution) be in the judiciary?

  5. Half of its spending cuts come from defense, which is the federal government’s first and most important duty.

    Is it? According to whom exactly?

    If we are going to go by the text of the Constitution, Article I Section 8’s first power is the power to lay taxes and its second is to borrow money; Section 8 doesn’t get around to the common defense until #11.

    The Constitution’s preamble states “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.” Again, defense is tucked into the middle.

    While defense is of course a key function of any national government, to say it is the “first and most important duty” is, uh, going a bit far in my mind. The Preamble has it right: justice is more important than defense. An unjust government which is competent at defense would be a terrible combination.

    1. And even if you feel that defense is the highest priority, why makes Hinkle think that the current level of spending is close to optimal? Perhaps cutting defense spending in half makes sense.

      1. Let’s take the premise at it’s face.

        1. form a more perfect union. OK. That’s a reason for the formation of the government, not really something to do.

        2. Establish justice. Right-O. Get a system of laws and a judiciary. Got it. Not a budget buster there.

        3. Insure domestic tranquility. Kinda goes with justice – need peacekeepers and a system of laws that will keep the peace. Still not a budget buster

        4. Provide for the common defense. Ok, now we have a system of laws and courts, we need a military. There’s the first large budget item.

        So not really all that tucked away when you think about it. It is the first ongoing responsibility that requires actual actions be taken by the government. The other items are largely related to how the government should be created, this is something they do on an ongoing basis.

        5. Promote the general welfare. Again, not much of a to-do. More of a guiding philosophy…. the activities of the government should be directed at promoting the general welfare.

        So maybe you have a point. A dual headed responsibility to the people – to provide a system of justice and to defend the people.

        How would our government look if that was the laser-focus of all federal activities? Ya think we could get by on 20% of what we spend right now and still provide a framework of justice and defend the people? Sure, it would be dissapointing not to have all of my favorites any more…. NASA, NIH, NSF…. I love those things.

        1. But, but, what about the roadz? And the children? And the children’s roadz?

    2. An unjust government which is competent at defense would be a terrible combination.

      Isn’t that what we have now?

      Also, you know who else funded a war?

    3. An unjust government which is competent at defense would be a terrible combination.

      Isn’t that what we have now?

      Also, you know who else funded a war?

      1. Zionist Squirrels, so we’ve been told?

        1. Not just the Zionist Squirrels, All Squirrels!!!11!!!eleventyone!!!111!!

    4. Liberty and justice were important to the Constitution makers of 1787. However, the functions to promote justice were largely the responsibility of the several states – the federal role was very restricted.

      Here’s what Madison said when promoting ratification of the Constitution: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce … The operations of the federal government will be most extensive and important in times of war and danger; those of the State governments in times of peace and security.” (The Federalist No. 45)

      Hinkle is talking about the federal government – one can make a good case that defense is the major function granted to the feds. Justice is key, however the federal government’s limited role should not be expensive. It was articulated quite nicely by Jefferson in his First Inaugural Address: “a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.” This should not require a major commitment of resources.

      1. The Ninth Amendment smashes that cite to bits. (the bullshit about indefinite state powers)

        1. Only post 14th amendment, at least as far as SC jurisprudence is concerned.

          1. Only post 14th amendment, at least as far as SC jurisprudence is concerned.

            The two amendments work together — as in Planned Parenthood v Casey (replaced Roe V Wade)

            For Roe v Wade, the 9th Amendment was used to strike down anti-abortion laws, using a right of privacy, in lower courts. SCOTUS switched to the 14th (due process) and handled it purely as a criminal manner.

            Casey combined due process with the 9th Amendment’s right to privacy, and treated it both as a fundamental human right in addition to the criminal. Casey first presumed (IIRC) that the woman and fetal child’s rights are precisely equal … per the definition of unalienable. Same as fire in a crowded theater.

            Mainly, the 14th clarified the nonsense that states have unlimited powers, as promoted mostly by southern racists, Ron Paul and other phony federalists who deny any conflict between the 9th and 10th Amendments.

            Before the Civil War, “federalism” wasn’t a serious issue, which is one reason the South seceded.

            1. As if compulsively copy/pasting the evidence of your total and complete ignorance of the 9th and 10th amendments in every thread you decide to shit on weren’t enough, you’ve jazzed it up with a new twist on the classic mis-reference to the Holmes dicta in the Schenck case — the one where the court upheld a conviction based on the Espionage Act for passing out anti-draft pamphlets by ruling that free speech rights are weakened during war time.

              Oh Hihn, never change.

              1. your total and complete ignorance of the 9th and 10th amendment

                What do I get wrong on those two amendments. Be specific. And there’s no call for your trashmouth. Be adult please

                on the classic mis-reference to the Holmes dicta in the Schenck case

                You’re babbling again. I never heard of that ruling. I cited two rulings, both by name. YOU say Schenk has nothing to do with abortion

                Your aggression has failed once again

                (My tone here is in response to aggression)

                1. Uh huh….and the Supreme Court once upheld slavery as lawful too. Didn’t make it right….or just.

                  Hell….they interpreted that the “regulatory clause” allowed the govt to regulate the water pressure at my TOILET for goodness sakes!!!! If those talkin jackasses told me the sky was blue…….I’d want to check it twice!!!!

                  1. Michael Hihn, the guy who claims Canada *murdered* thousands by not stealing more healthcare money from the taxpayers.

                    But he is the original libertarian, guys! What he says should be taken as gospel!

                    1. deconstructing a lie (my tone is defense against aggression)

                      Michael Hihn, the guy who claims Canada *murdered* thousands by not stealing more healthcare money from the taxpayers.

                      Goobers go trashmouth when tribal legends explode in their face. The facts.

                      Canada in the late 90s is used by some as an example of government spending cuts that did not slow an economy and may have stimulated it.

                      One problem. In 2005, their Supreme Court ruled their healthcare system an unconstitutional threat to life, citing all the people dying on waiting lists of a year or more.

                      Also, they began spending our GDP equivalent of a half trillion dollars, to reduce waiting times and increase diagnostic testing ? under threat of a court order,.

                      Provincial Premiers had fought for restored federal funding. Because their Medicare is jointly financed Federal and Provincial. The federal cuts just shifted the spending to them.

                      Undeniable facts. They cut spending, including healthcare. People were dying on waiting lists of a year or more. (“thousands” is bullshit) A court order required higher federal spending. And a Court ruling forced shorter waiting lists.

                      Now look upscreen to see what this goober claimed. Is anyone else stupid enough, like Paul W, to deny that large enough spending cuts can lead to lengthy waiting lists. with people dying on those lists. Inevitable?

                      My stalker will continue his bullying..

                  2. Uh huh….and the Supreme Court once upheld slavery as lawful too.

                    ((yawn) That’s like saying the Justices flunked their driving exams.
                    Slavery had been the norm for maybe 4000 years or more.
                    It was Europeans who brought slavery to the New World.
                    It was Americans who it in 124 years. (versus thousands of years)

                    What does that have to do with the 9th and 10th Amendments?

        2. The Ninth Amendment recognizes that people have power over their own lives. It is NOT an extension of federal power or authority. We are discussing federal powers and responsibility. Citing the Ninth Amendment does NOTHING to refute the proposition that defense is the major function of the FEDERAL government.

          1. Here’s what he REALLY said

            Link

            The Ninth Amendment is relevant because it discredits his cite.

      2. The federal government has a secondary role in defense too. The primary role in defense is the state/local militia. Constitutionally, the feds main defense role is to SUPPORT the militia.

        Not surprisingly, the militia was gutted in the process of ‘supporting’ it – so the feds can now ‘defend’ Afghanistan with a standing army instead of the US with a local militia. And a whole bunch of folks can then proclaim that defending Afghanistan is the one indispensable function of the federal government.

        And the Afghans can’t even eat the pork we so generously send them

    5. Maybe because without meaningful security/defense, principles of justice, freedom, and liberty are in an elevated state of jeopardy.

    6. At least national defense is a constitutionally MANDATED duty of the federal government. None of this welfare/entitlements/giveaway bullshit are legitimate federal activity. Cut that shit first.

      1. The REAL issue is how to return “safety net” programs to the private sector. “Cut that shit” will never be supported. “Replace that shit” will, and was a very early libertarian position.

        For every dollar you donate to a “life-support” charity you’d get a dollar tax credit. The tax credits would be taken from the “welfare” budget. Even if some smaller amount of government welfare remained, it would at least be funded by voluntary taxation.

        Every taxpayer could then support their own preferences for helping people. Many conservatives would place all their contributions in “responsibility” charities — like requiring work or be in school. Many liberals would prefer charities who support anyone who walks through the door.

        This drives libertarian purists and blowhards nuts. They cannot accept that it will take time to rebuild the private support network destroyed by government. Once we accept that, then we want the smoothest transition — in that proposal, the government welfare would decline as the private charities rebuilt, because the two would be linked.

        Libertarians, of course, have always had better concepts than conservatives. If only decades ago.

        1. The way to ‘replace that shit’ is via interstate compacts. Not via the federal government. Interstate compacts are the only constitutionally mandated way that states are allowed to ‘cooperate’ on any issue. And while interstate compacts require legislation from Congress to set up the compact itself; they do not require any executive agency to run it.

          Every federal authority that primarily affects individuals (ie safety net) is best handled through an interstate compact. Even resurrecting the idea of such a compact itself helps create ways of solving the safety net problems that the feds simply throw money at – whether it is catastrophic health financing or retirement.

          And most cabinet departments (from Education to Housing) can simply be restructured as interstate compacts – distributed around the country to get out of the pure DC-pork – and handed over to the states to manage as they fit. If states find that most of those functions are useless; they will quickly let them die once they have to pay for them. If they are useful; then that’s good

          1. Every federal authority that primarily affects individuals (ie safety net) is best handled through an interstate compact

            Instead of the private sector? Ummm, how will you sell that to a majority of voters, Mr, Jefferson?

            1. Having the federal govt decide a ‘privatization’ process is the worst possible form of cronyism. Top-down privatization was the m.o. for neo-liberals in the 80’s and 90’s – but in almost cases all it does it transfer a public state monopoly into private hands which is then ‘protected’ by the state. See Russia and now Greece ‘bailout structure’ for examples of how corrupt this almost always is. The feds didn’t get into those safety net programs by creating something from scratch. They got into it by taking over existing state level programs and then forcing the states out of it. Hell even FDR talked about how wonderful ‘home rule’ is – when he was a governor running for Prez and before he got to be Prez. If voters in a particular state want to privatize something; then the state level is the perfect place for them to do that – and an interstate compact allows that as well.

              1. Having the federal govt decide a ‘privatization’ process is the worst possible form of cronyism.

                Look again It’s decided by hundreds of millions of donors, based on their individual preferences. Like,.. you know, a free market. (gasp)

                For every dollar you donate to a “life support” charity., you get $1 CREDIT. Over time. all safety net dollars are shifted to private charity.
                And it happens at the same pace that private charities can redevelop, self-paced. (But if, say 10 million people prefer government continuing it, the remaining government spending would be funded by voluntary taxation. (everyone else having received their taxes back as a the credits.

                Le’s see. The money is inside government, but there’s no way to get it out without committing cronyism

                Top-down privatization was the m.o. for neo-liberals in the 80’s and 90’s –

                Umm, top-down has actions originating from the top to down.
                Bottom-up privatization starts at the bottom, which this does.

                in almost cases all it does it transfer a public state monopoly into private hands which is then ‘protected’ by the state.

                Umm, our federal government will take control of tens if thousands of charities?

                What’s YOUR plan?

                My prediction was spot-on

                This drives libertarian purists and blowhards nuts. They cannot accept that it will take time to rebuild the private support network destroyed by government.

                1. Your plan is top-down. It is nothing more than a creation of govt entitlements via the federal tax system. And you don’t see how that will simply be taken over by cronies?

                  1. Your plan is top-down.

                    One more time for the integrity challenged. The dollars are taken from federal spending and returned to the private sector … based on where individuals contribute, Individuals are at the bottom

                    It is nothing more than a creation of govt entitlements via the federal tax system.

                    That’s shameful, even for you.

                    JFree says in public, that it’s a government entitlement if federal spending is shifted to the private sector (that’s lower spending, Sluggo) … with every dollar in lower spending matched by a tax cut … and every dollar to charities is returned to the actual charity selected by a donor.

                    I can’t blame anyone for concluding that nobody could possibly be as stupid (or dishonest) as my portrayal of JFree. Here’s what he “responded” to:

                    Link

                    And welcome to the shadow reality of libertarian purists. I must be punished because I showed HOW to eliminate all welfare spending with a single policy … putting the savings directly in the taxpayers’ pockets (gasp) …which made a monkey of his wacky theory (and libertarian purity)

          2. I’d like to see the dollar for dollar idea combined with the decentralizing the public sector safety net to individual states, whenever possible.

            But, reality wise, I’m not sure the Feds are too interested in creating potentially antagonistic power blocs. Individual rights wise, I wouldn’t trust them any more than the feds. Just because the concept is theoretically more in line with constitution doesn’t mean those interstate compacts would act in accordance to the Constitution once created There’s also the matter of the individual state constitutions. Seems mighty ripe for conflict if they’re funneling state resources out of the state at the behest of other states who are all trying leverage the best deal and more influence for their own state. And if it’s a “screw the 14th Amendment” kind of thing, who checks the compacts?

            Sorry if I’m understanding it all wrong, I’m just knee-jerk leery of the “decentralization equals more liberty” philosophy.

            1. Decentralization always equals more liberty because you have the option of moving.

              I don’t think that needs explanation.

              1. your rights can’t be violated so long as you have the ability to sell everything and flee with some of it. Ok.

              2. Decentralization always equals more liberty because you have the option of moving.

                So boat people escaping from their country have more liberty than the people who were instead jailed or killed. And that’s more liberty than we have now.

                I don’t think that needs explanation.

                True, the stupidity is self-evident …. and confirms that the Paulista Cult is even wackier than the Birthers. (for anyone who doesn’t already know)

                Ignore the ninth amendment. States have whatever undelegated powers they want. And if you don’t like it, simply quit your job, pick up and move to a different state. Which is more liberty than you have today!!!

                Who tells Jefferson and the founders? We never needed a Constitution
                because the Colonists always had the right to move to another continent.

                No wonder the libertarian brand is rejected by 91% of libertarians (Cato)… when Americas best-known libertarian is spewing psycho-bullshit like that … AND his cultists celebrate with Gregorian chants.

            2. In the case of interstate compacts, I think they can be sold to Congress on purely political terms. ‘Federal’ legislation creates a slew of executive branch authority and everyone in Congress knows that that has resulted over the last century in a complete power tilt away from Congress and into the exec branch. ‘Interstate compact’ legislation is a way for Congress to level the playing field again by being able to legislate whether something will be executed by exec branch of federal (which will again grow with every new bill) or by an interstate compact (which is standalone and unaffected by any other legislation).

              Congress still has oversight authority over the interstate compact. And DoJ still has the ‘civil rights’ type authority. Does it deal with corruption? No. Port Authority of NY/NJ (an interstate compact) is prob corrupt. But it couldn’t possibly be less corrupt if it were managed from DC and overseen by a Senator from Louisiana who doesn’t give a fuck and who might want to kill that port anyway cuz it competes with New Orleans.

              1. Just to give you an example of how both the feds and top-down privatization can kill off small non-intrusive government. There was an interstate compact for general education issues – Education Commission of the States – created in 1965. What it mostly did operationally by the late-70’s was administer some achievement tests across states so states could benchmark their grade lvls for colleges.

                The federal Dept of Education was created by Carter to consolidate some existing federal programs (school lunch, Head Start) and transfer some functions out of constitutionally legitimate depts (DoJ, BIA, etc) and into a new multiheaded monster. Many of those could have simply been transferred to the interstate compact – even with continued federal funding if thats what congress wanted to do. But they weren’t. And nationalization of the ‘education agenda’ meant that when Reagan came in and tried to reduce spending in the DoE, he ended up focusing entirely on that testing. So that main responsibility of the interstate compact was privatized to a monopoly (ETS); the interstate compact laid off more than half of its 150 employees and basically became pointless. And with no competition anymore, the federal DoE began mandating and growing like kudzu in the budget.

            3. I’d like to see the dollar for dollar idea combined with the decentralizing the public sector safety net to individual states, whenever possible.

              Given two choices for the government safety net.
              1) Shift the dollars directly to private charity, as tax credits to individual donors.
              2) Shift the dollars to a different government … instead of tax credits to individuals, winding up in private charity.

              You’d keep the money in government welfare instead of private charity.
              Is that what you intended to say?

        2. http://neweconomicperspectives…..e-u-s.html
          This is govt funded, but good points on decentralisation.

  6. it can become a vehicle for raising taxes rather than constraining spending.

    I’d be OK with raising taxes if I thought it would actually be used to balance the budget. However, it’s much more likely that it would merely be wasted on something else and we’d still have to borrow. That said, an amendment of some kind is the only way spending will be brought under control. I like the idea of a fourth ‘branch’ of government whose responsibility would be to audit the other branches. It would have to report whether the budget was balanced. Hopefully, we could get accurate numbers as to debt and deficits, etc., minimizing the political games played with the numbers.

    1. How to account for an income statement, which is what the budget is, is complicated. There currently are different rules for public company reporting, tax reporting, charitable organizations, government entities, etc. If you’re a politician and you want to allow more spending in a balanced budget environment all you have to do is get the government to change the accounting rules, or interpret the rules differently.

  7. How incredibly na?ve. Washington isn’t interested in curbing spending. Spending is the mother’s milk of politics. Without spending, how would politicians embezzle the money they need to insure their reelection? A balanced budget is a pipedream. We are on a slow boat to financial ruin. This has been true for at least a few decades. The only possible way we can turn things around is with a revolution at the ballot box. Stop reelecting incumbents and maybe we’ll have a fighting chance to “right the ship”. Short of that, it isn’t looking good.

    1. Yep. Hinkle’s premise is that we can fix the debt problem if politicians start to care about the debt problem. Brilliant.

    2. Stop reelecting incumbents and maybe we’ll have a fighting chance to “right the ship”.

      That requites credible candidates and comprehensive policies. We have neither.

      1. Moderately competent and somewhat logical would even work. there are people like that. Shitbag progressives in the media tear them apart and brain dead uneducated voters don’t vote for them.

        1. As long as you describe voters that way, then YOU are a major threat to increased individual liberty . Here’s a free tip. Never insult the very people whose votes you need.
          Then again, if you support a dictatorship. ….

          1. Sadly, in the game where one needs the votes of shitbag voters, the game is already lost.

            Therein is the conundrum–you’ve heard the saying, “we get the government we deserve,” right? Well, a dictatorship is the government shitbag voters deserve, and so yes, insult away. It is watching them get their just desserts.

            Sadly some non-shitbag voters will get caught up in the fiasco, despite their best efforts, in part because they were outnumbered. As I said, the game is already lost. It happened long ago, when the gov’t crossed some subtle line and became more rent-seeking than not.

            1. Sadly, in the game where one needs the votes of shitbag voters, the game is already lost.

              From you, it always will be. And if you speak like that of voters, YOU are a major threat to liberty.

              But you squeezed in a lot of cool memorized soundbites.

              1. M Hihn,

                That is quite a presumption to say that winning elections requires groups of undesireable voters means that one is threat to liberty. Not true at all unless you are projecting.

                Acknowledging some voters make some politicians win is only telling the truth. How does it threaten liberty so long as no force is used?

                It is not a threat to liberty to dislike something and acknowledge it. The threat comes from forcing others to do as you please. I have seen none of that mentioned.

                1. That is quite a presumption to say that winning elections requires groups of undesireable voters means that one is threat to liberty.

                  If anyone had said that. How can insulting voters win elections and advance liberty? Do you agree we need more voters? How do we get them?

                  How does it threaten liberty so long as no force is used?

                  NAP obviously doesn’t not apply here.

                  Imagine our nationwide slate of candidates. Polls show we’re likely to control Congress. In the closing days, a massive ad campaign blasts all the common horror stories about libertarianism .

                  You say those ads are no threat to liberty, because no force is used?

                  It is not a threat to liberty to dislike something and acknowledge it.

                  That depends/ If libertarian campaign ads include, “vote for me or be a shitbag.” ? it would be no threat to their victory?

                  The threat comes from forcing others to do as you please.

                  See previous question and/or google definition for threat.

                  I have seen none of that mentioned

                  Neither have I, but you’ve clearly misdefined threat.

                  Assume Rand Paul has an actual libertarian platform.. His victory would be a major advance in liberty. Can his election be threatened ONLY by force?

          2. Forty years of progressives dominating the government schools plus teacher’s unions have created more than a generation of decreasingly literate and educated adults. Obama is a symptom of this problem.

            I have seen it firsthand during interviews of potential job applicants. I have seen high school graduates who cannot form a sentence correctly, and bachelor level college graduates who cannot write a simple three to five sentence paragraph.

            Don’t even get me started on the knowledge level of these people. Most of them think the electoral college is where you go to become an electrician. It’s that bad.

            But feel free to invent things I never said. You are quite good at constructing strawmen.

      2. Actually, no. The most important first step is to stop the gravy train that is the current system. Elected government is a criminal enterprise. We need to throw the crooks out. It needs to happen continuously, not just once. Term limits at the ballot box. That is the key to giving decent, honorable people a chance. Right now, by the time a politician gets to state office they are totally corrupted. You never hear about the good people because they never get past local primaries. Corruption is everywhere. As an example, the township I live in embezzles money from a sweetheart deal with the local trash hauler. There’s no escaping it. Do your part and stop voting for incumbents.

        1. The most important first step is to stop the gravy train that is the current system. Elected government is a criminal enterprise. We need to throw the crooks out

          First we must be elected. Your best guess, how many voters agree with that?

  8. Pop quiz: which of these is different form the others?

    balanced budget amendment
    sequestration
    limiting spending increases
    Garfield the Cat

    Of course the answer is Garfield, which, as dumb as the cartoon is, at least raises a chuckle once in a while. The others are just smoke and mirrors which give politicians more cover to hide their evil ways.
    No government can ever be reigned in by such easily-bypassed matters as long as that government defines its own limits.

    1. I’m more of a Dilbert fan.

      1. Maybe there could be a ‘Garfield Versus Dogbert’ crossover graphic novel?

        1. I’d be rooting for Dogbert. Don’t know how this rumour started that I like Garfield. I want to put it on record that Garfield is about the unfunniest comic I have ever seen, even more so than Apartment 3G or Mary Worth.

          1. Dogbert for congress!

            t

          2. Mary Worth is unintentionally funny at times.

    2. Pop quiz: which of these is different form the others?

      You convinced me! Liberty is a crazy, hopeless dream. We should face the reality that you describe and just accept ever-decreasing individual liberties. It was a nice dream, but time to move on.

  9. Yep: More here. http://pjmedia.com/blog/theres…..us-budget/

  10. This idea has been around for a long time.I remember it being discussed in the early 90’s,of course G.H.W Bush and congress raised taxes instead.

  11. Another simple solution is to just raise the full retirement (and medicare) age by 2 months per year. It’s slow to have an effect, but the long term savings is fantastic.

    1. And about ten years from that everyone starting to pay in will quickly realize that they will most likely never see a dime of ‘their’ money. Some short time later nobody will see a dime of ‘their’ money either.

      NTTAWWT, just that it means it will never happen. If only because it is a planned collapse.

      The collapse will come, but it will not be planned.

  12. “America’s debt is now bigger than America’s economy….” Why does Hinkle think this is meaningful? He’s comparing a balance sheet item to a production item (I’m assuming he means GDP when he says “our economy” but that’s just conjecture). Our debt may be a problem, but this statistic doesn’t prove it.

    1. Lies, damn lies, and statistics…

    2. Well start with reading Rogoff and Reinhart’s, “This Time is Different.”

    3. Why does Hinkle think this is meaningful?

      It puts big numbers into perspective, which is the first step in persuading a majority of voters. But he needs to go even further,

      Imagine total credit card debt greater than your entire annual income.
      Then add unfunded liabilities (more credit card debt) for x years until retirement. The amount of new credit card debt — on top of today’s debt — is 15% GREATER than all your income… for all those years … combined.

  13. What you need to do is cut spending AND taxes and stop worrying about the deficit. You are barking up the wrong tree here.
    “devour every single dollar Washington collects in taxes. Everything else, from education to national defense, will be funded by further borrowing.”
    That’s not really how it works. Spending happens in a cycle. Washington does not “devour” dollars.
    If you linearise the process and start at spending, you see the federal government spends, the money is then respent and an amount of real activity happens and some returns as tax.
    The key thing is even if there is a 0.5% tax rate and a huge amount of spending, if there is NO saving in the spending chain then the government gets ALL its money back. No matter how wasteful the spending. The problem with wasteful spending is it wastes resources. And if spending exceeds resources
    Similarly with interest spent, which generates an amount of tax and saving that is “borrowed” back.
    Deficits are not under control of the government, they depend on private sector decisions to spend and save.
    Do you see now?

    1. (cont)
      One way of looking at it is the US federal government effectively always spends by creating money (crediting bank accounts) and taxes by destroying money (debiting bank accounts.) This generates an asset for the bank (reserves/vault cash) and a liability (demand deposit.) Assets and Liabilities expand. It is functionally similar to a private bank creating a loan.
      The US could eliminate the “national debt” by “printing money” in other words the silly platinum coin gimmick, and the effect would be negligible.
      There are no financial constraints to the government crediting a bank reserve account, other than self imposed ones such as the debt ceiling. This is unlike a currency user like a household, business, state government or Eurozone country.
      “If Congress wants to eliminate the Defense Department and reallocate all of its funding to a newly created Department of Rainbows, Unicorns and Butterflys, it can do that too.”
      If Congress eliminates the Defense Department then that means the real resources used by the Defense Department are now free. The Department of Rainbows, Unicorns and Butterflys will need resources to accomplish its tasks, which may be different and in short supply.

      1. (cont)
        “While other European nations’ government debt was growing, Swiss debt shrank.”
        The Swiss have an export surplus and their government was “printing money” and swapping it for forex. The Swiss exporters then earned say Euros, and paid taxes and wages in Swiss Franc. This exchange made it look like the govt was not injecting money – but it was, via the external sector.
        They are in trouble now since the peg went in January.
        Another example is the Japanese government, which has had high government debt for several decades now and copious amounts of “QE” with continued deflation.
        In conclusion, the debt of a currency issuing government is not a major issue under present arrangements (or doesn’t have to be.) It can be seen as “non government sector savings” and libertarians should let deficits “float” and focus on reducing the overall size of government via tax and spending cuts.
        And the first cut would be bond interest by minting the coin.

        1. After all that, I’ll bet Jim Grant’s bow tie is spinning.

  14. Published by Cato makes it suspect. It’s not quite as crazy as Cato or either Paul on taxes and spending. But like theirs, t sounds simple if we ignore the facts — as many would prefer

    At some point, CBO would analyze it and report the need for massive cuts in Social Security and Medicare. Can you smell the bullshit NOW?

    No (sigh), I’m not defending government spending. Just tired of hearing all the bullshit that libertarians “want” to do, or “propose” that has zero chance of ever happening, but gets the hearts of movement libertarians beating faster.

    1. Given the inane support for open borders, which already costs us billions, I place little value on the efforts of libertarians to balance anything. It’s going to co,e down to conservative’s efforts if there is even a chance.

      1. Suicidy seems to focus on tiny problems, while ignoring the TRILLIONS of dollars blown by the Bush Administration, along with MASSIVE wealth redistribution. And an extreme social conservative will never get elected President, or much of anything.

        1. Nice straw man you made there. It take you long to put it together? Loads of bullshit I never said.

          I ignore none of those things. Also, it’s late 2015. Why the fuck are you obsessing about Boooossshhhh? Going on seven years of Obama spending bullshit now. And the Bushes have never been fiscal conservatives.

          And when did I bring up ‘extreme social conservatives’? I didn’t Michael Hihn, you did. I just said ‘conservatives’. A freudian could probably make a lot out of that. The social conservative subset of conservatives is not even relevant to this discussion.

          But clearly some kook outlier like you is going to fix everything, right? Oh wait, given your track record here you only responded because I brought up anything related to borders/immigration. And you can never resist the siren call to go full retard on that argument.

          1. Loads of bullshit I never said.

            You certainly did. Shame on you for denying what you said. s.

            I ignore none of those things.

            Pay attention. I’ll go slow.
            1) You said conservatives are our best hope for balancing the budget.
            2) You said libertarians can’t balance anything, because billions are spent on our open borders policy.
            3) So I ridiculed … and documented … you ignoring MULTI-TRILLIONS of waste AND massive wealth redistribution … to whine about “billions”

            I summarized:

            Suicidy seems to focus on tiny problems, while ignoring the TRILLIONS of dollars blown by the Bush Administration, along with MASSIVE wealth redistribution … as you whine about “billions” in a tiny portion of the budget./

            YOUR topic. YOUR claim. But you’ll likely continue bullying me

            1. I will. You are still totally full of shit and constructing straw men. Also, go as fast as you want. I can go faster.

              First, there aren’t enough libertarians to change much of anything. There are however, lots of conservatives. Enough to actually do something tangible if they’re organized and effective. Hence my statement. That covers 1 and 2.

              Your third point……..holy shit it’s obtuse. I don;t disagree about the Bush admin. But that ended at the beginning of 2009. Get with the times. Also, you appear to confuse the Bushes with fiscal conservatives, or any kind of conservatives. they are not. They are offshoots from the Nixonian wing of the GOP. The Reagan wing is the conservative end of the party. Just as there are different subsets of the DNC, albeit dominated by the progtards currently.

              And billion/trillions? What difference which word I use? I could say ‘millions’ and still be right. You can express the number 1,000,000,000,000 as one trillion, one thousand billion, etc.. WTF difference does it make for discussion’s sake? Other than you trying to distort what I actually said (again). Which appears to be a real theme for you instead of actually addressing the issue.

              1. Part 2

                Quit being a shrill, obtusely deceptive asshole and try to have a rational discussion. Historically you have moments where you manage to do that. So I know it’s possible.

                The bottom line is that if you want to get spending under control, the only group with enough numbers and the inclination to do it are conservatives. If you think I’m wrong about that, show me where we’re going to get enough libertarians to make a difference. I don’t give a shit what their social views are in this area, and I don’t get why you even brought up ‘social conservatives in your previous post at all. It’s a fucking accounting problem, not abortion, gay marriage, trannies, or freebasing Sweet & Low.

                1. Suicidy
                  If you think I’m wrong about that, show me where we’re going to get enough libertarians to make a difference.

                  (snicker) In a Cato survey, by a top political pollster, 59% of the population would accept a description of fiscally conservative and socially liberal … which also humiliates you here::

                  I don’t give a shit what their social views are in this area

                  (lol) which is why you’ve made a humongous fool of yourself, ever since you crashed into this thread spewing your potty-mouth aggression.

                  It’s a fucking accounting problem, not abortion, gay marriage, trannies, or freebasing Sweet & Low.

                  Limited government is both. Republicans have not shown even fiscal conservatism since Reagan ,… and he was libertarian … plus you just wrote off 59% of Americans!

                  Will he continue stalking me?
                  (My tone here is in response to extreme aggression, with stalking)

              2. Your bullshit is documented. here.

                https://reason.com/archives/201…..nt_5571647

                I DID say you’d continue bullying me!

                Quit being a shrill, obtusely deceptive asshole and try to have a rational discussion

                (snicker) My comment is at the top of this thread. YOU came in with insults … and aggression … and now your self-righteousness

                Troll and bully elsewhere.

                1. Well I can’t out troll the troll king can I Your Majesty? You keep inventing things I never said. The bottom line its that the conservative end of the population are the only ones that have enough numbers and inclination to fix things. Libertarians are not, and are unlikely to be populous enough to do anything. And the libertarian fixation on open borders is counter productive.

                  You don’t acknowledge ANY of that. You just keep playing diversionary games and introduce things I never said, then refute the things I never said i the first place. You do understand I use the word ‘conservative’ and not ‘republican’ right? I’m sure you do. You’re just extremely disingenuous. You just keep babbling to get the last word. just like in nearly every thread you start or t which you respond.

                  1. Well I can’t out troll the troll king can I Your Majesty?

                    (lol)

                    You keep inventing things I never said.

                    I documented your bullshit

                    The bottom line its that the conservative end of the population are the only ones that have enough numbers and inclination to fix things.

                    Why are you so obsessed with bullshit?

                    Libertarians are not, and are unlikely to be populous enough to do anything.

                    (lol) One more time (third?) libertarians are 59% of the population. It’s not true that things disappear if you refuse to see them,

                    And the libertarian fixation on open borders is counter productive.

                    I call you out, so you change your story

                    You don’t acknowledge ANY of that.

                    I even demolish it. Did you forget that the last fiscal conservative was Reagan … and he was libertarian. Your excuses are SO lame.

                    You do understand I use the word ‘conservative’ and not ‘republican’ right?

                    (yawn) How does that change the 59% libertarian?

                    Your stalking and bullying are laughable … likely caused by you humiliating yourself in this entire thread with your potty-mouth lies (documented)

                    (my tone here is in response to aggression)

    2. So, if Cato publications are suspect, you must be endorsing another think tanks ideas…I’m curious who that would be?

      1. So, if Cato publications are suspect, you must be endorsing another think tanks ideas…

        False premise. All think tanks these days are focused on fundraising instead of governing. If not for tribal loyalty, Cato would be laughed off the stage on their two largest proposals, Medicare vouchers and the 6.2% plan for privatizing Social Security/

        There are no credible libertarian policy proposals on any issues of major interest to voters, or with major impact on liberty,

        1. I disagree. Beyond fundraising and governing, there is the dissemination of info and opinions that broaden political discussion beyond the usual narrow parameters. They’ve represented a (relatively) consistent and cohesive political philosophy, identifying problems in a more in depth fashion than news outlets would bother, and offering some modest proposals for solutions. “Soup to nuts” may be an oversell, but “Soup to really hard and crusty soup” shouldn’t be blown off. It creates and furthers the discussion.

          Are their proposals being laughed off the stage because policy specifics? or because of tribal heckling? I’d argue there are no credible policy proposals from *any* think tank, philosopher, lobbyist, or legislator once the attempt is made to put it through the process of becoming reality. Politics, Lobbying, and the very mechanics of government put a thousand hands and a thousand compromises on any policies. That’s no reason not to try. I think you suggested as much yourself in earlier responses.

          Don’t get me wrong, I jive with your utilitarian angle and that if we can’t make ourselves viable to voters, it’s our fault, not theirs. And I’m all ears about the nuts and bolts of why specific policies would succeed or fail. But it seems a pretty harsh and pointless dismissal, when Cato are one of the major reasons “libertarianism” (how ever small, misunderstood, and despised) has any footing in political reality at all.

          1. I’m not sure if the proposed social security reforms republicans were rolling out in early 2001 were anything like Cato’s vision, but Social Security reform was a thing. It was in the ring and swinging. (And, hilariously, the dems major point against it was it would raise the deficit). Then 9-11 happened and changed the whole landscape for the stupid for a decade.

            Whatever their short comings, for me personally, the Cato Handbook for Congress was a big factor in switching my rails from radical far lefty dealing in pure emotional vaguery, to libertarian on the classical liberal tip (as opposed to anarchist), interested in how we can get some of this happening within the actual political arena.

            1. Beezard
              Social Security reform was a thing. It was in the ring and swinging. (And, hilariously, the dems major point against it was it would raise the deficit).

              Hilariously, you read the Cato 6.2% plan, but never realized that it would raise the deficit … immensely. it’s NEVER paid for. Which places it among the dumbest policy proposals of the last century. Here’s why.

              Let workers keep and invest their own contribution to Social Security, which takes roughly a half trillion dollars away from paying the benefits.

              Michael Tanner says the “transition costs” would be a one-time thing. But a moment’s thought — or even a half-moment — sees the “transition costs” start at roughly a half-trillion per year and continue for at least 30 years. That’s like saying the Ice Age was a one-time. event!

              In terms of HOW to do it, we go into psycho land. Pay for it in part from the remaining 6.2% tax. Do you see the bullshit? It’s like having your wages cut in half, but your employer says you can offset the loss from your remaining 6.2%

              As for covering the entire cost, Tanner says that’s the job of Congress. Cato’s job is to put a bunch of numbers into tables and graphs, throw in some “free market” slogans and soundbites, but have no fucking clue how to pay for it.

              “Hey, it’s not my job to pay for it. The Constitution establishes a Congress to do that. My job is to claim it can be done. And I just did!”

              1. I found it hilarious that democrats would worry claim to worry about deficits. I still do.

                I’m not defending Cato on the basis of their specific policy proposals. Though I think choosing cherry picking Social Security when they have proposals on just about everything is a bit unfair. I’m defending them as a libertarian voice in major media outlets when there were virtually none. And as far as specific policies, I never would have cared if I didn’t realize Social Security or regulation could be a problem in the first place. The handbook isn’t pure policy, it’s plenty of philosophy, and bulletin point reasons on why they take the stands they do. Coming from the far left and thinking only Mr. Burns could support this, it actually convinced me. You can poo-poo philosophy, but at some point, minds have to be changed.

                How close was the Bush Administrations plan to Cato’s? Was probably worse. But I don’t remember it being laughed off the stage so much as planes flying into it. By the sound of it, it might have been for the best.

                You’ve got my full attention. What’s your proposal on SS? You can be general or as specific as you want.

                1. I think choosing cherry picking Social Security when they have proposals on just about everything is a bit unfair.

                  Name one. I’ll add Medicare here. Cherry picking not required.

                  I’m defending them as a libertarian voice in major media outlets when there were virtually none.

                  That doesn’t elect anyone, and the libertarian brand is still toxic. Within the movement, Cato has the burden of creating policy… which is what think tanks do. Some claim the Cato/Koch kerfuffle was Cato not anything valid in policy.

                  How close was the Bush Administrations plan to Cato’s?

                  I don’t t recall. Cato’s was later, 2005.

                  What’s your proposal on SS?

                  SS is the toughest, likely the only thing that can’t be privatized . No way around the massive and long-lasting intergenerational links. We can’t do anything with the revenue because it goes out the same day. Increase immigration (our birthrate is now NEGATIVE, and the worker/retiree ratio is getting own worse ) We need away to OPTIONALLY move the SS age up to around 80. NEVER cut anyone’s 70 year-old granddad! If YOUR granddad opts out til age 80, GIVE him (or his estate) part of the savings. HUGE savings are available with Medicare. I’d use that to shift part of the Medicare/FICA tax into the SS/FICA

                  Medicare next comment

                  1. Medicare

                    Medicare is the biggest opportunity Vouchers are stupid — adds a costly miiddle-man (duh) — increases competition to the wrong market. We already have competition in Medicare. Always have

                    Seniors (like me) choose many of their providers, mostly by necessity. More would shop around if they had skin in the game. Pay a percentage of what they save, in lower premiums and co-pays, or add to their estate, Medicare savings accounts, in addition to the obvious, can also allow them to shop the providers who give HUGE discounts for cash. With THESE savings accounts they can pocket only a portion of savings — share the rest as eliminating the tax increases on their kids. And optional

                    Add competitive local bidding for costly but frequent procedures ? MRIs, CAT scans, etc (MASSIVE SAVINGS) They already local bid for medical appliances. There’s a lot more, different ways to add skin in the game. Give seniors their choice from at least 4-5 options, some at different times in their retirement. NOTHING mandatory. A cafeteria of incentivized options. No grandmas over the cliff — not even a hnt. All from skin in the game,

          2. Umm, philosophy is total useless is attracting voters. It’s like masturbating in an ivory tower filled with only your own tribe.

            Cato are one of the major reasons “libertarianism” (how ever small, misunderstood, and despised) has any footing in political reality at all.

            We have no footing at all in political reality.

            And that same Cato reports the libertarian brand is rejected by 91% of libertarians. In marketing terms our brand is toxic. We have less cred (at 5.3%) than Congress

            1. “philosophy is total useless is attracting voters.”

              No, it’s just mostly useless. There’s a difference. As diluted as they may be, there are genuine socialist and Keynesian assumptions behind much of the left wing perspective in this country right now. There are nationalist and religious platitudes guiding much of the right. The libertarian short coming is more a matter of exposure *physically* than an inability to reach the masses *conceptually*. If and when there are enough libertarian leaning media and cultural outlets to compete with the noise of Fox or CNN, it will be a contender. It takes just as easy to populist rhetoric as anything else.

              “We have no footing at all in political reality.”

              No, we don’t have enough footing. There’s a difference. And I think we should all except the fact it won’t be the LP getting huge or anything that obvious. The influence will be more in shaming major parties into acting on their rhetoric and/or astutely taking advantage of political weather. Republicans backing prison reform or gay marriage on the state level is an example. 10 years ago it was “liberwha-?”. Now the concept is well known enough to be appropriated by others when convenient or singled out for attack in fear and hatred by name.

              1. Libertarianism, for all intents and purposes, is classical liberalism.

                This was, in the past, an ideology that at least 51% of the country supported.

                So what changed?

                First, the Progressives stole our word and made it into something else. Rebranding liberalism as libertarianism has taken much time. It is starting to happen, but they have such a head start it looks almost impossible.

                Second, the Progressives chose their enemy. Even though libertarianism is in reality the opposite of Progressivism, they painted the Progressive Lite (conservatives) as their opposite. Opposition to Progressive ideas means you should go to the opposite ideology to a vast majority of people. That they are wrong in this is something many conservatives are starting to realize. This is why you are starting to see libertarian ideals take hold in a significant portion of the conservative population.

                In short, Progressive ideology is winning and has been winning for a long time because they control the debate and they choose their enemies. What we need to do is change this paradigm. Contrary to the Cosmotarians, I strongly believe we need to make ourselves the enemy of the Progressives, call out the progressive conservatives (socons and the like) and become leaders on policy for the reflexive conservatives.

                1. Many do not realize that no one will ever root for you if you don’t have an adversary. Playing nice between the two parties and with voters will get you as much cheering as the referee gets in a boxing match.

                  1. no one will ever root for you if you don’t have an adversary.

                    If you’re a hammer and everything looks like a nail.
                    Polls show voters TOTALLY disgusted by the current level of partisan hostility.
                    And those who see everything as a battle with Satan make shitty legislators,

                    Rand Paul doesn’t lob hissy fits at the partisan opposition, which is WHY he’s co-sponsored so many bipartisan bills.

                    Playing nice between the two parties …

                    … is called teamwork. Why do you believe Ronald Reagan was cheered as much as the referee in a boxing match

                2. ? classical liberalism. This was, in the past, an ideology that at least 51% of the country supported.
                  So what changed?

                  It’s now 59% (Cato/Zogby survey) 🙂

                  I Progressive ideology is winning and has been winning for a long time because they control the debate and they choose their enemies.

                  And because we do nothing.

                  I strongly believe we need to make ourselves the enemy of the Progressives, call out the progressive conservatives (socons and the like) and become leaders on policy for the reflexive conservatives.

                  Bravo, but policy is where we suck the most. Many prefer debating theory, Austrian economics, Road To Serfdom, etc.

                  Careful about those enemies. Rank-and -file socons and progressives are NOT like their leaders. They support their leaders only because nobody else supports their values.

                  Many or most socons don’t crave a theocracy. They even support Separation … because their own denomination was persecuted in the past. I’m a devout atheist and even I know Christianity is under attack. but their leaderships WILDLY exaggerates the threat .. which is why God created demagogues.

                  Many or most liberals have no need for a welfare state and all that other crap. They just want to make sure nobody gets left behind. And who defends their values there?

                  Ironically, most real Christians and most real liberals share a common trait. Empathy

              2. .. there are genuine socialist and Keynesian assumptions behind much of the left– wing perspective in this country right now.

                As POLICIES, Very few voters care HOW it connects with their values. (theory) Most folks need to know THAT it works, for them..

                There are nationalist and religious platitudes guiding much of the right.

                Expanding your concern, Our biggest challenge is connecting with OUR voters (the 59% libertarian). They’re in damn near every identity group. And invisible.

                The libertarian short coming is more a matter of exposure *physically* than an inability to reach the masses *conceptually*.

                Except the local level where there are THOUSANDS of elected libertarians . (Call them Nolan libertarians) LOCAL policies are fairly simple. Many say they can’t see moving up, mostly because they’re independent (no party platform),.

                If and when there are enough libertarian leaning media and cultural outlets to compete with the noise of Fox or CNN,

                Do we have time to wait, or control our own destiny. I’m sure you’d agree, if you thought it possible.

                I think we should all except the fact it won’t be the LP getting huge or anything that obvious.

                Been there. Electable libs always knew that/. They run locally and if they run at the state level, it’s as Reps or Dems where they’re all alone. Gov. Gary Johnsom.

  15. Reducing total spending increases to 2% a year sounds reasonable enough, but the real question is how sharply entitlements would need to be cut in order to hit this target.

    1. RoninX, GREAT point. I can’t give an exact answer, but it’s well known that Medicare and Social Security will grow faster than GDP, as the boomers continue swelling the ranks of seniors.

  16. Mr. Hinkle,

    Attempting to hold spending growth to 2% cannot balance fiscal expenditures.

    Firstly, the fiscal balance will vary regardless of what efforts government makes given inter-sectoral flows are determined by the spending and saving decisions of the non-government sector. If in aggregate it spends less than its income the government’s fiscal balance will move toward deficit.

    Secondly, government spending is the sole source of net financial assets in the non-government sector. Reducing spending therefore reduces its accumulation of financial wealth and, as a matter of accounting, reduces the government’s revenues. A spending cut is equivalent to a tax increase as a matter of financial flows.

    Third, government is the monopoly supplier of U.S. Dollars. Reducing spending below GDP growth requires that financial assets come from either the foreign sector (impossible as there is no chance of the U.S. running a trade surplus) or accelerating accumulation of private credit and debt. Your article does not point out that Switzerland’s reduction in public debt required record levels of household debt nor that other countries you list have stimulated their economies via combination of rising private debt and trade surpluses.

    Fourth, $18 trillion in government liabilities is $18 trillion in non-government assets. Reduce liabilities and reduce assets.

    1. Ok, so I’ve seen your posts before, and try as I might I still don’t get what you’re saying. Let me try to poke holes in it:

      1. I am a government with a 10% sales tax and no expenses. How the hell am I running a deficit? Sure, maybe I’m missing out on really cheap loans the private economy would be willing to make, but I don’t have to take those loans.

      2. When you say “net financial assets”, you’re only talking about government debt, right? If Uber grows from $0 to $10,000,000,000 in 5 years, the capital gains aren’t revenue in your model?

      3. The fed can accept any collateral it wants in exchange for US dollars, can it not?

      4. Reducing the debt (by paying it back) means giving cash to whoever owns the treasury note. The US wipes out their debt (but loses cash), and the lender wipes out the note, but receives cash. There’s no reduction in assets on the private side.

      1. This guy sounds like a proponent of the neo-keynesian Modern Monetary Theory, of which I’ve heard people who subscribe to that say some outrageous things. The belief that US debt outstanding is directly proportional to the amount of liquid wealth is one of the things they say, and doesn’t make any sense.

        “Reducing spending therefore reduces its accumulation of financial wealth and, as a matter of accounting, reduces the government’s revenues. A spending cut is equivalent to a tax increase as a matter of financial flows.”

        Stuff like this. We could cut spending massively, run a surplus, pay down the debt completely, and the non governmental sector would be fine. US Treasures are used liquid assets in the private sector, sure, but paying them off by the government would mean that private assets and debts would just take their place, and THAT would massively boost the private sector.

        1. Also,

          “Third, government is the monopoly supplier of U.S. Dollars. Reducing spending below GDP growth requires that financial assets come from either the foreign sector (impossible as there is no chance of the U.S. running a trade surplus) or accelerating accumulation of private credit and debt.”

          Not really at all. There’s only about 1.5 Trillion dollars in circulation. Replace worn out cash and keeping inflation at 2.5% the government would only need to spend about 40 billion newly created (i.e. no tax necessary) dollars per year. Anything beyond that is unnecessary to keep dollars supplied to the economy.

          And if we cut spending to where we could run a surplus to pay down the debt, a lot of the repayment of paid off Treasury Bonds would be then loaned out (i.e. stocks and bonds) by investors and banks who formally held those bonds, but it won’t be that way for all of it. A lot of that money would be directly spent and invested by business owners in their own businesses; no new debt required.

          1. And seeing how the private sector actually generates wealth unlike the government sector, imagine what all that new private investing will do for the economy. It’ll go directly to business lending and the stock market instead of being devoured by the government building fighter planes that will be obsolete and replaced by UAV’s in ten years.

            It’ll build buildings and businesses that could generate real wealth for generations in the private sector rather than simply be a temporary expenditure and paycheck to some governmental employee.

      2. Christophe,

        Lomg response in two comments:

        1) No government in the U.S. will have zero expenses but let’s assume your premise in a very simple model. Non-government spending is $100 with sales tax of 10% annually = taxes of $10 in first year. Non-government spending next year drops to $90, $81 next and so on. Each year private incomes fall unless made up by taking on loans or running surpluses against the foreign sector.

        If government were spending that revenue in the first year taxes would be $10 and spending $10 (balanced budget). Now if in a given year the non-government reduces its spending to $90 due to disaster, desire to hedge against future uncertainty, etc. government revenue falls to $9 but spending is still at $10; it has moved to defict through no action of its own.

        2)Net financial assets are non-government assets with no corresponding non-government liability. If you take a $100 private loan from your bank this creates a deposit in the banking system. That deposit is your asset and the lender’s liability, while the loan itself is your liability (you have to pay it back) and the bank’s asset.

        $100 in private assets + $100 in private liabilities = zero; no net increase in total private financial wealth.

        $100 spent into your hands by government is $100 in your assets and $100 in government liabilities. Private financial wealth net increases by $100.

        1. Cooking the books for Marx

          Now if in a given year the non-government reduces its spending to $90 due to disaster, desire to hedge against future uncertainty, etc.

          The deficit is caused by the disaster. FAIL.
          A disaster you invented to cover your bad math. DOUBLE FAIL.

          You’re also wrong on the “double-entry” calculations (assets and liabilities) as corrected here:

          https://reason.com/archives/201…..nt_5571559

          TRIPLE FAIL

        2. Except it didn’t, because the government sucked that money, or those assets, out of the economy to start with ( taxes ) and subtracted a management fee from it ( costs of operation ).

          The magic happened when I created, or the people I work for created, $100 of additional value in the economy, increasing total assets. The government can’t do that by creating
          bookkeeping entries. The local car dealer won’t accept those for the Corvette I want.

          1. That’s relevant only if the private sector is comprised entirely of manufacturing.
            How does the retail industry increase total assets?
            Or even that local car dealer?

      3. Christophe,

        3) The problem is that net-transfers wealth to government from non-government. If I use my bonds as collateral for a $100 loan from the government sector I personally might use the $100 for something profitable and come out ahead. But look at the accounting in terms of the non-government as a whole: $100 deposit is my asset and government’s liability, $100 loan is my liability and government asset. Loan + liability = net change of zero, meaning no net increase in non-government financial wealth. If government charges interest the net change will reduce private wealth by transferring more than the total loan to government.

        4) a. U.S. goes into deficit spending. This creates a reserve deposit of $100 and a checking account deposit of $100.
        b. U.S. auctions $100 in Treasuries. If you buy them your checking account is debited $100 by the bank, the bank’s reserve account is debited $100 by government (because government only accepts reserves) and the bank’s securities account is credited $100. So the reserve and checking transactions cancel out but the securities show a net financial increase of $100.

        c. If you redeem at maturity the securities account is debited $100, bank’s reserve account is credited $100 and your checking account is credited $100 (plus interest of course). The net increase in financial assets has moved from the securities account to the reserve account.

    2. Bringing the increase in spending closer to the rate of inflation of the money supply is the difference between a parasite that kills it’s host and one that does not.

    3. the fiscal balance will vary regardless of what efforts government makes given inter-sectoral flows are determined by the spending and saving decisions of the non-government sector.

      Translation: Government revenue growth is a function of private sector economic growth (profits, wages and investment income).

      If in aggregate it spends less than its income the government’s fiscal balance will move toward deficit.

      Translation: If government revenues are $3 trillion, and government expenses are $2 trillion, that creates a deficit for the year. Thus surpluses require spending more than income.

      government spending is the sole source of net financial assets in the non-government sector.

      Or ? government spending is precisely equal to the taxes it extracts from the private sector, so spending is merely redistribution. . The cost of government overhead thus creates a dead loss of private assets from the redistribution.

      $18 trillion in government liabilities is $18 trillion in non-government assets. Reduce liabilities and reduce assets.

      Umm, if we buy back $2 trillion in debt, then $2 trillion in non-government cash assets is precisely equal to what had been $2 trillion in non-government bond assets.

      $2 trillion = $2 trillion. Always and forever. Or would the $2 trillion be hidden in mattresses and buried in back yards?

    4. Holy shit, that’s a lot of wind moving for the purpose of dropping a big load of bullshit. As if government spending is what actually drives private sector growth. Which appears to be the theme of your nonsensical nonsense. Take it over to Salon. i hear they lap that shit up over there. Or maybe save it fro the next Krugman circle jerk session.

      The gains from reducing/eliminating QE alone will have a huge benefit by not stealing anymore money from the private sector. And so much more.

  17. “Mandatory social-welfare spending”

    Most of that money goes to the government enabled medical mafia, which can shake us down for whatever we have, because we are not *free* to buy medicines and medical care from whom we would choose, but instead must go through the mafia for what we want.

  18. What precisely is the problem being addressed by these proposals?

    1. There are no problems comrade tony!

      All problems were outlawed at last party conference.

    2. You seriously see no issue with massive deficit spending that is supported through steadily increasing our money supply and accumulating massive debt?

      1. Meh. Maybe I would if you could describe it.

        1. Do you even understand what I said?

          1. Deficits = debt, So we’re left with money supply, which is superflous … and incorrect. See Milton Friedman.

  19. So, the biggest argument against this column is that a true Scotsman would never do less than two steps?

  20. “Fifty years ago defense accounted for 7.2 percent of GDP; now it’s 3.5 percent. ”

    3.5%?
    Um, no.

    No matter how you do the math, it’s WAY more than that. If you include veteran’s benefits, international aid (training, arms, etc) it’s staggering. Include a lot of the DHS money, this is WAY over 20% into the 25%+ range.

    You can just Google “what percent of the us budget is spent on the military” or something of your choosing, then pick a source that seems reasonable. Pick 10.

    1. Umm, he said percent of GDP..
      You describe percent ot government spending.
      Two vastly different things.

      1. Something we agree on.

  21. “Government should adjust its rates of expenditure and taxation such that total spending in the economy is neither more nor less than that which is sufficient to purchase the full employment level of output at current prices. If this means there is a deficit, greater borrowing, “printing money”, etc., then these things in themselves are neither good nor bad, they are simply the means to the desired ends of full employment and price stability.”

    ? Abba Lerner, “Functional Finance and Full Employment”(1943)

  22. Google pay 97$ per hour my last pay check was $8500 working 1o hours a week online. My younger brother friend has been averaging 12k for months now and he works about 22 hours a week. I cant believe how easy it was once I tried it out.
    This is wha- I do…… ?????? http://www.online-jobs9.com

  23. Cut the size of the beast by 99%.

    Problem solved !

  24. That same broken record? Again? How about drafting a plank to abolish the personal income tax, then work on a referendum initiative to put it on wheels? I will lay heavy odds that once corporations can no longer use men with government guns to shift their bill onto individuals and sole proprietorships, a way will be found to cut federal spending.

    1. How about drafting a plank to abolish the personal income tax

      It would likely be total horse shit, like Ron Paul’s

      But how many extra votes would it garner?

      I will lay heavy odds that once corporations can no longer use men with government guns to shift their bill onto individuals and sole proprietorships, a way will be found to cut federal spending.

      Umm, what about the middle class who use men with government guns to shift half their share of the income tax to the rich? And would need a tax increase of at least 75%, just to pay their own way?

      I

  25. Several people commented on how naive and unlikely it was to suggest limiting government growth to 2 or 3 percent a year. And they’re quite right. Nonetheless, put this kind of idea out prominently in the political debate, and then hit people over the head with the idea that government growth is currently considerably more than 2% – 3% and dare them to come up with an alternative plan.

    1. Or rather, that the idea would work because government growth is considerably higher than 2-3% per year. It could be a great talking point for anyone who favors limited government.

  26. Since fiscal policy debates tend to focus on how to eliminate red ink and balance the budget, I may as well take advantage of this misplaced focus to push a policy that would be desirable even if we had a budget surplus.

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