"We must not let our rulers load us with perpetual debt... Taxation follows that, and in its train wretchedness and oppression." -Thomas Jefferson
“As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it, avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear. The execution of these maxims belongs to your representatives, but it is necessary that public opinion should co-operate.” -George Washington
This puts ignoring the real problem into perspective that everyone should be able to understand.
This was heard on the Dave Ramsey radio program. If the US Government was a family, they would be making $58,000 a year.
They spend $75,000 a year and are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. (These are the actual proportions of the federal budget and debt, reduced to a level that we can understand.)
Now you know the trouble we are in!
"Baseline budgeting" is one of those Washington terms that sounds very dry and boring. In reality, baseline budgeting is one of the most sinister ways that politicians claim to cut spending when they are actually increasing spending. The Congressional Budget Office defines the baseline as a benchmark for measuring the budgetary effects of proposed changes in federal revenue or spending, with the assumption that current budgetary policies or current services are continued without change. The baseline includes automatic adjustments for inflation and anticipated increases in program participation. Baseline, or current services, budgeting, therefore builds automatic, future spending increases into Congress's budgetary forecasts.
Baseline budgeting tilts the budget process in favor of increased spending and taxes. For example, if an agency's budget is projected to grow by $100 million, but only grows by $75 million, according to baseline budgeting, that agency sustained a $25 million cut. That is analogous to a person who expects to gain 100 pounds only gaining 75 pounds, and taking credit for losing 25 pounds. The federal government is the only place this absurd logic is employed.
Politicians often like to have it both ways. Baseline budgeting gives politicians an opportunity to deceive taxpayers by allowing them to claim that they are holding the line on spending while providing more services.
Baseline budgeting seems like a technicality and should not be such a hotbed of contention, but every round of budget negotiations involves baseline budgeting with both sides of the aisle complaining that the other side is using the process to mask spending increases. Baseline budgeting is an issue that truly separates the deficit hawks from the budget chickens.
Eliminating the inflated budget baseline will force Congress to justify and account for increased spending instead of hiding behind automatic increases. Through commonsense accounting, taxpayers would learn that spending in Washington is not under control.
What do real spending cuts look like?
So when the Super Committee (or any politician) comes out with a plan, look at the summary tables at the back of the plan, after it’s published. Look at the level of spending at the start of the timeline, and look at the level of spending at the end of the timeline (the timeline is usually ten years). If the number they end up with is smaller than the number they started with, that’s a REAL CUT. If the number they end up with is bigger than the number they started with, that’s a fake cut, a.k.a. business as usual. Click here to learn more. Then watch the video explanation and follow the Action Items.
Real or Fake?
Educate your friends, family, and neighbors about what a real cut looks like, and about this gimmick that politicians use to trick the American people about spending cuts. If we are educated, they can’t lie to us. Or, at least we can catch them when they lie. Share this document and video with everyone you know, post it on Facebook and Twitter, and keep your eye open for specific action items over the next week and a half that will hold resources you can use to educate others.
Start planning for another DEAL IN THE DISTRICT on Thursday, November 17. The Local Coordinators voted to hold a nationwide Deal in the District to express our desire for real cuts. Did you know that even just bringing a small group of people to a member of Congress’ local office can have a huge impact? Watch for more materials over the next few days to help you with your Deal in the District, and start getting the word out today!!
The Federal Reserve is propping up the entire U.S. economy by buying 61 percent of the government debt issued by the Treasury Department, a trend that cannot last, Lawrence Goodman, a former Treasury official and current president of the Center for Financial Stability, writes in a Wall Street Journal opinion article published Wednesday...
Some time ago, I described the pseudo-scientific theory of so-called "global warming" as "the phrenology of the modern age." In light of the latest avalanche of actual scientific evidence, it would appear I was actually being a bit on the generous side…
The size of government is of particular interest these days, with many Americans believing that rising government spending is crowding out the ability of individuals and businesses to control their own well-being and improve the economy. Indeed, Gallup reported last week that, on average, Americans think the federal government wastes 50 cents of each dollar it spends. But how much does the federal government really spend, asks Andrew G. Biggs, a resident scholar at the American Enterprise Institute.
On paper, the Congressional Budget Office reports that in 2010, the federal government spent $3.456 trillion, an amount that is equal to 23.8 percent of gross domestic product (GDP).
That's one-quarter higher than the historical norm of around 19 percent of GDP.
But direct spending isn't the only spending Washington does.
As Lori Montgomery reports in the Washington Post, last year the federal government spent an additional $1.08 trillion on tax expenditures, which are tax breaks that for all intents and purposes are spending.
That $1.08 trillion in tax expenditures is 24 percent of all federal spending, and is all off the books, allowing a much bigger government than official statistics tell -- and much bigger than people might be willing to tolerate if they knew.
Put it all together and the federal government spends an amount equal to 31.2 percent of GDP -- that is, almost one-third of everything produced in the economy. Add regulations to the mix and the total sway of the federal government over the private sector equals roughly 39 percent of the economy, a larger portion than in prior decades, says Biggs.
Source: Andrew G. Biggs, "How Much Does the Federal Government Really Spend?" The American, September 29, 2011.
The Environmental Protection Agency (EPA) has said new greenhouse gas regulations, as proposed, may be "absurd" in application and "impossible to administer" by its self-imposed 2016 deadline. But the agency is still asking for taxpayers to shoulder the burden of up to 230,000 new bureaucrats -- at a cost of $21 billion -- to attempt to implement the rules.
The EPA aims to regulate greenhouse gas emissions through the Clean Air Act, even though the law doesn't give the EPA explicit power to do so.
The agency's authority to move forward is being challenged in court by petitioners who argue that such a decision should be left for Congress to make.
The proposed regulations would set greenhouse gas emission thresholds above which businesses must file for an EPA permit and complete extra paperwork in order to continue operating.
If the EPA wins its court battle and fully rolls out the greenhouse gas regulations, the number of businesses forced into this regulatory regime would grow tremendously -- from approximately 14,000 now to as many as 6.1 million.
These new regulatory efforts are not likely to succeed, the EPA admits, but it has decided to move forward regardless. "While EPA acknowledges that come 2016, the administrative burdens may still be so great that compliance ... may still be absurd or impossible to administer at that time, that does not mean that the Agency is not moving toward the statutory thresholds," the EPA wrote in a September 16 court briefing.
The EPA is asking taxpayers to fund up to 230,000 new government workers to process all the extra paperwork, at an estimated cost of $21 billion.
That cost does not include the economic impact of the regulations themselves.
Source: Matthew Boyle, "EPA: Regulations Would Require 230,000 New Employees, $21 Billion," Daily Caller, September 26, 2011.
To save the economy on December 30, 2011 Congress will announce that they are ordering the Immigration Department to start deporting senior citizens (instead of illegals) in order to lower Social Security and Medicare costs. Elderly folks are easier to catch and will not remember how to get back home!