George Rebane
About 170 of us gathered in the theater of Colfax High School last night for a townhall with Congressman Tom McClintock. The Congressman started the evening with a PowerPoint detailing the fiscal crisis the country will experience “within five years” unless a radically different course is taken starting now. There is no more time.
He went through all the arguments, pie and bar charts familiar to RR readers. The numbers remain astronomical and the crowd seemed to be up on the consequences of the Dems’ continuing to identify $2B weekly spending cuts as being “heartless”. Looking at the coming decade of a trillion plus annual deficits that are growing weekly as people study the ramifications of Obamacare, a more reasonable spending cut rate would be somewhere in the $10-20B/wk level.
Jo Ann and I drove to hear Congressman Tom clear up his vote for last week’s continuing resolution (CR) that maintained the insignificant $2B/wk spending cut rate. According to the congressman’s arithmetic, this would balance the constant dollar federal budgets in about 15 years. And then came a point of clarification which corrects the misapprehension that many of us (me included) have had about the meaning of these spending cuts.
The confusion arose when the news reported that these cuts would continue at this rate until 30 September, the end of this fiscal year. This implied that the spending cuts were only for either this fiscal year or the next. Wrong concept. What all the celebration is about in conservative quarters is that these cuts would be in perpetuum – that is, they are permanent and would form the reduced baseline for all succeeding budgets. OK, **IF** that were to come to pass, then yes, one can argue that would finally balance the federal budget sometime around 2026. But, of course, not only would Congress have to maintain that discipline in spending, there are a whole slew of other dependers that would have to all fall in line also. What are the chances of that?
Congressman Tom’s firm answer is that Congress has to do that because there is no other responsible choice available. Massive cuts have to be made, and made quickly. Tom voted for the CR last week because he wanted give Speaker Boehner some “maneuvering room” when the Republican House leadership negotiates with the Democrats and the administration in the interval leading up to the rapidly approaching federal debt limit. The implication being that it is then that the rubber hits the road, and the Republicans will draw the “red line” on spending cuts which will put the country on a sustainable spending path.
Well, that’s not exactly what was said, but it seemed that the Republicans sure hope that this would come to pass. The congressman outlined no strategy or plan to get this accomplished, and I got the impression that one does not yet exist. However Tom did recount how in 1946 President Truman succeeded in cutting the federal budget in half and fired half the government workforce. The history buffs in the audience were reminded that this slashing was largely due to the expected demobilization after WW2 ended – but the intended takeaway was that Truman’s actions were an example of the art of the possible.
For me that didn’t go down as smoothly as I had hoped. Truman managed these cuts because it was politically palatable – for example, he didn’t have to sell too hard the notion of letting Johnny go marching home – the economy was ready to expand massively since we were the one and only industrial power left standing in a destroyed world that needed what only we could make to rebuild it. And the country was of one mind to now all pitch in and make the world safe for democracy with America in the undisputed lead. Our debt was huge, but we owed it to ourselves and not to foreigners – it was totally manageable since entitlements were still miniscule.
Today we live in a different world. The numbers are astronomical and all against us. Foreign governments are our creditors and are hell bent on making everything we could ever make and then some. Technology is outdating our workforce that has the double burden of having to compete with cheap overseas labor, while paying for the fattest government ever that overflows with unionized public service employees enjoying outstanding compensation packages. And they consider it their God given right to retain what they have and add to it until the last private sector worker is left standing.
Nevertheless Congressman McClintock still sees America’s best years ahead, after we go through some tough times. But no one in Washington wants to talk about the real numbers. That is left for private sector commentators and bloggers like yours truly. No one in government can put together a plan forward with believable interest and GDP growth rates that shows how we will come in for a soft landing. It’s not a complex graph to show the people; just a few lines arcing this way and that over the coming years that show deficits going to zero, and national debt (including unfunded liabilities like SS) returning to a reasonable fraction of GDP.
I don’t see anyone putting up such a graph any time soon. The real answer that cannot be voiced by an elected official is that our deficits will be monetized away (with newly printed dollars) along with all of our savings. (see Bill Mauldin’s Endgame) And if that catharsis is managed correctly, the country will emerge chastened and, hopefully, not fundamentally transformed to seek a brighter day.
However, at least a quarter of us, and maybe many more, are working as hard as they can to make sure that America is fundamentally transformed in the coming fiscal bloodbath. Those people, with whom ol’ Harry in 1946 didn’t have to contend, are today already busy as beavers making sure that America’s future will be as a weakened, reformed, and compliant peer in the new global world order that has been the dream since the Manifesto. Revelation of their plans and progress on this path emerge daily (e.g. google ‘SEIU Stephen Lerner Plans to Destabilize Capitalism’ – thanks to John Galt for link.).
[update] I received a copy of Congressman McClintock’s PowerPoint presentation from his office, and with permission make it available here Download ChoiceOfTwoFutures.
[24mar2011 update] The congressman also brought up an aside from the budget issues on Libya. He said he was concerned with the way we had entered that new fray, and had drafted a letter to the President about it. McClintock’s District Director Rocky Deal happened to have a copy of it on his Blackberry which Tom then read to us. This is the letter that went to the White House.
rebanesruminations.com 
Leave a comment