George Rebane
The House Budget Committee submitted the first federal budget in years to deal with our fiscal crisis. Under the leadership of Rep Paul Ryan (R-WI) the submitted budget will now have to weather the storms of Democratic opposition, for these are the people who think that liabilities in the tens of trillions will be handled by grudging spending cuts in the tens of billions. Nothing new here, math and economics have never been their strong suit.
Our congressman Tom McClintock has thrown his support in for the GOP budget, and we’ll see how he and the other tea party supported Republicans will do when they run into heavy weather. I have posted on this theme and its attendant continuing resolutions – one’s coming up this Friday – for some time now. Ryan is the first national politician who has stepped out front with cuts totaling over $6 trillion in the next decade, and a path from here to a balanced budget in which we spend what we take in. Well, not right away because initially we’ll still have to borrow to service the debt. But the budget is the first to recognize that nothing happens without reducing the Big Three entitlements.
The Democrats will have a field day convincing the ignorant and the stupid, nevertheless their constituencies must be served, even if all you can serve them is pabulum.
For the full story on the FY2012 GOP budget proposal ‘The Path to Prosperity’ go to the source before you get underwhelmed by the lamestream – check the charts and graphs linked in the hard-to-see lime green band. (H/T to Congressman McClintock’s office for the early email on this.) This saga will be with us for some days yet; stay tuned.
[6apr2011 update] The battle to rescue the country is joined. Over the years our European friends have told us that they see very little difference between our two major political parties. That problem has faded over the last four years, and I sincerely hope that it will completely disappear as the battle lines on the FY2012 budget and its more important portents are drawn.
Today the WSJ’s lead editorial essentially echoed the sentiments of this post and highlighted the significance of the first realistic budget as a stake in the ground marking responsible government and the distance we may/will stray from it in future negotiations with the country’s progressives.
The nearby photo was filched from another article on Rep Ryan’s budget that appeared in the 6apr11 WSJ showing the House Budget Committee stalwarts who have worked hard to bring this budget into the national debate on our fiscal future. Prominently shown to Rep Ryan’s right is an extremely serious looking Tom McClintock, our own congressman from California’s 4th District. The work in the coming months for all these gentlemen is cut out, and they deserve the support of all Americans who don’t belong to the can kicking cadres.
This morning via email from Rep McClintock’s office I received the transcript of his work session remarks to the Budget Committee. It is presented below in its entirety.
Opening Statement
House Budget Committee
Markup of the 2012 Budget
Mr. Chairman:
History walks with us today as we begin this work. History offers us not a single example of a nation that has ever spent, borrowed and taxed its way to prosperity, but it offers us many, many examples of nations that have spent, borrowed and taxed their way to economic ruin and bankruptcy. And history is screaming this warning at us: nations that bankrupt themselves aren’t around very long, because before we can provide for the common defense and promote the general welfare, we have to be able to pay for it – and the ability of our nation to do so is now in grave danger.
Throughout these hearings, economists from every part of the spectrum have warned us that if we have just a few precious years left to avoid a sovereign debt crisis and potentially the financial collapse of the United States Government.
Fortunately, history also offers us lessons of what to do and what not to do.
We know what not to do. Herbert Hoover responded to the recession of 1929 by increasing federal spending by a staggering 60 percent in just four years. He began by imposing the Smoot-Hawley Tariff Act – a steep tax on some 20,000 imported products – and ended by boosting the Federal Income Tax from 23 to 65 percent. Franklin Roosevelt amplified and expanded these policies and in 1939, the unemployment rate was just as high as when he started. We had lost an entire decade.
In 1945, Harry Truman abolished the excess profits tax. He slashed federal income taxes. In 1946, Truman cut the federal budget from $85 billion down to $30 billion in a single year. He fired ten million federal employees. (It was called war demobilization). The Keynesians at the time predicted 25 percent unemployment and a renewed depression. Instead, his policies produced the post-war economic boom.
We have more recent examples. During his administration, Bill Clinton reduced federal spending by a miraculous four percent of GDP. He dared to touch the third rail of entitlement spending and produced the most important and fundamental reform of the welfare state in our century. He signed what amounted to the biggest capital gains tax cut in history on home appreciation. He produced the only four budget surpluses in the last 40 years and a period of pronounced economic prosperity.
True, George W. Bush reduced taxes but at the same time he recklessly increased federal spending – boosting it by 2 percent of GDP. He re-introduced the discredited folly of stimulus spending. He approved the biggest expansion of entitlement spending since the Great Society. He produced massive budget deficits. If entitlement and stimulus programs, crushing deficits and massive spending increases were the road to prosperity, the Bush Administration should have produced a new Golden Age for the economy.
Let’s put partisanship aside today and concentrate on policy. In the mid-1990’s, a Republican Congress and a Democratic President, following precisely the policies outlined in the measure before us today – balanced the budget, reformed entitlement spending, placed us on a path to pay off the entire national debt and produced a period of economic expansion and prosperity.
This budget turns us away from policies that we KNOW do not work toward policies that we KNOW do work. It brings federal spending back under control, it puts Medicare and Medicaid on a sound financial foundation, it produces a million new private sector jobs next year through economic expansion and places our nation on a path so that when my children retire, the retirement systems they’ll have paid into all their lives will be safe and secure and their nation will be debt free and prosperous.
There was an interesting exchange on Ray Kurzweil’s website between Kurzweil and a reader with a “disturbing thought” about post-Sinularity trans-humans some day running out of ‘stuff’ on which to store their ever-expanding knowledge base and on which to do the ever more expansive ‘thinking’ that presumably we will then be able to do (here).
