Saturday, April 09, 2011

Big Spenders Always Win, or So It Seems; Tea Party Steamed Over Budget Deal

Obama's Budget
I have been trying to get a handle on the big budget fight between Republicans and Democrats.  What I want to see is actual numbers, but there is precious little explanation on the web.  That's because numbers cause eyes to glaze over and remind readers of doing math homework in the 10th grade; it wasn't fun then and it isn't fun now.  However, as an accountant I want to see the numbers and draw my own conclusions.  Bear with me if you can stand it.  I use numbers from the 2011 budget as described at this link.

It appears that the shut down of the federal government was averted by a budget compromise engineered by Republican John Boehner, Speaker of the House.   The Democrats want to spend $3.819 trillion in 2011, adding $1.645 trillion to the national debt.  Put another way, they want to spend $1.645 trillion more than they take in from tax and other revenues.  Boehner's compromise would cut $39 billion from the planned expenditures, a percentage so small that it is barely detectable.

The Republican proposed cuts would reduce the 2011 debt increase by only 2.37%, or 2 cents for every dollar added to the debt.  These same cuts would reduce total 2011 expenditures of $3.819 trillion by only 1.02%, or a single penny for every dollar spent.  That's chump change and hardly a "victory" over Democrat fiscal malfeasance.

When you consider the total national debt of $15.476 trillion (forecast for the end of 2011), the budget reduction amounts to only 0.25% of the total national debt, or two one-thousandths of each penny of debt.


Anybody who thinks this is a Republican victory is delusional.  After promising to cut a paltry $100 billion (as a "serious first step"), the GOP settled for cutting only $39 billion.  Andrew C. McCarthy of National Review Online explains it further here.  He says:
So now they’ve stopped short, significantly short, of that purportedly serious step, and the reaction is, “We won!” You’ve got to be kidding me. The only thing Boehner won is future assurance that GOP leadership can safely promise the moon but then settle for crumbs because their rah-rah corner will spin any paltry accomplishment, no matter how empty it shows the promise to have been, as a tremendous victory.
Some others also "get it," namely Rand Paul and Michelle Bachmann.  Others are content, as usual, with a superficial "win."  Ooooh, we made them cut 2/1000 of each penny!  That's got to hurt!

The GOP is perpetually weak and irresolute.  We need more radical solutions to stop the fiscal insanity of the Democratic Party.  I am not sure what those solutions are, but as of right now, I am thinking of voting for Ron Paul or Rand Paul if either runs.  I will not waste my vote on a Huckabee or a Romney or other establishment Republican.

Just for the record, I have long been critical of Ron Paul and previously wouldn't have voted for him if he were running against Satan.  Now I am beginning to realize that he is a hell of a lot better choice.  We've tried Satan and he just hasn't worked out.


Always On Watch said...

America is in such a hole financially that I don't see a way out.

Stogie said...

AOW, neither do I. It will take a radical solution that goes beyond business as usual, perhaps the secession of some states.

Adobe Walls said...

"We need more radical solutions"
That's the operative phrase here.
The reason I see this as a crushing defeat for conservatives isn't because of the amounts of spending cuts, but rather the targets of those cuts. The main reason to dwell on $100 billion isn't it's effect on the deficit but because that is what they promised. Cutting a few million from EPA if that cut is dedicated to stopping the regulation of carbon would save us hundreds of billions over the next decade. Making cuts that prohibited Interior from prohibiting use of federal lands could generate much tax and private wealth well out of proportion to money saved by small cuts. It's not the size of the cuts that is so disconcerting. It is the agenda not stopped that will destroy us. The fear of using the only weapon they have means the Republicans will cave again and agian. Those sons of bitches are going to force me to vote libertarian. A plague on the entire Washington establishment. May food turn to ash in their mouths and their loins wither.

Stogie said...

Excellent points, Adobe Walls!

Mark Williams said...

The Boehner Boner Budget Deal was a devastating loss for the Tea Party. We have been putting the cart before the horse all along.

To win, the Tea Party must invade and take over the GOP.

Left Coast Rebel said...

Stogie, this post encapsulates my thoughts precisely. And I totally agree with you on Rand and Ron Paul!