Wintery Knight

…integrating Christian faith and knowledge in the public square

Let the grown-ups lead: Paul Ryan describes his proposal to balance the budget

Paul Ryan's Balanced Budget Proposal

Paul Ryan’s Balanced Budget Proposal

In the Wall Street Journal.

Excerpt:

America’s national debt is over $16 trillion. Yet Washington can’t figure out how to cut $85 billion—or just 2% of the federal budget—without resorting to arbitrary, across-the-board cuts. Clearly, the budget process is broken. In four of the past five years, the president has missed his budget deadline. Senate Democrats haven’t passed a budget in over 1,400 days. By refusing to tackle the drivers of the nation’s debt—or simply to write a budget—Washington lurches from crisis to crisis.

House Republicans have a plan to change course. On Tuesday, we’re introducing a budget that balances in 10 years—without raising taxes. How do we do it? We stop spending money the government doesn’t have. Historically, Americans have paid a little less than one-fifth of their income in taxes to the federal government each year. But the government has spent more.

So our budget matches spending with income. Under our proposal, the government spends no more than it collects in revenue—or 19.1% of gross domestic product each year. As a result, we’ll spend $4.6 trillion less over the next decade.

Our opponents will shout austerity, but let’s put this in perspective. On the current path, we’ll spend $46 trillion over the next 10 years. Under our proposal, we’ll spend $41 trillion. On the current path, spending will increase by 5% each year. Under our proposal, it will increase by 3.4%. Because the U.S. economy will grow faster than spending, the budget will balance by 2023, and debt held by the public will drop to just over half the size of the economy.

Yet the most important question isn’t how we balance the budget. It’s why. A budget is a means to an end, and the end isn’t a neat and tidy spreadsheet. It’s the well-being of all Americans. By giving families stability and protecting them from tax hikes, our budget will promote a healthier economy and help create jobs. Most important, our budget will reignite the American Dream, the idea that anyone can make it in this country.

The truth is, the nation’s debt is a sign of overreach. Government is trying to do too much, and when government does too much, it doesn’t do anything well. So a balanced budget is a reasonable goal, because it returns government to its proper limits and focus. By curbing government’s overreach, our budget will give families the space they need to thrive.

Since Obama was elected, he’s added over $5.5 trillion to the national debt. This is not sustainable. We cannot continue to pass on enormous levels of debt to our children so that 30-year-old students can have free condoms bought for them. It is immoral to spend trillions of dollars and then pass the bill to the next generation. Democrats like to talk about helping the children, but really they just want to force them to pay for their wasteful spending. It’s got to stop.

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Obama’s fiscal cliff deal leaves us on a path to 200% debt to GDP

From The Hill.

Excerpt:

The nation’s long-term fiscal outlook hasn’t significantly improved following the recent agreement between Congress and the White House over tax and spending issues, according to a new analysis.

The “fiscal cliff” deal, combined with the debt-limit agreement of August 2011, only slightly delays the United States reaching debt-to-gross domestic product levels that would damage the economy and risk another fiscal crisis, according to a report from the Peter G. Peterson Foundation released on Tuesday.

The agreement “may have prevented the immediate threats that the fiscal cliff posed to our fragile economic recovery, but we haven’t remotely fixed the nation’s debt problem,” said Michael A. Peterson, president and COO of the Peterson Foundation.

“The primary goal of any sustainable fiscal policy is to stabilize the debt as a share of the economy and put it on a downward path, and yet our nation is still heading toward debt levels of 200 percent of GDP and beyond,” he said.

The report concludes that the recent round of deficit-reduction measures won’t make major improvements because they fail to address most of the major contributors to the debt and deficit, including rapidly rising healthcare costs. 

[...]At a House Ways and Means Committee hearing last week, lawmakers and budget experts agreed that rising healthcare costs, such as Medicare, must be addressed this year as part of efforts to overhaul the tax code and entitlement programs.

“Until spending in those areas is reduced, tax revenues are increased, or policymakers implement a combination of both, the United States will continue to have a severe long-term debt problem,” the report said.

“Reforms should be implemented gradually, and fiscal improvements must be achieved before our debt level and interest payments are so high that sudden or more draconian reforms are required to avert a fiscal crisis.”

The latest deal that stopped income tax increases for those making $400,000 a year or less may have only improved the burgeoning debt situation by a year.

Scheduled spending cuts from the 2011 budget deal, combined with the fiscal cliff agreement, put the debt on track to reach 200 percent of GDP by 2040, five years later than was projected prior to the passage of the two deals. 

The recent deficit-reduction measure gave the nation an additional year before hitting that 200 percent threshold, the report showed. 

I saw an interesting interview featuring Captain Capitalism in the Washington Times. He thinks that the debt spiral is irreversible.

Excerpt:

DDG: What was your take on the “solution” we saw earlier this month to the so-called fiscal cliff crisis?

Clarey: Band-Aid put on a cut aorta.

DDG: My concern is that inflation is distorting all levels of American society. For example, as prices skyrocket from monetary dilation at the Fed, we have this effect where as Rose Wilder Lane says, everything becomes increasingly more expensive and government starts creating laws and fines just for the purpose of revenue generation. So the formation of a police state and this loss of freedoms is in large part a result of government wanting to get more and more revenues to finance outlays that are being dilated as a result of the inflation they themselves are creating. What’s your take on this?

Clarey: I don’t know if it would be at the police state yet where the federal government comes in and confiscates wealth, as much as it is something much more clandestine. The government likes inflation in that it increases asset prices. Thus when somebody sells an asset – land, stocks, bonds, et cetera – they have to pay a capital gains tax.

Forget whether there was an actual real rate of return for the investor, the government gets to tax the real capital gains and the inflationary capital gains. Inflation also erodes the value of the federal debt, forcing the costs on US treasury holders. However, unless things change, the government will be forced [to cope with] with a simplified problem: Does it inflate its way out of its debts or does it confiscate wealth to pay for it?

I can’t read Paul Krugman and Barack Obama’s minds – if any exist – but I believe they will opt to go the inflationary route to solve the country’s debt problems. If they went the wealth-confiscation route, that would mean nationalizing people’s IRAs, 401(k)s and brokerage accounts much like they did in Argentina and Bulgaria. I fear however, because of their political ideology they have no problems doing both.

I am expecting inflation to continue in the near term, followed by seizing retirement accounts if the Democrats take back the House in 2014. The amnesty of 12 million illegal immigrants should give them that. So, if you have a plan to escape this, you’d better execute it in the two years. The clock is ticking.

Filed under: News, , , , , , , , , , , , , , , , , ,

Fact check of Obama’s budget: is there really $4 trillion in deficit reduction?

Here’s a story from the House Budget Committee, where Paul Ryan is the leader.

Paul Ryan made these two charts to help him discuss Obama’s new budget with Obama’s budget director.

Debt Increase in President's Budget
Debt Increase in President’s Budget

And:

Actual savings is 410 billion, not 4 trillion
Actual savings is 410 billion, not 4 trillion

Watch these clips to see Paul Ryan and Scott Garrett use the charts to do nasty things to Obama’s budget director.

Clip 1 of 3:

Clip 2 of 3:

Clip 3 of 3:

Guy Benson discusses both videos at Townhall.com.

Excerpt:

Ryan does a masterful job of puncturing Zients’ arguments, but let’s reiterate a few points that may have gotten lost in the shuffle.

(1) The White House is claiming that spending cuts within the Budget Control Act of 2011 — which is entirely separate from the FY 2013 budget — should count as savings “achieved” by their new proposal.  This is silly on its face, but crosses into laughable territory when one recalls that throughout much of the debt fight, President Obama adamantly opposed a cuts-for-debt-ceiling-hike quid pro quo.  He was on the record in favor of — demanding, in fact — zero cuts. Republicans dragged him into the BCA against his will; now he’s trying to take credit for that past action in next year’s budget.

(2) The White House says Obama’s budget “saves” $850 Billion by not fighting two wars at peak spending levels for another full decade.  This money was never proposed because the scenario is pure fiction.  These risible “savings” represent a White House bear-hug of Moon-Yogurt accounting. “Heaven help us” is right.

(3) Zients’ isn’t able to recall how much money this budget adds to the national debt.  You’d think the White House Budget Director would have that figure committed to memory (he likely does, but doesn’t want to admit it on camera), but let’s help him out:  The budget he’s defending adds nearly $11 Trillion to the debt, on top of the roughly $5 Trillion increase over which this president has already presided.  I seem to recall an infamous Right-wing zealot calling this sort of governance “unpatriotic.”

Next, we have Rep. Scott Garrett, a strong conservative from Northern New Jersey, asking Zients when the president’s budget comes into balance.  Zients refuses to directly respond to the question, perhaps because the correct answer is “never”…

Indeed, the closest Obama’s budget ever comes to balancing (expenses = revenues) within the ten-year projection window is 2017′s annual deficit of $617 Billion, which is still more than double the size of President Bush’s average annual deficit. Finally, Garrett lures Zients into a trap over Obamacare.  Garrett asks if a family making less than $250,000 per year (“the rich” cut off) is subject to a tax increase if they fail to comply with Obamacare’s individual mandate…

The president sold Obamacare to the public by characterizing the resulting mandatory pay-out as a “fine,” not a tax increase.  He even mocked George Stephanopoulos’ suggestion that it met the dictionary definition of a tax hike.  Once the law passed, however, the administration’s lawyers pulled an about-face and have defended the mandate in court by arguing that the fine is, in fact, a tax increase after all.  Zients has apparently reverted back to the outmoded argument, thus undermining his own administration’s legal defense of their signature “accomplishment.”

What I find frustrating is the media does such a poor job of vetting these “4 trillion dollar” claims that Obama makes. Sometimes, I wonder why anyone listens to mainstream media at all. What do you really learn?

Filed under: News, , , , , , , , , , , , , , , , , , , , ,

Barack Obama’s Hawaiian vacation estimated to cost $4 million dollars

Obama plans to hit the golf course at taxpayer expense

Obama plans to hit the golf course at taxpayer expense

From Hawaiian Reporter. (H/T Director Blue)

Excerpt:

The U.S. Secret Service has arrived, street barricades are in place, and the U.S. Coast Guard has stationed itself in the waters surrounding Kailua, Oahu.

That is a sure sign President Barack Obama’s security team is preparing for the first family to arrive in the small beachside community as early as Friday night for what is expected to be a 17-day vacation.

The President and his family are traveling separately to Hawaii because he wants resolve the payroll tax cut issue before leaving Washington – and his wife does not want to wait.

But the advanced trip and the cost that comes with it – as much as $100,000 (flight and security) – adds to an already expensive vacation for the taxpayers.

Hawaii Reporter research shows the total cost for the President’s visit for taxpayers far exceeded $1.5 million in 2010 – but is even more costly this year because he extended his vacation by three days and the cost for Air Force One travel has jumped since last assessed in 2000. In addition, Hawaii Reporter was able to obtain more specifics about the executive expenditures.

The total cost (based on what is known) for the 17-day vacation roundtrip vacation to Hawaii for the President, his family and staff has climbed to more than $4 million. Here’s why.

TRAVEL: $3,629,622

The biggest expense is President Barack Obama’s round trip flight to Hawaii via Air Force One, a cost the GAO office estimated at $1 million in the year 2000. Contacted today, the GAO confirmed there is no report the independent office affiliated with Congress has prepared since 2000 to operate Air Force One and Air Force Two.

However, the U.S. Air Force provides the most current numbers of $181,757 per flight hour. Travel time for Air Force One direct from Washington D.C. to Hawaii is about 9 hours or $1,635,813 each way for a total of $3,271,622 for the round trip to Hawaii and back.

The cost for USAF C-17 cargo aircraft that transports the Presidential limos, helicopters and other support equipment to Hawaii was not made available. However, the flight time between Andrews Air Force Base and Hawaii is at about 21.5 hours roundtrip, with estimated operating cost of $12,000 per hour. (Source: GAO report, updated by C-17 crew member). The United States Marine Corps provides a presidential helicopter, along with pilots and support crews for the test flights, which travel on another C-17 flightThat is $258,000, not including costs for the 4 to 6 member crew’s per diem and hotel.

Mrs. Obama’s early flight to Hawaii costs about $63,000 (White House Dossier), but add security and personnel for a total of about $100,000.

The rest of that article calculates the remaining components of the FOUR MILLION DOLLAR bill.

On another topic, here is a re-cap on our budget situation in 2012:

Barack Obama, Budget Deficit and Debt to GDP

Barack Obama, Budget Deficit and Debt to GDP

Remember, the Democrats took control of the House and Senate in January 2007, and that’s when the overspending started.

Why should we expect someone who can spend FOUR MILLION dollars on a vacation to have the discipline and frugality to balance the nation’s books?

Filed under: News, , , , , , , , , , , , , , , ,

CBO finds that Obama understated budget deficits by 2.3 TRILLION

From the Hill. (H/T Michelle Malkin)

Excerpt:

The Congressional Budget Office on Friday released its analysis of President Obama’s 2012 budget proposal and found it does less to rein in deficits and the debt than the administration had estimated.

CBO estimates Obama’s plan would produce 10 years of deficits totaling $9.5 trillion. By 2021, it would increase the debt held by the public to 87 percent of gross domestic product.

The administration, using different methods, estimated budget deficits would total $7.2 trillion over the next 10 years under the 2012 budget. It forecast that total debt in 2021 would be 77 percent of GDP.

The White House also said total deficits over the next decade would be $1.1 trillion more without the recommendations included in Obama’s budget.

Marc Goldwein, policy director for the Committee for a Responsible Federal Budget, said that CBO has found the effects to be almost nil.

He explained that the difference between the CBO’s $9.5 trillion estimate and OMB’s $7.2 trillion estimate comes from two sources: rosy economic growth assumptions by OMB and offsets for the Medicare doc fix as well as transportation spending OMB did not specify in the budget and which CBO will not factor in.

The most important aspect of CBO’s analysis is that, while OMB claimed the president’s budget “stabilized” the debt at 77 percent of GDP over the 10-year window, CBO estimates the debt will grow throughout the period and end up at 87 percent, he said.

Here’s Michelle Bachmann explaining that since the Democrats took control of the budget in 2007, over 5 trillion dollars has been added to the debt.

The chart Michele is talking about:

Barack Obama Budget Deficit

Barack Obama Budget Deficit

The last Republican budget was in 2006. The recession started in 2007, along with the spending.

Meanwhile, the Obama will attend his fourth party event of the month. It’s party time! Just like in college!

Filed under: News, , , , , , , , , , , , , ,

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