Posts tagged with: government spending

President-elect Donald Trump

President-elect Donald Trump

Sen. Lindsey Graham, Republican from South Carolina, wants to change the rules of one of the biggest crony capitalist organizations in Washington.  He wants to make it easier for the Export Import Bank to dish out large amounts of corporate welfare to companies such as Boeing, which already brings in revenues upward of $95 billion per year.

USA Today reported in a recent article that “Graham, as chairman of the Senate Appropriations subcommittee that funds foreign operations, has added a provision to the 2017 spending bill that would allow the Export-Import Bank to consider projects of more than $10 million.”

Many supporters of free trade have long opposed the cronyism and corporate welfare of the Export-Import Bank, all while only celebrating minor victories.  In the summer of 2015, the Export-Import Bank’s charter expired forcing it to close its doors until five months later when Congress reauthorized the bank for another five years.

Another minor victory for those who oppose the Export-Import Bank might be the election of Donald Trump.  Although evidence from Trump’s past portrays him as a mercantilist, the president-elect is on record of making critical remarks toward the Export-Import Bank:

I don’t like it because I don’t think it’s necessary. It’s a one-way street also. It’s sort of a featherbedding for politicians and others, and a few companies. And these are companies that can do very well without it. So I don’t like it. I think it’s a lot of excess baggage. I think it’s unnecessary. And when you think about free enterprise it’s really not free enterprise. I’d be against it.

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jmk photo

John Maynard Keynes

“Critics of John Maynard Keynes were so determined his economics were wrong that they allowed Keynes to dictate the terms of the debate,” says Victor Claar, professor of economics at Henderson State University, in his Acton University lecture. He continues to describe Keynes flawed anthropology with respect to classical economists and the Great Depression. Key observations of human nature include the principles of work, property, exchange, and division of labor. We can survive and prosper, take ownership of our work, support and rely on each other through exchange, and specialize in exchange at an opportunity cost. Furthermore, these observations are linked to moral imperatives.

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molechWe are now witnessing how some make the tie between human tragedy and federal spending. Just yesterday, Senate Majority Leader Harry Reid shamelessly implied that the accident that killed seven Marines in Nevada is tied to spending cuts from sequester. Hollywood actor Harrison Ford lamented that “accidents are going to happen” in aviation because of sequester. It’s almost if more government spending is needed to appease the wrath of the Divine State. If not appeased, wrath will reign down on humanity and nature if not given due alms. We know from Exodus that the Lord our God is a jealous God, but is the federal government a jealous god too? Slowing the rate of growth of this god stirs up anger.

We are being told by lawmakers and citizens that we can’t afford to cut federal spending. Never mind that almost every single American has noticed no change from a paltry and temporary slowing growth rate from sequester. But we are told it’s far too dangerous for our safety and humanity’s future. Never mind that we read absurd stories daily about federal spending initiatives that study why lesbians are fat or why they drink more than the general population.

Washington now has the inability to come together to at least make any responsible strides to curtail our spending crisis. Even throughout American history it has generally been understood by both parties that the federal government can’t or shouldn’t solve all of our problems. Instead, we see lawmakers almost ritualistically dancing on the dead bodies of innocent victims in their call for more spending and government involvement in our lives. It’s becoming a gruesome cult like practice.

In Ideas Have Consequences, Richard Weaver declares, “It is likely that human society cannot exist without some source of sacredness. Those states which have sought openly to remove it have tended in the end to assume divinity themselves.”

This summer I am teaching a class at Acton University titled “Religion and Presidential Politics in the Modern Era.” I’ll touch more upon the the topic of divinization of government in that lecture.

We’re witnessing increases in attacks on religious liberty, sin taxes, and massive centralization and debt. We need to ask ourselves going forward if a jealous government god is going to want to continue to compete with the Church?

800px-Livingood_Obama_State_of_the_Union_2011It was William F. Buckley who said “conservatism takes into account reality.” Reality has become the giant political obstacle for conservatives when it comes to governing, campaigning, and political messaging. It seems too many Americans still love their freedoms but eschew many of the responsibilities that come with it. That’s the crisis we face, the lack of responsibility and our collective grasp on reality.

In last night’s State of the Union Address, President Obama predictably fatigued those looking for real cuts, a limiting of the federal government, and the courage to tackle the federal debt and spending crisis. The president set the agenda on the sequester issue by calling decreases in the rate of growth, “cuts.” It’s not even close to the reality we face as a nation when it comes to the need for real cuts to address our federal debt.

Obama even offered new government spending initiatives such as pre-kindergarten, climate change legislation, and more federal “jobs” programs. Obama called for tax reform too, embracing further tax increases for the productive sector and the savers and investors. It’s a far cry from the president’s promise to cut the deficit in half by the end of his first term in office. Instead, it has increased by $6 trillion under his watch.

Our federal spending is increasing poverty and government dependence. It is making us poorer and crippling future economic opportunities for Americans. The president missed the grand opportunity to address the reality of the crisis we face. He intoned that, “deficit reduction alone is not a spending plan.” True enough, but increased government spending and the inability to deal with spending is the grand failure of Washington and both political parties.

In the GOP response, it may be that Marco Rubio struck a much too partisan tone and appeared just to be reacting out of opposition to the president. I thought Rand Paul, with his tea party response, struck the right chord and spoke the truth about the monumental crisis we face. He cut through the spending problem directly stating, “Every debate in Washington is about how much to increase spending – a little or a lot.” He directly addressed the deeper obligations of government within the constitution and should receive credit for laying out the problem, even if you don’t agree with how he wants to address it.

Bobby Jindal, Louisiana’s Governor, made a powerful point too after the president’s remarks about the shifting of greed to the government sector. The larger point is that the private sector is dwindling in significance, and being swallowed by government growth and strangulation. Unfortunately, as a nation, right now, there is not enough collective courage and responsibility to deal with the reality in Washington.

A recent Rasmussen poll reflects what many are feeling in this country, a deep disconnect with Washington and its leaders. According to the polling firm,

The number of voters who feel the government has the consent of the governed – a foundational principle, contained in the Declaration of Independence – is down from 23% in early May and has fallen to its lowest level measured yet.

Seventeen percent of likely U.S. voters think the government has the consent of the governed and Congress has a record low approval rating with only 6 percent ranking their performance as “excellent” or “good.”

The problem is exacerbated by the massive concentration of power in the Beltway. The model of federalism put forth by the Founders seems like a dim memory. Former Speaker of the U.S. House Tip O’Neil famously declared “All politics is local.” The quote has a wide breadth of meaning for elected officials at all levels of government. But concentrated power is raising the partisan stakes as the jostling for entrenched power gets uglier. So much so, that politicians are now calling concerned citizens sounding the alarm on federal spending “terrorists.” Not only is the virtue of self-restraint dismissed when it comes to spending, but it is similarly dismissed when it comes to rhetoric.

Below is an August 1 clip that aired on ABC World News Tonight that speaks to this disconnect, especially felt by middle America or as some dismiss simply as “Flyover Country.” It is making the famous quip by William F. Buckley that “I would rather be governed by the first 2,000 people in the Boston telephone directory than I would be by the 2,000 people on the faculty of Harvard University” all the more relevant.

Blog author: jmeszaros
Wednesday, July 20, 2011
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John Boehner recently stated, in the debt-ceiling talks, that “We’re going to continue and renew our efforts for a smaller, less costly and more accountable government,” which most Americans agree with in principle.  However, citizens say that keeping benefits the same for the three big programs, Social Security, Medicare, and Medicaid, is more important than taking steps to reduce the budget deficit by a margin of 60 percent compared to 32 percent for Social Security, 61 compared to 31 percent for Medicare, and 58 compared to 37 percent for Medicaid.

So Americans purportedly want thriftier government, but still want benefits? What gives?  Part of the problem, according to James Kwak, is “the idea that there is one thing called ‘government’–and that you can measure it by looking at total spending–makes no sense.”

What Kwak means is that total expenditure is a misleading measure of the “size” of government. He presents this example:

The number of dollars collected and spent by the government doesn’t tell you how big the government is in any meaningful sense. Most government policies can be accomplished at least three different ways: spending, tax credits, and regulation. For example, let’s say we want to help low-income people afford rental housing. We can pay for housing vouchers; we can provide tax credits to developers to build affordable housing; or we can have a regulation saying that some percentage of new units must be affordably priced. The first increases the amount of cash flowing in and out of the government; the second decreases it; and the third leaves it the same. Yet all increase government’s impact on society.”

So increased spending (or decreasing it) does not necessarily mean the “size” of government has grown (or shrunk). Think how regulation is synonymous with big government, but it does not involve a tax or direct spending of any kind.

In fact, “big” government is often viewed through the lens of regulation, rather than cost. For instance, Kwak explains:

When people say government is too big, they often have in mind something like the Consumer Financial Protection Bureau–a regulatory agency that tells businesses what they can and can’t do…the CFPA’s budget is about $300 million, or less than one-hundredth of one percent of federal government spending.”

Again the divergence between cost and “bigness” is seen.  The CFPA may be viewed as “big,” intrusive, and unnecessary but it is not large in terms of cost like Social Security and Defense spending.

Kwak states, “popular antipathy toward the regulatory state has been translated into an attack on popular entitlement programs.”  Many people dislike certain government regulations and, due to the budget debate, dislike of regulation, the amount of government spending, and specific government programs may have become accidentally intertwined.

As mentioned before, Americans view Social Security, Medicare, and Medicaid as important and worth preserving.  Kwak elaborates: “Rationally speaking, your opinion about Social Security or about Medicare should be based on how much you put in and how much you get out–not on the gross size of the program, and not on how big the rest of the federal budget is. Yet instead the total size of the budget has become the driving force behind potential structural changes in Social Security and Medicare.”

Kwak suggests that “we should make decisions on a program-by-program basis, just like a business is supposed to do.”  His advice is: “If there’s a program that the American people, through our democratic system, agree will provide benefits greater than its costs, we should do it, independently of the existing spending level. And if there’s a program that isn’t covering its costs, we should kill it.”

Instead of focusing on a generality, “government size”, our elected officials should evaluate programs on a cost-benefit level.  Then government agencies that are viewed as too costly or intrusive (the CFPA) could be eliminated and government programs that are viewed as beneficial (SS, Medicare), but need reform, can be focused on in an unbiased way and not be harmed by the “too big” generality.

Jordan Ballor, in a blog post for Acton, wrote: “All government spending, including entitlements, defense, and other programs, must be subjected to rigorous and principled analysis.”  Indeed, although the American people think Social Security, Medicare, and Medicaid are beneficial, 52 percent think Social Security needs significant reform, 54 percent think Medicare needs reform, and 54 percent, likewise, for Medicaid.  However, without having a clear definition of what “too big” means, successful retooling will be difficult to achieve.

Ballor added: “This means that the fundamental role of government in the provision of various services must likewise be explored. This requires a return to basics, the first principles of good governance, that does justice to the varieties of governmental entities (local, regional, state, federal) and institutions of civil society (including families, churches, charities, and businesses).”  True reform requires not simply legal and budgetary change, but a reevaluation of what entities perform certain services, as Ballor suggested.

The Acton Institute is committed to real budget reform, and, to make sure that programs, like Social Security, are evaluated fairly and reformed properly, the United States should make sure it clearly defines the costs and benefits of individual programs before taking drastic action.

Blog author: jmeszaros
Friday, July 15, 2011
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This is a fun, little online game from the American Public Media group called “Budget Hero.”

It is described by the organization as follows:

Budget Hero seeks to provide a values- and fiscal-based lens for citizens to examine policy debates during this election year.  Partisan messages tend to cloud the real issues at play during campaigns, and most candidates are loath to attach detailed financial impacts to solutions which make up their platform.  Budget Hero provides an interactive experience involving policy options that have been extensively researched and vetted with non-partisan government and think tank experts to enable players to objectively evaluate candidates.”

Click here to play “Budget Hero” on the American Public Media site.