Posts tagged with: government spending

In yesterday’s edition of the Grand Rapids Press, editorial page editor Ed Golder reflects on the implications of the historically-high levels of government spending, the deficit, and debt.

Most impressively, Golder notes where the government is actually spending money, and it is largely not in the areas of discretionary spending that so many politicians like to talk about. Golder writes,

Neither party is forthrightly honest about what needs to be done. Making the necessary cuts touches on very large and politically sacrosanct programs. About one fifth of federal spending, for instance, is defense. Can we seriously tackle the budget without looking at some prized weapons programs?

And the biggest category of spending, the one growing at the fastest rate, is entitlements – Medicare, Medicaid, Social Security and health insurance for children.

We may have to accept the idea that rich people will pay more than poorer people for medical coverage. We will almost certainly, given life expectancies, have to work longer before receiving Social Security benefits.

Reform of defense spending is important. But the real key is entitlement reform. I’ve often thought that one lasting legacy of the Bush era (beyond the wars and the Great Recession) is found in his insistence on bringing to the national discussion the issue of entitlement reform, particularly Social Security. He wasn’t successful, but it did show some principled political courage to make Social Security reform a major policy goal of his administration.

Golder also relates this entertaining little anecdote:

Speaking to the Economic Club of Grand Rapids Monday, financial forecaster Jason Trennert, was asked by an audience member to handicap Washington’s ability to make meaningful headway in tackling the debt. He wryly quoted theologian Augustine of Hippo, who famously quipped, “Lord make me chaste, but not yet.”

In other words: Sure, we’ll reform. Tomorrow.

Tomorrow’s here. Heck, tomorrow may be yesterday at this point.

That’s one other legacy of the Bush era that we are living with, the legacy of the mantra, “Lord, make me thrifty, but not yet.” That goes for the politician as well as for the citizen.

Golder rightly concludes by pointing to the need for leadership on these pressing fiscal issues. We’ve gotten to this place largely because of a lack of political leadership. “Our leaders have to talk frankly about what needs to be done – programs that will be cut, individual sacrifices that will have to be made,” writes Golder.

Instead of statesmen we’ve been electing those who could bring home the most pork for their districts and constituencies, damn the consequences. That needs to change, and it begins in the renewal of leadership in other spheres of social life, including the family, business, charity, education, and so on.

Blog author: ken.larson
Friday, February 19, 2010
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Jordan Ballor’s recent post “What Government Can’t Do” contained a quotation from Lord Acton worth revisiting:

“There are many things the government can’t do – many good purposes it must renounce. It must leave them to the enterprise of others. It cannot feed the people. It cannot enrich the people. It cannot teach the people. It cannot convert the people.”

On February 18th Barack Obama announced a “Debt Panel” – officially termed a Bipartisan National Commission on Fiscal Responsibility and Reform – to be headed by former government veterans Alan Simpson of Wyoming and Erskine Bowles of the Clinton White House years by way of Morgan Stanley; and the university at Chapel Hill. (Wiki terms Bowles an “American Businessman” but the only business he’s been in is financial services. Bankers are money lenders. I know it’s a peculiar distinction but that’s hardly on a par with entrepreneurial spirt or creating wealth with an idea and a lot of sweat.) Bankers use OPM — other people’s money — and put it out for a fee.

Obama wants the debt panel to come up with a solution for dealing with too much government outflow versus what citizens are willing to pay in taxes. It’s a CYA venture and the two guys “leading” the discussion and the fellow appointing them are illustrative of what is wrong with what passes on multiple levels for both elected and hired government leadership in The United States of America these days.

The conceit that brings us debt panels starts with the presumption inherent in such concepts as “schools of government” that are fixtures in many of our leading universities throughout the country. At Texas A&M, there’s a school of public service with former President Bush’s name over the doorway. At Harvard there’s the Kennedy School of Government. At University of Maryland the department is called “Business, Government, Industry” — an interesting ordering of words don’t you think with “government” at the center. And on the left coast, The University of Southern California touts their school of Public Administration as being responsible for training more bureaucrats for city, county and state government jobs than any other in the region.

After three terms in the U.S. Senate Alan Simpson left to take a job as lecturer and Director of the Institute of Politics at Harvard’s Kennedy School whose mission is “studying public policy and preparing its practitioners.” They boast 27,000 graduates in 137 countries. The effort was “born in the midst of the Great Depression and on the eve of World War II. As government grappled with historic challenges both domestic and international” and no doubt has helped bring us such innovations as The World Bank and other drains on our national checkbook.

The cumulative graduate classes from these places has contributed to the burgeoning number of municipal jobs throughout our country. Think about the job fair at your kids’ high school. How many private businesses were there? Okay, maybe a major aerospace company came or JOHN DEERE, but mostly these assemblies are catered by the police and/or fire departments, local public works departments, a county hospital, or Teach for America. The private sector is conspicuous in its absence and that’s too bad because I think it’s one of the reasons the size of government and government’s workforce has become so large, intrusive and demanding on our nation’s treasure.

In a recent post former Bush guy Rich Galen puts the total cost of running Congress at $4,656,000,000 per annum and moans that they can’t or won’t do their job. I did some research last year and was told by the Congressional Budget Office that annual operating costs of the Senate is $800 million and the House $1.2 billion plus security. That’s half of what Galen writes but if you do the math even with the smaller number you get $3.7 million per Congress member. They make over $175,000.00 a year. In fact 19% of all federal employees make over $100K per year. In Los Angeles, California more than a dozen City Council members make $195,000 annually and the city is going broke.

In a neat little book titled Liberty And Learning, author Larry Arnn chronicles among other things, The Northwest Ordinance of 1787 and The Homestead Act in an effort to illuminate the importance of education to the American Founders. He adroitly makes the point that education was never given the high priority it had in the Founder’s lives in order to “provide skilled workers for a changing economy” or insure that citizens would “make more money.” Education, especially knowledge and understanding of this nation’s founding principles was acknowledged by the Founders to be a prerequisite for the insurance of individual freedom and their constitutional republic.

But where are we in this? In the shame of survey and test results such as provided by Intercollegiate Studies Institute that testify to our Civic Illiteracy, many citizens vote present at a time when our nation’s economic and spiritual solvency are at risk. And every day we are told by a fawning news media that Obama and his administration – which does not include one high level official formed by some private sector experience – are the most intelligent assemblage in our country.

Recently I had the chance to read and discuss a story by Flannery O’Connor – The Enduring Chill. In the story a 25 year old son named Asbury has returned to his mother’s farm from an attempt as a writer in New York. There’s an older sister. He’s sick and if you know O’Connor you’re likely to be able to guess what’s missing in his life. While they wait for a country doctor to examine Asbury and make a prognosis the narrative provides us this:

When people think they are smart – even when they are smart – there is nothing anybody else can say to make them see things straight, and with Asbury, the trouble was that in addition to being smart, he had an artistic temperament. She did not know where he had got it from because his father, who was a lawyer and businessman and farmer and politician all rolled into one, had certainly had his feet on the ground…. She had managed after he died to get the two of them through college and beyond; but she had observed that the more education they got, the less they could do.

I think we have to do more for ourselves. And it needs to begin NOW.

In this week’s Acton Commentary, I argue for simplifying the tax code. It should also be evident that any sort of tax reform should coincide with reforming the way Washington currently operates when it comes to spending.

April 15th is of course tax day, and national protests will also be occurring across this nation under the historically significant title of “tea parties.” One of the points I made in my piece is that it is important that these protests are not just a partisan vessel for bomb throwing and another opportunity to just recite talking points. I think people of most political and ideological persuasions can agree that government spending is out of control. It’s hard for numbers to lie. Repackaging partisan characters who have a large hand in the spending crisis won’t be very effective. Fortunately I think some of the organizers understand this.

Back to the tax code, much of my thinking on this issue can be summed up by noting the tax code is only a very visible problem or symbol of the larger crisis, which is government spending and a never ending need for more revenue. In regards to the lobbyist and special interests, there is a great quote I didn’t include in my commentary that is worth mentioning. In an article written by Bill Theobald titled “Budget 101: easy to spend, tough to tax,” University of Cincinnati professor of Law Paul L. Caron says of tax reform:

Major tax reform is possible in our system, but only if it is truly so fundamental that it creates a constituency greater (in the politicians’ eyes) than the special interests that would be hurt.

Blog author: rnothstine
Tuesday, February 17, 2009
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In response to the question, “What are the moral lessons of the American Recovery and Reinvestment Act (ARRA)?”

One of the gravest moral issues related to the American Recovery and Reinvestment Act is the matter of dangerous deficit spending. Anybody plugged into our nation’s financial crisis is likely aware of the unsustainable spending path of not just the federal government, but individual states as well. Because many states have balanced budget amendments, they are not entitled to run deficits, so the federal government proposes bailouts, which comes at an even greater cost to taxpayers from fiscally responsible states. One can easily see how policies like these only encourages irresponsible government spending policies.

Dr. Samuel Gregg, who is the director of research at the Acton Institute, touched on this subject and a number of important topics concerning the financial crisis in his recent address “America’s Economic Crisis: Looking Back, Looking Forward.” Offering a scathing critique of Keynesian economic policies, Dr. Gregg directly addressed the moral aspect of deficit spending:

We have every reason to believe that deficit spending on the scale being contemplated is addictive and difficult to stop. Because once we see that the various ways of ‘jump-starting’ the economy do not spark an economic revival, we will undoubtedly be told that the stimulus was not big enough, and that more deficit spending is required. More and more capital will thus be placed in unproductive spending.

The cost of deficit spending is often passed on to future generations. In other words, we force future generations to pay for the sins of the present.

Deficit spending can imply the adoption of inflationary policies. Inflation is like cancer. It acts slowly but is deadly. It attacks the weaker parts of the body, and destroys the economic well-being of the poor, such as those on pensions or other fixed incomes. But I also think that inflationary policies are morally wrong. Why? Because when you inflate the currency, the value of people’s assets is reduced. In other words, once a government introduces inflationary policies, it reduces the value of the assets that people already own. People who work hard to build up the value of their business or property suddenly find that the government has diluted the value of their asset.

In talking to my pastor about these issues a few weeks ago he reminded me of the inscription on the Liberty Bell from Leviticus, “Proclaim liberty throughout all the Land unto all the Inhabitants thereof…” My pastor also reminded me of the meaning of the verse saying, “The passage speaks about the Jubilee year when the Lord forgave people of their debts and sins and allowed for a new beginning of freedom from the slavery debt brought.” And that is a reminder of a subject Dr. Gregg also spoke so well about during his lecture, and that is the moral failings of those on Main Street and Wall Street. If we are going to see fundamental reform of spending in the nation’s capital and beyond, we need to as families and individuals have a moral aspect to our own spending and budgets.

“Government budgets are moral documents,” is the often quoted line from Jim Wallis of Sojourners and other religious left leaders. Wallis also adds that “When politicians present their budgets, they are really presenting their priorities.” There is perhaps no better example of a spending bill lacking moral soundness than the current stimulus package being debated in the U.S. Senate.

In my commentary this week, “The Moral Bankruptcy Behind the Bailouts,” I offer clear reasons how spending more does not equate to morality, but quite the opposite in this case.

In fact, among many believers it seems that Christian thrift is lost as a value altogether. We forget how important financial responsibility and thrift was to the entire Christian tradition as important evidence of outward faith and devotion. Jordan Ballor offers some great words in his own commentary last year titled “The Fourth Pillar of the New Economy: Spend all you can:”

The eighteenth-century theologian and pastor John Wesley once preached that we should “earn all you can, save all you can, and give all you can.” Productivity, frugality, and generosity are the core moral virtues that have animated prosperous and free economies in the West for centuries. But now the federal government seemingly wants to add a fourth and conflicting principle to these traditional values: “Spend all you can.”

As for Jim Wallis, not surprisingly he enthusiastically supports the stimulus package, and because of the enormous stakes involved for future generations, this shows a lack of moral judgment and courage on his part. It may also be that Wallis is hesitant to pull his support for this $1 trillion spending bill because he is afraid to go against a President that reminds him of the Prophet Nehemiah.

The Wall Street Journal offers a welcomed reminder of the value of tax revolts titled, “The Spirit of 13.” Proposition 13 is a notable property tax revolt which was led by the late California citizen Howard Jarvis in 1978. There are several books about the famed revolt and many attribute the event to helping fuel the “Reagan Revolution.”

Proposition 13 passed with 65 percent voter support, and ever since has been part of the California Constitution. As a result, property taxes were slashed by 30 percent and annual increases were capped at no more than a 2 percent increase. Retirees with limited income benefited greatly from Proposition 13. Perhaps most important, taxpayers know exactly how much to budget for their property tax. The law continues to hold very popular support among Californian voters, a state where citizens are taxed heavily already.

Still there are tax and spenders who constantly decry the lack of tax revenue, and Proposition 13 always finds its way back in their crosshairs.

A call to end poverty through more spending by the federal government is forever professed by some candidates and politicians. Maybe, they say, if just more money was appropriated and distributed this time, the results and relief for those in financial need would be conclusively different? Former President Clinton at least ran for office as a “new Democrat,” went on to declare the end of the era of big government, and signed welfare reform. Clinton was the first Democrat to win consecutive elections to the presidency since Franklin D. Roosevelt, cracking the Republican Party’s hold on the White House.

Some young voters are attracted to Democratic Presidential Candidate Barack Obama because of his call to reshape society by empowering the federal government to spend even more on poverty programs. Young voters who are inspired by religious left icons are especially enamored with this not so new idea. Some older voters and still others who know their history are understandably hesitant to continue down that well traveled road.

Stephen Malanga reminds us once again in a recent piece in the City Journal that two parent married households are well equipped to overcome this trap. Malanga goes on to remind us that until the political sphere discusses the social and cultural plagues that promote poverty, “we can’t begin to take the necessary steps to reduce long term poverty.” Beginning in the 1960’s, another Democrat, the late former Senator Daniel Patrick Moynihan raised the issue of the emerging crisis of out of wedlock births and broken families and its relation to systemic poverty.