Posts tagged with: national debt

In my commentary this week, I reflect on the unemployment rate of many newly separated military veterans of our Armed Forces. The grim jobs outlook affects our reservists and National Guard forces too. As You Were, a book I reviewed on the PowerBlog in late 2009, touched on this topic quite a bit.

My first job out of college was working on veterans issues for former Congressman Gene Taylor (D-Miss.) I was able to meet and get to know combat veterans from battles like Okinawa, the Chosin Reservoir and Khe Sanh. It was a rewarding and educational experience.

I suspect we will hear more from Washington about how to solve this problem with additional centralized government action. But we already have real commitments and promises to veterans that must be honored and a debt of $15 trillion and growing that is staring down at us. My commentary is printed below in its entirety.


Playing Politics with Unemployed Veterans

Getting the U.S. economy back on a path to solid growth and the job creation engine jumpstarted is dominating the headlines, talk shows and policy debates in Washington right now. Many of the legislative prescriptions focus on the dismal unemployment woes of newly separated military veterans, whose rates outpace the civilian population. The troubling figures reveal a persistently bleak and stagnant economy.

National unemployment currently hovers around 9 percent, while unemployment for veterans of the Afghanistan and Iraq wars is more than 13 percent. Veterans in the age group of 18-24 are worse off, with an unemployment rate of 30 percent. Dead last in the Union is Michigan, where 30 percent of all former service members are unemployed.

These numbers may only get more discouraging as defense budget cuts push more and more from the active duty ranks into a weak job market.

Federal legislation passed at the end of last year seeks to address the problem with tax credits for companies who hire veterans. The measure could help some, but tax incentives like these generally offer no substantial improvement for removing people from the unemployment rolls.

Better immediate solutions would be omitting special licenses and training required by states to work in certain fields. There is no reason a combat medic in Iraq should not be able to work as an emergency medical technician. Many already have more training than their civilian counterparts do.

In his election-year State of the Union address, President Barack Obama painted a vision of a post-WWII society where triumphant veterans came back and created the strongest economy in the world. In his words, they understood that they were “part of something larger.” Part of that “something larger” after the defeat of fascism was a growing free economy, but they also faced a long twilight struggle against the spread of communism.

To restore prosperity today, President Obama called for a “common purpose” to rally behind. But the obvious common purpose, the reduction of the staggering national debt, was largely ignored by the commander-in-chief during his address. For the unemployed, all Americans, and a free economy, the debt is the largest obstacle to restoring prosperity and reawakening the most expansive economy the world has ever seen. The failure of the American government to live within its means threatens to eviscerate the promises made to America’s veterans. It is a classic case of one moral failing leading to another.

The “something larger” greeting veterans when they come home today is a national debt of more than $15 trillion and an economy burdened by more and more regulations. The White House has already requested a debt ceiling increase to a whopping $16.4 trillion dollars. So great is the obstacle, and so serious is the threat, Indiana’s governor Mitch Daniels dubbed it “the new Red Menace.”

The threat to veterans is substantial. Although veterans’ benefits are justly generous, the government’s fiscal crisis has put those guarantees at risk. Last year, for the first time, some in Washington talked about the necessity of trimming promised pensions and health benefits for military retirees. Politicians are playing politics with veterans when they talk of reducing promised benefits with one side of their mouth and say they are creating jobs for veterans with the other.

Older military retirees can remember a time when they counted on the promise of free health care for life. Many sacrificed more lucrative private sector careers, nonpayment for overtime, and additional time with their family because of patriotism and promised security. Now they pay premiums for their care.

Thomas Jefferson warned of the moral pitfalls and decay of debt when he said, “The earth would belong to the dead and not to the living generation.” Profligate spending in the past undermines our capacity to honor present commitments.

With their skills, work ethic, and patriotism, veterans have the ability to overcome the challenges confronting them. Most businesses and companies want to hire veterans. All they need is some assurance that their prospects going forward will not be dimmed by burdensome regulation or economic instability stemming from federal fiscal irresponsibility.

Washington does not understand there is little to be done in terms of a prescriptive policy to cure veteran unemployment. The oft forgotten Calvin Coolidge once warned, “Unsound economic conditions are not conducive to sound legislation.”

The best cure is still a market unleashed from needless regulation and spending policies that reflect a moral and rational resolve. In the end, a federal government that is broke can do little for veterans who earned and are entitled to benefits already promised.

The Keynesians will have little to cheer about in this story. Yesterday I saw this report from CNN Money that said U.S. consumer credit card debt fell by 11 percent in 2011. Mississippians led the Union by reducing their card balance by 23 percent. While total household debt fell by only 1 percent last year, it is still a towering accomplishment when compared to the U.S. federal debt increase.

This is exactly the point Jordan Ballor and I made in our 2008 commentary “The Fiscal Responsibility of Mall Rats and Bureaucrats.” In that piece, we pointed out that the federal government is a significantly poorer steward of our resources when put up against the supposedly “materialistic” and “selfish” consumer.

The inability of the federal government to curtail spending should be considered a form of insanity when one simply looks at the numbers. Instead, as I pointed out before, government spending is now so sacred for some in the religious community, it is a shrine that must be encircled.

Mark Tooley has an excellent write up over at FrontPage about religious left figures staging martyr like arrests in defense of tax increases, unsustainable deficit spending, and the welfare state. Here are some details provided by Tooley:

Religious Left officials on July 28 successfully sought arrest for “faithful civil disobedience” in the U.S. Capitol Rotunda to protest any consideration of limits on the Welfare and Entitlement State. They were also demanding tax increases. Unlike more courageous and spiritually insightful fellow believers imprisoned in Iran, China, and North Korea, these U.S. activist prelates were presumably arrested, booked, bonded and released back to their nearby air-conditioned offices in time for posting fresh news releases.

Arrestees included United Methodism’s chief lobbyist Jim Winkler; former United Church of Christ President Paul Sherry; and multi-faceted Bob Edgar, himself an ordained United Methodist, former NCC general secretary, former Democratic congressman from Pennsylvania, and now chief of the liberal advocacy group Common Cause, the secular chief organizer of the “prayer” witness at the U.S. Capitol.

In a previous post, I pointed out the fact that just one example of government becoming so mammoth is that it now has self-appointed clergy over a flock of bureaucracy. They are declaring the bureaucracy sacred. Tooley’s use of “photo-Op” and “martyrdom” in the title of the piece is entirely appropriate and fully exposes the sadness and hollowness of staging civil disobedience for a broken and bankrupt bureaucracy.

For these mostly white and aging baby boomers, trying to recreate the courage of the civil rights movement of the 1950s and 1960s is foremost. However, it will never be actualized by defending a broken system and by looking to the failed policies of the past. One of the strengths of Dr. Martin Luther King was borrowing from the richness of the American narrative history of freedom and Scripture and using it to expose the weakness of a bankrupt system of injustice that was of the past. Bankrupt is bankrupt.

At least from their perspective, these budget busting pastors will keep evangelizing and suffering for more government as faithfully as those who toil for the souls of the lost in mission fields.

In my 2009 commentary addressing the nation’s debt crisis I included words from Admiral James B. Stockdale. The full quote comes from an essay on public virtue from the book Thoughts of A Philosophical Fighter Pilot. In his 1988 publication, Stockdale declared:

Those who study the rise and fall of civilizations learn that no shortcoming has been surely fatal to republics as a dearth of public virtue, the unwillingness of those who govern to place the value of their society above personal interest. Yet today we read outcries from conscientious congressman disenchanted with the proceedings of their legislative body and totally disgusted with the log-jamming effect of their peers’ selfish and artful distancing of themselves from critical spending cutbacks, much needed belt-tightening legislation without which the long-term existence of our republic itself is endangered.

The religious left, on cue, descended to the temple of irresponsible spending to circle the sacred debt wagons. I’ve already addressed the problems of baptizing Christ into the big government for the poor mantra. Just to briefly add to that, we have a $1.5 trillion deficit this year alone. Our total national debt is just over $14.5 trillion. The annual federal budget was $1.86 trillion in 2001. This year the budget is estimated to end up at $3.82 trillion. For the mathematically challenged prophets circling Washington, that number has more than doubled in one decade.

Is robbing our citizenry and its future inhabitants of opportunity the best we can do for the poor and for the common good? Is the crumbling failed experiment of government as overseer and caretaker the best the nation has to offer those who are marginalized and need help? Because if the answer is feeding a government that has grossly mismanaged all the income it collects by continually extending its credit limit then we suffer from the poverty of sense and ideas.

If it is not the answer, then unfortunately some clerics in Washington are using the poor as pawns or calves in their temple sacrifice to protect their ideological god who needs another “revenue” boost before it comes crashing down like a toddler after a sugar high. The fact that so many religious leaders are stoked up about necessary budget cuts only serves as a reminder of just how big, bloated, and politically useful big government has become.

Blog author: jmeszaros
Wednesday, July 20, 2011

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: rnothstine
Tuesday, June 21, 2011

We’ve all heard of presidents, governors, and other civil leaders calling citizens to prayer in times of great need. In April, Texas governor Rick Perry called on his citizens to pray for rain because of an extreme drought.

It looks like the mayor of Harrisburg, Pa. is about to embark on a three-day fast and prayer practice for help with the city’s bleak budget deficit. The idea of the fasting and prayer is meant to help unite citizens to solve the crisis. Bravo, if that is the case. One would have to be concerned though if religion is invoked to avoid the hard choices facing government everywhere and it morphs into the ideological “What Would Jesus Cut?”

In a news story on the city’s prayer and fast effort, a local pastor explained:

The Rev. Herb Stoner, pastor of adult training at Christ Community Church of Camp Hill, said the answers to problems in Harrisburg and the region won’t be found in the wisdom or ability of humans.

This much is true, given the financial hole leaders of the city have dug for its citizens. I suspect we might see even more calls for divine help with the debt crisis, as it becomes even more apparent how serious and distressing it is for most of the people across this land. In a speech earlier this year, Indiana Governor Mitch Daniels called the federal debt “the new red menace.” If the comparison rings true, history tells us it will require colossal sacrifice and resolve to combat the national debt.

This week’s Acton Commentary:

Deficits, Debt, and Self-Deception

By Samuel Gregg

It passed almost unnoticed, but in late July the Obama Administration raised the Federal Government’s budget deficit forecast for fiscal year 2011 to $1.4 trillion. That’s up from February’s forecast of $1.267 trillion. In July alone, the Federal Government’s deficit was $165 billion, of which $20 billion was for interest-payments on debt.

The long-term outlook is even worse. The U.S. Government is now borrowing approximately 41 cents of every dollar it spends. It’s also predicting additional borrowing of $8.5 trillion until 2020. If that eventuates, America’s national debt would exceed 77 percent of its annual economic output.

At some point, most of us become dazed by all these numbers that track America’s upward spiral of debt. This numbness is only exacerbated by the fact that government debt-excesses in most developed countries have been matched and even surpassed by household and financial-sector debt.

In Spain, for instance, household debt rose from 69 percent of disposable income in 2000 to 130 percent in 2008. Britain was worse, with the ratio rising from 105 percent to 160 percent over the same period. Average American household debt increased from $27,000 in 2001 to $44,000 today.

The economic effects of servicing all this debt (let alone paying down the principle) are not hard to grasp. For many households, it means either bankruptcy or severe curtailing of lifestyles so that expectations match people’s actual incomes. For others, it translates into less access to credit, even for those with good credit records or well-conceived business plans that need only sufficient capitalization to succeed. The cost of servicing government debt also reduces the amount of private sector capital available for investment. This means slower growth which further impedes our ability to shrink government deficits. (more…)