Posts tagged with: spending

Blog author: jballor
Tuesday, April 1, 2008

Last week the Providence Journal ran a piece by me on the forthcoming “rebate” checks from the government intended to be an economic stimulus, “The mandate is to ‘spend all you can’.” I take issue with the idea that the government gives us money that is our own in the first place, and then tells us how we ought to spend it: on consumables and retail goods to spur growth in the economy.

Instead, I propose that people “should use this rebate money as they see fit, since they are the ones most familiar with their own situations and their own needs. Consider giving part of the money to charity or saving, paying off debt or investing. And if it makes sense for you and your situation, you should feel free to buy that hi-def TV if you so desire.”

“But you certainly should not feel obligated to do so as if mere consumption is a civic responsibility,” I add.

The real problem with the package is that it perpetuates a view of the government’s role in the economy as the final arbiter of how markets ought to work and what people should be doing with their money. No doubt this is in part a response to the idea that the federal government in general, and the president in particular, has a primary formative influence on the shape and health of the nation’s economy.

Alasdair MacIntyre puts it this way,

Government insists more and more that its civil servants themselves have the kind of education that will qualify them as experts. It more and more recruits those who claim to be experts into its civil service…. Government itself becomes a hierarchy of bureaucratic managers, and the major justification advanced for the intervention of government in society is the contention that government has resources of competence which most citizens do not possess.

Thus comes the idea that the president is a kind of “economist in chief,” who directs the nation’s and the world’s markets by executive decree (compare that idea with the presidential job description given by the Concerned Women for America here).

Update: It’s 3 am…and this time the crisis is economic…

Of course, if we’re really concerned about someone answering a phone in a crisis, maybe we should elect a Wonder Pet:

Blog author: jarmstrong
Wednesday, May 23, 2007

Both of our major political parties have missed what seems so obvious. One says that we need more tax cuts to strengthen the economy. This is correct. The problem is that they are not willing to also make serious budget cuts. That party has spent more than any previous administration. The other political party wants to expand federal government by spending more of our money by raising taxes. The first plan helps the economy in the short run but not in the long term. The second is an even worse disaster I think.

Look, budget deficits are not a good thing, at least not in my simplistic understanding of economics. What individual would decrease their revenue, at least for the short term, and then also increase spending, for the long term? I know, cutting tax rates generates more money in the long run and thus the government benefits. I agree with that proven principle. Ronald Reagan advanced it and to the astonishment of all his enemies it worked.

What I do not think is a proven fact is that you can keep raising government spending, so as to increase deficits, and not someday have to "pay the piper." The late Milton Friedman, a hero of mine, continually noted that the burden of government is best measured by the level of our spending, not by the level of our tax rates. John Stossel pointed this out very clearly in his syndicated column that appeared in my paper today.

Here is the bad news. Your FICA and Social Security taxes currently exceed the expenditures of these programs. But by 2017 or 2018 this will all change when the baby boomers start to retire in massive numbers and begin to drain the system. Stossel gives President Bush some credit for the falling deficit because of his tax cuts. This plan has shrunk the deficit, at least to some extent. Cutting taxes and cutting deficits are not opposites. Both can and should be done. There is enough blame to go around in Washington. I want to decrease tax rates even further but I also want to seriously decrease federal spending.

John Stossel notes that the anti-Federalist writer Melancton Smith (1787) wrote: "All governments find a use for as much money as they can raise." That is the real issue and few will admit it, whether Republicans or Democrats. One party generally does a better job with this issue than the other but the difference is more one of degree than of deep and true principle, or so it seems to this amateur. I am open to seeing this differently but I think the obvious is pretty obvious. We need to grow the economy, allow people to keep their own money so they can spend it and create new jobs, and limit the role of government in solving every social ill we face. I believe there are some pressing issues that demand federal solutions. I am not a libertarian Luddite. But I also believe that at some point we had better face this deficit issue and slow spending or we will soon face financial and social chaos like we have never imagined.

John H. Armstrong is founder and director of ACT 3, a ministry aimed at "encouraging the church, through its leadership, to pursue doctrinal and ethical reformation and to foster spiritual awakening."

Blog author: jarmstrong
Tuesday, December 19, 2006

There can be little doubt that one of the greatest political and economic problems in the US is the way that our Congress “earmarks” billions of dollars for special projects that benefit lawmakers in their bid for personal security and re-election.

The system works in a very straightforward way. Congress can pass massive spending bills and all the while representatives can add “earmarks” that benefit projects and people in their district or state. It is a form, quite often, of legal payback for favors rendered to the elected official. President Bush asked Congress, in his last State of the Union address, to give him a line-item veto. Don’t expect it to happen soon. The idea makes perfect sense really, and it has been done in several states, so why am I so pessimistic about the prospects? The simple answer is plain to see—both parties have found that it pays to spend money in this less accountable way. Incumbents use it to gain favor and to stay in power. Everyone knows that over 95% of the incumbents in the US House are re-elected every two years. Why fix a system that benefits those who are being asked to fix it? Supposedly smaller-government Republicans should favor this idea but many are just as adept at this “earmark” business as the most liberal Democrats.

All the recent talk we’ve heard about reforming the system is really not very impressive when you look at what really happens in Washington. But there have always been a few leaders who have risen above this type of spending and shown themselves to be consistent in their service of the common good of all the people. Michael Reagan recently told the story of how a wealthy businessman in California came to see his late father one day when he was running his first campaign for governor in the 1960s. The man left a paper bag with $40,000 on Reagan’s desk saying, “This is for you.” Reagan took the bag and threw it at his friend and walked out of the room. Later Reagan told this man that if he wanted to make a contribution to his campaign he should send the gift to his campaign committee. And he warned his friend to never try this stunt again, telling him that if he were elected governor the man should never expect to get a single favor from Reagan.

One could wish for more people like Ronald Reagan in public leadership. I think we call this integrity. The lack of such integrity is frankly harming all of us. Everyone knows that this growing practice of budget “earmarks” is called “pork.” Frankly, calling it pork is a disgrace to pigs, who have higher standards that many of those who spend public money to secure their spot in Congress. In a very real sense I call it “legalized bribery.” I pray for the day when the public has had enough of this and pressures Congress to clean up this mess. Changing parties in the last election cycle will not likely change the culture in Washington. We need something much bigger and stronger to do that. I would suggest that what we really need is leadership with courage and vision.

John H. Armstrong is founder and director of ACT 3, a ministry aimed at "encouraging the church, through its leadership, to pursue doctrinal and ethical reformation and to foster spiritual awakening."

Blog author: jballor
Tuesday, December 12, 2006

As noted at WorldMagBlog (among many other places), the incoming Democratic majority in Congress is suspending the process of earmarking, at least temporarily.

Rep. David Obey, D-Wis., and Sen. Robert Byrd, D-W.Va., the incoming chairmen of the House and Senate Appropriations committees, have pledged that “there will be no congressional earmarks” in the upcoming budget.

Earmarks will be available again in the 2008 budget cycle, after “reforms of the earmarking process are put in place.” There’s a lot of smoke right now around the talk of earmark reform. We’ll see next year whether there’s any fire.

Last month Tom Schatz, president of Citizens Against Government Waste, said that making lasting earmark reform will be difficult: “There are three parties in Washington: Democrats; Republicans; and appropriators,” CAGW President Tom Schatz said. “Democrats should expect any serious reform efforts to meet stiff opposition from appropriators who have no qualms about breaking party lines, or the bank, to keep their pork.”

According to CAGW, Rep. Obey has appropriated over $5.5 million in pork since 2005, and has a lifetime rating of 19% or “hostile.” Sen. Byrd, meanwhile, is crowned “The King of Pork” with a rating of 17% and a tally approaching $1 billion in pork since 2000. More on “the King” here.

It’s an open question, then, whether Byrd’s and Obey’s commitment to real reform is authentic.

In the meantime, I recommend checking out other resources at Citizens Against Government Waste.

Blog author: jballor
Tuesday, January 24, 2006

“The political left in America is emerging victorious,” writes Patrick Chisholm, and its true because “the era of big government is far from over. Trends are decidedly in favor of that quintessential leftist goal: massive redistribution of wealth.”

Over the past two decades, “Republicans’ capture of both Congress and the White House was, understandably, a demoralizing blow to the left. But the latter can take solace that “Republican” is no longer synonymous with spending restraint, free markets, and other ideals of the political right.”

Chisholm cites the fact that since 2000, “During the first five years of President Bush’s presidency, nondefense discretionary spending (i.e., spending decided on an annual basis) rose 27.9 percent, far more than the 1.9 percent growth during President Clinton’s first five years, according to the libertarian Reason Foundation. And according to Citizens Against Government Waste, the number of congressional ‘pork barrel’ projects under Republican leadership during fiscal 2005 was 13,997, more than 10 times that of 1994.”

And that’s just the tip of the iceberg, since “discretionary spending is dwarfed by mandatory spending – spending that cannot be changed without changing the laws.”

Read the whole thing: “Triumph of the redistributionist left.”