I Agree with Sarah Palin

Betcha didn't see that one coming. She may not be right twice a day like a stopped clock, but she's right every once in awhile, so credit where credit is due:

Sarah Palin: Paul Ryan's budget is 'definition of insanity'
Palin:

Do we still not understand how dangerous it is to allow government to grow unchecked as we shackle ourselves with massive debt -- a good portion of which is held by foreign nations who don't necessarily like us? If we can't balance the budget today, what on earth makes us think it will happen at some future date? The solution is staring us in the face. We need to rein in spending today, and don't tell me there is nothing to cut when we know every omnibus bill is loaded with pork and kickbacks.

The usual disclaimers -- I don't accept the "we," "ourselves" and "us" parts, since I have neither authorized any politician to rack up debt in my name nor have any intention of accepting an obligation to pay off said debt, etc.

But as far as it goes, she's right.

Ryan's budget proposal, which the usual Democratic suspects are already busy labeling "draconian" and so forth, is the usual, completely non-serious, crap.

If the politicians want to balance the budget, here's how to do it:

1. Make a sober estimate of next year's revenues (perhaps based on last year's revenues);
2. Draw up a budget which spends less than that amount;
3. Stick to that budget unless -- and only unless -- revenue shortfalls force you to revise it downward (any unexpected revenue windfalls can go to paying down debt principal).

Yeah, it's really that simple.

Ryan's budget proposal increases spending for the next two years. Then, based on rosy revenue projections and the silly notion that subsequent congresses will consider themselves bound by Paul Ryan's plan (when in fact he won't even consider himself bound by it if he's still in Congress three years from now), it supposedly takes eight more years to hit point (2) above.

Sound familiar? It's the thing the Republicans offer up every year.

Every year, Republicans think that if they offer a budget that doesn't decrease spending for two years, the Democrats will quit whining about "draconian cuts." They should know better. To all Democrats (and most Republicans, especially if the word "defense" is mentioned anywhere in the area under consideration) any cut is "draconian." Heck, it doesn't even have to be a cut at all to be a "draconian cut" --  any proposed reduction in future spending increases is a "draconian cut" too.

Every year, Republicans promise that their proposal will balance the budget ... some day, a long time from now ... with no pain involved for anyone. Not only should they know better, they do know better. But they think you're stupid enough not to know better.

If You Thought Republicans Were for Balanced Budgets ...

... you thought wrong.

House Republicans and Democrats both have some interesting little tricks in their political bags.

The Republican trick is to propose a "moderate/reasonable" budget-balancing path, then count on all the Democrats to vote against it, so that only a few Republicans have to pretend to jump ship to kill it (after which, they blame the Democrats for its failure to pass).

The Democrat trick is to get most Democrats to just vote "present," in the hope that the Republicans will pass said "moderate/reasonable" budget-balancing path (which Democrats consider "extreme"), after which it will die in the Senate or under the president's veto stamp (and the Democrats will campaign on how "extreme" Republicans are).

This time, both plans backfired.

The Republican Study Committee proposed a "moderate/reasonable" bill to balance the budget in four years. That's four years longer than it should take, of course, but a lot less time than other plans (Paul Ryan's budget supposedly balances in ten years, and none of the Democratic plans balance at all, ever, period).

Most Democrats voted "present" in hopes of forcing the Republicans to pass the "moderate/reasonable" -- er, "extreme" -- bill. That didn't work; the bill didn't pass.

The Republicans, not having enough cover from Democrats to blame them for killing it, decided they'd rather kill it themselves than risk the slim possibility that it might ever get through the Senate and past the president.

104 Republicans voted to balance the budget in four years. 118 Republicans voted not to.  QED, at least 53% of Republican US Representatives oppose balancing the budget any time in the near future, so much so that even if they can't shift the blame for not balancing the budget onto the Democrats, they'll still vote against balancing the budget.

And that 53% is a best-case scenario -- some who voted for the bill may have actually opposed it, but knew that it could be killed without a nay vote their constituents might notice.

Even counting the Democrats who did vote, only 15 more Republican votes would have passed the bill.

So Far the Sequester Looks Better ...

... than either of the "mainstream"  alternative proposals.

US Representative Paul Ryan's Republican proposal supposedly balances the federal budget -- over ten years. But it does so by keeping the taxes associated with "ObamaCare" while not delivering the programs associated with "ObamaCare." That's right -- you have to pay for socialized health care and then you don't even get the socialized health care. Oh, and Ryan insists that the federal government must continue to spend 4-5 times the maximum imaginably plausible amount on "defense."

US Senator Patty Murray's Democratic proposal is, if anything, even less convincing. It doesn't even pretend to balance the federal budget over any amount of time, and frankly it's mostly just vivid imagination -- it counts the prospective end of the Afghanistan war and hypothetical reductions in debt interest payments as "spending cuts" on one end, and predicts nearly a trillion dollars in increased tax revenues from "closing loopholes."

A serious 2014 budget proposal would be balanced, on the basis of 2013 revenues and tax rates. Period.

A serious longer-term budget plan would include:

1) Balancing the budget each year on the basis of the previous year's actual revenues;

2) Automatic appropriation of any end-year surplus for additional debt service;

3) An assumption, until and unless evidence to the contrary arises, that the US is smack on top of/in the middle of the Laffer Curve -- and that any proposed tax increases or decreases will therefore require corresponding spending cuts.

Anything short of the above is just  middle school horseplay.

Two other Toms on the Instant Situation

"Current U.S. fiscal policy, including the recently concluded 'fiscal cliff' debt deal," writes Jagadeesh Gokale at the Cato Institute, "is placing an enormous financial burden on today'’s children and on future generations in order to deliver government benefits to current middle-aged workers and their elders." Or to put it a different way, as he does in the title of the piece, "We Are Bankrupting Future Generations."

That's a fairly common theme among libertarian commentators when it comes to government spending and government debt. For example, in a column last week, 2012 Libertarian Party vice-presidential nominee James P. Gray asserted that "[o]ur children will have to shoulder our debt during the rest of their lives ..."

Problem is, it just ain't so. I'm not saying that by way of supporting government indebtedness, but just because it's a fact. A couple of quotes from other eminent personages also named "Thomas" make it clear why:

As we are not to live for ever ourselves, and other generations are to follow us, we have neither the power nor the right to govern them, or to say how they shall govern themselves. -- Thomas Paine, Dissertations On Government; the Affairs of the Bank; and Paper Money

and ...

I suppose that the received opinion, that the public debts of one generation devolve on the next, has been suggested by our seeing habitually in private life that he who succeeds to lands is required to pay the debts of his ancestor or testator, without considering that this requisition is municipal only, not moral, flowing from the will of the society which has found it convenient to appropriate the lands become vacant by the death of their occupant on the condition of a paiment of his debts; but that between society and society, or generation and generation there is no municipal obligation, no umpire but the law of nature. We seem not to have perceived that, by the law of nature, one generation is to another as one independant nation to another. -- Thomas Jefferson, letter to James Madison

It's true that "we're bankrupting our CHILDREN!!!!!" makes for a pretty good propaganda line in a policy fight.

But I think it's more practical to address those who continue investing, through the purchase of government bonds, in the debts run up by Obama, Reid, Boehner et. al. and let them know that the likelihood of making their money back over the long haul passed "slim" quite some time back and as of now is right at "none."

Sooner or later -- probably much sooner than most people think -- that debt is going to be defaulted upon and repudiated. There is no "if" involved, only an unspecified "when." Heck, it may even be this generation! Regardless of when the when is, one thing is certain: You don't want to be holding T-Bills when it arrives.

Of course, none of us -- except for those who are or have been among the 435 members of the US House of Representatives, the 100 members of the US Senate, and the President of the United States --  have any obligation whatsoever to pick up the ObamaReidBoehner check.

But that's especially and doubly true of future generations of Americans who've never yet taken, nor yet been asked to take, any part in the "consent of the governed" charade that supposedly "legitimizes" enslaving them to pay for Nancy Pelosi's airplane rides and Lindsay Graham's theatrical productions.

Which Part of ...

... "All Bills for raising Revenue shall originate in the House of Representatives," and "Congress shall have Power ... To borrow Money on the credit of the United States," does Matt Miller not understand?

In today's Washington Post, Miller trots out last year's bogus "14th Amendment argument" for a presidential power to raise the US government's "debt ceiling."

Let's be crystal clear here: That argument is 100% bogus. There's just no way to get from "The validity of the public debt of the United States, authorized by law ... shall not be questioned" to "the President of the United States can borrow money on the credit of the United States if he really, really, really wants to but Congress won't play ball."

It is Congress and Congress alone which has the power to raise revenue both in general and via the specific means of borrowing. The president can stop them from doing so with the veto, but he can't do it himself in their stead. There's no constitutional route over, under or around that fact.

So, no dice, Miller ... but you do get a consolation prize:

Only one house of Congress has the power to initiate the raising of revenue, and that is the Republican-controlled US House of Representatives. The Democratic US Senate and the Democrat president can concur with, or attempt to block, the House's decision to rack up more debt, but if the House doesn't propose it, that's the end of it.

So for the next two years, every last dime of government debt will be Republican debt. The Democrats don't get to spend it unless the Republicans borrow it.

If President Obama is smart, he'll force the GOP to own that instead of trying to find a way around it.

Government Debt = Terrorism?

The US government's post-9/11 "war on terror" breathed new life into its long, failed "war on drugs."  An American public showing signs of increasing disenchantment with the latter was told that drug money fueled and financed terrorism, and that the "war on drugs" was part and parcel of the war on al Qaeda.

Now this, via Reuters:

Italian police said on Friday they had seized about $6 trillion worth of fake U.S. Treasury bonds and other securities in Switzerland, and arrested eight Italians accused of international fraud and other financial crimes. ... Potenza's prosecutor Giovanni Colangelo said an international network "in many countries" was behind the forgeries. Italian daily Corriere della Sera said on its website that the criminal network was believed to be interested in acquiring plutonium, citing sources at the prosecutors' office.

I can only think of a limited number of reasons why someone would want plutonium, and all of them except for use in atomic/nuclear weapons would more likely run through legal/"official" channels of securities fraud, theft, etc.

Or, to put it a different way, if the US government didn't visibly run some serious debt, al Qaeda and so forth couldn't try to finance its nuclear terror aspirations by faking instruments of that debt.

If heroin cultivation in Afghanistan is a "war on terror" concern, so is an unbalanced US government budget and $15 trillion + in US government debt. But I'd advise against holding your breath while you wait to see if Congress declares "war" on those things.

There He Goes Again ...

Per Reuters:

The White House plans to ask Congress by the end of the week for an increase in the government's debt ceiling to allow the United States to pay its bills on time, according to a senior Treasury Department official on Tuesday.

Only this time, we don't get dinner theatre out of it. The last mock battle ended in an agreement that puts this kind of thing on rails. Obama "asks," and it's then automatic unless Congress says "no" within 15 days. Oh, by the way, Congress is in recess for the next 21 days.

Don't you wish your credit line worked like that?

Let Me Reiterate

Politicians who talk about "deficit reduction" are not, to co-opt one of the commentariat's favorite terms, serious, nor should they be taken seriously.

That is, when some yahoo presidential candidate is asked to address the issue of the US government's debt and his plan goes something like "right now, the US government spends a LOT more than it takes in each year; elect me, and by the end of my second term eight years from now, it will only be spending a LITTLE more than it takes in each year," you should scratch him or her off your list of serious applicants for the job (if you feel a need to fill the job in the first place; I don't).

The very first element of addressing the issue of the US government's debt is either abolishing the government or balancing the government's budget from here on out, and either repudiating the government's current debt or building debt service that actually reduces the principal into that balanced budget.

I'm all for, and all about, abolition/repudiation. Those who claim not to be need to quit fucking around and prove it. At 235 years, the United States of America is not a startup that needs some time to work its way into profitability. It fancies itself a going concern. And a going concern cannot spend more than it takes in in perpetuity.

In which I violate the alleged Supreme Law of the Land

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. -- 14th Amendment

Not only do I question its validity, I deny its validity, at least insofar as it implies any claim that the word "public" obligates me in any way.

At no point have I authorized the Congress of the United States to borrow money in my name or on my behalf. Nor have I at any time co-signed said loans, guaranteed said loans, or agreed to repay any portion of said loans.

If the (occasionally rotating/shifting) group of 537 persons composing the US House of Representatives, the US Senate, the Vice President of the United States and the President of the United States want to repay the debts they've incurred (or intend to incur if they can get their act together), hey, that's just peachy (as long as they do so from their personal wealth, rather than through some kind of program of organized theft).

If they want to default on it instead, that's between them and their creditors.

Maybe they can negotiate some kind of settlement.

That, however, is up to them. If Harry Reid, John Boehner et. al borrowed more than they can repay, poor them. If their creditors were naive or too optimistically avaricious in their speculations, tough shit. Not my problem.

This is my nth notice to both groups that I'm neither party to, nor do I consent to become party to, the matter (note to those who believe that I have no choice in the matter: Check your premises).

You keep using that word. I do not think it means what you think it means.

WaPo:

House approves dramatic cuts in federal spending in 235-189 vote

The cuts come to $61 billion. That's about 1.6% of the $3.81 trillion 20011 federal budget. It's about 3.7% of the 2011 federal budget deficit of $1.645 trillion.

Cutting less than 4% of your over-spending isn't "dramatic." It isn't "drastic." And, the fevered imaginings of US Rep. Norm Dicks (D-WA) aside, it's for damn sure not even close to "a meat-ax approach on top of a meat-ax approach."

Not only is $61 billion not "dramatic," "drastic" or "a meat-ax approach on top of a meat-ax approach," it's not even, to use a much over-used word, "serious."

"Serious" would be cutting that $1.654 trillion deficit entirely. For a little gold "sensible" star, cut a little more than that to get a surplus and use that surplus to draw down debt principal. Only at some point well beyond those would words like "dramatic" become accurately descriptive.

$61 billion is just campaign propaganda grab-ass.

But I guess it's better than nothing.