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What Budget?

Written by JB Williams

©2005-02-09

The Washington elite are at it again. The partisan jockeying for political positions has begun and no matter which political party wins the debate on Capital Hill, the American people will lose…again!

Where I come from, a “budget” is a tool of fiscal discipline. If it isn’t balanced, somebody is losing something somewhere, or everyone is filing bankruptcy. Bankruptcy is defined as “A debtor that is judged legally insolvent.” Insolvent is defined as “unable to meet debts or discharge liabilities, resources insufficient to meet all debts.

America has qualified under these definitions for many years, except to date no one has stamped the proper legal title on our nation’s financial statement. The current administration and congress are not responsible for our current condition. But they are responsible for not doing anything about it…

In the good old days, we talked about “tax and spend” budgetary policies, but that was then. Now, and for more than 60 years, Washington has practiced a “spend first and tax later” fiscal policy and neither side of the aisle is living in reality…

Washington is known for its ability to play word games using terms like “budget cut” to describe a lower than expected increase in the budget. They have the benefit of using “base line” accounting methods whereby an anticipated 10% budget increase that comes in at only an 8% increase is reported to the public as a decrease in spending… (Don’t try this at home you will most certainly get hurt…)

The President just submitted his $2.57 TRILLION 2006 [annual] budget proposal to congress. In it he prioritizes spending to suit his agenda. Meanwhile, his partisan opponents waste no time taking aim at his priorities with a set of their own priorities.

The President has described his budget proposal as “the leanest yet”, and that well may be, though it isn’t lean enough, it too projects continued deficit spending at record levels. His opponents across the aisle see it as too lean, cutting programs of interest to their constituents and the debate goes on…

The debate can be summed up as pro-national security and military, anti-social program republican’s verses pro-social program anti-national security and military democrats. They will both find prettier words to make their cases, but at the end of the day, this is what they will have said…

When the name calling and finger pointing is over, a budget will be passed, neither will get everything they want, but both will get some of what they want. Meanwhile, the American people can look forward to getting what we always get, deeper in debt.

Neither side of the aisle seems interested in facing the reality that both intend to keep on spending money we simply don’t have. Both talk about paying down the debt, as both continue spending us further into bankruptcy…

$2.57 TRILLION…. Not including supplemental spending for such things as our missions in Iraq or Afghanistan, which will easily add a few hundred billion. $2.57 TRILLION…. There are only three countries in the entire world with a GDP that large, the US, Japan and Germany…

Here’s the kicker…it ain’t enough! Many claim that even though $2.57 TRILLION is more than we can afford to spend already, we need to be spending more… According to some, the federal government is not doing everything it should be doing, which means we need more programs, more federal initiatives, and more spending.

This has been going on since the 40’s when FDR started long term deficit spending in America.

Democrats claim Bill Clinton balanced the budget in his second term, (a feat not possible since Presidents don’t have control of America’s purse strings). Republicans claim they balanced it as a result of the Gingrich contract with America, (closer to true, but still not quite true).

It was balanced alright…on paper. Of course if it was balanced at the bank, the national debt would not have continued to grow, and it did… So both were mistaken or misleading, you decide… (A valiant effort by congress though, one worthy of honorable mention).

Since we keep spending, some believe the solution is to simply keep taxing. However, with a 60 year track record of deficit spending during steadily increasing tax revenue, it would appear that Washington is well capable of outspending any revenue stream.

Remember the term “lock box” concerning the Social Security Trust Fund? Well, that didn’t work out… Turns out we should not have had so much trust in that fund… even less trust in those who promised to lock it up.

After Democrats spent years warning us about troubled waters ahead for Social Security, now they claim there is no crisis? Again, you have to be able to understand Washington speak. Republicans say the fund will begin running red ink by 2018, running out of funds by 2042 or so, and they are right if you go by cash on hand (like the rest of us do).

Democrats say there is no crisis because on paper the fund will not begin running red ink until 2040 something, forgetting that the paper won’t actually buy groceries when that time comes. On paper they are right, just like they are right that on paper, the federal budget was balanced during Clintons second term. Of course the debt grew anyway, despite what it looked like on paper… and the Social Security problem is just as real, in terms of real cash that is.

The American people feel concerned about both deficits, but completely out of control. This isn’t quite true either however…

As long as the American people elect public officials on the basis of what our federal government can do to improve our personal lives, politicians will continue buying votes with expensive promises to improve our lives. For a while, they will be able to deliver, as they have for more than 60 years now, until we are officially bankrupt that is…

Remember as you watch the budget debates over Social Security and the national debt, that in the end, we the people get the bill; there is nobody else to hand it to. Remember that Social Security is headed to insolvency, the debate is only over when.

Remember that no matter who wins the turf battle in Washington, the American people will be deeper in debt.

Then, remember that the “rich” are not going to pick up our tab. They have options, highly paid accountants and tax lawyers who see to it that their money is protected from a greedy federal government with a voracious appetite for private resources. No tax code can get to their money… so don’t buy into this garbage that only the rich will pay. We will pay, we always do!

When the American people realize that there will be no escaping reality for them, they will stop looking to politicians to solve the problem and begin solving it themselves at the polls by electing people for reasons other than what the federal government can do for them…

Until then, watch the problem grow!


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