Thursday, May 07, 2009

$17 billion. Not enough.

Today, President Obama announced a budget plan to cut $17 billion in gov’t spending. Good for him. I realize that $17 billion is only one half of one percent of his entire budget, but at least he’s trying and I give him credit for it. Hopefully, this will only be a start. There is a very long way to go. At the very least it tells me that he realizes the need to cut money out of the budget.

But there are problems that must be pointed out. Many of the programs that Obama wants to cut are the same programs that Bush tried to cut only to be thwarted by Congress. An example is Even Start, an education program similar to Head Start that has been proven to not produce results. It is a wasteful program and Bush has tried to cut it for years. Congress – no doubt under the influence of special interest groups – has continued to fund it. So while I am encouraged by Obama’s proposals – meager as they may be – I don’t have as much confidence that Congress will go along. Those people are spending money like a bunch of bong-smoking dopers at Waffle House. Listening to reason is not their forte.

The other problem is redirecting the spending cuts. Obama himself said that the cuts will make room for spending on health care and education. In that case, it’s not a spending cut. Instead it’s more like a reshuffling of the bloated government budget. A spending cut is worthless if you increase spending in other areas. The whole point of a spending cut in today’s environment is to reduce the deficit and the subsequent ever-rising national debt. There is no indication that Obama’s proposal will do either, so I guess we’re back to square one.

One suggestion would be to eliminate TARP funding. That’s about $500 billion of next year’s budget, or 14% of Obama’s total spending. Now that’s a serious spending cut. Besides, Bernanke and others are already saying the economic slide has bottomed and it’s only up from here so why the need to keep dumping money into TARP? In addition, of Obama’s $780 billion stimulus plan, only $15 billion has been spent so far, and yet we’re getting these reports of hitting bottom. So, if the economy has bottomed and recovery is expected to begin, why continue spending the other $765 billion? These are the questions I’d like Obama to answer. I don’t care about what enchants him the most.

The Government Accountability Office now forecasts that beginning in 2025, ALL federal revenue will be consumed by Medicare, Medicaid, Social Security and payments on debt interest. In 16 years we will only be able to afford 3 programs along with paying interest to foreign nations who hold our debt. That means there will be no money available for defense spending, energy independence, homeland security, education, salaries of government employees, or anything else outside of these 3 programs that the government wants to fund. 16 years. Not much time to fix a serious problem. So while I appreciate his effort to cut spending, Obama’s proposal demonstrates to me that he has no grasp of the serious budget problems that we face. If we’re going to avoid a major budget crisis within the next two decades it will require DRASTIC action now. Like, perhaps, an immediate freeze on new spending and an across-the-board cut on ALL federal programs (except maybe military pay). Let’s start at 20% and go from there.

But don’t listen to us Tea Party folks, nothing we say should be taken seriously.

1 comment:


Golly! If a 1000 thousand is a million, and a 1000 million is one billion, and one thousand billion is Only One Trillion...sorry folks, I give up!

I just hope to someday find an extention course to nail down a Bachelor's in Common Sense, but I cannot find a school anywhere with that subject listed in the curriculum. reb