First things . . . Richard Falknor on 26 Mar 2012 08:05 am
UPDATE MARCH 27! Republican Study Committee “Unveils Plan to Balance the Budget in Five Years.” Details here.
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We’re Out of Time: “Politically OK” Fiscal Fixes Aren’t Enough Now
“I was in Australia earlier this month and there, as elsewhere on my recent travels, the consensus among the politicians I met (at least in private) was that Washington lacked the will for meaningful course correction, and that, therefore, the trick was to ensure that, when the behemoth goes over the cliff, you’re not dragged down with it. It is faintly surreal to be sitting in paneled offices lined by formal portraits listening to eminent persons who assume the collapse of the dominant global power is a fait accompli. ‘I don’t feel America is quite a First World country anymore,’ a robustly pro-American Aussie told me, with a sigh of regret.” – Mark Steyn
Of course, world-class pundit Steyn is right to highlight our apparent paralysis either to change course fiscally or to rein in the power of our government.
Steyn wrote (National Review on Line) last Friday —
“The Democrats’ plan is to have no plan, and their budget is not to budget at all. ‘We don’t need to bring a budget,’ said Harry Reid. Why tie yourself down? ‘We’re not coming before you to say we have a definitive solution,’ the treasury secretary told House Budget Committee chairman Paul Ryan. ‘What we do know is we don’t like yours.’
Nor do some of Ryan’s fellow conservatives. Texas congressman Louie Gohmert, for whom I have a high regard, was among those representatives who appeared at the Heritage Foundation to express misgivings regarding the Ryan plan’s timidity. They’re not wrong on that: The alleged terrorizer of widows and orphans does not propose to balance the budget of the government of the United States until the year 2040. That would be 27 years after Congressman Ryan’s current term of office expires.” (Underscoring Forum’s.)
Steyn points right at our total indebtedness —
“Yet it’s widely agreed that Ryan’s plan is about as far as you can push it while retaining minimal political viability. A second-term Obama would roar full throttle to the cliff edge, while a President Romney would be unlikely to do much more than ease off to third gear. At this point, it’s traditional for pundits to warn that if we don’t change course we’re going to wind up like Greece. Presumably they mean that, right now, our national debt, which crossed the Rubicon of 100 percent of GDP just before Christmas, is not as bad as that of Athens, although it’s worse than Britain, Canada, Australia, Sweden, Denmark, and every other European nation except Portugal, Ireland, and Italy. Or perhaps they mean that America’s current deficit-to-GDP ratio is not quite as bad as Greece’s, although it’s worse than that of Britain, Canada, France, Germany, Italy, Spain, Belgium, and every other European nation except Ireland
But these comparisons tend to understate the insolvency of America, failing as they do to take into account state and municipal debts and public pension liabilities. When Morgan Stanley ran those numbers in 2009, the debt-to-revenue ratio in Greece was 312 percent; in the United States it was 358 percent.” (Underscoring Forum’s.)
And How About Paying for National Survival — i.e., Defense?
Most conservatives who have been paying attention to Mr. Obama’s background and colleagues are hardly surprised that his administration has been diligently weakening national defense. What we find troubling is to hear otherwise often sensible ‘libertarian’ voices looking at the defense budget as mostly another scam by crony capitalists wholly unrelated to national (or even their own) survival.
Mackenzie Eaglen and Michael O’Hanlon, however, in their Specter of sequestration spell out some disastrous fiscal threats to national security —
“Simply put, the cuts already baked into the cake and the sequestration that will happen without specific action to reverse it will make it nigh on impossible for the administration to maintain what it rightly considers irreducible strategic requirements for simultaneous military presence, crisis response and warfighting capability in both the Western Pacific/East Asia region as well as the broader Persian Gulf and Middle East.
But it’s worse than that. Sequestration will cause its greatest disruptions immediately in early 2013, when mechanistic and severe cuts have to be imposed overnight. The military can adapt to reductions that it sees coming; for all the inefficiencies of the Department of Defense, it is still one of the world’s most competent planning bureaucracies. But this is a whole different kettle of fish: Because spending would have to decline for 2013 based on cuts taking effect only in January, there would be no opportunity to use natural attrition in the force to cut personnel costs, no opportunity to use the natural annual cycle of working with defense industry to restructure contracts and keep alive those weapons programs that are needed and desired, no realistic way to scale back training carefully in a way that saves money yet keeps the military ready.”
Read it all here.
“Saving the American Dream”
As a useful starting point, readers may wish to visit “Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity” here.
“It [the Heritage plan] balances the nation’s budget within a decade—and keeps it balanced. It reduces the debt and cuts government in half. It eliminates government-mandated health care and fully funds our national defense. It squarely confronts Social Security, Medicare, and Medicaid, the three so-called entitlement programs, which together account for 43 percent of federal spending today. To encourage Americans to become more fiscally responsible, the Heritage plan redesigns our entire tax system into an expenditure tax that will have a single, flat rate. This is a structure that will promote savings, therefore benefiting individual Americans, our body politic, and the economy.”
As Steyn suggests, coming to grips with these perils depends on national will — for necessary reforms will have to be accomplished outside of what our government class is ever so quick to suggest are the “political limits” of action.
So what leaders will be able to give the lion’s roar to the necessary national effort to curtail spending now and foster economic growth — while restoring our defenses to the essentials for our survival and those of our close allies?
Just the right GOP presidential nominee alone? Helped along by today’s top GOP Congressional politicians? Or some emerging national leadership including a new White House, as well as strong voices from the conservative base and the many thoughtful independent voters to give this and the next Congress some principle and courage?
We also need an emerging leadership that will encourage state and mega-county politicians to take strong steps to bring their public-employee pensions and benefits under control. For no Washington, D. C. rescue for state and local governments is fiscally plausible any more.
Stay tuned for more on advancing conservative (and survival) principles in this tumultuous run-up to the November 6 national election – both on the presidential and — equally important — on the congressional track.