“Governments must be accountable to someone besides themselves”
Walter Lippmann
The budget charade currently playing at both ends of Pennsylvania Avenue is enough to turn even the most objective patriot into a hardened cynic, particularly where fiscal responsibility is concerned.
Perhaps the biggest shams in this American tragedy are the “deficit reduction” and “job creation” packages. Similar budget appeasement scenarios were foisted off on the public by then President Reagan and a Democratic Congress when they sold the American people on the Tax Reform Act of 1986 and again when the toothless Graham-Rudman
Deficit Reduction Act was enacted.
Each promised us fiscal salvation. Neither delivered! Instead, the national debt soared by fifty percent to roughly $4.1 trillion.
The centerpiece of President Clinton’s economic program is a pledge to “cut the deficit”, with a specific target of $500 billion in “savings” over the next five years.
A perennial skeptic, I am amazed the public and media alike are so easily co-opted into blithely accepting the theory that when federal budget proposals with staggering amounts of red ink are scaled back we have achieved a “deficit reduction”. It’s smacks of irresponsible rhetoric as well as playing fast and loose with our money on the part those entrusted to manage our domestic ship of state.
However, for those enthusiasts of Clinton new economics, a few thoughts to mull over.
Assuming the deficit reduction targets are met, our federal government will still spend between $200 and $300 billion more than it takes in during each of the next five years. This will result in our national debt skyrocketing as much as another $1.5 trillion, making it the fastest rate of deficit growth in U.S. history.
While the proposed “contributions” (they’re really higher taxes) are a near certainty, advertised spending cuts remain far more elusive and unpredictable targets. A failure to substantially reduce spending will require more taxes, result in a still larger deficit and quickly erode public confidence.
The Clinton program also fails take into account the impact of implementing (badly needed) national health care reform … or the ominous prospect of bailing out such programs as federal pension insurance and the medicare trust fund, to name two. Each of the foregoing carries a potentially enormous price tag.
Examining the President’s proposed economic stimulus package to “create jobs”, his $16.26 billion request is targeted for the creation of only some 219,000 new jobs, none long term in nature. Some quick arithmetic indicates each job will cost the American taxpayer almost $75,000! Moreover, many of the projects qualifying for funding under this bill are questionable in nature, others pure pork … and few address fixing the “infrastructure”, which I suppose was just more campaign rhetoric.
One wonders how many jobs the private sector might create if these monies were earmarked for small businesses, incentivizing them at perhaps $15,000 to $25,000 for each new full-time position they created and maintained for at least twelve months. Let’s see … $16,260,000,000 divided by an average of $20,000 per job equals a potential of more than 800,000 new and permanent jobs.
Despite the rhetoric to the contrary, there is an underlying assumption in both of these programs that only the government, unfettered by the private sector can solve the nation’s economic ills. The legacy of the failures of centralized planning has clearly been lost on too many of our federal legislators.
Lastly, once enacted, the implementation of these programs will be turned over to the bureaucracy … at which point accountability ceases. No member of Congress nor any identifiable member of the Administration will be responsible for the success or failure of either “deficit reduction” or “job creation”.
If as is the case in too many federal programs, deficit reduction targets fall short and/or the economic stimulus program delivers fewer real jobs than advertised … only the American taxpayer will bear the burden. What else is new?
