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Mail
Magazine 24
'The Nearest Thing to Eternal Life
on Earth is a Government Program!'
by Frank Hill
Federal
budgeting can be very
confusing at times.
But
at its core, it is very simple
arithmetic. As in 'addition and subtraction'. No advanced calculus
required,
ring theory or Boolean algebra. Just 1+1=2. Or preferably if you are a
spending
budget hawk: 100-50=50 as in 'reduce many federal programs by 50%...and
hardly
anyone would know the difference'.
Take
a look at how President
Obama's economic stimulus has been recorded in official CBO documents
in the
summary chart here. (We don't make this up out of thin air, you know)
As
of the year 2006, the
projections for federal spending (bottom chart titled 'Budget Outlook
Baseline')
for the next year, FY 2007 and the next five years looked 'pretty
normal': 4.4%
growth one year; 4.2% the next..somewhere in the 4%-4.7% vicinity for
as far as
the eye could see.
Well,
2008 comes around and the
banking system melts down like Three Mile Island or Chernobyl. All hell
breaks
loose and in 2009, President Obama and the Democratic Congress pass
their
stimulus bills and federal spending leaps $534 billion to $3.518
trillion in
just one year.
A
whopping 18% increase in one
single fiscal year.
Truth
be told, some of this bailout
expense started under President Bush in the fall of 2008 before
President Obama
took office but Nancy Pelosi was Speaker of the House and Harry Reid
was Senate
Majority Leader. Had the Republicans stayed in control of Congress,
much of
this initial outlay may have been about the same amount of money.
But
would it have stayed as high
for this long?
Typically,
'stimulus bills' are
passed in a year with the hopes they will work and then they evaporate
so the
baseline could return to its normal trajectory.
Well,
we have had an amazing amount
of stimulus spending that simply has not worked to reinvigorate the
economy and
stimulate the creation of millions of jobs that typically happens
coming out of
a recession, deep or shallow...and the high increased level of federal
spending
hasn't 'evaporated' yet to allow the baseline to fall back to its
normal
trajectory, has it?
Take
a look at the actual
performance of the budget for 2010-2011. According to the 2006
projection,
federal outlays in 2010 were 'expected' to be $3.105 trillion. Actual
federal
spending totaled $3.456 trillion, $351 billion above baseline
expectations just
4 years previously and not much less than in 2009, the BIG YEAR of
stimulus
spending and TARP bailouts. (see TARP for a detailed mind-numbing
discussion of
how The Credit Reform Act of 1990 deals with present-value accounting
of the
TARP cash flows)
What
the heck does this all mean?
It
means that we have not returned
to the baseline projections of 2006 yet and probably won't for quite
some time,
if ever. The baseline took a sharp 11% stair-step up in 2009.....and
has stayed
there for the last two years.
That
is a $1.231 trillion
accumulated hike in the underlying baseline that will probably never be
allowed
to go back down to the normalized baseline of 2006.
Why?
Because
all of these programs are
now deeply embedded into the American governmental structure. As we all
know,
NO federal program ever gets eliminated once it is put into place. NO
federal
program ever suffers an absolute real cut from this year's levels
because of
baseline budgeting (which always projects an overall increase of at
least the
expected inflation rate plus 1%-2% in future overall growth in federal
spending).
As
Ronald Reagan used to say: (take
your pick, they are all choice quotes)
"The
nearest thing to eternal
life we will ever see on this earth is a government program."
"Government
is like a baby: An
alimentary canal with a big appetite at one end and no sense of
responsibility
at the other."
"The
taxpayer: That's someone
who works for the federal government but doesn't have to take the civil
service
examination." *
This
time, the crisis of 2009
helped ramp up overall federal spending to a much higher baseline level
than
before...and no one is talking about it right now.
Our
tax receipts will never catch
up to the rate of growth in spending until spending growth is held
below the
rate of inflation for at least 5 years running.
Source:
familysecuritymatters.org
Read
this and other articles at Mail Magazine
24
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