Saturday, January 10, 2009

Trillion dollar deficits -- PART 2

ULTRACON: the blogger who refers to himself in the third person.

The following article appeared at the now-defunct, RIP. Ultracon then disseminated the thing through the ether via email in the hope of infusing the electorate with some sense before the election, alas. The fears expressed have all come to pass…and in spades: Trillion dollar deficits for years to come.

The Budget Deficit: Deflecting Blame, Abdicating Responsibility
By Jon N. Hall
October 16, 2008

One of the disadvantages of being the majority is occasionally you have to act like one.

When Democrats captured Congress in 2006, fiscal 2007 became the last year the Republican Congress could be held responsible for the budget. Total federal revenue for fiscal 2007 was a record $2.56 Trillion. The last year Democrats had produced a budget was fiscal 1995, when total federal revenue was $1.35 Trillion.

So, the new Democratic Congress had about $1.21 Trillion MORE with which to balance the budget than they had had 12 years earlier in their last attempt.

Would it be enough?

For the first 6 months of fiscal 2008, the federal deficit hit an all time record high of $311.4 Billion, up 20.5 percent from the previous year (also here, and for wonks here). The 2008 budget is the Democrats’ first budget since regaining control, and its deficit can’t be blamed on low revenue—federal revenue for the period also set a record.

There’s your Democrat Congress for you, the all time worst performance on the deficit for the first half of a fiscal year despite record high revenue. Not to rest on their laurels, the Democrat Congress went on to set the record for an entire fiscal year with a deficit of $455 Billion for 2008. This comes immediately after 3 solid years of progress by the Republicans, during which they reduced the on-budget deficit by $224 Billion—all wiped out by the spendthrift Democrat Congress’ first budget.

And remember, this Democrat deficit comes before the addition of universal health-care, universal pre-kindergarten and universal you-name-it. And it comes before the recent bailouts and rescues. Some predict a $1 Trillion deficit for fiscal 2009. (A trillion here and a trillion there and pretty soon you’re talkin’ real money.)

After 12 years in the minority—far longer than any other stretch since 1932—the Democrats immediately revert right back to their old playbook. The Democrats just can’t help themselves; they are genetically incapable of spending restraint. When confronted with what has been called a financial Pearl Harbor, they couldn’t resist larding up the $700 Billion bailout/rescue with pork—in what they themselves described as one of the most important votes of their careers, they couldn’t produce a clean bill.

The Democrats’ answer for everything is to raise tax rates on business and the wealthy, all the while demonizing them.

So how could the economy NOT be faltering? Investors and businesses are looking straight into the jaws of massive Democrat tax rate hikes. For the economy’s sake, wouldn’t it be better to leave the capital with the capitalists?

The Party of Taxes “needs” your money, nonetheless. And you should gladly fork it over to them, because Democrats know so much better how to spend your money than you do. After all, they’re the Keepers of Civilization.

July 13 on Meet the Press Senator Claire McCaskill (D-Mo) said: “and, and it was interesting that Carly [Fiorina, former CEO of Hewlett-Packard] referred to the boom years. That's when we had a Democratic president and a Democratic Congress. Those were the boom years. And that's the, the years we want to get back to.”

Whatever could Sen. McCaskill be referring to? When were these halcyon days of yore? The 1990s? Didn’t we have a Republican Congress in those “boom years”? She certainly can’t be referring to the Carter years. The last time a Democratic Congress produced a “real” balanced budget—that is, without an on-budget deficit [1]—when a Democrat was in the White House was fiscal 1951. The last time a Democratic Congress produced a “real” balanced budget under a Republican president was fiscal 1960.

Record deficits, soaring tax rates, rampant spending: This is what GOP Congressional candidates should run against this fall. They should ask America: Are you better off now than you were—2 years ago?

But Republicans are allowing Democrats to deflect blame for the record deficit onto the President, as when Speaker Pelosi spoke at the Democrat Convention of “the failed Bush policies that has [sic] weakened our economy and taken us from the Clinton surplus to reckless Bush deficits”.

“Clinton surplus?” “Bush deficits?”

When did Congress lose its responsibility for the budget? When was the Constitution amended to throw out Article I, Section 9 (7), which states: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time” [emphasis added].

Budgets are legislation. Legislation is Pelosi’s area. This is Pelosi’s deficit. The predicted $750 Billion deficit for fiscal 2009 belongs to Democrats—they’re the majority now.

But Democrats seem to want to campaign this fall as though they were still the minority. And well they should, for what have they accomplished since capturing the majority? Nonetheless, the word from the media is: 2008 is a Democrat year.

But why, this Democrat Congress has performed abysmally. Even Democratic voters think so. Congress’ approval ratings are in the toilet; 11% in the Reuters/Zogby poll, which was taken before their “miserable failure” with the budget. Congress’ approval ratings have since plunged to an all time low of 9 % in the Rasmussen poll.

Under the current crop of Democrats, Congress has become the branch of government that folks hold in the most contempt.

If John McCain is to lead Washington back to fiscal sanity, he’ll need help. And that can mean only one thing—real conservatives in Congress. But ending earmarks, cutting pork, and rooting out waste won’t be enough; McCain, a genuine fiscal hawk, will need to reform entitlements. And that will be impossible without a GOP Congress.

To retake Congress, Republicans must create a compelling new vision of what they abandoned in 2001—the Contract with America. Republicans must tell America exactly how, if given the majority, they will balance the budget. And America should listen up, because the GOP is the only party to have actually balanced the budget since 1960.

Forget the barbarians at the gate for a second. If Congress doesn’t soon get a handle on its infernal spending of money it doesn’t have, Congress itself will be quite enough to bring about the End of America as We Know Her.

It’s the spending, stupid.

Jon N. Hall is a mainframe programmer/analyst from Kansas City.

[1] Democrats like to cite fiscal 1969 as having had a balanced budget. But there was an on-budget deficit of $507 million that year. If you doubt my budget figures, check out the latest budget history from the feds, toggle Bookmarks on the left and click on the third item: Table 1.1—SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS (–): 1789–2013. You’ll be on page 25 of Adobe Acrobat, but page 21 of the document itself. (Dial-up users: This 342-page PDF is almost 2.5 megabytes and might take 5+ minutes to download.)

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