Remember when George W. Bush wanted to throw all of the Social Security money into the stock market? Remember how absolutely nobody was interested in doing it?That's about how well Barack Obama's "spending freeze" is going to go over. It isn't going pass; he can't enforce it if it doesn't; and even if it does, it's an utterly meaningless exercise. In fact, it may even be worse than doing nothing at all.
You know how members of Congress get re-elected? By bribing their voters with federal largesse. Do you honestly believe that members of either party are going to willingly surrender that? Do you think that 218 in the House and 60 in the Senate will? It's entirely possible that you, but you'd still be wrong.
If Congress appropriates the money, the president has to spent it. That was established in the early 70s when Richard Nixon refused to spend designated monies above and beyond what he requested in his budget. The courts have since affirmed that as well. If the legislative branch refuses to play ball, not only is the game over, the executive branch loses. President Obama could, in theory, veto the budget and force a government shutdown over the issue, but we all know that he doesn't have the balls to go to war with his own party.
Even if the "freeze" was passed, it's fundamentally meaningless, since it barely addresses the deficit. Let's assume that everything works as it should. Then you only save $250 billion over a decade, when the yearly deficit is now $1.3 trillion and expected to skyrocket over the next five years. Only Barack Obama would go on the warpath over something that achieves nothing.
An interesting by-product of the "freeze" is that it also freezes the massive increases in department spending that were established last year, so you're not saving anything in real terms.
The proposal attacks only non-defense discretionary spending, which isn't where the explosive growth is coming from. Non-defense discretionary spending totals something like a whole 17% of the budget. The real costs are in three programs and three programs alone: Social Security, Medicare and Defense. Unless you reform, cut or abolish all three, you're talking loud and saying nothing.
Social Security and Medicare have to be reformed, but won't be until it's too late, which it probably already is. Instead of taking the political hit of gradually phasing both programs out and replacing them with something more efficient and reliant on the states, both parties are willing to face the fiscal calamity of them collapsing under their own weight, taking the entire economy down with it.
Social Security and Medicare have something to the tune of $70 trillion in unfunded liabilities over the next several decades. Pretty soon, they will comprise 100% of the budget if their growth is left unchecked. And putting Social Security in the stock market is ridiculous, since it guarantees future bailouts that make the ones we've seen over the last 15 months look frugal. Sadly, there isn't a politician in America with the courage to seriously reform either program.
National defense is actually the easiest part of the budget to cut, from a non-ideological perspective. The Pentagon's budget reflects nothing more than America's foreign policy. If you believe that "making the world safe for democracy" is a fitting and proper role for the United States, then the current Defense budget isn't big enough. If you're married to the idea of using the armed forces to teach the world to sing in perfect harmony, then the military budget should be at least twice as large.
If NATO expansion continues the way I suspect it will, it won't be long before America is engaged somewhere in the former Soviet republics. If the War on Terror grows the way logic dictates it must - into countries and territories like Iran, Somalia, Sudan, Yemen, Pakistan and Kashmir - that's going to cost a fortune and require a draft, which is more expensive still.
The United Kingdom really couldn't afford it's empire after the First World War, but refused to admit it until after the Second, when food rationing had finally come to England. I'm not given to suggest that there's such a thing as an "American empire," but current U.S debt exceeds even that of the U.K after the war in real terms. A nation with a fourteen trillion dollar economy is currently carrying almost thirteen trillion in debt, with extra trillions being added annually and with no end in sight.
If American foreign policy is fundamentally rethought, tens of billions of dollars can be saved every year. Does America really need a military presence in over half the countries of the world, and if so, why? I'm not necessarily suggesting that it doesn't, but no one in the U.S government is even asking the question. Is it, for example, in America's foreign policy interest for the United States to spend itself into exactly the same hole that the Soviet Union did?
The United States is well past the point where fiscal sanity can be restored exclusively through spending cuts. There simply aren't trillions of dollars in the budget to cut. Yes, Republicans and Democrats alike prefer to pretend that there are, but they're both lying to you. They also like to pretend that the economy can grow at a rate that precludes tax increases, although that's never happened in human history to a country with financial burdens as great as America's.
President Eisenhower balanced the budget three times in eight years, and he did so while massively expanding the military and and establishing the interstate highway system. Social Security was still profitable then and Medicare was still a decade away from even existing. Yet, still needed a top federal tax rate of 91% to keep the government liquid. And that was when the United States was unchallenged economically and militarily.
That's not true today, and tax rates are less than half of what they were under Ike. As the influence of the federal government grew several fold, tax rates steadily decreased over the course of a half century. In some cases, they rapidly decreased. Ultimately, that's how the United States got where it is today.
No one has even addressed what the interest on the existing debt is going to do to the budget in the next decade or so. Even if all spending was frozen, the compounding interest payments on the current debt, coupled with the existing deficit levels will be enough to hobble the country.
Freezing non-defense discretionary spending to address that is as ridiculous as eliminating earmarks. Unless Social Security, Medicare and Defense are all cut, coupled with painful tax increases on everybody, you fundamentally accomplish nothing. Those three programs are growing at a rate that will almost immediately overshadow everything else that is either frozen or cut.
Worse, the appearance of a spending freeze makes actually reducing expenditures or raising taxes politically impossible. Why cut spending that's already frozen, the argument will almost certainly go.
The United States has been reducing taxes and increasing spending since the Kennedy administration. As time went on, that was financed with more and more debt. Now that debt is unsustainable and threatens the supremacy of the country in a way that no foreign enemy ever could.
America has spent fifty years building the perfect beast. Unless someone gets serious soon, that beast is going to eat America alive.
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