The further to the left or the right you move, the more your lens on life distorts.

Sunday, August 25, 2013

With a "B"

President Obama and his Democratic colleagues tell an unquestioning media that they are hard at work reducing our yearly deficit. The media reports this unmitigated nonsense without so much as a comment, let alone a probing question that might allow the public to understand that spending is increasing, not decreasing. Yearly deficits are, of course, different from the national debt, but it's still instructive to note that over the past 11 months, out national debt has increased at an average rate of $2.06 billion per day. That's billion with a "B."

During that time the infamous sequester occurred. If you were to believe President Obama and his Democratic colleagues, a 2 percent cut in Federal spending was going to cause the world to come to an end. Fortunately, that didn't happen, even as Democrats struggled to find any sign of that the "meat-axe" budget cuts were causing small children to starve, seniors to live on the streets, or the sick to die from lack of care. None of that happened, but any further attempt to cut spending will be met with the same predictions of calamity.

Over the next few months, the budget battles will be re-engaged. There will be much drama and many outrageous claims, but it's highly unlikely that any substantive cuts will occur. After all, we all want to avoid calamity ... don't we?

To illustrate, Noan Findley comments on a small (by Federal standards) program that is indicative of unnecessary spending:
Nothing better illustrates the impossibility of killing a federal entitlement than the fraud-riddled Obamaphone program.

The $2.1 billion giveaway, funded by a tax on every cellphone service contract, is a well-documented boondoggle — an estimated 41 percent of the phones go to ineligible recipients.
Let's assume that the estimates of fraud are wrong and that only 1/4 of the phones go to ineligible recipients. That's still a half a billion dollars of waste!

It would be refreshing to see this program cut or reformed, but as Findley notes:
So why hasn’t it been axed? Because federal spending programs rarely die, and are even more rarely reformed.

Every dollar the government spends has a constituency. In this case, the private companies providing the phones are perversely motivated to ignore eligibility requirements — the more phones they pass out, the more money they make. The recipients of the phones are voters, and the administration has no incentive to alienate its own voters to save such a piddling amount as $2.1 billion.

Federal programs are judged on their intent, not their performance. For example, the General Accounting Office two years ago identified $18 billion of waste in federal job training initiatives, and yet there’s been no move to cut off those funds, because no politician wants to vote against job training.
As is the case with most government programs, the phone program was started with the best of intentions. But as the years pass, these programs grow and grow until they become targets for fraud and abuse.

Our current national debt is $16.74 trillion. When the President took office, the Debt-to-GDP ratio was under 70 percent. Today, it is 101 percent. The President and many in Congress don't seem to care, and that is breathtakingly irresponsible.