Conservative Pension Inconsistencies

Congress is racing to get the Ryan - Murray Budget deal passed before taking some more time off.  (And believe me when I tell you that I for one, have nothing against our national legislature taking time away from their labors on behalf of the People.)   The House already passed it, Senate is poised to do so, and the President seems likely to sign it.  (He can always change things later if it doesn't work out, right?)  Neither side seems particularly pleased with the compromise reached, which not only pleases me, but makes sense when you consider that the two groups are supposed to be fundamentally, diametrically, and ideologically opposed; with the only thing that they can seemingly agree on (amongst themselves, at least) is that things would be better if their party were in complete charge.

The timing on the passage of this bi-partisan spending agreement is curiously compelling this year however, since it comes at the same time of the release of Senator Tom Coburn's annual report on government waste.  In it, the Oklahoma Senator details some $28 billion in 2013 government spending on things he calls "questionable or lower-priority programs".  One that particularly caught my eye however was that on the part of the military to junk a lot of the equipment used in Iraq and Afghanistan. "The military has decided to simply destroy more than $7 billion worth of equipment rather than sell it or ship it back home," Coburn said. 

It did so because one of the most hotly disputed bits included in this week's bi-partisan compromise is a provision to achieve a $6.3 billion reduction in federal spending through a one percent reduction in cost of living benefits for retirees under age 62.  This should of course lead one to question who the budget rocket scientists were who approved an amount for senseless equipment destruction that they refused retirees.  (Personally, I would have thought that we're so loved in that part of the world that we could have sent over a box of sledge hammers and set up a booth to charge locals for the privilege of helping us out with the process.  Maybe we could have even filmed it and turned it into a reality show.) 

Not surprisingly however, this particular spending cut has military and veterans groups up in arms in what's described as an attack on those who have already faithfully served their country.  Draconian budget cutting Conservatives seemed to rise to the attack as well on what could be considered a mere 'cost of living increase' modification on such pensions, which in turn got me thinking ...

Now perhaps it's simple jealousy on my part, that someone has managed to hold down a job with same employer for 20 years and could conceivably retire at the age of 38.  Even someone hanging one for the full 30 could therefore find themselves on the porch by 48.  Don't get me wrong, I respect and honor anyone who makes that choice for themselves; and can grant that those who have faithfully served their country might feel that such a reward is their due. 

As one working in the private sector however, I now see no escape from Congressional reform of the Social Security retirement age that will see it raised from 65 to 70 long before I reach either.  I've long since reconciled myself to passing quietly while sitting in a corner behind an unnoticed desk at some age beyond that (assuming they'll let me work that long) so that I won't be a drain on the nation.  I can't help but wonder over the huge reaction to even a minor modification for retirees as part of a greater discussion of public sector pensions.   

I wonder that many of the Conservatives crying the loudest over the mere proposed of cost of living adjustment to such pensions appear to be the very same ones crying over the crippling costs of police and firefighter pensions for those performing dangerous labors in their municipalities.  Isn't it the concept of making government pensions 'untouchable' that has many of those same Conservatives outraged with the very concept of public sector pensions?  Isn't the mountain of underfunded plans at local levels the major part of debt that has bankrupted Detroit, MI, as it did earlier to Stockton and San Bernadino, CA before?  Aren't both Illinois and California doing little more than bookkeeping tricks to hide their own massive burdens in underfunded state pensions plans?   

Now I'm sure that all of this already has me in trouble with many 'loyal American Conservatives' out there, who see my stance an attack on our gallant troops.  It isn't.  I'm not even saying that I approve of the the COLA adjustment, though I'd love to see House and Senate members who are up for election openly debate its inclusion rather than insert it through a backroom maneuver.  One must recognize however, that no one can hold back the future.  

Lifetime pensions are an endangered species in this country; even the ones long associated with government service like the military.  The courts are now only just beginning to sort out the contractual mess involved with deciding between the rights and obligations of a citizen as a government employee versus the rights and obligations of every other citizen not so employed.  It will take someone far wiser than most of us to reach a 'just' decision as to where these rights lie.  My advice however, before weighing in too heavily on one side of the argument or the other (or spouting out only when it's your ox being gored) is to make sure that you're attempting to judge each situation with the consistency that it deserves. 

This Is An Official Statement

"Blah blah blah, blah blah blah blah ...."

That, of course, is what they all seem to sound like these days (remarkably like the adults in a 'Charlie Brown' cartoon, if I do say so).  A representative of the city is standing in behind a podium and in front of a bunch of microphones to tell us that there's a problem, and that the water and sewer system is going to hell.  Oh sure, he knows as well as you do that part of what we've been paying for years was to take care of the upkeep of the system (which evidently no one really bothered to do, in spite of the fact that they told us they were).  That's not important now though.  What's important is that without money, a lot of money, the problem can never be solved. 

No wait, it's a representative of the state telling us that in spite of the fact that we're spending more money per child than we ever have in the nation's history on education, we need to spend much more money for it.  This isn't more money to keep and reward the best teachers, to test more innovative teaching methods, or for technology that might make the process better for teachers and students alike; but only to perpetuate the existing failed practices.  Previous dramatic increases in spending have done nothing to produce students more ready for higher education, increase measurable test results, or even increase general literacy in this country.  Such prior failure however, has nothing to do with the potential of success (no matter how remote it is); but more money it is.  

No, it's a representative of our federal government telling us that in spite of the increasing amount of money that we're spending on the war on poverty, that we're losing the battle.  Not only are we losing however, but according to the government, our investment has led to a situation where things are worse than when we started, and in fact worse than ever before.  In fact, perhaps one of the few successful bits of strategy is that some of the money we're spending has been to recruit new victims to the struggle or to relax the rules so that more than would have in the past will now qualify.  We've been fighting this war for over 50 years now, but instead of it being one that America has long since become tired of funding at previous or existing levels, it's one that our leaders tell us can only be held at a draw (no one even talks about winning it anymore) through ever increasing staffing and budgets.  You've guessed it ... more money from us it is.

Fortunately for you this isn't an official statement, which means that it isn't filled with what one of those once in power in the Glass City used to call "half-truths, mistruths, and outright lies".  That means that you're free to actually pay at least some limited attention to it (well, as much as you normally do with JBS at any rate) without fearing that it's going to cost you any money.  Cause if you're being even minimally honest with yourself, that's what you normally do.  You're tired of hearing the same old crap from the same cast of characters; and knowing that each time they open the pie hole in one of their two faces, someone's going to be reaching into your pocket. 

Like many of you in this economy, I've been forced to recognize that at times I've been a bit wasteful and profligate in my spending.  I always figured that this was money, earned from the sweat of my labors, and I could therefore do whatever I wanted with it.  I never counted on being able to borrow money from friends and relatives in order to fulfill my financial obligations; and in spite of my setbacks, think I can say that what I owe to both is simply my thanks for being supportive when I needed them to (and putting up with me in the first place of course).  And in the process of my minor trials and tribulations, I like to think that I've learned from my mistakes. 

Government at any level however, seems incapable of this last part, and therefore unable to do the same.  There are those at least in government, honest to admit that many of the same programs designed to take care of a problem, though designed and initiated with the best of intents, are full of waste and fraud.  Whether we're talking about the quality of drinking water or that of education, they can point to glaring errors (usually far enough in the past to show that they weren't responsible); and assure you that now that such situations have come to their attention are being seriously looked at.  They can likewise point to serious breaches in the rules and enforcement as part of the bad old days that will go away if new and additional funding is approved.  When was the last time that you heard any of them making a subsequent official statement regarding the progress that's been made, the rules that have been changed to close or even address issues, or the enforcement cases that are being prosecuted against those who have done little more than steal both our trust and our money.

Unfortunately we hear nothing of the kind.  Journalism (especially investigative journalism) has all but disappeared from the airwaves.  Neither the television nor the radio networks (nor the daily newspapers for that matter) can afford the news staffs required to attempt to do what they once considered their moral responsibility.  Instead more often than not, their programs and pages are filled little more than the official statements handed to them by the very corporations and governments that they once attempted to protect us from.  Most of those dedicated to editorializing on paper and television talking heads that are their broadcast counterparts have become willing sycophants to the official blather of the ruling elite in order to keep their 'inside access' to those in power.  This unfortunately, has become a gift that's little more than a parasitic arrangement used by both for feeding off the public.  It doesn't take someone with their tin foil hats slightly askew to believe that the parasites like it this way, since when you've tuned them out, they can do damned near anything they like to you.  After all, they've more than adequately informed you about it by issuing an official statement.

So before ending this I'd like to issue an official statement of my own:

"We regret that Just Blowing Smoke has done so few posts in the last couple of weeks.  Technical issues, in conjunction with a mild case of creative blockage and a healthy dose of pure laziness might normally have been considered the root of the problem.  In reality however, the sole responsibility for this has been a lack of government funding.

Since no government in their right mind is likely to change this situation, we at JBS will have to do our best to pull ourselves up by our collective bootstraps and return to doing a better job."

We apologize for the inconvenience, and now return you to reruns of Honey Boo Boo ...    

I'm Feeling Generous

I have to admit that I've been feeling rather good about myself this week.  Like most people, some part of my attention has been drawn to the 15th and tax day, and none of it had to do with the fact that I filed my paperwork months ago and even received a small refund. (Imagine, getting some of MY MONEY back from the government.)   Instead, the reason that I've been feeling rather proud of myself is because of realizing what a generous guy I've become.  

Now this may be a little hard for many to believe.  After all, I'm a greedy Conservative, and therefore have no heart.  (They're right about having no heart of course, but being Conservative probably has little to do with it.)  While filling out my taxes however, I reviewed a number of slips of paper that listed donations that I had made to various charitable organizations over the last year.  None of them individually might be worthy notice in the local media, and I was not asked to pose with an oversize copy of one of my checks for eventual media publication; but percentage-wise collectively, I think I did better than the nation's leader and his foot-in-mouth 2nd in command in my good works.  

Just as I was beginning to feel a bit smug about my munificence however, I realized that all of us paying taxes this year have every right to be proud of our generosity, regardless of the number of tax-deductible receipts that we're holding. You see, these days we're all making charitable donations on a fairly grand scale whether we know it or not, at least according to this chart from the Heritage Foundation.

See!  We're all paying a sizable portion of our tax dollars to pay for other people's medical bills (after paying an ever-increasing amount for our own health insurance).  We're paying for a "retirement insurance" program (a Government-run Ponzi Scheme) that's likely to be broke before we're able to collect anything from it.  Part of the 19% in income security includes food and housing assistance for those less fortunate, as well as that we justifiably owe in recompense for those who have more than honorably served in our Armed Forces.  As for the net interest listed in the chart, apparently we're all donating to nations like the Chinese, in a capitalist transaction with a Communist country to finance the sad fact that the US continues to spend more than the money than it takes in from the tax revenues we 'donate' to it each year.   It's was also great to find out that we're all so generous that we're willing to be rather charitable where other people's transportation or their kid's education is concerned (beyond what those of us who have to pay in local property taxes).

And while it really isn't broken out in the 7% that's listed on the chart, we're generous in ways that we don't even know (and couldn't comprehend the lunacy of if we did).  We are after all, paying oil companies to drill for oil that our government says is bad for the environment, and grain-based ethanol as a sustainable replacement that's even worse.  Speaking of grain, we're donating money to farmers not to grow crops in places that they could and other farmers for poor returns on those that they did plant at times or in places that they shouldn't. 

We're generous with green energy companies that go broke as soon as they run out of our charitable contributions, on maintaining government buildings that the government no longer uses, and on such needy causes as training Chinese prostitutes to drink responsibly (which falls under the category of foreign aid affecting US interests, I'm sure).  Let's face it.  The truth of the matter is that we're spending billions in charitable contributions to bad governments with worse leaders all around the world who really don't like us; in the misguided notion that 'buying friends' is a workable plan.  (Proving that while the US doesn't negotiate with terrorists, they're perfectly willing to fund those considered only part-time terrorists and full-time political leaders; who then work with or subsidize other full-time terrorists.)

You know, maybe too much generosity isn't such a good thing after all.  Maybe you and I are in fact donating far too much, and against our own best interests.  Maybe ....

Oh wait, we're talking about taxes after all.  Taxes are extracted at the point of a gun (or the threat of a federal prison sentence),  and their redistribution of our obligatory contributions fall under the same guidelines as most government operation.  Mostly begun with the best of intentions, they have morphed into a bureaucratic monstrosity whose only saving grace is the inefficiency of they're misguided efforts.  I suppose that as such, they cannot therefore really be considered generosity after all.  I feel better again ... sort of.

Donate Responsibly ....

 

Sky High Dreams

Kansas City is going to get a new airport that will cost it over $1.2 billion.  It really doesn't matter whether it needs one or not, whether the existing one gets the job done or not, or whether it makes any sense to build one or not.  What apparently is important to this situation is that the movers and shakers within city government want this new airport (as depicted to the left), and they're determined to get it.

Now for those of you who have never actually used KC's aerodrome, Kansas City currently possesses a unique three terminal design which was originally dedicated in 1972.  It has consistently ranked in the top five facilities in the country in terms of customer satisfaction (as tracked by J D Powers and Associates), for the last decade and in 2010 was rated as the top medium-sized airport.  (All of which appear to be good reasons to tear it down.)  

This isn't to say that KC hasn't hasn't kept up the facility and indeed has spent considerable money on its airport to update it over the last 41 years.  In a move to upgrade the original design, additional millions were spent not that many years later to add underground parking garages at each of the three terminals for the convenience of travelers.  (What fate that underground parking would see after this latest revision has yet to be discussed.)  During the years of airline expansion, a fourth concourse was even considered (and delayed long enough to make it unnecessary).  Just nine years ago, the city spent a further $258 million to again update the very terminals that it now wants to tear down and replace. 

Of course airline traffic is down these days; and with the recent mergers led by American and United, KC is today using only two of those available three terminals.  Then again, flights all over the country are down as the airline industry attempts to consolidate in the face of years of incipient financial failure.  The ever-increasing cost of fuel, the compeititive nature of key air routes, and an economic slow-down that has only added to a significant reduction in non-business related travel all point to an airline industry that will be struggling for many years ahead to maintain any level of profitability and damned lucky to see anything approaching a full recovery any time soon.  But instead of seeing the closing of 33% of its gates as a warning sign against future infrastructure spending, supporters of the new design see this instead as an opportunity to build the new facility over the recently closed corpse of the A Terminal.

On top of the poor industry timing, one has to wonder about the timing involved with looking for bond financing during the tight budgets of a stalled economic recovery.  After all, none of this has been approved for state or federal grants that might provide any alternative.  That would leave the airlines largely responsible for picking up the cost of this project by increasing landing fees, a move which will likely see such costs passed on to consumers through increased fares.  The city, whose infrastructure budget is already stretched like many others around the country, would likewise have figure out how to pick up part of the tab, something likely to be offset by yet more in the way of a higher sales tax or increases in hotel taxes (or both).  

And yet all of this effort and expense is to be made fro no better reason than to simplify the current security process at the airport and add shopping and restaurant venues.  The current layout apparently requires more staffing than the single entry port model of many airports (though it does shorten potential security lines); a job which has been ably handled by one of the few privatized security forces instead of the standard TSA agents.  Of course the real boon, as it is for any other such big government project, are some really great high-paying 'union' jobs in the construction trades, along with the inevitable construction delays and cost overruns that go with such efforts.  Strangely however, part of the initial justification of moving forward with the project is that it would allow this new airport to operate with less in the way of both security and other operational personnel.

Not surprisingly, local residents are rather dubious of moving forward with what they see as unnecessary spending, and have said so repeatedly.  KC's City Council however, seems unfazed by such public opinion and have recently approved the spending of $117,000 of such taxpayer money for a public relations firm to attempt to sell local residents on the project that they don't appear to want.  Or at least, not yet ... 

The bad news about such a disasterous waste in government spending in such tough economic times is that none of this will be going to KC road, water, and sewer systems that are all but crumbling beneath their feet.  The good news however, is that when such collapse does eventually happen, at least KC residents will have a new and more efficient escape route.

Fiscal Cliff ... Phoooey

(Please be aware that the occasional use of sarcasm is likely in this effort.  While I can promise you that it's there, I feel no obligation to specifically point out its use.)

The end of 2012 is almost upon us, and quite frankly there's not much to look forward to. After all, we're just about to see the last date with the same numbers that we're ever going to in our lifetimes (12-12-12).  And if that weren't depressing enough, I just discovered that we won't actually have Dick Clark this year to host "Dick Clark's New Years Rockin' Eve" from Times Square.  I mean sure, he's got a great excuse and all, having achieved room temperature in April; but I'm not sure that gives him the right to mess up a show that still has his name on it.  Now there's nothing to look forward from this mostly awful 'Made-for-TV' event than Ryan Seacrest and a bunch of mostly talentless performers (which actually sounds like an episode of American Idol, but that's another story).

So what do have we got to look forward to.  New Year's Eve is a Monday (not one of your prime drinking days), which probably leads to a mid-week hangover for those who insist on over-indulging despite the poor timing. Then there's a couple of weeks of screwed up checks (at least for those of us who don't pay all of our bills electronically), with the scribbled out corrections of the date, shrugs, and occasional apologies to clerks and grocery check out people who don't give a crap anyway.  Oh yeah, and then there's this pesky Fiscal Cliff thing.  I mean wow, what a fuss!

I suppose I don't want to give more to the government in taxes than the next guy (well, maybe except for that Warren Buffet character), but I figure that if any of us has to pay more, all of us should.  I mean hell, Democrats have been telling us for years that things haven't been the same since Bill Clinton was president anyway (and certainly they wouldn't lie about such a thing).  So being a big fan of "The Good Old Days", I say that we all ought to climb in the 'Wayback Machine' and take a trip back to the Magical tax rates of the 90's.  Of course I'd like to take government spending levels back to the same period as those tax rates, but that's just the kind of nostalgia fan I am.

I'm also a realist however, so I know that the government needs to take more of my money.  After all, without it how could they afford all the hiring that they've been up to again lately? (How else are they going to get the unemployment rate down?)  If not for government, who else could be counted to funnel money into solar energy companies that, when they're not shifting their manufacturing to China, are going bankrupt and sticking us for the money they the got from the feds?  How else could the government afford to pay farmers for crops they aren't growing?  Who else could continue to pay ethanol producers to make a fuel that still isn't affordable (even with the federal subsidies), causes more pollution in its production than the gasoline it replaces, wrecks the cars that attempt to use it, and drives up the price of the crops that the farmers do plant since they're being put in a gas tank instead of someone's pie hole.  Hell, they've got the system so well rigged that they can drive up the price of the fuel by forcing the mandatory use of ethanol, drive up the price of groceries being made with whatever's left; and ignore what it does to the cost of living, since neither fuel nor food count when the government calculates this rather vital number.   

But let's get past the nonsense of government's sad attempts to pick winners and losers in the game of capitalism. (Not that with their record, winners comes up often or that anyone's going to let them pick horses at the track because of their past performance ).  The US government has long sponsored pure science as well as commercial opportunities.  Oh sure, we've abandoned spending most of cash we once put in our space program, and NASA with it; but there's still a lot going on in important pure research.  For example, how else than by spending $3 million would we know how far a shrimp can run on a treadmill, or through a $300K grant learn how humans ride bikes?  (Personally, will all those legs I'd like to see a study with the shrimp on the bikes, but that's just how an inquiring mind like mine works.)  How about the $3 million given to the University of CA at Irvine to play video games, the $700K in government grants the University of New Hampshire is using to study methane emissions from dairy cows, or the $615K in taxpayer funding the University of CA at Santa Cruz got to digitize Grateful Dead T-shirts, tickets, and T-shirts?  Oh but there's more!  There's the $1 million in federal funds used to create poetry to raise environment awareness at the Little Rock, New Orleans, Milwaukee, and Chicago Zoos, or the $442K that the NIH is using to study male prostitutes in Viet Nam to name of few of the thousands in recent budgets.

And of course the government needs money to pay the 535 legislators that approve all of this money being spent on such worthy efforts in the first place.  House Speaker John Boehner's making $223K, Senate Majority Leader Harry Reid's right behind by pulling down a little over $193K, and all the rank (pun intended) and file legislators are knocking back $174K.  (And boy, they're worth it, aren't they?)  How can we expect to be able to afford such high-priced talent if we all don't redistribute a little wealth to those that are making far more than the rest of us (but just under the $250K line used to designate 'the two percent')?  And now that so many of them are retiring because of the toxic atmosphere they've created in Washington DC, there's some pretty fat pensions that have to paid to those who've made millions trading on the inside legislative and regulatory information they've gathered while in office.

So I say Phoooey to the current nonsense and worry being spewed about driving off the Fiscal Cliff in 2013.  I say that when we see that cliff, let's punch the gas and make a Dukes of Hazard, General Lee effort at the jump!  It's time to stand up and be counted for a government that's doesn't appear to be doing so well in the polls and fro some reason seems a bit short of cash. This is the Christmas season after all and our government needs us.  (Oops, did I just violate Jefferson's principle of the 'Separation of Church and State' by mentioning a religious holiday and government in the same sentence?  Sorry ....)  I say we all show the spirit of giving that Americans are famous for (even evil Republicans) and put some of that money we were going to use for holiday charitable donations (no doubt for no better reason than so we could write them off our taxes) and presents for the kids and put it instead where it can do the most good; in the hands of our trusted and respected politicians.  After all, who better than they would know what's best for us.  Besides, with just a little bit of luck, they might give a little bit of it back to us.  
  
             

Fiscal Cliff or Debt Ceiling - Confusion of Terms

It seems like everyone is talking about the country going over the Fiscal Cliff; and most of them like to use the same "Thelma and Louise" movie reference for this December 31st event that I've often used for the entire process of how the government deals with borrowing and spending money.  Of course I would have thought that going over a cliff was a bad thing (since both Thelma and Louise attained room temperature as a result of this last drive), but maybe I'm just a little confused.  Silly me.  It appears that both sides preaching their share of doom and gloom only do so they could steal my Hollywood reference to describe what would happen if the country were forced to plummet into the depths of the horrible, the evil ... "Sequester".  (The Bastards!  I mean geez, it's not like I get a lot of original ideas, and the one I do get they steal.)

Now Sequester, for those of you who have buried your heads in the sand for the last couple of years and don't understand it (which is apparently quite a lot of you), is the agreement to automatic tax increases and budget cuts that Democrats and Republicans consented to when they discovered that they didn't have the testicular fortitude to come up with another piece of duct tape to hold on the budget band aid that holds on the actual band aid that holds in place the government budgeting process.  Sequester was meant to be the Armageddon which no one wanted, but which would be required of the nation if the D's and R's once again could not agree on how much money the nation should take in and how much it should spend.  This horror would involve the end of previously agreed to tax cuts (you know, passing a tax increase without actually voting on one) and across the board spending cuts (which can be overruled by new legislation passed as soon as possible after the Sequester occurs).  This way, legislators of both parties can tell you that Sequester is bad (in spite of the fact the they created it as an alternative in the first place), that higher taxes are bad (in spite of the process letting tax cuts expire), and that spending cuts are bad (in spite of the making them automatically part of the Sequester).  

By the way, can anyone tell me why tax cuts are always temporary, but tax increases are permanent?  It almost seems that legislators are saying that increasing taxes is good, hence their permanence; and tax cuts are bad and should only be allowed to exist temporarily and when no other alternative exists.  Of course, we all know that this can't be the case.  After all, they've told us so.

Not surprisingly, much of the current budget jury-rigging came about not because of the Fiscal Cliff negotiations currently stalled; but because of the fact that the annual budget process and the  Debt Ceiling have failed to reach any effective conclusion for the last couple of years.  The Debt Ceiling, lest we forget, is the credit limit on the ability of the government to borrow.  The Annual Budget of course, is the money that the government spends each year.  Since we continue to spend more each year than we take in through tax revenues, the need arises regularly to raise the limit of the amount of money that the government is allowed to borrow in order for it to write the checks on money that it doesn't have.  

Interestingly enough, the only things that the two parties of experienced legislators (perhaps too experienced, if you know what I mean) were able to agree on during previous Budget and Debt Ceiling debates was to go ahead continue to spend more than we were taking in for a while longer (called 'Kicking the Can'), and to let the country borrow more money than it ever had in the past. (Though curiously these days, most of that debt is not purchased by the Chinese as politicians on talk shows would like to have you to believe; but by the Federal Reserve, which simply goes out and prints more money in inflationary spiral that makes that debt worth less in a process which it also ignores.)  After years of intransigence. obstinancy, and belligerence, these same legislators decided to threaten themselves with the formidable prospect of Sequester in the future in order to convince us that their continue lack of serious action in the present was a plan and not simply a failure failure of leadership. 

The result of this lack of fiscal responsibility going into the 2010 election was that Republicans took back control of the House; I suppose in the hope that such Armageddon could be avoided (and scrubbing the Bruce Willis / Ben Affleck shuttle mission).  Since then, the House has regularly passed budgets bills that at least attempt to address the reining in of the expansion and out-of-control spending of government, mostly to no effect since the Senate refuses to vote on the House proposals.  Of course their efforts at responsibility are performed in so timid a fashion as to be unrecognizable as such, but they should get credit for at least trying.  Instead however, its members are pilloried for sending the Senate weak-kneed spending reforms that are demonized by the majority party in the Senate as 'draconian cuts' and attempts to throw mom off a cliff. 

Meanwhile, in what is supposed to be the more deliberative Senate, no actual deliberation takes place, mostly because the Senate Majority Leader Reid won't allow it to.  (The Senate in fact has failed to pass an annual budget for almost four years, in spite of requirements that it do so.)  Out-of-hand rejecting the ideas of the House (too far to the right) and the President (too far to the left), the Majority Leader is apparently incapable of coming up with anything of his own that might be 'just right'.  He instead appears content to sit quietly with his gavel and mumble to himself "My Precious" while not Rome, but the entire nation burns around him.  (My personal belief is that Senator Reid's stubbornness may be part of an advertising contract in which he receives a fee for using his manner and appearance to draw attention to the upcoming release of  "The Hobbit: An Unexpected Adventure", which opens in theaters on December 14th.  Unfortunately, this may be a long running contract, as the movie is expected to have two sequels.)  Some say in Harry's defense that budgets coming from the House Republicans couldn't be voted on because the R's have thus far refused to compromise by replacing their own ideas with those of the D's; but that seems a rather lame excuse when a bi-partisan effort in the Senate rejected the last proposal of the leader his own Democratic party by a vote of 99 to 0.  

So if all of this appears confusing, don't feel bad ... it actually is.  You're not alone in having difficulty understanding this confusion of policies, described by terms that tells us that we are now going to go over a cliff in part because we are unable to agree on a budget that keeps us from hitting a ceiling.  You're likewise far from alone in confusion over the fact the end of the year will see us being forced into mandatory tax increases and spending cuts by two political parties who will tell you that both of these concepts, singularly or together, are an anathema not to be tolerated and the last thing that they want to see done in this country (except of course, for reaching agreement on any sort of alternative).

                                        

Less Is Most Definitely More

There's been a little sniping in the mainstream media as the 112th Congress begins its summer vacation.  Of course it's not really a summer vacation because since the middle of the Bush years, neither house of Congress likes to adjourn because it allows a sitting President to make recess appointments that might otherwise not pass the Senate.  Lately the recess appointments have been made anyway, which would seem to make the idea of staying in session to prevent it from happening rather ludicrous; but then again 'rather ludicrous' is usually a safe descriptor of Congress anyway.  But I digress ......

The apparent complaint with our National Legislative body is that it has accomplished too little in the way of passing laws, and therefore has not done its duty. Derision is cast on the 112th Congress for passing a repeal on Obamacare, something that many of those running for seats promised that they would do if elected.  Of course the fact that they passed such legislation 33 times since taking office might be a bit excessive, but could perhaps be explained as simply a reminder that occasionally political promises are kept .... even when doing so is meaningless.

Speaking of meaningless, ABC tells us that Congress has however proposed 60 bills to rename Post Offices, 38 of which passed Congress and 26 were signed into law.  Of course they failed to pass a law to fix the Post Office's indebtedness or even force it to fix itself.  As a consequence, the National Department Snail Mail defaulted on a previous Congressional mandate to pre-fund $5.5 billion in health benefits.  (I guess the check must have gotten lost in the mail.)  While I tend to agree with the assessment of ABC in the poor handling of the Post Office woes (oops sorry, felt like something was trying to come back up on me after making that statement), personally I find this lack of productivity rather refreshing.

The Washington Post disagrees however, and went even further in castigating those now on holiday by showing rather graphically the lack of legislative productivity from the most recent bunch; an illustration which must make Ohio's Speaker Boehner proud.

Courtesy of the Washington Post

Apparently being a newspaper inside the Beltway (though only just barely in the Springfield, VA facility) means that they are, like Congress itself, incapable of a proper assessment where this subject is concerned.  There are far too many laws and regulations in this country already, passed by the eager minds and overly productive hands of a group of people who always seem to legislate for everyone but themselves.  The mind numbing size of the Federal Register alone (the big book of Federal Regulations) has grown rather remarkably over the years from its humble origins of 2,620 pages during the FDR Administration.  In fact, the feds recently took this tome online as the only way to deal with its forest killing proportions, since it adds some 70,000 to 83,000 pages per year. (And probably a good deal more than that this year.)  

That being the case, perhaps we should be giving a standing ovation to lawmakers for the gridlock, deadlock, and partisanship which has characterized the 112th.  (Yeah, I know.  I find the idea of applauding politicians nauseating too.)   Maybe in their final session before the end of the year (which for some will include some lame duck time), we can get them to walk back some of the nonsense they and their predecessors have done over the years; subtracting rather than adding to the confusion of overlapping and contradictory federal, state, and local laws.

But listen, let's not stop with merely handing out kudos to the junior legislative body.  How about a shout out to those on the senior circuit with a 6 year-term to play with.  Oh sure you can talk about the arcane rules of the Senate, and how they've been manipulated to prevent real action on the floor; but one can't help but recognize a bunch of guys who haven't even managed to pass a budget mandated by law in three years.  That's non-performance on an epic scale.

So while the media seems intent on deriding Congress for less bang for the buck (understandable certainly, since it is filled with Republicans after all), I think that we can all easily recognize the debt of gratitude the we owe to the Senate Majority Leader for sitting in a cave on a rock and eating raw fish while contemplating 'his precious' ring of power, one that he may well lose for bringing his part of the national legislature almost to a standstill.  (Oh come on, admit it.  He does look like Gollem.)  Many may find Sen Reid's recent activities objectionable or even detestable, but for myself, I cannot help but recognize that a lack of new legislation equals a lack of new restriction.  While the Majority Leader may be seen by many as an obstacle to progress, I see him as a shining example of what government can do best for the people ... next to nothing.  (Though I can't help but wonder when he and his fellow Democrats will inherit 'the Party of No' mantle that they so richly deserve.)

My only disappointment in all of this is that in spite of the lack of productivity in the legislature, spending continues to increase.  Even in this apparent record level of impotence, these 435 non-union salaried employees seem to be able to throw more money away that their more productive predecessors.  I only wish it were possible to truly celebrate their lack of legislative potency with a corresponding level of frivolous monetary disbursement.  More spending, more borrowing, and more scrutiny over every aspect of our lives.  Yes it appears that were the federal government is concerned these days, even their less is definitely more.

 

The 2012 Budget Debate: Silent Surrender

Can anyone remember the heady days in the run up to the 2010 elections?  Does anyone still remember the promises made about what would happen to the size of government and the profligate level of spending being condoned in Congress if the right people were sent to represent us?  But we were going to show them, weren't we?  We were going to send a bunch REPUBLICANS to the House of Representatives and turn the ship of state around.  Rallying around their party battle cry, we were going to see $100 billion in spending cuts happen in the next budget if the GOP took control.

Well we gave the Grand Old Party their majority, at least in the House of Representatives, and what did we get in 2011 as a result?  Well for starters we got a budget with proposed cuts of only $61 billion instead of the promised $100 billion. We were disappointed of course, but after all even a cut of $61 billion out of an annual budget of over $3.7 trillion was nothing to sniff at.  (Actually it was, but we all choked down the bile, bit our tongues, and put the best face we could on it.)

That of course, was before this budget went to Senate, where Majority Leader Harry Reid was less than thrilled with the 'draconian cuts' that that Republicans in Congress were proposing.  He refused even to bring a vote to the Senate floor on what was purported to be an annual budget cut of 1.6%, in spite of the fact that it still would have provided more being spent than the government had spent in 2010.  (Some day, someone will have to explain the 'government-speak' that allows government to spend more than in the previous year and even use the word 'cut' in the sentence describing it, but there's no time for that today.)     
In the end, the Senate agreed to allow a vote on a 'cut' of some $38 billion dollars for the 2011 federal budget. (Now we're down to a 1% cut, but $38 is kind of  close to the original $100 billion, right?)  But wait, we're not done yet.  

According to an AP story in the Washington Post at the time, because of how long it took the House and Senate to reach an agreement and because the compromise reached for cuts was only on 'discretionary spending', the amount of the actual spending cut from the budget was in fact $352 million.  For those of you unwilling or unable to do the math for yourselves, this meant that Republican control of the House was able to bring about a total federal budget reduction of .0095%. (Are you impressed yet?)

But that was then and this is now, right?  Surely now that freshmen Republicans earned their spurs and learned a bit more how things are done in Congress, now that Ohio's own John Boehner is a bit more comfortable with his role as Speaker of the House; things would be different and real spending cuts will being made in 2012.  Not so fast, my friends ...

In a story posted in REDSTATE.com today, budget cuts recently proposed in the House by Republicans are in fact being rejected (at least in part) by the Republican majority in that legislative body:

"McClintock (R-CA) – Cuts the Energy Efficiency and Renewable Energy program by $1.45 billion. Rejected 113-275.
Chaffetz (R-UT) – Cuts the Advanced Manufacturing Program by $74 million, to FY 2011 levels. Rejected 140-245.
McClintock (R-CA) – Eliminates nuclear energy research subsidies (saves $514 million). Rejected 106-281.
Chabot (R-OH) – Eliminates funding for the regional commissions, such as the Appalachian Regional Commission (saves $99.3 million). Rejected 141-276.
Blackburn (R-TN) – Cuts 1% across the board (would cut $321 million). Rejected 157-261.
Mulvaney (R-SC) – Brings the bill toward RSC budget levels by cutting a total of $3.1 billion across almost all accounts. Rejected 125-293.
King (R-IA) – Prohibits funding of Davis-Bacon union wage requirements. Rejected 184-235.
Flake (R-AZ) – Across the board spending cut that would keep funding at FY 2012 levels ($87.5 million savings). Rejected 144-274."

While they were at it and during this same legislative period, the House passed H.R 5882 to keep Legislative Branch Appropriations at the same level as in 2011.  So not only has the Republican majority in the House managed to reject spending cuts that have been offered by members of its own party, but it has managed to do so in an election year while drawing little or no media attention to itself.

Why is all of this important?  Because while the federal government hoped, through its last compromise, to avoid taking up the issue of raising the debt ceiling before the 2012 elections; little of that hope now remains.  After raising the debt ceiling of the country by some $2 trillion less than a year ago, this nation seems to have once again reached its legislatively mandated credit limit.  So once more the two legislative Houses will have to take up discussion as to whether we can continue to run up debt like an evil Wall Street brokerage house or irresponsible 'too big to fail' bank without consequences to those watching the nation's purse strings.

In light of the Republican party's ability to snatch defeat from the jaws of victory the last time this debate took place, one cannot help but wonder if someone in the party's leadership will have the intestinal fortitude to take a stand (other than one imitating Custer's Last One).  One must likewise wonder what the Republican Presidential nominee's position on this debate will be, and whether he will attempt to show leadership, sit on the sidelines, or run for political cover.  Finally, one cannot help but wonder if a party attempting to rally its conservative base to keep control of the House, win control of the Senate, and send its candidate to the White House; can do so if its strategy in the debate continues to be an all but silent surrender.

   

TFP Column: Titanic Proportions

I truly intended to get a mid-week posting up on time this week; but the more I worked on the effort, the more it became apparent that the effort fit more with the TFP than with JBS. (I will still do a mid-week effort, but it may be a day late ... or so.)

With that in mind, I turned this effort over to Editor-in-Chief Michael Miller (who's work on the upcoming Titanic event in fact instigated this week's column).  Michael, kind soul that he is and ever willing to attempt to save a drowning man a lifesaver (cherry, my favorite) agreed to publish "Titanic Proportions" on the website.  While the piece is not about my ongoing battle of the bulge, you might find it interesting as exercise in tying two things together that shouldn't normally find themselves in close proximity (you know, like steamships and icebergs).  

Since this is happening in the middle of the week, you will find it while reading the mid-week Star Edition on the website; but I'm sure that there will be even more promising efforts there as well in the weekend edition of that which remains the largest Sunday circulation newspaper in Toledo, and Ohio's Best Weekly Newspaper for the third year in a row, the Toledo Free Press.

New Year's Resolutions - 2011 (Part I)

The end of the year is fast upon us, and for many of us it's once more time to make those time honored 'resolutions' of expectations that we have for ourselves for the coming year.  

I find myself on the eve of the election year of 2012 looking at the process much as I did in 2009 in a New Year's Resolution effort for the Toledo Free Press, and added to here in Just Blowing Smoke. I find that in the intervening years, I have held surprisingly firm to those resolutions; so perhaps it's time now to offer a few more serious ones and let you who have lost far too many hours reading the nonsense of JBS decide whether they have value, and whether I stick to them in the days ahead.

• I resolve to treat the pronouncements of Republicans and Democrats (and even Libertarians) with equal disdain, knowing such pronouncements can often be little more than the empty noise of political expediency at best and despicable political pandering at worst.
• I resolve to speak out whenever the opportunity arises against the unjust practice of forcing taxpayers to pay for primary elections in this country. If D's and R's require such ballots to pick candidates, let them pay for the process themselves.  If however, taxpayers are going to be forced to pick up the tab for these increasingly irresponsible organizations, let suffrage be universal and not restricted to club membership.
• I resolve to ignore most of what the 'pundits' say most of the time.  Most of this group is becoming just as guilty of self-serving bullshit as the politicians that they attempt to mold opinion on as they build them up, take them down, and pronounce them suitable for election (or not).
• I resolve to similarly ignore the polls, as they have become similarly tainted by their constant repetition and ever-changing results.  Polls may be of some use to candidates in determining their relative position in a given field or the sound bite that will get them the most media attention, but they are no basis for voters to use in choosing a candidate.  In fact, their influence on recent election process has probably done more harm than good  (at least according to my recent polling numbers). 
• I resolve to call out any misuse of the term 'spending cut'.  No longer allowing those in power to call a reduction in the increase in spending a cut. If you're spending more this year than you did last, and if you're planning on spending more next year, you haven't "CUT" anything. 
• I further resolve to call out any of the accounting trickery used to raise revenues (taxes) now in exchange for spending cuts later for the deceit that they are.  It has long been apparent that in this form of 'Wimpy Economics', taxes do increase, though no spending cuts inevitably occur.  Only changes that take effect immediately on both sides of the equation have equality.
• I resolve to highlight and attack any increase in the federal bureaucracy in this country.  Not only does it increasingly place the real power of government in the hands of people who are at no time responsible to the electorate, but the increasing restriction of their mandates is currently the greatest threat to freedom in this country.
• I resolve to continue to highlight the hypocrisy of politicians on both sides of the aisle talk about the reforms required in government union pensions and entitlement programs, while doing absolutely nothing to reduce the costs of their own compensation packages and pension programs.

At the very least, this should keep me busy enough to stay out of trouble in an election year that promises to be a truly 'target rich' environment.

Happy New Year!

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The Future of Government and Higher Education?

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Many in the 'Occupy' movement are complaining about the burden of student loans that they have after leaving an institution of higher learning. Having completed a degree in English Renaissance Literature or Sociology (and not paid attention during those boring economics courses), they are only now discovering that their investment in higher education is not going to pay the dividends that the broker (Admission's Counselor) encouraging them to speculate led them to believe.

Now finding themselves so underwater on college loans that they will never be able to achieve the American Dream of being underwater on a mortgage, they (like many homeowners) look to the government for relief.  Like many in banks, auto manufacturers, and green energy companies, they would like some assistance to help them survive the piling of one bad loan upon another, in their own form of investment 'bundling'.  It is their contention that government's involvement and intervention is not only preferable, but essential.  Some even go so far as to say that government should provide such education as a 'right'.

(Am I the only one who's noticed that the group constantly asserting 'rights' are those on the 'left'?) 

While not normally being one for capitulating to the demands of those with little in the way of logic and reason on their side (evidently these too were courses mostly ignored).  There are times when one must seek a more compassionate perspective; and I am willing to expend the effort required to do so.

Oh I don't believe that these loans should be forgiven.  Personal responsibility is something that society should prize, and not allowing them the opportunity to accept responsibilities for past mistakes and pay back legitimate financial obligations would be doing them a serious disservice.  I am willing to concede (or accede, as the case may be) to their cries for government intervention in higher education if that is the path that they wish to take.  In fact, I believe that some of the proposals that progressives in both education and government have told us for many years have reaped great rewards in society as a whole should be used as a model of such intervention.

I therefore propose:

* Reducing or eliminating much of the funding in pure research at universities that sees no likely immediate return.  Like that done for defense or space exploration, most could be done away with in the name of attempting to maintain the costs of operation within reasonable growth percentile.  There should likewise be a National Research Board to strictly monitor and regulate what research is done and who will do it in the name of fairness. There's no point in having one university duplicate the research of another .... that's simply inefficient.  Ultimately we need to recognize that Professors are after all teachers; and teachers get paid to teach, not financed for working on a patent that could make them rich.  

* A National Board of University Departments would have to take control and come up with rules to cover the regulation of all university departments, their budgets, and even their necessity.  I'm sure that a mostly college-educated bureaucracy could come up with a set of guidelines in enough annoying detail for even the most prestigious of universities to be able to understand and follow.  Just as with research, it would be inefficient to have too many colleges too close to each other, duplicating the departmental offerings of others.  Certainly some form of government regulation could relieve some of this duplication and function in as efficient a manner as say, government regulated railroads.

* A National College Housing Authority will be needed institute rent controls for dormitories across the country.  Student housing is a classic example of people living on minimal (or even borrowed) income that need affordable housing.  It would not be fair to let universities take advantage of this need through market regulated pricing structures when so many are in need.  Additionally, universities should be mandated to provide low-income housing to any and all students that require it as a measure of egalitarian compliance.  Something will likewise have to be done in regards to food for these students, but that can be addressed by further regulation and bureaucracy after the housing issue is addressed. 

* Perhaps a National Tuition Board should be appointed as well.  Colleges like Princeton, Harvard, and Yale simply cannot be allowed to charge whatever extravagant prices for their offerings they choose, regardless of the services they offer or the potential advantages that a diploma issued by them provides.  To do so would hardly be fair to those to whom it's not available.  Of course it's possible that they could allowed to continue to charge what what the market will bear for their product (perish the thought), but only if no federal money in the way of grants, loans, subsidies, or funding in any way, shape, or form is provided to the university.  If even $1 is accepted by any part of the university, they too become subject to the rules of a faceless bureaucracy that probably graduated from far less grand institutions (and in the bottom half of their class). 

* Of course, all of this leads to the logical conclusion that in fact a Government Board of Admissions would also be required.  You can't just have people taking government money for education and spending it wherever they chose.  A government regulatory board to apportion admissions to all universities using that money would be required.  Through the use of government efficiencies and 'mandated fairness' to determine the placement of students, a sufficiently egalitarian method of placement could replace the current unfair method of having them simply choosing a school based on its educational expertise, the pleasant nature of the campus, or whether the student feels that an education in such a place would be enjoyable.

You know, if we are going to in effect, nationalize higher education, perhaps professors should be put under government employment standards while we're at it.  Based on teaching ability, education, and testing, they would be granted government occupational pay levels or 'grades'.  University Administrators would likewise be given government ratings to provide an equitable level of compensation for all of those in salaried positions.  Of course such strict structures as the granting of 'tenure' or allowing paid leaves like 'sabbaticals' would need to be done away with, as they would hardly fall within existing federal employment guidelines and compensation plans.  Professors would however, have a government pension to look forward to; and at least be able to compete on a equal footing for advancement once they reach the 'full-performance level' of their existing position.

I can't help but wonder how many professors would be out in the quad protesting in solidarity with their students if such a double dose of of their demands were granted to them?  I wonder how many of those universities would allow them to do so if they understood that the strong arms of federal bureaucracy were about to tightly embrace them?  I wonder how many of those students would be protesting if they knew that new federal regulation and restriction on their choices was going to be the likely result?  Then again, perhaps among the other things that they have yet to learn is that with government funding comes government control.  But such would inevitably be the case for the future of government and higher education if those in 'Occupy' get their wish.

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It's A Grand Harvest Of Subsidies For Farmers

Yesterday the Senate decided to kill the ethanol subsidy 73-27 in a largely symbolic vote, since it's attached it to another bill that's unlikely to pass. This is the type of legislative misdirection that we can expect in a town where doing right is not nearly as important as being seen to 'try' to do right. There will be little publicity when this bi-partisan effort dies an ignominious death in the House. 


Of course the ethanol subsidy is but a paltry $5 billion of the budget. If the Senate wanted to show true bi-partisan effort, they might want to take on the bigger picture. Ethanol after all, is largely a product of corn, one of the many crops which the government pays farmers not to plant. Yes, that's right. Along with Soybeans, Wheat, and Rice, the government pays out some $25 billion per year in subsidies to farmers not to farm. And while this sum is less than 1% of the Federal budget (something that's alarming in and of itself), it is nevertheless a significant amount. 


When you think of it, it's kind of like a special form of unemployment compensation (being paid not to work) for farmers only. And lest we think that this money is the only thing saving the small family farmer, in fact it's commercial farmers making over $170,000 per year that receive a majority of the subsidies (according to the Washington Times). Even the EPA admits that according to its 1997 numbers that "46,000 of the 2 million farms in this country accounted for 50% of the agricultural products". 


It's not much of a stretch to assume that a good portion of the subsidies is going to those shrewd enough to be running the largest farms. And all of this, according to the Times, when in the last year: wheat is up 81%, corn 59%, and soybeans 39%. Of course none of this could have anything to do with ethanol, which uses some of these same grains in its production. But heck corporate welfare for corporate farmers who are dangerously close to being in the riches 1% might be a small price to pay if in fact we can use ethanol to decrease the use of imported oil right? Except for the fact (pointed out by the CATO Institute in a posting from some time ago) that if we used all of the corn in this country to produce ethanol, we could displace only about 3.5% of our gasoline consumption. Likewise pointed out in this previous effort, were the facts that:

• Without government subsidies, ethanol production is currently not a viable energy option economically.
• Ethanol actually causes more pollution than fossil fuels when that during its production is added into the equation.
• Ethanol, even as an additive to gasoline, does considerable damage to many of the current internal combustion engines in use today.

Crops being used in what is apparently the wasteful and polluting process of producing a gasoline additive might also be looked at as food taken out of the mouths of starving people if one were so inclined. For as more farmers turn their crops over to ethanol production, and in light of the land being covered with water in spring flooding, food prices for both these grains and the meat products that come from the animals they feed are likely to see an even greater increases than they have in recent years. 


But that's not all! According to a Las Vegas Review Journal article from 2008, the government program of "paying farmers "rent" not to grow row crops -- including corn and soybeans -- on 34 million acres (emphasis added) is now identified as a "conservation" program". Farmers literally enter into a rental contract with the government not to grow crops in buffer zones along streams and rivers for 10 to 15 years in the name of being eco-friendly. Incredibly, some of this payout is not even about farming and exists only as a legacy to the land, as pointed out in a Washington Post article from back in 2006: "Even though Donald R Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years. Yet under a federal program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payment" because years ago the land was used to grow rice." And Mr Matthews is not alone! "Mary Anna Hudson, 87, from ... Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709." The total for the program in 2006 was $1.3 billion. One can only imagine what the natural increases in such programs has done to these payments in the intervening 5 years. 


Don't get me wrong here, its nice to see any business doing well in this economy, and small family farms have suffered setbacks in years past; but income for farmers has been up in recent years. It seems that now however, with the increase in larger individual farms and Corporate farming, that this occupation has become little more than another bunch of self-serving individuals and greedy businesses that have gotten very good at playing the government lobbying game at the expense of taxpayers. So while they may be planting corn, wheat, soybeans, and rice (or not of course), what they are reaping is in actuality a grand harvest of Government Subsidies ...

TFP Column: I've Been Framed ... Badly

The debate is heating up in Congress over the debt limit, and the rhetoric from both sides of the aisle has little to do with the issues at hand. Congress has in fact become little more than a shopaholic whose credit cards are over the limit. 


Even before today's madness began, I was seeing trends in the discussion which were disturbing. It's bad enough when lawmakers can't come up with the answer, it's worse when they don't even know how to ask the question. This led to my offering for this week's Toledo Free Press, "I've Been Framed ... Badly". 


I even managed to use the words of economists who are much smarter than I am about everything, but most especially about what this debate is actually about and how Congress is treating their entrenched positions. I hope that you find the words of Thomas Sowell, Walter E Williams, and Henry Rosovsky as interesting and enlightening as I did. I hope that the words I used to fill in the gaps between also have some value. 


Speaking of value, what could be a better value than this week's TFP (it is after all, a free newspaper published twice a week). With the short week, the Star edition will be on the stands before you know it, with the regular weekend edition only a few short days behind. Summer is finally beginning to make an appearance, so you ought to spend some time outside enjoying Toledo's largest Sunday circulation newspaper, the Toledo Free Press.

Diminishing Returns

Simple interpretation of The Law of Diminishing Returns tells us that a something can be reduced by changing only one factor while holding the others constant. This is important because of all of the scrutiny being paid to the sorry bit of accommodation called the Budget Compromise of 2011. It seems that in inverse relation to the cautions spelled out on a rear view mirror, objects may in fact be far smaller than they appear. But we might be getting ahead of ourselves. 


Let's go back a few months to before the elections of 2010, when Republicans were promising budget cuts of $100 billion for 2011 if they were but given control. Of course they all but knew by then that Congress, with both houses firmly controlled by Democrats, had no real intentions of voting on a 2011 budget before the election (and as it turned out, little after). 


Flush with victory in November in the House however, these Republicans boldly announced in effect that 'there was a new sheriff in town', and things were going to change. Yeah ... not so much. Five months later we find that Republicans who controlled the House never even tried to pass a budget with the $100 billion in spending cuts promised, reducing their eventual request to some $61 billion in order to have a chance to get it passed. 


A Senate still controlled by Democrats refused to take up this weakened effort, even if only to reject it. Eventually the two sides (with the President acting as critic-in-chief), were called to the White House and Republican Speaker of the House John Boehner and Senate Majority Leader Harry Reid finally agreed to some $38 billion in discretionary spending cuts. 


It appears that like many of the numbers released by elected officials and employees of the government, this number too appears to be compromised, and in a way that no one outside of Washington perhaps expected. According to an AP story in the Washington Post, the actual number might be considered to be a couple of orders of magnitude smaller. It seems that according to the Congressional Budget Office, with the lateness in the current fiscal year and the areas from which funding was proposed to be cut, only some $352 million of $38 billion will be cut through the end of September. Evidently the compromise reached in this negotiation was only on discretionary government spending and not actual government spending. 


Now apparently this was done to protect defense spending for all of the military efforts that the US is involved in around the world; and because of this protection, very little of the $1.36 trillion of government's discretionary spending was subject to the compromise agreed upon. 


If that were not enough to make smoke come from your ears, it appears that approximately $8 billion of the immediate cuts to domestic programs are being offset by equal increases in defense spending. In fact, when all of the defense spending for the year is calculated, the government will actually spend over $3 billion more in 2011 that was originally proposed. 


In another tidbit offered in NETRIGHT DAILY, "Budgeting Apples and Oranges", we find that due to the lateness of the hour in which Congress acted, some of the cuts to Washington can and will be ignored by the dedicated bureaucrats that are the real power in government. Budgets to most of these bureaucracies were already locked in to the budgetary process and will be spent regardless of cuts made. "... Labor, Health and Human Services and Education will spend $202.5 billion in 2011 even though Congress has only authorized $156.5 billion this year. The additional $46 billion was already authorized, and not subject to the CR that passed Congress. Another example is that the Transportation and HUD will spend $131.76 billion in 2011, but the CR only authorizes $55.49 billion. The other $76.26 billion was previously authorized." 


To the credit of those in the current Congress, the cuts made should in fact affect future budgets; but like so many things in Washington, that can change quickly as discussions of the 2012 budget are taken up in the days ahead. Few bows should be taken by either party however, when considering the mindless and profligate spending by a government about to once again begin discussions to raise its own credit limit (debt ceiling). 




It seems that Washington is the set of conditions that remains the same, and that the longer we look at the budget cuts of the 2011 compromise, the smaller they become. The Law of Diminishing Returns has set in with a vengeance, and wisdom dictates that we stop contemplating the sorry nature of such compromise, lest the last bit disappear entirely.