Date: Fri, 07/23/2010
Author: Mark Grannis
This afternoon the White House once again availed itself of the rather sophomoric tactic of scheduling the release of really important but really bad news on a Friday afternoon so that fewer people would notice it. What was the bad news? That budget deficits for this year and next are likely to be even higher than the $1.4 trillion we had to borrow to keep the lights on last year.
Let me write that again, because I fear that our use of the word "trillion" is beginning to hide the magnitude of our budget problems. The bad news is that budget deficits for this year and next are likely to be even higher than the $1,400,000,000,000 we had to borrow to keep the lights on last year.
It's hard for me to write anything about this because it's hard for me to believe I have to. Isn't it obvious that we simply can't continue this way? Wasn't it already obvious when the deficits were less than half as large as they are now? All that has happened in the interim is that the change we so obviously need has become harder, and we have less time to effect it.
But since the point has so far been lost on my own senators and congressman, and on most others, let me offer four brief observations, all inspired by the Washington Post's Friday afternoon dispatch on this disturbing development.
First, note how large these deficits are in percentage terms. It's not just that we're borrowing $1,400,000,000,000 per year; it's that we're borrowing 41 cents out of every dollar we spend. For every three dollars the federal government takes in, Congress has spent not just an extra nickel or even an extra quarter, but an extra two bucks. In other words, they're not even close!
Why does this matter? Partly because it tells us that no one's really trying very hard to balance the budget; it is as if no one really remembers that ideally the expenditures should be lower than the revenues. No one in Congress seems to remember what zero means anymore. (It means, "Stop spending.") Obviously, the correct response to this on our part is to fire Congress.
But perhaps more importantly, it also tells us that it's ludicrous for people to approach our budget problems by talking about how to save money here and there on existing programs. The only way to limit the size and cost of government is to limit the number of things we ask government to do. The only way to cut our government back down to a size we can live with is to eliminate all the extraneous programs that our founders never intended for a national government to do in the first place. The road to fiscal responsibility in 2011 and beyond runs right through Article I of our Constitution.
My second brief observation is that it's no mere coincidence that the deficit failed to improve in a year in which Congress decided not to bother passing a budget. If your budget were this out of whack -- and if one spouse is out of work, it may be -- then surely the first thing you would do is sit down and make a plan. Somehow expenditures need to be brought into balance with revenues, and there's no budget fairy that will do that for us while we're sleeping (or passing expensive entitlements, or even trashing the first amendment by passing new regulations of campaign speech). Saving money -- big money -- did I mention that we're talking about $1,400,000,000,000? -- takes thought; it takes effort. Without a blueprint for saving money, is it any wonder that no money was saved?
Remember this in November: In the face of a looming fiscal disaster capable of shaking the very foundations of our national government, our current representatives have done nothing. They didn't even take a shot at it. Again, obviously, the correct response to this on our part is to fire Congress.
Third, cutting the deficit in half is an idiotic goal. I've never met budget director Peter Orszag (who apparently wants credit for still being "on track" to achieve this goal), but I refuse on principle to believe that he is dumb enough to think that cutting our deficit in half by the final year of President Obama's term counts as any kind of policy success. We have got to stop thinking of budget deficits like annual scorecards that don't have continuing long-term consequences. Last year's deficit is not like last night's baseball score. Every year in which any deficit exists raises the national debt, and it's the national debt that determines how much of next year's budget gets soaked up in interest payments we can't do anything about. Even in the unlikely event that we remain "on track" to have a deficit of "only" $700,000,000,000 during the President's last year in office, that will be really, really bad. This is not a good-news-bad-news story. There is no silver lining.
Finally, it is nothing short of contemptible for our elected representatives to try to excuse their malfeasance by pointing to the creation of a bipartisan commission to balance the budget. We already had a bipartisan group that's supposed to balance the budget every year. It's called Congress, and we pay an awful lot to keep it in session. If the people we've been sending to Congress for years and years, Democrats and Republicans alike, are collectively too timid, too lazy, or too incompetent to even try to tackle the single biggest problem we face as a nation, then it's high time for us to send different people to Congress.
People sometimes debate hypothetical questions about how far we would go to make a terrorist tell us the location of a ticking time bomb. But for Pete's sake, there's a time bomb ticking loudly right inside the Capitol and no one in the Congressional leadership seems to care! How much time do they think we have?
This is not complicated. We need to spend less. Much less. Starting right now.
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