Now Is the Time to Be Like Europe
The G8 and G20 got together over the weekend in T.O. (that's Toronto in case you haven't been to Canada lately), and the heads of the world's richest economies all got together and discussed how they were going to extricate themselves from this ever-worsening global debt problem. The responses were a little startling. Europe, the cradle and incubator of socialism, said they couldn't afford to run welfare states anymore, and it was time to cut back. Nations like Britain and Germany with rapidly rising public debts stated that they did not want to be the next Greece, and to avoid being the next domino to fall they were going to do the right thing and start to balance their budgets.
This did not sit well with our president and his colleague in the American Left. President Obama admonished the leaders of Europe for what he felt was the wrong thing to do during an economic slowdown, debt or no debt, crisis or no crisis. He later backtracked from his statement, but his initial remarks spoke volumes. Paul Krugman with his Nobel Prize in Economics (which I will go to the grave never understanding how he won that) was more blunt, leading a recent column with the following statement:
Spend now, while the economy remains depressed; save later, once it has recovered. How hard is that to understand?
Yes, Mr. Krugman with his Nobel Prize must immediately be smarter than several world leaders, because he clearly seems to think that the David Camerons and Angela Merkels of the world have the IQ of cow dung to try to stave off bankruptcy and global economic meltdown. How dare they sell out the movement toward a world where government does everything for you and all you have to worry about is... whether or not you still have any rights or freedoms. Krugman goes on to admit that bloated health care costs will cause our debt to continue to balloon (but I thought health care reform was supposed to stop that), and then promotes the value-added tax that will likely make its way through Congress next year if (and, as I've said here previously, when) the Democrats get their 60-seat Senate majority back in November. That the VAT will flat-line our economy (when combined with cap-and-trade and the expiration of the Bush tax cuts, all likely to happen by next year) is irrelevant. We must spend, spend, spend, continue to rack up debt, based on the illusory promise that things will get better, and THEN we can address the trillions in debt that we owe to China and others who still dare to buy it.
Well, I guess I only have one question to ask Mr. Krugman, although I clearly am far inferior to him intellectually (after all, he has a Nobel Prize): What happens if things DON'T GET BETTER?!?
We spent nearly a trillion dollars on a stimulus package that resulted in unemployment going UP by over 2 percent... and don't give me this BS about jobs created or saved. It is IMPOSSIBLE to determine whether or not jobs are saved by government spending. Just ask the people in New York who run the Empire Zone program. This spending is the only reason our economy has grown at all the last couple of quarters, and as soon as the money runs out, bye-bye growth. As soon as the census is over, all those census workers go right back to unemployment and those numbers start to rise again. Consumer confidence is plummeting, investors are dumping stock like crazy because of the debt crisis in Europe... we are going to have a double-dip recession. And it will be a global one. BET ON IT.
Therefore, it doesn't take a Nobel Prize winner to realize that no matter how much money we spend that we don't have, the only result is going to be a bigger debt and a greater chance of default and global economic catastrophe. Therefore, we must cut back. People on the Left have told us for years that we need to be more like Europe, well now is the time. Do what Europe has done, and CUT SPENDING NOW! No more corporate welfare (including farms), and when we do end these tax breaks, DO NOT immediately say "we'll spend that money instead on..." NO! DON'T SPEND IT AT ALL!!! Many states right now are going through this exact mess trying to balance their budgets, which is *gasp* required... not such a bad idea to require a balanced budget, now is it?
In fact, let's do that! To this date, 32 states of petitioned Congress to consider a federal Balanced Budget Amendment. We only need 2 more states to get the two-thirds needed. People in these 18 remaining states should be pushing HARD for their state legislatures to make this happen, especially in light of the fact that so many at the state level have committed to making the tough choices necessary to balance their budgets. However, there is one important situation that cannot be addressed by the states: Medicaid. It is a federally-imposed boondoggle that eats up more of a state's budget every year, and usually leads to cuts elsewhere in order to keep things on par. Since the federal government has NO plans to eliminate the program, they should have to cover the yearly increases in Medicaid costs, at least until states can take them on (assuming a better economy).
Yes, people's pet projects will be eliminated, defense contracts will go by the boards, we may have to cut back our presence around the world (but that's another entry), other hard sacrifices would have to be made like raising the Social Security collection age.
That being said, I'm likely going to ruffle some feathers on the Right with what I'm going to say next. We know cuts alone won't balance a budget and pay down debt. They know this in Europe, and unfortunately they've had to raise taxes. While I am very much against cap-and-trade (for its nanny-state pedigree) and the VAT (we don't need one more tax that can be raised any time Congress feels like it), I'm afraid we're gonna have to let the Bush tax cuts expire and the pre-2001 tax rates go back into effect. However, note to Congress: THIS IS NOT A LICENSE FOR YOU TO SPEND THAT MONEY!!! I know it's wishful thinking that any of this could happen, but it's what has to happen, and too many people are concerned with blaming the other side for our problems and too few are concerned with FIXING THEM. In fact, to honor Paul Krugman, I'm going to officially propose that the federal government's new motto be: "We'll fix the problem... eventually."
How fitting that these global leaders chose to meet in Canada, as our neighbors to the north have perhaps the model economy for other nations to follow. As I wrote in this blog a few years ago, Canada bucks worldwide economic hiccups and keeps a mostly-balanced budget, so when it does have to pony up for an economic stimulus measure, it doesn't threaten to break the bank. And crazier still, it WORKS! Hopefully, each of the world leaders at last weekend's summit (Obama included) spent some time getting tips from Stephen Harper on how to correctly run a major nation's economy.
And one final note on the hoo-ha in Toronto over the weekend: As usual, the Seattle Mob was there in full force. Rather than give these terrorists (and that's what they are... rampaging through a major metropolitan downtown smashing windows and torching police cars is TERRORISM) the attention they so crave, I will instead thank the Toronto police for arresting some 560 of these terrorists over the course of the two days. This included the novel idea of raiding a university building where they were organizing so they could get the crazies before they even started their destruction. These arrests naturally started radical sympathizers believing that they live in a police state and it's their own version of Chicago '68, but I'm pretty sure the marchers in Chicago DID NOT INTEND TO COMMIT VIOLENCE AND DESTRUCTION. Therefore, way to go, T.O. po-po. Just one more reason to justify my adoration of Canadians.
This did not sit well with our president and his colleague in the American Left. President Obama admonished the leaders of Europe for what he felt was the wrong thing to do during an economic slowdown, debt or no debt, crisis or no crisis. He later backtracked from his statement, but his initial remarks spoke volumes. Paul Krugman with his Nobel Prize in Economics (which I will go to the grave never understanding how he won that) was more blunt, leading a recent column with the following statement:
Spend now, while the economy remains depressed; save later, once it has recovered. How hard is that to understand?
Yes, Mr. Krugman with his Nobel Prize must immediately be smarter than several world leaders, because he clearly seems to think that the David Camerons and Angela Merkels of the world have the IQ of cow dung to try to stave off bankruptcy and global economic meltdown. How dare they sell out the movement toward a world where government does everything for you and all you have to worry about is... whether or not you still have any rights or freedoms. Krugman goes on to admit that bloated health care costs will cause our debt to continue to balloon (but I thought health care reform was supposed to stop that), and then promotes the value-added tax that will likely make its way through Congress next year if (and, as I've said here previously, when) the Democrats get their 60-seat Senate majority back in November. That the VAT will flat-line our economy (when combined with cap-and-trade and the expiration of the Bush tax cuts, all likely to happen by next year) is irrelevant. We must spend, spend, spend, continue to rack up debt, based on the illusory promise that things will get better, and THEN we can address the trillions in debt that we owe to China and others who still dare to buy it.
Well, I guess I only have one question to ask Mr. Krugman, although I clearly am far inferior to him intellectually (after all, he has a Nobel Prize): What happens if things DON'T GET BETTER?!?
We spent nearly a trillion dollars on a stimulus package that resulted in unemployment going UP by over 2 percent... and don't give me this BS about jobs created or saved. It is IMPOSSIBLE to determine whether or not jobs are saved by government spending. Just ask the people in New York who run the Empire Zone program. This spending is the only reason our economy has grown at all the last couple of quarters, and as soon as the money runs out, bye-bye growth. As soon as the census is over, all those census workers go right back to unemployment and those numbers start to rise again. Consumer confidence is plummeting, investors are dumping stock like crazy because of the debt crisis in Europe... we are going to have a double-dip recession. And it will be a global one. BET ON IT.
Therefore, it doesn't take a Nobel Prize winner to realize that no matter how much money we spend that we don't have, the only result is going to be a bigger debt and a greater chance of default and global economic catastrophe. Therefore, we must cut back. People on the Left have told us for years that we need to be more like Europe, well now is the time. Do what Europe has done, and CUT SPENDING NOW! No more corporate welfare (including farms), and when we do end these tax breaks, DO NOT immediately say "we'll spend that money instead on..." NO! DON'T SPEND IT AT ALL!!! Many states right now are going through this exact mess trying to balance their budgets, which is *gasp* required... not such a bad idea to require a balanced budget, now is it?
In fact, let's do that! To this date, 32 states of petitioned Congress to consider a federal Balanced Budget Amendment. We only need 2 more states to get the two-thirds needed. People in these 18 remaining states should be pushing HARD for their state legislatures to make this happen, especially in light of the fact that so many at the state level have committed to making the tough choices necessary to balance their budgets. However, there is one important situation that cannot be addressed by the states: Medicaid. It is a federally-imposed boondoggle that eats up more of a state's budget every year, and usually leads to cuts elsewhere in order to keep things on par. Since the federal government has NO plans to eliminate the program, they should have to cover the yearly increases in Medicaid costs, at least until states can take them on (assuming a better economy).
Yes, people's pet projects will be eliminated, defense contracts will go by the boards, we may have to cut back our presence around the world (but that's another entry), other hard sacrifices would have to be made like raising the Social Security collection age.
That being said, I'm likely going to ruffle some feathers on the Right with what I'm going to say next. We know cuts alone won't balance a budget and pay down debt. They know this in Europe, and unfortunately they've had to raise taxes. While I am very much against cap-and-trade (for its nanny-state pedigree) and the VAT (we don't need one more tax that can be raised any time Congress feels like it), I'm afraid we're gonna have to let the Bush tax cuts expire and the pre-2001 tax rates go back into effect. However, note to Congress: THIS IS NOT A LICENSE FOR YOU TO SPEND THAT MONEY!!! I know it's wishful thinking that any of this could happen, but it's what has to happen, and too many people are concerned with blaming the other side for our problems and too few are concerned with FIXING THEM. In fact, to honor Paul Krugman, I'm going to officially propose that the federal government's new motto be: "We'll fix the problem... eventually."
How fitting that these global leaders chose to meet in Canada, as our neighbors to the north have perhaps the model economy for other nations to follow. As I wrote in this blog a few years ago, Canada bucks worldwide economic hiccups and keeps a mostly-balanced budget, so when it does have to pony up for an economic stimulus measure, it doesn't threaten to break the bank. And crazier still, it WORKS! Hopefully, each of the world leaders at last weekend's summit (Obama included) spent some time getting tips from Stephen Harper on how to correctly run a major nation's economy.
And one final note on the hoo-ha in Toronto over the weekend: As usual, the Seattle Mob was there in full force. Rather than give these terrorists (and that's what they are... rampaging through a major metropolitan downtown smashing windows and torching police cars is TERRORISM) the attention they so crave, I will instead thank the Toronto police for arresting some 560 of these terrorists over the course of the two days. This included the novel idea of raiding a university building where they were organizing so they could get the crazies before they even started their destruction. These arrests naturally started radical sympathizers believing that they live in a police state and it's their own version of Chicago '68, but I'm pretty sure the marchers in Chicago DID NOT INTEND TO COMMIT VIOLENCE AND DESTRUCTION. Therefore, way to go, T.O. po-po. Just one more reason to justify my adoration of Canadians.
posted by Dave | 4:05 PM
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