Bottom line: The Democrats will never relinquish the welfare state or the means to shovel tax money into it.
The debt supercommittee on Monday announced its failure to reach even a minimal deal to reduce the deficit.
“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas), the co-chairmen of the supercommittee, said in a joint statement.
The stalemate highlighted the sharp divide between Republicans and Democrats over the nation’s deficit and triggers a yearlong fight over $1.2 trillion in automatic cuts to the Pentagon and civilian spending programs now scheduled to be implemented in January 2013.
Each party sought to blame the other for the impasse even before the two chairmen officially threw in the towel less than an hour after financial markets closed.
These debt graphics are an ominous indicator of what happens when entitlement programs get bloated and unsustainable:
When actual austerity is demanded by savers funding budget deficits, the consequences are never pretty. Amid powerful rallies in U.S. bonds in recent years, it may be forgotten that a three percentage point rise in long-term U.S. rates took no longer than six months in 1981. While driven significantly by a policy decision from the Federal Reserve at the time, such a selloff did not take significantly longer than the periods seen in Italy or Spain recently. Such a future selloff may not be an internal policy decision led by the Fed.
Quite simply, if Medicare as we know it and social security are to remain, the taxes collected to finance these programs are woefully short. Social Security already runs an operating deficit. Its assets are U.S. Treasury securities that have not been issued to the public, but will be matched with marketed securities when payments come due, as the public was subtly reminded as the debt ceiling was hit in August.
As figures 1 illustrates, the 6.2% payroll tax, prior to its “one year” cut in 2011, covers roughly one fourth of the present value of total future Medicare and Social Security obligations as extrapolated by Federal actuaries. The unfunded portion of these programs is now valued at $78 trillion through the future. Fully funding these entitlements will require huge program reforms or sharply higher taxes.
Entitlements are the biggest piece of the pie, besides the pork. It’s essential to have a robust national defense regardless of the economy, but some cuts will have to be made there as well.
This is just a sampling of the idiocy on display with government spending:
787 billion of our taxes, and here is how the government spends it.
– $462,000 to purchase 22 concrete toilets for use in the Mark Twain National Forest in Missouri
– $1 million for Portland, Ore., to replace 100 aging bike lockers and build a garage that would house 250 bicycles.
– $1.3 million on government arts jobs in Maine, including $30,000 for basket makers, $20,000 for storytelling and $12,500 for a music festival.
– $6 million for a snow-making facility in Duluth, Minn.
– $173,834 to weatherize eight pickup trucks in Madison County, Ill.
– $20,000 for a fish sperm freezer at the Gavins Point National Fish Hatchery in South Dakota.
– $300,000 for a GPS-equipped helicopter to hunt for radioactive rabbit droppings at the Hanford nuclear reservation in Washington state.
Rabbit droppings. There’s an asinine abundance of that kind of allocation throughout the U.S. budget. There’s no reason why our debt can’t be brought under control.
This disaster could have been on its way to being solved, but the Dems pulled their usual shit and tabled the Cut, Cap, and Balance bill passed by the GOP in the House. Billions of dollars in wasteful spending could be achieved by cutting stupid shit like THIS, and THIS, and THIS, and THIS.
It’s not the mandatory spending for infrastructure or the military that’s killing this country economically; it’s the bat-shit crazy discretionary waste and the looming collapse of Social Security, Medicare and Medicaid. People are living longer and the ratio of working taxpayers to retired people on Social Security, gets larger by the year. Think it’s bad now? Just wait those programs finally go under.
- Senate Democrats Blame Uber-Lobbyist For Super Committee Failure (businessinsider.com)
- Deficit Committee’s Failure: Thanks and No Thanks (blogs.wsj.com)