Your laughing, right? Honesty out of Washington? When is the last time we saw honesty in Washington? Well, enjoy the chuckle because you may want to cry before you finish reading this post.
Debt Crisis Looms
What is the biggest threat to America? Last night, Mitt Romney said it was a nuclear Iran. One friend of mine says if we don’t fix the illegal immigration problem, nothing else will matter because in a short time third world immigrants will be the majority in America. Hard to argue with that. Another friend would say if we don’t stop the stealth destruction of our country by the proponents of Agenda 21 and Smart Growth and Sustainable Living, we will wake up one morning and the socialist will have achieved their take over of America. Also hard to argue with. However, for me, the debt crisis is the greatest threat to America.
For the purposes of this post I am assuming that Mitt Romney will win the election for president. If Obama were to win, I would have no hope for America.
So, after the election we will have a lame duck congress and a lame duck president. They will be charged with dealing with the immediate taxmagedon and debt ceiling breach and the sequestering of $500 billion from the military budget. The payroll tax cut is expiring, the so-called Bush tax cuts are expiring, and some of the ObamaCare taxes are about to kick-in. Moody’s and Standard&Poor are threatening to cut America’s credit rating again and they probably will. I predict that there will be a lot of gnashing of teeth and threats from both sides of the aisle and in the end the lame ducks will kick the can down the road for three or six months more. In other words, the looming debt crisis will continue and the new Romney administration will, in my opinion, have no choice but to get serious about eliminating deficits and paying down the debt or risk a complete financial, economic, monetary collapse.
Congress is Broken
The approval rating of Congress is as low as it has ever been and deservedly so. Most people have a low opinion of Congress because the their pork barrel spending or because of gridlock. Me? I wish Congress had been gridlocked for the last fifty years. But, I am about to tell you why Americans should hold Congress in contempt. Congress is not only broken it has been perpetrating a fraud against the citizens of the United States for a very long time.
I said in yesterday’s post how much I appreciate political bloggers because I learn so much from them. Alex Gimarc wrote a post last week a American Thinker that for me was an education in why our government keeps on growing no matter which party is in control of Congress. I learned something about congressional budgeting that I should have known but didn’t. Please consider this article a must read.
Alex first takes us back to 1974:
In 1974, a Democrat-dominated Congress in the throes of Watergate passed the Congressional Budget Act of 1974. Among other things, the act established the Congressional Budget Office and codified the notion of baseline budgeting. A budgetary baseline increases about 6% per year. Any expenditure less than that 6% yearly increase is portrayed as a budget cut by Democrats and their media lackeys.
That one little paragraph explains so much. Since 1974, each year every department and agency of the federal government gets a six percent increase over what they spent in the previous fiscal year unless Congress specifically gives them more or gives them less. And, because of the Sesame Street accounting practices of the CBO, if Congress fives a department an increase in their budget of less than 6%, it is scored as a budget cut, for which our Congressmen and Senators will brag to the public they are cutting the budget. Let me state it another way. Under the Congressional Budget Act of 1974. Romney could come into office in January and push through a 5% across tha board cut for all of government and all of government could actually get a 1% increase in their budgets. Do we ever hear anybody in Washington talk about this? Of course not. This is the best kept secret in Washington. Although the 1974 Act was passed by Democrats, no Republican has to my knowledge ever voiced a concern. Since 1974 out Congress and Presidents have been defrauding the American citizens. But, hang on, because it gets worse.
One of the games played by Democrats under this law is the passage of stimulus bills. When a stimulus is passed, it adds immediately to the budget baseline for that year and then for every succeeding year. So the Obama-Pelosi-Reid stimulus passed in 2009 added $787 billion of new spending to the federal budget in 2009. It then went on to add $834 billion of new spending in 2010 ($787 billion times 1.06 for the 6% yearly increase); $884 billion in 2011; and finally $937 billion in 2012. Over the last four years, this totals $3,442 billion more than would have been budgeted through the normal process — which is precisely why the Democrats wanted it passed as a stimulus.
That is how we get $1.4 trillion deficits for the last four years. And, it will happen again in the fiscal 2013 budget or continuing resolution that will happen in the next one or two months.
There is a Fix
The fix should be obvious. And frankly, it can be done without all that much pain. First the 1974 Congressional Budget Act must be repealed. Every department of government should have justify any increase in spending and Congress would have to approve it. And, the CBO must use accounting practices that are closer to the GAAP that all businesses must use.
Secondly, if we cut from the 2013 fiscal budget the 6% compounded Obama 2009 stimulus package, we would reduce our deficits by $1 trillion. Who can argue that prior to the housing bubble collapse in 2008 that we didn’t have all the government we needed, which without the stimulus has incresed at 6% each year. Minimum pain. Still, we would have continuing deficits of about three to four hundred billion per year. But, Mr. Gimarc tells us there were two more Reid/Pelosi stimulus packages in 2007 of $ 152 billion and in 2008 of $146 billion. These two stimuli became part of the baseline budgets and have been growing at a compounded rate of 6% ever since. So, if we were to cut those from the 2013 budget as well as the 2009 stimulus we would have a balanced and with the other plans Romney is planning we would have a surplus and could start paying-down our debt. All of that theoretically could be done at minimum pain.
All that is needed is some Honesty Out of Washington
Seriously, that is all it would take; one honest man. That man would have to be Mitt Romney. If he went before the people and explained what I have written above, he could pressure Congress to change its ways and make the cuts that would solve our debt crisis. Will he do it? Sadly, I have my doubts. The fraud that is Congress is well intrenched. I suppose it depends on who Mitt Romney really is. Is he the Republican statist that has already been bought by Goldman Sachs and friends as many libertarians believe he is? Or, is he the man described by Ann Romney and others at the Republican national Convention some weeks back? maybe he is somewhere between those two descriptions. If he wins in November, we will soon find out. If he loses, then none of this matters and the debt time bomb will surely go off in the next five to ten years.
Well, now you know what I’m thinking. What are your thoughts?