Americanly Yours

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President Obama Wants To Cut Spending (But Not Really)

January 27, 2010 By: Phred Category: Uncategorized

The news leaked several days ago that in tonight’s State of the Union address, President Obama will speak about the need to curb the government’s out of control spending.  He will announce spending freezes on “non discretionary,” non military spending, as well as pay and bonus freezes on some political appointees.

To put this announcement in context, I want you to imagine a 400 lb man who was eating 3100 calories per day a year ago.  A year ago, the man started eating 3555 calories per day (an increase of 455 calories–14.67%) and gained 64 lbs during the past year and now weighs 464 lbs–an increase of 16%.  Now, the even fatter man realizes that his weight has become an even more serious problem and he hatches a plan to deal with it.  He decides that he will freeze the increases in his caloric intake from most snacks for the next three years.  However, he decides that instead of cutting his meal sizes, he will actually continue to increase their sizes.  He will also increase the sizes of some of his snacks, while freezing the growth in the sizes of other snacks.  He concludes that these meals and snacks are essential to his survival and that therefore he must increase their sizes if he wants to get healthy.

Does this example sound far fetched?  It isnt.  The numbers used above are scaled down numbers from our federal budget.

Our 2009 budget, passed in 2008 under President Bush called for $3.1 trillion in spending.  Of this, $1.89 trillion was “mandatory”–it funded government social welfare programs.  These are the meals described above.  The remaining $1.21 trillion was considered discretionary funding–these are the snacks described above.

But, included in the discretionary funding of that budget was $515.4 billion for the Defense Department, $145.2 billion for the War on Terror, $37.6 billion for the Department of Homeland Security, and $44.8 billion for the Department of Veterans Affairs.  That total is $743 billion.  These are the snacks that the man above will not only continue to eat, but will actually increase the size of.

Now, lets look at the 2010 budget which was proposed by President Obama last February.  This budget had $3.55 trillion in spending.  Of this, $2.184 trillion was “mandatory.”  This is an increase of 15.6% in only one year.  As you can see, the costs of Social Security, Medicare, and other programs are rising rapidly.

The remaining $1.368 trillion was considered discretionary.  The cost of these snacks increased by $13.1% in that single year.

In other words, while discretionary costs are rapidly rising they are not the biggest problem.  Our mandatory costs are not only bigger than our discretionary costs–but mandatory costs are increasing at a much faster rate than are discretionary costs.

But,this budget included $663.7 billion for the Defense Department, $52.5 billions for the Department of Veterans Affairs, and $42.7 billion for the Department of Homeland Security.  The total here was $758.9 billion.  This is an increase of about 2.14%.

If President Obama were proposing to cap the annual growth in the total budget at 2.14%, the majority of Americnas would be pleased.  However, as mentioned above this spending freeze will not include mandatory spending–the biggest and fastest growing part of the budget.  But, just like the fat man described above, our national debt increased by 16% in President Obama’s first year–and just like that fat man, we are going to increase what we eat.

The government is cooking itself bigger meals as well as increasing the size of its snacks.  This is not the way to get in shape.  Using our analogy of the overweight man, we see that at best, this will only slow the rate at which the man gets fatter.

And, we would be fools to think that the President’s freeze on discretionary spending actually means a freeze on discretionary spending.  The news of the spending freeze was leaked the other day, but this morning news leaked that the President was going to request a 6.2% increase in the education budget.

Of course this money will come with strings attached.  Federal money always comes with strings attached and efforts to increase federal control.  Federal funding for education is nothing more than a move by the federal government to expropriate the money from Americans through taxes and then sell that money back to State education departments and local districts in exchange for influence.  The Carter Administration nationalized education in 1979 and the effect has been disastrous: steady declines in education all across the nation and sharp increases in costs of education.  These federal actions have made the American people pay more money for less education.  But, we cant be surprised by the Obama Administration’s efforts to further erode local and family control over yet another aspect of our lives.

On top of this, President Obama will announce an $8 billion high speed rail initiative in Florida tomorrow.  This sounds nice, but the fact of the matter is that the high speed rail systems proposed by the government is a horrible idea that will be extremely costly, bad for the environment, and will not be high speed!  This isnt actually a new plan, but rather a rehashing of a plan that President Obama put forward last year.

The good people at the Georgia Public Policy Foundation put together a report on this plan last year.  You can find that report here.  Here are a few excerpts:

“The FRA is not proposing to build 200-mph bullet trains throughout the U.S. Instead, in most places it is proposing to upgrade existing freight lines to allow passenger trains to run as fast as 110 mph – which means average speeds of only 55-75 mph. This would actually be slower than driving for anyone whose origin and destination are not both right next to a train station.” (Page 6)

“Even with these optimistic assumptions, high-speed rail reduces corridor transportation energy consumption by only 8.3 percent. This means the operational energy and greenhouse gas savings fall to zero if we assume instead that automobiles and airplanes are, by 2025, just 8.3 percent more energy efficient than they are today. If automakers meet Obama’s fuel-efficiency standards, autos will be more than 30 percent more efficient in 2025 than they are today, so high-speed rail will actually be wasting energy.” (Page 21)

“the FRA system will carry each person an average of 58 miles per year.” (Page 25)

But, these are just the two spending increases that have been leaked today.  If we factor in the “mandatory” increases in social welfare programs, the increases in defense and intelligence budgets, and the new jobs/stimulus programs that Congress is almost sure to pass, we are still looking at heafty budget increases.

The man in my analogy would be stupid to not go on a diet.  Our government should do the same.  It needs to stop eating snacks where it can and begin to reduce the size of its meals to a sustainable level.

If President Obama is serious about preventing the looming debt crisis from wiping out decades of economic growth, he needs to change his tone.  Instead of just freezing spending in certain areas while allowing the already bloated budget to expand, Mr. Obama should cut the budget where possible.  He should also look for ways to stop the increases in the costs of mandatory spending before it is too late.

But of course, it may already be too late.

Americanly Yours,

Phred Barnet

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Quotes From Dr. Thomas Sowell

March 09, 2009 By: Phred Category: Uncategorized

I have written about Dr. Thomas Sowell here before.  I think he is possibly the smartest man in the country.  I scoured the interweb and found a bunch of great quotes from him.  Enjoy.

“People who talk incessantly about “change” are often dogmatically set in their ways.  They want to change other people.”

“Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good.  In area after area – crime, education, housing, race relations – the situation has gotten worse after the bright new theories were put into operation.  The amazing thing is that this history of failure and disaster has neither discouraged the social engineers nor discredited them.”

“One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.”

“The next time some academics tell you how important ‘diversity’ is, ask how many Republicans there are in their sociology department.”

“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it.  The first lesson of politics is to disregard the first lesson of economics.”

“Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated.”

“A recently reprinted memoir by Frederick Douglass has footnotes explaining what words like ‘arraigned,’ ‘curried’ and ‘exculpate’ meant, and explaining who Job was.   In other words, this man who was born a slave and never went to school educated himself to the point where his words now have to be explained to today’s expensively under-educated generation.”

“No matter how disastrously some policy has turned out, anyone who criticizes it can expect to hear: “But what would you replace it with?”  When you put out a fire, what do you replace it with?”

Capitalism knows only one color: that color is green; all else is necessarily subservient to it, hence, race, gender and ethnicity cannot be considered within it.

“Each new generation born is in effect an invasion of civilization by little barbarians, who must be civilized before it is too late.”

“If you are not prepared to use force to defend civilization, then be prepared to accept barbarism.”

“If you have always believed that everyone should play by the same rules and be judged by the same standards, that would have gotten you labeled a radical 60 years ago, a liberal 30 years ago and a racist today.”

“It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”

“Liberals seem to assume that, if you don’t believe in their particular political solutions, then you don’t really care about the people that they claim to want to help.”

“Mistakes can be corrected by those who pay attention to facts but dogmatism will not be corrected by those who are wedded to a vision.”

“Mystical references to society and its programs to help may warm the hearts of the gullible but what it really means is putting more power in the hands of bureaucrats.”

“Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated.”

“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.”

“Tariffs that save jobs in the steel industry mean higher steel prices, which in turn means fewer sales of American steel products around the world and losses of far more jobs than are saved.”

“The most basic question is not what is best, but who shall decide what is best.”

“The most fundamental fact about the ideas of the political left is that they do not work.   Therefore we should not be surprised to find the left concentrated in institutions where ideas do not have to work in order to survive.”

“The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending.”

“Too much of what is called “education” is little more than an expensive isolation from reality.”

“What ‘multiculturalism’ boils down to is that you can praise any culture in the world except Western culture – and you cannot blame any culture in the world except Western culture.”

“Would you bet your paycheck on a weather forecast for tomorrow?  If not, then why should this country bet billions on global warming predictions that have even less foundation?”

“The assumption that spending more of the taxpayer’s money will make things better has survived all kinds of evidence that it has made things worse.   The black family- which survived slavery, discrimination, poverty, wars and depressions- began to come apart as the federal government moved in with its well-financed programs to “help.””

“Most people who read “The Communist Manifesto” probably have no idea that it was written by a couple of young men who had never worked a day in their lives, and who nevertheless spoke boldly in the name of “the workers”.”

“Despite a voluminous and often fervent literature on “income distribution,” the cold fact is that most income is not distributed: It is earned.”

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.” [bureaucrats]

What is ominous is the ease with which some people go from saying that they don’t like something to saying that the government should forbid it.  When you go down that road, don’t expect freedom to survive very long.

Americanly Yours,

Phred Barnet

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