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  • A Tale of Two Gushers: Oil and Spending

    Federal Spending Chart

    Washington’s runaway gusher of spending makes the Deepwater Horizon disaster look small and simple to stop.

    Congress is debating another irresponsible round of extra spending (although they refuse to call it “son of stimulus”) before they take a Memorial Day break.  The measure would add an estimated $84-billion (or perhaps $100-billion) to the deficit.

    That’s actually good news, because earlier this week they planned to spend $50-billion more, until some Democrats joined Republicans in balking.  The bad news is that Congress refuses to adopt a budget that would describe how much more they intend to spend over the next five years—or even to tell us how much more they will spend this year.

    In addition, another spending bill is moving thru Congress–with $60-billion that is mostly to finance the war in Afghanistan—which is also deficit spending not included in official budget numbers.

    The National Debt clock just topped $13-trillion, surpassing $42,000 apiece for each American.  The $1.5-trillion deficit in 2010 makes everything worse.  (The Heritage Foundation has a useful set of charts about federal spending, for the graphically-inclined.)

    An uncontrolled geyser of spending keeps spewing money from Washington.  There is no plan to clean-up the long-term financial mess—even if the gusher stopped today.  There is no blowout preventer for federal spending.  There is no disaster relief plan.

    Capping the undersea geyser is simple compared to capping spending.  The undersea oil spill is only a mile deep, but Washington’s problems go down to the core.

    The supposed safety valve of “PAYGO” rules—to require new spending to be offset by new revenue or other spending cuts—is proving as futile as the blowout preventer on the BP well.  PAYGO was a faulty design to begin with, drafted to provide political cover rather than actually to work.

    Moody’s bond rating service keeps warning that runaway spending is on the verge of costing the U.S. its AAA bond rating—meaning higher interest charges.

    Failure to plan is a big part of the BP disaster, and a big part of DC’s as well.  The culpability of BP’s management is minor compared to elected officials who won’t control spending, but instead push the debt onto Generation X, the Millennials, and whoever is next.

    For those who counter by accusing Republicans of spending too much, I agree with you.  But that’s no excuse for even greater deficit spending by the current Democrat-run government.  Most of us learned in kindergarten that someone else’s misbehavior is no excuse for our own.

    BP at least has worked to shut off the flow; Washington is opening the spigot even wider.  Nobody knows how long it will take to clean up the mess in the Gulf, but one thing’s for certain:  Cleaning up the fiscal mess will take a lot longer.

    Posted in Economics [slideshow_deploy]

    7 Responses to A Tale of Two Gushers: Oil and Spending

    1. Tim Az says:

      I'm not sure how you can expect them to know how much spending congress intends to do in the next two years. They really don't know how much spending is required to collapse the system. Neither Woodrow Wilson or F.D.R. could pull it off when they made the attempt. Mao-Bama was slightly truthful when he said F.D.R. didn't spend enough fast enough to end the recession. What he wanted to say was that it wasn't enough to collapse the system. Had he been totally truthful the people would have understood what Mao-Bama meant when he talked about hope and change. We all know now what he meant. The question is can we derail that train before it reaches his destination?

    2. Mike, Wichita Falls says:

      As scary as this spending graph looks, it doesn't even account for the recently passed healthcare bill or the possible financial bill. Both of these are being sold as deficit/debt reducers, but they will only encourage more bad behavior and spending.

      Wow! OMB projects 43% growth in baseline spending over the next decade?!? How many of us "workers" will see our wages rise that much? How many of our employers will even be able to afford it? We may be doing good just to have jobs.

    3. MLP, Bellingham says:

      If one wanted to destroy the structure of the United States: our constitution, our entreprenureal spirit and free market system of business, our patriotism, and our two hundred years of personal freedoms and human advancement; one would put our United States so much in debt with spending, that as Greece, the United States cannot financially susrvive.

      The outcome is to polarized American thinking and actions to return us back to our Constitutional roots. This will be very apparent in November.

    4. Bill, Kansas City says:

      Throw them all out and make a career politician extinct, like the dinosaurs.

    5. Ram, MI says:

      It's amazing to see the absurd similarity in today's headlines. That gushing of oil is like our nation's spending run amok affecting our future that nobody fully understands or is willing/capable to STOP it NOW. The muddied, oiled waters are our children in the future. They're all getting soiled to the bone due to today's out of control spending.

      Somebody should put a powerpoint showing the similarities between these two items and highlighting how disgustingly and eerily similar they are. They might as well be one in the same.

      The author has a good point also, just because Republicans spent way too much, doesn't make it right for the Democrats to follow-suit. If they truely want to show they are the superior party, they would work to find a solution to stop the bleeding NOW.

    6. Lynn Bryant DeSpain says:

      Even if it cost America one Trillion dollars to clean up the oil damage and to feed those damaged by it, that is still one eigth of the increase that Obama has raise the National Debt in eighteen months, and all that has done is to delay the ultimate hangover.

      No where in our Constitution does the powers granted to the Federal Government as Agent to the States, give it the power they have assumed in creating this debt, purchasing into the Private Sector, Controling Market outcomes, and vesting interest in our banking systems.

      Please keep all of this in mind this coming November, and cast your vote to the untainted, to the new, to those who's ideas have not been tried, and give America a chance to recover to its great and former glory.

      You cannot fix any problem with the same level of intelligence that created it. That has never been done, and never will be done.

    7. rjgarfunkel says:

      What short memories! When did the right-wing cut spending? Reagan, Bush I and II were our biggest spenders in our peacetime history except when they crafted another economic Bubble that burst. Bush II will join Hoover as one of the great political disasters of the 20th Century.

      Conservatives, with their heads in the sand have opposed every effort in the 20th Century to bring fairness, equal opportunity and justice to our citizenry. They harp on family values, and often are moral hypocrites. The list is endless. They celebrate the 2nd Amendment and distort it to the nth degree. The 2nd Amendment protects the NRA and has done nothing to keep us free from their phony straw man of big "socialist" all-encompassing government. The conservatives have been on the wrong side of history since McKinley. When it has come to education, health care, pure food and drugs, clean water and air, child labor, sweat shops, slavery, social security and countless other advances, conservatives have fought, delayed and attacked anyone and any idea that has promoted equal justice under law. They were the heart of the KKK, Know-Nothings, the Liberty Lobby, America First, the White Citizen's Council, anti-lynching laws, the American Bund, and you name it. They have been against regulation of the market places and have hidden behind political party labels and the so-called free market. It is irrelevant that southern bigots were Democrats. In fact, they were conservative Dixiecrats. All that made this country great and moved us along towards progress were progressive thinkers and leaders. You may want to celebrate bigots and monopolists like Ford and Rockefeller, but it was their children that humanized their legacies. My question is and always has been, what to you folks really support? I see it as segregation, gated-communities, and being anti-women, minorities and equal access to opportunity. Keep on raving to the fools and dolts who read your claptrap. Keep on with the divide and conquer mentality. In the long-run the conservatives would still be supporting the cave men and Luddites, because most conservatives fear change. As William Buckley, the grand Poobah of the Right once said, not all conservatives are stupid, but assuredly most stupid people are conservative. Keep on screaming, the oligarchs and fatcats love your support,

      Richard J. Garfunkel

      Host of The Advocates

      wvox 1460 am radio, New Rochelle, NY

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