Great Article from Stossel on the games Politicians play when "Cutting Spending"

Discussion in 'Politics' started by Max E., Feb 16, 2012.

  1. Max E.

    Max E.

    This is a fantastic article that gets to the bottom of the game that politicians play when they pretend to cut spending.... The supposed "cuts" which they make are always conveniently after their next election, and they arent ever really cuts at all, simply slowing the growth on a previous politicians plan, which the other politician made knowing they would be long gone when their budget is proposed.... This is exactly the reason why we never seem to get anywhere when it comes to "cutting government."

    We Are on the Road to Bankruptcy

    By John Stossel

    President Obama said in his State of the Union speech, "We've already agreed to more than $2 trillion in cuts and savings."

    That was reassuring.

    The new budget he released this week promises $4 trillion in "deficit reduction" -- about half in tax increases and half in spending cuts. But like most politicians, Obama misleads.

    Cato Institute economist Dan Mitchell cut through the fog to get at the truth of the $2 trillion "cut."

    "We have a budget of, what, almost $4 trillion? So if we're doing $2 trillion of cuts," Mitchell said, "we're cutting government in half. That sounds wonderful."

    But what the president was talking about is not even a cut. The politicians just agreed that over the next 10 years, instead of increasing spending by $9.48 trillion, they'd increase it by "just" $7.3 trillion. Calling that a "cut" is nonsense.

    Mitchell gave an analogy: "What if I came to you and said, 'I've been on a diet for the last month, and I've gained 10 pounds. Isn't that great?' You would say: 'Wait, what are you talking about? That's insane.' And I said: 'I was going to gain 15 pounds. I've only gained 10 pounds, therefore my diet is successful.'"

    Democrats use this deceit when they want more social spending. Republicans use it for military spending.

    And the press buys it. The Washington Post has been writing about "draconian cuts."

    "The politicians know this game," Mitchell said. "The special interests know this game. Everyone gets a bigger budget every year. ... And we wind up, sooner or later, being Greece."

    We are definitely on the road to bankruptcy.

    "We have maybe 10, 15 years' advanced notice. And what's frustrating is that we're not taking advantage of that, even as we see these other countries collapsing into social chaos and disarray."

    Mitchell points out that the politicians don't even have to make actual cuts to save the future. If they just slowed the growth of government to about 2 percent per year, the U.S. economy could grow out of this mess. But the politicians won't do even that.

    "Being from the Cato Institute, I actually do want to cut spending. But if all we're trying to do is balance the budget over 10 years, which is sort of the minimal thing that politicians keep saying we should do, if we simply limit the growth of spending to 2 percent a year, which is about the projected rate of inflation, we'll have a balanced budget in 2022. ... But instead, the politicians say, 'Oh, we'll have draconian and savage budget cuts.' ... They don't want to put government on a diet, even if that diet allows spending to grow 2 percent a year."

    They also continually mislead us about what their schemes will cost.

    President Bush said the war in Iraq would cost $50 billion to $60 billion. It cost $800 billion. When Medicare Part A was created, the government said it would cost $9 billion in 1990. It cost $67 billion. They said the hiring of TSA airport security screeners would cost $100 million. Then they spent $700 million. Yet the media report the estimates as if they are realistic. Again and again, politicians get away with underestimating the cost of their programs.

    Often the cost goes up because people change their behavior to get free stuff. A program meant to help the needy costs a certain amount. The next year, it costs more, because now more of the needy know about the program and more social workers know how to tap it. The next year, the non-needy feel like suckers if they don't get the handout, and they figure out a way to game the system.

    Then, Mitchell point out, "what do politicians do the next year? They expand the program to buy more votes. And the year after that, they add a new benefit. That's what's happened with Medicare. It's not just that they got the fundamental estimates wrong. They did. But every new generation of politicians figures out some new expansion, some new benefit."

    And so we're on the road to Greece.

    Bottom line: Don't trust the politicians' numbers.
  2. Much like winning a $million in the lottery. $50k per year for 20 years is not a $million, in hand today. Yep, they all speak this way, and it makes no sense to accounting types.

    I like Stossel, but he tends to re-state the obvious quite a bit, IMO.

  3. Tom B

    Tom B

    +1 Excellent article.
  4. Max E.

    Max E.

    He breaks it down in that way in a naive attempt to get through to the 90% of people who dont put in the effort to keep themselves informed, for example, whether you agree, or disagree politically most of the people who regularly post in the politics and religion section are well informed on politics.

    If i was to go for a beer with most of my friends outside of trading, they dont know a thing about what is going on in the world besides the odd talking point they hear when they sporadically tune into the news. Stossel attempts to break things down in an incredibly logical way, in an attempt to drive home a point to people who arent paying close attention to the news who just might be happen to tune into his show, or read one of his articles that night.

    When you watch, or read a piece by stossell, it is almost impossible for a rational human being to argue with the points he makes, so i think his goal is to sway people who might not watch the news every single day.

  5. achilles28


    Yes, the Washington spin is rhetorical bullshit.

    The "savings" are cuts from future estimated increases.

    Not actual cuts to the present deficit.

    The 99%'ers accept the headline reporting because they're lazy idiots who can't think for themselves and trust Government like Daddy.

    The media, who propagate the lie, aren't on our side. They're part of the cover-up.

    Most of the econ numbers are bullshit and fraudulent. The whole system is corrupt to the fucking core.
  6. achilles28


    There's probably a million examples of this at the county, state and federal level.

    They should all be documented and published to expose politicians for the reckless, lying sacks of shit they really are.

    We need to face facts, as nation. Social Security is broke. It's a total ponzi. The economy is headed for Greece in 3-4 years. Not 15. Medicare/aid/Obamacare won't be there when it crashes. The whole system is a complete disaster and each elected fuck is either too stupid to know which end is up, or lies and obfuscates to cover their own ass and keep themselves in a job. The sheeple are waking up, but the majority are still clueless fucking morons.
  7. pspr


    We all know, Max, that usually the cuts talked about in Washington are cuts in the growth of spending. Or, as in Obama's latest budget, it is a cut in only the size of the deficit (for the current year versus a previous year or years).

    All of this is just a cut in the previous growth rate of previous spending or proposed spending.

    But, as Obama has shown with the military, real cuts in spending can be made even if they are taken entirely from the one thing the government has a responsibility to do.

    Except for the military, I don't think the government has ever made an actual cut in spending other than eliminating some boondoggle in which case the money is just channeled into something else.

    That's why we need a balanced budget amendment with the only exception being during a Congressional declared war.

    Of course, the Democrats are the most egregious at playing the "it's a cut" game. Not a one of them believes in cuts in anything except the military. What they believe in is NEW TAXES.

    The Democrats also believe the national debt doesn't matter. I don't know how they can be so naive.

    The debt per U.S. citizen was around $35,000 when Obama took office. Today, 3 years later, it is just under $50,000. I don't know about you but I don't have $50,000 to spare for Obama's debt (make that $100,000 if I count the wife).

    Just wait until (or if) the economy recovers. Short term interest rates will rise to at least to a more normal 4%-6%. At 5% the debt service alone will be $750 Billion. That amounts to almost half of all income tax revenue.

    Something has got to give.
  8. Ricter


    Incomplete analogy. What was the factor that resulted in the drop of 5 pounds from projections?
  9. Max E.

    Max E.

    Im not sure what you are getting at, care to elaborate?
  10. Lucrum


    Obvious to me and you maybe. Not necessarily everyone. There are a lot of uninformed sheeple out there.

    #10     Feb 16, 2012