Baby Steps

There is a schism brewing in the Republican Party over the Paul Ryan-Patty Murray budget deal … just at the wrong time … see: Business Insider Article.  This revolt revolves around the fact that this “bipartisan” deal raises taxes (“fees”) and also increases spending (through sequester rollbacks).  The tea-party branch of the GOP rankles at this Democrat-lite solution … while the establishment Republicans believe that this deal will remove this budget issue from the table for the 2014 elections.  In other words, "take what we can get and move on (baby steps … or incrementalism) and we will have more leverage after the elections."

I am sympathetic to both positions. However, one argument that has caught my attention is that Democrats have used incrementalism for generations to get us into the dire predicament in which we find ourselves today … a debt abyss from which it is almost impossible to extract ouselves.  So, if the Republicans now try to adopt incrementalism as their solution, they are once again playing the Democrats’ game. Yes, I realize that not playing this game jeopardizes Republican chances in 2014, but then I strongly suspect that our Kardashian-obsessed American electorate will not wake up to our real fiscal peril until confronted with the cataclysm that awaits if we continue down the fiscal path blazed by the progressives among us.

Being babied is seldom an effective cure for self-indulgence.

Rose-Colored Glasses

Yesterday President Obama released his budget … over two months late, but who’s counting?  The Senate and the House have already passed their budgets.  And, in typical Obama fashion, he is “leading from behind” or, maybe better phrased, “leading from his behind.”  Much of the left-leaning media is so impressed with the mere fact that he has done this rare feat … that they have given this document the benefit of the doubt on most of its lame assumptions. But this financial flight of fancy still grows our nation’s debt into the stratosphere … by almost $9 trillion over ten years (see: Breitbart Story).  And, in his patented “I don’t give a spit.” fashion, Obama even said that this budget doesn’t contain “a lot of smoke and mirrors” (see: Another Breitbart Story). Not a lot of smoke and mirrors?!? Wow!  Does anyone believe that it should contain any smoke and mirrors?

Senator Patty Murray was the architect of the Democrat's Senate budget which was seriously flawed by unrealistic GNP growth rate assumptions (see: Pattycake).  And Obama is following suit by also looking at the United States’ economic outlook through rose-colored glasses.  Even Politico points this flaw out in the following passage from its news blog: 

The faster the economy grows, the more taxes will be collected. At the same time, unemployment and low-income spending will decline. So good growth is a key to a better budget outlook. This administration projected growth of 3 percent in 2013, 3.6 percent in 2014 and more than 4 percent in 2015. Reality paints a different picture. Growth in 2012 was 2.2 percent and 2013 looks on track for another disappointing 2 percent. The gap between forecast and reality will not, however, stop another round of rosy assumptions.

To read more of this, see: Politico Story.  But, since the President’s budget was, apparently, not a serious policy document … but was, like most things he does, purely political, such Pollyanna-ish pronouncements were only meant for the Peanut Gallery (apparently the majority of U.S. voters) anyway.

Charm Offensive

I don’t know about you, but I am offended by President Obama’s “charm offensive.”  Yes, one can attract more bees with honey than one can with vinegar.  But the President has splashed around so much acetic acid during his last four years, that switching to Karo syrup just at the time when his media acolytes are beginning to waver seems rather disingenuous … see: Huffington Post Story

Offering candy to children to get them to toe the line often works.  But the Republicans in Congress are, hopefully, a little more sophisticated than turnip-truck ejectees.  I think that the current best Republican strategy is to wait for Obama’s budget proposal sometime in April (hopefully) and then pull out all the stops in educating the American public as to the debilitating ramifications of same.  Certainly, if the President’s 10-year fiscal outline is anything like Senator Patty Murray’s recent Democrat thigh-slapper (see: Pattycake), this should be an easy sell. Then, they might even get some minimal cooperation from main-stream media outlets.

If the Republicans need to throw the President and Democrats a bone in order to get any serious entitlement reform, then getting rid of the "carried interest" tax loophole would be my best candidate for a compromise.

Pattycake

Senator Patty Murray (D, Washington) just submitted the Democrat’s first 10-year budget proposal in the last four years … about a week after Representative Paul Ryan (R, Wisconsin) offered the Republican’s perennial plan … and about a month before President Obama has promised to submit his administration’s fiscal guidelines.  This is topsy-turvy.  The Congress as per the Constitution requires that the President must offer his budget by the first Monday of February to be followed, traditionally, by the Senate and the House reconciliations (see: Redhaired Grrl ).  Needless to say, although Paul Ryan has created a ten-year path to zero deficits, Patty Murray does not even offer a feigned attempt to do so.  And, in his “leading by following” style of (non)-governing, Obama’s budget is expected to even outdo Patty Murray’s profligate taxing-and-spending proposal.

To be specific, Patty Murray’s budget includes about $1.5 trillion of additional tax increases and fire-hose spending that culminate in annual deficits well above $500 billion continuing well after the ten-year view of her document … resulting in a total increase in our national debt by over $7 trillion by 2023 (to $24.4 trillion).   Please explore the details of this budget proposal at: Powerline Blog.  But what is even more maniacally unrealistic is that Patty Murray is using economic (GDP) growth expectations that are obviously science fiction.  Here they are as calculated by a clever reader of the Powerline reference, Mike McNary, and offered therein:

Year    Expected GDP Growth
2014            3.81%
2015            5.92%
2016            6.58%
2017            6.20%
2018            4.93%
2019            4.52%
2020            4.40%
2021            4.32%
2022            4.26%
2023            4.23%

Such robust economic expansion is possible and has happened in the past (like under Ronald Reagan), but Obama’s record for GDP growth shows that a 2% annual increase is the best he has been able to produce … but this was before his recent actual and additional hoped-for tax increases and the impact of Obamacare on our nation’s economy.  So, dear reader, if Patty Murray (and President Obama) have their way with us, there is no possibility that this country can outrun fiscal ruin over the next ten years.

Afterward: It's even worse!  Senator Sessions exposes Democrat double-counting budget mendacity.  See: Breitbart Story