Tuesday, March 8, 2011

Newest Fox News piece: The Truth About Obama, Democrats and Budget Cuts

My newest piece starts out this way:

With major budget votes set for Tuesday, Senate Democrats spent the weekend dismissing House Republicans' plans to cut the budget as “ideological, extremist, reckless." President Obama advocated “a government that lives within its means,” but he also charged “there’s nothing responsible about the Republican budget cuts.

Following the same script, news headlines described the House Republicans cuts as "dramatic" and "outrageous."

The magnitude of this year’s deficit might be hard for many to appreciate. But the monthly budget deficit for February of $223 billion is larger than the $160.7 billion deficit for all of 2007, the last time we had a federal budget that was approved when Republicans controlled the House, Senate, and presidency.

Democrats say that they can only come up with one-thirteenth the deficit cuts that the Republicans have put forward – just $4.7 billion, though Obama claims that these cuts meet the Republicans “halfway.” Democrats assert that there is not even enough waste in the federal budget to cut it by two-tenths of one percentage point. . . .

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Blogger wtffinance said...

"a government that lives within its means,” but he also charged “there’s nothing responsible about the Republican budget cuts."

That's the first time I have to agree with Obama. Well, kind of. The Republicans proposed budget cuts are all but responsible given that they barely want to cut anything. I know that Obama didn't imply it that way...

Fact is that both parties love to not only spend and grow the National debt, but they both also love to grow the control of Government. It's unfortunate how both parties don't have much regards for the Constitution.

I just recently wrote about the hypocrisy of Rep. Paul Ryan and the hypocrisy of President Ronald Reagan

It's amazing how both parties just compete in a race to grow the deficit, at least that's how it seems. True conservatism is unfortunately dead as both parties have their pet projects and refuse to address that type of irresponsible spending. Unfortunate.

I just found your blog by web search and like a lot of your content. I very much agree with your stance on guns and how government interference increases the cost of health care.


March 8, 2011 at 11:52 PM  
Blogger John Lott said...

Dear wtffinance:
The deficits that we are running now are not comparable to deficits under Reagan or any other peace time period. The deficits during the first three years of the Obama administration have been $1.4, $1.3 and $1.65 trillion. The deficits under all eight years of Reagan don't add up to one year of Obama's deficits. As a percentage of GDP, Reagan's were never close to Obama's.

March 8, 2011 at 11:58 PM  
Blogger wtffinance said...

I very much agree with you but think that the cause of this is not Reagan vs. Obama or Democrats vs. Republicans. I believe the root cause of this is our fiat currency system and the Federal Reserve policy that results in a non-sustainable bubble economy.

US policy has been for nearly a century to never allow recessions to unfold. The Federal Reserve is quite proud of this "achievement". As a free market economist I disagree that we should interfere in recessions, just as I disagree that the government should interfere in the market place with regulation and subsidies. I see recessions as a natural event that is the solution to the economy having gotten ahead of itself. During recessions non-viable businesses fail while the responsible and fiscally sound survive. It's economics of the fittest. Since it is Fed and Government policy to avoid recessions and to shorten the duration of any recession we might encounter, the fundamental problems never get solved and only grow bigger in size as economic bubbles are re-inflated and/or replaced by subsequent other bubbles. The Housing bubble is the latest example which "saved" us from a recession in 2001 and we now have policies to re-inflate that bubble while growing the equities and GDP/USD bubble in the process.

With an economic environment where recessions are "avoided" and solutions always include the growth of Government to offset and reduce unemployment numbers, the associated deficit spending will only grow bigger in size over the long term. The fact that neither party has been willing to seriously address this issue and reverse the policy of Government growth and deficit spending illustrates this point.

I very much agree with you that Reagan was much more conservative and had less debt spending than the Obama Administration. As much as I disagree with Socialism and the Obama Administration I believe that the debt increase has much to do with our system of doing things as whole rather than an isolated Presidency. Of course that is not at all an excuse for this administration but I think the root problems are elsewhere and can be traced to our fiat monetary system and the quasi private Federal Reserve.


March 9, 2011 at 12:21 AM  

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