What do we think of this:
President Obama proposed Tuesday that the government adopt “pay-as-you-go” rules for federal spending.
The so-called PAYGO proposal requires Congress to balance any increased spending by equal savings elsewhere, Obama said in announcing the measure that now goes to Congress.
A previous PAYGO mandate helped erase federal budget deficits in the 1990s, and subsequent ineffective rules contributed to the current budget deficits, Obama said. Now the PAYGO rules should be the law, he said.
“Paying for what you spend is basic common sense,” Obama said. “Perhaps that’s why, here in Washington, it’s been so elusive.”
Sounds to me like a reasonable idea, but what about recessions and the like- will it give the flexibility they need? What do we think of this? Useful tool, or gimmick>
I should probably note that I am deeply supportive of the concept.
The Grand Panjandrum
The concept is good. The Bush regime and its sycophants in Congress quit doing it to demolish the budget when they were trying to save us from all the terrorists hiding in plain sight.
rachel
It’s social-ism! (Or it’s as much like social-ism as anything else Obama’s done.)
Jim Pharo
In the hands of the wrong people it’s a bad concept (like just about everything else).
The Republicans will use it to slash government spending at a time when that’s a bad idea. Democrats are (in general) too dumb to use it to raise taxes, which is not an especially good idea at the moment either.
While the concept may be interesting, rolling it out now seems to come from left field, and is likely a sop to the idiot Blue Dogs as many have speculated.
JGabriel
John Cole:
In theory it sounds good, but the results are decidedly mixed – it seems to work well in times of plenty, not so much otherwise.
In practice, I assume provisions would be made for emergency spending in recessions or natural disasters – but they can be easily thwarted when you have opposing parties in the legislative and executive branches, especially in the case of a Democratic president and Republican congress.
So while it’s a good principle for the government to aim for and abide by, it’s probably not such a good idea to enshrine it in law.
.
JDM
Paygo is a horseshit republiKKKan dogwhistle that allows the reich not to fund things we need, as directed by their Owners. Want the whole country to run like California? Personal financial planning – and sound ideas about how to do it – don’t help with the economics of government. Read Keynes or much easier, just listen to Krugman. It’s not intuitively obvious by any means, particularly with the EmEssEm drumbeat of discredited Raygun voodoo economics, but government spending ( and revenue generation) works differently than personal finance. Paygo is just more bullshit cant for pay the rich, screw the rest of us.
ploeg
As I understand it, Obama was an advocate of PAYGO during the campaign. Naturally, it was set aside because of the economic crisis, but the idea has been to go with PAYGO just as soon as the crisis passes.
It’s a good idea if it’s done at the right time and in the right way. Naturally, if you institute PAYGO when the economy’s still weak, you’re taking the government out of the economic stimulus business and you risk a double-dip recession. If you cut SDI and use the savings for retraining and public works, that’s still going to be a problem but it’s not so bad. If you cut unemployment benefits and use the savings to prop up Citibank, that’s going to be a problem in most every conceivable way.
Alien radio
Pay Go is retarded, It makes counter cyclical investment impossible, and will only ever be used to cut services rather than raising taxes a federal pay go law would be a wet dream for the grover norquist crowd.
See California.
Bill E Pilgrim
I thought it was a pay-per-view site to see Pogo cartoons.
Never mind.
harlana pepper
I am not against the concept. However, the 90’s were a different time. I recall the 90’s as being pretty good years. I do not feel that this is the time to be wringing our hands about the deficit. As I have said before, I do not want to hear one word, not one word, from republicans about the deficit which they created. They have absolutely no right to whinge about it now. NONE. They need to STFU but since I never hear anybody call them on it, which should be done regularly, they continue.
Honestly, I don’t know how we can stimulate the economy, fix health care, fight two wars, create green jobs (help me out here, am I missing anything? hard to keep up with how fucked we are right now; are we going to buy ponies for everyone, too?) and eliminate the deficit at the same time, most of which was created in the previous administrations that wiped out the Clinton surplus.
Anyway, it just doesn’t seem realistic to me at this time. As a nation, we really need to get on our feet first which requires the infusion of federal dollars into the economy and not forcing agencies that provide vital services to cut back at a time when their services are needed more than ever (which is what will happen). Once we get our bearings, we will be better prepared to tackle the deficit. Now is not the time. But, as always, we must placate hateful republicans who want Obama to fail anyway. We are such a bunch of pu$$ie$.
Ash Can
I’m concerned about the flexibility issue as well, and I’m sure this aspect isn’t something that Obama would simply ignore. I have to wonder if this is a way for the Admin to get a variety of congressfolks on record on the general topic of spending, with the larger, long-term picture of economic recovery and big-ticket programs in mind. Maybe Obama just wants to get people talking and get them to show their hands before he really starts to go to the mat. (Disclaimer: this is sheer wild-ass, insufficiently caffeinated guessing on my part.)
harlana pepper
ahem, PICTURES?! update?!
PeakVT
What do we think of this? Useful tool, or gimmick?
It’s the most sophisticated framework for budgeting we’re going to see in the US Congress. I’d like to see debt to GDP target and a framework for budgeting over the business cycle. I’d also like a pony.
Taylor
PAYGO had nothing to do with eliminating deficits in the 90s. Clinton couldn’t get any of his programs through Congress, and he vetoed the Republican tax cuts. So the deficits disappeared thanks to gridlock.
They should have been running big surpluses in the 90s. Counter-cyclical investment. Instead we got the tech bubble. In the 1930s, PAYGO would have been used by the Hooverites to kill the New Deal. The Bushies dumped it to pay for Iraq.
It’s meaningless gibberish, signifying nothing.
robertdsc
His timing sucks. We don’t need Blue Dogs squirming when we’re trying to hold them still to vote for the health care thing.
Mike Roberts
Some random thoughts:
It’s always a good idea to be careful how you spend money.
You can spend your way to oblivion, but you can’t save your way to prosperity.
After Reagan’s monster deficits, and now after 8 years of Lil W’s slow motion train wreck, Republicans don’t get to claim they’re the party of fiscal restraint EVER AGAIN.
Pay as you go is a great idea – as long as we remember that there are well over 300 million of us now, and if we’re to have a ‘right-sized’ governement, it’s probaly going to be more expensive than we expect. Trying to do it on the cheap usually ends up costing more in the long run.
harlana pepper
OT, but did anybody see Rachel Maddow’s segment last nite on Michael Steele and his hat analogy? Priceless.
Montysano
@harlana pepper:
FWIW, I was traveling yesterday, listening to the radio, and picked up on the new wingnut meme. I heard Limbaugh, Hannity, and Levin all spout it: that Obama did not inherit a mess; he inherited a robust economy, which he has since trashed.
I don’t think it will stick. I think that about 80% of the populace has “George W was a fuckup” tattooed in their brain. But that won’t stop them from trying.
harlana pepper
repubelican Rep Tom Coburn is now whingeing on Washington Journal about Medicare. Hm. We can afford hundreds of billions on a bogus war and tax cuts for the rich but we can’t afford to care for our elderly. Nice.
(sigh)
Bring on Howard Dean (9:00 am) before I blow my brains out.
harlana pepper
Why are we having a hearing on single-payer health care today when we know Obama is not going to do it? Seems like a waste of money.
Oh, Coburn is bitching about pay-go. Honest to god, Dems, PLEASE stop placating these bastards. You cannot please them because they are no longer in power. Give it up and take care of the peeps. PLEASE. We are suffering. We could care less about being nice to republicans.
anonevent
I think the reason he’s pushing it now is to try to get people thinking about how you pay for things. In order to do the things he and the country wants done, it’s time the US actually thought about how to pay for it. At some point we are going to have to raise taxes, and he’s trying to build that into a consensus.
The Saff
I don’t know how anyone can listen to Limbaugh, Hannity, Beck, et. al, and not go completely nuts. Olbermann played a clip last night of Gingrich saying how the Obama stimulus plan is failing. Um, yeah, Newt, after only 4 months we were all expecting immediate results. You guys had 8 years to trash the economy but Obama only gets a few months to fix it. Naturally, I was yelling back at the teevee.
Gawd.
geg6
As I remember my economic theory from my undergrad days, PayGo would be a terrible thing to be doing during this phase of the current economic cycle. And the idea that it is what killed the deficit in the 90s is ridiculous. It was only one of many things that went into the Clintonian surpluses. It would have been a disaster if the economy hadn’t been roaring along, if one single progressive program had ever passed, or…well, there are many things to point to and in economics, as in most things involving humans and human behaviors, a single cause and effect relationship is impossible to pinpoint. And my greatest disdain for the idea is purely visceral. Anything that smacks of the DLC and GOPer Lite, which is exactly what PayGo is, cannot be the best possible idea. Much more likely that it is the best of the worst possible options.
The Saff
Agreed. Obama is about 10 steps ahead of where the Republicans are on the issues and they can’t figure out how to keep up.
Shalimar
Great idea, but now is not the best of times to implement it. I still think we could slip into a depression if further home defaults and job layoffs are as bad as they look like they could be. And serious economic downturns are the one time when government spending is absolutely necessary to keep things from getting worse.
Wilson Heath
Several have already hit it. Essentially, pay-go could only work in a steady-state economy, which just doesn’t happen, no matter how much people try to steer it. We should spend it when we need to and pay it back when we’re able to. Like us DFH’s were shouting in 2001 when the Moron-in-Chief insisted on tax cuts with the projected surplus. (When can we call a tax cut an entitlement?)
Rick Taylor
Isn’t it interesting how we start talking about Paygo and fiscal responsibility the minute a Democrat enters the oval office? I used to be an economically conservative Democrat. Then I saw how Republicans used the progress we made on the deficit to fund tax cuts tilted towards the rich, an insane war, and new exploding deficits. We increased a regressive tax to shore up social security, only to have them try to privatize it, and continually argue it needed to be sacrificed. I have absolutely no interest in being a chump again this time around.
José
Hi John and fellow readers,
There are all these economical theories and strategies and everyone throwing ideas, but one thing is certain, the basic thing is always the same : if the spent is higher than the income, things will never work.
For too long that a big part of economy has been setting on services which are in the hands of a few and although they may generate profit, that profit doesn’t reflect in the economy as it should.
Lets no forget that countries like the USA, Germany, France and UK have become economic powers through industry, agriiculture and construction, areas that create jobs and thus more spending, keeping the things rolling.
There has to be a change how people see what’s important to economy, people must be creative and think about what areas of development create jobs.
Mr. Obama may be doing the best that he can, but he or anyone cannot artificially improve the REAL economy by simply injecting money which afterall is being taken from those who most suffer with this situation.
Kind regards,
José
Rick Taylor
And as much as I like Obama, I find this grating. The United States budget is not your household’s family budget; the same rules do not apply. It’s a lot more complicated. This is a conservative framing that is destructive, and I don’t like seeing the President feeding it.
Jay
Paygo sounds like a good idea, but in reality will probably be used for evil.
Example- What if we wanted a Special Task Force to protect us from Christianist Terrorists in hospitals and clinics? Under Paygo, the government would have to compensate for this expense by slashing someone else’s budget, since no one would dare to actually raise taxes. Maybe cuts at the FDA, they’re a bureacracy most people are ambivalent about. Republicans go on TV, or god forbid Twitter, and say that “The Democrats don’t want to keep us safe from contaminated foreign beef. They’d rather waste our money persecuting Christians for their beliefs!” Politics fail.
What’s scary is that no matter what you’re trying to get or where you’re trying to cut, you can always Mad Lib the results into something scary sounding. Cut handouts to Israel to pay for Medicare benefits? Anti-semite communist. Eliminate Hummer tax-credits to pay for public schools? Class warfare. Slash farm subsidies to pay for an orphanage? Nazi.
If Obama wants to solve the budget problem, he needs to cut defense spending and raise taxes. Stunts like paygo will never yield the same results as showing a little spine.
gex
I note that increasing revenue (taxes) is never an option. So do we just put a ceiling on federal spending at current levels into perpetuity?
Anphang
I, myself, am deeply supportive of the idea where it is defined as the wise spending of money, with a weather eye kept on future payment. But where it is so defined, doesn’t legislation become pointless – or maybe even misguided? As others have said, President Bush ignored PAYGO where it suited him – and the Republican Party didn’t mind so long as it won them support for its policies. Presumably some future Democratic administration will do the same thing, eventually.
The solution, then, cannot be to mandate or legislate a system that forces Congress to try really, really hard not to go into the red – too much. This is where I agree with TNR (gasp), who brought up Thomas Schultze criticizing “command-and-control” proscriptions against social ills by writing “first it will take 21 pages to deal with ladders, and then even more as time goes on.”
So, the solution can only be to elect representatives that do this basically on their own, gently (hah!) reminded by a political culture which entrenches the idea as a given. If that sounds too idealistic, let’s all remember that the finance industry didn’t get its hyperfavorable legislation by merely buying out Congressmen – it started with legislators who already agreed with them, like Phil Gramm, and patiently worked their way outwards, until even Democratic governors of Arkansas started paying attention.
YellowJournalism
I can’t help it. Whenever I hear about PAYGO, I think of that scene in the movie “Dave” where he calls up his accountant buddy to help him balance the budget.
If it were only so easy as cutting out stupid programs like congratulating people for buying American cars…
Tim H.
In theory it’s a very dumb idea during a near-depression. It’s especially dumb because taxes on the rich are impossible now, and increasing taxes on the middle class will further submerge the economy. Spending cuts will also tank the economy, unless it’s something like the military, which almost certainly will be off limits. But I’d bet that Obama is saying this to keep the Chinese happy, which means we have no flexibility anyway. Unless this is just kabuki.
You can thus behold the wonderfulness of Bush: he has tanked things so that no comeback is even possible.
Llelldorin
The basic argument against paygo is that it turns the Democratic Party into a sort of janitorial service for the Republicans. With paygo in place, Democrats are largely prevented from using their control of government to help their constituents. We instead get the Clinton years: we waste years getting the country’s fiscal house of cards into order, then the Republicans accuse us of being lousy fiscal managers, screech about it being “Your Money!”, then take office and use the money the we painfully accumulated to achieve their own ends.
That said, I’m not sure the alternative–be every bit as irresponsible as the Republicans, and play chicken on who’s finally going to be a grownup–is any better. It leads directly to California’s current mess.
Da Bomb
It sounds like a decent idea. I don’t have the strongest background in economics. I know we are trying to argue the practicality of Paygo and how it’s not good during a near-depression and what not, but we trying a tame a different beast here compared to the past. So maybe it could work if used in the context of today’s economic situation.
malraux
Regardless of the merits of PayGo in theory, I really don’t trust unilateral disarmament while the republican party is still batshit insane. What the Clinton to Bush years showed was that fiscal discipline is very easily lost. In fact, as one party is better at fiscal discipline, the other party will find it that much easier to campaign and win on the basis of destroying that fiscal discipline.
The other lesson is that big social programs are a lot harder to cut. The best way to build a lasting improvement on society isn’t to improve the fiscal situation and then leave adding a health care overall to the next guy, its to do the big program and hope that program results in fiscal improvement.
Sasha
Like many simple binary ideas (“You buy only what you can pay for right now, or you don’t buy it.”), it’s great in theory but very likely to be not-so-good in practice.
Investment is rarely something you can pay for all at once up front. For instance, I am certainly better off with my college education, as is society with me being a productive citizen and all. Higher education was a good investment. But I could only afford university by taking loans, i.e., not Pay-Go. If I had to pay my entire college costs up front, needless to say, I wouldn’t have my BA now.
The Raven
Well, that’s change. Barack Obama turns into Herbert Hoover. Krawk!
David
You may recall that the topic of PAYGO was brought up in one of the 2004 presidential debates. Bush made fun of it on the basis of “PAYGO” being a funny-sounding word.
Anoniminous
Paygo started as a way to run government as a business. The basic problem is they are two different organizations created for two different purposes. Counter-cycle economic stimulus is one crucial purpose, as has already been mentioned by several other posters … so I won’t go into it. Conservatives, of course, are unable to grasp the differences but, one hopes, those with a functioning brain can.
On to the important stuff.
It’s not the size of the debt that matters but the relation of debt to income. Precisely, it’s the percentage of debt service versus total free & clear income. This is true whether the debtor is an individual or an organization – public or private. Now, no matter what type of entity is considered as the percentage of debt service approaches 100% the free & clear cash available for other purchases or savings must drop in an arithmetical inverse ratio. Since there is a certain percentage of cash required to meet necessary and on-going operating expenses: food, rent, energy, roads, schools, the U.S. Army, and so on, the amount of debt service plus these expenses may total more than 100% of income requiring the issue of more debt to cover current expenses.
In fact, the Federal Government has been issuing debt to cover that gap for decades. Notably under the fiscally conservative Reagan, Bush I, and Bush-the-ReRun.
Note: some Federal Government issued debt is done to garner the funds to return the principal on previously issued debt. And some of that actually lowered the amount of debt service as these new instruments had a lower interest rate than the retired debt. This increased the cash able to be devoted to other things — thus, issuing debt is not necessarily a Bad Thing.
Observation 1: over the past 40 years the Marginal Tax Rate, especially for corporations and wealthy has fallen. Essentially exactly those entities with the greatest ability to meet increased taxation. (The reasons are long and involved and elided for brevity.)
Observation 2: over the past 40 years the number of people availing themselves of public services: roads, schools, & etc., has increased by a third, roughly from 200 million to 300 million.
Observation 3: a goodly whack of national income has been devoted, as in the past 6 years, to bombing the bejesus out of brown people or in preparation for bombing the bejesus out of brown people.
The above ridiculously superficial exposition gives me the space, as it where, to state:
Pay-As-You-Go requires:
1. Increased taxation and/or user fees
2. Zero increase and/or reduction of the US population thus demand on public services
3. Lowering the percentage of national income devoted to the military
either individually or in some kind of combination¹.
A wee bit of thought brings the conclusion each of these run smack into politically powerful blocks or factions determined to stop their ox being gored and foist the pain on some other slob. Want to eliminate the debt? Fine. Eliminate Social Security.
Yeah. Right. Never Gonna Happen. And the same is true for the other two.
At least until the posturing and baloney stops and our political (theoretical only at this point in time) leadership stops playing their little short-term bullshit games and comes into some vague contact with long-term reality. And that long-term reality is painful. Sacrifices must be made – everyone agrees on that – but everyone agrees it’s the Other who has to sacrifice for the Greater Good while they continue their merry way.
IMNSHO, PAYGO is merely a way of side-stepping the whole problem while pretending it’s being addressed, solved.
¹ Oh, one can go the “eliminating waste” route which is both humorous and completely beside the point as evidenced by the history of Waste Elimination over the past 40 years. (Hint: after much foo-foo, posturing, and talkity-talk … it didn’t do dick.)
Jen R
I wonder if it really has to be *pay* as you go, or if it can be “figure out how you’re going to pay” as you go.
So for instance, you could pay for a stimulus by borrowing, but at the same time commit to a tax hike down the line to pay for it. Say, passing a law that “x” tax increase will take effect in “y” number of years, or when economic indicator “z” is reached. If anti-tax zealots are in charge when the hike is supposed to take effect, they have to figure out how to raise the money or cut spending if they want to repeal the hike.
I realize that such a plan would be subject to a lot of fictionalizing of projected debts and income, but it seems better than a strict pay-as-you-go, no deficit spending allowed approach.
ETA: and none of this “off-budget” spending shit, either. How much support would Little George would gotten for his pet war if people had known how much it was costing them?
Roq
Sounds great to me. Further, I think it’s a sign that they don’t see any more big bailouts or money outlays in the near future. Note he gave his support for it AFTER the big stimulus and so on. It seems this would be a sign that as far as his administration is concerned, the worst is over. Now we start the slog back to normality.
A little bit of common sense sounds like just the thing.
Comrade Dread
I think Obama is just floating the idea to calm the bond markets which are getting rather anxious about trillion dollar deficits for the foreseeable future.
I don’t think it’s much more than that.
I don’t think we will really get a handle on spending unless there is a real debate on the reality of scarcity and the limitations of government. I think too many of our leaders (and our citizens) have this idea that government can (and should) do anything and everything.
Unless people are willing to deal with the fact that if they don’t to pay more taxes, they will have to prioritize which government functions are more important to them, and if they want more, they will have to pay more, we’re going to keep struggling with deficits.
Anoniminous
Comrade Dread:
You might give a look at Fisher’s The Great Wave.
What we’re – the globe, not just the US – is experiencing is an Golden Oldie being played out with only minor variations.
At least so far.
scarshapedstar
Unfuckingbelievable. The GOP took us from a surplus to history’s largest debt AND deficit, and the fiscal scolds were too busy sucking Bush’s balls to say a word.
And now, with the worst economy since the Depression, it’s time to tighten the purse strings. Yeah, okay.
I will support this on one condition: that our savings from from a) universal single-payer healthcare and b) taxing the ever-loving fuck out of the mega-rich. Go Galt, assholes.
Bill H
I’m pretty much on board with that. May work on a $50k household budget, but in a national budget? Give me a break.
Obama is an interesting mixture of real inspiration and empty sloganeering. I am really frustrated that a man with the ability to be as forward looking and inspiring as he can be, a man that can create excitement and bring people to their feet the way he can do, keeps coming out with these utterly empty political, meaningless demagougeries. “My first duty is to keep Americans safe.” Gack.
sparky
@Anoniminous: yes.
and, since the intertubz are the home of uninformed speculation, here’s mine: i think this is a move designed to sell what will be a crap healthcare initiative. in other words, this premise will be deployed only as a forward-looking proposition and thus be used only to explain why we get crap healthcare since we can’t afford to pay for anything better (yes, of course we could but bla bla new taxes are a non-starter bla bla pragmatic bla bla).
why do i say this? because i can’t think of another good reason why Obama would spout such patent GOP drivel. China and the bond markets don’t care about claptrap for public consumption; they care about rates, which are driven by deeds at this point (we’re still at zero, right?). incidentally, the Chinese are openly laughing at Geithner. so this is directed towards the general public as a setup.
sucks.
and on the other personal responsibility issue, gotta love that Obama appointed someone to HHS who is opposed to contraceptives! now there’s some change! even Bush didn’t go that far. yeesh.
TenguPhule
He speaks to the audience at a level they’ve demonstrated to understand.
Jason
“Pay as you go”? What happened to “Throw A Shitload Of Money At It” (“TASOMAI”)? I thought that’s been working pretty well for an administration or two. Also it sounds like something a Japanese soldier might say while running into battle.
My understanding of economics is poor, and my ability to understand it is likely worse. But the discussion is always rich in easy-to-spot signifiers. So while the reality of the US budget entails a bunch of complex this-and-that, the rhetoric is always nice and simple: balance the budget, like your checkbook. Pay as you go, like your lay-away plans. Avoid wasteful spending, like you tell your kids.
This isn’t something that’s gov’t spouts, exclusively – in “Dave,” that movie where the normal guy gets to run the gov’t? And he brings in his accountant, who is Charles Grodin? And you think, “That’s Charles Grodin, I want to punch him in the face.” And then the Charles Grodin character does the budget of the United States on a little calculator with one of those tiny printout thingies and whines “mmmmnnuuhhh Dave if this government were a business the business would be out of business nnnngahhhh” and you think “Never before in the history of Charles Grodin have I wanted to punch Charles Grodin so hard in so much of his face” but it’s really not his fault, it’s the “Run the gov’t like a business” trope that’s just so Understandable to Everyone.
But why do we want to do that? It’s like saying “drive your car like a bicycle.” Here the US is waking up en masse to the fact that hey! when businesses think about the bottom line we’re the first to get screwed, in novel ways and through byzantine connections of butterfly-wing-flapping de-contextified nonsense that we could never see with a magnifying class and an ability to combine macroeconomics and particle physics! And the answer is that government budgeting should be presented as more simple so as to further hide complexity?
It’s not the PAYGO plan I’m interested in. It’s why the plan has to work so hard to prove that it’s all common-sensical and approvable by people who don’t want to be involved with government, and so they go into business, or tend home.
malraux
BTW, its worth pointing out that households don’t believe in PayGo either. If they did, buying a house via a mortgage wouldn’t be the responsible thing to do, nor would going to college via loans. Borrowing money to purchase something is the responsible thing to do if the benefits are obtained in the future rather than just immediately. Businesses will often do the same thing, purchasing assets on credit rather than with cash.
Of course, a rather large amount of government spending falls into categories where the benefits are felt years from now. Public education takes many years before it turns children into high income earners. Infrastructure like roads, bridges, towns, etc can pay benefits for many many decades. Why must those sorts of assets be paid in advance?
Comrade Dread
It’s simply because it obscures the realities.
The reality is that the US Government takes in over 2 trillion in taxes, and currently is spending about twice that.
No one wants to have the conversation that starts at the point of asking, “We’ve got 2 trillion to spend, what are the most important functions of government that should get first allocation of this money?”
Defense?
Entitlements?
Farm and Corporate Subsidies and handouts?
Drug Prohibition Enforcement?
Domestic Security?
Do we have any money left over?
If so, what else can we spend it on that’s high priority?
If not, do we really need to spend all of the money on the highest priority projects?
Can this be handled by State government?
If not, should we raise taxes to pay for this?
Would our constituents still want this if we made it clear that it would cost each of them an additional sum of money they had to give us per year?
If not, is it still necessary?
These are basic types of questions that I don’t think really get all that much consideration anymore, because it’s been far easier to pass the spending bills and run up debt.
Debt isn’t bad to a point, but when you start to hit huge amounts, people will lose confidence in your ability to repay that debt and inflation can follow.
Sadly, I don’t think this mentality will cease until circumstances force it to cease.
brantl
I think it’s a great idea, to be implemented after the economy, the environment and the laws are fixed from the the Bush “let’s screw the pooch with abandon” approach’s effects have been ameliorated. Then, let’s take a shitload out of defense spending (how much good did that do on 9/11?) to start being fiscally responsible.
And exactly how often have we been attacked, here, during the 200 + years? I don’t know, did we or didn’t we start the war of 1812? That would make once, wouldn’t it? There have been 2 events in history that required us to have a large army, and in both events, there was no problem with that being made up of volunteers, was there?
dpjbro
Our creditors will dump US Treasury bonds in a heart beat if this actually happens. Interest rates will go negative, and what is left of foreign investment will disappear. Deflation will ensue as will hyper-unemployment. It will improve our relationship with the Chinese government since they’ll probably roll over dollars into euros allowing the US to deal with world problems without having to look over our shoulders at how China will react. But, then again, dollars will go the way of the ruble.
Let’s hope cooler heads will prevail. If not, Canada isn’t that far away, they do speak English, and their healthcare system works pretty well.
Anoniminous
Sparky:
WalMart and their shareholders are just going to have to accept the fact some of their $785 billion in profits needs to be re-directed towards the public good or there won’t be a national economy capable of supporting WalMart. Ditto Exxon, IBM, Proctor & Gamble, and blah-dee-blah-blah. The single greatest cause of middle class descent into poverty over the last decade has been a health care “situation.”
Now add the home mortgage debacle and we get …
If the American consumer no longer has a disposable income to spend … they won’t spend. If they don’t spend WalMart, Exxon, IBM, Proctor & Gamble and blah-dee-blah-blah can’t sell stuff. And since all these companies are in hock up to their eyebrows with debt then they are facing huge debt payments with a shrinking income.
It’s in the major corporation’s long-term interest for the US to have the best public healthcare system in the world. Unfortunately “long term” in modern finance is 6 months.