The Tenther Grapevine
Last week, Senator John Kerry (D.-Mass) was unhappy with a Republican plan to cut as much as $61 billion out of the federal budget. “I think it’s an ideological, extremist, reckless statement,”Kerry said of the plan.
I hadn’t kept up on all the numbers recently, so I took a look at President Obama’s 2011 budget. My shock at the numbers was matched only by my shock that even Kerry could say something that demented.
The fiscal situation America now faces is unutterably appalling. I don’t want to bury you in numbers, so I’ll just mention a few, rounding out to the nearest hundred-billion.
First, the deficit is not just a few percentage points in the budget. Fully a third of all spending is now on borrowed money—that is, $1.3 trillion out of 3.8 trillion. That would be like spending $100,000 a year on a salary of $67,000.
If the President has his way, this situation will not change any time soon. He projects deficits approaching the trillion-dollar-range as far as the eye can see. And those projections assume that (1) ObamaCare saves money and (2) income tax receipts go up steeply in the next few years. Hah!
To balance the budget with more revenue, the federal government would have to take in 50% more cash. But if you raise taxes 50%, you won’t get 50% more money because the tax hike would hurt the economy, and people would find ways to avoid paying that much more. So to balance the budget with revenue, you’d probably have to double all federal taxes.
Congress has put most federal spending on autopilot rather than reviewing and appropriating it from year to year. (The Obama budget jocularly calls autopilot expenditures “mandatory” spending.) Autopilot spending includes Social Security, Medicare, and Medicaid, and amounts to $2.1 trillion. The entire rest of the budget is $1.3 trillion ($800B for defense and security; $500B for social programs). If you immediately abolished everything not on autopilot, you’d only barely balance the budget.
Even if we completely and immediately eliminated both Social Security and Medicare and kept their taxes in place we wouldn’t quite balance the budget.
So you can check the numbers yourself, here are the principal expenditures, rounded to the nearest hundred billion:
* Defense and other security programs – $800B
* Appropriated social programs – $500B
* Auto-pilot social programs – $2100B ($700B for Social Security, $500B for Medicare, $300B for Medicaid, and $600B for others)
* Interest on debt – $300B
Note that national security—the federal government’s first constitutional responsibility—absorbs only 21%. 79% goes to other programs, many of which are flagrantly unconstitutional. (This is in addition to state and local social spending.)
Study these numbers and three things hit you:
(1) The political and economic dynamics are such that balancing the budget will be forever impossible without radical change.
(2) Cutting $61 billion—about two percent of expenditures when the deficit is 33% of expenditures—is only “extremist” or “reckless” in a way opposite to what Senator Kerry intended.
(3) If we had honored the Constitution’s limits on federal power, this appalling situation never would have arisen.
In private life, Rob Natelson is a long-time conservative/free market activist, but professionally he is a constitutional scholar whose meticulous studies of the Constitution's original meaning have been published or cited by many top law journals. (See: www.constitution.i2i.org/about/.) Most recently, he co-authored The Origins of the Necessary and Proper Clause (Cambridge University Press) and The Original Constitution (Tenth Amendment Center). After a quarter of a century as Professor of Law at the University of Montana, he recently retired to work full time at Colorado's Independence Institute.
If you enjoyed this post:
Click Here to Get the Free Tenth Amendment Center Newsletter,
Tenther Radio Archives
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
Subscribe to entries
Subscribe to comments
All content © 2013 by Tenth Amendment Center Blog
When I lived in Montana, the lame stream media and both parties painted Mr. Natelson as crazy, and I bought it. Now from a distance I see a true patriot. Please forgive me.
Comrades, You get sooo excited over paper posing as money. It is worth less every day and will become worthless at which point a glorious new paper money will be issued. You will get 1 New for 10 old, maybe 20 or 50 old, but don't fret the details. We will have a glorious New Country, Comrades! Obamacare, Obamacar, Obamabank, Obamacollege, all just for You, The Obamanation!!!!!
Economic historian and author Niall Ferguson has said that when the interest being paid on an imperial national debt reaches the same level as it's military budget…it's curtains. The fat lady already has her voice warmed up and has opened her mouth to sing. Those rounded figures in Mr. Natelson's article are: Interest on debt – $300B and Defense and other security programs – $800B.
Two questions people ought to ask: 1. Can we really be sure about what we're spending on Defense? During a recent audit, the Pentagon was unable to account for at least $8B in Iraq alone. What about black budgets that aren't even open to public scrutiny? 2. What happens if interest rates on short term treasury bonds (I'm told they are the primary means of financing US deficit spending) spike? Is it possible that $300B figure could double or triple in matter of years?
What kind of government enslaves future generations with debt so that we can keep on spending money we don't have today? Aside from crooked, the word "unconstitutional" comes to mind. Is this the "liberty" and "right to pursue happiness" that the Founders had in mind?
What kind of people are politicians to not face up to the facts and tell us what those facts are? What kind of people are politicans to let this go on? The words "wise, good, and noble" don't come to mind.
Most of the spending of the federal government is unconstitutional and the politicians and people clamoring for more entitlements are nothing but a pack of hyenas feeding off the carcass of the nation.
The question is what are WE the People, the people who have paid the bill all these years going to do about it? We either do something or something gets done to us…pick your poison…
Add in the fact that the unfunded liability for social security and medicare over the next 20 years is over 100 trillion dollars and you can see exactly how bad it is. Our Gross Domestic Product or GDP, the total economic output of our nation, was only 14.5 trillion in 2010. Our gross public debt in 2010 rose to over 13.5 trillion, 93% of GDP, and that is before adding in the unfunded liability for all our entitlement programs.
Let's put the icing on the cake. The United States of America is broke. So is the rest of the world. We're not the only government that spends more than it takes in. The dollar is the reserve currency of the world economy. What is the dollar worth actually? Not much, it is only a piece of paper, not backed by anything except the promise of future taxes on children who aren't even working or born yet.
HERE’S HOW TO REALLY UNDERSTAND THE MAGNITUDE OF THE FEDERAL SPENDING PROBLEM: In 2010 discretionary spending was 1.19 trillion dollars. That was only 34.4% of the federal budget. The 2010 budget deficit was 1.29 trillion dollars. We could have closed every federal agency, every federal department, everything, including Homeland Security and the Dept. of State and the Dept. of Defense and all the rest, and the federal deficit for 2010 would still have been 100 billion dollars!!!! Do the math… let’s see, 1.29 trillion minus 1.19 trillion = .1 trillion = 100 billion…..Oh My GOD!!!!
Mandatory spending composed of social security, medicare, medicaid, welfare, other entitlement programs and interest on the debt was 65.6% of the federal budget. If we could have done away with all the other spending and were still 100 billion dollars in the hole, the only thing a reasonable normal sane person could say is that mandatory federal spending must be cut too in order to balance the budget or that taxes must go up or BOTH.