Video: The real problem of the deficit is the spending

posted at 4:47 pm on December 15, 2009 by Ed Morrissey

Dan Mitchell of the Center for Freedom and Prosperity reminds us that we can’t reform alcoholics by giving them more to drink — and you can’t reform politicians by giving them more money to spend. The problem of deficit spending isn’t so much the deficits as it is the spending. Reasonable deficit spending can be sustained for some period of time, as long as the spending doesn’t get so bad that government has to start printing money to pay for it.  That creates inflation, erodes the value of the debt held by creditors which makes them less likely to buy more, and pushed interest payments so high that it creates a cycle of destruction for the currency.  Hiking taxes isn’t the answer either, as the capital destruction means economic stagnation, which undercuts the ability to pay the interest service, let alone the principal of the debt.

So what’s left?  For politicians, the unthinkable:

Expect to hear a lot of concern from Democrats in 2010 about the deficit.  They want to use it as a lever to push for higher taxes, including a new VAT tax that will burden the entire nation with a tax on consumption in addition to the tax on income and capital gains.  We need to instead insist on a reduction of the federal budget, a shrinking of the federal bureaucracy, and a return to spending sanity.

Blowback

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Duh!!!

JonPrichard on December 15, 2009 at 4:50 PM

Expect to hear a lot of concern from Democrats in 2010 about the deficit.

Which they were instrumental in inflating like a dead cow.

upinak on December 15, 2009 at 4:52 PM

The VAT tax is perfect for Dem thinking. It has a rate that is not explicitly seen (e.g., sales tax on your receipt, incomes taxes withheld on your paycheck) and it is collected by businesses, thus they can blame businesses for higher prices and being greedy.

WashJeff on December 15, 2009 at 4:52 PM

Expect to hear a lot of concern from Democrats in 2010 about the deficit.

Yeah, good luck blaming the 2010 budget deficit on Bush.

Doughboy on December 15, 2009 at 4:56 PM

Remember that Obumler only has 10% of his advisers/staff from private industry. A government worker have only two things in their bag–raise taxes and spend (foolishly).

jukin on December 15, 2009 at 4:56 PM

I don’t love Cato, but they are at least equal opportunity critics.

Bleeds Blue on December 15, 2009 at 4:57 PM

Yeah, good luck blaming the 2010 budget deficit on Bush.

Doughboy on December 15, 2009 at 4:56 PM

You just hide in the corner and watch ‘em.

thomasaur on December 15, 2009 at 4:57 PM

Some related humor:

2009 White House Christmas card: http://optoons.blogspot.com/2009/12/2009-white-house-holiday-card.html

Obama Announces Massive Debt Has Been Detected Heading Straight for U.S. http://optoons.blogspot.com/2009/12/obama-announces-massive-debt-has-been.html

Mervis Winter on December 15, 2009 at 4:58 PM

Hockey stick?

Juno77 on December 15, 2009 at 4:59 PM

You just hide in the corner and watch ‘em.

thomasaur on December 15, 2009 at 4:57 PM

Obama’s still using the word “inherited”. But he’s not getting anymore mileage out of it.

Doughboy on December 15, 2009 at 5:00 PM

they never blame Congress and the political pressures that come from those who finance campaigns on spending.

jp on December 15, 2009 at 5:01 PM

Sorry, I can’t stand these videos. While the content is often good, the narrator sounds like a weird combination of Wallace Shawn and Phil Hartmann.

PackerBronco on December 15, 2009 at 5:02 PM

This video needs a companion.

Supply side Economics

The Rock on December 15, 2009 at 5:04 PM

We need to instead insist on a reduction of the federal budget, a shrinking of the federal bureaucracy, and a return to spending sanity.

This will not happen on this planet, with these thugs in control.

The Republicans are equally pigs. See Sunday’s vote, where only McCain was shouting against the 4000 pork items, frm the left, to the right.

They ALL need to be thrown out in 2010, and again in 2 years, and again, and again. The American people, from the middle to the right need to restore what it means to represent them. If they continue to believe their own ‘represenrtative’ to be a glorious one, then they believe to be treated as whores. In fact, then they will be the whores.

“Parliament of Whores” by P.J. O’Rourke, is a great book.

Schadenfreude on December 15, 2009 at 5:04 PM

How did this country survive without a federal reserve bank from 1836 to 1913?

WashJeff on December 15, 2009 at 5:07 PM

Here’s what our “Congress” accomplished in today’s business:

WASHINGTON — Fifty years after jazz legend Miles Davis recorded “Kind of Blue,” the House voted Tuesday to honor the landmark album’s contribution to the genre.

Davis collaborated on the record with saxophonists John Coltrane and Julian “Cannonball” Adderley, pianists Bill Evans and Wynton Kelly, bassist Paul Chambers and drummer Jimmy Cobb.

Rep. John Conyers, a Michigan Democrat who sponsored the measure, said the group “made musical history and changed the artistic landscape of this country and in some ways the world.” The resolution recognizing the album’s 50th anniversary passed on a 409-0 vote.

Columbia Records released the album in August 1959. The original album — only 37 minutes — had a huge impact that extended beyond jazz to other types of music — from rock musicians such as the Allman Brothers and Carlos Santana to minimalist composers like Steve Reich and Philip Glass.

Davis, one of the greatest trumpeters in jazz history, died of a stroke in 1991 at age 65. He was renowned for morphing his cool jazz into fusion and experimental sounds that later gave way to jazz funk and hip-hop grooves. Cobb is the only musician from the “Kind of Blue” album who is still alive.

The resolution is H.Res.894.

Now, I have absolutely nothing against Miles, but don’t these clowns have more important things to do?

Del Dolemonte on December 15, 2009 at 5:07 PM

They’ll say they inherited it from Bush.

“Yeah, the $1 trillion Bush spent FORCED us to spend $4 trillion more!”

Daggett on December 15, 2009 at 5:09 PM

Now, I have absolutely nothing against Miles, but don’t these clowns have more important things to do?

Del Dolemonte on December 15, 2009 at 5:07 PM

With current house leadership, the more of this stuff the better.

WashJeff on December 15, 2009 at 5:10 PM

Obama’s still using the word “inherited”. But he’s not getting anymore mileage out of it.
Doughboy on December 15, 2009 at 5:00 PM

The more he relies on using that excuse, the less effective it will be.

Juno77 on December 15, 2009 at 5:13 PM

2009 White House Christmas card: http://optoons.blogspot.com/2009/12/2009-white-house-holiday-card.html
Mervis Winter on December 15, 2009 at 4:58 PM

You know when those kids grow up they will blame grandma and grandpa for the sacrifices they will have to make. How sad it is to pass these deficits onto future generations.

fourdeucer on December 15, 2009 at 5:14 PM

Cut the spending! This is old, but still relevant:

How Long Do We Have?

About the time our original thirteen states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinburgh , had this to say about the fall of the Athenian Republic some 2,000 years earlier:

‘A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.’

‘A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.’

‘From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.’

‘The average age of the world’s greatest civilizations from the beginning of history, has been about 200 years’ ‘During those 200 years, those nations always progressed through the following sequence:

1. from bondage to spiritual faith;

2. from spiritual faith to great courage;

3. from courage to liberty;

4. from liberty to abundance;

5. from abundance to complacency;

6. from complacency to apathy;

7. from apathy to dependence We are now depending on other countries to help us pay our bills;

8. from dependence back into bondage’

Professor Joseph Olson of Hamline University School of Law, St. Paul , Minnesota , points out some interesting facts concerning the 2000 Presidential election:

Number of States won by: Democrats: 19 Republicans: 29

Square miles of land won by: Democrats: 580,000 Republicans: 2,427,000

Population of counties won by: Democrats: 127 million Republicans: 143 million

Murder rate per 100,000 residents in counties won by: Democrats: 13.2 Republicans: 2.1

Professor Olson adds: ‘In aggregate, the map of the territory Republican won was mostly the land owned by the taxpaying citizens of this great country.

Democrat territory mostly encompassed those citizens living in government-owned tenements and living off various forms of government welfare…’

Olson believes the United States is now somewhere between
the ‘complacency and apathy’ phase of Professor Tyler’s definition of democracy, with some forty percent of the nation’s population already having reached the ‘governmental dependency’ phase.

rukiddingme on December 15, 2009 at 5:14 PM

The government needs to change its ways. But to do that, the people must be taught that government’s job is not to provide them with health care, food, clothing, housing, a job, or protection from their own poor choices.

hawksruleva on December 15, 2009 at 5:18 PM

How did this country survive without a federal reserve bank from 1836 to 1913?

WashJeff on December 15, 2009 at 5:07 PM

Before the permanent establishment of the Federal Reserve System in 1913, banks extended loans by issuing notes. Banks would issue their own bank notes to the borrowers, usually backed by (too little) specie or government bonds. The overwhelming determinate of value on a banks notes would be the quality of that bank’s assets. Different states had different standards since many of the states’ regulations required for the banks to back their notes with state bonds.

Many varieties of money different banks traded at different discounts to their face value. Lists were published to help bankers and others to identify and appraise the bills (and forgeries).

The effects of a complete lack of a national bank were not limited to shaky currency and a horrible headache in interstate banking, but even a summarized history would make for quite a long post.

Dark-Star on December 15, 2009 at 5:19 PM

Underground economy, here I come.

Bishop on December 15, 2009 at 5:20 PM

rukiddingme on December 15, 2009 at 5:14 PM

Okay, now you’re talking my game!

A democracy cannot exist as a permanent form of government. It can only exist until a majority of voters discover that they can vote themselves largess out of the public treasury. Alexander Tytler

I have no doubt we are somewhere in the “Tytler cycle” as it’s called – the 64 Trillion dollar question is: How do we get out of it?

Chainsaw56 on December 15, 2009 at 5:21 PM

Fiscal conservatism IS the Big Tent…

Wannabe GOP politicians…. Learn it, love it, speak it

phreshone on December 15, 2009 at 5:26 PM

rukiddingme on December 15, 2009 at 5:14 PM

I see this paraphrase quote, and while I agree with the sentiments, it is in fact, not part of history. The reality is, it’s basically made up. Check out the snopes file on this.

keep the change on December 15, 2009 at 5:26 PM

They want to use it as a lever to push for higher taxes, including a new VAT tax that will burden the entire nation with a tax on consumption in addition to the tax on income and capital gains.

Good call.

ThackerAgency on December 15, 2009 at 5:30 PM

Ed, thanks for the post.

Yet, the old adage that you can’t spend what you don’t have hasn’t applied for some time now.

It’s more like you don’t have to worry about making mistakes anymore, the government will make them for you in spades.

Some time down the road of this republic [if there still is a republic] a constitutional amendment will be submitted and passed to oust those public officials who do not live by the rules that the rest of the citizenry have to live by. Living within your means is just one of the rules that comes to mind.

Americannodash on December 15, 2009 at 5:33 PM

A focus on deficit reduction would be another obvious bone to throw moderate Democrats. But does anyone really think that the formation of a “deficit commission” will quell voter frustration over the spending spree of the last two years? Moderates have been forced to vote on substantive legislation to spend money. If they want to get credit for saving money, they need to have their own substantive examples too.

Schadenfreude on December 15, 2009 at 5:35 PM

I hope everyone’s in store for a scary 2010 regarding the state of our economy.

The dollar is just about DOA.
Inflation (stagflation) is just around the corner.
China owns our arse.
Our dollars are printed with nothing to back ‘em up.
Peeps can’t get jobs.
Banks are failing (133 this year so far).
The FDIC is in the red…have been since October.

Gerald Celente has predicted this for a while and after Christmas, it’s just a matter of the Commercial Real Estate Busting out.

Hope y’all have a Zimbabwean wheelbarrow ready. He ain’t called “Ogabe” for nothing. This is why Turkmanbama was bursting with pride to Dirty B itch Winfrey about his “solid B+”. Yee-haw.

Gob on December 15, 2009 at 5:37 PM

keep the change on December 15, 2009 at 5:26 PM

Thanks. Will do more research before posting again.

How do we get out of it?

Chainsaw56 on December 15, 2009 at 5:21 PM

A good start would be if everyone did this:

the people must be taught that government’s job is not to provide them with health care, food, clothing, housing, a job, or protection from their own poor choices.

hawksruleva on December 15, 2009 at 5:18 PM

Then our politicians would know that they can no longer buy votes.

rukiddingme on December 15, 2009 at 5:37 PM

keep the change on December 15, 2009 at 5:26 PM

A number of people have expressed this same concept.
For example:

“It is impossible to introduce into society a greater CHANGE and a greater EVIL than this: the conversion of the law into an instrument of plunder.” Frédéric Bastiat

Simply put, the concept is that once you have enough people who will vote based on what the politicians will give them, you have an end to democracy (or Republic as the case may be).

The problem is that we cannot affect the back end of this process – the handing out of largess based on votes, so how do we affect the front end of the process – the seizing of property to buy those votes?

Chainsaw56 on December 15, 2009 at 5:37 PM

Del Dolemonte on December 15, 2009 at 5:07 PM

LOL! Well, Miles was a real arsy arsehole…just like a good Lib ought to be. He was more megamaniacal than Turkmanbama and loved to bat around his hos (if you know what I mean…and I think you do).

Gob on December 15, 2009 at 5:41 PM

Cloward-Piven

marklmail on December 15, 2009 at 5:45 PM

A good start would be if everyone did this:
the people must be taught that government’s job is not to provide them with health care, food, clothing, housing, a job, or protection from their own poor choices.
hawksruleva on December 15, 2009 at 5:18 PM

Then our politicians would know that they can no longer buy votes.
rukiddingme on December 15, 2009 at 5:37 PM

Yes, I would agree – part of the problem is that we have a media with a Leftist bent and a government school system that teaches dependency – that has to change.

My thoughts are more on the question of how do we avoid the brick wall that is rapidly approaching.

A total collapse of society will not be pretty for anyone involved, people need to start thinking of Non-violent ways of avoiding this fate.

The producers and achievers are the fuel that runs this society and the government – how do they stop this disaster in the making?

Chainsaw56 on December 15, 2009 at 5:52 PM

“Turning America into a welfare state.” Sadly we are there already. I work full time as a paramedic and I see an astounding number of people who live on social security disability. The problem is the vast majority and I mean VAST majority Have no discernable disability that I could determine. I even ask them how they ended up on SSD. They usually have some lame story about a back injury, alcoholism or a psych. problem or Lupus etc. Sadly these people are perfectly capable of holding down jobs. They even laugh about it while my wallet gets lighter. Another one I love is the easy availability of handicapped license plates (and hence lower plate fees and privileged parking spaces). I see people at my gym parking in the primo handicapped parking spaces then merrily skip into the gym. Let us not forget AFDC, Medicaid, food stamps, housing assistance etc. These benefits are easy to obtain. Sorry, “welfare state?” We’re there already. Why bother working anymore? It is simply and easily taken from me and given to so many who are feeding at the public trough.

paraff on December 15, 2009 at 5:56 PM

My thoughts are more on the question of how do we avoid the brick wall that is rapidly approaching.

Wish I knew the answer, my friend.

It is almost as if the brick wall has to hit us. A wake up call, albeit too late, that forces a change upon society.

rukiddingme on December 15, 2009 at 6:04 PM

Now, I have absolutely nothing against Miles, but don’t these clowns have more important things to do?

Del Dolemonte on December 15, 2009 at 5:07 PM

With current house leadership, the more of this stuff the better.

WashJeff on December 15, 2009 at 5:10 PM

LOL, with Nazi Pelousy as Speaker, all I can think of is one of Miles’ later albums-”B*tch’s Brew”.

Del Dolemonte on December 15, 2009 at 6:09 PM

Why bother working anymore? It is simply and easily taken from me and given to so many who are feeding at the public trough.

paraff on December 15, 2009 at 5:56 PM

1. It’s not quite as simple or easy as you (or most people) might think.

2. Feeding at the public trough involves standing alongside a lot of hogs, a description I think fits a great many welfare recipients in more ways than one.

3. Federal money comes with strings. Enough federal money and you’re a puppet.

Dark-Star on December 15, 2009 at 6:28 PM

Every single person I have met on government assistance has no problem with the so called strings the government attaches to their easy paycheck. Most people don’t seem to mind being a “puppet” of the government. The shame has gone from receiving gov. assist. And yes it is not very difficult to receive government assistance of some kind.

paraff on December 15, 2009 at 6:35 PM

We need to instead insist on a reduction of the federal budget, a shrinking of the federal bureaucracy, and a return to spending sanity.

From your lips to the next Congress’ ears. (This one is hopeless.)

JDPerren on December 15, 2009 at 6:36 PM

Simply put, the concept is that once you have enough people who will vote based on what the politicians will give them, you have an end to democracy (or Republic as the case may be).

The problem is that we cannot affect the back end of this process – the handing out of largess based on votes, so how do we affect the front end of the process – the seizing of property to buy those votes?

There was a reason only landowners were allowed to vote.

uknowmorethanme on December 15, 2009 at 7:09 PM

Yeah, “It’s the spending, stupid”!

See Greg Mankiw’s op-ed in the NY Times -
Tax Cuts Might Accomplish What Spending Hasn’t

dissent555 on December 15, 2009 at 7:49 PM

It’s not how much you go into debt that matters, it’s WHY you go into debt. You’re supposed to keep a positive balance sheet so that if an emergency comes up, you’re ready. In the case of a nation, that emergency should be something like a national disaster. There’s no such thing as a “Welfare emergency.”

What America has been doing is equivalent to an individual borrowing money to finance a heroin habit.

It doesn’t matter whether a debt like that starts out small or not. It always ends up encompassing everything.

logis on December 15, 2009 at 7:57 PM

My thoughts are more on the question of how do we avoid the brick wall that is rapidly approaching.

Wish I knew the answer, my friend.
It is almost as if the brick wall has to hit us. A wake up call, albeit too late, that forces a change upon society.
rukiddingme on December 15, 2009 at 6:04 PM

Yes, sadly that seems to be our fate.

It would be nice if someday, people will have learned enough from history NOT to repeat this same lesson.

Chainsaw56 on December 15, 2009 at 9:55 PM

I think people would understand the crisis better if they understood what the benefits are if the deficit was completely paid off.

What would those benefits be?

Is there a website or Youtube videos that would help explain this concept?

Conservative Samizdat on December 16, 2009 at 12:55 AM

While Reagan was in office, Democrats demanded and got three substantive tax increases, in order to solve the deficit. In every single instance, spending rose immediately after the tax was imposed, with the amount of new spending equal to or greater than the amount of the tax.

MarkTheGreat on December 16, 2009 at 8:57 AM