Greece is in trouble, but so are we

From Pat Buchanan’s colum “Pitching for America.” We are lurching into crisis.

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Congress this year will spend $1.6 trillion more than it collects in revenue, with the largest outlays in that FY 2010 budget for defense at $719 billion and Social Security at $721 billion.

Thus, if the U.S. Government on Oct. 1, 2008, had shut down the Pentagon and furloughed every soldier and civilian here and around the world, and announced that it would not send out a Social Security check for a full year to any of the 50 million retired and elderly, we would still be $160 billion short of balancing the budget. If you zeroed out federal benefits to veterans for a full year, that, added in, would bring us close.

Such is the magnitude of the fiscal crisis facing the country.

To balance the budget this year would require a 43 percent across-the-board cut in every category of federal spending — defense, Social Security, Medicare, Medicaid, Homeland Security, highways, etc. — or, if one used taxes alone, a 72-percent increase in federal tax revenues.

Budget cuts of that magnitude are impossible. They would cause a revolution. And any attempt at tax hikes of that magnitude would drain off all available consumer capital and hurl the economy into another Depression.

For the foreseeable future, then, this nation is going deeper into debt

And when Harry Reid and colleagues wave through yet another $10 billion for unemployment checks and making sure farm folks get yard dishes to see reruns of “The Sopranos,” the United States must go to Beijing, Tokyo or Riyadh and borrow the money.

That is the hole we are in.

And when one stares at some of those budget numbers, the priorities of the Obama administration seem almost surreal.

In George W. Bush’s last full year in office, we spent $29 billion for “international affairs.” The lion’s share of that was foreign aid. In FY 2011, the year for which Congress has begun to budget, spending for international affairs and foreign aid is to jump to $54 billion and continue to surge through the Obama years.

What is the rationale for the United States, the world’s greatest debtor nation, putting itself deeper in debt to China to send foreign aid to nations that will never repay us and that vote habitually with China and against us in the United Nations?

This city does not seem to grasp that the days of wine and roses are over. We are not in the 1950s or 1960s anymore. Then, we could throw open our markets to imports from the world. Then, we could dish out foreign aid and fight wars in Vietnam with 500,000 men, while maintaining 50,000 troops in Korea and 300,000 in Europe.

America is headed for a time when, like the British Empire, she is going to have to make painful choices, or have them forced upon us.

Comments

  1. A man-made disaster created solely by incompetent and derelict career politicians who care little about the future of this country or her people.

  2. Michael Bauman :

    Chris…and a hedonistic people whose higest priority is ‘what’s in it for me?’ Our leaders reflect us. In every election in my conscious lifetime, the trend has always been to ‘throw the bums out…just not my bum, I like my bum, he gives me pretties’.

    One case in point:

    The Contract with America went largely unfufilled as the ‘conservative’ politicians spent like the liberals to buy votes which we sold them. We did not make them accountable. Character ceased to matter.

    We’ve been on a 50 year Mardi Gras–the hangover is going to be a bitch.

  3. Michael, That’s not completely true. The Contract with America worked originally, hence the budget surpluses under the last few years of the Clinton presidency. It’s when we got socialist-light from the Republicans in Name Only crowd under the Bush years combined with the failure of the GOP to stick to conservative principles that we got ourselves in the mess that we’re in now.

  4. Michael Bauman :

    Chris, short-term gains from the Contract, sure but the larger restructruing that was an essential part of the Contract, IMO, was a total bust. Things such as the elmination of the Dept. of Education (my personal favorite promise) hardly even had a serious attempt. My own Congressman who promised a self-limitation on the number of terms he would serve–did not deliver. His seeminly effective, indepentdent conservative voice in the early years turned into a “I brought you the bacon, reelect me” clone once he was given a minor leadership position. And we have kept electing him because his oppponents were even worse–liberal democrats.

    The drive to greater centralization of power was left untouched; the principals forgotten and abandoned in favor of the corruption of power.

    • re: The drive to greater centralization of power was left untouched; the principals forgotten and abandoned in favor of the corruption of power.

      That’s precisely what has been happening. We’re heading towards totalitarianism step by encroaching step.

  5. George Michalopulos :

    If I may paraphrase Tocqueville: “There are two kinds of people in the world, those who work for a living and those who vote for a living.” It is fascinating to read the veto of President Grover Cleveland who refused to issue federal monies for drought relief back in the 1880s. We have gone downhill since the demogogues who made up the Progressive movement pandered to the greed of slices of the population. (BTW, Adolf Hitler was definately a Progressive, as were Benito Mussolini, Lenin, and FDR. Some were just more violent about it.)

  6. As I posted elsewhere about a week or so ago, both California’s and Greece’s problems are largely the consequence of their progressive economic policies. Unfortunately, it is a trend that is increasing nationwide and will only continue to increase – especially when government wages AND benefits (and work hours) are more beneficial than those in the for-profit sector. Fortunately, the increasing debt load this creates (since they don’t actually make anything and typically operate at a loss) seems to be awakening increasing opposition.
    While California’s GDP dwarfs Greece’s, the effects in California MAY be mitigated by the fact that companies and customers can look to nearby states when needed. Greece doesn’t have that outlet or support. Yet both states are being driven over a financial cliff by the relentless demands of the various public sector unions. Unions, focused as they are – and as they must be – on the preservation of their benefits, have a nasty history of bankrupting their host organizations – whether steel, automobiles, schools, etc. Regardless of the field, however, unions have been unwilling to accommodate market forces and, as a result, whether steel, auto, teacher or Soviet, unions seem to gradually diminish the economic viability of their various endeavors. (Not that they have not served a vital role. Often they arise as a last-ditch response to inept or self-serving management – which also shares in the blame for each venture’s demise. Economic implosion is almost always a collaborative affair.)
    Shifting anything to the government – like health care or education – is a recipe for insolvency since the forces that foster efficiency, productivity and innovation – namely, competition and the threat of being fired by customer (neither of which are possible with the government) – are utterly absent, and the incentives for government are primarily political rather than economic.
    In short, a lot of what we are seeing in Greece may soon be on display California if corrective efforts are not taken. I am not holding my breath.
    One thing I consistently see is that there are those who choose discipline and those who have it forced upon them. (Interestingly, this is true in all of life – not just financial. It is certainly true in careers, in our bodies and in our spiritual growth.) The first are often comfortable, content and even wealthy (Whether financially, physically or spiritually). The latter are usually faced with very unpleasant choices and it rarely ends well.

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