This from Pajamas Media: Actually, The Budget Cuts Are Enough. My take on it is simple; I think they are enough for now. We’ll need more, but we’re closing out a budget that should have been done a year ago. Excerpt:
More would be better, I agree. But as I wrote back in 2008, the key here is that the rate of change in spending be reduced below the rate of change in GDP. Graphically, it looks like this:
This particular example was from the 2008 campaign, and I was showing that even if we had a one-time step up in spending — something the Obama administration has provided handily — and if spending still increases, but increases less quickly than GDP and therefore tax receipts, then eventually all the deficit and even all the debt will be paid off.
Now look at the Boehner compromise: not only does it reduce the rate of spending increase, it actually reduces spending: the red line would be going down. By comparison, here’s the Obama administration’s proposed budget plans:
Let’s be honest; that proposed plan is a disaster. We can not address a problem like this on the revenue side of the stream; there is a limited amount of dollars the government can remove from the economy without causing a collapse. We have to address the spending side. If this chart does not make that amply plain, I don’t know what would.
There is some sign that some politicians are beginning to get the message. Let’s hope it continues. For example, this from the Washington Examiner: Spending Cuts Are Hot in the Political Marketplace. Well, sure; when you’re bleeding to death, the first thing you want to do is stop bleeding. Excerpt:
One of the things that fascinates me about American politics is how the voices of the voters as registered in elections and polls are transformed into changes in public policy. It’s a rough and ready process, with plenty of trial and error. But for all its imperfections the political market seems to work.
The first was Tuesday’s election for the Wisconsin Supreme Court.
Democrats and public employee unions rallied against the bill sponsored by Republican Gov. Scott Walker and passed by the legislature scaling back public employee unions’ bargaining privileges and stopping the automatic flow of dues money from the state treasury to the unions and their allies in the Democratic Party.
The public employee unions hoped to defeat a Republican Supreme Court justice and create an activist liberal majority that might overturn the law. Turnout increased from 793,000 in April 2009 to 837,000 in the February 2011 primary to 1,494,000 last week, and examination of the returns shows big increases where unions are strong.
But the anti-spending enthusiasm that brought so many conservatives to the polls in November was still operative in April, and the Republican seems to have won by 7,000 votes. And Democrats’ efforts to recall Republican state senators seem unlikely to net them the three seats they need for a majority.
So spending cuts – actual cuts, not just reductions in the rate of increase – are in fashion now? Good – let’s hope they stay in fashion for a long time. Maybe we can still claw our way back from the edge of the fiscal cliff we’ve been poised to go over for some time now.