More Support for Sequestration

CATO Institute Weekly Dispatch links to four pieces welcoming the Budget Sequester.

First, Christopher Preble says "Sequestration is Still Better than the Alternatives."

Then Tad DeHaven provides his insight with "Sequestration Cuts Will Lead to Floods, Plagues, and Pestilence."

Daniel J. Mitchell adds his voice, "Exposing the Absurdity of Washington's Anti-sequestration Hysteria."

Finally, a study by Christopher Preble and Benjamin Friedman "Budgetary Savings from Military Restraint."

Let us add our voice to this growing Chorus. Bring on Sequestration. Create Two, Three...many Sequestrations!

Privatizing Gains and Socializing Losses

Oftentimes when politicians speak of privatizing government functions they seek to allow the efficiencies of the market to lower the costs. For instance, when municipalities hire private companies to run golf courses the private companies can do so at a lower labor cost because they do not have to pay unionized government workers to mow grass and work at the snack bar.  Other times, the reason is more nefarious, to provide for a chosen "winner."

Recently Amtrak's food and beverage service has been under the microscope for posting HUGE losses in the last decade: $833 Million!

Rep. Jean Schmidt has sponsored a bill to require Amtrak to solicit bids for its food and beverage services.  As Jean herself said, "This is an easy fix."  Well, Jean's bill is a fix alright.  The bill, which is nominally aimed at eliminating these losses, continues to subsidize losses incurred by the private companies who bid on the contract.  As such, all this bill does is allow for private companies to be the beneficiaries of the Amtrak subsidy rather than Amtrak.  This is nothing but a shell game!

From the Bill:

(7) SUBSIDY FOR NET LOSS- The Federal Railroad Administration shall provide directly to the entity providing food and beverage service on Amtrak trains any portion of appropriations for Amtrak necessary to cover a net loss resulting from the provision of such service, but only to the extent that such net loss was anticipated in the bid selected.

So, on those routes where there is profit to be made, the gains will be privatized; and where there are losses, the losses will be subsidized.

Jean's bill does little more than change who benefits from the government subsidy.  This is just another naked attempt by Congresswoman Schmidt to pretend to be a conservative!

Proving once again the wisdom of the voters on March 6, 2012.

1/3/13 cannot come soon enough!

Federal Deficit to blow past $1 Trillion

Our country's fiscal health continues to deteriorate rapidly. Through the first 8 months of the fiscal year the federal government ran a $929 billion deficit, placing our government on pace to roughly match last year's astonishing deficit of $1.3 Trillion. If economists were concerned when our deficit was crossing $400 billion, then 3 consecutive years of deficits over $1 Trillion should have everyone petrified.

At some point the rest of the world will stop lending us money. Then what? If people are screaming like petulant babies at the prospect of 5-10% budget cuts in some programs, what happens if the government has to cut 40% of its budget overnight? Social Security - your check is cut 40% immediately. Medicare - 40% benefit cuts. Think the Ryan plan sounds bad now? Military pay - immediate 40% cut.

On the bright side revenues are up $139 billion compared to last year. Unfortunately spending has increased $132 billion, resulting in virtually no benefit to our balance sheet. Entitlement programs are driving the spending growth. Social Security is up 3.6%, Medicare $3.8%, and Medicaid 5.4%. Spending on all 3 programs, which already consume a large chunk of federal revenues, is set to explode in the next decade. The modest reforms on the table for these programs should merely be a starting point; the programs are clearly unsustainable in their present forms.

The lack of leadership from Barack Obama and most Members of Congress is disconcerting. The childish attitudes of the majority of voters are a problem as well, but perhaps they would be more mature in facing our budget problems if those in charge provided the proper leadership. I'm remaining undecided in the 2012 presidential race until I find a candidate who will credibly tackle these important issues.

National Debt ripping country apart

Now it's Greece. If the United States doesn't get control of its finances, it could soon be us. Imagine ongoing economic depression, much higher taxes, steep Social Security reductions, steep Medicare reductions, significantly reduced government services, severe defense cuts, etc.

We need to address our $14 Trillion Debt (and climbing rapidly) before we become Greece. It's not enough to nibble around the edges. It means serious defense cuts, serious Medicare reforms, serious Medicaid reforms, serious Social Security reforms, closing tax loopholes, and scaling back tax deductions, in addition to the reductions in non-security domestic spending we've already seen.

Neither party, nor the voters, seem to get it. Democrats think we can control our budget without reforming Social Security and Medicare, and without making domestic cuts. Republicans think we can do it without defense cuts and without bringing in more revenue even by just restricting tax loopholes and deductions. Many voters think we can get our budget under control without doing any of the above.

I still plan on doing the Part 3 I had promised weeks ago of my budget series. Soon enough. I planned to do it sooner but then life and stuff got in the way.