Will Republicans and Trump reduce the budget? Maybe not!
Hypocrites and liars: Less than two days after winning the Presidency and retaining control of both houses of Congress, Republican budget cutters are already signaling that they are now more willing to considering big spending projects, now that they are no longer opposing a Democratic president.
Sen. David Perdue (R-.Ga) stood on the Senate floor a little more than one month ago and declared that “we have a budget crisis. We have a debt crisis.” Two weeks ago, he wrote in an op-ed that “President Obama’s budgets ignored fiscally responsible principles, instead leaving an ever-growing mountain of debt for taxpayers down the road,” and he urged the United States to pass a balanced-budget amendment ensuring that the government can’t spend more than it takes in.
But asked about President-elect Donald Trump’s fiscal plans on Wednesday morning, Perdue sounded much less of an urgent note. “Well, I think there’s a short-term view and a long-term view. What we need is a long-term strategy, and by long-term, I’m talking, you’re going to say, 30 to 40 years to solve this debt crisis eventually,” Perdue said in an interview on CNBC.
,,,Perdue’s comments on CNBC could be one sign of how the politics of debt in Washington may shift when Trump takes office Jan. 20. Under George W. Bush, the nation’s debt exploded with federal spending and tax cuts, often with the consent of Republicans in Congress. But over the past eight years, the Republican establishment has repeatedly excoriated President Obama for plans that don’t immediately balance the budget.
Trump’s liberal roots had him immediately propose a variety of big government spending projects in his acceptance speech, and it appears that the Republican leadership is eager to go along, as they did with Obama, to put those big spending plans in place. Unfortunately, it also appears that that leadership might not get much resistance for bigger spending from its rank and file, who will no longer be fighting a Democratic administration and thus can jump on the bandwagon for more pork in their districts.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
Hypocrites and liars: Less than two days after winning the Presidency and retaining control of both houses of Congress, Republican budget cutters are already signaling that they are now more willing to considering big spending projects, now that they are no longer opposing a Democratic president.
Sen. David Perdue (R-.Ga) stood on the Senate floor a little more than one month ago and declared that “we have a budget crisis. We have a debt crisis.” Two weeks ago, he wrote in an op-ed that “President Obama’s budgets ignored fiscally responsible principles, instead leaving an ever-growing mountain of debt for taxpayers down the road,” and he urged the United States to pass a balanced-budget amendment ensuring that the government can’t spend more than it takes in.
But asked about President-elect Donald Trump’s fiscal plans on Wednesday morning, Perdue sounded much less of an urgent note. “Well, I think there’s a short-term view and a long-term view. What we need is a long-term strategy, and by long-term, I’m talking, you’re going to say, 30 to 40 years to solve this debt crisis eventually,” Perdue said in an interview on CNBC.
,,,Perdue’s comments on CNBC could be one sign of how the politics of debt in Washington may shift when Trump takes office Jan. 20. Under George W. Bush, the nation’s debt exploded with federal spending and tax cuts, often with the consent of Republicans in Congress. But over the past eight years, the Republican establishment has repeatedly excoriated President Obama for plans that don’t immediately balance the budget.
Trump’s liberal roots had him immediately propose a variety of big government spending projects in his acceptance speech, and it appears that the Republican leadership is eager to go along, as they did with Obama, to put those big spending plans in place. Unfortunately, it also appears that that leadership might not get much resistance for bigger spending from its rank and file, who will no longer be fighting a Democratic administration and thus can jump on the bandwagon for more pork in their districts.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
Reducing the debt, or even the deficit, does not seem to be on Trump’s agenda. I’ve never heard him even suggest doing something like that. He’s in the real estate business where high debt is The way to make monies copulate. While I think that he will solve many important problems in society, I’m sure that the debts will increase as much as is possible and that this financial brinkmanship game will continue to escalate. I think he will be proud of how much he has increased the debt, and getting away with it.
Trump is a moderate who likes government programs. We knew this all along.
He wants to reduce debt through growth, which is great but it needs a little help through good spending policy.
This is a great time for the Tea Party types in congress to push for some spending control. They won’t get everything they want but hopefully can have an impact.
Running a deficit wouldn’t be as big a problem if the deficits were much smaller. If they started by targeting a smaller deficit, growth would have a better chance of reducing or eliminating them over time.
You want debt when the cost of borrowing is lower than potential growth. However, Trump has indicated that he wants to reduce our debt to foreign entities. Plus he prides himself on getting things done under budget (you notice how little he spent on his campaign?)
He wants growth above 4% and you can be sure he wants credit for a balanced budget. He wants to increase the military and keep social security but everything else is on the chopping block. He will use his veto (although with cooperation he shouldn’t need to.)
I haven’t liked Obama’s economic policies (that’s a gross understatement), but anybody’s economic policies would have difficulty in the face of our demographic difficulties, and this makes it more important to get the economic policies right. There’s no way anybody could bring about economic expansion on the scale that Reagan did; we live in a different world now.
With people living longer after retirement and with relatively few children being born, our population pyramid has become much more top heavy (although less so than Europe, Japan, China, etc.). The last time social security was reformed was in 1986, and since that time we’ve gained many, many retirees, and they’ve lived longer, without enough young people to pull the wagon. The last effort I remember to reform social security was maybe 8 years ago, which was defeated, and even then, the proposal was to raise the retirement age of people who at the time were 8 years old and younger!
Entitlements are becoming a bigger and bigger piece of the budget, and it’s only getting to get worse. We need growth really badly, but we also need entitlement reform.
I’m 50 years old, and am not counting on being able to collect social security for the entire length of my retirement (if I ever do retire); by the time I’m in my 70’s, something will have happened to change the system, because it’s simply unsustainable in the long term.
The other major factor in personal situations is the technological revolution that has been taking jobs away, as we’ve discussed in other threads.
Bringing businesses and jobs back home is the best bet to stimulate growth; get rid of (or greatly reduce) the double taxation of money earned overseas and brought back into the country, and lower our corporate tax so that it’s no longer the highest among the major economies in the world.
Another major measure would be to reduce job security for government employees, and although I’m not a big fan of Trump, I can’t think of anyone more qualified to try to overcome the bureaucratic rules that protect government workers, even those who act criminally (see Veteran’s Administration).
I don’t think Trump is going to be a budget hawk, but I do believe that he’s going to try to eliminate waste. Whether he will be able to is another question, and rests on how effectively he can rally the American people when Congress gets in his way.
Garry wrote: “There’s no way anybody could bring about economic expansion on the scale that Reagan did; we live in a different world now.”
The rules of economics have not changed since the 1980s. Or the 1960s or 1920s, for that matter, when lower taxes and reduced governmental regulation resulted in boom years. The 1930s, 1970s, and 2010s, when Keynesian economics and centralized control were tried, all resulted in terrible economic times.
We could have the same economic expansion that we did under Reagan, Kennedy, and Harding (such good booms that they lasted into the next administrations). However, Trump does not believe in that kind of governance. He believes in top down, bigger government, centralized control type of governance. Getting him to implement the better kind will take some doing, and I don’t know if anyone has what it takes to get him to do that. Perhaps this is what Garry meant by “a different world.”
Once again, we are at the mercy of “hope and change,” except that now it is a “hoped-for change.”
Garry wrote: “I can’t think of anyone more qualified to try to overcome the bureaucratic rules that protect government workers.”
I can, but he was rejected. Trump’s main problem is a lack of familiarity with the current government system. Anyone who is going to re-engineer a system will have to know how and why it works that way. (Or was supposed to work well that way, because if it worked, why would you be changing it?) Without that knowledge, you are going to break something important in a spectacular way. This is one of the problems with having an outsider fix the system — he does not yet know the system well enough to make intelligent changes.*
Another problem is that Trump is unfamiliar with the kinds of resistance he will come up with. He is like a newcomer to the game of chess as he comes up against a master. Although he can have masters as advisers, he will have to make the decisions when there is contradictory advice. And there will be contradictory advice. We can only hope that he decides wisely so that the change is for the better, without any unexpected unintended consequences.
* I am reminded of a story about a company that hired a consulting firm to improve their manufacturing processes to reduce costs. After much questioning of the employees and analysis, all they could come up with was to stop cutting a couple of large holes in one bulkhead, because that just seemed unnecessary. After the consultants left, the first unit without the holes made its way to the welder, who asked his supervisor, “so, how do I make the weld that is on the other side of this bulkhead?”
The consultants had not understood the manufacturing process well enough to make the recommendation that they made. They did not know that the bulkhead had to be in place before the weld could be made, and they did not know the purpose of the large holes.
A personal-experience story about a project I worked on:
A group of consultants asked us a lot of questions in order to figure out how we could do better. When they made their final presentation to us, they talked a lot about the “doer” that we were working on, complete with overhead slides (read as: “Power Point presentation”). Unfortunately, what we were working on was a “Dewar.” I don’t know if any of their advice was good, because they lost our respect, and none of their recommendations were implemented. We could not trust that they knew the subject well enough to give good advice.
Come to think of it, this is what happened to our health care system. A bunch of bureaucrats thought that they knew better than the experts, but none of their promises came true, and our healthcare system is now far worse for most people and only marginally better for only a few. (Come to think of it, that is what happened to the health care systems in many other countries, too.)
Did I make my point?