No More Excuses; Stop Government Obesity

I don’t know about you, but I for one am tired of Presidential and Congressional excuses. We are racing down the road in our car and the cliff is getting closer, but our leaders are not putting on the brakes. Now is the time for thinking out of the box, not sticking to partisanship. If we don’t, maybe we can declare bankruptcy like Hostess.

In this morning’s paper there was an interesting article written by Denny Scott of Brush Prairie, Washington about the demise of Hostess. He argued the failure of Hostess was Management’s fault. As a proponent of a W. Edward Deming philosophy, I agree that 85% of all problems are a result of poor management. However, in the case of Hostess, the Teamsters and the inefficiency of the delivery system played a huge part of the economic loss that led to Twinkiegate. But, going with Deming’s beliefs management was responsible for negotiating the contracts with the Teamsters. They gave in, so, maybe we can blame management. Regardless, a beloved company fails due to the inability of people to work together and create an efficient system for providing a product to market.

Let’s apply this thought process to the way our government is attacking the federal debt problem. The President and Congress are at odds over what level of increased taxes and spending to allow. Boehner has denounced the President’s budget plan as “silliness,” and Obama has denounced the Republican version as “still out of balance.” If there is no agreement we will all have to pay $4,000 more per year to the government.

Scott derides management at hostess, but McFeatters in her article this morning states that lawmakers don’t care about their constituents. She argued that with a 18% approval rating for congress, it is an increase over its 10% of last August, how can congress think it is doing a good job? She ends her rant by saying, “Congress doesn’t want us to have a happy holiday. Congress wants us to be miserable. Congress hates us.” If that is the case, then so does President Obama. I wish it were as simple as saying it is management’s fault, Obama, but it is not.

George Will in his column this morning made some very good points that I think are worthy of reiterating. Obama is demanding a $1.6 trillion tax increase. He is also going to cut spending an unspecified amount, including $800 billion in military spending. This is nothing new, we read about this all the time. However, it is at this point Will’s column begins to get interesting. “Year after year, the Democratic-controlled Senate, ignoring the law, refuses to pass budgets. Year after year, Washington makes big government cheap by charging Americans only $6 for every $10 of government services, borrowing the difference. And, the biggest purchaser of U.S. government debt is not China but . . . the U.S. government, through the Federal Reserve.” Does anyone else get the feeling of impending doom?

An Economist from the University of Georgia, Jeffrey Dorfman, has responded to the claim that our budgetary problems are a result of not enough tax revenue. He writes in RealClearMarkets that, “possible tax increases and spending cuts would reduce the current deficit by less than a third, leaving the deficit larger than any run by any President not named Obama.”  As much as I would like to stop here and focus on the travesty of this point, it is at this point that Will’s editorial even gets more interesting.

President Clinton was the last President to have a budget surplus. Through his leadership we were able to balance the budget. During his Presidency federal spending was $1.94 trillion and revenue was $2.10 trillion. Dorfman, according to Will, states, “Adjusting for inflation and population growth since the start of 2001, today’s equivalents would be $2.77 trillion and $3 trillion.” This is a $230 billion surplus.

Dorfman says the reason for our huge deficits today is Bush era tax cuts, the recession, and Obama’s spending. “Today federal revenue is $2.67 trillion, slightly less than the Clintonian equivalent, and spending is $3.76 trillion, $987billion” more than if we would have just increased Clinton’s budget in conjunction with inflationary and population growth. All of us should take note of this and start pushing our elected officials to get spending under control.

Will states in relation to the Fiscal Cliff, “this melodramatic language encourages the supposition that plunging off the (metaphorical) cliff is unthinkable.” Will argues that this language feeds into the progressive agenda of increased government. “The tax increases would augment (Obama’s) policy of enlarging government’s control of the nation’s economic output, and he could henceforth blame continuing economic anemia on Republicans who supposedly should have averted what progressive desire.” Will proposes that if we buy the argument that the only way we can avert this fiscal cliff is to give into Obama’s tax policies, we will “further darken the nations future.”

I am not too sure that raising taxes on people making over $250,000 per year will create a darkened future, but I do think it is reasonable to expect the wealthy to pay a little more than 13% on their investment income. The amount of increased taxes would at least raise government revenue to the Clintonian level. However, the level of Obamanomic spending is unsustainable, and if we don’t do anything with that, then we are heading down the Hostess road.

Hostess will be gone, but Twinkies, maybe not. Our standard of living is in jeopardy. If anyone thinks that continuing to spend more than what we make is healthy, I have a bridge to sell you. We need to stop this insanity, and roll up our sleeves to create an innovative solution to our debt problem. We cannot leave this too our grandchildren to figure out. If we don’t sovle this, our governmental brand will declare bankruptcy. Our $2.77 trillion business will be purchased by someone else, and we will no longer be the United States of America, but the United States of America (a subsidiary of the Canadian government).

And that is my thought for the day!

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