Do these talking points sound familiar?
– If the U.S. only spent more would this economy then improve
– More debt means the country is richer
– Budget deficits don’t matter to the economy
– A government budget is different than a household budget
These statements have been made by liberals and conservatives, Democrats and Republicans alike for decades. These concepts are most popular among Keynesians, like Paul Krugman, who believe President’s Obama stimulus didn’t go far enough and the Federal Reserve should be printing even more money than it is doing now.
The latest news publication to purport such ideas is the Washington Post, which published an article Friday titled “CBO’s scoring system holds U.S. government back on long-term programs” in which the author, Zachary Karabell, essentially states:
CBO projections getting a little too "real" for you? Blame the CBO. http://t.co/JV8YprCZ4c Massive debt is good for the future, you guys.
— Andrea Castillo (@anjiecast) March 3, 2014
The author began the piece by citing President Dwight D. Eisenhower’s Federal Aid Highway Act, a bill that was passed in 1956 that would link the nation through its highway system. It was a $329 billion investment (1996 dollars) and has been lauded as an example of governmental investment
Of course, it is rarely mentioned that officials say $360 billion is needed over the next five years in order to repair and upgrade roads and bridges – the president has proposed $302 billion over four years. In addition, taxpayers have paid about $130 billion for the interstate system, primarily through gasoline and diesel fuel taxes – only a few cents of the gas taxes get transferred to the actual Highway Trust Fund.
Karabell urged readers to consider if Eisenhower would propose the same idea today. According to Karabell, the headlines would be: “President’s bill would add billions to deficits.” This, says Karabell, underlines the growing problem that the public doesn’t understand the need for government intervention and spending to fix the nation’s woes.
A part of the problem, says the author, is the Congressional Budget Office (CBO), which has garnered headlines for its reports, especially as of late that highlight the negative effects of both raising the minimum wage and the president’s Affordable Care Act (ACA).
“Until relatively recently, however, none of these debates would have been shaped by the CBO,” wrote Karabell. “Forty years ago, it didn’t exist. For most of American history, the government considered bills, spent or did not, without reference to this obscure but increasingly powerful agency. Now, it has become the gantlet all bills must run through, and where many go to die.”
He stated that before any bill is introduced it must be studied by the CBO for their effects on long-term budgets and future deficits (this is a bad thing?). By issuing an assessment utilizing gross domestic product growth, inflation and tax receipts, the “process and those numbers stop us from channeling spending toward needed public works, long-term investments and innovations whose future outcomes are, by virtue of being new and untested, uncertain and unpredictable.”
At the present time, says Karabell, the nation has reached a point, because of agencies like the CBO, where the government can pay for defense and entitlement programs but not “in the long-term future of the country at a national level at precisely a time when we need it dearly and when societies around the world are doing so heavily and actively.”
Here are some facts Karabell should consider before urging the government to spend even more all in the name of “stimulus”:
– $17.4 trillion national debt
– $640 billion budget deficit
– $2.6 trillion interest payments
– $129 trillion in unfunded liabilities and expenditures
– $16.4 trillion in total personal debt
The economy isn’t improving, the real unemployment rate is in the low- to mid-20s, Americans are taxed to death, the dollar is being devalued by the day and the country’s welfare, entitlement programs are on the brink of collapse. For all of the government intervention since the Second World War, the U.S. doesn’t seem to be any better off.
The CBO isn’t perfect but at least it provides an official bureaucratic warning to politicians that are inclined to spend the taxpayers’ money.