I’ve never posted about anything non-political at this blog, but there’s a first time for everything.
Today is my favorite artist, Billy Joel’s, 64th birthday. In honor of this occasion, here are my top ten favorite Billy Joel songs you probably don’t know, but should. I’m sorry, but the fact that “Uptown Girl” is more well known than these, and other gems, upsets me greatly.
Summer, Highland Falls
This is my favorite song of all time.
You’re My Home
Best love song ever.
State of Grace
This amazing song conveys the slow process of two people growing apart perfectly.
Stop in Nevada
Old school Billy. A song about escape. Just so, so, so good.
All About Soul
This song is beautiful, powerful, and perfect
Everybody Loves You Now
Notoriety without accountability, and the little twinge of guilt associated with it. This song has always spoken to me.
Billy Joel’s doo-wop song about giving into temptation. It’s one of my absolute favorites.
“You know that when the truth is told that you can what you want, or you can just get old” was my high school yearbook quote.
Tomorrow is Today
Perhaps the most amazing song about a state of depression ever written.
This is the Time
An incredible song about trying to cling to a very specific point in time while living it.
(Note: I am a member of the Board of Directors of the Coalition to Reduce Spending)
With debate over the “fiscal cliff” heightening, there’s a lot of alleged brokering going on amidst the politicians in DC. Supposedly, by Christmas, a deal will be struck to avoid what is being called a perilous combination of tax increases and spending cuts — although we reject the notion at the Coalition to Reduce Spending, that a small reduction in proposed future spending increases constitutes a cut, despite the various claims from politicians on both sides of the aisle.
While this deal making goes on, and the federal government continues to spend $2.08 million per minute, there’s a lot of heated political rhetoric about how this problem should be dealt with. Unfortunately, all of the proposed solutions on the table seem to be more politically convenient than they are economically viable.
Analyzing the fiscal cliff debate at the Cato Institute, Michael Tanner lays out some facts surrounding the whole debacle that are worth noting. In particular, Tanner has some hard numbers about economic realities that, unfortunately for the DC brokers, don’t line up with their political priorities.
“President Obama has called for $1.6 trillion in tax hikes over the next ten years, which would amount to just 16 percent of the combined deficits that we are projected to face over that period. In fact, the president’s proposed tax hike doesn’t even cover the $2.6 trillion in spending increases that he has called for over the next ten years.”
This is a key point that seems to go unaddressed in the DC echo chamber, because admitting it would require politicians to actually do the one thing that would solve the problem: actively reduce government spending. But because this is politically difficult to do, the obvious math is avoided as a topic of discussion.
“President Obama claims that his plan includes spending cuts — in fact, $3 in spending cuts for every $1 in tax hikes. But he hasn’t actually offered any details beyond smoke and mirrors. The president’s plan, for example, includes $1 trillion in spending cuts that were already agreed to as part of the 2011 debt-ceiling deal, a neat exercise in double-counting.
He also includes savings from not fighting a war in Iraq or Afghanistan after 2014, money that was never going to be spent in the first place. And, finally, he includes $634 billion in savings from not having to pay interest on the phantom spending he’s cut. More realistic estimates suggest that the president is actually proposing almost $3 in tax hikes for every $1 in spending cuts.
Even those spending cuts are not real cuts, in the sense of less money being spent, but simply reductions in the baseline rate of increase. And while the president’s proposed tax hikes would go into effect immediately, the spending cuts are pushed off into the dim and distant future. In fact, according to recent reports, the president actually wants new stimulus spending in the short term, to be followed by spending cuts once the economy has bounced back.”
This summarizes the fundamental problem with the terms of the debate. Political realities are so far from economic realities, that it’s virtually impossible, absent growing outside pressure, to truly reduce spending. But the tools to change the incentive structures politicians face are increasingly available – including our “Reject the Debt” spending pledge, that holds politicians to their rhetorically pleasant promises that often get thrown to the wayside upon election. Ultimately, the fiscal cliff brokering will more than likely lead to something that reflects similar deals of the past.
As Tanner explains:
” In 1982, Ronald Reagan agreed to raise taxes as part of a deal that promised $3 in spending cuts for every $1 in tax hikes. By the time Reagan left office, tax receipts had indeed rise by $290 billion. But not only had spending not been cut, it had actually risen by $318 billion, an increase in spending of $1.10 for every $1 in new taxes.”
In 1990, President George H. W. Bush approached the football, famously breaking his “read my lips, no new taxes” pledge, and agreed to a deal that promised $2 in spending cuts for every $1 in taxes. As with Reagan, the tax hikes proved all too real, an almost $60 billion increase by 1992. But once again, not only did the spending cuts fail to materialize, spending actually increased by $128 billion, a $2.10 increase for every $1 in tax hikes. The deficit, of course, increased as well.
While the brokering looks negative from where things stand at this juncture, we can change the incentive structure in Washington by instituting outside pressure one step at a time. This won’t happen overnight – but we must embark upon this journey in order to secure future American prosperity. Join us now in rejecting the debt.
(Note: I am a member of the Board of Directors of the Coalition to Reduce Spending)
Economist, best selling author, and nationally syndicated radio host Peter Schiff, who serves on the Coalition to Reduce Spending’s Board of Advisors, recently put out an episode of his Schiff Report series in which he breaks down the political and economic situation in the face of President Obama’s reelection, accompanied by little change in the House and Senate.
While we think it’s certainly worth your time to watch the entire clip (it’s 16 minutes long), we want to highlight the part in which Mr. Schiff makes a very timely point about the real crisis America will inevitably face if we keep up this profligate deficit spending and refuse to make any real cuts to federal expenditures, which have been growing exponentially at unsustainable rates. (Our current debt to gross domestic product ratio is 105%, meaning the federal government spends more than our country actually produces in the aggregate).
We suggest that you watch this video starting from the four minute, forty five second mark, where Mr. Schiff begins discussing the long term economic perils associated with our government’s spending habits, with a particular focus on what’s next given the recent election results. His specific focus on the spending issue lasts for about two minutes.
As Mr. Schiff eloquently explains, simply because Europe is currently dealing with a worse debt crisis, which has the impact of temporarily muting the extent of the one the United States faces, doesn’t mean our day of reckoning will never come. Sure, the dollar is still the world’s reserve currency, which gives us some temporary security. But the notion that such a scenario will last forever isn’t supported by the facts, as Schiff notes.
Like Schiff says, the media is very focused on the upcoming “fiscal cliff,” in which the politicians in Washington face the prospect of tax cuts expiring coupled with a “sequestration” debate surrounding whether or not to actually cut spending (shrouded largely in accounting tricks that claim reductions to projected spending are actual cuts – but that’s an issue for an entirely different post).
This situation exists in addition to an upcoming discussion about raising the debt ceiling yet again. But as Schiff points out, we’re headed for an inevitable fiscal cliff of some sort. The question is, once we go over it, will we continue to pursue the wrongheaded policies of unsustainable spending and loose monetary policy that got us to this point? Or will we work toward a sane approach, in which Americans have healthy debates about the proper role of government, but agree that immoral generational theft through a several trillion dollar national debt is fundamentally wrong and economically unsound?
Over at EconomicFreedom.org, Sam Patterson wrote an informative blog post entitled “We’ll Never Know the True Cost of the National Debt,” which is worth highlighting. Throughout the piece, Patterson throws out some disturbing numbers that should concern all Americans.
In 2000, U.S. national debt was about 57% of GDP … today it is a full 102%.
The Congressional Budget Office (CBO) projects that in 25 years our debt will be double our GDP, meaning we will owe more than twice the value of all goods and services produced in America in an entire year.
We are adding more than $1 trillion to it every year. If we continue spending at that rate then, in the coming decades, the interest on the debt alone will be nearly impossible to pay.
These are sobering figures, and prove that easy political promises don’t necessarily translate in the real world. For a visual representation of just how out of hand government spending has gotten, Patterson provides a fantastic chart that demonstrates how spending drives the debt:
Given the gravity of the situation, what can we do? At the Coalition to Reduce Spending, we believe the most impactful way to change the way DC works is through outside pressure. The magnitude of our debt problem requires citizen engagement that creates a new incentive structure for our elected officials. First, Americans need to be educated as to the extent of the issue, and how it directly impacts them. (Can each taxpayer afford their $113,000 share of the debt?).
Then, these voters need to challenge the Washington culture by demanding their representatives stop saddling them with unsustainable debt – which is why we’ve crafted our Reject the Debt pledge, which we we hope you’ll encourage your Congressman and Senators to sign so that together, we can hold them accountable. When the men and woman in DC feel they don’t have to answer for their behavior, they will behave accordingly, hence our current situation.
After all, the massive borrowing and spending the politicians in DC engage in is ultimately everyone’s problem, because together, all Americans will have to bear the consequences.
As Patterson explains:
Despite the drawbacks and risks, many of us are willing to go into debt for an education, to start a business, for reliable transportation, or for housing. In other words, we decide that there are instances when the benefits of borrowing money are greater than the costs of paying it back.
The federal government is supposed to be making the same calculation—looking at the risks posed by having debt, then deciding whether or not the benefits of the loan outweigh the risks. But that isn’t what the government is doing. Borrowing from foreign countries to enable current spending is now the standard operating procedure in Washington, no matter what the drawbacks of borrowing or the risks involved.
Clearly, our government is far beyond the point of borrowing responsibly as a means to create economically viable outcomes in the future. What the politicians in Washington have done is create a system that is ultimately unsustainable – and it’s up to us to call upon them to reverse course.
I’ve shocked myself by feeling this way, but Mitt Romney has finally impressed me. As a Massachusetts native (and adopted Texan, thank God) I’ve been waiting a long time for my former Governor to fire me up. And I’ll admit – his debate performance Wednesday night actually got me excited. Romney looked presidential. Obama looked weak. Romney sounded authoritative, utilizing real facts, figures, and studies. Obama wavered and told irrelevant sob stories as a means to distract from reality. Anyone who watched could tell objectively, that Romney absolutely destroyed Obama. After all, the CNN poll wherein only 25% of viewers voted Obama the winner says it all.
While I was highly encouraged by Romney’s performance when it came to domestic and economic issues, I’m skeptical that this honeymoon will last. I say this is due to the fact that there is an upcoming foreign policy debate – and the way Romney has framed many aspects of this issue (particularly during his Republican National Convention speech) has made me cringe. Romney has unfortunately, made a habit of engaging in what Congressman Mick Mulvaney (R-SC) has brilliantly termed Military Keynesianism.
Essentially, Mulvaney called out many of his Republican colleagues for treating the military as if it’s a jobs program, and not simply for defense purposes. As if somehow, because the military is the most important function of government, it’s impervious to the laws of economics. Military spending should unquestionably be our nation’s top priority – but acting as if using government money to pay for military activity is any more of an economically sound jobs program than an Obama style stimulus dig-holes-fill-holes program is to misunderstand how free markets function. Romney eloquently explained to the nation why Obama’s “trickle down government” policies have failed to grow the economy on the domestic front on Wednesday – so naturally, I worry when he doesn’t apply the same logic to government spending in other areas, which is what happened surrounding military spending during his RNC speech – and was even touched upon similarly in his closing statement on Wednesday.
And putting my own ideological tendencies aside for a moment, one of the things that actually impressed me about Romney’s debate performance was the fact that he came across as reasonable and NOT ideological. This is something that appeals to swing voters who want someone to get the job done. Presenting a fact-driven common sense approach is precisely how challengers win. Naturally, as a libertarian Republican who is supporting Romney and is invested in the future of the GOP, I hope that he performs similarly in the foreign policy debate. However, some of his comments make me worry that he’s being pushed in an ideologically neoconservative direction – which is interesting, because polling distinctly shows that voters are NOT on the same page.
As Scott Rasmussen notes in his extremely interesting piece on the views of Americans on military spending that is featured in the October 2012 issue of Reason Magazine:
Well, maybe it’s not so happy, and certainly, most people don’t realize this, but October 1st marks the beginning of the federal government’s new fiscal year. What does this mean? That the federal government’s timing for taking stock of its yearly expenditures begins on October 1st, whereas the calendar year begins on January 1st for the rest of us.
To mark this occasion, James Harrigan and Antony Davies recently published a timely piece in the Washington Times entitled, “Uncle Sam’s New (Fiscal) Year Resolutions,” Davies and Harrigan share some interesting data about precisely who is (and isn’t) funding the operations of the United States federal government.
As they note:
Fifty-five percent of federal spending occurs automatically. This “mandatory spending,” on Social Security, Medicare, Medicaid, unemployment compensation, welfare, civilian and military retirement and veterans’ benefits is determined by the number of people who qualify for the programs, not by congressional action and a presidential signature.
And unfortunately, a huge chunk of this spending isn’t actually paid for, as this year marks the fourth consecutive time the deficit has been higher than $1 trillion. As Davies and Harrigan note, this year, revenue actually coming into the federal government through taxation only covered 70% of spending. We suppose future generations will just have to enjoy paying for that extra 30% on top of making up for all the other deficit spending. (Perhaps this is why a recent Rasmussen poll shows that only 23% of Americans believe life will be better for current children than their lives were – a perverse reversal of the traditional American Dream concept).
Ultimately, all of this ties in well to an inquiry recently made by Dr. Stephen Davies over at LearnLiberty.org. In a recent video entitled, “How Should Governments Deal With Debt?,” Dr. Davies lays out what he believes are the three choices governments dealing with large amounts of public debt face:
1. Enact a combination of spending cuts and tax increases
2. Repudiate the debt (leading to unspeakably high interest rates)
3. Inflate debt away by devaluing the currency
Unfortunately, as Davies notes:
The most common solution, unfortunately, is for the government to resort to inflation, and to inflate away the value of the debt by depreciating the currency. There are already alarming signs that this is what the American administration is thinking of doing.
(Watch the full video below)
Ultimately, we agree with the conclusion Dr. Davies makes: That the only way to truly deal with government debt in a sustainable manner is to reduce spending. After all, as he says:
Increasing taxes to get out of debt is better than the alternative route of causing inflation, which is in fact in this sense just another kind of tax. However, it’s ultimately undesirable, simply and straightforwardly for two reasons. The first is, taxes inhibit and distort economic activity, as any economist will tell you. So to the extent that you raise taxes, you’re going to slow down or reduce economic growth and the increase in human well being. The other thing is that a rise in taxation means an increase in the proportion of income that is decided and allocated by the political process rather than by personal and individual choice. And that is a bad thing to do on civil liberties and independence grounds. So therefore, the best way of dealing with the kind of fiscal crisis that many countries face today, not least of which is the United States, is to cut spending and to reduce the number of things the government does.
At the Coalition to Reduce Spending, we hope that the federal government will spend in a more responsible manner as the new fiscal year rolls around – but right now, it doesn’t look like the politicians are willing to change course. After all, the status quo will remain the same until political pressure from the people forces a paradigm shift. If you’re worried about the continuously growing $51,000 piece of the national debt each citizen, (including each newborn American) owes, tell your elected officials, and demand real spending reduction today.
Congressman Ron Paul, who is perhaps most well known for his career-long quests to rein in the Federal Reserve, published an interesting commentary this past week in his “Texas Straight Talk” series entitled “Interest Rates Are Prices.” Here at the Coalition to Reduce Spending, we’ve made it a point to touch upon the rarely discussed but centrally important concept of how artificially low interest rates encourage economically unsustainable behavior from not only the federal government, but private citizens as well. (For more on this, please read Coalition to Reduce Spending advisory board member Peter Schiff’s Washington Times piece, “The Real Fiscal Cliff“).
Touching further upon the important interest rates issue, Congressman Paul says:
Because the interest rate is the price of money, manipulation of interest rates has the same effect in the market for loanable funds as price controls have in markets for goods and services. Since demand for funds has increased, but the supply is not being increased, the only way to match the shortfall is to continue to create new credit. But this process cannot continue indefinitely. At some point the capital projects funded by the new credit are completed. Houses must be sold, mines must begin to produce ore, factories must begin to operate and produce consumer goods.
Congressman Paul makes an interesting analogy when he compares interest rates to price controls for goods and services. Certainly, one could see where this might be problematic in a long-term context.
As Paul states:
Because the coordination between savings and consumption was severed through the artificial lowering of the interest rate, both savers and borrowers have been signaled into unsustainable patterns of economic activity.
What does Congressman Paul mean by “unsustainable patterns of economic activity?” As he goes on to explain, resources that would have been put to use in more productive ways in a less manipulated system are allocated toward projects that are later found to be unprofitable, and thus, unsustainable. Paul posists that the only way for an economy to recover from this kind of manipulation is that the resources that have been invested in unproductive sectors need to be liquidated, instead of consistently propped up. And the latter has been standard practice for some time – only prolonging recessions, as Paul notes.
Additionally, as Paul explains:
Another effect of the injections of credit into the system is that prices rise. More money chasing the same amount of goods results in a rise in prices. Wall Street and the banking system gain the use of the new credit before prices rise. Main Street, however, sees the prices rise before they are able to take advantage of the newly-created credit. The purchasing power of the dollar is eroded and the standard of living of the American people drops.
Certainly, there has been a correlation between rising prices and increased credit injection into the system, and there’s no doubt that with a stagnant economy and the purchasing price of the dollar decreased, that the American people are adversely impacted. At the Coalition to Reduce Spending, we’re very concerned about the fact that so much money is being reallocated from productive sectors of the economy to serve the interests of well-connected central planners at the expense of honest taxpayers.
Current economic conditions demonstrate that the central planning in Washington, which has unfortunately been promoted in large part by both major parties, is not only not working – it’s harming everyday Americans. It’s time to reduce spending and manipulation in DC, and to put more resources back in the hands of the American people. After all, our national debt already divides up at $51,000 per citizen and $140,000 per taxpayer – and will increase exponentially if Americans do not demand a serious change of course in Washington immediately.
In the October 2012 issue of Reason Magazine, pollster Scott Rasmussen has a comprehensive article that discusses the feelings of Americans on the issue of military spending. Based on the findings, he concludes that on a bipartisan basis, the political class is squarely against the people on this matter.
As Rasmussen says:
Republicans who demand cuts in every program except the military open themselves up to justifiable Democratic charges of hypocrisy. Exempting major budget categories from spending discipline is a key reason government almost never gets cut. The American people are ready to take a more mature approach. A 2011 poll conducted by my firm, Rasmussen Reports, found that 67 percent favor finding spending cuts in all government programs. Every budget item, Americans emphatically believe, needs to be on the table.
That 67% of Americans believe the entire federal budget should be open to cuts, yet the political class refuses to make commitments reflecting that, speaks to a growing disconnect between the government and the governed. Often in Washington, numerous special interest groups approach politicians looking for favors, yet the majority of actual taxpaying citizens either don’t realize it, or don’t speak up in high enough numbers to drown out the lobbyist noise. In the face of our $16 trillion dollar debt, however, it’s imperative that we work on a paradigm shift in that area, and finally force politicians to compromise in the right direction: they must put their sacred cows aside, and actually reduce spending.
As Rasmussen touches upon, it’s hard for Democrats and Republicans to come to a rational compromise on spending reduction when one party refuses to consider entitlement spending, and the other won’t touch military spending. Of course, there are exceptions on both sides of the fence, but by and large, this is the situation our nation faces as our elected officials push harder on the gas in our drive toward a major fiscal cliff.
That being said, it’s not as if military spending has in any way decreased, or even leveled out under a Democratic administration; even during the time when Democrats also controlled Congress. Sadly, this is similar to how entitlement spending was not meaningfully reformed or decreased when Republicans last possessed all three branches of government.
If you turn on cable news these days, it’s likely that you’ll be bombarded by talk coming from all sides of the political aisle about “devastating cuts” to whichever government program happens to be a favorite of the individual pundit or politician on the television screen.
Many Democrats are often seen describing Paul Ryan’s budget, which takes 23 years to balance (assuming the long-term projections even hold out) as radical. An equal number of Republicans are up in arms about the so called “sequestration” cuts to military spending as a result of the 2011 Budget Control Act (BCA).
But if we cut through all of the political rhetoric, what are we really looking at? Here at the Coalition to Reduce Spending, we’ve delved a bit into why the Ryan Plan is anything but “radical” in the face of a $16 trillion dollar national debt and $120 trillion dollars in unfunded liabilities.
To understand the effects of sequestration on future defense spending, it is important to understand how the BCA spending caps and sequestration apply to the base defense budget alone and when war spending is considered.
She then goes on to share an extremely helpful graph that she put together:
As a libertarian, I approve of Mitt Romney’s vice presidential choice. Naturally, I expect this statement to inflame a certain subset of the movement – but to those of you who are invested in mainstreaming libertarian thought, particularly within the Republican Party, I hope you’ll consider why the Ryan pick is actually a victory for us – on an intellectual level.
The reality is that we’re contending with a tale of two Paul Ryans. The Paul Ryan that I like, and encourage other libertarians to embrace, is Vice Presidential candidate Ryan – the man with a natural gift for communicating; who articulates the dire need for entitlement reform and balanced budgets effectively (which I recognize and appreciate, even if I disagree with some aspects of his plans). Before we can enact the bolder reforms of, say for example, Senator Rand Paul, the public needs to be introduced to the notion that entitlement programs are no longer the third rail of politics. Vice Presidential candidate Ryan is different from his evil twin Congressman Ryan, whose voting record libertarians should rightfully reject. But we need to understand the difference between the two Paul Ryans, and how one can be our enemy while the other is our friend.
As libertarians, we often forget how many steps ahead we are of the average voter in understanding the breadth of the fiscal mess our nation faces. It can be difficult for us to remain patient. But if we truly want to see our ideas impact federal policy, we need to compromise to the extent that it furthers our longterm goals. In this instance, that means embracing the aforementioned notion of the two Paul Ryans; understanding that we can reject the voting record of Congressman Ryan, but embrace the rhetorical skills of Vice Presidential candidate Ryan, who will be traveling the nation, pushing the message that refusing to reform our entitlement programs means not only ending them in a catastrophic manner, but bankrupting our nation.