The case against balancing the budget
By DonSurber
In 1835, the seventh year of the tyrannical presidency of Andrew Jackson, the federal budget ran a surplus and the national debt was eliminated.
The nation immediately plunged into a recession.
The powers that be in Washington learned their lesson. We have not paid our national debt off since. Congresses and presidents were careful ever since to spend more than they dare tax their constituents.
The one exception was the 1920s, when Republicans ran up 10 consecutive budget surpluses.
Then came the Great Depression.
In recent years only Nixon and Clinton presided over surpluses. Their reward? One was forced to resign or face impeachment; the other was impeached.
In recent times, the deficits in dollars:
The deficits in percentage of GDP:
In George Walker Bush's presidency, Americans have paid 90 cents in taxes for every $1 in service they received.
If this were a business, the government would be bankrupt. But it is not a business; it is government. And treating government like a business can be very dangerous to the economy.
Anatole Kaletsky, economics columnist for the Sunday Times of London, made that clear in his column today, "What has four letters, begins with E and is slowly killing half of Europe?"
Kaletsky's point is that to meet European Union criterion for the euro, duly elected democracies in Italy, Hungary and elsewhere are wrecking themselves and their people.
"What we see in Eastern and Southern Europe today are the consequences of the EU’s transformation from a union of democratic countries into a sort of supra-national financial empire in which the most important decisions affecting EU citizens are no longer subject to democratic control.
"In Italy the Government is on the brink of collapse because of Signor Prodi’s insistence on implementing tax increases and budget cuts demanded by Joaquín Almunia, the EU Economic Commissioner, under the terms of the Maastricht Treaty. In Hungary, the riots began a month ago because the Prime Minister showed his contempt for democracy by publicly admitting that he had “lied, morning, noon and night” about the tax increases and public spending cuts that he had promised Señor Almunia before a recent election — and after the election was over, he naturally felt that his promises to Brussels were far more important than the ones he had made to Hungarian voters.
"The resulting budget cuts of 7 per cent of GDP over two years would be roughly equivalent in Britain to closing down the entire NHS. And Hungary, remember, is being forced to do this to comply with the Maastricht treaty, without even being admitted to the eurozone."
Now then, I will admit that balancing the budget has its charms. I was beguiled by the thought until we actually balanced the damned thing. Then I saw nothing had really changed. The government was no more efficient. My taxes were just as high. No one was being held accountable for most of the lunacy I saw.
Oh, a balanced budget is a nice goal. But looking at the U.S. budget, we would need to cut spending by 10% to achieve a balanced budget. Anyone care to tell my 84-year-old mother her Social Security checks will be 10% smaller next year? I'll give you a hint: She walked over a mile to work each morning in a pill factory to raise 5 kids.
Kaletsky said Eastern European countries are being forced to make such cuts or else load up their citizens with usurious taxes to meet arbitrary goals set in Belgium:
"The Maastricht treaty has turned the Eastern Europeans into second-class citizens. The belated recognition of this fact is starting to have the predictably ugly impact on the politics of Europe’s eastern periphery. But before getting too indignant about the injustices to Eastern Europe, let us spare a thought for the citizens of old Europe who are privileged to “enjoy” full membership of the eurozone. The latest budgetary crisis in Italy may well be averted and the Prodi Government will probably survive for a few more months. But as Signor Prodi’s huge tax increases begin to bite, the Italian economy is almost certain to sink back into recession. Moreover, there will be no chance of Italy tackling any of its real economic problems once unemployment starts rising next year."
I say let the marketplace work. As long as people are willing to buy U.S. bonds, then Congress should not be afraid to borrow.
The debt is not being passed on to our grandchildren. That is the dirty little secret to the national debt: It never gets paid!
Money Martin Van Buren borrowed in 1837 still has not been paid back and I doubt it ever will. We just roll over the debt.
Living beyond one's means is the American way. If we all suddenly paid cash only for our homes, our cars, our lattes, why the economy would collapse. No thank you. donsurber.blogspot.com |
