Here’s the problem: the way things are going, we’re going to have a deficit of $1.35 tillion this year. I have been alive long enough to remember when the national debt was that much. Okay, not really, but it is a staggering amount of money for the government to be overspending on an annual basis.
So the solution is, I have always thought, rather obvious. The first step towards getting out of debt is to not incur any more debt. Therefore, Congress needs to stop passing budgets with substantial deficits. Over time, we will pay down our long-term debt and can get back to having an ambitious government when we can afford it. Now, to be sure, the government will never get completely out of debt; it can’t not be in debt because short-term debt is necessary to ensure continuous operation of government functions while tax inflow is uneven. But we can, over time, get to a place where we do not have any long-term debt to service. Yes, I know some guys dream of having two girls at the same time; some guys dream of playing in the Super Bowl — but I say, dare to dream of a world in which there is no such thing as a 30-year T-bill.
So the President has now floated the policy balloon of a three-year spending freeze on certain government programs. Progressives are having fits of apoplexy about this. So much for their dreams of an expanded government taking an activist hand in helping peoples’ lives improve or, if you prefer, their dreams of a dramatic increase to the heavy foot of statism to restrict individual freedoms in pursuit of a wooly-eyed nirvana of command economies and bureaucratic government. Their savior, their champion, their beautiful paladin in the White House, has sold out. After all, didn’t he campaign on opposing exactly such a maneuver?
But frankly, I don’t think there’s much choice. I’ve been saying for a long time that this day had to come, and it wouldn’t matter all that much who would be in the White House when it did. Indeed, I’ve been saying for a long time that this day is long overdue. And a freeze is not the same thing as a cut. Where my idea of a strong cut leading to a thirty-year paydown of our long-term debt requires an immediate and painful sacrifice and a long-term diminishment in the scope of what we expect the government to do for us, President Obama is much more modest than I would be.
He is proposing only talking about a freeze in social programs, a freeze which is not really a freeze in the sense that it is indexed for inflation, and a freeze which exempts defense spending and homeland security, foreign aid, the V.A., Medicare, Medicaid, and Social Security. In case you weren’t keeping track, those things are nearly seven-tenths of the federal budget. No one can do anything about the cost of servicing old debt, which is another eight cents on the federal dollar right now.
So tomorrow night when you hear President Obama announce his desire for a spending freeze in the State of the Union address, bear in mind that 1) he’s only talking about 23% of government spending, and 2) spending levels in real dollars will remain constant over time even within those programs. Failure to increase a budget is not the same thing as cutting it.
This is not a deficit-reduction proposal. It is a growth-of-the-deficit reduction proposal. Don’t get me wrong, it’s a step in the right direction and the protests and revolts Obama will have to face from within his own party are evidence of how difficult and painful this process will be. So in that sense, I applaud the President for making the proposal at all, no matter how modest it really is.
But don’t think he’s taking a chainsaw to the government. This is the scalpel, not the hatchet.