In his recent State of the Union address, President Obama said that he wanted an American economy that is “built to last.” Today’s release of his fiscal 2013 budget proposal shows that the president still thinks he can build economic prosperity with more spending, taxes, and debt. Those are the building materials for an economic time-bomb that will explode on future generations.
At the center of the debate over efforts by policymakers to “stimulate” the economy with government spending is the issue of fiscal multipliers. Some economists argue that government spending can be a free lunch: an additional dollar of government spending increases GDP by more than one dollar. Other economists say that government spending is not so free: an additional dollar of government spending increases GDP by less than one dollar or even reduces it.
A Washington Post investigation identified dozens of examples of federal policymakers directing federal dollars to projects that benefited their property or an immediate family member. Members of Congress have been enriching themselves at taxpayer expense? In other news, the sun rose this morning.
I don’t recall ever agreeing with the left-liberal Center on Budget and Policy Priorities (CBPP), but their new paper on the drawbacks of the federal government switching to biennial budgeting is a good read. Congressional Republicans, including House Budget Committee chairman Paul Ryan (R-WI) and Senate Budget Committee ranking member Jeff Sessions (R-AL), are the chief proponents of switching to a biennial budget cycle. By providing (qualified) support to the CBPP paper, I’m hoping to demonstrate to would-be GOP naysayers that criticism of biennial budgeting isn’t confined to one area of the ideological spectrum.
The president’s fiscal 2013 budget proposal is scheduled to be released on February 13th. State officials are predictably sounding the alarm on the coming “deep cuts” to federal subsidies now that stimulus funds are running out and Washington is being forced to confront its mounting red ink.
Contrary to what various news outlets are reporting, President Obama is NOT proposing to cut government. The administration is proposing to take four independent federal agencies that specialize in corporate welfare – along with the Office of the U.S. Trade Representative – and combine them with corporate welfare programs at the Department of Commerce to form what I would argue should be called the Department of Corporate Welfare.
That’s the message I came away with after reading an online article from a Philadelphia Inquirer reporter about a decision by the state of Pennsylvania to limit eligibility for food stamps. The article is a perfect example of the difficulty advocates for limited government face in communicating their ideas through the mainstream press.
Chris Edwards and I have regularly complained that most policymakers have been insufficiently specific when it comes to identifying spending cuts. With the Republican primaries about to get underway, it’s a good time to see what the current crop of presidential aspirants has to offer.
The office of Senator Tom Coburn (R-OK) has released the 2011 edition of its annual “Wastebook.” The document spotlights 100 particularly ridiculous expenditures of taxpayer money from the past year. From an entertainment standpoint, it’s pure gold. But it’s also infuriating, depressing, and a painful reminder of what happens when politicians and bureaucrats spend other people’s money.