President Obama has instructed federal agencies to come up with spending cuts equal to five percent of their discretionary budgets for fiscal year 2012. The 2012 fiscal year doesn’t begin until October 2011. Why wait ?
General Overspending
Wash Post Cites ‘Regime Uncertainty’
We argued in October that “regime uncertainty” was stifling the economy’s ability to recover. Businesses are more reluctant to invest or hire when Washington pursues a policy agenda that could be detrimental to their bottom lines. The phrase was coined by economist Robert Higgs who observed that FDR’s anti-business policies prolonged the Great Depression.
Federal Spending Limit
The nation is facing a fiscal emergency. Debt is exploding and federal spending exceeds revenues by more than $1 trillion a year. To fix the problem, policymakers should pursue reforms on two paths.
Regulatory Spending and Staff
Analysts across the ideological spectrum generally agree that the government’s regulatory bodies fail far too frequently. However, analysts seem to learn different lessons from this experience.
This Week's 'YouCut' Choices
Republican Whip Eric Cantor unveiled the GOP’s “YouCut” website last week, which includes five possible spending cuts for citizens to vote on. The “winner” is then brought to the House floor for a vote. Although enlisting citizens to help Congress start cutting the bloated government is a good idea, the GOP’s cutting choices last week only amounted to 0.017 percent from the $3.7 trillion federal budget.
I Cut Spending by 10%
House Republicans proposed some small cuts to the federal budget on their new YouCut website last week. I noted that the GOP cuts amounted to just 0.017 percent of the federal budget, and suggested that the conservative party in Congress could do much better. Below I’ve listed 10 terminations that would save about $380 billion a year, which is more than 10 percent of total federal spending.
'YouCut' Spending by 0.017%
House Republicans unveiled a bold strategy to cut 0.017 percent from the $3.7 trillion federal budget this week. Republican Whip Eric Cantor unveiled the GOP’s “YouCut” website, which includes five possible spending cuts for citizens to vote on. Mr. Cantor promised to take the favored cut to the House floor next week for members to consider.
Cheap Talk from a Fiscal Commissioner
The president’s fiscal reform commission started off with some breathtaking chutzpah from Senate Budget Committee Chairman Kent Conrad (D-ND):
Conrad's Budget Proposal
Senate Budget Committee chairman Kent Conrad has released his budget plan for the next five years. The following are some thoughts on the proposal:
The Debt Explosion
According to the Congressional Budget Office’s recent estimates of President Obama’s current budget proposal, debt held by the public relative to the size of the economy is heading toward heights last seen since the end of the Second World War: