How to Crash the US Economy

The best possible thing that could’ve happened with the GOP primaries was a win for Mitt Romney, given the political hellstorm heading our way in the next six months.

We are fortunate as a nation (Dems included) that the center-right candidate won out.  We can only hope that if he does win the White House, Mitt’s voice will be a powerful one during the coming Fiscal Cliff/Debt Ceiling debates that threaten to blow up our economy.  Those other lunatics he ran against would have gleefully ridden the nuke, cowboy-style, as it dropped toward our homes from the bomb bay doors.

The Tea Party probably started with good intentions – no one in the country likes wasteful spending, centrally-planned authoritarianism or high taxes.  But in order to turn this from a notion into a political movement, the intellectuals behind it needed bodies.  Unfortunately, in the recruiting of bodies the party became wholly inclusive of idiots and – even worse – hypocrites.

Take, for instance, the Sarah Palin hoedown in Kentucky where a reporter witnessed a roomful of medicare recipients and obesity poster-children riding around on taxpayer-funded scooters, screaming about the government and, of course, the evils of Barack Obama (who obviously got us into this mess in the first place).  These are the same people who take their kids to creationist museums to learn from exhibits depicting Adam and Eve riding saddled dinosaurs.  To get this group whipped up enough to fight against their own self-interest really doesn’t take all that much cajoling.

But what the Tea Party and the obstinate hard-right of the GOP will never admit in public is how crucial it is that we rebuild the economy while preserving the spending scaffolding for the time being.   Either they don’t understand why the scaffolding exists or they truly don’t mind impoverishing a huge swathe of their country’s citizens.  Ripping out current spending just for the sake of making a point can only have the disastrous effect on the US that the current spate of Germany-mandated austerity is having throughout peripheral Europe.  This is because here in the Untied States, half of all households are currently on the government dole in one form or another.

Some amazing census data stats from Phil Izzo at the WSJ’s Real Time Economics blog:

• 49.1% of the population of the US  lives in a household where at least one member received some type of government benefit (as of the first quarter of 2011).

• This is up from 30% in the early 1980s and 44.4% as recently as the third quarter of 2008.

• “As of early 2011, 15% of people lived in a household that received food stamps, 26% had someone enrolled in Medicaid and 2% had a member receiving unemployment benefits”

• “16% of the population lives in a household where at least one member receives Social Security and 15% receive or live with someone who gets Medicare.”

Now of course the government spends too much money.  But the point here is that the above-referenced social spending has become largely necessary due to the current balance sheet recession.  Taking that a step further, only a mad man would pull it out from under us as we try to recover, especially a mad man (or woman) who does so in an attempt to get elected.

And while medicare and social security spending and obligations have grown at an obscene rate, they are not the only areas where spending is killing us (our military budget is equal to the size of the military spending in the next 18 countries combined).  It is also not the only area where there is tons of waste (Obama’s green spending “investments” have been some of the most corrupt, horrifying government boondoggles in American history).

Now I understand the need to cut spending overall – where I differ from the GOP rhetoric is on the timing and the nature of these cuts.  Mitt Romney talking about cutting 5% of non-defense discretionary spending is a good start – even while it will not do anything about the structural issue.  To put his “promise” into context, non-defense discretionary spending is like 15% of total – so we’re talking 5% of that, which is a raindrop over the Pacific ocean.  So it’s a pragmatic start, a spending cut that, if it actually happens, is symbolic without hacking off an actual functioning limb.  It should serve as the first step in a long-term project to realign our spending with the modern realities of our country and economy.

Like you and everyone else reading this with an IQ above room temperature, I am for the elimination or wasteful, crony spending and programs.  I am for low taxes on job creating activities (not just low taxes for rich people but for rich people who invest and hire).  I am for government support of a recovery that can only be led by individuals and businesses (I’m not for government leadership of said recovery, which hasn’t worked well thus far).  I am for continued aid to the helpless and the retired to whom we’ve made promises.  And I am for an overhaul that changes what we will owe and to whom in the future.

But am I for draconian, medieval spending cuts just for the sake of “taking a stand” or “sending a message”?  Not now, not at this economic moment.  It will only make the mending of this economy more costly to derail it at this juncture.  Only a German finance minister or a Tea Party candidate with an ignorant and impoverished government-funded constituency would be so reckless as to think otherwise.

Source:

Number of the Week: Half of U.S. Lives in Household Getting Benefits (Real Time Economics)

The Truth About the Tea Party (Rolling Stone)

Forget Bain — Obama’s public-equity record is the real scandal (WaPo)

Greetings from Idiot America (Esquire)