"Provoking Emotions" = "Political Intolerance"

I guess it's good or bad, depending on if you are in power or not:

S. African President Walks Out of Parliament Amid Chaos

[...] Early this year, the public protector ordered Zuma to pay back to the state a portion of the $23 million used for security upgrades to the home. Zuma was in parliament to explain his response to the public protector’s report. “I have responded appropriately and I am saying people who did the upgrades at Nkandla, they are the ones who always determine who pays, when to pay,” he explained.

But the leader of the newly formed Economic Freedom Fighters, (EFF) Julius Malema, who was expelled from the ruling ANC partly for undermining Zuma’s authority, demanded a precise response. “The question we are asking today and we are not going to leave here before we get an answer, is when are you paying the money?” he stated.

When President Zuma insisted that he had already answered the question, there was commotion as EFF members refused to take instructions from the speaker of the House of Representatives.

It is at this point that Zuma decided to walk out. The speaker then temporarily adjourned parliament and called in riot police to eject EFF members, who violently refused and instead started chanting "pay back the money."

Chaos: scuffling, shoving

When it was time for parliament to resume, ANC members of parliament charged towards the EFF members, leading to a scuffle as they pushed and shoved each other.

[...]

The ruling ANC is now calling on parliament to slap the EFF members with the strongest sanction possible. In a strongly worded statement, the ANC warned the EFF not to provoke emotions, saying this could lead to political intolerance with dire consequences to the country’s democracy.

A bit ironic, that last statement. When the ANC was in political opposition, they did their share of provoking emotions. But now that they are in power, provoking emotions is a bad and dangerous thing.

Here is an earlier post I did, about the money issue the president is being questioned about:

What South African Taxpayer's Money Buys

I'm no fan of Julius Malema. But taxpayers everywhere have the right to question how the government is spending their tax dollars.
     

What South African Taxpayer's Money Buys

Really nice chicken coops, among other things:

Nkandla style – don’t worry, it is for security

In March 2014, public protector Thuli Madonsela found that president Jacob Zuma and his family unduly benefited from upgrades made to his private Nkandla homestead, which cost the taxpayer around R246 million.

According to the public protector’s report titled “Secure in Comfort”, government built a visitors centre, cattle kraal and chicken run, swimming pool and an amphitheatre for the president and his family in his private home.

Madonsela said that this clearly shows that Zuma and his family unduly benefited from the upgrades. However, government had a simple explanation for it all – security.

Justice Minister Jeff Radebe said that the cattle kraal, fire pool (seen by some as a new swimming pool) and all other features are “essential security features which ensures physical security and effective operation of security equipment.”

Who can dispute Radebe’s argument? Chickens setting off alarms – security risk. Not having a fire pool in case of a large fire – security risk. Not having an amphitheatre and having to travel on South Africa’s pothole ridden roads to visit a place of entertainment – security risk.

In fact, security is such an elegant excuse when explaining questionable decisions that it should not come as any surprise that this excuse has been used by government previously. [...]

Lookit that Chicken Coop. A real work of art, that. Would love to see it close-up.




Also see:

What Nkandla’s millions could have bought South Africans

Public Protector Thuli Madonsela released the Nkandla report this week, which showed that the estimated total cost of improvements to President Zuma’s Nkandla home is R246,631,303.

Madonsela’s report found that the total cost of the Nkandla project included:

Total payment to contractors R161,418,824;
Value of contractor payments certificates, certified but not yet paid, R3,672,748;
Total payment to professional consultants R50,352,842; and
Cost estimate for phase three, excluding consultants’ fees R31,186,887.

According to the public protector’s report a critical service delivery program was shelved and money diverted to upgrade Zuma’s homestead.

“Funds were reallocated from the inner city regeneration project and the dolomite risk management programme of the department of public works,” Mandonsela said in her voluminous report.

“Due to lack of proper demand management and planning, service delivery programs of the department of public works were negatively affected.”

The homestead has been at the centre of controversy after it emerged that the public works department had approved upgrades to the President’s KwaZulu-Natal homestead.
What could the Nkandla money have been better used for?

South Africa can benefit tremendously from better IT infrastructure, a more connected society, and better education.

Here is what the money spent on the Nkandla upgrades could have bought South Africans: [...]

Ouch. A long list. I wonder what affect, if any, it will have on the next election?
     

The Grace Commission: Good Advice Ignored

I've often heard the Grace Commission mentioned in various articles, so decided to look it up. From Wikipedia:

The Grace Commission

The Private Sector Survey on Cost Control (PSSCC), commonly referred to as The Grace Commission, was an investigation requested by United States President Ronald Reagan, in 1982. The focus of it was waste and inefficiency in the US Federal government. Its head, businessman J. Peter Grace,[1] asked the members of that commission to "be bold" and "work like tireless bloodhounds. Don't leave any stone unturned in your search to root out inefficiency."[2]

The report
The Grace Commission Report[3] was presented to Congress in January 1984. The report claimed that if its recommendations were followed, $424 billion could be saved in three years, rising to $1.9 trillion per year by the year 2000. It estimated that the national debt, without these reforms, would rise to $13 trillion by the year 2000, while with the reforms they projected it would rise to only $2.5 trillion.[4] Congress ignored the commission's report. The debt reached $5.8 trillion in the year 2000.[5][6] The national debt reached 13 trillion after the subprime mortgage-collateralized debt obligation crisis in 2008.

The report said that one-third of all income taxes are consumed by waste and inefficiency in the federal government, and another one-third escapes collection owing to the underground economy. “With two thirds of everyone’s personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the federal debt and by federal government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services [that] taxpayers expect from their government."[4]

Congress was warned. They had the chance to do something about it, and did nothing. We The People, let them do it. Now we are living the consequences.

Mr. Grace, a Democrat Businessman, was an interesting fellow:

J. Peter Grace

[...] In the Kennedy administration, J. Peter Grace was head of the Commerce Department Committee on the Alliance for Progress.[5] President Reagan, in announcing the selection of J. Peter Grace to lead The Grace Commission on waste and inefficiency in the Federal government, said:

We have a problem that's been 40 years in the making, and we have to find ways to solve it. And I didn't want to ruin your appetites, so I waited till now to tell you this, but during the hour we're together here eating and talking, the Government has spent $83 million. And by the way, that includes the price of your lunch. [Laughter] Milton Friedman is right. There really is no such thing as a free lunch. The interest on our debt for the last hour was about $10 million of that.

In selecting your Committee, we didn't care whether you were Democrats or Republicans. Starting with Peter Grace, we just wanted to get the very best people we could find, and I think we were successful.

I'll repeat to you today what I said a week ago when I announced Peter's appointment: Be bold. We want your team to work like tireless bloodhounds. Don't leave any stone unturned in your search to root out inefficiency.[6]

Mr. Grace, a Democrat, was asked what he would say to the campaign theme of Walter Mondale, the 1984 Democratic Presidential candidate, that higher taxes would be required to ease the deficit regardless of who wins the November election.

"I'd tell him he's nuts," Grace said. "He's wrong. He's wrong."[7] [...]

   

Who sucks, S&P or our Government?

I'd say, our overspending government:

Ouch! U.S. booted from Triple-A debt club

[...] On Friday, S&P downgraded the United States to AA+, an investment grade level just one notch below triple-A. It marked the first time the world's largest economy has been downgraded, since Moody's first gave the country a credit rating in 1917.

S&P cited estimates that U.S. government debt would balloon to 79% of the size of the entire U.S. economy by 2015, and 85% by 2021 -- a level S&P says is consistent with AA+ rated countries.

In comparison, estimates from the International Monetary Fund show triple-A rated Canada's debt is likely to only rise to 34% of its economy by 2015, and Germany's is forecast to rise to 52%. (The IMF does not publish forecasts out to 2021).
Your money in a AA-rated U.S.

The debt of Belgium, another AA+ rated country on S&P's list, is expected to grow to 85% of GDP by 2015, according to the IMF. [...]

If the growth of debt as a portion of GDP is the criteria they use for assigning ratings, and we are on a par with Belgium, which is also rated AA+, then isn't the changing of the rating for the United States justified? People and nations who over-extend themselves by borrowing too much, lower their credit ratings. Sad but true.

Yet, I know there are other nations on that 15 member AAA list that are having financial troubles too. The article didn't mention all their Debt as a portion of GDP growth projections, I'd like to see those.

Meanwhile, we are going to have to deal with the repercussions of this:

Dollar Weakens to Record Versus Franc as S&P Lowers U.S. Rating

[...] “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said.

Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings for the U.S. on Aug. 2, the day President Barack Obama signed a bill that ended the debt-ceiling impasse which had pushed the Treasury to the edge of default. Moody’s and Fitch also said downgrades were possible if lawmakers fail to enact debt reduction measures and the economy weakens.

S&P’s move “highlights the much-less advanced pace of fiscal consolidation in the U.S., relative to Europe and the U.K.,” John Normand, the London-based global head of foreign- exchange strategy at JPMorgan Chase & Co., wrote in a report to clients.

Haven Rally

Foreign exchange strategists at Barclays Capital said in a note to clients that S&P’s move may initially lead to a rally in assets and currencies perceived to be a haven, such as the franc and yen, while causing currencies of economies that are depend on commodities to weaken. The dollar may also benefit from the “risk impact of the shock,” though longer-term U.S. “fiscal problems are likely to mean a weaker dollar.”

“S&P had been very clear about what it wanted to see in order for the U.S. to maintain its AAA rating, and the agreement reached last week had not met those criteria,” Paul Robinson, a strategist at Barclays in London, wrote in a note to clients. “Commodity currencies look most vulnerable in the short run, again because of the risk element.” [...]

This is what happens when you keep spending money you don't have. It's not politics, it's MATH.
     

Oregon's State Budget, and Facing Reality

Here is an interesting read. It claims our state deficit needn't exist:

The Fallacy of a $3.5 Billion State Budget Deficit

[...] The official assumptions assume we will continue to do almost everything the state is doing now, in the same manner it is doing them now. This is not only a recipe for a huge deficit, but it is also a recipe for shortchanging everyone who has a right to expect that their state government will focus on its core responsibilities and do so in a fiscally responsible manner.

As set forth in Facing Reality, we identify a number of ways the state can reform how it performs certain services, how it pays for them, and how it can spin off or end other services to reduce costs and/or improve service. Included are items such as privatizing liquor distribution and sales and the DMV, reducing corrections costs, eliminating a number of costly tax credits and new programs, and targeted reductions in public employee compensation. All together these reforms could save some $2 billion in the upcoming biennium.

In Facing Reality we also propose a reasonable limit on the future growth of state expenditures, and the reduction or elimination of perhaps the most damaging symbol of Oregon’s perceived unfriendliness to business and entrepreneurship: the highest-in-the-nation 11 percent capital gains tax. [...]

Read the whole thing for the details; it's excellent. Now we just have to find a way to force our politicians to face reality.


Also see:

Oregon tax hikes lead to cut jobs, higher prices

Oregon nears highest income tax in the nation

Oregon; following California's example?
     

When does cut funding = freedom of speech?

When NPR loses it's government funding. A case can be made for it:

Defund public broadcasting and set it free

[...] This week's brouhaha has underlined the single biggest problem with public broadcasting from the fan's point of view: namely, that with taxpayer financing, no matter how small, inevitably comes political considerations and even outright interference.

[...]

What did Sting teach us? If you love someone, set them free. Should NPR lose its federal funding tomorrow, we would see the mother of all pledge drives, and I would be first in line to contribute. As a friend told me this week, "I would actually start giving them money if they'd stop taking it from me." NPR has one the best media brands in the country; you don't think George Soros would be willing to up his annual contribution to cover the shortfall?

De-coupling from the federal government would allow NPR to sell advertising. Its executives could talk as much trash as they want to about Republicans and Tea Partiers, and few people would care.

We no longer would be subjected to this perennial sideshow and obsequious tip-toeing around political sensibilities. And best of all, at a time when governments at every level are out of money, we wouldn't force taxpayers to fund the listening habits of people who hate them. [...]

I've had my say about this already:

Defund NPR now... and make them more honest

On NPR recently, someone complained that NPR is like a sweater; if you cut government spending, the sleeves will fall off. Well, guess what? Short sleeves are IN this year! I'm sure NPR would adapt, and learn to do more with less like everyone else. Or perhaps even raise revenue in new ways.

In the long run, I think it would work out better for everyone.
     

Why Unions need limits placed on them

5 Reasons Unions Are Bad For America

At one time in this country, there were few workplace safety laws, few restraints on employers, and incredibly exploitive working conditions that ranged from slavery, to share cropping, to putting children in dangerous working conditions. Unions, to their everlasting credit, helped play an important role in leveling the playing field for workers.

However, as the laws changed, there was less and less need for unions. Because of that, union membership shrank. In response, the unions became more explicitly involved in politics. Over time, they managed to co-opt the Democratic Party, pull their strings, and rewrite our labor laws in their favor.

As Lord Acton noted, "Power tends to corrupt," and that has certainly been true for the unions. Unions have become selfish, extremely greedy, and even thuggish in their never-ending quest to take in as much as they can for themselves, at the expense of everyone else who crosses their path.

That's why today, unions have changed from organizations that "look out for the little guy" into the largest, most rapacious special interest group in the entire country. Where unions go, disaster usually follows. Just to name a few examples: [...]

It goes on to give 5 excellent examples of how the unions have been bilking taxpayers, demonstrating why it must not be allowed to continue. For all our sakes.
     

Defund NPR now... and make them more honest

First there was the Juan Williams debacle, thanks to Vivian Schiller.

Then there was Vivian Schiller's Grand Scheme for putting local news agencies out of business so NPR could take them over, creating a government subsidized news monopoly.

Now there's the Ron Schiller debacle. Vivian throws Ron under the bus. Then NPR's board of directors throws Vivian under the bus.

Who cares? You know they are going to be replaced with left-wing dingbats who think exactly the same way as the people they are replacing. I heard NPR on the air yesterday, trying to spin this, denying they believe any of the things that they said. I simply don't believe them. I've listened to them for YEARS; it's pretty obvious what they believe. When will they start being honest about it?

NPR can say or do whatever they like. It's a free country, and I support their right to express their opinions. However, they can do it on their own dime, like everyone else. As a taxpayer, I don't wish to pay to promote ideas I don't approve of.

I've listened to NPR for decades. Some of the programing is nonpartisan, but most of it is biased towards the Left. It often offends me. I can deal with that, but I definitely don't want my tax dollars subsidizing it.

If they don't like the loss of revenue, they can run commercials like everyone else. Maybe even broaden their market share by trying to appeal to a wider audience? There's a novel idea!

They won't disappear, they will just have to adapt. And now is the time for it.


Also see:

All Things Considered, NPR Board Decides it’s Best to ‘Oust’ CEO Vivian Schiller

NPR executives caught on tape bashing conservatives and Tea Party, touting liberals

NPR officers compare deniers of climate change to birthers and flat earth believers

NPR Cans Ronald Schiller

NPR CEO: 'We Get a Tremendous Amount of Criticism for Being Too Conservative'

NPR's Schiller Denies Liberal Bias, But Station's Content, Policies, Board Say Otherwise

Brent Bozell Calls on Congress to Pull Plug on NPR's Propaganda Machine
     

Does gridlock mean bigger government?

It would, by default. What could make a difference? Perhaps the Toomey bill:

Debt-Limit Remedy Gives Fiscal Hawks Leverage

What happens when an unstoppable force meets an immovable object? House Republicans can pass all sorts of legislation to reduce the burden of government spending, but they don't control the Senate and they can't override a presidential veto. President Barack Obama, meanwhile, lacks the power to compel Congress to approve Democratic goals, including higher taxes.

This is a recipe for gridlock. And gridlock means bigger government: Democratic proponents of the status quo are in much stronger position to prevail because there are few ways for budget cutters to exert their will.

But there is some hope because of a "must-pass" piece of legislation. The president wants Congress to increase the statutory debt ceiling of $14.3 trillion so that government operations remain unaffected. Republicans oppose this business- as-usual approach and are insisting on real fiscal reforms in exchange for a higher ceiling.

[...]

Quite simply, Toomey's bill would require the federal government to fulfill obligations to bondholders before making any other disbursements.

To the extent that investors actually are worried, Toomey's legislation would remove ambiguity and, to borrow from the title of the bill, make clear that the "full faith and credit" of the U.S. government would be preserved.

Toomey's proposal has generated a lot of angst among Beltway insiders because it would change the political dynamics of the budget fight. Politicians love to pontificate about the dangers of debt, but many of them are MIA when it comes to putting real limits on the growth of government spending.

It's much easier to put the budget on auto-pilot and delay tough choices, which is usually what happens with closed-door budget compromises in Washington.

Powerful Weapon
If the Toomey legislation is adopted, fiscal reformers will have a powerful weapon at their disposal. Secure in the knowledge that default no longer is a possibility, they can be much tougher in their negotiations with the politicians who favor the status quo. [...]

THAT would be change I could believe in.
     

Cut the government waste first

Coburn: Control Government Spending or Face 'Apocalyptic Pain'

"Apocalyptic pain" from an out-of-control debt could cause 18 percent unemployment and a massive contraction in the economy that would destroy the middle class, a leading Republican deficit hawk said in an interview that aired Sunday.

Sen. Tom Coburn, R-Okla., who recently issued a report on government waste, warned that the U.S. only has about three or four years to get its fiscal house in order or it could find itself facing austerity measures seen in Greece, Ireland, Spain, Portugal and earlier in Japan.

[...]

The senator, who was recently elected to a second -- and he pledges -- final term in Congress, said he's not trying to scare anyone, but eliminating waste in the federal government's ledgers is imperative not just to prevent default but a massive implosion that he defined in catastrophic terms.

"I think you'll see a 15 to 18 percent unemployment rate. I think you will see an 8 to 9 percent decline in GDP. I think you'll see the middle class just destroyed if we don't do this. And the people that it will harm the most will be the poorest of the poor, because we'll print money to try to debase our currency and get out of it and what you will see is hyperinflation," Coburn said.

"If we didn't take some pain now, we're going to experience apocalyptic pain, and it's going to be out of our control. The idea should be that we control it," he said.

Coburn said he can come up with $350 billion off the top of his head in inefficiency and waste that could be eliminated without impacting anyone in a practical sense. He noted $50 billion in programs that are duplicative and $100 billion in Medicare and Medicaid fraud that was not addressed in the health care law.

"We have 267 job training programs across 39 different agencies. Why do we have 267 of them? We have 105 programs to encourage people to go into science and technology, engineering and math. That's 105 sets of bureaucrats. None of them have metrics on it," he said.

"The Pentagon can't even audit its own books. It doesn't even know where its money is going. And we refuse to have the tough forces go on the Pentagon so that at least they are efficient with the money they're spending," Coburn added. [...]

Government has no respect for the money it spends, because it doesn't earn it. That's why they waste so much, and why it's important to limit their power to spend. It's pathetic that it's gotten this bad already.
     

Best option to avoid a massive federal bailout

Sounds good to me:


Give States a Way to Go Bankrupt

[...] In the decades since the constitutionality of municipal bankruptcy was affirmed by the Supreme Court, the most serious obstacle in practice has been the rule that only insolvent municipalities can file for bankruptcy. Because a struggling city theoretically can raise taxes or slash programs, it often isn’t clear if even the most bedraggled city needs to be in bankruptcy. In 1991, a court concluded that Bridgeport, Connecticut—which wasn’t anyone’s idea of a healthy city—had not demonstrated that it was insolvent, and rejected Bridgeport’s bankruptcy filing. To avoid this risk, without making bankruptcy too easy for states, Congress would do well to consider a somewhat softer entrance requirement if it enacts bankruptcy-for-states legislation. Current corporate bankruptcy does not require a showing of insolvency, and the new financial reforms allow regulators to take over large banks that are “in default or in danger of default.” Although these reforms are in other ways deeply flawed, the “in default or danger of default” standard would work well for states.

Given that a new bankruptcy chapter for states would clearly be constitutional, and the entrance hurdles could easily be adjusted, the ultimate question is whether its benefits would be great enough to justify the innovation. They would, although a bankruptcy chapter for states would not be nearly so smooth as an ordinary corporate reorganization. When a business files for bankruptcy, the threat to liquidate the company’s assets—that is, to simply sell everything in pieces and shut the business down—has the same effect on creditors that Samuel Johnson attributed to the hangman’s noose: It concentrates the mind wonderfully. Because creditors are likely to be worse off if the company is simply liquidated, they tend to be more flexible, and more willing to renegotiate what they are owed.

One can imagine something like a liquidation sale for cities and even states. Indeed, in the early 1990s, professors Michael McConnell and Randal Picker proposed that Congress amend the existing municipal bankruptcy chapter to allow just that. They argued that many of a city’s commercial, nongovernmental properties could be sold in a municipal bankruptcy, and the proceeds simply distributed to creditors. (They also suggested that municipal boundaries could be dissolved, with a bankrupt city being absorbed by the surrounding county.) Although California has taken small steps in this direction on its own—it recently contracted to sell the San Francisco Civic Center and other public buildings to a Texas investment company for $2.33 billion—it seems unlikely that Congress would give bankruptcy judges the power to compel sales in bankruptcy. Nor could it do so with respect to any property that serves a public purpose. Liquidation simply isn’t a realistic option for a city or state. (The same limitation applies to nation-states like Ireland and Greece, whose financial travails have reinvigorated debate about whether there should be a bankruptcy-like international framework for countries.)

With liquidation off the table, the effectiveness of state bankruptcy would depend a great deal on the state’s willingness to play hardball with its creditors. The principal candidates for restructuring in states like California or Illinois are the state’s bonds and its contracts with public employees. Ideally, bondholders would vote to approve a restructuring. But if they dug in their heels and resisted proposals to restructure their debt, a bankruptcy chapter for states should allow (as municipal bankruptcy already does) for a proposal to be “crammed down” over their objections under certain circumstances. This eliminates the hold-out problem—the refusal of a minority of bondholders to agree to the terms of a restructuring—that can foil efforts to restructure outside of bankruptcy.

The bankruptcy law should give debtor states even more power to rewrite union contracts, if the court approves. Interestingly, it is easier to renegotiate a burdensome union contract in municipal bankruptcy than in a corporate bankruptcy. Vallejo has used this power in its bankruptcy case, which was filed in 2008. It is possible that a state could even renegotiate existing pension benefits in bankruptcy, although this is much less clear and less likely than the power to renegotiate an ongoing contract.

Whether states like California or Illinois would fully take advantage of such powers is of course open to question. During his recent campaign, Governor-elect Jerry Brown promised to take a hard look at California’s out-of-control pension costs. But it is difficult to imagine Brown taking a tough stance with the unions. Even in his reincarnation as a sensible politician who has left his Governor Moonbeam days behind, Brown depends heavily on labor support. He doesn’t seem likely to bring the gravy train to an end, or even to slow it down much.

But as Voltaire warned, we mustn’t make the perfect the enemy of the good. The risk that politicians won’t make as much use of their bankruptcy options as they should does not mean that bankruptcy is a bad idea. For all its limitations, it would give a resolute state a new, more effective tool for paring down the state’s debts. And many a governor might find alluring the possibility of shifting blame for a new frugality onto a bankruptcy court that “made him do it” rather than take direct responsibility for tough choices.

This brings us back to the issue of federal bailouts. When taxpayer-funded bailouts are inserted into the equation, the case for a new bankruptcy chapter becomes overwhelming. And it’s a case for Congress to move now on the creation of a state bankruptcy law.

With the presidential election just two years away, the pressure to bail out California, Illinois, and perhaps other states is about to become irresistible. As we learned in 2008 and 2009, it is impossible to stop a bailout once the government decides to go this route. [...]

I think we NEED a state bankruptcy law. I don't see another viable alternative. Bailouts just increase debt without solving the problem.

It was hard to chose excerpts, it's worth reading the whole article. There are many examples given that back up what is being said.


Also see:

Government Employee Unions are Ruining Us
     

Brits, Americans, and cutting budgets

Can the Brits teach us something about it? Yes, and no:

Lessons from London
The British Tories have demonstrated how a newly elected party can deliver a program of radical spending cuts.

Deficit hawks are flying high in Washington.

With rediscovered virtue, Republicans are vowing to rein in government spending and cut the deficit. Incoming House speaker John Boehner argues that voters want “a smaller, less costly” government, while Republican senator-elect Pat Toomey says that “the government has overreached dramatically. . . . Spending has been wildly excessive.” Even Democrats are singing a new tune, with Senate majority whip Dick Durbin saying that his party will be looking for compromises: “We’re going to be giving on spending, I’m sure.”

But restoring fiscal sanity won’t come easily. The Republicans’ $100 billion in promised spending reductions will hardly make a dent in last year’s $1.29 trillion deficit. To make a difference, would-be cutters will have to convince a skeptical electorate — polls consistently show that most substantial, specific spending cuts are unpopular — and navigate a treacherous two-year electoral cycle.

Across the Atlantic, however, the British Tories have demonstrated how a newly elected party can deliver a program of radical spending cuts. The coalition government, led by Conservatives and supported by Liberal Democrats, aims to cut spending by £81 billion and departmental budgets by 19 percent over five years, eliminating the U.K.’s structural deficit. It is a strikingly bold plan: An estimated 500,000 public-sector jobs will be lost; higher-education spending will be reduced by 40 percent; and departments will be cut by up to 51 percent.

These dramatic cuts illustrate the kind of action the U.S. will eventually have to take. The U.K.’s fiscal context is roughly analogous to America’s: The current budget deficit totals 11 percent of GDP in the U.S and 10 percent in the U.K., while the national debt is 66 percent of GDP in the U.S. and 69 percent in the U.K. (2010 figures). In many ways, however, the Conservatives’ success at tackling the deficit illustrates the roadblocks that Republicans face en route to implementing such policies. [...]

It goes on to describe the reasons why the Brits have a good chance of success... and why some of those reasons will NOT apply to American conservatives, due to differences in political structure and dynamics, and election cycles. It makes for an interesting comparison. America will have to find it's own way.

     

Where to make the spending cuts?

There has already been lots of research on the topic:

What Spending Should the GOP Cut?

[...] Out of the starting gate next year, fiscal reformers in Congress should push for an across-the-board cut to discretionary spending for the rest of the current fiscal year. One approach would be for House leaders to propose a continuing resolution that extends spending at last year’s levels, less some substantial percentage cut applied to every program.

For the upcoming fiscal year of 2012, reformers need to carefully target some major program cuts and eliminations. The president and the Democrats in the Senate will likely resist proposed cuts, but the point is to further the national debate that has begun about the proper size and scope of the federal government.

Some initial targets for GOP reformers, with rough annual savings, could include: community development subsidies ($15 billion), public housing subsidies ($9 billion), urban transit subsidies ($9 billion), and foreign development aid ($18 billion). On the entitlement side, initial cuts could include raising the retirement age for Social Security and introducing progressive price indexing to reduce the growth rate of future benefits. [...]

The article has many links to think-tanks and groups who have been studying the topic, and have many suggestions.

Europe has recognized the global economic threat and is reacting accordingly. They've been urging us to do the same. How long will it take us to change course before the collapse of our currency is imminent?

Spending cuts may be tough, but it will be nothing, compared to world-wide ecomomic collapse. See the links below for details.


Additional information:


What would a U.S. currency collapse look like?

What happens when Tax Cuts Expire in 2011?

Our true national debt: $130,000,000,000,000.

Argentina's Example: Are we heading there?

Glenn Beck – 15 Days of Economic Collapse

Has US Currency already "collapsed"?

     

What NPR's Vivian Schiller is pushing for

Check out her agenda. She's got BIG plans:

NPR CEO Vivian Schiller Key Architect of FCC Govt Takeover of the News

Last week, National Public Radio CEO Vivian Schiller took a break from her crusade for a government takeover of the media to swat a fly. With now-former NPR analyst Juan Williams suitably splattered across the evening news after politically incorrect comments he made on Fox News, Schiller can return to her real passion – the creation of a national network to ensure that in the future, you get your news from the government in general and NPR in particular.

[...]

Schiller, a former New York Times executive, is one of a few dozen power players working with the Federal Communications Commission, the Federal Trade Commission and a leftist group called Free Press to “reinvent journalism.” That’s how the FTC describes it. The FCC calls what they are doing the “Future of Journalism.” Free Press, a think tank funded by leftist billionaire George Soros, among others, calls it “the new public media.”

It’s all the same thing, a plan to take over local news coverage from for-profit television, radio and print media, which Schiller and her friends claim is in danger of extinction. These “friends” get together regularly with the heads of the FCC and FTC to brainstorm the details in government and congressional meetings. These meetings include the leaders of all the country’s public broadcasting outlets, including PBS, the Corporation for Public Broadcasting and American Public Media.

They are beefing up their staffs in local news markets with herds of public news reporters to “take over” coverage as commercial media fails. Nationwide, this will cost $40 billion to $60 billion over a decade, they believe. Their plans, according to the FCC’s Future of Media report, are to raise this money by taxing for-profit news organizations – the ones whose reporting Schiller is supposedly trying to “save.” They want to charge “spectrum fees” of five percent of broadcast station revenues for use of the public spectrum and airwaves, which the government controls. They figure that could bring in $1.8 billion a year. A one percent tax on all electronic devices like cell phones, televisions and laptops could bring in billions more. So would a monthly fee on internet subscriptions.

While conservatives were busy arguing that NPR should be defunded in the wake of the Williams debacle, Schiller was putting the finishing touches on the national infrastructure NPR has launched to deliver this new government news product to cities across the nation. A decade ago, defunding NPR would have sufficed. To stop Schiller now, Republicans would have to defund PBS and CPB as well to have any hope of torpedoing her plans to build a nationwide news delivery system in the style of the BBC, but on steroids. Schiller imagines a national public print, television and radio news leviathan that would compete with the top five news companies in the news industry.

“We can create a national network around all of public radio that provides the kind of public service that is being not provided by other media companies that are suffering,” Schiller told Cyberjournalist.net. Never mind that her planned confiscation of their revenues will cause them more suffering and possibly send them to an early death. [...]

Read the whole thing. Chilling, absolutely chilling. She's actually creating the problem she claims she is trying to solve, then pushing her own power grab as the solution. And why not? She has gotten away with it thus far. Another example of government power gone wild. Once released, it knows no limits.

Creating a government controlled news monopoly with taxpayers money is not what taxes are for. De-fund the lot of them... NOW.


Also see:

Marxist Censorship Dreams, and the FCC
     

Nearly ALL of our budget deficits come not from reduced tax revenues, but from spending increases

WHERE DO PEOPLE LIKE THIS COME FROM?

[...] One liberal writes that "the government actually ran a surplus during the Clinton administration's last few years, and it was former President George W. Bush's wars and tax cuts for the rich that turned our federal budget into the red." This is typical liberal thinking based more on an intense dislike of George Bush - possibly born of bitterness over the 2000 election - than on economic facts. The writer ignores the fact that tax revenues actually increased after the Bush tax cuts. Tax revenues were then and remain now above historical averages - even after the tax cuts. The Heritage Foundation has published studies showing that nearly ALL of our budget deficits come not from reduced tax revenues ... but from spending increases; both from George W. Bush and Barack Obama. It's the spending - not the tax cuts - that have brought us our immense debt. But you don't want to confuse this letter writer with those facts. [...]

But it's a fact that bears repeating. When the tax cuts are allowed to expire, what do you think will happen to tax revenue? We are about to see:

What happens when Tax Cuts Expire in 2011?

Those who don't learn from the mistakes of the past, are doomed to keep repeating them.
     

Mathamatics are not Partisan

The Bush Tax Cuts and the Deficit Myth
Runaway government spending, not declining tax revenues, is the reason the U.S. faces dramatic budget shortfalls for years to come.

President Obama and congressional Democrats are blaming their trillion-dollar budget deficits on the Bush tax cuts of 2001 and 2003. Letting these tax cuts expire is their answer. Yet the data flatly contradict this "tax cuts caused the deficits" narrative. Consider the three most persistent myths:

• The Bush tax cuts wiped out last decade's budget surpluses. Sen. John Kerry (D., Mass.), for example, has long blamed the tax cuts for having "taken a $5.6 trillion surplus and turned it into deficits as far as the eye can see." That $5.6 trillion surplus never existed. It was a projection by the Congressional Budget Office (CBO) in January 2001 to cover the next decade. It assumed that late-1990s economic growth and the stock-market bubble (which had already peaked) would continue forever and generate record-high tax revenues. It assumed no recessions, no terrorist attacks, no wars, no natural disasters, and that all discretionary spending would fall to 1930s levels. [...]

The whole thing is very detailed, exposing each flawed premise being used to blame tax cuts for deficits, and then goes on to clearly demonstrate how it's government spending that's driving up the deficits.

Tax cuts allow people to spend and invest their own money, which stimulates the private sector economy and creates jobs, which creates more taxpayers, thereby increasing revenues also. But if the government continues to spend beyond the revenues they are bringing in, well nothing can "fix" that, other than cutting spending. Raising taxes won't do it because that means less jobs and overall less tax revenue being generated.

It's math, numbers. You can't spend what you don't have, and you can't over-tax or you will reduce tax revenues. The solution: live within our means. Duh.


Related Links:

Why the "Recovery" is stalling

What happens when Tax Cuts Expire in 2011?

Obama's Anti-Business Policies Are Our Economic Katrina
     

The Republican Problem

And what would that be? Getting people to trust them about spending:

Do Not Trust Cornyn or McConnell on Spending Cuts

[...] Republicans, perhaps because of their party’s evangelical wing, understand what it means to be born again — and they’re out to convince Americans that they are born-again debt crusaders, ready to rumble in the holy struggle for smaller deficits and less-unbalanced budgets. This takes a little bit of chutzpah. Here’s McConnell: “The American people don’t think our problem is that government taxes too little. Our problem is that government taxes too much. And that it spends too much and borrows too much. And until Democrats demonstrate even the slightest ability to restrain the recklessness with which they spend Americans’ hard-earned tax dollars, the job creators and the workers of this country aren’t about to take them seriously on how to lower the debt. The American people shouldn’t be asked to pay the price for Democrats’ recklessness through higher taxes.” Until Democrats demonstrate the slightest ability to restrain their recklessness? Fair enough, but let me refresh Senator McConnell’s memory:



Check out the spending under your guys, Senator McConnell. Notice how it doesn’t go down? This is why nobody trusts Republicans on spending: because Republicans have not earned anybody’s trust. [...]

And it doesn't help that we had eight years of a Republican Administration that spent money like a Democrat. Money we didn't have. Republicanism in recent years has meant sucking up to the social conservatives, and ignoring fiscal conservatism.

If Republicans can't put fiscal conservatism FIRST, even before social issues, then why should anyone bother with them?
     

He's alive. And where is the "wonderful"?

Obama Porkway: Road Built With Stimulus Money Will Bear President’s Name

[...] Most roads that are constructed are paid for with taxpayer dollars, but the fact that the first new road named after Barack Obama is being funded by his beloved “stimulus” is only appropriate.

If you’re in Orlando looking for this road, it’s just a mile west of the intersection of Hope and Change, and a half-mile east of the corner of Shovel and Ready. Why did local officials decide to name the stimulus road after the president? Because “A Blatant Attempt to Bankrupt America Boulevard” wouldn’t fit on the sign. [...]

Remember when people used to get things named after them, only after they were dead? And only if they had achieved something wonderful?

So far as I know, Obama is still alive. And as for the wonderful, I'm still waiting.
     

Our true national debt: $130,000,000,000,000.

What!?! Isn't it supposed to be "only" 14 trillion, instead of 130? Not if you use REAL accounting practices, like real businesses have to do.

The Other National Debt

[...] Accountants get a bad rap — boring, green-eyeshades-wearing, nebbishy little men chained to their desks down in the fluorescent-lit basements of Corporate America — but, in truth, accountants wield an awesome power. In the case of the federal government, they wield the power to make vast amounts of debt disappear — from the public discourse, at least. A couple of months ago, you may recall, Rep. Henry Waxman (D., State of Bankruptcy) got his Fruit of the Looms in a full-on buntline hitch when AT&T, Caterpillar, Verizon, and a host of other blue-chip behemoths started taking plus-size writedowns in response to some of the more punitive provisions of the health-care legislation Mr. Waxman had helped to pass. His little mustache no doubt bristling in indignation, Representative Waxman sent dunning letters to the CEOs of these companies and demanded that they come before Congress to explain their accounting practices. One White House staffer told reporters that the writedowns appeared to be designed “to embarrass the president and Democrats.”

A few discreet whispers from better-informed Democrats, along with a helpful explanation from The Atlantic’s Megan McArdle under the headline “Henry Waxman’s War on Accounting,” helped to clarify the issue: The companies in question are required by law to adjust their financial statements to reflect the new liabilities: “When a company experiences what accountants call ‘a material adverse impact’ on its expected future earnings, and those changes affect an item that is already on the balance sheet, the company is required to record the negative impact — ‘to take the charge against earnings’ — as soon as it knows that the change is reasonably likely to occur,” McArdle wrote. “The Democrats, however, seem to believe that Generally Accepted Accounting Principles are some sort of conspiracy against Obamacare, and all that is good and right in America.” But don’t be too hard on the gentleman from California: Government does not work that way. If governments did follow normal accounting practices, taking account of future liabilities today instead of pretending they don’t exist, then the national-debt numbers we talk about would be worse — far worse, dreadfully worse — than that monster $14 trillion–and–ratcheting–upward figure we throw around. [...]

This article goes on to show, point by point, using real accounting principles, what the actual debts are that will be coming home to roost. And along the way, explaining the political reasons as to how and why it's been allowed to happen.

More proof that government is not only not the answer; it's often the problem. Of course we need government, but we also need BALANCE. Especially on the balance sheet, as every real accountant knows.

     

The cure for Greece is the one for US too

America faces a big, fat Greek-style bankruptcy

[...] Greece's problem is Europe's problem ... and following closely behind, America's problem, too. We're all Greeks now. Quite simply, Greece's problem starts and ends with government employee unions. There are too many government employees (one of every three Greek citizens works for government); their salaries are way too high; their bonuses can be described only as insane (2 months for each public employee); their pensions are ridiculous (retirement far too young and free health care for life); and their government jobs are guaranteed for life.

Sounds crazy, right? Sounds like in Greece the inmates must be running the asylum. Except America has the exact same problem. California, New York, New Jersey and Illinois are our very own homegrown versions of Greece. These states are bankrupt, insolvent and desperately need a bailout. Why? For the same reasons as Greece. Far too many government employees; bloated salaries for civil servants; bonuses and raises are contractually obligated even during an economic crisis; sky high pensions; and jobs guaranteed for life. The only difference is that we are a nation of 300 million, so the debt is far bigger than Greece. It turns out that we are Greece squared.

The solution to save America from economic Armageddon? Simple. Use the same "austerity measures" imposed upon Greece, in return for this $145 billion loan, to dramatically cut spending on government employees:

-- Freeze government hiring for the next three years.

-- Eliminate bonuses and raises for the foreseeable future.

-- Institute layoffs and across the board wage cuts. Why should government employees enjoy "privileged status" that no employee in the private sector enjoys?

-- Change pensions from "defined benefit" to "defined contribution" pension plans, meaning retirees receive only what has been built up in their 401K type retirement accounts.

-- Raise the retirement age. In Greece it is going from age 53 to 67. Gold-plated pension plans are the single biggest factor that bankrupted Greece. The same problem bankrupted U.S. automakers GM and Chrysler.

-- Require government employees to pay more of their health care (through co-pays and deductibles).

-- Change the way pensions are calculated by eliminating overtime and raises in the last years of employment to "game the system."

The real global threat to our existence isn't global warming -- it's catastrophic government spending and, more specifically, spending on government employees. Our government's unfunded liabilities are now estimated at $60 trillion to $75 trillion over the coming decades. To give you some perspective, the New York Post recently reported that one New York firefighter is retiring on a pension of $240,000 per year. If he lives 40 years beyond retirement, that will cost the taxpayers almost $10 million. That's for one single government employee.

There are millions of them on the federal, state and local level. It can only be described as a ticking time bomb that threatens to destroy our children's and grandchildren's future.

Nevada's economic future is clouded by this same crisis.

Government employees should be cheering the solutions I have laid out above. [...]

Yes, they should, and the author goes on to explain why. The way things are, government employees are risking losing it all. But the unions are doing every thing they can to block any changes to make pensions sustainable. Excessive Union greed can kill the host, the goose that lays the golden eggs, the prosperity engine that pays the bills, leaving us all poorer.

I know that unions are not going to disappear, but there must be balance. Their relationship to their employer needs to be symbiotic, not parasitic. In the private sector that concept is sometimes understood, by unions that understand enlightened self-interest; they know that their employer needs to thrive, so that the union can also thrive and survive. But in the government sector, that concept doesn't even exist. It's a parasitic relationship that's completely out of control. And the taxpayers are the host that's being attacked. We need the cure, for ALL our sakes!

I wanted to print this entire article, it explains the causes perfectly and has the answers too. It's worth reading the whole thing.