From Fox Nation:
The Republican chairman of the House Budget Committee said his party’s budget proposal for 2012 would cut deficits by more than $4 trillion over the next decade, vowing to tackle costly entitlements like Medicare and Medicaid.
The proposal, set to be unveiled Tuesday, would serve as the Republicans’ official response to President Obama’s proposed $3.7 trillion budget for 2012. The White House claims its plan would cut deficits by $1.1 trillion over a decade.
But Ryan, R-Wis., in an interview with “Fox News Sunday,” accused Obama of “punting” and said Republicans’ plan would exceed the fiscal goals set by the president’s fiscal commission — which issued a report calling for $4 trillion in cuts. That report never made it out of committee…
It is true that the President is punting – and the alleged $1.1 trillion in deficit reduction in the President’s plan is almost certainly bogus. It is probably the result of rosy revenue forecasts and “we’ll cut next year” savings. For all we know, the President’s plan is still working on the idiotic assumption that ObamaCare will reduce the deficit. So, very good that the GOP will call him on it and offer a vigorous alternative. Pity, though, that it simply isn’t enough.
$4 trillion in cuts sounds like a lot, but it is over a decade…which means $400 billion a year. Cut $400 billion from the FY 2011 deficit and you still get nearly a trillion dollars in deficit. And I’ll bet that a lot of the cuts are back-loaded…in other words, I’m figuring that we don’t start with, say, $800 billion in cuts the first year and then go from there. It’ll probably be a couple hundred billion in cuts right now with more to come later. We promise. But even if we really did cut $400 billion a year, it would not stop a complete fiscal collapse of the United States. We need to have a balanced budge by about 2015 or we’re toast – and that will take more than $400 billion in cuts.
We could probably get away with $800 billion in cuts in FY 2012 provided that it was followed by another $800 billion in FY 2013, and at least another $400 billion in 2014. That sort of budget cutting would have a strong chance of actually balancing the budget by FY 2015 – and when I say “balanced” I mean really balanced…where Uncle Sam actually spends less in 2015 than he takes in, entitlements included. That is the only way to avoid a real fiscal crisis – we have to get ourselves to a position where we are no longer borrowing to pay for current expenses. Only thus can we be sure of the ability to roll over short-term debt at something other than a ruinous interest rate (and we have built up a massive amount of short-term debt over the past two years thanks to exceptionally low interest rates…but that is something which cannot and will not go on forever)…only thus can we avoid the fate of Greece.
I know a lot of experts out there say otherwise. They claim either that the debt/deficit is not that bad, or that in any event the United States will never default. I remind everyone that these same experts never figured that the sub-prime mortgage market would collapse…I remind everyone that the economic experts are, for the most part, a bunch of Keynesian dolts who haven’t a clue what they’re talking about. We can default – eventually, we can build up so much debt that, at first, people will only lend to us at extortionate rates and, eventually, won’t loan to us at all because they fear we won’t be able to pay back. This is crunch time – this is the time where we must act to avert a crisis. We can do it, or we can punt and hope that things work out…but, they won’t; of that you can be certain.
In the end, the GOP plan is good. It will be useful in getting our house in order. It clearly shows the differences between the GOP and the Democrats heading in 2012. But it isn’t enough – not by a mile. We need to really get serious about this…and our hope is that a new, GOP-lead government in 2013 will do just that.
UPDATE: In March, Uncle Sam spent 8 times more than he took in. Houston, we have a problem…
UPDATE II: By CBO numbers, the cuts will be $4.4 trillion…using Obama’s numbers, it will be $6.2 trillion in cuts. Here’s the kicker – the drop dead date on the debt ceiling is now July 8th.
UPDATE III: Obama’s plan? Why, spend more money, of course! In this case, double conservation spending and buy more land. The man is simply not serious – he’s an utter fool.
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