The Farm Follies Continue

The latest CBO report shows that the FY2013 deficit will come in at around $642 billion, a dramatic reduction. Naturally, the usual suspects are calling for more “stimulus” spending now that the deficit problem is “solved”. But they should read some critical points raised by Peter Suderman. The “small” deficit is a result of tax hikes, spending cuts and about $200 billion in one-time revenues (Fannie/Freddie dividends and tax adjustments). The “small” deficit will only last a few years before entitlements and Obamacare began to raise it again even under optimistic budget scenarios. And even under optimistic scenarios, interest payments will reach historic highs.

(As an aside: what’s really hilarious is to watch the Left scramble to explain why “austerity” hasn’t crashed the economy. Most of them are simply going the Krugmann route and ignoring everything they’ve been saying for the last five years.)

So now is not the time to open the spending or tax cut floodgates. Now is the time to keep to build on the budget momentum and reign in entitlements. Now is the time to … oh, shit:

House and Senate farm subsidy supporters are pushing to enact the first big farm bill since 2008. Democratic and Republican supporters say that this year’s legislation will be a reform bill that cuts spending. Hogwash.

Last year, House farm subsidy supporters proposed a bill that would spend $950 billion over the next 10 years, while the Senate proposed a bill that would spend $963 billion. By contrast, when the 2008 farm bill passed, it was projected to spend $640 billion over 10 years. Thus, the proposed House bill would represent a 48 percent spending increase over the last farm bill, while the Senate bill would represent a 50 percent increase.

Congress is bizarrely claiming that they have “cut” the farm bill because it’s 3% less than the original proposal. But not only is this their usual “cut spending growth” trick, it runs into the problem that the farm bill is usually much larger than originally budgeted. Next year’s farm bill be almost 50% more than originally proposed.

The spending “discipline” of the last two years is already eroding in the face of temporary unsustainable deficit reduction. And even worse, it’s opening on one of the many places it shouldn’t: the massive pile of corporate welfare euphemistically called the “farm bill”. Now is not the time to be shoveling more money into this hole. Now is the time to follow the advice P.J. O’Rourke gave twenty years ago: “drag the Omnibus Farm Bill out behind the barn and kill it with an axe.”

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  1. Mook

    The “small” deficit is a result of tax hikes, spending cuts and about $200 billion in one-time revenues (Fannie/Freddie dividends and tax adjustments).

    And also the artificial bump which increased the selling of stocks and other assets in 2012 in order to book capital gains in 2012 because of the expiration of the Bush tax cuts.

    It can’t be emphasized enough that the cumulative debt continues to increase at a rapid pace, racing toward $17 Trillion (not counting unfunded liabilities which are a multiple of that number), even if the annual deficits are temporarily lower this year as compared to the deficits from the few years before. If a private business ran off-budget accounting trickery like the US govt. does with SS and Medicare, the owners of those private businesses would be jailed.

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  2. AlexInCT

    The latest CBO report shows that the FY2013 deficit will come in at around $642 billion, a dramatic reduction

    I bet you that when we get the real numbers that $642 billion will be off by several hundred billion in the direction that makes it higher. Especially since there is no official budget to base any of this crap on. These idiots at the CBO have not gotten any numbers right unless they are reporting on those from at least 2 or 3 years ago.

    Here is a prediciton: not only will that $642 billion deficit go higher when all is said and done, but next year it will again be close to $1 trillion for sure. Before Obama leaves office we will be sitting on close to $20 trillion of debt. And the same fucking idiots will blame Boosh’s tax cuts and evil banks instead of the fucking Keynesian cock sucking pols that have used tax payer money to enrich their buddies and buy/steal elections.

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  3. Miguelito

    As an aside: what’s really hilarious is to watch the Left scramble to explain why “austerity” hasn’t crashed the economy. Most of them are simply going the Krugmann route and ignoring everything they’ve been saying for the last five years.

    Or they’re saying the same bullshit as before:

    Growth is holding up well in 2013, but would be even stronger if the federal purse strings were not being tightened,

    i.e. “We’d be even BETTER off if we were still spending like drunken sailors. You should’ve trusted us!

    Claims that can’t actually be proven of course. Plus, you know, all growth comes from the sainted gov’t.

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  4. hist_ed

    Two shit storm await us:
    Storm #1 entitlements. Doesn’t matter what the CBO says for the next few years, in a decade or so SS and medicare will eclipse everything else
    Storm #2 interest rates. At some point printing money to buy US debt will cease. At that point we will have to start offering bigger payouts for our debt. Interest rates will rise and debt service will go up with it. Hopefully this will happen gradually and reasonably, but I bet that ain’t how it plays out. A spike in interest rates could double or triple the amount we spend hiring money-then we are fucked.

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  5. zinger

    I can remember when Democrats would go absolutely bonkers about government deficits that might exceed $300 billion. That must have been a loooong time ago. Like, almost ten years.

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