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.”