Tag: Spending

Budget Blueprint Out

Trump released a blueprint of his budget for discretionary spending today. It includes a big increase in military spending but balances it with massive cuts to other agencies, particularly the EPA, NIH and HUD. Real cuts, not “slowing growth” cuts.

There is little chance that the Congress will pass this budget. In the end, they will come up with their own plan. There is a lot that alarms me. The big cut to NIH would be a blow to public health and scientific research, including the research we need to deal with things like Ebola. Cuts to EPA sound good but unless you’re also cutting regulations, that just means longer delays in EPA evaluations and clearances. The budget also guts climate science since we apparently don’t have to care anymore.

Other cuts, like HUD and that National Endowment for the Arts, seem more reasonable. The gripping hand is that, with big increases in military spending and no entitlement reform, even Trump’s budget does nothing to get our debt under control.

Of course, the Left, being the Left, has decided to focus their criticism as stupidly as possible. They are claiming that Trump is canceling Meals on Wheels.

Are they right? Is Trump canceling Meals on Wheels? No he isn’t.

One of the cuts in the budget is longer overdue cutting of the Community Development Block Grant Program. The CDBG is a $3 billion program that ostensibly goes to developing poor communities but mostly goes to graft, corruption and waste. It blows massive amounts of money on wasteful projects, sees a huge chunk disappear into administrative costs and, unsurprisingly, sends most of its funds to wealthy communities around DC that can, frankly, fund their God-damned white elephants.

(Note: this is typical of programs that purport to develop communities up to and including the grandaddy of all “community development” pork barrels — public subsidies for sports stadiums. It’s odd how often governments decide that the best way to develop a community is to throw money at their rich friends.)

With such a juicy slice of government pork-barrel spending in danger, the Democrats had to find some way to save it. And so they scoured the budget until they found something. It turns out that one of the many things the CDBG program gives money to is Meals on Wheels.

Meals on Wheels is a great program. But their national program only gets 3% of their funding from government grants. Almost all of the rest of their funding comes from private sources. And a huge amount of its costs are covered by volunteers. So even if Meals on Wheels never saw another red cent of federal money, they would still be able to do almost everything they do right now.

This nonsense is typical of attempts to cut government spending. The federal government does not run a Federal Cat Kicking Program or a National Dog Beating Program. Almost all of its programs have noble intentions. Or at least noble labels. So even if a program is wasteful, it purports to fight illiteracy or feed the hungry or build communities. The people who benefit from a federal program — in the case of CDBG, that would be rich DC-area governments — are very invested in making sure it stays funded. By contrast, the people pay for it — that would be the rest of us us — only see a tiny part of their paychecks go to that particular program. And so Trump’s proposal to kill the wasteful CDBG program are cast as, “DONALD TRUMP IS TRYING TO STARVE SENIORS AND THIS PROGRAM ONLY COSTS YOU TWO CENTS A DAY!!” And, of course, our worthless media repeat that lie until the program is saved.

This is why we ended up with the sequester. Because the alternative to a dumb misguided across-the-board spending cut was no spending cut at all. Trump would be far better off simply setting a cap on how much discretionary spending he will accept before a veto and then let Congress squabble about where the money’s going. And if the Left really cares about Meals on Wheels, they can pony up another 3% of its funding themselves.

It Takes a Village to Waste Money

For a time, it looked like Hillary Clinton might actually end up being the more conservative candidate in the race. Trump has been talking about restricting trade, blowing holes in the debt, opposing entitlement reform and expanding executive power.

Well, no longer. Apparently afraid that Bernie Sanders will bolt the Democratic Party for the Green (this tends to happen when you let people run who aren’t technically members of your party), she has now basically adopted Bernie Sander’s agenda in full.

  • She’s supporting the push for universal Pre-K, proposing a new bunch of subsidies and tax credits, doubling the size of the failed Head Start program and pushing for 12 weeks of mandatory paid leave. I’ve argued before the universal pre-K is a solution stumbling around in search of a problem and documented the complete failure of universal pre-K efforts. Clinton doesn’t care; there’s votes to be bought!
  • Clinton has now abandoned education reform in favor of more spending and more spending. There’s no evidence that this approach does anything but employ more union members. Clinton doesn’t care; there’s votes to be bought!
  • She’s now supporting a $15 minimum wage, a plank taken straight from Bernie Sanders. I’ve pointed out before that the push for $15 is a kind of mass insanity that has gripped the Left, only slightly more scientific than if the Republicans had responded to the Ebola epidemic with prayer. The cruelty of this is that it if the Democrats are wrong, it will not destroy their jobs, but the jobs for the people they purport to care for: the poor, the workings class, minorities, dropouts and convicted criminals trying to straighten out their lives. Clint doesn’t care; there’s votes to be bought!
  • She’s now embraced Bernie’s plan to massively inflate college tuition … uh … “make college more affordable“. As has been pointed out innumerable times, shoveling money at colleges will simply raises costs, increase debt and persuade more people to waste their time in college when they could be working or training. Clinton doesn’t care; there’s votes to be bought!
  • She’s now supporting creating a public option for Obamacare. Obama is now calling for this too, claiming the markets are not competitive enough. You have to admire the gall. First, the crush the insurance market with Obamacare. Then, they refuse to let insurance be sold across state lines. Then they propose a “public option” to bankrupt the insurance companies that remain. Every day, Obamacare looks more and more like a deliberate plan to destroy the private insurance market to create the “need” for socialized medicine. In this case, Clinton does care; there’s vote to bought!
  • She’s now turned not just against TPP but against free trade in general. Never mind that trade has made our country wealthy while almost eliminating poverty in other countries. Clinton doesn’t care; there’s votes to be bought!
  • All of this will be paid for with big tax hikes on “the rich”, who are close to maxed out. Clinton doesn’t care; there’s votes to be bought!

The $15 minimum wage is the issue for me with Democrats. It is so mindless, so stupid, so at variance with economics and so destructive to the future of the people it supposedly helps. If you wanted to create unemployment, make poverty more intractable and condemn a generation of people to lifelong unemployment and poverty, you’d be hard pressed to come up with a better plan than the $15 minimum wage.

I realize that a lot of liberal organizations don’t pay their interns or, in the case of groups like Ralph Nader’s, pay them sub-minimum wage through legal loopholes. But the University of California already fired 500 people to account for the minimum wage. Even the dumbest Democrat can do math. And Hillary Clinton is many things, but she’s not dumb. They must know, on some level, that this is going to be bad. They just Don’t. Fucking. Care.

But it’s worse. As McArdle points out in the link above, Clinton is proposing to pay for all this stuff with the usual litany of Democratic tax hikes: raising rates, eliminating the Social Security cap, closing the “carried interest” loophole, etc., etc. She’a also proposing to eliminate almost all tax deductions for the rich (which will produce 100+% marginal rate in some income brackets). But:

For while it is true that these programs are paid for, that doesn’t mean that the budget math is sound. The government’s spending capacity is, in the end, limited, and every dollar that you spend on one thing is a dollar that cannot be spent on something else. Virtually all of Clinton’s “pay fors” are concentrated on a relatively small number of affluent-to-rich people, and because of that, they represent a large cut of those incomes; if she managed to enact all of her plans, her top bracket would be inching close to a marginal tax rate of 50 percent before you factor in state and local taxes that can easily add another 10 percentage points to that figure.

Even if you think that it would be politically possible to extract taxes at those levels, and that you could do so without causing any unwanted economic side effects, the question remains: What do you do for an encore? After enacting Clinton’s agenda, America will still need to fix Medicare, Social Security, state and local pensions, the disability insurance program, and so forth. And given that Democrats have proven as unwilling as Republicans to raise taxes on the middle class, where are we going to get the money?

I’ve said this many times and I will keep repeating it until it sinks in: you can’t fund a welfare state by taxing the rich. There simply isn’t enough money. European welfare states aren’t funded by the rich. They’re funded with massive taxes on the middle class.

The United States has one of the most progressive tax systems in the world, being very reliant on the wealthy for revenue. The European welfare states, by contrast, are more regressive, having flatter taxes and relying on VATs and sales taxes that are regressive. They have to be that way because you simply can’t finance a welfare state by taxing the 1%.

A welfare state financed by the rich doesn’t even work politically. When everyone is paying taxes, there is more support for a welfare state because everyone is pitching in. The perception is that you’re getting out something related to what you paid in, which is why Social Security and Medicare are popular in this country (both financed by a regressive tax that is denounced by Democrats for not soaking the rich enough). But a system that is dependent on taxing the rich isn’t a welfare state, it’s a plunder state. And as I’ve pointed out before, most people don’t want that. They don’t want to feel like they’re living on someone else’s dime or on stolen property. The Communists discovered this 70 years ago when they tried to “redistribute” estates to the commoners only to discover that the commoners didn’t want that wealth if it was stolen.

But proposing to fund this garbage through a middle-class tax hikes would be political suicide. So — in a situation where we are already half a trillion in deficit, have $19 trillion in existing debt and have trillions of dollars in future unfunded liabilities — the Democrats are proposing to burn our last few sources of revenue on a series of brand new will-o’-the-wisp social spending programs.

(Yes, yes, we once had marginal tax rates of 70%. And we also had a huge number of exemptions. No one ever paid that rate. We are very close the practical limit on marginal rates.)

I understand why Clinton is selling out wholesale like this. She’s afraid Bernie on the Green Party ticket will wreck her chances. But I think this tells you how principled Hillary Clinton is. She has either completely changed her views on several major issues or she is going to betray her campaign promises the second she gets into office. I don’t think she actually cares either way. She just wants to be President. And if she has to wreck the economy to get there, well, she’ll wreck the economy to get there. This is way more of a sell-out to the party fringe than any Republican has ever made. But you won’t see it described as such because 98% of our media are going to vote for Clinton anyway.

This is worst election ever. Two rich leftists are battling to see who gets to the screw the country over and how badly they can screw us. And people wonder why I’ve voting for Johnson:

I will not vote for Trump. And I will not for Clinton. To hell with them both. The only election I really care about is Congress. It is absolutely critical that the Republicans hold onto Congress, preferably retaining a majority in both houses. Look at the agenda. Imagine the damage Clinton could do with a Democratic Congress. And then, whatever you may think of Trump, put that Republicans roadblock in her way.