Notwithstanding hysterical rhetoric from the White House, the bureaucracies, and the various pro-spending lobbies in Washington, the sequester does not mean “vicious” or “draconian” spending cuts.
I wish that was the case.
All it does is restrain spending so that it grows by $2.4 trillion over the next 10 years rather than $2.5 trillion. We need a much greater degree of fiscal discipline to address the long-term spending crisis – including some real entitlement reform.
But the sequester is certainly better than doing nothing.
My concern, though, is that feckless and incompetent Republicans will fumble away victory. I explain in this Larry Kudlow interview that “doing nothing” is the right approach since the sequester happens automatically, but I’m worried that this very modest step in the right direction will be eroded as part of subsequent spending bills.
On a related note, Byron York of the Washington Examiner is rather perplexed by the GOP’s sequester strategy, which is based on the inconsistent message that it should happen, but that it’s bad.
Boehner calls the cuts “deep,” when most conservatives emphasize that for the next year they amount to about $85 billion out of a $3,600 billion budget. Which leads to another question: Why would Boehner adopt the Democratic description of the cuts as “deep” when they would touch such a relatively small part of federal spending? The effect of Boehner’s argument is to make Obama seem reasonable in comparison. After all, the president certainly agrees with Boehner that the sequester cuts threaten national security and jobs. The difference is that Obama wants to avoid them. At the same time, Boehner is contributing to Republican confusion on the question of whether the cuts are in fact “deep” or whether they are relatively minor. Could the GOP message on the sequester be any more self-defeating?
My two cents is that fiscal conservatives should argue that sequestration isn’t the ideal way to trim the burden of government spending, but that it’s the only option since President Obama is refusing to look at any alternatives unless they are based on class-warfare tax hikes and phony entitlement gimmicks.
What really matters, though, is in the driver’s seat in this battle. They can win…but only if they want to.
Every so often, I issue imperious edicts about things that Republicans should do to demonstrate that they genuinely support limited government.
- No tax increases, since more money for Washington will encourage a bigger burden of government and undermine prosperity.
- To stop bailouts for Europe’s decrepit welfare states, no more money for the International Monetary Fund.
- Reform the biased number-crunching methodology at the Congressional Budget Office and Joint Committee on Taxation.
- No more money from American taxpayers to subsidize the left-wing bureaucrats at the Paris-based Organization for Economic Cooperation and Development.
- Defund the crony capitalists at the Export-Import Bank.
I’m not naive enough to think that GOPers actually care about my demands, but I certainly think the sequester is a “gut-check” moment for Republicans.
If they capitulate to Obama in the short run, or if they wipe out the sequester savings as part of subsequent spending bills, that will be a very dismal sign that the folks who came to DC thinking it was a cesspool have instead decided that it’s really a hot tub.
The economy is reverting to a new norm of lower growth, because the traditionally exceptional incentives that Americans had to work (relative absence of safety nets and high reward for success) are being eroded across the board by copy-Europe social policies. Yet, statists will take the opportunity to ignore the forest for the tree and blame the sequester for lower growth. That breeds fear into the political lives of Republicans, hence they are likely to cave in. Voter-lemmings will of course prefer to latch on to the narrative that it is the sequester, rather than the comfort in mediocrity through the milking of success, that is causing the slow growth, somber economic mood, and decline.
The scenario of political dynamics in the US is playing exactly as it has in the many other European countries that once flourished and declined. Naive Americans, confirming their worldwide naïveté, are failing to see the striking resemblance and thus American voter-lemmings continue their march down the ever steepening slope of decline. Initially it is a pleasant walk, downhill, easy, but after a while the slope increases to the point where mere resistance is hard but turning around is even harder. Then you tumble, into decline and the dustbin of history. Others take the lead, and write the history.
Americans, by virtue of fiercely competing against each other in the first place (ie. relative absence of mandatory collectivism), have always won the international prosperity competition. They take that fact so much for granted that I’m not sure they are aware the competition exists, and what the stakes in losing it are. The American 99% are really the worldwide top 15%. But they seem to be doing their darndest towards descending into the true worldwide 50%.
…Truth is, you don’t have to do your darndest to decline. You only have to do a little worse than those who will lead. You only need to have effort-reward curves that are a little flatter than those countries that will eventually overtake you. Those that will crowd you out as high value supplier in the international marketplace.
Don’t think you are being crowded out? Watch how economic growth is in the doldrums, yet the price of gas, oil and commodities is rising. That is the face of the beginnings of decline. You are being crowded out by the rising sea of billions of emerging world citizens whose purchasing power is rising and crowding out your purchasing power, because, in the first place they are crowding out the value of your work, which is becoming less and less exceptional by the day as you are been promised more comfort in mediocrity and more haircutting were you to succeed.
That is what decline is. A wretched slow descent. Appears slow on a day to day basis, it is precipitous on an intergenerational time scale. You, the American middle class, now commands a prosperity level 6x the world average. But growing at an average 2% in a world that is growing by 5% for the next 30 years, your children will only command 2.4x.
That is what decline is. And you will live to see it in your own lifetime. The world is moving too fast now to conveniently pass the decline down to the next generations.
…and don’t expect your politicians to tell you the truth. Nobody can afford to flat out offend the voter-lemmings. Not even Mr. Mitchell, though he’s probably the closest thing you will get to the truth. The only better point of view would be to look in the mirror.
[...] as Dan Mitchell points out, it’s actually not even that [...]
This is a test for the GOP. If they want to have any claim that they are fiscally responsible, here is their chance. If they cave here, IMO, this is the end of the GOP as we know it. The Tea Party will certainly split off and create their own party. No Libertarians will support the GOP; although they barely support them now.
The GOP keeps worrying about poll numbers and the next election. Instead of standing on fiscally responsible ground and doing what is right, they continually acquiesce to the Democrats. Or, as we saw with Bush and the GOP controlled congress, they spend money just as poorly as Democrats.
Voters need a clear alternative to the Democrats. If the GOP doesn’t want to step up and take that role, then we’re destined for a new political party.
Btw, Romney lost the last election for many little reasons but one big reason – voters didn’t see him as any different than Obama. Hard to get excited about a slightly less terrible option, so why even vote? GOP runs to big government RINO/CINO candidates in a row and loss. Will then learn and run an actual fiscal conservative?
[...] try to make the sequester as inconvenient and painful as possible for the American people. As I said in this Larry Kudlow interview, the heads of those agencies should be [...]
[...] the NYT story actually has some decent reporting on how Republicans so far have (fingers crossed) avoided the tax-increase trap that Obama thought the sequester would [...]
Good article, and completely right. The GOP should not be describing the sequester cuts as deep or painful or dumb, they should be describing them as a small, but necessary first step. The only sequester criticism they might make is they would prefer the cuts were against specific programs, so they could better target the most wasteful programs, rather than across the board, but Obama has made that sensible modification impossible because of his demand to replace the cuts with yet more tax hikes. They should also make an offer to Obama that they will consider any proposal from him that would replace the sequester cuts with equal targeted cuts, but will not consider any more tax hikes, or lesser cuts. Then they should put forward their own propposal of targeted cuts, picking some of the worste waste that everybody complains about. They should also make it quite clear that the amount of the sequester cuts is not negociable, they will happen, the only point of negociation is where the cuts will happen. They should also warn that they will provide oversight on how the cuts are administered, to make sure that Obama does not administer them in a manner that makes them more disruptive, instead of less (no washington monument syndrome).
[...] Obama and the other politicians are engaging in hysterical hyperbole to protect special-interest spending. [...]
[...] Obama and the other politicians are engaging in hysterical hyperbole to protect special-interest spending. [...]
[...] be sure, my fingers are crossed that Republicans won’t snatch defeat from the jaws of victory, and I’ve been busy on Capitol Hill talking to folks about the issue, but this post already [...]
[...] try to make the sequester as inconvenient and painful as possible for the American people. As I said in this Larry Kudlow interview, the heads of those agencies should be [...]
[...] Obama and the other politicians are engaging in hysterical hyperbole to protect special-interest spending. [...]