Perhaps some of these programs are helping people in a measurable way. And of course, many may be well-intentioned, yet yielding unintended negative consequences. But gauging the metrics of various federal initiatives is a task for a different time. What’s being delved into here is the irony of the “fairness” concept as it relates to federal spending – particularly deficit spending.

No matter how compelling the case for a certain amount of federal spending on any project may be, it’s important to consider the result of said spending in the aggregate. As former Congressman Hal Daub of Nebraska and college senior Dae Hemphill of The Can Kicks Back recently wrote at the Omaha World-Herald:

“Our $17 trillion-and-growing national debt is devastating the country’s ability to provide for our next generation. If our leaders fail to address our fiscal dysfunction, future generations face an uncertain economic outlook, with the potential of higher taxes, higher unemployment and a lower standard of living.“

As a 26 year old, it concerns me greatly that my generation is being treated like debtors for decisions we largely weren’t even around to make. Given the current trajectory of federal spending, we will be responsible for a national debt accrued allegedly in the name of “fairness” – but at what cost to millennials?

As Nick Gillespie and Veronique de Rugy pointed out at Reason Magazine:

“There’s a new generation gap opening up, one that threatens to tear apart the country every bit as much as past confrontations over war, free love, drugs, and sitar music. This fight is about old-age entitlements and whether the Me Generation will do what’s right for the country and stop sucking up more and more money from their children and grandchildren.

Social Security and Medicare, which provide retirement and health insurance benefits for senior Americans, generally without regard to need, are funded by taxes on the relatively meager wages of younger Americans who will never enjoy anything close to the same benefits. From any serious fiscal or moral viewpoint, and particularly for the sake of helping those truly in need, Social Security and Medicare should be ended. 

The demographic math is irrefutable: Entitlements are killing the safety net.”

Further delving into the problem, Gillespie and de Rugy note:

“Because it is on automatic pilot, spending on entitlements can grow without political consequence or fiscal conscience. Between 1975 and 2000, spending on all entitlements grew at an average annual rate of 3.96 percent, while annual GDP growth was 3.27 percent. Then the ratio really started to deteriorate: Between 2000 and 2010, entitlement spending grew 5.3 percent a year while the economy managed just 1.81 percent. The Great Recession has added a bit to that disparity (Medicaid rolls tend to swell during downturns), but it’s far from the whole story. The aging of the population and the expansion of Medicare to include prescription drug coverage—at a cost of $338 billion from 2006 through the end of 2011—are the major reasons entitlements grow faster than the economy. And given that the oldest baby boomers are turning just 66 this year, we haven’t seen anything yet.”

Unfortunately, the issue of government spending, particularly as it relates to demographic differences, isn’t limited to the United States. Take what’s happening with youth unemployment on a worldwide basis. Data reported via the International Labour Organization, a United Nations agency, shows that for young people, future prospects look bleak. As reported by the Canadian newspaper The Globe and Mail:

“Global youth unemployment is set to continue growing over the next five years, putting a generation at risk of lasting damage to their earnings potential and job prospects throughout their lives, the International Labour Organization has warned.

The UN agency said in a report released on Wednesday that it expected the worldwide youth jobless rate to increase from 12.4 per cent last year to 12.8 per cent by 2018.

The jobless rate for young people – defined as those aged between 15 and 24 – has risen from 11.5 per cent of the work force in that age group in 2007 as the economic downturn took its toll.

The ILO said the youth jobs crisis was worse than the data suggested because long-term unemployment was growing, along with part-time, temporary and insecure jobs. Young people are almost three times as likely as their older peers to be out of work, and many are giving up on the search for employment.”

While the youth unemployment problem looks worse for many European countries than it does the United States, it stands to reason that continuing to follow the same reckless spending policies that led these countries into crisis will yield the same results.

Ultimately, despite the rhetoric from politicians and their beneficiaries, there’s nothing fair about the generational warfare that Washington DC is waging for its own benefit at the expense of rising Americans  – many of whom are not yet born. Until we come to our senses and accept that the politically easy route of deficit spending with abandon is also an economically devastating one, young Americans of several generations will continue to suffer the consequences.

The post Fairness? What Fairness? appeared first on Coalition to Reduce Spending.

A recent report by the Mercatus Center‘s senior research fellow Veronique de Rugy and Harvard University professor of economics Robert Barro suggests some surprising conclusions.

The existing studies found that a dollar increase in federal defense spending results in a less-than-a-dollar increase in GDP when the spending increase is deficit financed. Combining this with a tax multiplier that is negative and greater than one, the authors estimate that over five years each $1 in federal defense-spending cuts will increase private spending by roughly $1.30. [emphasis added]

Yes, you read that right: the report suggests that decreasing Pentagon spending is shown to increase private spending. The ultimate GDP effects are positive. We encourage you to read the summary or the rest of the study, which offers an exciting new perspective to the old assumption that spending on the defense industry automatically helps the economy.

Conservatives hearken back to the crowding-out effect argument in many areas. This study shows that there is reason to believe this phenomenon exists in the military realm as well.

Over the years, Pentagon spending has risen relatively consistently. Even so-called “devastating” sequester cuts reduce this spending to barely under Cold-War levels.

And as the chart below shows, US military spending is fantastically large compared to the rest of the world, more than that of the next 14 countries combined.

Of course, the various rationales for this level of spending are up for debate. A sizable majority of the American public and political class of both parties are committed to the idea of the US as military superpower. And this is a conversation worth having. But beyond that commitment lies reality.

And the reality is, that all the noble aims in the world cannot escape the inherent unsustainability of the US budget trajectory. As Chairman of the Joint Chiefs of Staff Admiral Mike Mullen recently said, “the single, biggest threat to our national security is our debt, so I also believe we have every responsibility to help eliminate that threat.”

And now, with this report, there is strong evidence that there is not only national security but also economic value to be gained by refocusing the nation’s longtime approach to Pentagon spending.

The post Want to Help the Economy? Reduce Pentagon Spending appeared first on Coalition to Reduce Spending.

Mark Sanford signed this pledge, advancing to the runoff on the Republican side and ultimately to the general election.

Elizabeth-Colbert Busch declined to sign.

The pledge is not a partisan one; in fact, it’s specifically designed not to be partisan. In this very election, Colbert-Busch’s Democratic challenger signed. Politicians from various parties can and have recognized the need for a sane fiscal approach.

But Colbert-Busch? Her recent comments seem to reflect a determination to carry on policies that now threaten to send the country into inescapable debt.

In their recent debate, Sanford referenced signing Reject the Debt (around 50:00 in the video), noting that, “it should come as no surprise” that he would sign such a pledge. Colbert-Busch responded by saying that she will pledge only to the people of South Carolina, perhaps forgetting that SC-1 more than most districts, seeks fiscal responsibility. Not to mention that Reject the Debt explicitly states that it is a pledge I “to the citizens of my state and to the American people.”

The true telling moment, though, came later in the debate, when Sanford argued his fiscal credentials would be useful in what he described as a “tipping point in civilization.” Colbert-Busch smiled and responded, “The sky is not falling, Henny Penny. As a matter of fact, our best days are ahead of us.”

With respect, this type of mocking dismissal is what has led to many financial crises in recent memory. And if a situation in which debt is approaching 200% of GDP, interest payments might soon top $1 trillion annually, and the most “devastating” cuts the government can muster result in spending 10 years from now that will be $2 trillion higher instead of $2.1 trillion higher, does not count as a defining moment, what does?

Colbert-Busch’s comments are concerning because they show little indication that she understands the true source of the fiscal crisis, or that she is willing to take it seriously.

Instead, while the American people face down the looming fiscal crisis and leaders in Washington compete to see who can spend more, Colbert-Busch mocks such concerns.

The sky is not falling, Henny Penny.

Perhaps it’s not. But isn’t it time for a level-headed appreciation of the gravity of economic reality, rather than mocking as the economy falls?

The post “The Sky is Not Falling,” or How to Mock a Real Crisis appeared first on Coalition to Reduce Spending.

For example, Tanner points out opposition to some of the President’s proposals such as Medicare cuts and the chained CPI reform. Of course, there may be reasons to oppose these measures – particularly chained CPI, because although it could be construed as a step in the right direction there’s an argument to be made that it’s a tax increase. But as Tanner goes on to chronicle, the problem goes beyond some Republicans acting in reactionary partisan ways. The fact is, too many elected officials in the GOP are just as tied to special interests as their bigger-spending congressional colleagues.

As Tanner states,

“Recall that during last year’s presidential campaign, Mitt Romney’s big complaint about Obamacare was that it cut $716 billion from Medicare over ten years. Medicare is facing a minimum of $42 trillion in future red ink. Perhaps someone should be praised for cutting it. It would have made sense to criticize the president for spending those savings on other aspects of Obamacare. One could certainly question whether the president’s proposed cuts were the best way to reduce Medicare spending, or even whether they would be effective. But Governor Romney focused his criticism on the idea of the cuts themselves.

Elsewhere, Republicans continue to resist any efforts to reduce defense spending. Modest defense cuts were included in the sequester of course — over the strenuous objections of GOP hawks such as John McCain, Lindsey Graham, and Representative Buck McKeon. But advocates of increased defense spending have hardly given up the fight — expect continued efforts this fall to undo the sequester’s effects on the Pentagon.

There is also some parochialism: attempting to funnel federal money to one’s district at the expense of the broader public purse. Thus Representative Steve Stockman of Texas opposes cuts to NASA (invoking the specter of an asteroid crashing into Earth), and Representative Jim Jordan pushes the army to buy Abrams tanks, built in his home state of Ohio, it says it doesn’t need. Republican senators from farm states are among the biggest defenders of farm subsidies. Representatives from the northeast demanded federal assistance after Hurricane Sandy. And so on.”

This speaks to the fundamental problem with the incentives that elected officials face in DC. When a basic role federal politicians are expected to undertake is bringing back the bacon not only to their districts but to lobbyists, nothing will change. That’s why at the Coalition to Reduce Spending we believe reform must start at home. When politicians are actively amidst their constituents, making what often turn out to be false promises, inserting an accountability mechanism into that process is key.

This speaks to the power of our Reject the Debt pledge, which can be effectively used as a leverage point, especially in primary contests between candidates. Getting a candidate to sign his name to a spending reduction commitment through pressure from his potential or current constituents is a great way to hold his feet to the fire in the event that he does in fact find himself either back in Washington, or there for the first time.

Amidst nearly $17 trillion in debt with $120 trillion in unfunded liabilities, the time for vague promises is over. As Michael Tanner so aptly explained, the problem is a bipartisan one. Thus, it must be answered with a non-partisan, constituent centered solution. If a candidate can’t put pen to paper on his campaign promises, why utter the words in the first place?

The post Republicans Are Part of the Problem appeared first on Coalition to Reduce Spending.

As the above chart shows, the US’s finances are stuck in an unfortunate trend that shows no signs of improving. As it stands, the US debt limit has been one small measure of accountability, one moment of pause, over the years. Raised, temporarily extended, or redefined 78 separate times since 1960, the debt limit is essentially formulated to be a line in the sand. As the US Treasury said recently,

Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations

The Treasury goes on to warn of drastic financial consequences that would result from failing to raise the debt limit, including “another financial crisis, threatening “jobs and savings of everyday Americans,” and “putting the United States right back in a deep economic hole.”

And in a sense, these warnings are right. Nearly no one wants default. Importantly, though, many of  us also object to continuing the policies that lead to default in the first place and simply kicking the can of eventual consequences down the road to next generations.

If you’ve been paying off each credit card with successive new ones, cutting off that process is difficult, and someone will get hurt. Someone will have debts unpaid. We are not suggesting otherwise or even that the debt limit formula is the ideal approach. The simple fact is that perhaps taking a step back from all the spending is a more reasonable attempting to delay indefinitely what is, in reality, inevitable.

As we reported, in January, Congress took the unprecedented step of choosing to avoid this question entirely, instead delaying the issue until May 18. And now, there are hints of a further delay on the horizon, as Roll Call’s Paul M. Krawzak reported recently, based on expectations that Fannie Mae will make a sizable dividend payment to the Treasury and dependent on other actions the Treasury might take.

Of course, this newest development is not as troublesome as the first. Avoiding getting to the point of a debt ceiling standoff is a goal worth pursuing. But now more than ever, Congress needs accountability for its actions, and delays can unfortunately remove accountability from the equation.

Whether the vote happens next month or in the fall or next year, it is crucial that elected officials be held responsible for the financial impact of their decisions. For that reason, it is imperative that Americans who care about spending stay focused on this issue and do not let it, like so many other fiscal issues, slip into the realm of endless delay in the face of unavoidable eventual crisis.

The post Indefinitely Avoiding Responsibility? appeared first on Coalition to Reduce Spending.

“Milton Friedman said the true cost of government is what we spend, not what we tax. We ultimately have to pay for this,” says Jonathan Bydlak, president of the Coalition to Reduce Spending and former director of fundraising for Ron Paul’s 2008 presidential campaign. ”If we’re not paying for it now, we’ll pay for it tomorrow.”

The non-partisan coalition encourages politicians to sign a pledge agreeing to consider all spending open for reduction, including defense and entitlements. Politicians who sign the pledge also promise to vote against any spending increase unless it’s offset by spending cuts. Thirty-nine candidates for federal office have already signed the pledge; among them are Ted Cruz (R-Fla), Mark Sanford (R-S.C.), and Doug Collins (R-Ga.).

Emphasizing the role of incentives, Bydlak discussed the Coalition’s role and purpose, noting that in order for outcomes to change, incentives must first change.

While now, as Bydlak notes, most of the incentives are in favor of more government spending, the Coalition to Reduce Spending fills this vacuum by providing sorely needed motivation in the other direction.

“If you’re serious about balancing the budget and you’re serious about cutting spending, you have to look at those parts of the budget where spending’s actually occurring,” Bydlak said, “when you’re borrowing 40 percent, you have to look at those big-ticket items.”

Check out the rest of the interview here

The post The Grover Norquist of Spending Cuts appeared first on Coalition to Reduce Spending.

Every now and then, though, pieces of information come through that shine a different light upon the situation and make the grave situation clearer.

In his recent article on the National Review Online, Kevin D. Williamson points out one number to keep in mind.

763 Billion Dollars

What is the relevance of this number, which is approximately 16,470,232 times the average US family income?

Williamson explains:

If enacted, Barack Obama’s latest budget would mean that in just ten years, interest payments alone on the national debt would begin pushing the trillion-dollar mark: $763 billion a year by 2023. That may be a rosy estimate: It assumes that interest rates, currently near historic lows, do not rise a great deal over the next ten years as the Treasury continues to pile up new debt. If interest rates do climb a bit higher — not even to their historical average, but higher than they have been of late — then those interest payments easily could be more than $1 trillion a year.

That’s right. The national debt has ballooned to such proportions that its interest payments alone could soon total more than $1 trillion a year.

The following CBO chart stopping in 2011, shows the current situation, hardly ideal now, and certainly looking to get worse.

Sometimes, it’s easy to get lost in the numbers. Rows of zeroes, and charts that don’t seem to affect our daily lives. Calculations that seem beyond our reach, and leaders that surely know what they’re doing, right?

And sometimes, a little bit of information comes along that brings back down to earth how fantastically absurd our financial situation is, and how out of touch spending-happy leaders truly are.

One doesn’t have to be an economist, mathematician, or politician to see this absurdity. Our nation simply cannot withstand much more on this track. It is time for leaders committed to striking at the root of this problem by pledging to Reject the Debt, and time for citizens who will remain vigilant to holding them to their promises.

We absolutely can and will right the fiscal ship, but sometimes it takes a little wake-up call to remind us of the gravity of doing so.

The post $763 billion. appeared first on Coalition to Reduce Spending.

The recent budget proposal released by President Obama has been criticized by many on the Right as continuing down the path that sequestration has laid out for our nation’s defenses. His 2014 proposal accounts for $526.6 billion in Pentagon spending, roughly a billion dollars less than the 2013 enacted budget. But while the President’s request does indeed make a few significant cuts in the Pentagon’s budget, the vast majority of programs will see their funding tick upward in accordance with an increasing baseline.

Although the language in the President’s budget leaves much to the imagination with very broad descriptions of where cuts could occur, it does attempt to make a few specific recommendations.

The President offers up the idea of making military retirees more responsible for their TRICARE payments — the armed forces’ healthcare service — much like similar reforms proposed by Senator Tom Coburn (R-OK).

The budget also proposes a “needed” $176.2 billion for operations, training, and support, while acknowledging that base closures are still a necessity. Through 2021, the budget asserts that bases will continue to be shut down when necessary.

Unfortunately, these are where the savings end. For example, another massive $166.8 billion is requested for weapons systems, a significant portion of which is being spent mainly to keep ties with allies who joint-spend on military procurement. Additionally, while the President recommends capping Overseas Contingency Funding at ~$100 billion per year, this funding is coyly separated from the rest of the budget, which makes the President’s real request for Pentagon spending come closer to $640.5 billion.

While there’s been much skepticism from the Left and the Right with respect to the President’s 2014 budget, there are a number of good starting places for both sides to come together in support of responsible, lasting spending cuts.

The post President Obama’s Pentagon Spending Request appeared first on Coalition to Reduce Spending.

FOR IMMEDIATE RELEASE – April 10^th, 2013

ALEXANDRIA, VA – The Coalition to Reduce Spending announced on Wednesday that Dan Winslow, Republican candidate for US Senate, signed the group’s Reject the Debt spending commitment.

Massachusetts State Representative Dan Winslow stepped to the front of the pack on fiscal issues, becoming the first candidate in the special election to sign the Coalition’s Reject the Debt commitment, which asks candidates to go on record, stating that they will consider all spending open for reduction, vote only for budgets that present a path to balance, and vote against bills that increase total spending or fund new programs without offsetting cuts in others.

Winslow, a longtime Massachusetts Republican turned state representative, champions fiscal issues in his campaign. Rep. Winslow says on his campaign issue page that, “Our national debt is choking our economy. It’s a bipartisan problem, and we need to call on Republicans and Democrats alike to focus on solutions that reduce wasteful spending and balance our budget.”

The Coalition’s president Jonathan Bydlak agrees with this sentiment and praised Winslow’s signing, saying: “The national debt and spending are key issues for the entire nation, and my home state of Massachusetts is no exception. Now more than ever, as young Americans are being saddled with debt to pay off spending we weren’t responsible for, we need candidates willing to put their promises to remedy this on paper so they can be held accountable.”

Winslow’s Republican opponents, Gabriel Gomez and Michael Sullivan, have yet to sign, and the Coalition is also awaiting responses from Democratic candidates Stephen Lynch and Ed Markey.

The post MA US Senate Candidate Dan Winslow Rejects the Debt appeared first on Coalition to Reduce Spending.

This is why it’s puzzling that politicians today who claim to be for limited government seem to think that a strong stance against tax increases is all they need to earn the “fiscal conservative” label. Policy wise, nothing could be further from the truth. As Jonathan Bydlak and I explained in an op-ed that was published at Real Clear Policy last December, Milton Friedman reminded us that spending is, in fact, taxation. As Friedman said:

“Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax … If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or in the form of borrowing. The thing you should keep your eye on is what government spends, and the real problem is to hold down government spending as a fraction of our income, and if you do that, you can stop worrying about the debt.”

If spending is taxation, it follows that deficit spending is an even more pernicious form. This is the case, because deficit spending pushes the negative economic impact of taxation to the future, causing harm to people who received no benefit from the service rendered.

This is why politicians who tell voters they’re working to limit government and sign only a pledge promising they won’t raise taxes are merely fighting half the battle. Sure, that’s a great commitment to make if you’re running as a fiscal conservative, and it’s something that shouldn’t be overlooked. But the simple fact is that a refusal to raise taxes hasn’t starved the beast – it’s arguably made it fatter. A federal beast that gorges on a diet of deficit spending is given a greater chance to grow than one who subsists on taxes, because the impact of the debt that accrues isn’t immediately felt the way taxation is. This is why deficit spending is far more politically popular – and why Republicans engage in it constantly while using the “but at least I didn’t raise taxes” excuse. Except ultimately, they did.

A perfect example of the contrast between Republican politicians on this issue can be seen in the special election for South Carolina’s 1st congressional district. A runoff between Mark Sanford and Curtis Bostic will be held on April 2nd. Both Mr. Sanford and Mr. Bostic have made a promise to their constituents not to raise taxes by signing the Taxpayer Protection Pledge, which is administered by Americans For Tax Reform. However, only Sanford has signed the Coalition’s Reject the Debt pledge, which commits candidates to consider all spending open for reduction and vote only for budgets that present a path to balance; and vote against any appropriations bill that increases total spending and against authorization or funding of new programs without offsetting cuts in other programs.

We still hope that Bostic will sign, although he’s been approached by voters concerned about the spending issue from his district on multiple occasions asking him to make this commitment, but to no avail. At the Coalition to Reduce Spending, we believe that South Carolina voters deserve to rest assured that both Mr. Bostic and Mr. Sanford will be held accountable for their spending related votes in the event that one of them is elected to Congress. So far, they haven’t been given that assurance from Curtis Bostic.

The post Why Tax When You Can Deficit Spend? appeared first on Coalition to Reduce Spending.