Jewish World Review Nov 28, 2011 / 2 Kislev, 5772
Bailing Out The Titanic With A Thimble
By Mark Steyn
http://www.JewishWorldReview.com | I see Andrea True died earlier this month. The late disco diva enjoyed a brief moment of global celebrity in 1976 with her ubiquitous glitterball favorite:
"More More More
In honor of Andrea's passing, I have asked my congressman to propose the adoption of this song as the U.S. national anthem. True, Miss True wrote the number as an autobiographical reflection on her days as a porn movie actress but, consciously or not, it accurately distills the essence of American governmental philosophy in the early 21st century: Excess even unto oblivion.
When it comes to spending and the size of government, only the Democrats are officially panting orgasmically, "More More More, How do you like it?" while the Republicans are formally committed to "Less less less." This makes for many dramatic showdowns on the evening news.
In the summer, it was the "looming" "deadline" to raise the debt ceiling. In the fall, it was the "looming" "deadline" for the alleged supercommittee to agree $1.2 trillion of cuts. The supercommittee was set up as a last-minute deal for raising the debt ceiling.
Now that the supercommittee's flopped out, "automatic" mandatory cuts to defense and discretionary spending are supposed to kick in — by 2013. But no doubt as that looming deadline looms the can of worms will be effortlessly kicked down the room another looming deadline or two.
In return for agreeing to raise the debt ceiling (and, by the way, that's the wrong way of looking at it: more accurately, we're lowering the debt abyss), John Boehner bragged that he'd got a deal for "a real, enforceable cut" of supposedly $7 billion from fiscal year 2012. After running the numbers themselves, the Congressional Budget Office said it only cut $1 billion from fiscal 2012.
Which of these numbers is accurate? The correct answer is: Who cares?
The government of the United States currently spends $188 million it doesn't have every hour of every day. So, if it's $1 billion in "real, enforceable cuts," in the time it takes to roast a 20-pound stuffed turkey for your Thanksgiving dinner, the government's already borrowed back all those painstakingly negotiated savings. If it's $7 billion in "real, enforceable cuts," in the time it takes you to defrost the bird, the cuts have all been borrowed back.
Bonus question: How "real" and "enforceable" are all those real, enforceable cuts? By the time the relevant bill passed the Senate earlier this month, the 2012 austerity budget with its brutal, savage cuts to government services actually increased spending by $10 billion. More more more, how do you like it?
But don't worry. Aside from spending the summer negotiating a deal that increases runaway federal spending, those stingy, cheeseparing Republicans also forced the Democrats to agree to create that big ol' supercommittee that would save $1.2 trillion. Over the course of 10 years.
Anywhere else on the planet that would be a significant chunk of change. But the U.S. government is planning to spend $44 trillion in the next decade. So $1.2 trillion is about 2.7%. Any businessman could cut 2.7% from his budget in his sleep. But not congressional supercommittees of supermen with superpowers thrashing it out across the table for three months. So there will be no 2.7% cut.
That means the "sequestration" from defense and discretionary spending will now be enforced, starting in 2013. That would be so brutal and slashing that by 2021 it would reduce U.S. public debt by $153 billion! Which sounds kinda big if you say it in a Dr. Evil voice and give a menacing mwa-ha-ha laugh, but in fact boils down to about what we borrow currently every month.
But don't worry. Slashing a month's worth of spending over a decade is way too extreme. So that's not going to happen, either. Instead, CNN and "Meet The Press" will just interview big shot senators and congressmen about it day in, day out, and then normal service will resume: More more more, how do you like it?
In the course of a typical day I usually receive at least a couple of emails from readers lamenting that America is now the Titanic. This is grossly unfair to the Titanic, a state-of-the-art ship whose problem was that it only had lifeboat space for about half its passengers.
By contrast, the SS Spendaholic is a rusting hulk encrusted with barnacles, there are no lifeboats, and the ship's officers are locked in a debate about whether to use a thimble or an eggcup.
A second downgrade is now inevitable. Aw, so what? We had the first back in the summer, and the ceiling didn't fall in, did it? And everyone knows those ratings agencies are a racket, right? And say what you like about our rotten finances, but Greece's are worse. And Italy's. And, er, Zimbabwe's. Probably.
The advantage the United States enjoys is that, unlike Greece, it can print the currency in which its debt is denominated. But, even so, it still needs someone to buy it. The failure of Germany's bond auction on Wednesday suggests that the world is running out of buyers for western sovereign debt at historically low interest rates.
And, were interest rates to return to their 1990-2010 average (5.7%), debt service alone would consume about 40% of federal revenues by mid-decade. That's not paying down the debt, but just staying current on the interest payments.
And yet, when it comes to spending and stimulus and entitlements and agencies and regulations and bureaucrats, "more more more/how do you like it?" remains the way to bet. Will a Republican president make a difference to this grim trajectory? I would doubt it. Unless the public conversation shifts significantly, neither President Romney nor President Insert-Name-Of-This-Week's-UnRomney-Here will have a mandate for the measures necessary to save the republic.
As for Andrea True, back in 1976 she made a commercial in Jamaica. To protest the then-prime minister's flirtation with Castro, Uncle Sam had imposed economic sanctions against Her Majesty's Government in Kingston. Miss True was unable to bring her earnings home.
So, for want of anything better to do with them, she went into a Jamaican recording studio and made a demo of a song: "More More More." Sure, 35 years later Fidel's still around, but at least the world got a disco hit out of it, which is more than you can say for the Iranian sanctions.
We're approaching a state in which the government spends $4 trillion but only raises $2 trillion. Which is an existential threat to the nation, but at least has the advantage of being one whose arithmetic is simple enough even for politicians: Try to imagine every aspect of government having to make do with half of what it currently has.
That's the scale of reform necessary to save America from a future as a bankrupt, violent, Third World ruin. More more more, how do you like it? More poverty, more crime, more corruption, more decay: how do you like that?
Flirting with Castroite policies? Maybe Washington could impose economic sanctions against itself.
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© 2011, Mark Steyn