The feds' disease: Spending! Part 1

We all know ad nauseam that Washington, D.C.'s spending is completely foolish and totally out of control. But will we show ourselves equally misguided by allowing those same bureaucratic bandits to stay in office?

Since World War II, federal spending has remained roughly between 18 and 22 percent of GDP. Under President George W. Bush, spending increased from 18.4 to 20.9 percent of GDP. Since President Obama took office, revenues have fallen by $381 billion and spending has increased by $508 billion, increasing the deficit from $459 billion to $1,348 billion. Non-defense discretionary spending alone has jumped 28 percent.

According to the CBO analysis released on Sept. 7, by the end of the current fiscal 2010 year, which ended with the closure of September, there is another deficit of at least $1.3 trillion – what the CBO labeled, "the second-largest shortfall in the past 65 years," second to last year's deficit of 9.9 percent of GDP. Even if all the Bush tax cuts were repealed, the CBO concludes that the deficit will still be nearly $1.1 trillion in 2011.

The cumulative deficit from 2010 to 2019 under the president's proposals will total $9.3 trillion. Washington projects a 2020 end-of-decade debt to top $24.5 trillion, even exceeding the Gross Domestic Product projection for 2019 of $22.8 trillion.

Source: Heritage Foundation calculations of the current policy budget baseline, based on Congressional Budget Office data.

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Back in August, Obama asked, "How do we, over the long term, get control of our deficit?" That's a great question, Mr. President.

The CBO made one strong and simple recommendation: Stop spending so much. Is that really economic rocket science? The CBO's recent report reinforced exactly what we already knew: The feds are still spending out of control!

Isn't our nation in a recession? Or aren't we seeking to recover from one? Then why would any federal government spend so recklessly?

Do the following sound like the fiscally responsible people and plan you want in office?

• In a mere 31 months Congress has added more than $4.4 trillion to the 10-year spending baseline. In 2005, total federal spending was only $2.47 trillion. (What about that recession the Obama administration "inherited"?)

• Even as the economy recovers and war spending decreases, the projected budget deficit never drops below $1 trillion and reaches nearly $2 trillion by 2020.

• And how about that all the frivolous spending like the incredible $192 million splurge fest in taxpayer money to plaster every possible highway with signs touting how stimulus cash is "Putting America to Work" with infrastructure projects?

• From 2009-2020, it is estimated that the Troubled Asset Relief Program, or TARP, will cost $67 billion while the Fannie Mae and Freddie Mac bailouts are estimated to cost $190 billion.

• Even CBS recently reported, at present rates of spending, by 2020 roughly 93 cents of every dollar of federal revenue will be eaten up by major entitlement programs such as Obamacare, Social Security, Medicare and payments on the national debt.

• And what about the fact that health-care insurance providers have announced that the new rate hikes due to Obamacare may result in consumers facing a 20 percent increase in costs for health-care premiums and coverage?

• Bush started the borrow-bailout debt chain with the Wall Street bailout (TARP) of $700 billion (what I call, new debt No. 1). But then it continued under Obama, who pushed for the next $787 billion stimulus bill (debt No. 2). And that wasn't enough either, so then they tried the $410 billion omnibus spending bill (with 9,000 earmarks – 60 percent Democrat and 40 percent Republican in origin), which like the others was railroaded through Congress (debt No. 3). Then Obama informed us that another $634 billion would be required for a down payment for universal health care (debt No. 4), etc. And all of that doesn't include other economic stimuli needed on the government horizon, as Rep. Daniel Inouye, D-Hawaii, the chairman of the Senate Appropriations Committee, noted when he called the mammoth $787 billion spending bill "stimulus No. 1."

• Again, according to the Bureau of Public Debt, as of Aug. 20, 2010, after just 19 months of Obama's four-year term, the public debt has grown to $8.8333 trillion, an increase of $2.5260 trillion.

Was that the hope and change you were counting on?

This present administration promised hope and change, but all we got was more of the same.

Obama again spoke out of one side of his mouth a while back when giving financial advice to the people in New Hampshire, "When times are tough, you tighten your belts. You don't go buying a boat when you can barely pay your mortgage. You don't blow a bunch of cash in Vegas when you're trying to save for college."

But he then spoke out the other side of his mouth when he informed the American public that he was proposing a record-breaking $3.8 trillion budget for 2011 (starting Oct. 1), which equates to spending $7.3 million a minute. (The federal budget was only $1.9 trillion in 2001.)

Tragically, the president expects Americans to live one financial way (fiscally prudent) and the federal government to live another (extravagantly wild). Not so surprising, Moody's credit rating agency announced the next day after the president's 2011 budget proposal release that his fiscal policies "test [America's] AAA boundaries" and now push the U.S. government credit ratings below those of Canada, Germany and even France.

And despite our president confessing to global leaders at the Asia Pacific Economic Cooperation summit that "debt-driven growth cannot fuel America's long-term prosperity," Washington continues literally to sell America via our increasing international indebtedness to $3.5 trillion – $800 billion in U.S. government securities to China, followed by Japan with $731 billion and including other smaller nations like Luxembourg, Taiwan, Singapore and Ireland.

Even liberal media predicted that Obama's spending would "leave a string of deficits dwarfing any in the nation's history." And they are right.

There's absolutely no justification for all the feds' out-of-control spending.

Unfortunately, Ronald Reagan was correct when he quipped, "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

But when the receipts don't cover the outlays, it should be a sign we're in trouble. When the government, year after year, digs itself deeper and deeper into debt, someone needs to be held accountable to fix the system. When government wastes $100 million a year on minting pennies that cost 1.26 cents each and nickels that cost 7.7 cents each to make, we have already admitted that our government is clueless and the worst-run business in the world. When taxpayers are forced to pay $100 million for an earth-monitoring satellite that never launched into space and that costs an additional $1 million a year to store, someone is making ludicrous financial decisions in Washington, D.C.

It has been estimated by watchdog organizations that the government wastes nearly $1 trillion dollars every year. That is a staggering amount, especially when one considers the annual federal budget is roughly $4 trillion. Yet, to date, I've never heard one government official confess he or she is a bad money manager.

The system is broken, but our government bureaucrats have no incentive to fix it. Who holds them accountable? The White House? Congress? Both ends of Pennsylvania Avenue is where the wasteful spending starts. It's up to we the people, not only to demand change and elect people who promise it, but to hold them accountable.

If our country is to survive, we must also elect only those who show proof of fiscal discipline, refuse under all circumstances to increase our national deficit, disdain special interests, and commit to pass and live under a constitutional amendment for a balanced budget. And if our incumbents voted for the bailouts or bailed on their fiscal frugalness, then now's your chance to vote them out of office.

Time is running out, but it's not too late to reverse Washington's fiscal frenzy. You only have a couple days left to register to vote, if you haven't already. Check your state's registration deadlines here. And you can also download the voter registration form for your state here.

The future generations of America are counting and depending upon us.

(Next week in Part 2, I will give a specific plan and strategies for reigning in and cutting federal spending. For a more exhaustive treatment of that plan based upon our founders' fiscal prudence and wisdom, please see the chapter, "Stop America's nightmare of debt" in the paperback expansion of my New York Times best-seller, "Black Belt Patriotism." )