To The Super Committee: It’s The Spending! (2)

One would never know it from all the anguish expressed by the political-media establishment, but the Congressional Super Committee’s assignment is absurdly easy.

This week the august Senators and Congressmen head into their final, dramatic days of deliberations.  Their assignment is to propose $1.2 trillion of “deficit reduction” over ten years, beginning 2013.

In Washington the phrases “spending cuts” and “deficit reduction” are more political slogans to deceive the people than legitimate accounting terms.  Even if the committee reaches an agreement that Congress approves spending will increase every year and future deficits could be greater than the 2011 deficit.

Congress operates on a corrupt system called “baseline budgeting,” driven by the assumption that virtually every government program and function will receive a funding increase, every year.  The Congressional Budget Office (CBO) produces reports called “baselines” that project spending increases in each of the next ten years.  In this context a “cut” does not mean  that future spending will be less than current spending.  It means that – on paper – the “baseline” will be adjusted.

As has always happened in the past, even these illusory, baseline “cuts” won’t last.  The current Congress has authority only over the current budget and cannot force the elected members of 2013 or 15 or 18 Congress to comply with a baseline published by CBO bureaucrats in 2011.  But the tax increases Democrats demand in exchange for their phony “cuts” would be real.  They would be enacted into law immediately.  If the currently serving Republicans allow themselves to be suckered by this scam all the Conservative/Tea Party victories of 2010 will have been for nothing.

The charts below show what genuine deficit reduction could look like.  The first is a summary of the government’s tax revenue, spending and deficits from 2007 through the 2011 fiscal year that ended September 30. [continued below the chart]

Each of Obama’s three deficits about three times 2008, the largest of the Bush era.  The Obama deficits are in part the outcome of falling tax revenue due to the recession.  But mostly they result from massive increases in spending he and the Democrats initiated in 2009.

The next chart illustrates what could have been a budgeting alternative to achieve smaller deficits.  What if instead of huge spending increases for almost every department of government Congress had frozen spending at 2007 levels, allowing exceptions only for Social Security, Medicare, Defense and Veterans’ Benefits?  This chart shows that the Obama deficits deficits would have been $1.3 trillion less.  [continued below the chart]

A partial spending freeze could have resulted $1.3 trillion of real deficit reduction in three years vs the $1.2 trillion over ten years of illusory deficit reduction the Super Committee is tasked with proposing.  Congress cold have driven those deficits even lower by actually cutting some programs below 2007 levels and/or changing Social Security and Medicare eligibility rules very slightly.

Few Americans would remember 2007 as a year of national suffering because the federal government spent a third less than it does now.  Barack Obama’s campaign began in 2007 and he would have been booed off the stage if he had promised to increase federal spending by 32% from 2007 to 2011.

Since the government-caused recession began in 2008 most Americans have had to cut their household and business budgets and reduce their standard of living even as government spending exploded.  Many now wish they still lived as well as they did in 2007 when unemployment was at 4.7% (Vs 9% today) and the deficit was $161 Billion.  The Obama government borrows $161 billion every six weeks!

All the Super Committee and the current Congress have to do is ask future Congresses to spend an average of $120 billion per year less by voting to instruct the CBO to modify its “baseline” schedules.  $120 billion is about 1.5% of 2011 spending.  No tax increases would necessary.  Does this simple task really justify the Congressional and Presidential anguish and wrenching emotion on display in the media?

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