[Rhodes22-list] one more time with jokes

[Michael Meltzer]

(Mumf note: a bit long, but interesting!)

Citing the growing cost of running the Federal government and the need to
cut costs in order to reduce the budget deficit, President Bush announced
today that he was laying off all 535 members of Congress and transferring
lawmaking operations to a legislative support center in Bangalore, India.
"Hey, outsourcing is the way to go these days," said Bush at an impromptu
news conference where he announced the decision, adding, "the American
people want to see less government waste. Since every one of those
ex-Congressmen had a salary of $150,000, this move will cut our costs by
over $80 million per year, and that's not even counting what we'll save on
health insurance and retirement plans." Sources indicate that the Indian
replacements will be paid approximately $250 per month.

The outcry from the newly laid-off Senators and Representatives was swift.
Ex-California Senator Diane Feinstein said, "This is absolutely outrageous.
How can a bunch of replacements over in India run Congress? What do they
know about filibusters and committee hearings?" As she was being escorted
out of the Hart Senate Office Building by U.S. Capitol Police officers,
Feinstein complained that the newly-terminated lawmakers were only given ten
minutes to clean out their desks and leave the building.

"I think it's a great idea," said Vice President Dick Cheney, speaking from
a secure undisclosed location. "The American people were fed up with that
expensive do-nothing Congress which didn't always give the President
everything he asked for. Our new Indian replacements will be much more
cooperative to the President, which is what we all want." Asked whether the
outsourcing may be unconstitutional, Cheney noted, "That's up to the Supreme
Court to decide, but as you know, they usually see things our way."

The new members of Congress seem thrilled with the attention they are
receiving. Speaking from the offices of All-India Legislative Support Centre
Ltd. in Bangalore, new Mississippi Senator Srinivas Yalavarthy told
reporters, "The Indian people are very hard working and we will do our best
as U.S. Congressmen and Congresswomen. And we are going to have some fun
too. Just think: we have $2 trillion of the American taxpayers' money to
spend!"

 - from Sandy Fraser

--
This is an interesting bit of information that you didn't hear much about in
the media:
  a.. Enron's chairman did meet with the president and the vice president in
the Oval Office.
  b.. Enron gave $420,000 to the president's party over three years.
  c.. It donated $100,000 to the president's inauguration festivities.
  d.. The Enron chairman stayed at the White House 11 times.
  e.. The corporation had access to the administration at its highest levels
and even enlisted the Commerce and State Departments to grease deals for it.
  f.. The taxpayer-supported Export-Import Bank subsidized Enron for more
than $600 million in just one transaction. Scandalous!!
  g.. BUT...the president under whom all this happened WASN'T George W.
Bush.
  h.. SURPRISE ......... It was Bill Clinton!

 - from Fred Frost

--
The Bush administration this week backed away from three major rationales
for going to war in Iraq last March, undermining its assertions that
Hussein's Iraq posed an imminent threat to the United States and its allies.

September 11th As recently as Sunday, Vice President Cheney, claimed that on
the question of Saddam Hussein's involvement in September 11th, "We just
don't know."[1] But within days, both President Bush and Defense Secretary
Rumsfeld each admitted there was no evidence that Hussein had any
connection. On Wednesday, Bush maintained there was "no evidence" that
Hussein was involved.[2] Two days later, Rumsfeld, said, "I've not seen any
indication that would lead me to believe that I could say that."[3]

Yet in March, Hussein's possible involvement in the terrorist attacks
garnered support for the war from many Americans. At the time, the widely
reported meeting between 9/11 planner Mohammed Atta and Iraq's security
chief in Prague a few months before the attack was found by the CIA not to
be credible.[4]

Recently, Cheney backed away from the assertion he made three days before
the war began, that the strongest reason for going to war was that "we
believe [Hussein] has, in fact, reconstituted nuclear weapons."[5] But the
International Atomic Energy Agency reported two weeks before that , "There
was no indication of resumed nuclear activities."[6] And six months later on
Meet the Press, Cheney said simply, "I misspoke."[7]

This week, Rumsfeld reversed earlier statements claiming that the U.S. knew
where Iraq's weapons of destruction were located. When asked why the weapons
hadn't been found, this past Tuesday Rumsfeld said, "What do you mean?
You're talking about a country the size of
California."[8] Yet months ago, just two weeks into the war, Rumsfeld said,
"We know where they are. They are in the area around Tikrit and Baghdad and
east, west, south and north somewhat."[9]

Sources:
1. Meet the Press, NBC, 9/14/03.
2. Remarks by the President After Meeting with Members of the Congressional
Conference Committee on Energy Legislation, 9/17/03,
http://daily.misleader.org/ctt.asp?u=1233028&l=5426
3. Defense Department News Briefing, Secretary Rumsfeld and General Pace,
9/16/03, http://daily.misleader.org/ctt.asp?u=1233028&l=5427
4. "Bush Team Stands Firm on Iraq," Washington Post, 9/15/03, p. A1.
5. Meet the Press, NBC, 3/16/03.
6. The Status of Nuclear Inspections in Iraq: An Update, 3/7/03,
http://daily.misleader.org/ctt.asp?u=1233028&l=5428
7. Meet the Press, NBC, 9/14/03.
8. Defense Department News Briefing, Secretary Rumsfeld and General Pace,
9/16/03, http://daily.misleader.org/ctt.asp?u=1233028&l=5427
9. This Week with George Stephanopolous, ABC, 3/30/03.

 - from Jay Pocius

--
If you had visited the online National Debt Clock at 12:00 noon on August 1,
you would have seen this figure: $6,736,489,356,420.66. That's the amount of
money owed by the federal government. (Over $6.7 trillion dollars.)

But if you visited it again just 30 seconds later, you would have seen a
different, bigger number: $6,736,489,954,145.59. That's an increase of about
$590,000 -- a half-million dollars -- in 30 seconds.

It's a stark reminder of just how quickly the politicians in Washington, DC
are plunging this nation further into debt. The more time that passes, the
scarier that number gets.

If you visited the Debt Clock (at www.brillig.com/debt_clock/) one minute
later, the number would have been $1.2 million larger. An hour later, it
would have grown by $70 million. A day later, it would have swelled by $1.68
billion. Over the course of the year, the numbers add up to about $613
billion in additional debt owed by the government.

Yes, the national debt is back. And so are deficits.

Before we go on, let's define our terms: The deficit is the amount of
overspending politicians do in one year. In 2003, for example, the federal
government will take in $1.75 trillion in tax revenue, and spend $2.21
trillion. The difference -- $455 billion -- is this year's "official"
deficit. (We'll examine later why that number is different from the $613
billion mentioned above.)

The national debt, by contrast, is the sum of all the yearly deficits (minus
whatever the Feds have paid off). The current number shown on the National
Debt Clock -- $6.7 trillion -- is the result of decades of overspending.

As a political issue, deficits dropped off the public radar in the late
1990s. Thanks to a surge in tax revenues and modest fiscal restraint --
prompted by tension between Democratic President Bill Clinton and a
Republican-controlled Congress -- the federal government technically
"balanced" the budget for four years. (They didn't really balance it, as
we'll see in a moment.)

All that changed in mid-July, when the Bush Administration announced that
this year's federal deficit will be $455 billion. In raw dollars, it's the
government's largest-ever deficit, and it catapulted deficits back into the
headlines.

Let's look at that discrepancy now: If the deficit is $455 billion, why does
the National Debt Clock say it's $613 billion? Because $613 billion is the
real deficit; $455 billion is the phony deficit. Thanks to arcane accounting
policies, the federal government counts Social Security Trust Fund surpluses
as an asset, which reduces (on paper) the size of the deficit.

This year, Social Security will take in $160 billion more than it will pay
out. That money -- supposedly deposited into the Trust Fund -- is counted
against the real $613 billion deficit, lowering it to $455 billion.

The only problem: It's not true. Social Security Trust Funds are immediately
spent on general government programs. The government just deposits IOUs
(Treasury bonds, which it owes itself) in the Trust Fund. It then counts
those IOUs as an asset. That's like your right hand lending your left hand
$10, spending it, and then counting that $10 as an "asset" you owe yourself.

Don't believe that the government could get away with such blatant
deception? The proof is in the numbers. In both 1998 and 1999, politicians
claimed there was a budget "surplus." Yet, the federal debt increased $120
billion in 1998 and another $162 billion in 1999.

Bottom line: Alleged surplus or acknowledged deficit, the national debt gets
larger every year.

So why is deficit spending bad? Here's why:

1) Deficits increase the cost of government.

When the government spends more than it takes in, it sells U.S. Treasury
bonds to cover the difference. To get people to buy them, it has to pay
interest on those bonds (anywhere from 2% and 12%, depending on when they
were issued). With a $6.7 trillion debt, interest payments add up in a big
way.

In the fiscal 2003 budget, the Bush Administration allocated $181 billion
for interest on the debt. But with the deficit ballooning, interest payments
are ballooning, too -- to almost $1 billion a day, according to U.S. House
Rep. Gene Taylor (D-MS). "In the first nine months of fiscal year 2003, the
Treasury spent $278 billion on interest on the debt," he said. That makes
interest payments the federal government's third-largest expense, trailing
only Social Security and military spending.

In other words, about 20% of every tax dollar goes to pay interest on money
borrowed by politicians 10, 20, and 30 years ago.

2) It crowds out private borrowing, which can cripple business growth and
hurt the economy.

As Benjamin M. Friedman, a professor of economics at Harvard University,
wrote in the Boston Globe (July 27, 2003): "What's wrong with continual
large budget deficits ... is that they take away the economy's means of
achieving economic growth.

"When the government spends more than it takes in from taxes, the Treasury
has to borrow in the financial markets to cover the overage," he wrote.
"This borrowing absorbs some of the saving done by families and firms,
saving that otherwise would have remained available to finance investment in
productive new plants and equipment."

It's happened before, noted Friedman. During the country's last huge deficit
spike, in the 1980s under President Ronald Reagan, "the share of U.S.
national income devoted to net new investment in plants and equipment fell
to the lowest average level in the postwar period, and real wages -- and
therefore the income of the typical U.S. family -- stagnated."

3) It means less money for you and your family.

More federal spending means less money for you to buy what you want, noted
the Future of Freedom Foundation's Richard M. Ebeling (January 17, 2003).
That's true whether government spending is paid for in today's dollars (via
taxes) or tomorrow's dollars (via borrowing).

For example, wrote Ebeling, Bush's $455 billion deficit will cost more that
the combined total of all the furniture and household items bought by
Americans this year ($319.2 billion), or clothing and shoes ($321 billion),
or single-family residential housing ($245.3 billion).

"In other words, these are the kinds of things that Americans will have less
of when their dollar equivalents are borrowed away by the federal government
to cover the expected budget deficits," he wrote.

4) It makes future generations pay for current spending.

When the government runs a deficit, it is "essentially taking money from one
generation and giving it to another," said Creighton University economics
professor Ernie Goss in the Salt Lake Tribune (July 20, 2003). That's
because the government has to eventually pay off the money it owes. For
example, this year, the Treasury paid off the last of the 30-year bonds it
used to finance the final year of the Vietnam War -- in 1973. So, today's
young taxpayers are paying for the mistakes of Richard Nixon, just as
tomorrow's taxpayers will pay for the mistakes of George W. Bush.

The immorality of deficit spending prompted Thomas Jefferson to write in
1791: "We should consider ourselves unauthorized to saddle posterity with
our debts, and morally bound to pay them ourselves." Jefferson understood
that a big-spending government is bad. But a big-spending government that
pushes the costs onto the nation's children and grandchildren is even worse.

Given the damage caused by deficits, here's what we should do to start
restoring the government to fiscal health:

1) Cut government spending

The "cure" for a deficit is not much different than the cure for obesity,
which is: Eat less and exercise more. Translated into fiscal policy, that
means: Spend less and exercise more self-restraint. Politicians don't agree.
Republicans say the deficit is caused by a dip in tax revenues and the cost
of fighting terrorism. Democrats say the deficit is caused by President
Bush's modest tax cuts.

However, in their more honest moments, even the politicians admit the real
cause.

"These are spending-driven deficits," U.S. Rep. Jim Nussle (R-IA). chairman
of the House Budget Committee, told Fox News on July 16, 2003.

The evidence is clear, reported Bloomberg News columnist Caroline Baum on
July 22, 2003. "The dirty little secret that neither party wants to talk
about is that President George W. Bush is a big spender," she wrote.
"Stripping out the increase in national defense outlays, discretionary
spending rose 12.3% in fiscal 2002 and will rise 12.6% in 2003."

Adding in his 2001 spending, Bush has increased non-defense discretionary
spending by 20.8% (adjusted for inflation), noted Baum. That's more than the
full four-year term of Jimmy Carter (up 13.8%) or the second term of Bill
Clinton (up 8.2%).

Bush has apparently never met a spending bill he didn't like: He has yet to
veto a single spending bill. (By contrast, Ronald Reagan vetoed 22 bills
during his first three years in office.) If politicians need suggestions
about what to cut, they could look at the Cato Handbook for Congress, which
lists dozens of programs that are ripe for the budget ax. The government
could move the budget solidly back into surplus territory, notes Cato, by
moving Social Security toward a system of individual savings accounts; by
privatizing all government-operated businesses, such as Amtrak and the U.S.
Postal Service; and by selling excess federal land and buildings.

Then, to keep the pressure on, the government should "establish a 'sunset'
commission to automatically review all federal programs on a rotating basis
and propose major reforms and terminations," recommends the Cato Handbook.

2) Don't raise taxes.

As the Cato Institute's Veronique de Rugy wrote (March 24, 2003), raising
taxes was tried as a method of combating deficits during the Great
Depression, and it failed.

Faced with a growing deficit, presidents Herbert Hoover and Franklin
Roosevelt boosted the top income tax rate from 25% to 79%, and corporate
taxes from 12% to 25%. They also imposed a new dividends tax, a liquor tax,
and a Social Security payroll tax.

The result: The deficit jumped from $2.2 billion in 1932 to $2.9 billion in
1940, wrote de Rugy.

"A key problem in trying to balance the budget with tax increases is that
higher taxes fuel more [government] spending," she wrote. "[Also], the hikes
contract the tax base by reducing economic growth and spurring greater tax
avoidance. As a result, the government gains only a fraction of the revenues
it hopes to receive."

For those reasons, de Rugy piquantly noted, "raising taxes to balance a
budget is like drinking a six-pack to cure a hangover."

3) Pass a strict balanced-budget Constitutional amendment.

Congress should take a cue from the LP Platform, which gives a prescription
for such an amendment.

The LP Platform supports "the drive for a constitutional amendment requiring
the national government to balance its budget." To be effective, the
Platform says, the amendment should provide:

 * That neither Congress nor the president be permitted to override this
requirement.
 * That all off-budget items are included in the budget.
 * That the budget is balanced exclusively by cutting expenditures, and not
by raising taxes.
 * That no exception be made for periods of national emergency.

Of course, the drawback of a Constitutional amendment is that politicians
may simply find ways to evade it, no matter what restrictions are written
into it.

Cheating is something politicians are good at. Over the past decade, to
evade self-imposed spending caps, Washington, DC politicians pioneered a
number of innovative bookkeeping techniques that would have landed them in
jail had they worked for a private company.

For example, they slipped the cost of the 2000 Census into an off-budget
"emergency spending" bill. (The Census was hardly an emergency or a
surprise: It's been conducted once a decade since 1790.)

Politicians also moved spending to the first day of a new fiscal year
(rather than the last day of the old year), and lowered estimated
expenditures by predicting cost savings through Al Gore-style "Reinventing
Government" initiatives. (Not surprisingly, most such cost savings never
materialized.)

So, yes, politicians will cheat. But if a balanced budget amendment makes it
more difficult for them to spend this nation into bankruptcy, it's worth
doing.

Conclusion

In a way, the deficit is the byproduct of a politically schizophrenic
American public that is anti-tax but pro-spending. In other words, most
Americans don't want their federal taxes to go up, but they do want to keep
receiving federal checks for Medicare, Social Security, college loans, farm
subsidies, and so on.

Politicians, eager to please, promise more government programs and benefits,
while vowing not to raise taxes. They plunge the government into debt so
they can keep handing out goodies.

One example: The $400 billion prescription drug benefit President Bush has
promised seniors will be paid for with deficit spending. Although Grandma
and Grandpa may not admit it (even to themselves), this means their children
and grandchildren will be forced to pick up the tab for their high
blood-pressure medication.

That almost irresistible temptation to spend today -- and let someone else
pay tomorrow -- may be why Thomas Jefferson once wrote that public debt is
"the greatest of dangers to be feared."

Of course, it's not the only danger big government poses. That's why we want
a federal government that is much, much smaller than it is today.

Merely balancing the budget won't accomplish that; a budget balanced at $2.2
trillion would be no victory. However, it would be better than what we have
now. A balanced budget would, at the very least, herald a return to fiscal
honesty, would stop boosting the cost of government with exorbitant interest
payments, and would stop shifting the cost of today's spending onto
tomorrow's taxpayers.

For all those reasons, a balanced budget could be the beginning -- but not
the end -- of more fundamental efforts to genuinely reduce the cost of
government.

 - from Jimi Pocius