Politicians have fallen in love with leaving the bill for the next occupant of the office. From President Bush's tax cuts to Rep. Peterson's new Ten-Year Farm Plan scheme, this "Budgetary Time Bomb" approach is becoming the answer of choice for dysfunctional legislatures.
-- A 10-year farm bill, rather than a 5-year timeline;I think this pattern of excusing yourself to go to the restroom when the waiter brings the bill is a direct outgrowth of the government discovery that it seems to work with seemingly limitless deficit spending.
-- Direct payments would cease in year 9, thereby saving $5.2 billion, but direct payments would come back in year 10 so they would be included in a new farm bill budget baseline and enable the necessary budget savings to fall within the 10-year timeline [More by subscription to ProFarmer]
The new $3.1 trillion federal budget that President Bush has submitted makes you wonder why Barack Obama, John McCain, Hillary Clinton or Mike Huckabee would want Bush's job.In fairness, there is scant political will across the spectrum, and certainly among the general populace for fiscal restraint. Lord knows, farmers don't care as long as their programs are funded. Deficit spending simply has worked like a charm for decades defying the lamentations of economists and moralizing pundits: we get what we want now, and somebody else pays for it.
His proposed budget is a sham, built on deceitful assumptions. For example, no costs are considered for military operations in Iraq and Afghanistan after 2009. And economic growth, despite a looming recession, is projected at a healthy 2.7 percent.
The spending plan does, however, contain a few mathematical truths that should haunt the next president.
The projected deficit for fiscal 2009, for example, is $410 billion. By the time Bush leaves office, he will have bequeathed his successor a national debt of $9.7 trillion. About $4 trillion of that was added during his fiscally reckless presidency. [More]
Like parents who never leave home, we keep using our descendent's credit card. And while there seem to have been few serious consequences, the recent splurge could be the bale that breaks the camel's back. And since much of that debt is held be people we don't have to live with daily, why not shaft them by letting the dollar spiral downward?
Then what?
I'm betting on several years of serious inflation.
1 comment:
I have thought inflation is the only way out of our financial mess unless you want to have another depression like the late 1920's and early 30's. To much debt to be paid by government and individuals. They can only pay their way out of debt if their income doubles with weak dollars while the original debt remains static. Of course this makes the people who have been accumulating cash savings the scape goat. Major contributors to all of the individual debt is due to easy credit from banks and credit card companies and the auto industry's low or no interest car loans. This gave people temporary buying power which created more jobs but now we must quit buying and pay off debt. The job market must go to pot unless we allow runaway inflation. I agree with you projection into the future regarding inflation.
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