Debt – Douglas Ernst Blog

CBO Director Douglas Elmendorf was speaking at The Atlantic’s 2014 Economy Summit in Washington and he had a message for the American people: Pain.

CNS News reported:

The United States faces “fundamental fiscal challenges” stemming from the growth in spending for Social Security and major health care programs,” CBO Director Douglas Elmendorf told a gathering in Washington on Tuesday.

The rising cost of those programs leaves Americans with “unpleasant” choices to make, but the sooner they’re made, the better, he said: “So we have a choice as a society to either scale back those programs relative to what is promised under current law; or to raise tax revenue above its historical average to pay for the expansion of those programs; or to cut back on all other spending even more sharply than we already are,” Elmendorf said.

“And we haven’t actually decided as a society…what we’re going to do. But some combination of those three choices will be needed.”

Elmendorf said there are various ways to proceed: “But they tend to be unpleasant in one way or another, and we have not, as a society, decided how much of that sort of unpleasantness to inflict on whom.”

I’ve been beating this drum for over four years now on this blog — I’ve called it the Jenga Economy — but Mr. Elmendorf is correct: “we have not, as a society, decided how much … unpleasantness to inflict on whom.”

The right answer is that you disperse the pain across as wide an area as possible because we are all Americans and we are all responsible for the debt tumor within. The problem is that we have “leaders” who lie to the American people about what is really happening under the surface, we have some that are just plain stupid, and we have others —like Sen. Claire McCaskill — who openly admit they have serious issues.

Hotair reported:

I do believe a $17 trillion debt is irresponsible. I do believe that. … It’s not like I am such a fiscal hawk that I don’t see that there are needs out there that we need to address. Supporting extending unemployment insurance, all of those things. … I don’t think we can keep our eye completely off that ball. So, some of the people who think, well, you know, deficits don’t matter, and debt doesn’t matter. We have cut our deficit by a lot, and that’s great, but I don’t think it’s responsible to go back to the old way, ’cause you know what the old way was? We said yes to everybody. You know, we want to be loved. That’s why we run for office. …

She wants to be loved? That’s why she runs? Again — she’s said yes to everybody because she wants to be loved.

Unbelievable. You can not make this stuff up.

Leaders do not say yes to everyone. Leaders know that they must make tough decisions and that they will not be loved by everyone. Leaders take it on the chin because they know that what they’re doing is in the long-term interest of those under their command.

It is safe to say that Sen. Claire McCaskill is not a leader. The vast majority of her friends in the Senate are not leaders, and neither are the vast majority of her counterparts in the House. But, like I said, we’re all in some way culpable for what is to come.

The constituents who elected politicians to whisper sweet nothings into their ears are responsible. The American citizen who seemingly prides himself for being an uninformed boob is responsible. Independents who only opt to rhetorically throw stones at both parties are responsible. And yes, yours truly is responsible…in many, many ways that I’d be happy to expand on in the comments section.

Are you prepared for the “unpleasantness” coming down the pike? I am.

Kurt Anderson Hayek — Kurt Anderson from the New York Times understands that it’s so much easier to call someone a lunatic than to try and understand what they’re saying. Conservatives don’t think he’s stupid (he’s apparently just a jerk).

I’ve been reading a lot of liberal responses to the debt ceiling fallout. Whereas once the media simply tried to label the Tea Party “racist”, we are now “madmen” and “actually unhinged,” according to New York Times op-ed columnist Kurt Anderson (emphasis his). The only thing that is mad is our Mad Debt, as Mark Steyn points out for National Review Online:

“Cutting federal spending by $900 billion over ten years” is Washington-speak for increasing federal spending by $7 trillion over ten years. And, as they’d originally planned to increase it by eight trillion, that counts as a cut. If they’d planned to increase it by $20 trillion and then settled for merely $15 trillion, they could have saved five trillion. See how easy this is?

As part of this historic “cut,” we’ve now raised the “debt ceiling” — or, more accurately, lowered the debt abyss. Do you ever discuss the debt with your neighbor? Do you think he has any serious intention to repay the 15 trillion racked up in his and your name? Does your congressman? Does your senator? Look into their eyes. You can see the answer. And, if none of these parties seem inclined to pay down the debt now, what are the chances they’ll feel like doing so by 2020 when, under these historic “cuts,” it’s up to 23-25 trillion?

Most independent voters will read Mark Steyn’s analysis of the situation and conclude he’s a pretty logical guy. In fact, I would wager that most people would (even those who disagree with him) concede that he’s an incredibly smart man. But yet, according to Kurt Anderson, the millions of people who agree with the Steyn’s sentiments are “unhinged.” Obviously, Mr. Anderson has never read F.A. Hayek (another undeniably smart man):

It is a common mistake to regard National Socialism as a mere revolt against reason, an irrational movement without intellectual background. If that were so, the movement would be much less dangerous than it is. But nothing could be further from the truth or more misleading. The doctrines of National Socialism are the culmination of a long evolution of thought, a process in which thinkers who have had great influence far beyond the confines of Germany have taken part. Whatever one may think of the premises from which they started, it cannot be denied that the men who produced the new doctrines were powerful writers who left the impress of their ideas on the whole of European thought…Once one accepts the premises from which it starts, there is no escape from its logic. It is simply collectivism freed from mall traces of an individualist tradition which might hamper its realization,” (F.A. Hayek, The Road to Serfdom).

Smart conservatives know that to dismiss liberalism as “a mental disorder” is to set the conservative movement up for failure. The left has incredibly sharp minds at work promoting an ideology that should not be taken lightly. While I hate to give advice to the guy who flat-out says that I’m an unhinged lunatic, I can’t help but advise Kurt Anderson to rethink his position. The Teaparty is composed of millions of people who are familiar with economic giants like F.A Hayek, Ludwig von Mises, Thomas Sowell, and Walter E. Williams, among others. The Teaparty turns to the Constitution, The Federalist Papers, and the timeless principles so eloquently articulated by our Founding Fathers, to guide them. To dismiss the Teaparty as a bunch of “madmen”, one wonders how Kurt Anderson feels about the Founders…

Actually, we know how liberals feel about them—and it’s not warm and fuzzy. In order to hide their animosity towards the Founding Fathers and the magnificent document they produced, liberals refer to the Constitution as “a living document” (i.e., it means whatever it is they want it to mean.) Only by viewing the Constitution in that light can liberals work around what has been an impediment — and a source of frustration — to their central planning for ages. In order for them to succeed, they need power. In a country of 400 million people — each with their own thoughts and dreams and desires —it requires incredible power to get everyone “in line.” The Constitution stops them in their tracks, which is why its defenders must be labeled “unhinged.”

Crazy? I think not.