Pay as You Go Balanced Budget Laws and Other Myths
Remember the good old days of President Jimmy Carter, soaring gold prices, gas shortages, 20% home interest rates and double digit inflation. Our financial fiasco then and our unfolding financial calamities today did not come upon us suddenly. But, how did we get there and what can we do about it?
"The purpose of Compulsory Education is to deprive the common people of their commonsense."
Remember the good old days of President Jimmy Carter, soaring gold prices, gas shortages, 20% home interest rates and double digit inflation. Our financial fiasco then and our unfolding financial calamities today did not come upon us suddenly. But, how did we get there and what can we do about it?
"The purpose of Compulsory Education is to deprive the common people of their commonsense."
_____ G.K. Chesterton 09/07/29
Unfortunately, today’s public (government) education system robbed too many Americans of their common sense and replaced it with a secular thought process based on my government shall take care of all my problems and supply all my wants.
During the Roosevelt years, an increasing number of Americans began to expect a hamburger today and let someone else pay tomorrow. Not until President Lyndon Baines Johnson enacted his “Great Society” in 1964, however, did America's buy-now let someone else pay-later get into full swing. The political promise you can have it all, regardless of your efforts or lack of same, is both a moral and a political problem
Due to deficit spending and monetizing the debt the first big bill came due during President Carter’s Administration. The money supply increased 13%, resulting in double digit interest rates and high inflation. The price of gold increased more than 2,000 percent. In order to suck fraudulently created dollars out of the system and avoid runaway inflation, Federal Reserve Chairman Volker raised interest rates. Home interest rates climbed to 20% and double digit inflation rates slowed.
During President Obama’s first year the money supply increased 120%. Nearly ten times the amount experienced during Carter’s Administration. If 1970's double digit interest and inflation was a 4.2 magnitude financial earthquake, what do we possibly face now? And what is Congress’s answer to massive deficit spending and trillions of dollars of debt? They pass balanced budget laws. They lie.
“A liar begins with making falsehood appear like truth, and ends with making truth itself appear like falsehood.” ____ Shenstone
They lie and because they do we face confiscatory taxes, double digit interest rates, and hyperinflation—financial devastation and judgement. Why, more than thirty years of desiring comfort without labor and political lies.
Congress passed Public Law 95-435 requiring a balanced budget beginning with fiscal 1981. Yet, the accumulated deficit had tripled 10 years later. What happened? Congress passes laws and Congress ignores laws. They lie.
Congress passed the 1985 Balanced Budget and Emergency Deficit Control Act Commonly known as Gramm-Rudman-Hollings Act, the new law required deficits to decline to zero by 1991. The Supreme Court ruled Gramm-Rudman's automatic cutting procedure unconstitutional.
In 1987, an amended Gramm-Rudman-Hollings Act revised the automatic cost-cutting procedure. The new version was acceptable to the Court. Congress’s amended version put-off reducing spending until later. Making it acceptable to Congress. The new Gramm-Rudman only allowed a $36 billion deficit in fiscal 1990. Further budget deficits would be reduced until achieving a balanced budget in 1993. What happened?
One week into fiscal 1990, Congress ignored Gramm-Rudman. The 1990 budget included a misleading estimated 100 billion dollar deficit. Misleading? Congress used Social Security reserves. The actual fiscal 1990 deficit totaled 220.4 billion dollars. This was 500 percent higher than the 36 billion dollar deficit Gramm-Rudman allowed. What happened? They lied.
In bipartisan irresponsibility, Republican President G. H. Bush and Democrat controlled Congress went for broke and set a new all-time high deficit in 1991, a record 268.7 billion dollars. Wimpy’s hamburger economics theory was in operation, “I'll gladly pay you tomorrow for a hamburger today.”Wimpy also lied. But Wimpy was only a morally flawed comic book character.
The administration predicted a budget surplus in five year's. The optimistic forecasts changed a few months later. The White House Office of Management and Budget forecast the 1992's fiscal deficit would approach 400 billion dollars. The Bush administration admitted the public could expect huge deficits well into the1990s.
To win conservative support, candidate George H. Bush promised no new taxes and a balanced budget. What happened? He lied. President G. H. Bush raised taxes and increased deficit spending. Voters tossed George H. Bush from office and voted in Democrat Bill Clinton who promised change.
White House occupants changed, political rhetoric remained. Disenchanted voters again demanded change. Two years into Clinton’s presidency, voters swept Democrats from office. Republicans controlled both houses and Democrats controlled the White House. But the Wimpy hamburger economic theory still dictated federal deficit spending.
Both Democrats and Republicans called for a balanced budget—in the future. Me-too Republicans promised a balanced budget in seven years. The Democrats called the plan extreme and risky; and promised a balanced budget in ten years. They both lied.
Deficits continued. Then, President Clinton announced a federal budget surplus for fiscal year 2000 amounting to at least $230 billion, the largest in U.S. history—thanks to robbing Social Security reserves. President Clinton predicted surpluses would increase as much as $1 trillion over the next 10 years. It was not to be. He knew it. Congress knew it. The Congressional world of Wimpy Hamburger economics ruled. “I'll gladly pay you tomorrow for a hamburger today." Yes they lie. To soothe his conscience, Wimpy lied—mostly to himself. To get reelected just one more time, Congress lied—to the voters.
During Me-too Republican George W. Bush’s last four years the size of government escalated and federal deficits’ skyrocketed, close to half a trillion dollars his last year. An amount President Obama tripled his first year! His proposed programs and instituted spending are forecast to increase the deficit one trillion dollars or more yearly for the next ten years. And Obama continues to add new programs and new spending—all on borrowed money.
Aware of middle America’s growing anger with his administrations’s binge spending and ever raising the debt limit, President Obama, in great pomp, proclaimed Pay-as-you-go legislation. Pay-as-you-go legislation quickly passed and even quicker ignored. What happened? Binge spending continues. Our President lied. Our Congress lied..
Today we borrow to just pay the interest on our debt. We are at a point where even confiscatory taxes can not bail us out. If Congress refuses to cut spending and balance the budget, only two ways are left to finance the massive deficits. Both ways, like higher confiscatory taxes, will drain the financial lifeblood from America’s economy: First, as long as America can still find lenders, borrow it. The second way, as done in the past, monetize the debt—inflation.
“To live beyond our means today is to live below them tomorrow.” ____ Dr. Hans Sennholz, 1987
Only a limit on spending and a balanced budget can protect middle-America from confiscatory taxes, double digit interest rates, and hyperinflation—financial devastation. That will take a major change in spending habits, a change most elected officials and a growing number of voters are unwilling to make.
Running with the Hare and Hunting with the Hound, Congress continues to promise support for spending cuts and a balanced budget, and Congress continues to pass increased government bailouts and social programs for everyone. The bill is coming due. Financial judgement
approaches. What can we do?
“Without God, without everything," ____ Welsh proverb
Buying gold and storing food to sustain our family during a possible financial Armageddon may or may not be the prudent thing to do. For those who do not have nearly enough as it is, it is not an option. Either way, those whose faith is in a caring God, they know He shall supply all their need. What of those who depend on government to supply all their need when government no longer can? We saw the results in the streets of Greece, hell on earth. Now multiple that by twenty, thirty, or more times. That is the bad news.
The good news, America’s multifarious economy is massive enough to survive. Can it? To do so will be painful. Hard choices need to be made. Choices not made by political con artists promising “Reward without risk, wealth without work.” Lasting prosperity for all comes from hope, ideas, inventions, hard work, and the freedom to succeed—not from bailouts, growing debt, inflated dollars, more and more socialist government programs.
It will take personal and political courage, men and women with strong Judeo-Christian convictions and the intestinal fortitude to stand up and speak out for those convictions—political action. Do we want God’s best for family, friends, and Nation? That requires a moral rebirth.
______ Michael E. Odell
Your thoughts and comments are welcome, well most of the time.
E-mail: odellmike@comcast.net
Write your Senator or Representative in Washington, D.C. Tell them: No to more debt and federal make believe jobs. Remind them that jobs and true prosperity do not come from massive government spending and increasing debt. Hard work and freedom to succeed created a free and prosperous America—not massive government debt, higher taxes, and a bloated bureaucracy.
Suggest as a start, Congress cut their own salaries by 10 percent this year and each year for next three years or until they balance the budget, also they cut their operating budget by 10 percent each year for next three years.
You may follow this form:
Senator Donna Arrogant
Senate Office Building,
Washington, D.C., 20510
Senator Arrogant,
Rep. Bill Spender
House Office Building,
Washington, D.C., 20515
Congressman Spender,
What can you do to change the negative direction our elected leaders are taking us?
For six proven action steps go to Blog Archive at upper right, click on May-11-08, “But What Can I Do?” Pick yours.
