The Right Opinion

It's the Spending, Stupid!

By John Stossel · Dec. 19, 2012

Listening to progressive media pundits, I’d think the most evil man in the universe is Grover Norquist, head of Americans for Tax Reform. His crime? He heads a movement that asks political candidates to pledge not to raise taxes.

I think Grover accomplished a lot. But I wish he’d convinced politicians to pledge not to increase spending.

President Obama says raising taxes to cut the deficit is a “balanced” approach.

Balanced …

But what’s “balanced” about raising taxes after vast increases in spending? Trillions for war, Medicare, “stimulus” and solar panels. Tax receipts rose – after tax-rate cuts – from $1.9 billion in 2003 to $2.3 billion in 2008, the year the recession started. That increase couldn’t keep up with the spending. The deficit doubled – actually, more than doubled – as politicians increased spending to nearly $4 trillion! Our debt, at more than $16 trillion, now exceeds our gross domestic product.

Ludicrous, irresponsible spending is why we’re in trouble. As columnist Ron Hart points out, Bill Clinton’s balanced budget spent $1.7 trillion. “Adjusted for inflation,” he writes, “our federal government would (have) a $200 billion surplus. But instead of increasing government spending in line with normal inflation, under Bush and Obama we are spending $3.8 trillion today. Democrats, who believe we have a ‘revenue’ problem instead of a ‘spending’ problem, must also think they have a bartender problem, not a drinking problem.”

The media obsess about tax rates, but spending is more important. As Milton Friedman taught us, spending is a far more accurate gauge of the government burden. If government spends a dollar, that dollar is taxed away from someone. If it’s borrowed, it’s removed from productive use, setting the stage for higher taxes later. If the government prints more dollars to fund spending, our purchasing power falls. Transferring purchasing power from the people to the government via inflation is a form of taxation.

If Republicans and Democrats reach a deal, the tax increases will be real – but spending “cuts” probably illusions. If they actually happen, they will only be reductions in already planned increases. The Wall Street Journal notes that when the two parties talk about cutting spending by $4 trillion over a decade, “those numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill’s ‘baseline’ has automatically increased spending every year according to Congressional Budget Office projections … . Tax and spending changes are then measured off that inflated baseline.”

Given our growing debt, can’t they even slow the growth of government to the rate of inflation? Or inflation plus 1 percent? Or even inflation plus 2 percent? That might balance the budget within a decade.

But the spenders won’t even give me that. They want more. Always more.

Jonathan Bydlak, founder of the Coalition to Reduce Spending, has a good idea. “It’s important to do for spending what Norquist has done for taxes: create a means for voters to hold elected officials accountable when they break campaign promises of fiscal responsibility.”

Bydlak has no time for any politician who pledges not to raise taxes without pledging to cut spending. He praises Doug Collins, representative-elect from Georgia, and Ted Cruz, senator-elect from Texas, for signing the Reject the Debt pledge and thereby promising voters they would:

“ONE, not vote for any budget that is not balanced nor for any appropriations bill that increases total spending;

"and TWO, consider all spending open for reduction, and not vote to authorize or fund new programs without offsetting cuts in other programs.”

Well, sure. Good luck to him.

But people are reluctant to give up their favorite programs. Or any programs.

Let’s not fool ourselves about how dependent politicians have made people on government.

To succeed, the crusade to cut spending needs an ideological understanding of how unsustainable our current course is, not just a narrow appeal to short-term self-interest. People will have to see the wisdom of giving up government benefits now – in exchange for something more abstract: a future free society in which our children won’t be burdened by debt and taxes.



Howard Last in Wyoming said:

Why not a pledge to abolish every bureau, department, agency, rule, regulation, law not specifically authorized by the Constitution? This would probably reduce the budget by 90% or better. Instant balanced budget plus more freedom for our citizens. Did anyone say when pigs fly?

Wednesday, December 19, 2012 at 1:26 AM

M Rick Timms MD in Georgia said:

The founding fathers never intended that we send our money to Washington, and then send a "states-man" there to try and bring some of it back home.

Border control, defense, and resolution of disputes involving interstate commerce are the limits of Federal government. If Georgians want to do research on peanuts and peaches, why should the folks in Oregon help pay for that? Should cranberry growers in Minnesota pay for pig research in North Carolina - hell now - anymore than the pig farmer should pay taxes to Washington for a grant on Cranberry flavors.

And why we would send any money - including the pile borrowed from China - to other countries as -- Foreign aid??

This is simple madness, which will be no less destructive than a madman in a school -- it will simply take longer to destroy the lives of helpless Americans. Enough is enough. We must make Washington stop. The left - and the media act as if - expanding government is the same as expanding the economy of America. They are moving around the stacks of quarters, but they create no new money - no growth - and are choking the life out of the American economy. They see the economy as a fixed sum game -- and for them it will be. No growth, no expansion - just a common misery, equalized into the left's utopian society of equal outcome.

The media must know that this is folly. Yet they put forth the big government idea as if it is a proven entity - rather than the oft proven mechanism of tyranny and despair. We now have an illiterate society, led by the leftist media, and our time of freedom appears to have passed. I hope I am wrong - but I fear that the blame for the impending economic collapse will be placed - by the media left - on the Republican/Conservative/Capitalists, who they will call obstructionists. Never mind that the Senate under Harry Reid has not produced anything close to a "BUDGET", since they called the ObamaCare fiasco a "budget reconciliation" bill in order to get it on the table and shoved down our throats..

Wednesday, December 19, 2012 at 2:07 AM

MIResident in Michigan said:

I use this argument: Even if the GOP gives Obama his roughly $1.2 trillion in tax increases over 10 yrs - that raises only $120 Billion a year - and we are running $1 Trillion deficit per year, so we're still $880 Billion a year in the hole.

So if Obama and the Democrats are serious about have a balance budget, they need to propose $1 Trillion in new taxes per YEAR, not 10 years.

Wednesday, December 19, 2012 at 12:04 PM

Rod in USA replied:

The issue is that these folks lack the balls to cut anything. They cannot even agree on reducing the **annual deficit**, let alone doing anything to start paying off our **national debt**.

"Oh, somebody else can worry about that."

Wednesday, December 19, 2012 at 1:04 PM

Rod in USA said:

This is the point I have been talking about for a very long time.

1997: $1.7T
2003: $1.9T
2008: $2.3T

Why all of a sudden are we **DOUBLE** what we were spending? And we cannot cut it?

I agree the cuts are a mirage: Reagan is *still* waiting for the cuts promised him by Tip o'Neill.

Also, the cuts are BS: So cutting $4T over a decade equates to $400M. Great. **We would still be spending $3.2T!** That is still $1T more than we spent in 2008. ***$1 Trillion, MORE***.

And spending cuts "over a decade" will be made in year 1 maybe. The following 9 years will not be cut.

We need to cut back to **less than $2 Trillion.**

I guess we producers will just have to live with funding stupid stuff like cell phones for welfare recipients and Harry Reid's bullsh!t 'Cowboy Poetry" festival.

***Stop the insanity.***

Wednesday, December 19, 2012 at 1:01 PM

Tapdaddy in Indiana said:

"If Republicans and Democrats reach a deal, the tax increases will be real -- but spending "cuts" probably illusions. If they actually happen, they will only be reductions in already planned increases."
The burden that we are subjecting our grand- children to is a sin.

Wednesday, December 19, 2012 at 2:50 PM

Tod the tool guy in brooklyn ny said:

We immediately transfer housing, health care, student loans, and automobiles, over to the private sector. If these industries don't show profits, guess what---Bye Bye! Free markets and free people are the answer. Attend Churches and Synagogues. Howard, you are right on, today.

Wednesday, December 19, 2012 at 5:57 PM

Joe P. in Phoenix, AZ said:

Mr, Stossel,

You claim to be libertarian, and on spending and weakening the United States you sound like one. However, I heard you on a talking head show and you sounded like Mayor Bloomberg's little brother on gun control. As a presumed libertarian you should know that gun control is not about guns; it is about control.

Wednesday, December 19, 2012 at 11:41 PM

David Poole in Hayward said:

I think on the tax receipts you mean trillion - not billion

Thursday, December 20, 2012 at 11:49 PM