The Ugly Reality of How it Works… And Why

San Diego — The sequester — so-called although it is a semantic oxymoron… but then again, it is elected officials we are talking about — is about a week old.  Thus far the apocalypse we were told was inevitably descending on us like a financial tsunami has failed to materialize.  But an odd dance is now playing out that ought to tell everyone willing to watch and (dare I say it?) THINK, just what kind of stuff our leadership is made of… and how badly it smells.

After the administration started making a career of complaining loudly and with a degree of pathos that makes a dog begging at the table seem disinterested, that due to this Draconian and unthinkable axe, critical governmental activities would be curtailed, the House offered a Bill to allow the president to be more flexible in picking and choosing what would get cut so long as the final tally was undisturbed.  Sounds reasonable.

But he reacted as if they has offered him the hot end of a branding iron… which of course is what they did by calling his bluff.  If accepted, he would now have to publicly be seen not only as the author if the idea in the first place, which he was, but now would be seen as the person picking and choosing.  That is a task guaranteed to make no one happy even though it offers the best opportunity to date to selectively get rid of the financial weeds while hoeing around and sparing the good stuff.  Worse it means he would have to make a public decision and stand by it, unable to vacillate and worm out of it with his prodigious rhetorical abilities.

At first blush though his response makes absolutely no sense.  Despite the PR danger attached, if he wishes to fundamentally transform America as he says clearly, this is probably the best chance to do it. If he is truly an enlightened leader then he would jump at the chance to demonstrate his nearly superhuman wisdom in a way to make the ghost of Solomon writhe in envy.  Even his economic God, Keanes wrote that the way to bring down a government was economics and the debauchery of the currency and Obama is doing both.  So why not go all-in and make it clear what you want to kill and what you want to protect?  After all, he claimed the almost 2% majority that voted for him was a “mandate” of biblical proportions for his policies.

But Thomas Sowell — a real economist — wrote the disturbing answer in his own blog.  And it is as frightening as it is ugly, mostly because it has that inescapable ring of truth to it that can only be associated with politics.  With apologies to Dr. Sowell since I do not have it in front of me, I’ll paraphrase it but the gist is the same.

He wrote of an exercise he used to give his students in which they were to imagine a government bureaucracy that was created and, over time, evolved into having two activities under its charge (neither of which was the original intent but then, hey, it is the government and it is a bureaucracy).  The first was to feed hungry and homeless children.  The second was to build statues in parks across the land to Benedict Arnold trying to change his image and pointing out that before his little indiscretion, explainable easily to an self-entitled populace, that he was a hero, a brilliant strategist, and that despite that, he was passed over unfairly and so therefore justified in changing sides in mid stream and treasonous stabbing his country and his benefactor in the back.  And both activities of this agency were working just fine, getting lots of government money to keep them running, and a cadre of desk-bound bureaucrats fed and coddled.

But then the budgets were slashed by the evil opposition and they would have to curtail one of the activities.  But which one?  The children or the statues?  The students, after a careful examination of other governmental decisions, came to the only politically savvy conclusion: stop feeding the children.

What?  What kind of cold-hearted wretches could come to such a stance?  Politicians and bureaucrats sadly find it a no-brainer. You cut the kids because that does two things in the agency’s benefit.  First it makes an emotional case against the cuts per se, and second, that humanitarian cause is valid and needed so sooner or later the money will be returned.

But if they cut the statue activity, too many people will look at that, wonder why we were EVER spending money on such a hare-brained scheme, and kill that activity forever.  THat is death to a bureaucrat.

Now if you have been paying attention to the news and the government’s responses to the budget cuts, this ought to start making a sort of malevolent and highly Machiavellian sense.  Good ol’ Nicollo wrote in “The Prince”  that now and then the Prince needs to turn the dogs loose on the people so they will be so grateful when he calls them off.

Meantime, the lack of national collapse is not escaping attention and is instead calling attention to all of the cries about impending doom and disaster as being, perhaps, a bit hyperbolic and, worse, political gaming.  That, of course, cannot go unpunished.  So I would expect to see, using the story example above as a metaphor, more starving kids’ programs being very publicly cut and the other side more roundly blamed for it so the current Prince can make everyone so happy when he “convinces” the spineless opposition to capitulate and give him the money he wants.

And then, just as Maciavelli predicted for Lorenzo de Medici, the people will feel gratitude and once again line up behind his banner no matter where it is actually leading them.

 

Are Voters Mathematically Challenged?

San Diego — Tomorrow the world as we know it ends.

At least that is what the whiner in chief and his sycophantic minions are telling us.  When the sequester — that was his idea in the first place, which, in an interview in October with the Des Moines Register, he said was part of the grand bargain that included the cancelling of the Bush tax cuts and would set on a balanced road to stability – kicks in he is now trotting out his department heads to prophesy everything from closing school to closing airports to cutting back on military capabilities to having to set free illegal aliens held in jails for other infractions.

But in order for that to happen, or even come close to happening, one of two things would have to occur.  Either the laws of mathematics would have to change significantly or the administration would have to make specific choices and decisions designed to bring about the greatest harm to the country while ignoring solutions that really should have an effect only on those wasting money or defrauding the system.

Since I am skeptical of the first option occurring, I am left with the second.  And why would I say that?  Simple… I own a calculator.

We have a current debt of about $16.6 Trillion dollars (which is currently much higher than it was when Obama first proposed the sequester idea as a means of forcing action which was, to his enormous surprise, accepted by the opposition.  But that increase and the increases currently planned are extra-budgetary meaning they are planned by the administration but are not contained in any budget initiated or approved by congress which is what the Constitution requires for a budget to be valid.

We have not had a budget for over 4 years; the lack of which allows the President and his departments to sneak in spending increases under the radar and such is the case with the increases currently being proposed.   They have never been approved by congress.  Nevertheless the President proposed and congress accepted a plan to decrease the RATE OF INCREEASED SPENDING over the then $15 Trillion debt by 2% across the board, exempting those areas that, by law, cannot be cut without specific congressional approval.

What is critically important for you to remember is that was not 2% of the total budget; it was 2% of the rate of increased spending being planned over the current expenditures.  Now the debt is up another $1.6 Trillion from the data of that plan’s acceptance.  Money being committed for which there is no budget and no revenue to cover it.

When one factors in that by the time this happens what was calculated to be a total decrease in increased spending of $85 Billion is actually only about $44 Billion, and not a penny of that cuts into the budgetary base line, it still works out to a reduction of the national indebtedness figure of about 2 cents per dollar.

Additionally we are told that all cuts must be made equally “across the board.”  But that is not precisely true.  The bill itself the cuts to be equally made across the non-exempt DEPARTMENTS’ budgets but makes no mention of any restrictions on how, WITHIN a department the cuts are allocated.  Those decisions can be made sensibly with a sort of economic triage or they can be made based on politically desired outcome.

The Defense Department spokesmouth said, for example that Coast Guard rescue missions would be cut.  But later the commandant of the Coast Guard said he could find the money from other non-essential areas.

FAA talks about cutting air controllers but does not even look at such things as a subsidy they pay for snacks on flights (you thought the airlines paid for that, huh?).  The FDA talks about health issues but does not talk about cutting subsidies for tobacco growers while the Health Department then also pays huge amounts for anti-tobacco campaigns.   Or how interior pays some farmers to NOT grow a crop it pays others TO grow.

And if ANY part of the government is able to be called “non-essential” why are we paying for it anyway?

Bottom line even if all of the apocalyptic cuts are made as prophesied, we will still be spending more in 2013 than we did in 2012 because we have only cut the rate of increase not the actual existing budget items.

So get a grip people!  And hold your elected folks’ feet to the fire to allocate the cuts wisely, as you would expect.  As it is now, it is as if an individual had a cable contract but when their bonus check was cut, they decided to deal with it by cutting back on food for their kids and leave the TV offerings alone.  But when the government does an exactly analogous thing it is OK with you and you just accept it because you think the enlightened folks leading it have an imprimatur from God to act wisely in all things?

In the end it is all in YOUR hands.  You can tell the representatives that how they allocate money and how the President’s minions allocate money in their departments is going to have an effect on your voting.  And if you do that I can nearly guarantee things will get better.

If you don’t, if you remain minimally informed about the details of these things that can, if used poorly – or maliciously – have a very bad effect on you, then you have only yourselves to blame for whatever the outcome will be.