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Join Jim and Greg for three crazy martinis today! First, they cringe at the idea of taxpayers footing the bill for up to $50,000 in salaries for journalists in the new spending bill pushed by Democrats. They also fire away at President Biden and other lefties for trying to convince the public that their multi-trillion spending binge won’t add anything to the deficit. And they get a kick out of Beto O’Rourke trying to criticize Biden for being too tough at the border.
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This past week, the Congressional Budget Office (CBO) projected annual deficits in this and the next fiscal year will near $1 trillion and that the U.S. will rack up more than $12 trillion in debt over the next decade.
There was virtually no reaction from the White House, Congress, or political figures of any stripe. The media also largely ignored the news.
Former South Carolina Gov. Mark Sanford is trying to sound the alarm about the debt crisis and is seriously considering a GOP presidential campaign to stress the issue since no other candidates are.
Sanford also spent separate three-term stints in the House of Representatives. He was defeated in the 2018 Republican primary after running afoul of President Trump and GOP leaders over government spending.
In discussing the latest CBO forecasts, Sanford began saying the mounting debt is simply a deferred tax on future generations who will have to pay the bills. Then he stopped himself and warned that the current generation could well face it too.
“This is not just a next generation problem. There is a proverbial straw that breaks a camel’s back. We are growing ever closer to that moment.
“I believe we’re walking toward the most predictable financial crisis in the history of man. It is not something that will happen to the next generation, but it’s going to happen in the next couple of years,” said Sanford.
“Think about this: we will spend more on interest (on the national debt) than we do on national defense in 36 months. That’s not a kid or grandkid problem. That is our problem,” said Sanford.
Sanford says he cannot pinpoint what will “light the match that lights the fire” or when exactly that might happen. However, current government estimates suggest Medicare will go insolvent in seven years and Social Security will follow suit in 15 years.
For his part, Sanford worries that increased tariffs will be a recipe for economic trouble. He says trillion dollar deficits are always alarming, particularly so in during a good economy.
“The deficits that we’re running are being run in peacetime and relatively calm economic waters. You reverse the economic waters and the deficits explode,” he said.
If the CBO projections are correct, the official national debt will stand at $34-35 trillion a decade from now. Sanford says the real numbers are far worse.
“The Congressional Budget Office numbers are not real. Those are fairly conservative numbers. This is why a variety of different organizations, like the Committee for a Responsible Federal Government have said those numbers could actually stretch closer to $2 trillion a year in operating deficits,” said Sanford.
Listen to the full podcast to hear Sanford discuss why neither party is serious about reining in federal spending, what action he thinks needs to be taken to return to fiscal stability, and how he is deciding whether to run for president.
The latest report from the Treasury Department shows a record level of spending for the first nine months of the current fiscal year, and the U.S. is on it’s way to a one trillion dollar deficit by the time the year is through.
According to Treasury, expenditures from October through June totaled nearly $3.356 trillion. Revenues came in at just over $2.6 trillion, leaving the nation with a deficit of more than $747 billion with three more months to go.
One of the nation’s top financial watchdogs says this is a bipartisan problem, noting the deficit was $5.4 trillion when George W. Bush left office. That number jumped to $19.9 trillion when Barack Obama’s presidency ended. Our debt is now headed towards $23 trillion just two-and-a-half years into the Trump administration.
OpentheBooks.com CEO Adam Andrzejewski says the current budget deficit is particularly bad considering the strength of our economy.
“Right now, we’re in a period of great economic expansion. We shouldn’t be running one trillion dollar budget deficits. You run budget deficits during an economic cycle when you slip into recession. You don’t want to run them when you’re in economic growth and expansion,” said Andrzejewski.
Andrzejewski warns Republicans that running against the big government agenda of Democrats is going to be a tougher sell because of their own lack of fiscal discipline.
But with neither party wanting to remove funding for their friends and priorities, is there any room for common ground. Andrzejewski says some ways to trim the fat ought to be obvious.
“The 20 largest federal agencies since 2003, they admit to $1.4 trillion going out the door in improper payments. Just last year, our auditors at OpentheBooks.com found a billion dollars went out the door from these federal agencies to dead people,” said Andrzejewski.
It gets worse. Andrzejewski says another six billion dollars went out in overpayments in student loans and grants and Medicare and Medicaid combined for $80-85 billion in improper payments.
Listen to the full podcast as Andrzejewski lists more wasteful spending projects that are wasting taxpayer dollars and how he encourages citizens to make their representatives pay attention to our soaring deficits and debt.
Jim Geraghty of National Review and Greg Corombos of Radio America are glad to see former New York City mayor Michael Bloomberg decide not to run for president in 2020 but groan as he vows to spend huge sums of money to move the world “beyond carbon” in the next decade. They also fume as Hillary Clinton finds yet another pathetic excuse for losing to Donald Trump in 2016. And they react with disgust as the federal budget deficit jumps 77 percent in the first four months of Fiscal 2019 compared to last year – and because neither party and most Americans have no interest in addressing our debt and deficit crisis.
House Republicans approved a tax cut bill that faces a bleak future in the Senate and both chamber pushed off any real debate on spending until December in order to avert a government shutdown.
On Friday, the House approved what Republicans call Tax Cut 2.0, the centerpiece of which is to make the individual tax cuts permanent from last year’s tax cut legislation. At the same time, the House approved a temporary spending bill of more than $700 billion to cover government operations until December 7.
Spending remains largely at the same levels established in February when Republicans beefed up military spending and Democrats got their way on discretionary spending. President Trump did get $1.6 billion for his border wall but that’s just a fraction of what he wanted.
On taxes, making those cuts permanent for families won’t have the same impact as the corporate tax reductions, but experts still believe families will appreciate the certainty of stable rates.
“That changes a lot of calculations as you’re budgeting for the future as an individual of what those tax rates are going to be. As we know from previous experiences with temporary tax cuts like the Bush tax cuts, you don’t change your spending habits or your savings habits as much as you would had those tax cuts been permanent,” said Vance Ginn, senior economist at the Texas Public Policy Foundation.
However, on spending, Ginn gives Congress a thumbs down.
“We must get control of spending. As Reagan used to say, wee don’t have a revenue problem. We have a spending problem. I think that’s the same situation here,” said Ginn.
“Passing a bill that’s just going to punt the ball for a couple more months down the road and then have to go through this again, is not an appropriate form of budgeting,” said Ginn.
This year alone, the U.S. is piling up $800 billion in deficits, which in turn grows our massive debt.
“If you have a debt to (Gross Domestic Product) ratio, meaning debt as a measure of economic activity above 80 percent, you have slower economic growth. We are currently above 100 percent of debt to GDP.
“That is telling me that we are having slower economic growth than we otherwise would have even as the economy looks to be doing pretty well right now. Just think about how much more growth and prosperity we could have overall,” said Ginn.
Listen here for the full conversation, including Ginn’s suggestions for reining in federal spending.
Listen to “Schumer’s Silly SCOTUS Strategy, Bernie’s $3.2 Trillion Single-Payer Scheme, TSA Monitors Sweaty People” on Spreaker.
Jim Geraghty of National Review and Rich McFadden of Radio America break down Senate Minority Leader Chuck Schumer’s request that red-state Democrats remain neutral on Brett Kavanaugh’s nomination to the Supreme Court. They also cannot believe that some Democrats are seriously considering the idea of almost doubling the federal budget to pay for Sen. Bernie Sander’s Medicare-for-all program. And they cannot find any examples of malfeasance in the Boston Globe’s story about the TSA’s passenger-monitoring program that tracks people who sweat too much and urinate too often.
Earlier this year, a $1.3 trillion dollar omnibus spending bill left many fiscal conservatives wretching over the rise in domestic spending, but Hillsdale College Prof. Gary Wolfram says mandatory spending is real emergency and we’ve got less than a decade to do something before it gobbles up all of our revenue.
Wolfram teaches economics and public policy at Hillsdale. He also served as chief of staff to former Rep. Nick Smith, R-Mich, in the mid-1990’s and on the Michigan State Board of Education.
The omnibus controversy arose when President Trump and Republican congressional leaders agreed to huge increases in domestic spending in exchange for lifting the spending caps on national defense spending.
In a recent column, Wolfram explains that mandatory spending – Social Security, Medicare, Medicaid – is the much greater threat. What makes it mandatory is specific congressional acts dictating how much is spent on those programs.
In our interview, he discussed how much federal revenue goes towards mandatory spending now and what it will look like in a few years if the problem is not addressed.
“If you look at mandatory spending plus interest on the debt, in 2019 it’s going to be 70 percent of the budget outlays and 89 percent of the revenue. So if Congress didn;t enact anything, 89 percent of the revenue’s going out the door already with mandatory spending.
“If you get to 2028, according to the Congressional Budget Office, 98.5 percent of all the revenue that comes into the federal government is going to be spent already, either through Social Security, Medicare, Medicaid, and some other items that are already mandated, plus net interest,” said Wolfram.
“So if you do not do something about Social Security and Medicare, which between them are almost two trillion dollars in 2019 and are going to be $3.3 trillion in 2028, you’re not going to do anything about the deficit,” said Wolfram.
While Wolfram believes each mandatory program must be reformed, his first recommendation is to change the appropriations process. In Wolfram’s home state of Michigan, the legislature determined how much is spent on each program every year, regardless of what is mandated in statute. He says the same principle should be applied in Washington.
“Let’s say Social Security is supposed to spend $1.043 trillion in 2019. If this were the way the Constitution worked in the federal government, Congress appropriates a trillion dollars. Everybody gets their proportionate share of the trillion dollars. I think that’s the type of thing we’ve got to be looking at,” said Wolfram.
Wolfram says Congress won’t get serious about reforming programs until members are faced with passing a massive hike on Medicare and Social Security taxes.
He ought to know. When serving for Rep. Smith, Wolfram pushed legislation that would allow taxpayers to set aside a portion of the their Social Security tax payments into a private account in exchange for receiving smaller checks when they retire. Only one other members showed up at the press conference announcing the bill.
But he says there are still measures that could do some good.
He says keeping the system in place for Americans 55 years and older is doable if younger people are told they won’t get Social Security benefits until they are 70 or 75. However, he believes Medicare needs a far more drastic overhaul.
“With Medicare, you’ve got to change the way the system works. You’ve got to make it like health savings accounts are in the private sector, where it’s a high deductible policy where you get so much and then you ask the question, ‘How much does it cost when you go to get your blood test?'” said Wolfram.
He says there are simple ways to drastically reduce Medicaid costs as well.
“Think of what the incentives are in Medicare or Medicaid. It’s to produce something that the government will pay for, even if it’s inordinately expensive, because the person buying it is not the person receiving it,” he said.
Wolfram says the health savings account approach works well on Medicaid as well.
“If you apply that to Medicare and Medicaid, it’ll change the whole incentives of the system. I’ll be Walmart or Walgreens and I’ll have a nurse practitioner there, charge you ten bucks to tell you your kid’s got pink eye and then provide you with a prescription,” said Wolfram.
Congress refuses to deal with the problem, but Wolfram still holds out hope that lawmakers will do the right thing when they have no other choice.
“I believe at some point things are going to get bad enough that they’re going to have to deal with it,” said Wolfram.