Baseline Budgeting, Sequestration and Lies

Posted by PITHOCRATES - February 21st, 2013

Politics 101

The Sequester Automatic Spending Cuts equal about 2% of Current Federal Spending

If you heard the president speak recently we’re all doomed.  The automatic spending cuts in the sequestration he proposed and signed into law will take food away from children.  And lead to the collapse of society as we know it.  Ushering in the end of the world.  For he warned…

Border Patrol agents will see their hours reduced. FBI agents will be furloughed. Federal prosecutors will have to close cases and let criminals go. Air traffic controllers and airport security will see cutbacks, which means more delays at airports across the country. Thousands of teachers and educators will be laid off. Tens of thousands of parents will have to scramble to find child care for their kids. Hundreds of thousands of Americans will lose access to primary care and preventive care like flu vaccinations and cancer screenings.

President Obama gave this speech in front of some first responders.  Police officers.  And firefighters.  Always the first they threaten with layoffs when the government can’t raise taxes.

Amazing what $85 billion can buy today.  And if it can buy all that you’d think we wouldn’t have to spend $3.8 trillion at the federal level.  For if we can get all of that for a little over 2% of all federal spending it makes you wonder what else that 98% is buying.  What’s even more remarkable is that the federal government doesn’t even pay police officers, fire fighters or teachers.  We pay for these with property taxes.  At the city and county level.  Which the federal government cannot cut.  Because they don’t pay for these.  Yet the president says the sequester will even cut these.  Remarkable.

The Important Thing to understand about Baseline Budgeting is that Spending Cuts don’t Cut Spending

To understand sequestration you have to first understand baseline budgeting.  Which goes back to the Congressional Budget Act of 1974.  When we stopped being responsible.  And set government outlays to forever increase.  The baseline is the starting point for the following year’s budget.  And the baseline is last year’s outlays.  This year’s spending will be last year’s spending plus an additional amount based on inflation and population growth.

So spending always increases from year to year.  Automatically.  No one has to request an increase in appropriations.  And no one has to cut spending elsewhere for new spending someplace else.  Because all of last year’s spending is approved.  No matter how wasteful and pointless it may have been.  And on top of that spending there is new spending.  Always.  Guaranteeing that federal spending will always grow greater.  There will always be deficits.  And always a growing federal debt.

Now the important thing to understand about baseline budgeting is the meaning of ‘spending cuts’.  In a household if a family decides to cancel the family vacation because things are a little tight that is a spending cut in the real world.  Because it results in less spending.  But a cut in baseline budgeting doesn’t result in less spending.  For the only thing they cut is the amount they will increase future spending by.  For example, if spending for ‘X’ is scheduled to increase by $100 million but will only increase by $75 million that is a $25 million spending cut.  Even though spending will still increase by $75 million.

The President’s Sole Objective now is to destroy the Republican Party

President Nixon decoupled the dollar from gold in 1971.  Taking American off the gold standard.  Unleashing the inflation monster.  Allowing government to spend more.  As they paid for that additional spending by printing money.  And with the addition of baseline budgeting added in 1974 they spent more.  A lot more.  Total federal outlays from 1974 to 2008 increased on average 7.5% each year.  Total federal outlays in 2012 were approximately $3.8 trillion.  So the scheduled increase in spending (thanks to baseline budgeting) for 2013 is approximately $284.7 billion.

The spending cuts of the sequester are $85 billion.  Which President Obama says will usher in the end of the world as we know it.  But these ‘cuts’ are not cuts per se.  They are not like the cuts a household makes when they cancel the family vacation.  These are cuts that reduce the increase in future spending.  So instead of increasing future spending by $284.7 billion they will only increase by $199.7 billion.  Which is 2.3 times greater than the amount of the sequester.  Now President Obama said the sequester cuts would be the end of the world as we know it.  Even though total federal outlays will actually increase by an amount 2.3 times the sequester.  So one cannot but ask the question how will this sequester usher in the end of the world as we know it when we are actually increasing spending?

Because it is not the end of the world.  The president is lying.  Everything that we can pay for today we can still have after the sequester.  Because there are no real spending cuts.  We’re just increasing spending less than the original baseline projection.  Which means all the jobs we will lose will be future jobs.  But talking about losing future jobs doesn’t put the fear of God into people like telling them they won’t have any police or fire protection anymore.  Or telling them that their children’s teachers will lose their jobs.  You see, the president’s sole objective now is to destroy the Republican Party.  The only thing standing between the country and the liberal agenda he wants to impose on the country is the Republican opposition.  Which is why the sequester that he proposed and signed into law is now the fault of the Republicans.  This is the reason for all of this theater.  To get people to hate Republicans.  For why else would the president call a spending increase a spending cut?  If it wasn’t to demonize the people who keep demanding spending cuts?

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FT136: “Unions only represent those who pay union dues.” —Old Pithy

Posted by PITHOCRATES - September 21st, 2012

Fundamental Truth

The Cost of Teachers’ Salaries, Health Care and Pensions are so Costly that there is Little Left to Spend on the Children

The Chicago public school teachers’ strike is over.  And the teachers got enough of what they wanted to go back to the classroom.  Or else they wouldn’t be going back to the classroom.  Which proves the benefit of belonging to a union.  In exchange for those union dues they get a lot of political muscle.  Which they greatly leverage by having children out of the classrooms.  Suffering.  For the kids are losing out on their education.  Worse, parents are stuck with their kids longer.  And must wait longer before they get their break from having their kids home all day long.

And speaking of the children one thing you didn’t hear in the list of demands was more supplies for the classroom.  Despite good teachers everywhere dipping into their own pockets to pay for classroom supplies.  Why?  Because the cost of teachers’ salaries, health care and pensions are so costly that there is little left to spend on the children.  And that pay and those benefits are pretty generous.  Especially considering with all the time off teachers get they’re technically working part-time jobs (30 hours a week or less).  With about two and half months off during the summer and the breaks during the school year teachers work about 9 months out of the year.  Which comes to about 1,548 hours a year.  Compared to the 1,560 hours (30 hours X 52 weeks) a year a part-time worker can work.  With far fewer benefits.

But yet it’s always about the children.  Higher pay and benefits for teachers benefit the children.  At least that’s what they tell us.  The ability to retire with nearly their full salary.  And free health care until Medicare kicks in.  All paid by the taxpayers.  That’s what’s important to maintain.  So the children get a quality education.  By having their teachers live a higher quality life and retirement than these children’s parents.  Who are paying for both their own quality of life and retirement.  As well as their kids’ teachers.

Big Cities set up Generous Public Sector Pay and Benefits based on an ever Expanding Population Growth Rate

Whenever a city is having trouble paying their bills they always threaten to lay off police officers and firefighters.  As if that is the only expense a city has.  They never talk about cutting back on their health care plans or their pension plans for all city workers.  Like everyone working in the private sector has gone through.  How many times have you been told by your employer that they cannot make a contribution to your 401(k) retirement plan this year because business was down?  It happens a lot.  And that’s the retirement plan most people have today.  It’s mostly what you put away for your retirement.  Pensions in the private sector are long gone.  Only those unionized sectors with enough political clout still enjoy generous pension plans.

Recessions reduce tax dollars flowing into city coffers.  But that’s only part of the problem.  The bigger problem they have is a flat population growth rate.  All these big cities set up generous public sector pay and benefits based on an ever expanding population growth rate.  But that growth rate flattened out in the Sixties and Seventies.  Thanks to widespread use of birth control and, to a lesser extent, abortion.  Women stopped having a lot of babies.  Which means there are a larger number of people retiring than there are entering the workforce to replace them.  So you have a higher growth rate of those consuming taxes.  While you have a lower growth rate of those paying taxes.  Which means cities will pay more out than they collect unless they raise tax rates.  Which they often try to do.  While threatening to lay off police officers and firefighters if voters don’t approve a new millage.

Things can be especially hard for some city workers because of that flat population growth rate.  Not to pick on the firefighters but look at a typical firehouse.  Say a firehouse with one engine/ladder truck and one rescue squad.  That’s about 6 firefighters.  If a city has 30 firehouses that’s 180 firefighters.  If they are 24 hours on duty and 24 hours off that brings it up to 360 firefighters.  If a firefighter academy graduates 100 new firefighters a year that’s about a third of all firefighters.  Now unless each firefighter only works 3 years there will always be more firefighters than open positions.  New building technologies and fire alarm/suppression systems have greatly reduced the number of building fires.  All of this on top of a flat population growth rate makes it very difficult for anyone wanting to be a firefighter these days.  Making matters worse a lot of the old cities are actually seeing population decreases.  Which cities respond to by closing firehouses.  Which reduces the number of firefighters.  Making it even harder for aspiring firefighters.

A Union Represents those who pay Union Dues—not Children, Taxpayers or Patients

Cities collect property taxes to pay for the services they provide.  As well as other taxes and fees.  From that pot of money they collect they divide it between the various departments they have.  Such as for education.  From that money educators have to pay all their bills.  From classroom supplies.  To teachers’ salaries, health care and pensions.  They can only spend this money once.  So if they give more to the teachers there is less for the classroom.  So when teachers strike and say it’s for the children it is probably not for the children.  For the children pay no union dues.  As unions don’t represent the children anymore than they represent the taxpayers.  They represent the teachers.  Because they pay the union dues.  And it is their job to get as much of that money spent on education to the teachers as possible.

There are some moves to unionize nurses and other health care workers.  In fact, that will happen under Obamacare as health care workers will all become government workers.  And eligible to join public sector unions.  Which is why all the unions were so adamantly for Obamacare even though many of them have gotten waivers to opt out.  Because it will swell the ranks of the public sector unions.  While greatly increasing the cost of health care.  And hurt the quality of our health care system.  For if we pay nurses like government bureaucrats we will shift more health care money to these new public sector workers while leaving less to spend on patients.

It is remarkable how selfless all public sector workers are.  For they never want more taxpayer money for their own selfish needs.  It’s always for the children.  The safety of our citizens.  And when Obamacare fully kicks in, the quality of health care our patients receive.  It’s just a coincidence that while protecting the children, the taxpayers and our patients that they benefit, too.  Funny how that works.  Which is what happens when you belong to a union and pay dues.  For a union represents those who pay union dues.  Not children, taxpayers or patients.

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FT134: “There will always be poor and oppressed people because someone has to vote for liberal Democrats.” —Old Pithy

Posted by PITHOCRATES - September 7th, 2012

Fundamental Truth

Liberal Democrats would Not Like an America without Poor and Oppressed People

In the anti-nuclear power movie The China Syndrome Jack Lemmon’s character wanted to warn everyone about his dangerous nuclear power plant.  He was a control room operator at the plant.  During one event there was a vibration.  The reactor shut down (SCRAM) safely.  But Lemmon’s character did some investigating and found that some safety reports had been falsified.  And in his quest to publicize this fact people died.  So he did the only thing he could.  He locked himself inside the control room at the nuclear power plant.  Requested that the characters played by Michael Douglas and Jane Fonda come down to put him on the air live.  And threatened to create a nuclear catastrophe himself if that didn’t happen.  That’s right, as dangerous as that reactor was he did NOT shut it down.

Odd, really.  He threatened to cause what he was trying to prevent.  Why?  Well, consider what would have happened if he did everything he did with one change.  Instead of threatening his own nuclear catastrophe he shut down that reactor.  So it was safe and could not harm anyone.  If he did that what do you think would have happened?  No one would have brought that news crew (Douglas and Fonda) to the plant.  And plant security would have just broken into the control room and subdued Lemmon.  But because he left the reactor hot and dangerous they didn’t break in and subdue him.  And they brought in that news crew.  Because his threat of causing a nuclear catastrophe gave him power.  While a safe and shutdown reactor gave him no power.

So what do we learn from this?  Sometimes the thing you’re fighting against is the very thing that gives you power.  A purpose.  A reason for getting out of bed in the morning.  Something that gives you a job.  Something that pays the bills.  And it’s just not disgruntled nuclear power plant operators.  Imagine a world with no crime.  If there was no crime we wouldn’t need any police officers.  Something police officers wouldn’t like.  Just as firefighters wouldn’t like a world without fires or accidents.  Just as cardiologists would not like a world without heart disease.  Just as environmentalists would not like a world without global warming.  Just as advocates of affirmative action would not like a world without discrimination.  Just as liberal Democrats would not like an America without poor and oppressed people.

The Poor and Oppressed are a Favorite Constituency of the Federal Government

The more horrible the things people are fighting against the greater are the need for these people.  The Left makes use of this strategy all of the time.  Falling test scores means we need to spend more on education.  As in hiring more teachers.  And paying them more.  This works the other way, too.  When municipalities are running budget deficits because of costly public sector contracts calling for high pay and generous benefits they place a new millage on the ballot.  And warn the people that if they don’t vote ‘yes’ for these higher taxes they will have no choice but to increase the number of rapes, murders and assaults.  As well as increase the number of deaths from fires, heart attacks in the home and car accidents.  Because if the people vote ‘no’ they will lay off police officers and firefighters.  Instead of renegotiating those contracts that are causing their financial problems.  No.  It’s never cutting back on the things that are bankrupting their cities.  It’s always putting the fear of God into their electorate.  So the public sector workers can maintain their generous pay and benefits.

Of course some will say that our teachers, police officers and firefighters don’t get paid that much.  If that’s true then they belong to some real crappy unions.  Because you join a union to get better pay and better benefits.  And you pay union dues for the union’s help in getting better pay and better benefits.  Also, if we didn’t already pay them very well you would know what their pay and benefits were during these millage requests.  For it sure would help their argument for higher pay if most people made more than they did.  Because, let’s face it, we need good teachers, police officers and firefighters.  If we paid them less than most other people everyone would feel guilty and vote ‘yes’ without hesitation.  But during these millage requests they don’t make public their current pay and benefit schedule.  And it’s hard to find this information online.  Because that’s ‘personal’.  Even though we pay them with public money.  Which should tell you something.  They’re paid better than most people.  Because they’re asking for more without telling us how much they currently make.  For it is hard to get sympathy for your pay level when you make more than most other people.

It’s no secret that government workers get better pay and benefit packages than people in the private sector.  Especially in the federal government.  Where federal employment grows by leaps and bounds every year.  And they create ever new programs to fight against something.  So they can keep hiring more people into the federal bureaucracy.  To reward friends and cronies.  And to endear a growing federal government to ever more people.  So they will continuously help to support and promote that sprawling bureaucracy.  Through their votes.  And by making as many people as possible dependent on the government.  Making the poor and oppressed a favorite constituency of the federal government.  As it has been for a very long time.  Despite the numerous battles to end poverty and oppression.

The Liberal Democrat Answer to Poverty is Not a Job but a Government Entitlement

JFK was a tax-cutter.  Just like Ronald Reagan.  They both believed that you had to create a business-friendly environment to create jobs.  Because if a business did well it grew and hired more people.  That’s why both JFK and Ronald Reagan had strong economic growth and low unemployment during their presidencies.  And they each brought in a lot of tax revenue into Washington.  Even with their low tax rates.  So low tax rates are good.  They help businesses grow.  They help people get jobs.  They lower the price of consumer goods so people can buy more for less.  And they bring in more revenue to the government to help those who need help.  Of course liberal Democrats hate this.  Because if everyone is doing well there is no need for all their agencies and programs.  Or them.

Shortly after the assassination of JFK things changed.  LBJ became president.  Who was a big liberal Democrat.  Who declared unconditional war on poverty.  This was in 1964.  The plan was to explode the size of the federal government.  Which is what he did when he gave us the Great Society.  The war on poverty would become one of America’s longest war.  Longer than the wars in Iraq and Afghanistan.  Longer than the Vietnam War.  Even longer than the Cold War.  The war on poverty continues to this day.  Requiring ever more government agencies.  And programs.  Yet they’ve all failed to end poverty.  Proven by the fact that every generation of liberal Democrats running for office is an advocate for the poor and oppressed who have no voice but theirs.

The liberal Democrat answer to poverty is not a job but a government entitlement.  Because jobs lead to lower unemployment.  And less purpose for a liberal Democrat.  Liberals don’t want jobs and low unemployment.  They want high taxes and high unemployment.  So they can matter.  And make a difference.  So they can have a cushy job with high pay and generous benefits.  So they attack tax cuts.  They attack any lowering of regulatory costs.  And anything else that would help businesses create jobs.  Which would take the poor and oppressed away from them.  They don’t want people to be rugged and independent.  They want them needy and dependent.  And they want as many people as possible to be needy and dependent.  Even if it leads to a little rioting.  Especially if it leads to a little rioting.  For a little level of danger can be useful.  As it can be in a nuclear power plant in an anti-nuclear power movie.  Because it’s very hard to get taxpayers to vote for people that want to increase your taxes and make your lives more costly.  While some liberals genuinely care about making people’s lives better many more are like Jack Lemmon in The China Syndrome.  Who understand that they must maintain a certain level of poverty and oppression in the nation.  Or they will have no power.  As no one will vote for them.  Because if you’re in the business of ending poverty and oppression you need a certain level of poverty and oppression to fight against.  Always.

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