Okay, what about the second part of this speech.
The dire economic warning part.
The Hageman speech to the legislature. Deconstruction and Analysis. Part One.
Harriet Hageman appeared to address the House.The early portion of Hageman's address deals with the new rules that the House is operating under, some of which are a restoration of old rules, as is noted.
The back portion is a call for extreme budget cuts. Without saying as much, it would seem that you can take hints that this would include Social Security, but perhaps I'm just reading that into the speech and it isn't there.
It then goes into the legislative session.
Are we correctly being forewarned about Die Nornen? That'd be scary.
Maybe we should be scared.
Hageman was not precise in her warning that Waltraute ought to hurl the ring away, but the gist of it is that we're spending way beyond our means, government wise, and we can't keep doing it forever.
I agree with that, and that's always been my position. I'd note that since Reagan left office, it's only been the position of the Republicans when they're not in office. They're all about fiscal responsibility then, but when they are in office in Washington D.C., the fleet's in, they have shore leave, the Rockettes are appearing downtown. . . Woo Hoo!
Given that, it's a little hard for me to take the GOP seriously on this.
Indeed, quite frankly, listening to Republican declarations that "we need to be really careful on how we spend money" has gotten a lot like listening to an evangelical preacher warn us about the dangers of dancing and drink when we were just downing Makers Mark with him the prior night at the "Ol Elephant Saloon". Your sort of want to say, "um, didn't you buy me a tumbler of Makers last night, and didn't I see you dancing with Billie Jean. . . .?"
Hmmmm. . .
The other thing is that it seems that the House of Representatives seems to have suddenly confused itself with the House of Commons and believe that Kevin McCarthy is the Prime Minister, rather than just the Speaker of the House. In terms of actual power to influence directions, he's much more limited than he's presently pretending. Indeed, he risks going down right now as a flaming failure who might end up a footnote in a biography on Nancy Pelosi.
None of which means that hte dire warning might not be right.
Well, it might be, but she's not really terribly accurate in her statements.
I agree that the government can't spend for ever, and I do think the budget should be balanced. Does that require massive universal cuts to achieve?
No, it really doesn't.
Actually, given the scale of the budget and the of the economy, relatively moderate cuts combined with rational tax increases would cover it. You could easily generate a surplus that way too. If you were hired by the Federal Government as the CFO, that's exactly what you'd do. Any halfway competent CFO would do just that.
So why didn't she call for that?
Easy enough. Unlike John Howard Hermann, we're not talking about economics, we're talking about money.
John Howard Hermann: We aren't even talking about money! We're talking about economics.
Hail Caesar!
Economically, this is easy to achieve, at least right now. So much money is spent, so much money is brought in. You need to spend less, or bring in more, or both. Doing both, if you control the expenditures and the income, is fairly easy. And that'd be easy here, fiscally.
Republicans hate the income part, however, as it requires them to concede a dear dear belief, which is that tax is theft and that by leaving lots and lots of surplus money at the upper end of the income scale the rich reinvest it in businesses, rather than buying Twitter and wrecking it, or going to hang out with Jeffrey Epstein and a passel of underage girls.
We already know from past experience that you can tax the very wealthy up around 50%, and it won't drive them to Argentina or cause them to tank the economy. Indeed, we did that for years and years before the "rising tide lifts all boats, even the ones with big gaping holes in them" theory of economics came to prevail. We started cutting upper tax rates with Ronald Reagan, and we haven't stopped.
We need to, and it needs to go back to the 1940 to 1960 type rates.
We can also tax a lot of surplus and idle wealth quite easily. We just don't. People buying pure luxury itemss, third houses, McLaren cars and the like, can pony up.
My guess is that Harriet Hageman, however, isn't going to go to Susan Gore and say, "wowsers Susan, these are some nice digs here in your compound. . now let's talk about taxing you a little more. . . "
Not hardly.
But it ain't just Republicans.
Democrats never saw a spending program they didn't like. Americans are so used to spending programs that have come into existence over the years in through relatively liberal (usually) Federal projects that they really have no idea whatsoever what they all are, and people have come to support them as rights.
As an example, when I was a kid, there was no Federal Department of Education. Education was 100% a state concern. In FY 2023, the Department of Education had $89.76 Billion distributed among its ten subcomponents, which is a fair chunk of change, and that's only a single example.
It's tempting to believe, and some fiscal conservatives will tend to claim, that if we cut out all the fluff and added on budgetary items, the budget would balance. While what the GOP wants to do would require that, and indeed it is required realistically, that still doesn't get you there. The big bear is non-discretionary spending.
You can get a bit of an insight into that here:
Much Ado About Debt
Oh oh.
Here are the Congressional Budget Office's infographs on the topic for 2021, first with discretionary spending.
And here's the graph of non discretionary spending:
As you can see, the list of items that Congress has placed beyond itself, and then refused to find a way to pay for, is something like five times the size of what it can control through annual appropriations.
In other words, there's no earthly way to pay for everything the Federal Government is funding through spending cuts alone.
None.
That's why Republicans hint at going after non-discretionary funding. But because people like it, that's also why they hint, but won't flat out admit it, usually. You aren't very likely to have Harriet Hageman or anyone else say, "wow, Medicare is expensive, let's cut it".
Indeed, programs like Medicare have been big budget inflators. Richard Nixon, going down in flames due to Watergate, still retained enough political savvy to give a gift that kept on giving, with that one.
Once you give a benefit like that to people, there's no taking it away. The Affordable Health Care Act certainly has proven that, and the COVID relief bills came close to being a Uniform Basic Income that wouldn't go away, and is still impacting the economy. The point is not that these need to be cut, they likely cannot be, realistically.
You have to tax to pay for them.
Republicans in the House thinking that they're going to cut into Social Security or Medicare might as well plan on having pony rides on the moon. Ain't happening. Americans are used to these programs and are entirely acclimated to depending upon them. The only way that programs of that type every go away is due to massive societal disaster, which is ironically enough the way they tend to come into being in the first place. You can't now tell people who are Social Security that something they were depending on for their entire lives needs to be drastically reduced. And all the youngsters who didn't care much about Nixon and his geezer centric Medicare bill in 74 sure do now.
Lots of conservative economists will, at this point, say something like "hold on there buckwheat, that would hurt the economy". They'll propose just growing the economy out of this problem. That actually is completely true, up to a certain point, but at some point you just can't do it. Cutting back and tightening the belt makes sense if you can actually expect to be able to live within your means. But if you are far beyond them already, that's not going to happen. It also won't happen if there's simply no moral hazard for anyone in the Federal economy, and right now there isn't. I.e., it's easy to think "Free lunches for house cats? Why not. . ." right up until somebody raises taxes to pay for it.
Indeed, one way that taxes could be raised would be simply to raise user fees for things. Some budget items are already paid for this way. Hunters and fishermen pretty much pay for the entire U.S. Fish & Wildlife Service, as well as state agencies, through excise taxes, user fees and hunting licenses, for example. The U.S. Department of Transportation could be paid for this way as well. The U.S. Post Office, while not a great example, funds itself. That won't address mandatory spending directly, but if departments that task specific civil roles can be funding that way, general taxes don't have to fund them.
If you expand this out, there's no good reason that health related expenditures, which include a fair amount of the non discretionary spending, can't be covered by excises. Alcohol excises could pay for nearly 100% of alcohol related diseases. Tobacco related excises could pay for 100% of tobacco caused illnesses. A tax on marijuana, which is tricky as it remains illegal at the Federal level, could be imposed on the increasing amount of health and crime expendistures it causes. All this, moreover, is just as not everyone drinks, smokes, or uses dope.
The level at which a person might wish to do this inevitably gets tied up with social concerns. Some would say, well, if you are going to do that, are you going to tax firearms and ammunition manufacturers to cover health care costs derived from shootings? Are you going to tax automobile manufacturers to cover costs related to automobile accidents?
I might.
Now, the working deficit right now is $421,409,781,344.
The FY 2022 chart is really instructive, as what that tells us is that the deficit frankly isn't that huge in the annual budget. yes, that's a big number, but the revenue figure nearly covers. We only had to make up $1.38 Trillion to balance in FY 2022, and that was a COVID mess year.
Finally, what about the claim that only three countries have "fixed" their budgetary crisis?
M'eh, that's hogwash.
Canada runs a mild deficit and spends a lot more on social programs, per capita, that have real effect than the United States does. Germany, Switzerland, and South Korea often post budget surpluses. Japan runs a mild deficit and is projected to increase military spending while achieving a balanced budget by 2026. New Zealand, cited by Hageman, tends to balance. New Zealand has national health care and national tort coverage.
What are these countries doing that we aren't?
Taxing.
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