Budgeting for the Near Term

Since Lyndon Johnson first opened up the lock box of social security in 1968 and included it in the Unified Budget, politicians have robbed future generations to get re-elected. Except for a four-year period during President Clinton’s tenure, all budgets have looked very similar to President Obama’s budget this year.

The budget by President Obama was to be expected; after all, every budget in the last several decades -- except for Clinton’s -- have all put off pain and cuts to the future and put the burden of paying for today’s government’s short-term programs on future taxpayers.

The payroll tax is a perfect example. A short-term boost -- that has proven not to work -- will be paid for over the next 10 years. An election year gimmick is paid for over the next decade so that the current incumbents can get re-elected.

Long-term unemployment insurance is going to be extended so that millions don’t end up without any money, and this will be paid for by future generations. The US is not built for long-term high unemployment, but instead of creating jobs with a real jobs plan we simply help those who are casualties of a lack of energy policy (which could create millions of jobs) or any other real job policy merely survive.

The jobs plan from the current administration is the ultimate short-term jobs plan – it will create and save jobs through the next election. The rallying cry of ‘teachers, firefighters and police’ is a great rallying cry until you realize that jobs will be only saved through the election.

Very few politicians -- and none in a position of power -- want to do what is right this year.  They all say the right things but every plan put forward is just like this budget that puts it off to some point in the future. This is why we are in this mess and not getting out anytime soon.

To cut spending now and deal with entitlements and pensions would cause real pain. This pain will be dealt with at some point, but politicians who cause this pain, even though it is the right thing to do, will most likely lose their jobs. And the one thing all politicians agree on is employment -- their own employment.

So, how do you spin this if you are in charge? Make it about the rich; after all, that has worked for centuries, from the Pecora Commission and FDR to Hamilton and Jackson. If we just tax the rich and oil companies won’t all be ok?

Let’s see, that would bring in about $50 billion a year and our deficit is still $1 trillion annually. The $50 billion is not enough to pay the interest on the current debt. However, politically it sounds great to say we just need to tax the rich more and everything will be fine.

Real life doesn’t work that way.

However, when in doubt run against the evil banks and the rich, at which those in power are doing a very good job.

More importantly, if you want to get re-elected, stand up for reforms and change -- and send the bill to future generations.  Unfortunately, it’s becoming the American Way.