Deficits Don't Matter

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It was just about 30 years ago when President Ronald Reagan stated in his first inaugural address that a major objective of his presidency was to reduce the size of government and reduce government spending and eliminate deficits. He stated that while many of the programs were started with good intentions, people's hearts were in the right place but their heads were not. These ideas are just as current today as politicians at all levels of government try to address government spending and eliminate deficits.

Well, local governments generally do not run deficits and the state government also must plug its biennial deficit with every budget. The federal government is the exception. It can and has run deficits more often than balancing the budget or creating a surplus. And every few years, politicians run for office and get elected promising to be financially responsible. When we think about how often these promises have been made and how few times they have been kept, the whole idea becomes laughable.

When the federal debt hit $1 trillion, that seemed like a landmark that would try to be avoided from ever increasing and doubling to $2 trillion mark. Yet it did in a very short period of time. In four years with the first President Bush, the federal debt doubled again. The federal debt kept doubling and is now approaching $14 trillion. In 2009, the annual deficit topped $1 trillion. A few years ago, this benchmark also seemed unbelievable and unattainable even with limited financial responsibility from Congress and the president. But it happened.

Instead of moving towards being fiscally responsible, the president failed to propose a budget to Congress last year. Following a election cycle in which the president promised to examine line by line federal budget to see what works and what does not, it seemed almost unfathomable that a president would not propose a budget. Congress did not pass a budget. This to seemed unbelievable as all 435 members of Congress would be up for election and most will be campaigning to convince voters that the federal budget would be getting under control. What happened?

Last December, the president's debt commission was to propose actions that we need to take as a nation to reduce the $14 trillion debt and put America on solid footing. Again, what happened? Either their proposals were not taken seriously, or we will be waiting until the next Congress convenes in January to address the issues. Yet Congress passes silly proposals such as pay-as-you-go and then evades that promise. If it's an emergency, it's okay to tack the spending onto the national deficit. That was the thinking of the Democrats. Well, everything became an emergency.

Stimulus spending to get the economy going is certainly an emergency. That way we can add another trillion dollars to our annual deficit. It doesn't matter. Again, the results are in and the stimulus did not work. The economy is still sluggish and unemployment is still way too high. How about tax cuts? Conservatives love these and even the president went along with them this time. Tax cuts were for conservatives, and the stimulus spending is for the Liberals. It's the same thing, it just depends on what label you want to put on it.

So here we are again. Congress can't do anything unless it involves spending money. Was there a message in the last election cycle? Are we going to be able to allow people to keep more of their own money yet think that we are going to one day balance our federal budget? Last year, President Obama said that we could look forward to trillion dollar deficits as far as the eye can see. I find that up pretty bleak vision for the country. What are politicians thinking?

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