Congress to outdo M.C. Hammer: The FY 2010 Omnibus Bill - Politics and Economics

**Bigdaddydvo** · 12-13-2009, 04:06 PM

The U.S. Senate just approved a $1.1T Omnibus spending package for FY 2010, confirming its well established, utter indifference to bankrupting future generations:

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The 1,000-plus-page bill covers spending for the Departments of Education, State, Health and Human Services, Transportation and Housing and Urban Development. In all, six of the 12 spending bills Congress is required to pass each year is folded into one measure that raises spending for its designated programs by an average of about 10 percent, or well above the inflation rate.

More highlights:

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• Provides an 8 percent discretionary spending hike for the third consecutive year;
• Provides these spending hikes in addition to $311 billon in earlier stimulus funding for these discretionary programs; and
• Includes approximately 5,224 earmarks, bringing the FY 2010 total to 8,939, with a pork-laden defense bill expected to push the final total over 10,000.
Assuming passage of the omnibus bill and a separate defense appropriations bill, the three-year-old Democratic congressional majority will have:

• Spent $561 billion more than the baseline level for discretionary programs;
• Pushed up the 2011-20 discretionary spending baseline by $1.7 trillion--nearly $1,500 per household annually; and
• Been responsible for three of the five highest earmark years in American history.

Last year's budget deficit of 10 percent of the economy ($1.4 trillion) shattered the post-war record. Far from just a temporary result of the recession, current estimates show the budget deficit rising to nearly $2 trillion by 2019. At that point, the debt would be nearly 100 percent of the economy.

These spending bills represent a complete denial of America's deteriorating fiscal situation. While rapidly expanding entitlement bills, Congress is providing yet another 8 percent increase for discretionary programs and another 10,000 earmarks. Congress is leading America down a path that could soon require tax increases of more than $10,000 per household just to balance the budget.

As the size of the Federal Government to expand faster than the waistline of the recently fired Head Football Coach at the University of Notre Dame, the real, productive economy upon which it relies for its funding continues to contract. Far be it for, at a time when everyone in the real world is cutting spending, making sacrifices, and paying down debt, that the government follow suit. The fact is, our politicians always have plenty of excuses to spend money. During periods of economic expansion, growth in government is allegedly "paid for" by higher tax revenue streams. On the other hand, during downturns such as this, we are told that government "must spend" to make up for contractions in private sector spending. Taken together, this means there is never a good time for us to start paying back the vast sums of money we owe. Which leaves us here: Ben, accelerate the printing presses please. And Timmy, get to work. You have some bonds to sell. Make that a lot of bonds to sell.

2/325Falcon · 12-13-2009, 04:10 PM

2 legit.

tubasteve · 12-13-2009, 04:22 PM

(to quit spending)

**Bigdaddydvo** · 12-13-2009, 04:23 PM

9.5/10

wiper · 12-13-2009, 04:26 PM

*sigh*

RollinHand · 12-13-2009, 04:29 PM

I got this!

clemensol · 12-13-2009, 04:58 PM

It's really sad that actual conservatives have been duped into caring about earmarks. It's a total non issue in terms of relevance. However, it's an effective marketing strategy, because this way Republicans can pretend to be for smaller deficits despite being against higher taxes, for more military spending, and staunch defenders of entitlement programs.

Also, the national debt will not be anywhere close to 100% of GDP by 2019. And even if it was, it wouldn't be the end of the world.

jah7_fsu1 · 12-13-2009, 05:47 PM

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Originally Posted by clemensol

Also, the national debt will not be anywhere close to 100% of GDP by 2019. And even if it was, it wouldn't be the end of the world.

No, but it would create all sorts of problems. Sooner than later we are going to have to stop growing the government and become more efficient. And I'm not even close to AC, I'm a medium gov't socially liberal as they come person. And the spending still scares me.

pokerbobo · 12-13-2009, 06:11 PM

common sense has officially left the building

**Bigdaddydvo** · 12-13-2009, 06:14 PM

Quote:

Originally Posted by clemensol

It's really sad that actual conservatives have been duped into caring about earmarks. It's a total non issue in terms of relevance. However, it's an effective marketing strategy, because this way Republicans can pretend to be for smaller deficits despite being against higher taxes, for more military spending, and staunch defenders of entitlement programs.

Also, the national debt will not be anywhere close to 100% of GDP by 2019. And even if it was, it wouldn't be the end of the world.

What you say is generally true, but earmarks are an identifiable symptom of D.C.'s spending excesses. And while Republicans have been awful with deficits the past decade, right now the Dems are orders of magnitude worse.

clemensol · 12-13-2009, 06:18 PM

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Originally Posted by jah7_fsu1

No, but it would create all sorts of problems. Sooner than later we are going to have to stop growing the government and become more efficient. And I'm not even close to AC, I'm a medium gov't socially liberal as they come person. And the spending still scares me.

I agree, but the debt mongering is way overdone. And the thing that bothers me is that it's more for political purposes because people don't understand the implications of having a lot of debt too well. Thus, it's a really easy issue to demagogue.

clemensol · 12-13-2009, 06:22 PM

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Originally Posted by Bigdaddydvo

What you say is generally true, but earmarks are an identifiable symptom of D.C.'s spending excesses. And while Republicans have been awful with deficits the past decade, right now the Dems are orders of magnitude worse.

I agree that earmarks suck... But if Republicans want to keep whining about the debt then they should grow some balls and propose actual substantive measures that will reduce it.

As it is, their entire budget spiel is about earmarks, because they have no way of reducing spending significantly without running contrary to their current rhetoric.

owsley · 12-13-2009, 06:27 PM

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Originally Posted by clemensol

Also, the national debt will not be anywhere close to 100% of GDP by 2019. And even if it was, it wouldn't be the end of the world.

This is nonsense. First, it will be way over 100% of GDP by 2019. Right now it is at around 70-80% of GDP, and seeing as the US gov is running annual trillion dollar deficits right now, we will be over 100% relatively soon. Second, that is not a scenario you can dismiss as just not a big deal or a minor problem. The US is eventually going to default on its debt, and this will be very messy.

The standard reason given for why debt levels of 100% GDP are not a giant problem is that we ran larger ones relative to the economy during WW2. This is a terrible argument, as it ignores the huge differences between the structure of the US economy in 1940 and its structure today, it ignores the unfunded social security and medicare liabilities the US has today, and the prospects for the economy going forward.

http://www.nytimes.com/2009/11/23/business/23rates.html

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With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

...

The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years. On top of that, the Treasury has to refinance, or roll over, a huge amount of short-term debt that was issued during the financial crisis. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead.

How the US is going to find a buyer for another 5 trillion dollars of debt is completely beyond me. The US is a huge credit risk right now, who is going to continue to lend it money at 1 or 2% a year? The low rates of the last year were a one time phenomena of a flight to safety when equity markets were imploding. Making 0-1% and passing up the chance of a gain was more attractive than leaving money in stock markets which had lost 30-40% of their value. No major investor is going to be satisfied with that in the long run, they will either choose not to roll their loans over, or they will ask for very high rates to compensate for the risk.

The Fed is going to monetize the debt, period. The only way 5 trillion dollars of US debt can be issued is for the Fed to buy it with money it prints. The system will probably putter along for several years, I am actually relatively optimistic in terms of how long it will last. This depends on how willing the rest of the world's central banks are willing to make investments in US treasuries that are -EV in the long term, but +EV in the short term because it will prevent chaos (and to what degree the US can use its huge military to nudge them in the right direction). But commitments have been made which have effectively sealed the fate of the US dollar, someone, either the citizens the US gov has made promises to, foreign owners of US debt, will have to take a default.

**ElliotR** · 12-13-2009, 06:28 PM

Quote:

Originally Posted by Bigdaddydvo

What you say is generally true, but earmarks are an identifiable symptom of D.C.'s spending excesses. And while Republicans have been awful with deficits the past decade, right now the Dems are orders of magnitude worse.

lol no.

qdmcg · 12-13-2009, 06:42 PM

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Originally Posted by owsley

owsley wall of text

good post