American Elephants

Cutting government spending is far less harmful to the economy than raising taxes.

This President likes to tell the people that he has dramatically cut spending already. This is not true, and he knows it. Obama has tried hard to convince Americans that they are poorer because someone else is richer. This is not only complete hooey, but does irreparable harm to the American ethic of achievement, which has been behind the fabulous growth that has been the hallmark of the American economy throughout our history.

Obama has a warped idea of America and the American economy, wrapped up in fuzzy ideas about inequality and fairness, and an economy that is fixed so that if one person gets more— someone else gets less. But the economy is not a pie except in political cartoonists’ vocabulary. As economist Alan Reynolds said: “Barack Obama does not understand economics, and apparently he refuses to listen to anyone who does.”

The hallmark of Barack Obama’s first four years has been wasteful spending. He has consistently tried to blame the fiscal crisis, the debt and the deficit on George W. Bush, but his attempts to slough off all blame for anything less than perfection, are not going to hold. The truth, as they say, will out.

Barack Obama spent more in his first four years than George W. Bush spent in eight years, and we criticized Bush for spending too much.

Here, from the OMB, are some examples of the growth in spending for some federal functions under the Obama Administration. (The percentages are inflation adjusted).

• Transportation: up $36.6 billion, an increase of 37.5%.
• Education: Up $30.8 billion, or 25%.
• Housing Assistance: up $16.4 billion, or 31.4%.
• Community and regional development: up $11 billion, or 36.5%
• Natural resources and environment: up $9.5 billion, or 21.3%
• Farm income stabilization, up $6.8 billion, or 39.5%
• General government; up $5.9 billion, up 26.6%

This doesn’t include all the energy boondoggles and green jobs. Nor does it include the 130,000 new federal workers added to government in his first term with average salaries of $128,000. The federal government is projected to spend $3.8 trillion in fiscal 2013, although the Senate has not produced a budget for four years although required by law to do so. The President hasn’t come up with the budget he was, by law, supposed to have turned in a month ago.

The sequester cuts just over 2% of the $3.8 trillion that is forecast to be spent. Even Defense, where the cuts are more drastic (about 6%), spending would still match 2007 levels when adjusted for inflation. While the President is whining about how the drastic cuts forced by intransigent Republicans who refuse to raise more taxes on the rich mean that the poor and the disabled will suffer, he’s flying all over the country at $180,000 an hour to make campaign speeches about how the nasty Republicans want to force him to make a choice between hurting poor children or hurting disabled children.

Here’s the most humongous of the political histrionics. Republicans wanted to pass a bill to give the President more flexibility to minimize any sequester damage. The President already has more than enough authority to avoid harm to air traffic control, national parks, but House Republicans offered to give Mr. Obama even more flexibility.

The White House issued a statement on Thursday that the President will veto any Republican bill to give him more flexibility to minimize any sequester damage. The President wants to deny himself and his administration the authority to do less harm.

If Americans see that cutting 2.3% of federal spending is possible without mass suffering, they might even conclude that government does not need to continuously increase spending. That perhaps government doesn’t need to be really big. That there are many things that government does not do very well, and perhaps they shouldn’t be doing them.

How far will the President go in attempting to show how much harm the sequester does? He has used some pretty drastic examples of real pain for the economy that are clearly unnecessary. He can choose eliminating some real waste, and hurt no one. Or he can keep on playing vicious politics in order to pretend that it’s all the Republicans’ fault.

I think he will go all out — making sure that these small cuts are as painful to the American people as possible. He is a fierce competitor, and his ideas are fixed in concrete. He does not change his mind. Richard Epstein said he has always avoided any opportunity to put his ideas out there in general conversation to be shot down. Unfortunately, that is how we learn where we have been stupid. He deeply resents disagreement.

He has placed himself way out on a limb, and may not have noticed that termites have nearly eaten through the branch where it’s connected to the tree. This time he may have gone too far.