Latest posts by Richard Ebeling (see all)
- Identity Politics: The New Totalitarianism - November 1, 2018
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- The Bad Economics of Short-Run Policies - October 3, 2018
President Donald Trump has issued his preliminary federal budget proposal looking to the U.S. government’s next 2018 fiscal year. What it shows very clearly is that there will likely be no attempt to reduce the size and cost of most of the American interventionist-welfare state.
On Thursday, March 16, 2017 the White House released, “America First: A Budget Blueprint to Make America Great Again.” Listening to the comments and commentaries by some on the political left, you would think that the world was going to come to an end. For many on the political right, the programs placed on the chopping block for reduction or near elimination seemed like a dream come true – if the budgetary proposals were to be implemented.
Furthermore, the blueprint claims to offer an insight into the mind of Donald Trump about the role of government in society. When the budget was released, Michael Mulvaney, the director of the Office of Management and Budget, said that this was Donald Trump’s fiscal vision for America. “If he said it on the campaign, it’s in the budget,” Mulvaney declared. “We wrote it using the president’s own words.”
An Unchanged “Entitlement” State, Only More Money for Defense
In fact, a cursory or a detailed look at President Trump’s budgetary proposals reveals that he plans to leave the “entitlement programs” – Social Security, Medicare and related spending – untouched while merely reallocating the approximately 30 percent of the federal budget’s “discretionary” expenditures from one set of activities to another. Neither the total amount of government spending nor the likely budget deficit is threatened with meaningful reduction.
In the current 2017 federal fiscal year, Social Security and Medicare and related spending make up almost 64 percent of Uncle Sam’s expenditures. The net interest on the near $20 trillion national debt comes to another 7 percent of federal spending. Out of the remaining around 30 percent of the budget, defense spending currently absorbs 15 percent of federal outflows.
The budget proposal makes it clear that President Trump is devoted to expanding the military capability for continuing foreign intervention. A foreign policy focused on “America First” is losing none of its global reach or its capacity to have the military hardware to back it up. Donald Trump reiterated in comments during his brief press conference on Friday, March 17, 2017, with visiting German Chancellor, Angela Merkel, that he was not a foreign policy isolationist. Indeed, he emphasized his allegiance to NATO and its role in Europe, at the same time that his Secretary of State, Rex Tillerson, was at the demilitarized zone between North Korea and South Korea declaring that nothing was off the table, including a preemptive military attack on North Korea’s nuclear capability.
For those conservatives and classical liberals who hoped for a change to a foreign policy placing the United States less in the harm’s way of regional and related problems and conflicts in other parts of the planet, President Trump and his cabinet members are making it clear that the shift in emphasis remains only on an insistence that America’s political and military allies pick up more of the financial tab for their joint policing of different parts of the world.
Reflecting this, the president’s blueprint proposes to increase Defense Department spending by $54 billion dollars, which would put military expenditures for 2018 to a total of $603 billion. The Department of Homeland Security would gain an additional $2.8 billion dollars for a total in 2018 of around $70 billion.
The eyes and ears of the surveillance state will, also, remain intact and grow. The only wiretapping that President Trump seems to mind was a presumed eavesdropping into his own conversations before he took office. As for the rest of us, well, Big Brother is watching and listening – for our own good. After all, it’s all part of making America “great” and “safe” again.
Cuts in Discretionary Spending Make Progressives Whine
To pay for increases in the warfare state, President Trump’s budgetary axe has fallen on a variety of “discretionary” welfare and redistributive programs. To cover the $54 billion increase in defense spending, $54 is to be cut from the other 50 percent of the 30 percent of that discretionary spending. But its worth keeping in mind that the gnashing of teeth by the “lefties” is about a decrease of less than 1.5 percent of the projected more than $4 trillion Uncle Sam will spend in 2018.
It must be admitted, however, that virtually every cut in this part of the budget can only warm the hearts of most conservatives and classical liberals. Department of Agriculture spending will be reduced by 20.7 percent. But it is worth observing that not set for the chopping block are subsidies paid to farmers, including for not growing crops. Trump does not want to antagonize a crucial part of rural Republican America that lives at the trough of government spending.
On the other hand, the State Department and related foreign aid programs would be slashed by almost 29 percent. Not many tears need be shed here, given that State Department programs and personal are at the heart of America’s misguided global social engineering schemes; and foreign aid is merely a slush fund for foreign political power lusters that, in addition, undermines real market-oriented economic development in other parts of the world.
This list goes on: Housing and Urban Development, down 12 percent; Health and Human Services, cut 16 percent; Commerce Department, reduced 16 percent; Education Department, decreased over 13 percent, but with a shift of some funds to increased funding for falsely named “school choice” programs; the Interior Department down almost 12 percent; the Labor Department cut nearly 21 percent.
Oh, the Horror! Cuts in the EPA and NPR
The Environmental Protection Agency would be cut by over 31 percent. The climate and land-use social engineers are being driven berserk by this one. That the swarm of regulatory locusts will be reined in or even stopped in some instances who plague the country with their wetland rules, their land-use restrictions, their market-hampering prohibitions and abridgements of private property rights, is being forecasted as meaning the end to an environmental-friendly planet Earth. The heavens will darken, the seas will rise, and the land will be barren. How can humanity survive without environmental central planning by the self-righteous regulatory elite meant to lead mankind into socially sensitive green pastures?
And, oh, no, the National Endowment for the Arts, the National Endowment for the Humanities, the Institute for Museum and Library Services, and the Corporation for Public Broadcasting are targeted for a virtual 100 percent cut.
Oh, the horror! Those concerned with arts and the humanities may have to put more of their own private charitable money where their culturally sensitive mouths are. The thought that those who enjoy driving to and from work listening to those mushy, moralizing collectivist voices on National Socialist Radio – I mean, National Public Radio – may have to pay for it completely out of their own pockets with donations or subscriptions, or from interruptions of their leftie listening pleasure from capitalist commercials (please, please, not that!) is just too, too much for their delicate group-think souls to bear.
At the same time, pocket-picking political plunderers are warning that the poor and aged are threatened with starvation due to the planned cut in spending for “Meals on Wheels.” In fact, 65 percent of the program’s funding comes from private donations or local and state governments, with only 35 percent funded by federal dollars. The day after the release of the “America First” budget blueprint, the media reported that a more than 50 percent increase in the regular rate of private donations had come flooding into Meals on Wheels around the country following the report of the planned cut in the program. Private benevolence – amazingly! – materialized almost instantaneously to replace the coerced dollars with voluntary dollars for a charity that many, clearly, consider worthwhile to support.
Trump’s Vision Leaves the Entitlement State Intact
All of this could warm the heart of the usually despondent and despairing opponent of the overreaching and grasping interventionist and regulatory state. But Donald Trump’s budgetary blueprint for American greatness needs to be put into the wider context of where this still leaves the size and scope of government in the United States.
And, alas, it leaves it seemingly untouched. What is feeding the insatiable growth of America’s domestic system of political paternalism are the “entitlement” programs: the governmental spending surrounding Social Security and Medicare redistribution.
Under current legislation, their cost and intrusiveness will only get worse. The Congressional Budget Office, in its January 2017 long-term federal government budgetary forecast looking to the next ten years, estimates that if legislatively nothing changes the “entitlement” programs will end up consuming nearly 80 percent of all the taxes collected by the United States government.
Since the remaining 20 percent of projected federal tax revenues will not be sufficient to cover all projected defense and other “discretionary” spending plus interest on the national debt between 2018 and 2027; the United States government will continue to run large annual budget deficits between now and then, adding $10 trillion more to the total national debt over next decade.
Donald Trump made it clear during the primary and general presidential election campaigns in 2016 that he considers Social Security and Medicare sacrosanct, not subject to the budget cutter’s chopping block. In addition, ObamaCare may be repealed, but the reform that he and the Republicans leadership in Congress have in mind to replace it will still leave a heavy federal government fiscal footprint. This, too, will maintain and entrench Uncle Sam’s intrusive presence in the healthcare and medical insurance business, and will, inescapably, cost a lot of government dollars, though the full estimates remain to be made.
Many of the Proposed Cuts Likely Will Not Happen
It also needs to be kept in mind that Trump’s budgetary blueprint is merely his administration’s recommendation to the Congress, and especially to the House of Representatives where spending legislation is constitutionally supposed to originate. Already the grumbling has begun to be heard not only from the Democratic Party minority in Congress against the proposed discretionary spending cuts, but from members of the Republican Party majority, as well.
Spending cuts in the abstract almost always serve as good campaign rhetoric, especially for Republicans running for elected office. But like their Democratic Party counter-parts, Republicans soon find themselves pressured and dependent upon the financial support of their own special interest groups, each one of which feeds off government spending dollars in the concrete. The resulting resistance to fiscal repeal and retrenchment turns out to be no different than with the groups surrounding the Democrats. Plus, the Republican foreign policy hawks have all the big-spending military contractors to serve in the name of warding off foreign threats to American greatness.
At the end of the day, when the actual 2018 federal fiscal budget gets passed by Congress and signed by the president, it will no doubt contain fewer of the discretionary spending cuts than proposed in Trump’s blueprint. And the “entitlement” portion of the federal government’s budget will remain untouched, other than adding to it whatever “repeal and reform” emerges out of the contest between ObamaCare versus TrumpCare (or RyanCare).
The Premises of the Entitlement State Must be Challenged
The fact is America is continuing to move in the long-run direction of fiscal unsustainability. The supposed untouchability of the “entitlement” segment of the federal budget will have to be made touchable. Nearly 90 years ago, in 1930, the famous “Austrian” economist, Ludwig von Mises, said to an audience of Viennese industrialists during an earlier economic crisis:
Whenever there is talk about decreasing public expenditures, the advocates of this fiscal spending policy voice their objection, saying that most of the existing expenditures, as well as the increasing expenditures, are inevitable . . . What exactly does ‘inevitable’ mean in this context? That the expenditures are based on various laws that have been passed in the past is not an objection if the argument for eliminating these laws is based on their damaging effects on the economy. The metaphorical use of the term ‘inevitable’ is nothing but a haven in which to hide in the face of an inability to comprehend the seriousness of our situation. People do not want to accept that fact that the public budget has to be radically reduced.
If there is any chance of stopping, reversing and repealing the welfare state, the entitlement language in political discourse has to be challenged. “Entitlement” presumes a right to something by some in the society, which in the modern redistributive mindset equally presumes a compulsory obligation by others to provide the means of having it.
The dollars and cents of the fiscal unsustainability of the entitlement society are essential to emphasize and explain. And there are certainly a sufficient number of historical examples to point to for demonstration that the welfare state can go down a road to societal ruin.
But, in addition, the entitlement mindset must be confronted with an articulate and reasoned defense of individual liberty, on the basis of a philosophy of individual rights to life, liberty and honestly acquired property. Plus, the ethics of liberty must be shown to be inseparable from the idea of peaceful and voluntary association among people in all facets of life. And that government’s role is to secure and protect such liberty and individual rights, not to abridge and violate them.
If this is not done, and done successfully, the road to fiscal failure and paternalistic serfdom may be impossible from which to exit.
[Originally Published at the Future of Freedom Foundation]