Obama, Dems Play Budget Games

The day before the big November 30 summit meeting on the budget, president Obama ordered a 2-year pay freeze for 2 million federal employees.


Woop-dee-doo. He said it will save $2 billion this year. It sounds like a good start to controlling spending.


Actually it is completely fake because it is just $2 billion extra that we would not be spending next year. It does nothing to actually reduce the massive deficit. And don’t think for a millisecond that back pay for those employees will not be inserted in legislation down the road as soon as it can be worked out.


Perhaps Obama could pay for the debt or for Democrats’ huge unemployment benefits extension ($12 billion) or for “reparations” for black farmers and native Americans ($4.6 billion) through savings generated by actually cutting federal salaries. So that his own bloated, overpaid constituency for once can help out with the debt, the unemployed, black farmers and native Americans, so they too can find out what it is like to be hounded for money like the taxpayer is every day.


Obama also did not mention the other side of the story, that generous benefits and pension for those federal workers will not be affected and that the salaries of federal employees and the size of the federal workforce have been skyrocketing for the last decade – even in the recession – and that any pay freeze today is a potemkin measure that would be like taking a cupcake away from an 800 lb. glutton.


The government is obese and it must go on a big diet. The three richest counties in America per capita all surround Washington, DC. What does this say?


It says that unionized government workers are making too much money, while they are among the least productive people in the American labor force, working less, retiring earlier and actually detracting from economic growth. Because each of their jobs is “crowding out” two or three jobs in the private sector.


Labor unions have been declining for decades in the private sector. They did huge damage to America in their heyday, driving thousands of companies and even entire industries (steel, railroads) into bankruptcy with their outrageous wage, benefit and pension demands, and their ridiculous work rules. Thus today workers are intentionally voting against unionization.


But now unions of government workers are doing the same damage – driving the whole nation into bankruptcy, and entire states too. Just look at California which is controlled lock, stock and barrel by the Democrat party.


Do we need all these federal workers in Washington?


No. We can get along with half of them and get the remaining half to work a whole day (like the rest of us) and with their pay cut 20%.


Obama made his pay-freeze gesture as the opening gambit in budget talks. And this gambit is supposed to suggest that “I, Obama, gave in on a critical issue, daring to freeze the pay of people who are part of my core constituency. Now the Republicans must make big concessions too.”


Nonsense. This Obama “concession” is nothing at all, just a subterfuge so that the media now can hound Republicans to make giant compromises across the nation by raising taxes, new taxes, value-added taxes, excise taxes, big tax hikes, huge tax increases and massive tax spikes.


And gutting the military, of course.


The United States is in a serious economic crisis, and so is the whole world, for one reason only – debt. And debt comes from government leftists worldwide spending nations into oblivion, something conservatives have been warning about for centuries. The Founding Fathers of America repeatedly warned about debt and about the way that government can control societies and drive them into debt by recklessly spending Other People’s Money.


America currently is reaching the point where our national debt is equal to our annual Gross Domestic Product, which it rarely has been before, only at the end of World War II after astronomical expenditures on the war.


Obviously no rational person would choose to have debt because debt is destructive. The whole idea of debt is a huge burden on the minds and the budgets of individuals, families and companies at all times, and it now is a burden on our collective minds and our national budget through the fault of one group – Democrats in Congress.


Even Europe has come to understand their debt crisis. After decades of welfare-state spending, the calamity is spreading across the Continent to Spain which is one of the most left-leaning nations in Europe. And it has one of the most bankrupted economies to show for it with deep debt, sky-high unemployment and the wreckage of its decade-long experiment with ‘green energy’. Meanwhile Portugal‘s parliament has passed a budget for 2011 that is intended to reduce the country’s deficit from 9.3% of GDP in 2009 to below 3% by 2013.


In other words, they finally are making real cuts now that the storm is on the horizon.


Good. Sometimes a crisis is what is needed.  


Meanwhile Ireland’s government said it will cut spending by a whopping 20%(!) and raise taxes over the next four years. Welfare cuts of $3.8 billion (American) and income tax increases of $3 billion are among the steps planned to narrow the budget deficit to 3% of gross domestic product by the end of 2014, while it will be 12% of GDP this year. America’s current annual deficit is about 9.5%.


Ireland only has a population of about 4.6 million people.


Ireland plans to cut pay for new entrants to the state workforce by 10% and to whittle the minimum wage by 11%, both steps in the right direction.  And Ireland plans to maintain its 12.5% corporate tax rate that has been criticized by some European governments. America’s corporate rate is 35%.


Yet Ireland’s low rate, criticized by the left, has attracted many employers and much wealth and so must be maintained to insure future growth. Hewlett-Packard, the world’s largest computer maker, said that it may reconsider its investment in Ireland if the country raises its business tax rate as part of a Euro bailout.


But still there will enormous pressures here to raise taxes and spend, spend, spend. In the United States, despite the fact that the collapse of Fannie Mae caused most of the economic meltdown, Fannie still was kept out of new regulation under the financial reform bill because Democrats are going to continue to spend and spend without regard for the future or for our present circumstance. And this is why we have this crisis in the first place.


And who is paying zero to solve the crisis?


Answer: The core constituency groups of the left – featherbedding government employee unions, the handout poor, the state bureaucracy, the university elite whose exorbitant tuitions are ruining America’s families, labor unions with fat government contracts, and rich liberal urbanites with massive stocks of sheltered wealth who give their campaign contributions to the Democrat party.   


They should now pay the cost of our new austerity, because they are the ones who have been benefiting over the last 30 years.


Please visit my website at www.nikitas3.com for more. You can read excerpts from my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.