AMERICAN CONSERVATISM IN 2008 AND BEYOND

Policy Analysis
Downsizing the Federal Government

by Chris Edwards

Chris Edwards is director of fiscal policy studies at the Cato Institute.

Executive Summary

The federal government is headed toward a financial crisis as a result of chronic overspending, large deficits, and huge future cost increases in Social Security and Medicare. Social Security and Medicare would be big fiscal challenges even if the rest of the government were lean and efficient, but the budget is littered with wasteful and unnecessary programs.

In recent years, mismanagement scandals have occurred in many federal agencies, including the Army Corps of Engineers, the Bureau of Indian Affairs, the Department of Energy, the Federal Bureau of Investigation, and the National Aeronautics and Space Administration. Even the National Zoo in Washington has recently been shaken by scandal. The $2.3 trillion federal government has simply become too big for Congress to oversee.

The good news is that Americans do not need such a big government. Most federal programs are unconstitutional, unnecessary, actively damaging, or properly the responsibility of state governments or the private sector. This study analyzes programs that could be cut to create annual budget savings of $300 billion. If these cuts were phased in over five years, the budget would be balanced by fiscal year 2009 with all of President Bush's tax cuts in place.

Some reform ideas should be applied throughout the government. Business subsidies should be terminated, and commercial activities should be privatized. Also, federal grants to the states should be scaled back. Currently, a complex array of 716 grant programs disgorges more than $400 billion annually to state and local governments, which become strangled in federal regulations. That form of "trickle-down" economics is very inefficient.

Such reforms were on the agenda in the Reagan administration and in the Republican Congress of the mid-1990s. But the need for spending cuts is even more acute today because of the large fiscal imbalances that loom from projected growth in entitlement costs. Spending cuts would not just balance the budget; they would also increase individual freedom and expand the economy. All federal spending displaces private spending, but many federal programs actively damage the economy, cause social ills, despoil the environment, or restrict liberty as well.

Given the government's record of mismanaged and damaging programs reviewed in this report, policymakers should be far more skeptical about the government's ability to solve problems with higher spending.
Full Text of Policy Analysis No. 515 (PDF, 68 pgs, 347 Kb)

The federal government is headed toward a financial crisis as a result of chronic overspending, large deficits, and huge future cost increases in Social Security and Medicare. Social Security and Medicare would be big fiscal challenges even if the rest of the government were lean and efficient, but the budget is littered with wasteful and unnecessary programs.
...
Given the government's record of mismanaged and damaging programs reviewed in this report, policymakers should be far more skeptical about the government's ability to solve problems with higher spending.
Full Text of Policy Analysis No. 515 (PDF, 68 pgs, 347 Kb)

About 90 percent of the benefits from capital investment goes to workers in the form of higher wages due to increased productivity, according to a study by the National Center for Policy Analysis...
WALL STREET JOURNAL

ftp://ftp.bls.gov/pub/suppl/empsit.cpseea1.txt
Total employment in the USA in:
December 2006 = 144,427,000
December 2007 = 146,047,000 (The high employment year for Bush that began with 136,933,000 in 2001)
December 2008 = 143,338,000
January 2009 = 142,099,000.

http://www.bls.gov/news.release/pdf/empsit.pdf
October 2009 = 138,242,000
November 2009 = 138,381,000
December 2009 = 137,792,000

You may have gone to flying school, but your knowledge about economics is zilch.

ftp://ftp.bls.gov/pub/suppl/empsit.cpseea1.txt
Total employment in the USA in:
December 2006 = 144,427,000
December 2007 = 146,047,000 (The high employment year for Bush that began with 136,933,000 in 2001)
December 2008 = 143,338,000
January 2009 = 142,099,000.

http://www.bls.gov/news.release/pdf/empsit.pdf
October 2009 = 138,242,000
November 2009 = 138,381,000
December 2009 = 137,792,000

“Friday, a spokesman for Secretary of the [Massachusetts] Commonwealth William Galvin, who is overseeing the election but did not respond to a call seeking comment, said certification of the Jan. 19 election by the Governor’s Council would take a while.
“Because it’s a federal election,” spokesman Brian McNiff said. “We’d have to wait 10 days for absentee and military ballots to come in.”
“Another source told the Herald that Galvin’s office has said the election won’t be certified until Feb. 20 - well after the president’s address.
“Since the U.S. Senate doesn’t meet again in formal session until Jan. 20, Bay State voters will have made their decision before a vote on health-care reform could be held. But Kirk and Galvin’s office said Friday a victorious Brown would be left in limbo.”

“In contrast, Rep. Niki Tsongas (D-Lowell) was sworn in at the U.S. House of Representatives on Oct. 18, 2007, just two days after winning a special election to replace Martin Meehan. In that case, Tsongas made it to Capitol Hill in time to override a presidential veto of the expansion of the State Children’s Health Insurance Program.”

When long time aide and confidant of the late Sen. Edward M. Kennedy… and interim Sen. Paul Kirk , who was handpicked by Gov. Deval Patrick, was asked whether he would vote for the Dems ‘Health care’ bill he said “Absolutely, “It would be my responsibility as United States senator, representing the people and understanding Senator Kennedy’s agenda. . . . I think you’re asking me a hypothetical question but I’d be pleased to vote for the bill.”

a survey by the Democratic firm Public Policy Polling found the race a dead heat, with Mr. Brown up 48% to 47%. The scary prospect for Democrats is that the race is even this close on their home ideological turf, and turnout is always difficult to predict in special elections.

...especially true in midwinter and with a voting public that is increasingly opposed to the Democratic agenda in Washington. The Public Policy Poll found that likely Bay State voters oppose the Democratic health plans by 47% to 41% and that they give President Obama only 44% job approval. This in a state he carried by 26 points only 14 months ago. It also found Republicans much more motivated to vote than Democrats.

" ...especially now that the unions and national Democrats have become alarmed by the polls.

Brown has campaigned on the fact that if elected he would be the 41st vote to kill Obamacare.