Forget Balancing the Budget โ€“ Let's Think Big

Okay, so our pal Sen. Mitch McConnell (R-Ky.) has done a budget deal with Sen. Chuck Schumer (D-N.Y.) that does not do a thing about moderating spending, let alone balancing the federal budget.

And this, we understand, is a Very Bad Thing.

But how bad is it?  Here is a chart of U.S. deficits since 1950, in percent of GDP.

The worst deficits were incurred after the Crash of 2008.  But that is a Good Thing, because after defense, the most important job for government is to be lender of last resort in a financial meltdown.  Oh, and the reason we had a crash at all is because Gentle Ben Bernanke choked in September 2008 as lender of last resort and decided that he didn't have the authority to bail out Lehman Brothers.  Ben, oh Ben.  How could you?

Then there were the Reaganite 1980s with deficits of 4 percent of GDP.  But since Reagan was busy winning the Cold War while reviving the U.S. economy and killing inflation, who is to argue with success?

And now, with the deficit now down to about 2 percent of GDP, what's the problem?

It's true that the entitlements have trillions in unfunded liabilities; that many blue states are facing ruin from underfunded government employee pension programs; and that if nothing is done, we will come eventually to what Kevin Williamson calls "The Crash."

Well, maybe.  But maybe not.

Here's how I think we could beat the rap.  We could have the Trump economy keep going.  We could have Democrats fed to the meat-grinder in the worst U.S. government scandal since Watergate Teapot Dome.  We could have a Trump re-election in 2020 with a 55-45 landslide as ordinary Americans of all races and both sexes come to think that "Trump cares about people like me."  We could have Supreme Court decisions rolling back the fascist totalitarians at the nation's elite finishing schools.  We could have middle-class mothers pushing school choice and elite mothers naming and shaming other elite mothers who don't homeschool.  We could have Steve Bannon's The Permanent Republican Majority atop the bestseller list for 30 weeks straight in 2021.

You think that is crazy?  How about this?

In the mid-2020s, a Generation Alpha, fed up with the snowflakes and victims of Millennials and GenZ, arises to champion the principle of personal responsibility.  Gen-A will say Social Protection means nothing if it is a government program; real social protection means a web of social individuals saving their own money for all the challenges of life: college, sickness, retirement, end of life.  Of course, Gen-A wants to provide for the less fortunate, but government sucks at that, so Gen-A wants to create a true safety net of people helping people, backed up by a Billionaires Club that only the nine richest self-made men and one self-made woman in America can join; liberal trustafarians need not apply.  There won't be many schools, except for KIPP-type schools to boost inner-city kids that need a boot camp in bourgeois values and crammers to get the children of liberal trustafarians into Harvard.  Most mothers will home-school alongside the other mothers in the neighborhood.  And we'll do away with child labor laws, because Gen-A thinkers will insist that kids should work while they learn, and why not have employers subsidize the education of their employees as in the olden time?

Yeah.  Americans can be dreamers, too.

For sure, humans naturally want protection, because there are nasty dangers out there.

Government offers protection.  But so does insurance, and so do savings, and so do families, and so does charity, and so does billionaire philanthropy.  All these different social institutions offer protection for different things, in different ways.  And they do it well.

Government is force, so its protection should be for dangers that can be mitigated only by armies and policemen.  And the occasional regulator that does his job, Ben.

Insurance is protection against unusual dangers; savings is for protection against predictable dangers; families are for protection of those nearest and dearest.  Charity is to rescue people driven into the ditch.  Philanthropy is a good way of keeping rich men out of trouble.

The question is, how much shall we force some Americans to protect other Americans from danger?  Shall we protect American workers from Chinese workers?  Shall we protect employees from employers?  Shall we protect mature industries from startups?  From Walmarts and Amazons?  Shall we protect special snowflakes from haters?  By force?

That's why we have a budget deficit: because a lot of people want to force the American people to help them, but not quite as many people want to pay for it.

One more thing: no pensions for government employees.  These low-risk lifers should pay for their own bloody retirement.

Christopher Chantrill @chrischantrill runs the go-to site on U.S. government finances, usgovernmentspending.com.  Also get his American Manifesto and his Road to the Middle Class.

Okay, so our pal Sen. Mitch McConnell (R-Ky.) has done a budget deal with Sen. Chuck Schumer (D-N.Y.) that does not do a thing about moderating spending, let alone balancing the federal budget.

And this, we understand, is a Very Bad Thing.

But how bad is it?  Here is a chart of U.S. deficits since 1950, in percent of GDP.

The worst deficits were incurred after the Crash of 2008.  But that is a Good Thing, because after defense, the most important job for government is to be lender of last resort in a financial meltdown.  Oh, and the reason we had a crash at all is because Gentle Ben Bernanke choked in September 2008 as lender of last resort and decided that he didn't have the authority to bail out Lehman Brothers.  Ben, oh Ben.  How could you?

Then there were the Reaganite 1980s with deficits of 4 percent of GDP.  But since Reagan was busy winning the Cold War while reviving the U.S. economy and killing inflation, who is to argue with success?

And now, with the deficit now down to about 2 percent of GDP, what's the problem?

It's true that the entitlements have trillions in unfunded liabilities; that many blue states are facing ruin from underfunded government employee pension programs; and that if nothing is done, we will come eventually to what Kevin Williamson calls "The Crash."

Well, maybe.  But maybe not.

Here's how I think we could beat the rap.  We could have the Trump economy keep going.  We could have Democrats fed to the meat-grinder in the worst U.S. government scandal since Watergate Teapot Dome.  We could have a Trump re-election in 2020 with a 55-45 landslide as ordinary Americans of all races and both sexes come to think that "Trump cares about people like me."  We could have Supreme Court decisions rolling back the fascist totalitarians at the nation's elite finishing schools.  We could have middle-class mothers pushing school choice and elite mothers naming and shaming other elite mothers who don't homeschool.  We could have Steve Bannon's The Permanent Republican Majority atop the bestseller list for 30 weeks straight in 2021.

You think that is crazy?  How about this?

In the mid-2020s, a Generation Alpha, fed up with the snowflakes and victims of Millennials and GenZ, arises to champion the principle of personal responsibility.  Gen-A will say Social Protection means nothing if it is a government program; real social protection means a web of social individuals saving their own money for all the challenges of life: college, sickness, retirement, end of life.  Of course, Gen-A wants to provide for the less fortunate, but government sucks at that, so Gen-A wants to create a true safety net of people helping people, backed up by a Billionaires Club that only the nine richest self-made men and one self-made woman in America can join; liberal trustafarians need not apply.  There won't be many schools, except for KIPP-type schools to boost inner-city kids that need a boot camp in bourgeois values and crammers to get the children of liberal trustafarians into Harvard.  Most mothers will home-school alongside the other mothers in the neighborhood.  And we'll do away with child labor laws, because Gen-A thinkers will insist that kids should work while they learn, and why not have employers subsidize the education of their employees as in the olden time?

Yeah.  Americans can be dreamers, too.

For sure, humans naturally want protection, because there are nasty dangers out there.

Government offers protection.  But so does insurance, and so do savings, and so do families, and so does charity, and so does billionaire philanthropy.  All these different social institutions offer protection for different things, in different ways.  And they do it well.

Government is force, so its protection should be for dangers that can be mitigated only by armies and policemen.  And the occasional regulator that does his job, Ben.

Insurance is protection against unusual dangers; savings is for protection against predictable dangers; families are for protection of those nearest and dearest.  Charity is to rescue people driven into the ditch.  Philanthropy is a good way of keeping rich men out of trouble.

The question is, how much shall we force some Americans to protect other Americans from danger?  Shall we protect American workers from Chinese workers?  Shall we protect employees from employers?  Shall we protect mature industries from startups?  From Walmarts and Amazons?  Shall we protect special snowflakes from haters?  By force?

That's why we have a budget deficit: because a lot of people want to force the American people to help them, but not quite as many people want to pay for it.

One more thing: no pensions for government employees.  These low-risk lifers should pay for their own bloody retirement.

Christopher Chantrill @chrischantrill runs the go-to site on U.S. government finances, usgovernmentspending.com.  Also get his American Manifesto and his Road to the Middle Class.