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About this blog: I am a native of Alameda County, grew up in Pleasanton and currently live in the house I grew up in that is more than 100 years old. I spent 39 years in the daily newspaper business and wrote a column for more than 25 years in add...  (More)

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Washington D.C. speak

Uploaded: Feb 26, 2013
The manufactured crisis in the nation's capitol is just amazing.
Thanks to the profligate spending by Congress and the president and despite having no budget for four years, there is seeming hysteria about cutting about 2.5 percent of the budget. The laundry list of substantial cuts in services for each state that the White House issued over the weekend was dutifully reported by media outlets. A few of them actually asked the next question—the federal budget is up 19 percent since President Obama took office and the cuts are pretty trivial—what is the big deal.
How many American families have dealt with diminished income—in real terms? You have to remember that a "cut" in Washington D.C. speak is a reduction in the anticipated increase in spending, not spending less money. The sequestration reduces the rate of increase over 10 years, not actual spending. That's the scam that Washington D.C. has played upon the citizens for decades—reducing the spending rate is considered a cut. In an expanding economy the reduction in the rate of growth will close the gap.
It's also worth remembering that the country is borrowing about 46 cents of every dollar that is being spent—a trajectory that makes the unfunded pension liabilities in California and many of its governments look pretty manageable by comparison.
Consider other examples—California's governors and legislatures, most specifically Gov. Arnold Schwarzenegger, manipulated numbers on revenue and borrowed excessively to close the budget gap on paper over the last decade. The gap was real—revenues had plunged about 25 percent at the depths of the recession and there was no appetite to truly close the gap.
The Bay Area News Group ran a retirement story this week about the Antioch city manager that shows just how dramatically and quickly things can change and require immediate change from government (that's why Pleasanton has numerous reserve funds for economic uncertainty and equipment replacement—and Pleasanton still instituted a hiring freeze when the economy started to go south).
Revenues in Antioch went from $47 million to $34 million over four years as new home construction dried up and sales tax revenue went with it. That required three rounds of layoffs, employee benefit and salary concession and stringent other spending restrictions. It was necessary because cities cannot run deficit budgets.
Oh, for such requirements at the federal level which is addicted to borrowing and spending (revenues this year will be at an all-time high and there's still the 46-cent per dollar deficit spending).

Comments

Posted by Daveg, a resident of Birdland,
on Feb 26, 2013 at 10:29 am

Daveg is a registered user.

I believe Tim has objectively commented on this entire sequestration farce. So many people are buying into Obama's scare tactics as he continues his political campaigning on the road rather than actually sitting down with both parties and working out a true, workable plan. It's worth noting that Obama was determined not to face another debt-limit increase before his re-election campaign. He scuttled a bipartisan agreement prior to the election and instead proposed a "sequester." The sequester was initially proposed as a deal so bad that Republicans and Democrats would have to come up with something better. But as deadlines have passed, neither side has provided an alternative that is acceptable to the other. Obama can't be bothered to actually spend a few hours working out a sensible sequester plan with the Republicans. Apparently it's more important to keep on bashing the Republicans if the sequestration goes through as planned.
The Wall Street Journal itself weighed in in an editorial, referring to a recent White House event that Obama hosted, saying that "Americans can expect more such melodrama in the coming days."
And they have been correct!


Posted by liberalism is a disease, a resident of Birdland,
on Feb 26, 2013 at 9:17 pm

liberalism is a disease is a registered user.

Geez, Tim, how dare you cast some light on the manufactured crisis of leadership that is oblamo. To reiterate one of your salient points, most private sector employees have had to do without for a few years now and all we hear is wring, gloom and doom and claims the world will end when the govt only has to reduce their INCREASE IN ANNUAL SPENDING. Whiny beeyatches, grow up.


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