Reagan speaks on deficits, spending, and debt

Government spending and national defense are among the key topics whenever Ronald Reagan's legacy is discussed. Reagan is credited with rebuilding the military into a force capable of projecting America's presence anywhere in the world. He is also criticized for increasing the national debt even though federal revenues increased during his administration, which is an indictment of Congress' long-term lack of fiscal discipline.

Today's America can only long for the late Ronald Reagan's leadership. Then again, perhaps he's still on the job. A portion of his legacy can help us appreciate our military prowess while simultaneously understanding our unimaginable indebtedness.

The Gipper would certainly be pleased with the USS Ronald Reagan (CVN-76), a state-of-the-art warship right down to the life rafts. The USS Reagan epitomizes the term "supercarrier." With a 90-aircraft air wing, fire and forget missile defenses, and various radar, jamming, and countermeasure systems, the Reagan is adequately equipped to fulfill the former President's defensive strategies.

Since its commission in 2003 the Reagan has indeed impressed America's military might on all who see her. She's a crowning achievement in technology, maneuverability, speed, and reliability. For some Americans the Reagan represents the nation's commitment to excellence and innovation, and complements the former President's "peace through strength" ideology. But the USS Reagan stirs emotions on the other side of defense spending, too.

To Americans critical of military spending, the USS Reagan represents waste and a bully mentality. She is a $4.5 billion floating testament to misplaced national priorities. A progressive peace activist might argue that the USS Ronald Reagan is a budget-busting monument to America's military-industrial complex.

The Reagan is justified in Congress' constitutional duty to "provide and maintain a navy" (Art. I, Sect. 8). Even so, for the purpose of honest debate, a few points must be conceded to the Pentagon's detractors. Certainly there's waste in the defense budget, waste that can be trimmed without sacrificing needed upgrades, unit cohesion, or overall preparedness. Also, $4.5 billion is a pile of bucks no matter how you stack them, meaning the Reagan can illustrate our record budget deficits, federal spending, and national debt. But not in the way defense critics think.

What could each American household do with its share of the Reagan's $4.5 billion price tag? You might take the family out for pizza, but that's about all. Based on Census Bureau statistics for 2003, the USS Reagan cost each American household only $40.43, meaning the ship's construction had little impact on Washington's chaotic finances. However, it can help us understand the vastness of federal spending.

Any attentive person knows the federal deficit has grown unchecked, reaching $1.3 trillion in both 2010 and 2011. What isn't so obvious is that each $1.3 trillion in deficit spending would buy 288 aircraft carriers built to the same specs as the USS Reagan, with spare parts to boot. The federal government spent $3.6 trillion last year alone, a total that could build the Reagan 800 times. Based on the accumulated national debt -- currently $14.8 trillion and closing in on 100-percent of GDP -- we have borrowed enough money to provide the USS Ronald Reagan with 3,288 sister ships, again with spare parts leftover.

If many aircraft carriers are a good policy, are bigger aircraft carriers a better policy? Just how big would the USS Reagan be if its size were measured in federal spending? Dividing the ship's final construction cost by its overall length ($4.5 billion/1092 feet) shows that each foot of the Reagan cost the taxpayer $4.12 million. How much carrier can we then buy? Well, that depends on the chosen model.

The "Annual Red Ink" class, based on our $1.3 trillion deficit, could build a "supercarrier" measuring 315,533 feet from bow to stern. And that's the dove version. A more hawkish model, the "Yearly Expenditures" class (based on $3.6 trillion in annual spending), sails at an overall length of 873,876 feet. Now that's a "super-supercarrier." Not enough? Try the "National Debt" class, a genuine "super-duper-supercarrier," boasting a flight deck 3,592,233 feet long.

The USS Reagan's actual 1092-foot long flight deck is impressive. But the enormity of a carrier deck based on the aforementioned numbers is unimaginable. For ease of comprehension let's convert the feet into miles and apply the results geographically.

The "Annual Red Ink" class of aircraft carrier would be 59.75 miles long, approximately half the length of Long Island, NY. The "Yearly Expenditures" class, at 165 miles long, would stretch from Atlanta, GA to Montgomery, AL. Saving the best for last, a pilot on the "National Debt" class could travel from New York City to Myrtle Beach, SC and never leave the flight deck.

The point of this illustration isn't that America should've constructed 3,288 aircraft carriers. The point is to highlight the central government's disregard for its fiduciary duties. Washington spends a trillion dollars like the rest of us put change in a Coke machine. Slick-talking politicians can continue their lies, pretending to understand the fiscal mess they've created. But thanks to the USS Ronald Reagan and a 13-digit calculator, politicians can't continue bankrupting this country while believing the public is ignorant of the disservice they're committing.

America’s chickens are roosting in a train wreck

Rev. Jeremiah Wright infamously declared that America’s chickens had come home to roost. He was speaking of the 9/11 attacks, and his opinion brought him well-deserved scorn. The loosest of canons in the Trinity United Church of Christ may have been justified had he said America’s chickens would roost in the Congressional Rotunda or the Obama White House.

Like hens and roosters, our alleged representatives preened and crowed over the debt ceiling deal they hammered together earlier this week. They’ve mugged for the cameras of a cooperative media, patted each other on the back, and flashed the "thumbs-up" sign. After finishing their latest work -- "on behalf of the American people" -- our federal rulers were all smiles while mopping their brows as if they had just dug a four-mile ditch through rocky ground.

Washington may view their latest contribution to American insolvency as reason to spike the football and exchange high-fives all around. But those of us in the great unwashed see their work as one collective mooning from 535 juvenile delinquents, plus one gigantic bird-flipping from the Delinquent-in-Chief. We’ve been had . . . again! Washington dug a ditch, no doubt. But through that ditch will flow a torrent of red ink, drowning yet another generation of unborn Americans in a debt they didn’t create, authorize, or deserve.

The entire debt ceiling debate was predicated on falsehoods. Didn’t our betters tell us a debt ceiling increase was essential to preventing default and maintaining the nation's stellar credit rating? Wasn't increasing our debt the only way to prevent a stock market collapse? Washington employed a scorched earth strategy on the American people, using misrepresentations and utter lies to instill a false fear in the population. Moody’s promised a wait-and-see attitude toward the latest Washington spending spree and Standard & Poor's issued a downgrade, exactly what the debt ceiling increase was promised to prevent. If our credit rating sinks it will join the New York Stock Exchange, which has faltered since government announced it had approved itself for a new series of loans.

Factually, can extending the national debt breed confidence in America's national creditworthiness, considering the current debt isn't being repaid? If you or I attempted a similar stunt we’d be arrested, tried, and jailed for credit fraud. At the least we’d see our credit lines cancelled and be forced to live within our means. However, to our federal house of lords, living within our collective means makes as much sense as the evening news from Jupiter’s third moon. Nothing has changed. Washington will go on pretending it can borrow its way out of debt, which is as logical as trying to dive out of the ocean.

Not even the numbers make sense. Of course, it’s difficult to imagine numbers in the trillions. So let’s put them in perspective. If each dollar of the current $14.57 trillion national debt equaled one second of time, the total debt would equal 462,011 years. And we don’t have a debt problem? The figures Washington elites have tossed about don’t add up, either.

The debt ceiling deal promises spending cuts of $2.1 trillion over 10 years, or $210 billion annually. Conversely, the government can now borrow an additional $2.4 trillion, which will satisfy Washington’s credit appetite only until 2013. We can add another $3.3 trillion in federal tax revenues to what Washington will “borrow” over the next 16 months. If the intent weren't to spend the entire $3.3 trillion, the borrowed funds wouldn’t be necessary. And if the borrowing will only feed the government beast for 16 months, the intent must be to spend all revenues, both collected and borrowed. Thus Congress and the White House plan to blow through $5.7 trillion by January 2013, an average of $356 billion per month.

Math isn’t my strongest subject. Maybe it isn’t yours either. But this much I know; $5.7 trillion dollars spent in less than a year-and-a-half exceeds $2.1 trillion saved over ten years. And we must accept on faith that the promised “cuts” will actually materialize. Faith, in this case, may as well be a synonym for naiveté. You might have faith in the innate goodness of the snarling pit bull inside your neighbor’s fence. But stick your leg through the gate and the dog will gnaw it to the bone. Government is gnawing us, too, in the wallet and elsewhere.

The debt ceiling plan is pure fantasy. J.K. Rowling couldn’t have written it better. The spending reductions don’t exist. They’re a magician’s trick, at best only slight reductions in the rate of growth. The new debt limit, which will undoubtedly be raised again once it's reached, is our rulers' solemn pledge to spend this nation into oblivion.

The federal government is a runaway train, hurtling down a steep grade and gaining speed. With the cliff in sight, Engineer Obama is pushing the throttle full forward while Senators and Representatives from both parties shovel coal into the firebox. If we don’t pull the brake, hard and quick, the most dynamic economic engine the world has ever known will be a smoldering hunk of mangled steel. All the while our federal chickens cluck, strut, and preen over their latest bipartisan compromise.

Rev. Wright may be proven a prophet after all. America’s chickens are coming home to roost . . . in a train wreck.

Stark reality on the debt ceiling

The debt ceiling debate is a political charade. Democrats are simply doing what they’ve previously done. The threat about a government shutdown is an empty political bluff. No reasonable person can claim the government hasn’t acquired too much debt. So, extending the debt limit means the government’s credit card doesn’t run dry.

This opinion of the debt ceiling debate sounds like a synopsis of the Rush Limbaugh Program. But it’s not. Actually, California Rep. Pete Stark provided this analysis of the debt ceiling debate. And just so there are no misconceptions, let’s affirm that Rep. Stark has no political commonality with Limbaugh.

If governing left is described as walking westward, Pete Stark has one foot in the Pacific Ocean. A brief review of his record provides all the testimony required to convict Pete Stark as one of Congress’ most fervent liberals. He is a man in love with his position; a man superior to his great unwashed constituency. In short, he is the kind of politician we would expect to manipulate the debt limit extension for personal gain.

This is Pete Stark, who once quipped to an ObamaCare opponent, “I wouldn’t dignify you by peeing on your leg. It wouldn’t be worth the waste of urine.” This is Pete Stark, who believes the federal government faces few, if any, constitutional restraints. Rep. Stark is a Washington insider, thoroughly versed in political grandstanding and gamesmanship. For him to call the debt limit debate a “political charade” is like Bill Clinton declining a bimbo’s phone number.

Pete Stark’s candor confirms what the astute observer has long believed about the debt ceiling. Political chicanery is driving this crisis. The Beltway establishment, at work in both political parties, is using the debt ceiling to sow doubt and fear in the American public. Politicians are defending their turf, forecasting calamitous ruin unless their way is followed. The elderly will die, the nation will default and ruin our bond rating, and total chaos will ensue. It’s all spin, a dastardly charade.

Debt ceiling or not, revenue will remain available for the federal government’s essential obligations. Federal revenue averages $180 billion to $210 billion per month. Debt interest and Social Security payments consume about $100 billion per month. Moody’s threat to lower the United State’s AAA rating is tied more to Washington’s failure to reduce deficit spending than failing to increase debt. So, if the debt ceiling isn’t raised and the projected calamities ensue, we should blame government demagogues (mostly liberals) whose political security depends on creating public fear and paralysis.

Only Pete Stark knows if he intentionally exposed Washington’s manipulation of the debt limit debate. Purposeful or not, he was right on target. What we’re witnessing is a charade, pure political theatre. Americans are being led down a primrose path by blind guides whose only concern is spinning the situation for favorable media play and campaign talking points. That is the debt ceiling debate’s stark reality.

Cap, Cut and Balance was preferable, but still flawed

If there were an elephant in your swimming pool would you need to call attention to it? An elephant is difficult to miss and impossible to intentionally ignore. So the problem isn’t in realizing the elephant’s presence, but in removing it from the pool. Federal debt presents a similar predicament, dominating an economy like an elephant does a swimming pool. The question is what can be done about the debt elephant?

One idea for addressing Washington’s spendthrift habits is a balanced budget amendment to the U.S. Constitution. Theoretically, under constitutional mandate the federal government would be forced to balance annual expenditures with receipts. However, requiring the federal government to balance the budget and forcing it to control spending are quite different.

A balanced budget amendment without spending controls is a disaster in the making. Once ratified, politicians who favor tax hikes could argue the Constitution mandates tax increases to meet projected spending levels. To be useful, a balanced budget amendment must respect the Constitution’s spirit of limited government.

Cap, Cut and Balance addressed the fear of constitutionally imposed tax increases. Modeled after H.J.RES.1, it limited federal spending to 18-percent of GDP, required a supermajority to raise taxes, and introduced a balanced budget amendment to the states. With egregious taxation and federal spending limited, a balanced budget amendment could finally fulfill the promise its proponents have long claimed.

Of course, optimism plays well in an ideal world. Reality is far from ideal. Cap, Cut and Balance passed the House with relative ease. But it had no chance to pass the Democrat-controlled Senate and would never have escaped Obama’s veto pen. Democrats will support nothing more than token spending reductions. Thus any compromise on a balanced budget amendment would lack spending controls, making it a constitutional mandate for tax increases. Such a scenario would suit Democrats just fine.

But problems existed even in the House version of Cap, Cut and Balance. It would’ve increased the debt ceiling by 18-percent, to $16.7 trillion. To put that number in perspective, consider each dollar as one second in time and do the math. A $16.7 trillion debt equals 529,553 years. Chew on that number, if you can do so without choking. Furthermore, a balanced budget amendment would have, at best, only symbolic effect until ratified by 38 states (U.S. Constitution, Article V). Before the proposed amendment could become part of the Constitution the debt ceiling could be raised several more times.

Was Cap, Cut and Balance mere political theatrics, a distraction orchestrated to divert the public’s attention from the federal elephant in the swimming pool? Or did it represent action toward curing Washington’s debt addiction? Actually, it was both. While easily the lesser of all current evils, Cap, Cut and Balance remained flawed nonetheless.

Looking through a Greek crystal ball

When the Dow suffered a 1000-point nosedive some experts pointed a quick finger at Greece’s financial insolvency and social disorder. I’m no international financier, but it seemed odd that such a small Mediterranean nation could so affect the U.S. markets. Are we so fragile?

Greece’s population (10.7 million) is roughly equal to Ohio’s, and only 3-percent that of the United States. Geographically, Greece is about the size of Alabama. Their 50,948 square miles is miniscule compared to the United States’ 9.28 million. Alaska is 13 times larger than Greece and seven U.S. states exceed its population.

Greece’s GDP is about 2-percent of U.S output, a drop in the proverbial bucket. Thirteen U.S. states produce greater economic activity than Greece generates. Their exports are a fraction of our own and only 5-percent of the total Greek exports find their way to American shores ($106.8 million annually). Our exports to Greece are statistically insignificant.

Given the small role Greece plays in our economy, why did our stock market react so violently to their financial and civil problems? Well, it didn’t. It turned out that a trader erroneously entered a $16 million trade as $16 billion, sparking a massive sell off and the associated panic. Greek finances didn’t trigger our slide at all. However, their unrest can disturb U.S. markets if America’s future is seen inside this Greek crystal ball.

Greek rioters have torched buildings and lobbed Molotov cocktails at police. An Athens bank was burned, killing three bank employees. Why has incivility gripped this cradle of ancient culture and civilization? According to a union leader the Greeks are loosing their rights and their future. However, what actually fueled their rage is the imminent death of the free ride.

I hesitantly paraphrase Jeremiah Wright: Greece’s financial chickens are coming home to roost. Greece has long overspent its income and juggled its books. Thus public employees enjoyed escalating salaries, extravagant pensions and numerous unsustainable perks. That gravy train has now reached the edge of the cliff and the beneficiaries refuse to let go of the caboose. The riots are the result of Greece’s dependent class, people with no intention of providing for their own needs.

This should sound familiar; America is riding the same train. Just as Greece’s fiscal insanity has created a dependent class of government workers, America has also. In fact, we have created an even greater entitlement mentality.

The United States has a burgeoning public sector while private sector hiring is stagnant. Life’s necessities have become quasi-constitutional rights in the eyes of a gullible public and a pandering, manipulative government bureaucracy. Our government, just like the Greek government, has issued promises it can’t fulfill.

Our national debt is approaching 100-percent of GDP. Social Security and Medicare are going broke, their “trust funds” depleted and their long-term obligations beyond impossible. Medicare Part D will unquestionably follow both into insolvency and now we have a national healthcare system to boot. At least Greece’s politicians are attempting government austerity. Our politicians are doubling down on a pair of deuces.

The streets of Greece could be a harbinger of things to come. What happens when our government can no longer print its way into a fraudulent form of financial solvency? What happens when those who’ve long lived on the public dole discover that the cash cow is dry? If you think they’ll sigh and say, “Oh well. Better get a job,” you’re fooling yourself. They won’t graciously accept the end of the free ride, meaning Greece’s rioting might resemble a frat party in comparison.

Greece is a prime example of rewarding demand rather than production. Political exploitation and personal selfishness have reduced the once-proud Greeks to begging at the world’s feet. Their present may be a glimpse of our future.

Orignially published at AmericanThinker.com.