Balanced budget debate — “Next man makes a move, the [sheriff] gets it!”

Remember that scene from Blazing Saddles? (Yes, I know he didn’t say “sheriff.”  I’m not up for a PC death match over a stupid word.)  The townsfolk, enraged that their new sheriff is “of color,” form a lynch mob and things are looking inescapably grim for the hero (Bart — hilariously played by Cleavon Little).

Without a second to spare, he pulls his gun out and points it at his head and declares “Hold it! Next man makes a move, the [sheriff] gets it!”

In the face of this ruse, the ignorant sod-busters immediately forget their original intentions…

“Isn’t anybody going to help that poor man? ”
“Hush, Harriet! That’s a sure way to get him killed!”

It’s make-your-sides-hurt funny, because it’s so preposterous.  I thought.

But in the here and now, the townsfolk were fed up, enraged over the mind-boggling debt tsunami and about to hold the elected aristocracy responsible for the first time, reckoning day threatening to dawn on the entire welfare state, and what does Sheriff Boehner and his deputies pull out of their collective trillion gallon hat and hold to their head?  The Balanced Budget Amendment.

In other words, instead of actually spending the same or less revenue than the government takes in, which is the one thing they’re supposed to do, they’re going to promise to hold a gun to their own heads and threaten to shoot themselves if they don’t spend the same or less revenue than the government  takes in.

And the rubes fall for it.  Again.  It’s cry-your-eyes-out sad, because it’s so preposterous.

Here’s how this would work if it really happened…

It would take years to pass through the states.  In the meantime, they’ll be spending money like drunken politicians because “sure, the debt’s exploding, but we don’t have to worry about it because the BBA will fix it. ”

The gang that will be holding that gun to their own heads will be writing the language of the amendment.  They’ll understand the need to allow for exceptions in extreme circumstances.  Like if we go to war, or there’s a nuclear meltdown, or the Big One hits California, etc., etc.  No one can imagine all of the possibilities, so it will say something about if everyone agrees it’s an emergency, they won’t have to pull the trigger.

Day one.  The bill, after making the state circuit, finally becomes law.  There is much rejoicing and self-congratulation and photo ops of the historical event where the government will now force itself to do what it never had the integrity or intention to do before — by holding a gun to its own head.

Day two.

Treasury Secretary: “Mr. President, members of Congress, we won’t be able to pay the debt, send out Social Security checks, and meet our other obligations unless we immediately make massive and painful spending cuts, end subsidies, close entire federal departments, and completely redefine our entitlement programs, including abolishing many of them.  ”

President and Congress: “IT’S AN EMERGENCY!!”

Day three: A few Tea Party folks file a suit insisting that this is not an emergency as contemplated by the amendment, but in fact the exact business-as-usual that the amendment was intended to address.

It will take at least a couple of years to work its way up to the Supreme Court.  In the meantime, they’ll be spending money like drunken politicians because “sure, the debt’s exploding, but we don’t have to worry about it because the court will fix it. ”

Two years later, the Supreme Court, having added a liberal due to the Democrats sweeping back in after the backlash over the Chinese foreclosing on the Grand Canyon, rule that Congress must raise income tax rates to 75% on anyone making over $250,000 a year and pass a 90% tax on any estates over $10,000,000 and also a one time “Investment in America” tax of 45% on any IRA or 401k plan balances.

That’s bad, because — even though the minimum wage is now $50 an hour and median household income is $187,000 — gold is at $17,000 and ounce, cigarettes are $100 a pack, and 63% of Americans are still on unemployment since eligibility was extended to a maximum of 1, 099 months due to the recovery still being a little flat.  There’s a bit of offset for the pain, however, as the intention to finally address the debt leads Moody’s to upgrade the rating for U.S. debt to CCC+, causing mortgage rates to ease down to 39%.

Americans are finally enraged and dumbfounded enough to start asking how they can possibly do that, but the politicians sadly shake their heads and explain that it’s not their fault and they don’t really want to do it but they have to — it’s in the Constitution.

So you’re standing there looking into the bluest eyes God ever created, thinking about what her world could’ve been if the dollar hadn’t been so badly inflated that its value is now measured in the BTUs it can produce burning it, and she asks:

“Why couldn’t they just have pulled the trigger, Paw Paw?”

“It’s what they do, Baby.  It’s what they do.”

Default, you useless dumbasses.  It’s our only hope.

 

 

 

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10 Responses to Balanced budget debate — “Next man makes a move, the [sheriff] gets it!”

  1. Jonathan says:

    and how about a good “Up your’s [Congress]”

    Very good. Present yourself a laurel and hearty handshake!

    — JN

  2. janeeno says:

    cant comment

    You can leave comments. They don’t show up until I see them and approve them…

    — JN

  3. YounWeezy says:

    Libertarians are just Republican’s nerdy younger brothers :). There’s a reason that no libertarian has ever been elected to office, and never will. You guys are losers with smelly pubes.

    Enjoy your insignificance.

    Tooter, is that you?!?

    [Tooter is a “vegetrollian” from my brother’s nutrition and science blog — Fathead-Movie.com — with an odd obsession with Tom’s and my excretory areas.]

    Um, Libertarians have been elected to office. Granted, it’s all been at the state and local levels so far. Ron Paul (and Rand) run on the Republican ticket, but they’re libertarians. The first time Ron ran for president, it was on the Libertarian party ticket.

    Note: when you’re talking philosophy, it’s small “L,” the political party is capital “L”.

    But I don’t care if Libertarian politicians haven’t made it in the Majors yet. People are consistently talking about “libertarian” Republicans, “libertarian” Tea Party activists, and libertarian ideas in general. Even more amazing, they’re using the term correctly.

    Us small “L” libertarians don’t care whether or not Libertarian Party members are elected. We’re just happy to be getting some of our freedom back as you government-worshipers lose your grip.

    –JN

  4. Janalaim says:

    “However, that assumes that the brilliant financial minds that missed Enron, WorldCom, the internet bubble and collapse, Fannie Mae, Freddie Mac, the PIIGS meltdown, the housing bubble and collapse, the Countrywide scam, the Lehman collapse, Bernie Madoff, the Bear Sterns collapse, the AIG debacle, and the dollar bubble and impending collapse — in other words, every major financial event of the last decade — are going to get one right this time.”

    So, how would you respond to the claim that if only the government had more power, more regulation, more oversight, etc., would those financial disasters been averted. After all, wasn’t it deregulation that caused all those economic and financial calamities?

    [Note: this comment is quoting from the earlier post “August 2, 2011 — Doomsday or just Tuesday?” — JN]

    Short answer, the government has all of the power, regulation, and oversight it needs; it’s just incompetent.

    Every single one of those entities I noted in that list was crawling with regulators, examiners, auditors, and ratings agencies. Over half of the failures in that list were directly related to the total corruption of Fannie Mae (and Freddie to a lesser extent) — a completely political creation.

    So now, four years and counting into the final collapse of the U.S. government, the Dodd-Frank Bill (written by the two biggest unindicted co-conspirators in this fiasco) that is supposed to prevent this from ever happening again is another 2,000 page bill full of stupidity, redundant regulations, and whole new bureaucracies that has barely begun to be implemented, but is already crushing small banks, credit unions, brokers, and financial advisers, while leaving all of the “too big to fail” turds floating around in the punch bowl.

    Oddly enough, there’s only a couple of financial entities in the country that none of the provisions in this monstrous “reform” bill apply to:

    Fannie Mae
    Freddie Mac

    See my point?

    If you’re interested in a terrific book on the housing collapse and everything that got taken down with it, get a copy of “Reckless Endangerment.”

    — JN

    • Janalaim says:

      Mr. Naughton,
      please don’t get me wrong. I am a new libertarian. and I was just wondering what the best libertarian response would have been to that claim that I made. I am currently a college student, and soon will be entering professional school. I have read Meltdown by Thomas Woods, which provides an Austrian view of this current recession. So I can easily see how the housing bubble was due to government intervention into the mortgage industry (politicians pushing for bigger and more loans to minorities, Fannie and Freddie buying those mortgages from the banks, the Fed keeping interest rates artificially low, etc.) But it has been slightly more difficult to see how skyrocketing tuition costs are due to easy credit made possible by government intervention. At least with the housing bubble, people with huge loan, that normally wouldn’t have that type of money on the free market, suddenly started bidding on the housing prices, which made them skyrocket, creating a bubble. But for colleges ( and especially for graduate and professional schools), the number of seats are very limited. Also, many professional schools have very limited number of seats, – only a small fraction of the applicants actually get accepted into such highly competitive schools. And also, acceptance to such schools are based on academic criteria – things like having high GPA, good standardized test scores, well-rounded extracurricular activities, etc. With that in mind, could the tuition costs at some of these highly competitive schools and programs really increase significantly just because more loans are available to more people??? I mean, it’s easy to see how big, easy loans can cause housing prices to skyrocket – because almost anybody could get a loan and can then bid up the housing prices. But for these competitive schools, ONLY a very small percentage of applicants that apply actually get accepted – it’s not like the housing bubble where anybody can just get a loan and then come and bid up the tuition costs – you have to first get accepted into the school, which as I’ve mentioned, only very few can do. I’ve just been wondering how this could cause tuition costs to skyrocket at such competitive institutions, where only a few can enter. Maybe it doesn’t – I don’t know for sure. I just don’t see how it’s comparable to the housing bubble. I’m just wondering if easy loan policies by the government can also make the education costs at some highly competitive professional schools skyrocket in the same manner as the housing bubble. And if so, then how exactly?

      Good question. This one can be answered as a fairly straightforward “supply and demand” analysis.

      Let’s look at the two main pieces of information:

      1) There are a limited and fairly inelastic number of these goods (college “seats”) available.

      Supply is constrained naturally by the amount of time and capital needed if one were to decide to start a new university, medical school, etc. More importantly, supply is also heavily constrained by the educational “cartels.” The accrediting agencies, like all government regulatory bureaucracies, are essentially “owned” by the industry they are supposed to be regulating. So, another medical school is not going to get built unless all of the other vested interests don’t object. So let’s consider the “supply” side of the equation essentially fixed. Although you correctly point out that there are varying degrees of criteria applied to awarding these seats (GPA, test scores, etc.), nowhere near the number of seats are available to meet the demand for those that would qualify.

      2) There has been a growing bubble of “free” or “easy” money available.

      To get this part of the equation into better focus, let’s think of what the market would be in the complete absence of grants, scholarships, loans, etc. In other words, every student (or more commonly, their parents) had to come up with 100% of the funding for their education. How much could colleges charge, assuming they want to have more than 25% of their seats filled?

      Enter government grants. If a certain population will use 100% of the capacity of college seats at tuition of $10,000 per year out of pocket, and then most of that population gets a government grant of $5,000, what do you suppose the tuition will rise to? In other words, people who were willing to spend $10,000 out of pocket still are, correct? If someone says “well tuition was only worth $10,000, so I’ll go out of pocket $5,000 and use the grant,” they’re going to get out-bid by the next person on the list. Even someone who can scratch together $8,000 will bid $13,000 with the grant.

      Supply is fixed below the amount demanded. As more money is injected into the system, the price will rise to absorb the amount available.

      Even worse is easy loans. These are just like the mortgage crisis in that people signing up for them — generally young college students — don’t have much financial acumen or understanding of the financial obligations they’re signing up for. Then off they go to the educational marketplace with a load of easy money to bid with. The economics are the same as the housing meltdown, just the commodity in question is different. Also like the mortgage crisis, this will puts hundred of thousand of people in financial stress for years, while driving up the costs, or putting it out of reach, for people who would’ve bought at a true market price.

      Thanks again for a great question. As to the recently becoming a libertarian, I’m sorry to report there’s no known cure!

      –JN

  5. Karen D says:

    I’ve been thinking that Gabby Johnson would make a good President. What we need is some good authentic frontier gibberish.

    My 7 year old told me the other day that she is absolutely NOT going to college when she grows up. I really didn’t have anything to say to her but, “That’s a long time from now, and honestly I have no idea what the world will be like then.” That’s when it really hit me how different my generation is from hers. My parents would have talked until their faces turned blue about the value of higher education. Now, I just want my girls to be able to live independently and fiscally sound – that could mean they’ll be the brightest, prettiest plumbers and electricians the world has ever known. Who knows what debt they will be shouldered with. Makes me more the furious to be a captive audience to it all.

    Frontier gibberish beats the heck of of Washington DC gibberish any day.

    College, like so many other things in society, has been dumbed down in pursuit of butts-on-seats and inclusiveness. At the same time the actual skills and knowledge that a college education confers has been watered down, government subsidies and easy loan programs have ensured that the cost skyrocketed.

    Higher education is about the only area of the economy that consistently outstrips health care when it comes to inflation.

    That’s not even considering the professors, classes, departments, and entire disciplines that are completely useless on their best day, and generally detrimental to the students and society — Womyns Studies, Social Justice, etc. Any person who gets a degree in one of these is pretty much guaranteed that they’ll enter society with a mountain of student loans and no marketable skills; but a nice attitude of entitlement and grievance to differentiate themselves from other job candidates.

    If your daughter aspires to be an engineer or scientist or accountant, then she’s going to have to go to college. And I’m a big believer in the value of what used to be called a Liberal Arts education, as long as you’re not going into hock to get it. I completed the Junior/Senior level college work for my Accounting Degree as an evening student while working full time. No loans.

    But the world is always going to need more plumbers, electricians, welders, and heating & air conditioning techs than it will Social Justice majors — thank God.

    — JN

  6. Gerry says:

    Hey Mate,

    Clicked on this from a link from your brother’s site…. haha – but had no bloody idea what you were talking about as I have never seen the movie :)….. Before my time I think.

    Would you describe yourself like your brother as a Libertarian or a Conservative.

    I’m assuming the former. If so in your view what separates a US Libertarian from a US Conservative… I would have thought you guys in very simplistic terms would agree with right wing economic view points but also sympathies with some leftist social view points. Particularly ones that do not overlap on economic management.

    Have you ever looked into centrist/3rd way Governments? We in Australia have done extremely well out of them. In the 80s we went all economically rationalistic and deregulated everything for the most part & opened up of markets in a big way. But we kept tax relatively high & the finance industry well regulated. Can’t complain – it’s good… As Thomas Sowell says “good compared to what”…. well frankly there is no where else in the world id like to live in then this 3rd way centrist Australian pragmatic government. So yeah, good compared to everything! :)

    Check out how well a high taxing, socialist government can do when they are in charge of deregulation and economic rationalistic reform. They never de-regulated the minimum wage and kept massive social net of public health, welfare, and so forth.

    This is our GDP since our left of center government imposed reforms estimated by the IMF. While free-ing up markets they imposed necessary regulation so that not one bank collapsed during the GFC.

    Year Australian GDP
    1980 140,987
    1985 245,596
    1990 407,307
    1995 500,458
    2000 669,779
    2005 926,880
    2007 1,044,162

    I find Libeterian by in large well educated and have their ideas well thought out. But I think they over estimate or even idealize the free market as the be all and end all. I by no means am trivializing its importance but I see countries like my own and other Scandanvian countries like Norweigh doing very well out of a highly socialised free market hybrid model.

    Cheers mate :)

    You’re correct in that I’m libertarian all the way. As far as the libertarian/conservative divide, libertarians want an absolute minimum amount of government in all areas of our lives and society, so we tend to talk the same game as conservatives on economic issues and liberals on the “personal” stuff.

    Libertarians, however, also want to walk the talk. Many conservatives talk their belief in the free market, but went “all in” on the bailouts and are cheerleaders for things like grain subsidies, ethanol, etc. Liberals talk about keeping government out of our personal lives, but I don’t think it gets more personal than forcing pro-life people to subsidize the abortion industry to the tune of hundreds of millions of dollars a year, or speech codes on campuses, or telling parents what their kids can bring to school in their lunchboxes, etc.

    I personally tend to get more disgusted with conservatives than liberals because conservatives talk like they’re “my people” right up to the point they sell out, whereas liberals can’t help but show themselves for the nanny-staters that they are.

    My limited reading of world economic issues supports your data on Australia’s economic growth. However, to quote one of Tom’s main themes when analyzing data, whether it’s about nutrition or economics — “correlation is not causation.” So my proposed libertarian interpretation of Australia’s success to date emphasizes the following points:

    * Deregulation was the primary growth driver. The fact that high taxes and social programs remained in place doesn’t mean they contributed anything. After all, they were already there before deregulation (and progress) started.

    * Saying the finance industry is well-regulated is something of a misnomer and the alleged “deregulation” of the US finance industry is constantly pointed to as a major factor in our meltdown (which, incidentally, is only in the beginning stage). In fact, it’s the “too big to fail” model, where the mega-banks are protected by the government (regulators) from the market instead of subjected to the market that has led to disaster.

    A couple of things you didn’t mention:

    * Australia has maintained a strong currency. My understanding (again, from a far away observation point) is that your money is commodity-backed. In other words, you can’t just hit a button and create 3 times the amount of paper that was circulating the day before, like we’ve been doing here. A strong currency makes for a strong economy as it constrains the government from “taxing” via the printing press (that’s why gold has now shot past $1,800 USD).

    * China. Would you agree that China has been a big part of the Australian economic miracle? My reading indicates that China has been a huge purchaser of Australian exports, especially over the last half-decade or so. It’s been purchasing huge quantities of raw materials — coal, cement, grains, etc. — to keep people working in its economy and unload some of its rapidly devaluing US dollars. A large amount of those commodities are being bought from Australia, so your economy is getting something of a second-hand high from our folly.

    Finally, in many cases the measure of the strength and health of an economy isn’t so much defined by a snapshot of where it is compared to before (deregulated with high taxes vs. prior highly regulated with high taxes) as the direction it’s headed. In other words, a country A that has higher taxes, regs, etc. than country B, but is in the process of reducing those regs and taxes may actually have much better indicators than country B if B is in the process of increasing regs, taxes, and socialized systems as we are here in the US. So it’s about trajectory and velocity as opposed to a point-in-time coordinate.

    Thanks for your input.

    — JN

  7. Paula says:

    http://youtu.be/-McpNtHet3w

    Ha ha! This guy (“Felonius Munk”) has it about right about the debt “crisis.” Uses words I only use when I’m REALLY mad at my husband, and one or two I never use, but he’s funny and right on. LOVE him at the end! Ha ha!

    That was awesome. Thanks for the heads up…

    –JN

  8. Ed Terry says:

    I’ve worked in Washington DC for 20 years and I’ve come to the conclusion that Shakespeare was right in Henry the Sixth.

    Our earthquake Tuesday was God’s way of trying to tell all the politicians to stop all this BS and start solving problems. He’s also sending a hurricane this weekend as a reminder. I guess the next will be a plague.

    Oh wait, that’s already been here for years, just down Pennsylvania street where I work.

    I didn’t want anyone hurt, but I kept thinking “TURN LEFT; TURN LEFT” as Irene made her way past DC. Unfortunately, the odds of a hurricane making a left turn are about the same as Congress cutting spending. It’s not that it’s not possible — it’s just never happened.

    — JN

  9. David says:

    Everybody take the blue pill or the sheriff gets it.
    Love your references Jerry. Absolutely no time to read blogs. Too much on my plate with the 4 jobs and all .. but I’m making time to read your witty, insightful, and informed writing. And I thought Tom was the comedian. (Enjoy his work as well). Blame him for me being here. He told me about you. Tell you what. If I can play the system and make a cereal box full of gold coins, I’ll sponsor and help produce a radio show if you and the Fat Head will host it. I’d listen to a few hours a day of what you guys have to say….. Seriously. Good stuff here.
    DY

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