Author Archives: Rabbi

    The most frightening aspect of a possible “federal government shutdown” is the politicians’ realization that most Americans will not notice. While Tip O’Neill famously stated “all politics is local,” what is less disputable is that all services are local. Clearly, the federal government has vital functions to perform, especially in the realm of security and defense. But most of what they do is unknown to the average person because they do not benefit or affect the average person.

    That is why the illustration of the hardships of a government “shutdown” is the closure of national parks and museums, and the photo op is always of the unfortunate family whose planned vacation in a national park has been thwarted by the selfish politicians. Of course, there is no logical reason why the national parks have to be closed, or even museums for that matter. Having visited many across the country, I have noticed that most charge admission, and so should be able to pay for itself. Five hundred daily visitors to a national park generate thousands of dollars in revenue, which could easily pay park employees. It is one of the few government enterprises that actually earn money in return for providing a product that people actually want – so no wonder they close them; it is atypical of government.  But, in fact, parks and museums are chosen for closure because they inflict real discomfort on real people.

    This begs the question, of course, of why the federal government manages these parks at all. Every park(and museum) is located in a state (or DC), so the states could just as well manage their own tourist attractions and reap the revenue. The other cases of “hardship” – the inability of small businesses to obtain federal loans or the shutdown of some federal mortgage programs (the Fanny/Freddy boondoggle that has ripped off billions from taxpayers apparently stays in business) – are also contrived. Presumably, local banks are better situated to evaluate the credit-worthiness of local businesses, so the intrusion of the feds distorts the lending system by providing loans to unworthy recipients (who will invariably default, leaving the taxpayers holding the bill). Ditto the federal home loan mortgage guarantee program – that in the early 2000s failed so utterly – that also underwrites home purchases by people who largely should not be purchasing homes. If these programs are on hiatus for a week or so, no one will notice.

   But imagine if the Departments of Education, Energy, Agriculture, Commerce and the Interior had to close – and permanently ? Is there anyone who could find even ten people who would be affected, short-term or long-term ? One of the principal methods of income redistribution presided over by President Obama has been the growth in government employment since he took office. Not a person hired produces any income, but all consume the income of working people, and, has been widely reported, earn more for similar jobs – and with lifetime security – than their peers do in the private sector. Indeed, the other potential horror trotted out is the inability of people to receive their government checks in a timely fashion, or, in other words, the shutdown will throw a monkey wrench into the income redistribution apparatus.

   The richest comment of impending doom came from Maryland’s liberal Senator Barbara Mikulski who asserted that closing the National Institutes of Health will set back cancer research when they are just now on the brink of discovering the cure. Hmmm… We certainly hope their research is not impeded, but even if a cure presented itself, say, tomorrow, it would be many months, if not years, before the FDA allowed it on the market! Once again, this is another pol’s attempt to humanize – to put a face on – the “suffering” that will accrue to the average person in case of a government shutdown – and falling woefully short. And most research was conducted in the private sector anyway – at least until Obama decided to target the evil pharmaceutical companies for their “obscene” profits, earned trying to market the drugs that cure the diseases that the NIH was unable to discover while on the government tab.

    It is certainly sad if government workers lose their jobs, however bloated the federal government is, but there might be no other recourse. But here’s the irony of the pain of the “shutdown:” federal workers that are furloughed do not receive their wages, until they return to work – and then they are given back pay for the paychecks missed. In other words, if the government shuts down, these non-essential workers will not work but will still get paid eventually. So why don’t they just work ? Because this government, as currently constituted, does not work.

     The farce is overwhelming, and the showmanship exceeds that of a Kabuki theater. The pols are fighting over whether this year’s deficit will be 1,500,000,000 or 1,450,000,000 (that’s trillion), and the congressmen, Senators, and President (and staffs) will of course still get paid in the event of the shutdown. That is another crime – because neither side is ready to come to grips with life’s reality that you can’t spend what you don’t have. The Democratic pleas for “maturity” and “compromise” from the other side amounts to a demand that everyone continue business as usual, play the media game for partisan advantage but at the end of the day just cut checks for each side’s pet projects as before.

     Here’s hoping the government does shut down for a time, or longer. Essential services will continue, and local services that most affect our lives will go on without change. We will see exactly what we are overpaying for in Washington.

     The fear of that realization taking root in the nation – even with the pictures of the family of five unnecessarily locked out of Yosemite and Yellowstone – will drive the parties to an agreement that will still not have embraced the real challenges of America’s economic future.

     The solons on Capitol Hill, with their fellow travelers in the White House, are again predicting the direst consequences if a new federal budget is not approved later this week and the government is thereby “shut down.” This movie (tragedy/comedy) has been shown before, and it always seems as if at the very last moment, somehow all parties reach agreement to fund their respective pet projects in the hopes of spending their way to re-election. I am actually hoping that no budget is passed, and curious to see what a government “shutdown” looks like. The truth is that the government will never shut down, and here’s why.

    The main problem is the $1.5 trillion deficit that is only escalating, but more on that in a moment. The budget proposed by the feds (supported by the White House) envisions spending $3.9 trillion, with government revenues only $2.4 trillion. (There was a time when “trillion” was an unimaginable figure.) However you slice the budget –whatever fantasy spending is contemplated by the politicians – the reality is that the government is taking in $2.4 trillion in the present fiscal year. The government need not “shut down” because it still has $2.4 trillion to spend. It can spend that $2.4 trillion wisely by doing what financially strapped people do – real people, that is – what is known as prioritizing. But prioritizing is a novel concept for politicians, because their metric for success – re-election – is theoretically based on their capacity to spend someone else’s money on programs and boondoggles that will endear them to their constituents.

    For Democrats and Republicans to be haggling over whether to cut $16 billion or $73 billion from the current multi-trillion dollar budget shows that neither party has a surfeit of serious people. They may wear finely-tailored suits, and be neatly coiffed, and speak in a poised and presentable way – but Congress and the White House contain too many unserious people, and the contemporary political system is steering the United States towards collapse.

   President Bush is rightly criticized for his budgetary mismanagement. His last “normal” year budget – 2008 – had a deficit of almost a half-trillion dollars – but that embarrassing number pales before this year’s mess. In the collapse years of 2008-2009 (fiscal year 2009), Bush ran a deficit of $1.4 trillion, artificially inflated by the bailouts, the TARP, and other consequences of the financial sector woes. (And before we blame the Bush tax cuts, let us recall that from 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history, all in the wake of the Bush tax cuts.) But that number – the $1.4 trillion deficit – was unique in that it allegedly required spending in order to “save the financial system from collapse.” Let the economists argue that one for the next few decades, but that President Obama has continued – and increased – that same profligacy, without the same exigency, is absolutely disgraceful. His spending has little to do with the economy itself, and much to do with payoffs to those who feed him votes – especially government employees and unionized workers. Keep Other People’s Money flowing into their hands, and the votes flow right back. It is a system that is primed for the downfall of the American Empire.

     And for those pols in both parties who cannot see any way to spend what the government takes in, a simple question presents: so why have any fiscal discipline at all ? If running $1.5 trillion annual deficits is not a problem worth addressing seriously, then why not run a $3 trillion annual deficit ? Or maybe $10 trillion deficits annually ? It is clear that the government will never be able to pay off the total deficit of $15 trillion – so why try ? What can the Chinese, who lend us the money, do ? Nothing. They live in fear of the Federal Reserve devaluing the dollar to make repayments easier, thereby undercutting the value of their investment. So why not run the table and satisfy the needs of every single interest group ? Let there be no limits ! Every American run to the government trough for your feeding !

   Obama comes in for special criticism, because he is no longer dealing with a fiscal crisis, has zero interest in reducing the deficit at all, and instead begins this week his re-election campaign fund-raising. One recalls that Obama fired the CEO of General Motors when that company saw its product become unpopular, its revenues decline and its losses pile up. So why doesn’t the same standard apply to Obama himself ? Obama is CEO of a business – the United States Government – that is so far in the red it will never emerge, and with absolutely no plans to make it solvent. How can he even run for re-election ? Because politics is not at all about governance but rather about money, power, and winning. A serious person – Paul Ryan of Wisconsin, for one – struggles even to be heard, because he is speaking a different language than his fellow pols.

    If I had $2.4 trillion to spend, and sought to have a mature conversation with my fellow citizens, I would inform them (much like Chris Christie is doing here in New Jersey) that pols of years past made promises that were unrealistic and that cannot be kept without bankrupting the country. We have to focus first on the basic needs that a federal government should provide: security and defense, ensuring free access for all to a free trade system by enforcement of commercial norms, laws, standards and contracts, and guaranteeing the freedoms granted to individual citizens under the Bill of Rights.

   That should be government. But what is government is a behemoth that is in the charity business, the health care business, the foreign-state building business, the media business, the culture business, and a host of other businesses that it has no business being in – and without the money to underwrite it. Indeed, almost every other aspect of government life other than those outlined above are essentially the primary goal of liberal government today – the wealth-re-distribution industry, or seizing money from the productive in order to give it to the unproductive. Ideally, caring for the downtrodden should be the responsibility of local governments if they were properly managed, but under no circumstances should there be tolerance for multi-generational “downtroddens.”

     One government expenditure is always of great interest to Jews: foreign aid, especially to Israel. There are numerous politicians who pander to US Jews by robotically assuring the potentates who lead US-Jewish organizations that funds for Israel will always continue, never to be cut, and a small handful that cut their budgetary teeth on the elimination of foreign aid, including to Israel. In truth, I am of two minds about this, and people should be aware of the reality of American foreign aid to Israel. On one hand, Israel is not at all a poor country (it has pockets of self-inflicted poverty, mostly in the sector that eschews gainful employment) and I sat in Congress and applauded in July 1996 when PM Netanyahu ( in his first tenure) promised to wean Israel off American economic aid – and he did so.

    On the other hand, Israel “receives” today $3 billion in military assistance, but with the proviso that 70% of that money (or $2.1 billion) must be spent in the United States. It comes out that US military assistance to Israel subsidizes the American arms industry, as the grant compels Israel to spend that money here, and prevents Israel from developing its own weapons industry in those same areas and competing with American companies across the world. If the US, say, would cease its military assistance to Israel, Israel would undoubtedly suffer in the short term, but would have to begin manufacturing its own planes, helicopters, missiles, other ordnance, etc. and sell it globally – and that would gravely impact the US arms industry. Does government have a role in subsidizing the production of weapons ? Certainly, under the first category listed above. In effect, US military (foreign) aid to Israel is probably the most justifiable form of foreign aid for the benefits that accrue to American industry (for sure, those weapons that the US “sells” to Israel are manufactured in the districts of influential congressmen, and provide thousands of jobs to Americans), and notwithstanding the other benefits of the US-Israel alliance in combating first Communism and now radical Islam.

    I cite this example not only to justify this type of foreign aid, but also to make the case that such an analysis should be typical of every government expenditure but sadly is not. Or, at least, it hasn’t been in the past. That Medicare and Medicaid threatens to bankrupt the country is obvious to all, and that Social Security is the largest Ponzi/Madoff scheme in history was known even to FDR, who nonetheless endorsed it. But a government that cannot even seriously contemplate eliminating the funding of a public radio and television network in a marketplace where those should compete with others, and refuses to even stop its funding of arts and obscure and usually meaningless research, is like the welfare case who insists on spending money on movies and a new flat screen TV. In other words, it is a government led by immature, power-hungry profligates who are supported by hordes of parasitic freeloaders with permanently-outstretched hands (who use those hands also to provide the votes that keep the carousel spinning) and which as presently constituted could never address the most challenging aspects of the federal budget.

    And they would have us believe it is the Tea Party that is dangerous.

(P.S.  My deepest thanks to the Jewish Press and editor Jason Maoz who selected this site, among others, as one of the best Jewish blogs of 2010-2011. See the full list at http://www.jewishpress.com/pageroute.do/47678)