Mindless Austerity vs Mindless Irresponsibility

Some of the liberal press who favor the President’s new budget proposal’s spending increases are justifying the latter with a new term they have coined – Mindless Austerity (MA). What creativity! They definitely deserve an A+ in poetry. Apparently evil forces conspired to put us all through a time of MA and finally the President has been bold enough to stand against this harmful, debilitating process.

But I wonder about some things. First, consider the meanings of these words. Austerity is acting or doing without justification or concern for the consequences. It is authoritarian and severe. A synonym for mindless is stupid or idiotic.

What these commentators are saying is that MA that was the product of the same President’s past proposal that passed through Congress was done stupidly, without thought and with no consequences in mind. And these are the same press who supposedly think President Obama is both intelligent and a great leader. MA seems like a strange choice of words to me.

Along with MA is the idea of unnecessary suffering. Clearly the President believes that the middle class has suffered and his latest proposed policies are necessary to improve their lives. A corollary is that government needs to do more to improve their lots and so the additional government spending (and tax revenues) necessary to achieve these goals are absolutely necessary. The idea that economic growth is the only real sustained way to improve jobs and incomes for the middle class is not a major selling point of the President’s new budget proposal. Government to the rescue is. 

Another way to describe the President’s budget proposal is Mindless Irresponsibility or MI. The definition of irresponsibility is not having or showing maturity or good judgment. Adding Mindless to Irresponsible is redundant since the former means stupid. MI is stupidly not showing maturity or good judgment. It seems to me that MI is a better way to describe what the President and Congress did then and are contemplating doing now. Even though they know better they essentially put us in a no-win situation.

Notice what they did to us. First they punished a lot of people when they mindlessly put restraints on programs that might have helped people who needed help. Second, they let other programs grow and in some cases rapidly. Third, despite making some people suffer, the budget did nothing but put us in a worse condition financially.

And that’s what I mean by a no-win situation. The proper financial thing to do is to have a plan whose primary goal is to reduce national indebtedness. The proper economic thing to do is to have programs that support and enhance sustainable economic growth. But notice that while you will see bits and pieces serving those twin goals, the primary emphasis of both parties is to push for more spending and higher taxes.

This is bad for two reasons. Despite hopes and prayers about helping the middle class with “new and improved” government programs that broaden the scope of welfare and reliance on government, few of us really trust these guys to do anything that really works. It is all about them and not about us. Second, we know the President is pushing for higher taxes that are anti-growth.

Governments always promise that big expansions of government deemed necessary in recession will be removed when times get better. A quick check of the calendar shows the recession has been over since January of 2010 – a period of five years. Yet here we are in 2015 arguing about how much bigger spending and taxes have to be. No one seems to be the least bit concerned that the national debt level gets bigger each year and will get a whole bunch bigger when the next recession hits. Think Greece and by that I don’t mean Grecian Yogurt.

Do you see austerity in these tables below? Spending rose from $1.8 trillion in 2000 in $2.7 trillion in 2007 and then to $3.5 trillion in 2014. After rising by $940 billion in the first seven years spending rose by another $775 billion in the next seven. After rising by 53% total spending rose by another 28% in the second period. That is a reduction in rate but let’s face it – a 28% increase in seven years is not austerity by any definition.

Austerity was greatest with net interest. Thanks to the Fed keeping interest rates near zero since 2009, Federal net interest expense has remained stable. Estimates have this one category rising $600 billion in the future when interest rates reach normal levels. After rising by $253 billion between 2000 and 2007, discretionary military spending rose by $48 billion in the next seven years. So you might say that government spending on the military slowed considerably. The rest of the spending categories below showed increases from 2007 to 2014 ranging from $89 to $264 billion dollars. I wonder what the Greeks think of US austerity. 

Spending Levels  in billions
	2000	2007	2014
Discr. Military	295	548	596
Discr. NonMilitary	320	494	583
Social Security	406	581	845
Medicare	216	436	600
Medicaid	118	191	302
Income Security	134	203	311
Healthcare	313	567	831
Net Interest	223	237	229
Total	1,789*	2,729*	3,504*
Changes in Spending Levels in billions
	2000	2007	2014
Discr. Military	na	253	48
Discr. NonMilitary	na	174	89
Social Security	na	175	264
Medicare	na	220	164
Medicaid	na	73	111
Income Security	na	69	108
Healthcare	na	254	264
Net Interes	na	14	-8
Total	na	940	775
Percent Changes in Spending Levels in percents
	2000	2007	2014
Discr. Military	na	86	9
Discr. NonMilitary	na	54	18
Social Security	na	43	45
Medicare	na	102	38
Medicaid	na	62	58
Income Security	na	51	53
Healthcare	na	81	47
Net Interest	na	6	-3
Total	na	53	28

 * Categories do not sum to the totals since some categories are left out.