A Budget of Disappointments

Earlier we noted surprises in the budgetary emphasis on energy and transportation.  Without prose to explain its retreat, the White House slashed spending in its quest for cars that run on pure green thoughts.  All that remains is deep seated hostility to most families’ means of transportation.

Some of the biggest reductions in the budget come in Medicare, achieved by means-testing premiums and prescription prices.  Drug makers’ complaints of “price fixing” might be credible if they had no history of pricing drugs in foreign markets at levels far below those charged in the U.S.

One really smart idea in the budget is to hike Medicare premiums where the beneficiary’s medigap policy leaves no incentive to think twice before selecting the costliest treatments.  If consumers don’t see prices, they cannot react properly.

The budget is a calamity for some on the left.  Jeff Sachs complains bitterly that discretionary spending will shrink to 4.9% of GDP, down from 7.9% of GDP in 2008.   He accepts that for many Americans the federal government seems “little more than a corrupted trough for special interests.“  That sentiment pushes chronic social and economic problems beyond the federal government’s budgetary reach.  He says “until 2017 at the earliest, there is likely to be no or very meager action to address America’s growing underclass, gaping inequalities, decrepit infrastructure, persistent drought or worsening climate change.  Slow growth, unemployable young people, a vast incarcerated minority population and gaudy excesses at the top will remain the norm.”

Crystia Freeland laments the same problem areas and says without adequate budget President Obama is doing his best, but “it requires transformational leadership and a transformational agenda.  Liberals need their own Margaret Thatcher, and they haven’t found her yet.”  That sounds like desperation.

David Brooks, a moderate seems surprised by the austerity in the President’s budget.  He says that the public holds an uninformed and dim view of discretionary spending, but that additional cuts to entitlements could free some funds for the most pressing social and economic issues.  As Brooks notes, the Hill and White House will practice their public kabuki dance of trading entitlement cuts for more taxes.

Expect few results.

Alan Daley is a retired businessman who lives in Florida and who writes for The American Consumer Institute Center for Citizen Research

 

FacebooktwitterredditlinkedinFacebooktwitterredditlinkedin