David Stockman: Deficit Reduction “Flimflam & Swindle,” Taxes Must Rise

[dkf]

Official Washington congratulated itself for reaching a deal to cut $38 billion from the deficit of the current fiscal year. But some observers aren’t impressed. “Flimflam & swindle,” is how David Stockman characterized the deal in a recent Fiscal Times column.

“I’ve seen a lot of accounting smoke and mirrors in my day in government, but this was beyond the pale,” said Stockman, my guest on Daily Ticker. “There was nothing real and substantive that actually cuts something and saves a dollar in the whole thing. I calculated, the cash reduction might be a couple of billion dollars.”

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When Stockman looks at Washington today, he sees the same type of misdirection, fuzzy math, and only-in-Washington accounting that he saw in the 1980s. The Congressional Budget Office found that the actual reduction is about $352 million. The flim-flammery, Stockman says, arises from the difference between cutting actual spending and cutting spending authorization.

Among the gimmicks: the deal reduced “spending” for the Census by $6 billion. “The problem is that happened last year, and it’s over,” said Stockman. ” They didn’t save a dime. It was a placeholder in the continuing resolution.” Several billion dollars were cut from defense military construction “when the defense department didn’t even ask for the money.” The agreement claimed $5 billion in savings from capping expenditures in a fund for crime victims. “But the program only spends $750 million annually, so they cut six times more than the annual limit of the program.”


The upshot: a lot of sound and fury, signifying nothing. “We’re borrowing $6 billion a day, so after this entire orchestration they went through, they probably saved less than one day’s worth of borrowing for the balance of this fiscal year.” Many of the Republican freshmen were shocked to learn that the advertised cuts weren’t real. But to Stockman, this is business as usual. “The appropriations committees in Congress — House and Senate, Republican and Democrat — are cesspools of deceit, and they have endless ways to trick the rest of Congress into thinking they’re doing something.”

http://investmentwatchblog.com/david-stockman-deficit-reduction-“flimflam-swindle”-taxes-must-rise/

[moondust]

1. Yes but it knocked "JOBS" out of the headlines after the midterms.

Mission accomplished.