Thermonuclear Budget Politics

[Geee]

American Spectator:

While the battle over the 2011 budget and serial CRs (continuing resolutions) has been noisy, the amount of real money actually cut and to be cut from the federal budget is modest relative to its engorgement since 2008.

Writing in the Wall Street Journal, a Nobel Prize winner, a former Secretary of State, and a Stanford professor of economics point out that, if the House Republicans succeed in passing its budget plan, HR1, it would represent only a modest cut in spending in percentage terms.

Given the time lag between budget authorization and its translation into actual government spending, "outlays will only be $19 billion less in 2011 with HR1, meaning it would take spending to 24% of GDP in 2011 from 24.1% today," write Gary S. Becker, George P. Shultz and John B. Taylor. This down payment on a ten-year schedule of budget restraint is a prudent, gradual approach to fiscal reform over time in their estimation.

Moreover, historically, when private investment is in the vicinity of 17% of GDP, unemployment is low, say, 4 to 5%. In 2010, in the midst of the Obama spending binge, private investment was down to 12% and unemployment was up to more than 9%. So the House GOP is doing the right thing by the unemployed, too.