E!!

You’ve probably heard the social drinker’s jovial party line, “I don’t drink any more.  (dramatic pause)  Don’t drink any less, either…”

Yuk-yuk.

Today’s Morning Bell says this joke pretty much sums up Obama’s proposal for pay-as-you-go (PAYGO) legislation which comes equipped with an exception for entitemlement spending.  Their quoted quip: 

Commenting on President Obama’s exemption for entitlement spending in his PAYGO legislation, Committee for a Responsible Federal Budget President Maya MacGuineas said: “This is like quitting drinking, but making an exception for beer and hard liquor.”

Here’s a clip from the piece:

In theory, PAYGO sounds like common sense: Congress can only spend a dollar if it saves a dollar elsewhere. In reality, PAYGO is nothing more than a political gimmick that only enables higher spending and exploding deficits. Heritage fellow Brian Riedl explains:

1) PAYGO has never been enforced

• During the 1991-2002 round of statutory PAYGO, Congress and the President still added more than $700 billion to the budget deficit and simply cancelled every single sequestration that would have enforced PAYGO.
• Since the 2007 creation of the PAYGO rule, Congress has waived it numerous times in order to add $600 billion to the deficit. In fact, the entire “stimulus” bill violated PAYGO; Congress simply ignored the rule.

2) PAYGO’s design is flawed

• PAYGO exempts all discretionary spending, and would also allow all current entitlement programs like Social Security, Medicare, and Medicaid to continue growing on autopilot. It affects only new entitlements or tax cuts that may be created in the future.
• Even if PAYGO were fully enforced, entitlement spending would still grow 6 percent annually, and discretionary spending could grow without limit.

Already this year Obama expanded Medicaid liabilities by $200 billion over 10 years, and he is now pushing a public health insurance option that would cost $452 billion per year, or more than $6 trillion over a 10-year period. How does Obama plan to pay for all this new spending under his new PAYGO legislation? He doesn’t.

Obama is banking on trillions in exemptions to PAYGO over the next decade, including the one for his health care reform plan which will have to run big deficits if they get it passed.  PAYGO is a farce, sham, mockery, etc.  As is politics in this country.

Pass the vodka, please.

Victor Davis Hanson is always worth the read.  Today’s column is on the basic lessons we can learn from the financial mess.

An excerpt:

The new national gospel became charge now/pay later and speculate, rather than put something away in case of a downturn. To provide more goodies that we hadn’t earned, politicians ignored soaring annual budget deficits and staggering national debt and kept spending.

The lessons:

First, cash really is king. For all the talk of a trillion here or billions there, when the crunch came, many of these investment houses and their once-strutting managers found themselves with a minus net worth. They were desperate to find liquidity — any money anywhere they could find it. Pedestrian passbook savings accounts proved wiser investments than all the clever hedge funds, derivatives, and sub-prime schemes put together.

And:

Second, wisdom and blue-chip college educations are not quite the same thing. The fools in Washington and New York who blew up Wall Street had degrees from our finest professional schools.

And:

Third, we as a nation need to relearn the old notion of shame — as in “shame on you!” Firms like Lehman Brothers and Bear Stearns were once responsible Wall Street institutions, built up over decades by sober men. But their far-lesser successors in just a few months have bankrupted these venerable brokerage houses — with seemingly no shame at what they have done to the image of Wall Street.

Americans used to pay their debts. Somewhere in all the blame-gaming about the crooks and liars in New York and Washington, we never hear that real people borrowed real money that they should not have. And they then defaulted on what they owed to others. Walking away from debts may have been understandable, but it was also a violation of trust — and wrong.