Governments shutting down services

February 24, 2010

In my neck of the woods we would hear threats from time to time from the city about shutting down certain services if a tax increase was not passed, or an existing tax was not sustained. So far the threats have been empty, I think mainly because we’ve been better off in terms of the ratio of tax base to spending we have.

Well the crap has finally hit the fan in Colorado Springs, CO. It started shutting down many of its services on Monday. Some street lights have stopped operating. I guess they’re now four-way stops? This is kind of pathetic. You mean they’re unable to pay their electric bill? Maybe I’m being too harsh, and it’s just that they’re not able to be maintained. They’re selling their police helicopters to bring in some needed cash. They’re laying off some firefighters, police officers, and crime detectives. They’ve stopped mowing, watering, and picking up trash in their parks. For people who come to them, they’re going to have to BYOB (bring your own (trash) bags). They’ve shut down their road maintenance service, though a limited county-run road maintenance service is available. City recreation centers, city pools, and a few museums may close permanently at the end of next month, unless private buyers are found. Come to think of it, private companies could take over many of these services (I can imagine this for all but police services). They’d probably be able to do them for less than what the city was paying its employees. I’m surprised the city didn’t think of this. Glenn Beck recently interviewed a private company that runs state parks (the videos below are from

Some have criticized the voters of Colorado Springs, citing the fact that they voted down a tax increase to prevent this, but the opinion of the voters seemed to be that the city government was spending irresponsibly. John Stossel, now at Fox Business Network, wrote a brief article on this, saying that the main problem is the commitments that the city made to its unionized employees. It’s having to function like a bank rather than a city government. Glenn Beck got into some more examples of this across the country:

I know what Glenn’s talking about, in a sense. We don’t have the trouble with firing teachers here that he describes, but our local teachers union in the Boulder Valley School District has been raising hell since almost a year ago over the fact that our superintendent is not giving them the raises they want. They did a couple of work actions last year of questionable legality to make their point. The teachers union is tone deaf about the economy. Guess what, guys. That raise you were expecting has to come from us voters, and right now we’re not feeling so generous. What I’ve seen from some teachers is a callous disregard for the financial troubles of their constituents, as if we’re displaying a lack of gratitude. They say, “We have our struggles, too.” Well, maybe, but I hear that our teachers here have a spectacular pension program, better than what you’ll find just about anywhere in the private sector. And they have a “cadillac” health care plan. These haven’t been downgraded at all and they should be thankful for that. Many private sector workers have not been so lucky. When I’ve brought this up with teachers, one of the responses I’d get is, “Well that’s the much vaunted private sector for you. Why would people prefer that?” That wasn’t the point. The point is that’s where the money comes from to pay their salaries!! I swear, many government employees don’t understand this and it is baffling and frustrating to me that they don’t. I don’t mean to paint with a broad brush. I have seen some teachers and former teachers totally get it, and they’re for fiscal restraint. It’s just that some of them, the hundreds that walked out on students a couple times last year, seem to seriously believe that money grows on trees. It’s scary to think that they lack the math skills necessary to understand what’s happening. After all they’re just educating the kids!


Being inspired by our legacy

February 22, 2010

I saw this Saturday night. Wow! I’ve been saying I don’t listen to Glenn Beck often, but I guess I have lately. Time will tell if that continues. He was on fire with this speech. Very inspiring. This last part brought tears to my eyes.

He tells a bit of the story of the Statue of Liberty that really does change the character of it. Ken Burns did a short documentary on it many years ago. What I remember him saying was that the statue was commissioned at the end of the Civil War, and that it was meant to be a symbol of unity between the North and the South. He might have even said the passage about the “huddled masses” “yearning to breath free” was a message directed at the South, which had been destroyed by the war. I forget. Beck was reading the Emma Lazarus poem that’s inscribed on a plaque, inside the statue’s pedestal.

Understanding the unconstrained vision in the 20th century

February 8, 2010

This is a follow-up to a couple previous posts I wrote, called “We are suffering under the ignorance of our national heritage”, and “The liberal/conservative divide explained”. Next to the show where Beck introduced Sarah Palin to the world (before McCain picked her as his VP candidate), the following show, from 1/29/2010, is the best one I’ve seen him do.

He’s talked for a while about the origins of socialist, fascist, and communist thought, mostly its European origins and its effects in Europe, though he’s talked some about the effects of progressive thought in the U.S., from what I’ve seen. Like I’ve said before, I don’t watch his show much. He’s usually too hysterical for me. This episode was an exception. It really gets into what the original progressives were thinking, and how they influenced our entire society to separate us from the founding philosophy of the United States, and the understanding of why the original ideas were good. (h/t to The 912 Diary):

Edit 3-10-2010: I’ve added/updated the following four paragraphs.

I just recently found this interview with Norman Dodd, a man who was a researcher with the Reece Commission in 1953. This interview was done in 1982. It really helps fill in what the men on Beck’s show were talking about, regarding how our notions of our history were deliberately changed by a group of elites and their tax-exempt foundations in the first half of the 20th century. It also gets to their motivations, which will sound outlandish.

The reason behind this push to change our history is that the Progressives saw the Constitution and the founding ideas as their enemy. They thought of them as backward and outdated. They were ignorant of why these ideas were (and are still) good. Their world view is understandable by listening to what Thomas Sowell has had to say about the unconstrained vision, which believes that special elites need to be put into leadership so that they can work their will to bring about a better society. Their conceit was the belief that there are such “perfect” people who are so refined and educated that they do not have the flaws that the rest of us have. As was briefly mentioned in the Glenn Beck episode, this notion came from pseudoscientific ideas that were popular in intellectual circles at the time, namely eugenics and social darwinism. They thought they could improve upon the Founders by moving away from the idea that there’s a wise tension between the “wisdom of crowds” and an accomplished elite whom we elect to represent us that respects the sovereign rights of all Americans, and move us toward the idea that the people need to be led by philosopher kings who contain all the wisdom necessary to do what is right. The struggle between the constrained and the unconstrained vision has been around since the dawn of Western civilization, 2,500 years ago.

I’ve been discovering that there have been some very powerful people in our country who have had some very foolish ideas. The more I read about this subject the more they sounds like mad scientists. We can understand their foolishness by keeping in mind that these people operated under technocratic assumptions. They believed that a better society could be achieved by making everything, even human societies, conform to mathematical “laws” that were predictable. They would also benefit from this, as it would keep their businesses profitable, and help them consolidate their power. They tried to use their notions of science and engineering to bring about this utopia. They believed that efficiency was the ultimate value in society. I don’t mean to say that the disciplines of mathematics, science, and engineering are not valuable. They just don’t deliver what people of this consciousness think they do. Nevertheless, most of us have been at the effect of these foolish ideas for about 60 years, and it has been to our detriment.

The reason I favor getting back to the Founders’ vision for the U.S. is it seems to me they understood these disciplines well, and they wanted to use the perspective that they really do provide to help the members of society improve society. They did not worship mathematics as the ultimate perfecter of humans, nor did they worship science as the ultimate revealer of truth.

The constrained and unconstrained visions in everyday life

We can see the difference between those who believe in the constrained vs. the unconstrained vision by their attitudes. There are gradations of these attitudes among people. One should not take these as cookie cutter templates. I’m presenting “purist” definitions here to provide contrast.

Those who believe in the constrained vision of humanity approach the ideas of governance from a philosophical, principled standpoint. They are interested in the give and take of ideas, and encourage vigorous and robust debate. They believe in the fallibility of human beings, and so are wary of the idea that any one person has the one right answer, though they are confident that there are many wrong answers. The challenge is to try to tease out which are the good ideas, and to filter out the bad ones. They believe that power in government must be checked by competing forces, and that competition has its benefits in other arenas. They see society as a collection of systems, and they have a keen understanding of human nature. Their debates center around a comparison of systems, and which better serve the greater good, making human nature a key factor.

Those who believe in the constrained vision believe in a literary and scientific education (ie. testing our notions about what we think we know, and what we think we see, and forming our own models which map well to the results of those tests) to empower individuals to understand and reason about their world, and their society.

Those who believe in the unconstrained vision approach the ideas of governance from a moral and symptomatic standpoint. They see some problem or other in the moment, and in response attempt to address it with a grand solution, big or small, that seems to fit the size of the problem in the moment. They do not look at fixed systems of interaction which may have created the problem. Instead they see groups of people acting morally or immorally and attempt to stymie and correct the people who they deem to have acted immorally. In short, they are reactionary.

They see it as the job of those who govern to manage everything, and to some extent everyone, for the benefit of those whom they deem are oppressed. The leaders demand something in return, to maintain their power–“I scratch your back, and you scratch mine”–and so they set up systems of patronage, even with the oppressed.

They do not care for debate. Authorities whom they deem to be cultured, intelligent, educated, moral, and know how to wield power are to be respected, without question. They do not see any “wisdom of crowds”, which are just “the seething ignorant mob” to them. These “mobs” cannot have grievances that they have determined for themselves, because they are not intelligent enough to have any. It’s assumed that the leadership will be able to determine which groups of people are aggrieved, and that they will act appropriately to address them.

Any group that is to be respected must have a leader or group of leaders that is deemed respectable by the aforementioned criteria, or else they are illegitimate. If you are not a member of the aforementioned oppressed, and you are not considered a legitimate leader of a group that can help the oppressed and maintain the leadership’s power, you must abide whatever the leadership deems is appropriate to do. If you resist, you are made a pariah.

Those who believe in the unconstrained vision also believe in education, one that is cultured and literary. Critical thought is encouraged, but there is a heavy emphasis on approaching subjects in a symptomatic way. In all but the best schools, deep understanding of subjects is not encouraged. Instead there is an emphasis on analysis and case-based skills.

The Founders used a constrained vision of humanity in designing our government in the Constitution. They were men of the Enlightenment. They designed the government to address human nature as it has been, as it is, and will be for a very, very long time. The Progressives have always been deluded, as the socialists of all stripes have been, in believing that humans can be perfected. Our flaws can be rectified and eliminated. The Founders believed that our flaws can only be mitigated. That’s the difference. In other words, our flaws are innate and unchangeable, but systems can be put in place and used in order to improve our lot, to bring out and encourage the positive aspects of our nature, and put a damper on and frustrate the extremely negative aspects of it, so as to create a society that is as harmonious as humanly possible. That’s a limited statement. The Founders never envisioned America as a utopia, and did not believe that was possible. What they went for was a “as good as it gets” society. The Founders formed it based on a learned view of history, of past regimes, and worked carefully to construct a system of government that promoted freedom, but did not allow anarchy and the concentration of power. They tried to learn from past mistakes. They went for a “happy medium”.

Secondly, they understood that the project of building our society and government was not complete when they first created it, and that future generations would need to change the structure of our government to create a “more perfect union”. Thankfully we did. The most significant accomplishments have been freeing the slaves, which the Founders could not reconcile and deliberately left to a future generation to resolve, giving women property rights and the vote, and promoting equal rights for all citizens, no matter who they are or where they came from. We should rightfully celebrate those changes. I think they have created a more perfect union. Where we “went off the road” was with the idea that the Constitution is an interpretive document in all respects, that we need not try to understand the original intent of its articles and amendments–what was in the heads of those who wrote them, and that they mean whatever we want it to mean. That way leads to a gradual erosion of our rights, and our freedom. We become a nation of flawed, hubristic humans ruling to try to correct the actions of flawed humans; not a nation of law, but a nation of will, which will ultimately lead to a tyrannical government if we remain ignorant of our legal heritage.

Edit 2/10/2010: I found out about this ad after the Super Bowl. We could be looking forward to this if we’re not careful.

It really would behoove us to reject the Progressive philosophy of governance, because it has been shown to be a failure many times over. They never seem to learn. Because of their cultural influence, we have forgotten, and so we haven’t learned either. That can always be corrected, but we as individuals have to undertake our own education. Unfortunately our schools, for the most part, are not going to help us with that.

Lifting the veil of the Left

February 7, 2010

I watched the conversation between David Horowitz and Pat Caddell at the 2009 Restoration Weekend, talking about the “insides” of the Democratic Party, and how it’s been taken over by neo-Marxists and crooks. (Update 12/1/2014: I had the video of this here for a while, but it looks like it’s now gone. Too bad. It was a very interesting conversation.)

What I found impressive about it is how explicitly they explained the general pattern we’ve seen of Democrats “saying one thing and doing another.” It isn’t just the same old thing where “politicians lie.” There’s a specific strategy behind it with an end game, and it’s not just to get around the “greedy capitalist Republicans” so that help can be delivered to those who need it. It’s to gain and maintain power for these neo-Marxists by making the citizenry dependent on them. The big lie of the Left is that they are doing these things to help the downtrodden. No, they are doing these things to help themselves, all the while saying, “It’s all for you.” The more dependent the citizenry is on Democratic governance, the longer they can have jobs and stay in power. That’s the idea, anyway. According to Horowitz, (I heard this from him in an interview) the neo-Marxists don’t give a damn whether their programs are sustainable. They don’t even think about that.

Now, I am sure that there are many, many Democrats who have been supporting Democratic proposals in the last year out of a selfless love for the downtrodden. I hate to break it to you, but you’re being used. Simply saying that is not going to be satisfactory to many. I only hope that some of you become aware of what you have been involved in at some point (these will be people with long memories and critical minds), and realize what I am saying here. Just hold the thought for a while. You don’t have to accept it as true right now.

What Horowitz and Caddell have made explicit is an idea that Jonah Goldberg laid out at this same event (at a different talk), which is that the powerful far left wing of the Democratic Party has been trying for the past year to turn the U.S. into a client state, which means that every American would be a client of the government for many of our important needs, such as health care. What’s interesting is that they have so far not been able to pull this off, even though they had a super-majority. The far left is powerful in the Democratic Party, but there are also enough centrists in the party to moderate what happens. The Republicans have largely been powerless up until this past Thursday. What’s ironic is that the Democrats helped elect these centrists so that the far left could rise to leadership. They wouldn’t have gotten where they are without them. They’ve tried as hard as they could to shove their crap through the legislative process, but they haven’t been able to do more damage than they’ve already done with the “stimulus” bills they’ve passed, and their outrageous yearly budgets. That’s a consolation, and I wish I could say things were better than this. As things stand now we’re headed for “stagflation,” a lethargic economy that will not produce that many jobs, and rising interest rates and inflation, which will make everyone poorer. Plenty of change, without hope.

Yep. The “zeros” have turned out to be almost a repeat of the 1960s and 70s, just without the social revolution, and the amazing technological innovation and exploration. Maybe that’s yet to come.

In case anyone’s interested, Horowitz referred to

Tea time

February 6, 2010

I’ve been observing the Tea Party movement since last year. In recent years I’ve found it difficult to be involved in political activism. My life is occupied with other responsibilities and pursuits. However, I’ve felt an affinity with the concerns of the Tea Partiers, and have been supportive of them “from afar”. I, too, am worried about the runaway spending of the federal government. I am also bothered by the government seeming to not be concerned with solving real problems. Instead the goal of every proposal has been to satisfy certain constituencies, as if that’s good enough.

I watched some TV coverage of the first day of the Tea Party convention in Nashville, TN. It gave me this feeling of deja vu. I was a supporter and member of United We Stand America (UWSA) beginning in 1992. Ross Perot was its figurehead and lead supporter. The history of it seemed to begin with a “throw the bums out” grassroots movement that began in 1989, or thereabouts. It was just in its nascent stages then. People were inspired by a Larry King Live interview with Perot in February 1992, and a grassroots “draft Perot for President” campaign began (I think it was called the Perot Petition Committee). He advocated higher taxes and cuts in spending in order to bring down the federal debt, which at the time was “only” $4 trillion. President Obama’s budget for next year almost equals that amount! Oh how far we’ve come! Anyway, back then we thought $4 trillion was an immense amount, too big to fathom. Perot advocated entitlements reform, to decrease their growth. He had read the projections of fiscal economists, which said that in the far off future there would only be two people working for every person retired, and that this would be unsustainable. We’re still on a collision course with that future.

He wanted to lower discretionary spending, and decrease the debt dramatically, because he foresaw the kind of events we’ve seen over the last 10 years. He wanted a balanced budget amendment to the Constitution, with some caveats that would allow deficit spending only for specific circumstances, like war, or national emergencies (the latter has problems, though, because literally anything can be classified in law as an “emergency”). He used to talk about how there would be wars in the future, and that carrying a large debt load into that situation would mean trouble, because the government is forced into deficit spending in every war. Well, that’s the situation we’re in now.

At the time of Perot’s run in 1992, the Cold War had just ended. Conventional wisdom held that it was “the end of history”, and we could enjoy a “peace dividend” (never mind the Gulf War of 1991). Unfortunately our society decided to go for that myopic message (despite the World Trade Center bombing in 1993). So much for “the end of history”. Nevertheless, beginning in the mid-1990s, with a Democratic president and a Republican congress, the government was able to run budget surpluses and decrease the federal debt. Pressure from Perot voters, with our advocacy for reducing the federal debt, helped make that happen.

I listened to Tea Partiers talk to the media yesterday, and call in to C-SPAN. They sounded a lot like the Perot supporters I used to hear from, just in their general tone. The main thing that seems to drive the Tea Partiers, like the UWSA supporters of yesterday, is that they are alarmed at what the two major parties are doing in government, and above all else they want to stop it. Like the Tea Partiers, UWSA supporters were ridiculed for not supporting anything in specific, though Perot did outline some agenda areas he’d like to see addressed (part of which I’ve described above). Most UWSA members agreed with his agenda, for a time (though there was a major split in the movement over Perot’s opposition to the free trade agreements, NAFTA and later GATT). It seems like the politics are different, though. From what I’ve been hearing, the main hope of the Tea Partiers is to bring the Republican Party back to a conservative agenda. UWSA was not focused on one party in this way. We used to say that there was no difference between the two parties. There’s also more of a focus on constitutional, limited government among the Tea Partiers, one that spends less and taxes less. UWSA did not emphasize the Constitution, and was in favor of higher taxes, and cuts in spending, with the goal of reducing the federal debt.

The goal of the Tea Partiers is to make the political system come to them. UWSA had the same goal.

There’s a lot of speculation about what the Tea Partiers stand for, and whether they will form a third party. From where I sit, I think it’s good for the Tea Party movement to lack definition, to allow the people who are participating to be a part of an association like this, but one where they can have their own individual voices, even though there will be a temptation to say, “Let’s create an official organization with official representatives. Let’s define ourselves.” If the Tea Party movement goes that direction, I see it falling apart. We went through that with UWSA. Beginning in 1993 we started getting “directives” from the UWSA headquarters in Dallas, TX for government policy issues to work on. It was framed as a way to promote a united message. After all, we were calling ourselves “United We Stand”. The problem was the membership was never asked about the details. I thought this was fine, since I supported these goals anyway, but other members resented it. This, along with other public advocacy activities that Perot subsequently undertook led to a schism within UWSA. I think an advantage that the Tea Party movement has had is it began in a leaderless way. People have come together around some principles, rather than in support of an individual who people believe embodies those principles.

Given actions that the government took subsequently, starting in 1993, we felt like we weren’t having a big enough influence. So in 1995/96, the Reform Party was formed. We were going to run political candidates. We actually had a contest for the presidential nomination between Ross Perot and former Colorado governor Richard Lamm. There was a lot of controversy about that. There were complaints about a corrupt nomination process. People who had been with the movement for a long time wondered whether Lamm was loyal to the party or whether he was a Democratic stalking horse. In any case Perot was picked as the nominee, and he did worse than the time before, getting 8% of the popular vote. The big difference was Perot was not included in the presidential debates, as he was in 1992. He got a big boost out of those then.

Forming the party was probably the worst thing we did. Maybe I lack perspective, since I was more deeply involved with the Reform Party than with UWSA. There was constant infighting amongst ourselves, mainly because a political party is just a vehicle, and it must be this way legally. We, the Perot supporters, naively thought that since we had founded the party we could control the platform, and be careful enough to select candidates who represented what we wanted implemented in our government. It turned out there was more opportunity to control the agenda we wanted to promote with UWSA than there was with the party. Once the party was founded, any candidate, no matter their agenda–even if it was diametrically opposed to what we set out to do, could come in with his/her supporters and just take the party over. I eventually woke up to this fact, and saw some of the wisdom in this structure for parties, but there were many other “old timers” who resisted this to the bitter end.

A persistent problem we had from 1992 onward was we knew what we wanted to do, but we were ignorant and naive about what political structure would best advance that agenda. We tried UWSA, which was a 501(c)(3) educational organization, but we ran into problems when we wanted to endorse candidates for office. It was illegal for a 501(c)(3) organization to do that. Later we wanted to push forward a particular agenda, rather like an interest group, but we wanted to run candidates for office, to exert power. So the next “form” we took was as a political party, which is not designed for agenda advocacy. It’s basically a structure for coalition building, but according to the rules it’s not allowed to dictate what the coalition represents. The coalition that gathers the most power within the party at any given time gets to do that. You don’t own it just because you created it. You have to politically organize large numbers of supporters for the agenda you support, and you have to do that consistently, not just when you’re excited about a cause, like the Tea Partiers are now, or around elections, if you want the party to maintain a direction and purpose that you support. To do that, you need to be a consistent presence in the media, and you need supportive organizations. To do all this you need lots of money. And of course everyone who joins in with you has to understand and support the rationale for your cause. It’s a lot of work!

The other thing that was poisonous to the Reform Party effort, particularly after the 1996 presidential race, is that Perot had earned enough votes for the party to qualify for FEC money for the next presidential race in 2000. This was one of the goals, but it created monsters out of otherwise nice, decent people. I can’t remember the amount. It might’ve been $8 million. This started a gold rush for opportunists to come in and compete for power positions within the party. We started breaking up into factions. It was becoming a chaotic mess. We spent a significant amount of our time fighting each other rather than focusing on what we all came together to do originally, which was to reform government fiscal policy. It all basically ended in 2000, when Pat Buchanan ran for the party’s presidential nomination, along with someone who used to run for president regularly in the Natural Law Party. The party split in two at the national level, and had thereby mortally wounded itself. I saw people I had once trusted do the most despicable things. The corruption that was occurring was so obvious it was like witnessing Tammany Hall in the 20th century, though with no government power. It actually made the corruption in the two major parties look civilized by comparison. I thought, “You know what? It’s a good thing that not too many of our people have been elected to public office. They’d be worse than the people who are there now!” I did not think this of Buchanan, who I thought ran a good campaign for the nomination, putting in the sweat equity required to get it. Despite all of the chaos within the party, Buchanan was legally recognized as the Reform Party nominee by the FEC, and his campaign was given the $8 million in FEC money, but he limped over the finish line with 0% of the popular vote. The split in the party was one of the most heart-wrenching things I had experienced in my whole life.

As I think back on it now, I wonder why we didn’t organize ourselves as an interest group, or perhaps split between that and a 501(c)(3), with some choosing political advocacy, and some choosing to just educate. Given what we wanted to do this would’ve made so much more sense. Of course, we didn’t think of forming an interest group because we were AGAINST political interest groups! We used to complain about them constantly. We said we wanted to get beyond interest group politics, but legally it would’ve allowed us to do what we really wanted.

I’m telling this story so that Tea Partiers in particular can read it and learn from our mistakes, both in terms of organizing an association, and forming a third party. I would say to them, that beyond the conventional concerns about splitting the presidential vote down the road, they should approach the idea of forming a third party with extreme caution. From my experience, forming the party was the death knell of the reform movement. It became a huge distraction after 1996, and in the end it exhausted us. It was the best thing that could’ve happened to the powers that be in the Democratic and Republican parties, because we became so distracted with our own “inside baseball” political infighting that it removed our influence from the national stage.

The real record on deficits

February 3, 2010

Dick Morris wrote an interesting article on Feb. 2 on what’s really been happening with the deficit situation. President Obama and the Democrats have been distorting the record to make their own profligate spending look moderate. First, they excused the $1.4 trillion deficit we accrued last year by saying that Obama put the wars in Afghanistan and Iraq “on budget” where Bush had put them “off budget”, but the truth was the war budget was a minority proportion of the deficit. The rest of it was $300 billion of the $787 billion “stimulus” bill, and entitlement programs. In Obama’s recent State of the Union speech he said that he inherited a huge deficit that was just a little smaller than the deficit we had last year, and a bad economy. “Bush made me do it,” is his refrain. Such a leader.

Morris lays out the truth about Bush’s deficit from 2008. It was not $1.3 trillion as Obama claims. It was more like $800 billion, which is still huge by pre-Obama standards. Democrats and Republicans used to complain if deficits were $400 billion or more.

The reason Morris makes his claim is that Obama, in blaming Bush, is including the $700 billion the Bush Administration allocated for TARP. Now, TARP, if you’ll remember, was supposed to be used to prop up our major financial institutions, to save them from collapse. It was money on loan to them. They were supposed to pay it back with interest. Most of this money has been paid back by now, with interest. So why is the Obama Administration counting this money as part of the deficit? First of all, as Morris points out, Obama has an easy excuse. According to budget rules, any loans have to be counted as grants–expenditures in the budget. So officially TARP was counted as part of the deficit for 2008. Any repayment would be counted as a credit in a future budget. If we look at this situation realistically though, it doesn’t make a lot of sense to count a loan as an expenditure if the money was going to be paid back, and be credited towards the public debt. If we’re concerned about the debt, it’s net effect would be to count against the debt in the long term, not increase it, or at the very least be deficit neutral. In that case, this interpretation makes more sense than to make it sound equivalent to an expenditure which will never be repaid. Of course, being a lawyer, Obama has to make his case look as good as possible, and officially he has the facts on his side. He’s just hiding the effect of what he is saying.

There’s a silver lining in the accounting of TARP for Obama. Sen. Judd Gregg complained bitterly yesterday that the Obama Administration wants to use the repaid TARP funds as a credit source for small businesses. Gregg pointed out that there was a provision in the TARP legislation, which he put in, which said that the monies that were to be paid back must be used to pay down the public debt. If the government did that, Gregg said, it would reduce the national debt by $300 billion next year. But no. Obama wants to reuse $30 billion of it, and he’s confident that the Democrats will change the law to allow it. In effect, Obama wants to make it so that this money is not counted as a credit in the budget. Not that small businesses wouldn’t repay their loans, but come on. Look where this is going. Once that money is repaid through their new program, they’ll just find some other use for it. Obama wants the government to become a bank. He is covering for this by once again blaming Bush, making him look like a liberal spender, not unlike himself. The reality is that Obama’s deficit was not merely $100 billion more than Bush’s. He nearly doubled Bush’s 2008 deficit in 2009! This is yet another distraction.