Not a fan of Paul Krugman’s column in the New York Times, but today he correctly levels a charge against the GOP that is on target and deserved. I have often said that the Republicans are good with the bullhorn but over the past 10 years, when push came to shove over budget issues they were not willing to do the hard work. Krugman:

The idea — propounded by many members of the conservative intelligentsia, from Alan Greenspan to Irving Kristol — was basically that sympathetic politicians should engage in a game of bait and switch. Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government’s fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit.

O.K., the beast is starving. Now what? That’s the question confronting Republicans. But they’re refusing to answer, or even to engage in any serious discussion about what to do.

Krugman of course will argue against proposed cuts, but he has a valid point. The cuts will have to come from the very popular programs - Medicare, Medicaid, Social Security. Defense, Social Security and Major Health Programs make up 61% of the budget*. This is where big government lives. For many years I have believed that - like Nixon going to China - it would take a Democrat to make headway in reforming Medicare and Social Security, but it will also require the willingness of a serious opposition. With the current GOP leadership of Mitch McConnell and John Boehner the opposition is not serious.  

Time to step up and do some heavy lifting, not just point fingers at the other guy.

* Defense and international security: 21 percent of the budget, or $625 billion; Social Security:  21 percent of the budget, or $617 billion; Medicare, Medicaid, and CHIP: 20 percent of the budget, or $599 billion. ($391 billion went to Medicare)  

Source: Center for Budget and Policy Priorities

Econstories.tv rap Hayek vs. Keynes: Fear The Boom and Bust - http://www.youtube.com/watch?v=d0nERTFo-Sk

In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the economic crisis. Before the conference begins, and at the insistence of Lord Keynes, they go out for a night on the town and sing about why there’s a “boom and bust” cycle in modern economies and good reason to fear it.

Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program that began under President George W. Bush, and was expanded under President Barack Obama, states in his Quarterly Report to Congress:

“It’s unrealistic to think we’re going to get all of that money back.”

“Despite the aspects of TARP that could reasonably be viewed as a substantial success,” he wrote, “Treasury’s actions (i.e. ‘Treasury’s refusal to require TARP recipients to report on their use of TARP funds, its less-than accurate statements concerning TARP’s first investments in nine large financial institutions, and its initial defense of those inaccurate statements’) have contributed to damage the credibility of the program and of the government itself, and the anger, cynicism and distrust created must be chalked up as one of the substantial, albeit unnecessary, costs of TARP.”

The Treasury Department has spent more than $454 billion. Of the $454 billion only $73 billion has been paid back, while $317 billion remains outstanding.

Source: Yahoo! News and SIGTARP

The Center On Budget and Policy Priorities report, Where Do Our Federal Tax Dollars Go? , has recently been updated (Compare to last years chart). The report breaks down how the Federal Government spent $3 trillion in fiscal year 2008. The big tickets remain:

• Defense and international security: 21 percent of the budget, or $625 billion
• Social Security:  21 percent of the budget, or $617 billion
• Medicare, Medicaid, and CHIP: 20 percent of the budget, or $599 billion. ($391 billion went to Medicare)