Cavuto to Washington: Money Isn’t an Elixir

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Published July 08, 2014

| FOXBusiness

Tell the truth. Have you ever spent money you didn’t have? Ever knowingly binged on a vacation you knew you couldn’t afford? It’s human nature to splurge, just as it’s human nature to try and find a way to pay for it afterwards.

But here’s the difference when we do it versus when the government does it. When we go overboard, it’s on us. When the government goes overboard, it’s on…well, us. So when I’m hearing President Obama is proposing a $2 billion immigration fix, curiously timed to these busloads of illegal immigrants making their way here, I’m thinking even if it were a good idea, where’s the money to pay for it?

That’s the thing about grand plans out of Washington. There’s no money in Washington. It’s all done on credit. It’s all slapped on the same Visa bill. And if Uncle Sam can’t pay that bill, he just increases the credit line on that bill. Same story, same bill, same headache….for us. Because we’re the ones who pay for all this stuff. And time and again, we’re the ones getting stuffed.

I’m not here to judge the merits of any of these initiatives, whether it’s billions to fix the processing of illegal immigrants (which strikes me as an oxymoron, since we’re processing folks who shouldn’t be here) to billions more to shore up Iraq, or take down Syria, or “trillions” to fix climate change. We can debate the issues, I’m just saying there’s NO debating we don’t have a dime to address ANY of these issues.

I’m going to be completely unemotional here. Just the facts. Just the numbers. So if you’ll forgive me, let’s not question the virtue of these goals. Let’s simply crunch the numbers and see if we can address any of these goals. I’ll save you the trouble – we can’t. I’ve crunched. We’re cracked. We can’t even put a down payment on them – any of them. That’s the thing about being out of money; pretty soon you’re out of options as well. And that’s about where this country stands now, and has, in fact for years. We’re so deep in debt, that just digging out could take decades, and that’s being optimistic.

Yet we continue to strategically invest money we don’t have for programs we can’t afford, whose bang for the buck we can’t measure. It would be one thing if we could guarantee ourselves an automatic bang for the buck, or invest as if we hit the financial jackpot. But politicians investing ain’t exactly Warren Buffett investing. The return on government-initiated programs is consistent only for the staggering sums that accompany those programs.

When Medicare was signed into law back in 1966, it was a $65 million program. Today its obligations run into the trillions. The same with President Bush’s Medicare Prescription Drug Plan. It was a well-intended effort and at the time, billed as an entirely affordable one too. But what started as a $70 million drug fix has since become a nearly billion-dollar unfunded liability.

The problem is Washington assumes more money yields more results. That means if a total of $125 billion in infrastructure taxes, tolls and fees isn’t cutting it, hike the gas tax and bring it up to $150 billion in such spending, and maybe you’ll have different results. That’s not good money going after bad, that’s just bad. Yet that was the thinking every step of the way, with every step of increased budgeting. Under Republican presidents and Democratic presidents, Republican congresses and Democratic congresses, the story is remarkably the same: It’s just their respective political preferences that differ.

Republicans throw good money after bad on military ventures they refuse to cost out, if they put them on budget, at all. Democrats aren’t much different pushing more money for the Veterans Administration to fix accountability problems there. The assumption, of course, is that more money is the answer. If that were true, we’d have no starving people in this country. Yet after spending trillions to fight a war on poverty, we have just as high a percentage of Americans who are impoverished, and just as high a percentage of citizens who are hungry.

Money is not the elixir. If it were, we would be seeing considerably more bang for the buck. We’d have won Vietnam in a walk, solved the problem for disadvantaged Americans in a sprint, and settled the Mideast crisis in a snap. We didn’t. We couldn’t. We…don’t.

And that’s when we had the money to spend. Right about now, we’re just spent. That’s why countries around the world can’t take us seriously. They know we’re broke, and they know we can’t do a lot of what we say. Our threats are as empty as our goals. That’s not to say we should think small. I’m proposing we just think.

If we’ve learned anything from stimulus that doesn’t stimulate, and promises of keeping a doctor it turns out we cannot, it’s that money doesn’t solve our problems. Throwing more of it the same way at the same problems, only compounds them.

The arrogance of spending money we don’t have expecting any different results isn’t only feckless, it’s priceless, and ultimately, reckless. That doesn’t mean we can’t make a good case to put some urgent needs on credit. But it better be a damn good case, and it better damn well be a mission for which we can ultimately pay in the end, even as we’re stacking up the credit before we do.

That’s the difference between reckless spending and just being…spent.

 

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http://www.foxbusiness.com/economy-policy/2014/07/08/cavuto-to-washington-money-isnt-elixir/