donsutherland1

Recently, Congressman Ron Paul unveiled his concept of a comprehensive economic revitalization plan. In terms of federal spending, his plan called on policymakers to “Eliminate wasteful spending. Reduce overseas commitments. Freeze all non-defense, non-entitlement spending at current levels.”

Although, at first glance, this proposed solution might seem like a panacea for the nation’s substantial federal budget deficits, it does not survive closer inspection. Instead, Congressman Paul’s proposed remedy misdiagnoses what ails the federal budget. It demonstrates a gross lack of understanding of the reasons for the large federal budget deficits, the dynamics behind the major fiscal challenges that lie ahead, and the importance of sustaining a credible and coherent American foreign policy. In short, it would amount to fiscal malpractice.

Spending on international affairs is not what is driving the U.S. federal budget deficit. It comprises a relatively tiny portion of the federal budget. In fact, spending on international affairs as a percentage of the federal budget is less than half of what is was some 40 years ago.



The U.S. is facing major fiscal challenges from its mandatory spending programs, specifically Social Security and Health care related spending. Those financing challenges have been well-documented by the Social Security Trustees, the Congressional Budget Office (CBO), and a large number of private economists.

When it comes to non-defense international affairs spending, the U.S. actually needs a large increase commensurate with the nation’s overseas interests and needs. Otherwise, if the United States is unable or unwilling to make the investments in trade liberalization, foreign aid, and diplomacy, necessary to safeguard and advance its critical overseas interests, it will find itself relying even more heavily on military measures to safeguard those interests. Moreover, a short-sighted lack of investment in non-defense international affairs spending would exacerbate potential crises and reduce America’s ability to contribute toward a stable balance of power necessary for promoting international peace and security.

One can look back to the philosophical struggle over the Marshall Plan for guidance toward what a Paulian approach would entail. Had the U.S. retreated after World War II to the kind of doctrinaire non-interventionism that defined its pre-World War II foreign policyh, Western Europe’s and East Asia’s transformations might well have been far different from what ultimately resulted. Even today, the dividends from the Marshall Plan and formation of NATO in terms of regional stability and economic benefits from growing trade continue to flow to the United States.

More recently, as the Cold War was coming to a close, there were calls for the U.S. to withdraw from the world stage. These advocates of what would have amounted to unilateral U.S. foreign policy abdication cited fiscal challenges as an important foundation for retreat. “America could not afford to play a major role on the world stage,” was their argument. Neither President Reagan nor President Bush appeased their arguments at the time.

At the height of the bid to engineer a dramatic U.S. abdication of foreign policy, former Federal Reserve Chairman Paul Volcker forcefully entered the discussion and repudiated the economic case constructed by the non-interventionists. “It has somehow become fashionable to say that we can’t ‘afford’ to do important things abroad, like providing substantial help to Eastern Europe…,” Volcker observed. He then shot down those arguments, declaring, “We ought to be clear… If it’s true that a prosperous peaceful world requires a focus for leadership, I don’t think we can happily sit back and expect others to fill the vacuum.”

That issue of the void U.S. disengagement would leave amounted to the crux of the problem of U.S. abdication from world affairs. Fast forward to today. Imagine if the U.S. indiscriminately disengages from the Middle East, Europe, and Central Asia. Who would fill the vacuums created by the U.S. disengagement? What kind of societies do such states have? What aspirations do those state and non-state actors possess? How would such actors respond to the U.S. abandoning its longstanding allies across the globe? What has been the historical outcome in which power vacuums have emerged?

In reality, the need for efforts and investment in foreign policy, particularly the vital task of maintaining an effective equilibrium in power, never cease. Henry Kissinger once observed, “[M]anagement of a balance of power is a permanent undertaking, not an exertion that has a foreseeable end… Management of the balance requires perseverance, subtlety, not a little courage, and above all understanding of its requirements.” The Paulian prescription of a world that can be frozen as it is, in which there would be no adverse consequences of radical U.S. disengagement from interests and allies alike, is as naïve as his ignoring the actual budgetary calculus behind the nation’s fiscal challenges would be reckless. American non-interventionism did not protect the U.S. from the ravages of World War II. Indeed, it acted as oil for spreading the fire of aggression in tilting the calculations of Nazi Germany and Fascist Italy toward war.

In 1989, Volcker left U.S. policymakers with the following challenge and warning:

Are we willing to continue, in this bright new world, to step up to the responsibilities of leadership at home and abroad? Sure, it will cost something. Equally sure, the costs are within our capacity. It is the costs of withdrawal from leadership that are truly incalculable.

Those words are as relevant today as they were back in 1989. Knee-jerk rhetoric in the name of radical U.S. disengagement from the world at large is no substitute for sound policy, no matter how attractively it might be packaged.

ARealConservative

Show me a better stimulus package, then we can talk.

the current one amounts to placing the majority of the nation on welfare for the month of June.

All I see out of this critique is that it doesn't cut spending enough.

Freezing non discretionary spending is probably the best hope we have in todays political climate, so I don't find this critique very reasonable.

vauge

Please cite your references.

Thanks!

donsutherland1

Well, in his own Party, both the leading candidates have a bolder approach to fiscal discipline. They both address the need for entitlement reform. At the same time, they do not call for disengagement from the world at large. Neither of the leading Democratic Party candidates--Senators Clinton and Obama--call for the U.S. to disengage from world affairs, either.

With respect to spending policy, the following are highlights of the two leaders' positions:

Senator McCain:
• As president, John McCain will oppose spending money on projects that siphon away tax dollars collected to fund these important commitments. Setting priorities, and keeping them, is a crucial step toward fiscal restraint and an important priority for a McCain presidency...

• Members of Congress who request earmarks in legislation should be identified and their request should be fully described. Too often, wasteful spending is obscured or buried in hundreds of pages of legislation. Demanding transparency in the budget process will identify elected officials with their fiscal decisions and will ensure Americans know exactly how each of their hard-earned tax dollars is spent...

• Unchecked, Social Security, Medicaid and Medicare obligations will grow as large as the entire federal budget is now in just a few decades. Without comprehensive bipartisan reform to America's entitlement programs, the nation will be unable to meet the challenges of providing vital medical and social security assistance to future generations.

Source: John McCain 2008 - John McCain for President

Governor Romney:
• Establish Strict Spending Limits. Veto domestic nondefense discretionary appropriations that increase spending by more than inflation minus one percent.

• Conduct Stem-To-Stern Review. Re-examine and evaluate all federal spending programs to identify waste, duplication, and inefficiencies that can be eliminated.

• Reform Entitlements. In a forthright and bipartisan manner, as President, Governor Romney will work with Congress to address the looming budget crisis caused by increasing entitlement spending.

Source: Curbing Federal Spending

donsutherland1

ARealConservative

So you claim they have a bolder plan for fiscal displine.

Excellent. What is it?

So McCain talks about Pork Spending - and how those requesting it will be famous. This isn't the same is freezing non-discretionary spending. It's just holllow rhetoric. McCain likes to point out the bridge to nowhere, as nobody agrees with that kind of pork, but what about other forms of pork?

Next up he talks about comprehensive bipartisan reform for entitlement spending. How much is he going to cut? What is the plan? Anybody can say - "this is a problem - I will work with the democrats on a solution".



Paul's plan is to freeze nondiscretionary spending. Romney will allow it to grow as long as it grows dslightly less then inflation. Why is Romney's plan more bold?

Quote:

• Conduct Stem-To-Stern Review. Re-examine and evaluate all federal spending programs to identify waste, duplication, and inefficiencies that can be eliminated.

Great. Ron Paul is way ahead. He already has a list of p[rograms that can be cut.

Quote:

• Reform Entitlements. In a forthright and bipartisan manner, as President, Governor Romney will work with Congress to address the looming budget crisis caused by increasing entitlement spending.

Hey - same as McCain's plan.

donsutherland1

ARealConservative

Finally we are at the heart of what you don't like. You like being the lone super power, even if it requires us to borrow to maintain this position.

As long as politicians don't address this problem, their solutions aren't bold enough.

If you want to stay on South Koerea, Germany, and the other hundreds of bases across the country, it will cost you.

ARealConservative

The Coming Entitlement Meltdown by Ron Paul
He singled out the Medicare prescription drug bill, passed by Congress at the end of 2003, as “probably the most fiscally irresponsible piece of legislation since the 1960s.”

Guess who voted for this fiscally irresponsible entitlement expansion?

Yep - John "Mr Bold Plan" McCain.

donsutherland1