Less We Can!

Meteoric, historic, a tidal wave, all of these terms have been used to describe the recent midterm elections.  Most surprising of all, these words are actually pretty good descriptors of the events of November second.  Pundits opined that the midterm could be a repeat of the '94 elections when Republicans gained 52 House seats and control of that chamber.  Some conservative pundits shushed other conservative pundits, worried that such rosy optimism would suppress turnout and cause the Republicans to lose seats they would have gained otherwise.  As of the current count right now Republicans have won 60 seats in the House, their largest sweep not since 1994 but since 1938.  State legislatures broke big for Republicans as well, not only was the sweep a large one but now the total percentage of Republican state legislators is the largest it has been since 1956.  With all these Republicans now in power, does that mean that we are headed towards fiscal sanity?  Well, probably not.

Republican leaders Mitch McConnell and John Boehner have introduced legislation to end earmarks, the pet projects that Senators and Congressmen attach to bills with little to no oversight.  Last year earmarks cost taxpayers $17 billion.  Although that sounds like alot of money, that's less than one-half of one percent of the annual budget. 

Republicans are also touting that they will cut government waste, fraud and abuse from the budget but if economics teaches us anything it is that government is inherently inefficient and rife with waste, fraud and abuse because government is a non-profit driven monopoly.  With no incentive from either competition or profit, there is no incentive to be efficient.  Although some Republicans have talked about privatizing various functions of the government, no broad based support exists to do this.

What about the deficit commission that recently released its report advising some tax raising measures like doing away with home mortgage interest deductions and some cost cutting measures such as reforming entitlement programs?  Doing away with the home mortgage interest deduction might very well tank the real estate markets (again) and would effectively raise taxes on the middle class in the midst of a recession.  Reforming entitlements is a great idea and the only one likely to put a dent in the budget. Social Security, Medicare, Medicaid, defense spending and interest on the debt add up to more than 80% of the annual budget.  Any serious talk of cutting spending must include these sacred cows.  Of course, how serious could the commission be on reforming entitlements when they made no suggestion of repealing the latest one, Obamacare?  Also, Americans have no appetite for cutting entitlements.  Among the signs at Tea Party rallies about cutting spending are also signs that say "Get The Government Out Of My Medicare!"  When asked generally, Americans want the government to cut spending but when asked on specifics still consider 80% of the budget untouchable. 

Entitlement reform is not coming anytime soon and it would be a miracle to even preemptively reform Obamacare, forget repeal.  Republicans may slam the brake on this administration's big spending ways by virtue of gridlock but there's no sign that they want to turn the car around.  Worse yet, there's no sign that Americans want them to.  As Alexis de Tocqueville said, "In a democracy, we get the government we deserve."