The Oxford Dictionary of Economics defines the Ratchet Effect as: “A tendency for a variable to be influenced by its own largest previous value…the ratchet effect implies that variables are more sticky in one direction than the other.” Think of it as one of those notoriously unreliable DC Metro escalators that only go in the direction conservatives don’t want to travel.

This is the spending mindset the Republicans face in Washington, DC next year.

The Iron Triangle of big government spenders — Democrats, media & feeders at the federal trough — turn every attempt to cut spending into trench warfare.

For the Triangle the ratchet of government spending only moves toward more spending. The old guaranteed maximum spending ceiling from the past Congress — designed by experts to educate children, eliminate poverty, drain the oceans, reduce obesity, cure cancer, beat up bullies and reparate for racism — becomes the new skinflint minimum spending, insufficient to meet all the unmet needs discovered during the next Congress.

And the fight does not have to involve the big programs like Social Security. The Triangle fights as hard for pennies as it does for dollars.

Buried in the “Stimulus,” was a shovel–ready project that involved shoveling money toward government employees who commute on Metro.

Back in the days of want and privation, during a Republican administration, federal employees were given $120/month as a gift from taxpayers to finance their travel. Taxpayers, who were hoping the Escort’s bald tires on would hold out another month, were comforted by the knowledge government workers got $ 1,440/year to pay for their subway ride.

The “Stimulus” increased the monthly handout to $230. The new spending level was justified as a “one time boost” set to expire on Dec. 31, 2010.

Approximately 170,000 federal employees signed up for the program, which cost roughly $192 million over two years.

How giving money to people who were already riding Metro was going to stimulate the economy is something of a mystery.

They couldn’t use the extra money to buy breakfast burritos to enjoy on the train, because eating so much as a French fry is illegal. (An ordinance I heartily support, by the way.) Did Obama’s experts predict federal employees would be so grateful for the extra largess that they would commute twice each morning?

Now that they’ve been enjoying the money for almost two years, the ratchet effect begins and it comes as no surprise there’s a fight to perpetuate the bonus.
The ratcheteers at the Washington Post describe the natural expiration of a TEMPORARY increase in a taxpayer subsidy as “a direct hit of $1,320 annually.”

Let’s see, if I win the Virginia Lottery, and I elect to take my winnings in monthly installments, is it a “direct hit” when the lottery winnings stop? Can I demand the Commonwealth extend the payments because I’ve become accustomed to spending the money?

Why no interviews with Oklahoma taxpayers overjoyed that their handouts to government employees will be cut nearly in half; Nebraska taxpayers thrilled by this start on deficit reduction and federal workers who understand they will again enjoy the taxpayer–financed subsidy that was just fine as recently as two years ago?

But that ignores the ratchet effect where even a one–time increase is viewed as a down payment on permanence.

So the fight to keep the money begins and we see the Iron Triangle in action. Metro will begin an ad campaign “warning” federal workers of the benefit expiration and urging letters to Congress. The contractor who waited by the revolving door and hired the staffers who wrote that portion of the “Stimulus” bill, will use those same staffers to lobby Congress for an extension. And mass transit “activists,” who feed on government grants, complain the return to the old subsidy levels will “force” commuters into their cars and “subsidize” gridlock.

And the ratchet clicks on.

Maybe the expiration would cause Metro commuters to join carpools. That keeps cars off the road, reduces crowding on Metro, saves taxpayer dollars and generates a sense of community and shared enterprise during the daily commute.

Sort of it takes a village to get to work.

This ratchet mindset is what makes reducing the size of government so daunting. It’s easy for Congressmen and Senators to extend the spending and keep the staffers in their office happy, while only soaking each taxpayer a few pennies.

I hope the new Republican House will be a conservative House, with the courage and determination to wage the big spending fights and the small spending fights.

Because without that determination the ratchet effect combined with the Iron Spending Triangle is going to bankrupt the rest of us.

Michael R. Shannon is a public relations and advertising consultant with corporate, government and political experience around the globe. He’s a dynamic and entertaining speaker and can be reached at michael–shannon@comcast.net.

 

WesternFront America

These Republicans are definitely not the “party of no” (as cheap shots would have it)

By Deroy Murdock

NEW YORK — Whether or not the GOP wins the U.S. Senate, several Republican contenders for the World’s Greatest Deliberative Body hope to promote some rather unique proposals. Republicans are running on such ideas as repealing ObamaCare, curbing federal spending, and making permanent the 2001 and 2003 tax cuts. Those are all fine concepts, but several candidates have gone beyond the old perennials to promote good, less-familiar ideas.

•Among others, California’s Carly Fiorina highlights two particularly intriguing proposals:
First, she recommends something called Jobs for Americans Zones. In these specific geographic areas, federal tax benefits would be coupled with relief from state and local regulations. This would create conditions designed to lure manufacturing jobs back to America that have fled for more appealing economic climates. These incentives would include:

A 10-year tax holiday for facilities repatriated from overseas
A five-year tax holiday for start-ups and expansions
State and local permitting and land-use assistance
Holidays from uncompetitive state and local regulations, such as onerous work rules that boost labor costs

“Carly believes we must compete and fight for every single job,” says campaign press secretary Andrea Saul. “That means both creating jobs at home and bringing jobs back from overseas. She believes we should ensure that the incentives we offer for high-skill and manufacturing jobs are competitive with what foreign governments offer.”

Second, Fiorina advocates something she calls “Letting Americans Pay Down the Debt.” In short, taxpayers could steer part of their levies to curbing America’s $13 trillion in deep-red ink. As Saul explains, Fiorina “understands that, in order to put Americans back to work, get small enterprises back in business and boost economic growth beyond just 2 or 3 percent, we must reduce the stress that record-high federal spending places on our economy. To do that, among many other ideas, she has proposed that Congress give taxpayers the opportunity to designate 0 to 10 percent of their federal tax liability towards debt reduction.”

•Connecticut’s Linda McMahon spotlights congressional pay. She would slash legislative salaries to match the U.S. median income. If McMahon prevailed, congressional pay would plunge from $174,000 to $44,389.

“If Members of Congress want their own salaries to rise, they will need to support policies that will help boost incomes for average Americans,” McMahon spokesman Shawn McCoy elaborates. “Career politicians will probably do their best to block such a proposal, so it might be easier to push for capping Congressional salary until median income catches up.”

Harmonizing congressional and rank-and-file salaries will pry Congress from the bubble of relative affluence that isolates them from their constituents. Members of this Congress might have understood this economy’s thoroughgoing flaccidity if they struggled as hard to pay their bills as do the Americans they represent.

“I won’t take a dime in salary,” says McMahon. “Career politicians run for the U.S. Senate for the perks and the money. I’m not interested in the perks, and I won’t let taxpayers pay me more than a million dollars over six years while Connecticut families are hurting.”

McMahon also says she will limit her own time on Capitol Hill. “I’ll serve only two terms. Period,” she declares. “If you can’t work through an agenda in 12 years, you don’t have an agenda. You have a career.”

•Florida’s Marco Rubio is a one-man think tank. He has unveiled “10 Simple Ways to Lower HealthCare Costs,” “12 Simple Ways to Improve Education,” and “23 Simple Ways to Create Jobs.” Among his “12 Simple Ways to Cut Spending,” these look especially tantalizing:

Reduce the Size of the Federal Bureaucracy. To get spending under control, we must cut the size of the government workforce. To begin, we should freeze federal civilian workforce pay for one year and bring the pay scale back in line with market rates. In addition, we should reduce its size to 2008 levels. To accomplish this without disrupting critical government services, we should implement a policy of only hiring just one civilian employee for every two who leave government.

Freeze Federal Non-Defense, Non-Veterans Spending at 2008 Levels. We should freeze non-defense and non-veterans discretionary spending at pre-Obama levels. In addition, we actually should enforce our goals to cut spending and reduce the deficit by making automatic cuts if politicians won’t. This could save hundreds of billions of dollars over 10 years.

Automatic Sunset of Government Programs. We need to end the permanent lease on life that government programs are given. Too often, Congress creates a spending program, increases it’s funding, and never looks back to see if it is actually working. We should mandate that all discretionary spending programs end every 10 years after the Census, unless Congress specifically votes to continue them.

Rubio campaign spokesman Alex Burgos says that the Automatic Sunset already brightens the Sunshine State. “It’s an idea that’s been at work in the Florida Legislature and helps make sure programs are regularly evaluated and properly debated, not passed once and allowed to live on forever.”
Democrats constantly accuse Republicans of brain death. “The other side just is not presenting a serious idea of how to balance our budgets and put us on a stable fiscal footing,” President Obama complained to Richmond, Virginia voters on September 29.

In fact, GOP congressional challengers and incumbents are bursting with worthy ideas for repairing America. Some are wise, albeit oft-repeated. Others are novel and merit further interest.
Whether Leftists like Obama and his Democrat pals on Capitol Hill will listen to such proposals is another matter entirely. After Tuesdays’ vote, those ideas may become too powerful to ignore.

New York commentator Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. This column first appeared on NationalReview.com.

 

WesternFront America

The Lord God Almighty grants eternal life in the hereafter, but on earth it’s politicians who control immortality. So when the Virginia House of Delegates passes a budget that executes the Commission for the Arts, it’s big news.

Politicians prefer to be more even–handed as in: you lay off ten percent of your state troopers and then we can lay off ten percent of our mimes. Across–the–board cuts avoid evaluating the worth and function of bureaucracies and instead delegate important government decisions to Procrustes; and shifts the blame to him, too.

That’s why total elimination sets a dangerous precedent. If delegates boot the ballet, there’s no telling what’s next!

Government feeders fear the zero like nothing else. Better to cut the budget 95 percent. Then, like the German Army after WWI, it could survive with a skeleton staff, until the return of tax–and–spend Democrats puts new taxpayer–funded flesh on those patiently waiting bones.

Zero means get a haircut and get a real job.

Predictably, every tutu and beret within a 50–mile radius of Richmond protested the closure of the public arts trough.

Arguments ranged from jobs to junior. Employees of “Kid Pan Alley” claimed to “inspire creative thinking” by enabling 14,000 children to write songs performed in concerts before over 200,000 people.

Inflated numbers aside, that’s a chilling thought. I see generations of grim parents enduring the agony of listening to other people’s brats saw through some abomination until their little Mozart is able to seize the stage.

If parents want their little Gershwin to make it in music, do what we did. My son took piano lessons paid for without begging for a subsidy from Richmond. Admittedly it didn’t last very long, because after a year or so the teacher fired him — which came as a shock since he was only nine.

(The teacher claimed she was retiring, but I think that was to spare our feelings. She still sees students, just not Karl.)

A teacher at The School of the Performing Arts in the Richmond Community, told reporters if the commission is eliminated, “I and about 50 percent of my friends will be out of a job.”

A valid point since commission money is not really funding the next Michelangelo, it’s more like the next Mr. Peepers — an anonymous paper–shuffler who gets to hang around “artists” and “poets” so he’s part of the “creative community.”

This $4.4 million in tax dollars spent to subsidize the affectations of Virginia’s upper crust isn’t a crop, and this is the year the boll weevils hit, so there’s less cotton.

It’s my money and your money that the government takes and spends as it pleases.

The House has recognized in a recession the vast majority of taxpayers are not pleased their money is being spent to subsidize “art” and “artists” they have no interest in seeing.

After the budget vote, Democrat House Minority Leader Ward Armstrong pontificated he would “rather resign my seat than vote for this budget.”

Don’t let the door hit you in the behind. And while you’re at it, take Sen. Ralph Northam (D–Norfolk) with you.

Northam is the legislative giant that introduced a bill establishing a council to provide guidelines regarding concussions and requires any student-athlete who suffers a concussion be pulled from play and not allowed to return until a doctor clears him.

Can’t you just see the awed and grateful constituents back home? “Thank you, Sen. Northam! Last season when Bubba wasn’t comatose, he didn’t know what day it was, but thanks to your bold leadership he won’t have to play football with a concussion again.”

Isn’t this what parents are for?

But guess what, Northam just happens to be a “pediatric neurologist” and since his legislation requires “clearance from a licensed health–care professional” I guarantee a visit to the CVS Minute Clinic won’t qualify.

This bill will do nothing to reduce concussions and not much to increase Northam’s income.

A simple rule change that outlaws the massive cage on football helmets would do the trick. There is less grillwork on a ’58 Buick. I played 16 seasons of Rugby without a helmet and never suffered a concussion.

Why? A thick German skull for one; and the knowledge that without bars over my nose, using my head as a weapon would get it broken. Going back to a simple T–bar face guard would remove the sense of facial invulnerability that encourages head–first tackles.

Politics is broken. Not because laws don’t get passed, but because too many publicity–seeking, trivial, nanny–state laws do get passed.

My advice to Richmond and Washington is govern better by meddling less.

Michael R. Shannon is a public relations and advertising consultant with corporate, government and political experience around the globe. He is a dynamic and entertaining keynote speaker. He can be reached at michael-shannon@comcast.net.

 

WesternFront America