'Cut, Cap and Balance,' the Debt Ceiling and Federal Spending

Cato Institute Scholars Dan Mitchell and Chris Edwards evaluate the plans offered by Republicans for lowering federal spending using a so-called "Cut, Cap and Balance" proposal that would make small cuts to federal spending in the short run, cap federal spending at a higher share of GDP than the last years of the Clinton Administration, and balance the federal budget using a tax-limited balanced budget amendment to the Constitution.

Video produced by Caleb O. Brown and Austin Bragg.

[RobertFay]

"When you’re doing what you’re supposed to be doing, it rests softly inside your being with no judgment, no guilt & no imbalance. You KNOW!"

[Wilsontheterrible]

@efishunter That merely highlights the failures of our broken monetary system. Artificially maintaining an inefficient manufacturing labor force would be a waste of money and manpower. We should be focusing on creating a stable monetary policy centered around rational interest rates and the creation of skilled labor and service oriented professional jobs. This has not been the US policy and the results have been disasterous.

[DOHCL]

@boredmonkey29 You're right. Entitlement programs are pay-as-you go programs, therefor they cannot be 'cut' because the way those programs funded doesn't rise to the conservative standard, or how the video explained that standard to be. Thus entitlement programs are a type of discretionary spending.

[nsu]

The ONLY proposed legislation that would have met the spending-restraint criteria necessary to avoid a downgrade was the Cut Cap Balance proposal. It included $5.8 trillion in cuts, easily more than the $4 trillion the S&P required. But Obama vowed not to sign it, and the Senate Dems refused to consider it.

[pholland]

@L33thalLee I'm sure that would work out really well, especially when we already have the 2nd highest corporate tax rate in the world. They'd just move their corporate headquarters overseas as well.

[blrohm]

@AtlasShruggery I was incorrect in my numbers, he hasn't spent 40% of what we currently have. He is on pace to surpass 40% of what the debt was when he took office. So far he has "only" accumulated $2.65 trillion in debt and is projected to have another $1.1 trillion next year and it is assumed he'll maintain his minimum yearly deficit of $1.1 trillion for his 4th year. So whil I am by no means saying Bush's debt was great and/or a good idea. Just saying Obama is far our greatest deficit creator

[davemorgan]

These guys are starving the U.S. economy of desperately needed capital for huge public works projects, the likes of which we haven't need so badly since the Great Depression. In 1933, four years into the Great Depression, Roosevelt kicked us off the gold standard and started printing money.  He put millions of people back to work, got the economy rolling again and MADE IT POSSIBLE for the U.S. to fight a World War on two fronts.  We were a much stronger and more nimble industrialized country in 1941...we were able to respond to the existential challenge of Nazi Germany and the "Emperor's Japan."  Had Roosevelt not told the fiscal conservatives to go fly a kite we'd all be speaking German on the east coast and Japanese on the west.  The fact that the GOP is beating that same old tired drum TODAY, claiming that the government's budget is no different than a family's checkbook is asking all of us to drink rat poison.  We have our own currency.  Money is nothing more than an incentive for people to work to get it.   Today, there's not enough money on the streets of America anymore because the rich are hoarding vast quantities of it, and the GOP controlled Congress refuses to increase the money supply.  Make no mistake about it, the GOP IS A VAST CONSPIRACY TO CRUSH THE AMERICAN PEOPLE DOWN TO THE STATUS OF SLAVES, EVEN IF THEY DON'T REALIZE WHAT THEY'RE DOING.

[cesar]

It doesnt matter if you have a D or an R at the end of your name. Both parties are for big government. It just that they have their own version of government.

[vechorik]

Who voted against raising the debt ceiling?
95 Democrats and 66 Republicans exactly - voted against the bill
The US credit rating was downgraded because the bill didn't contain enough cuts.

[Wilsontheterrible]

@efishunter It's an outstretch of creative destruction. What we should have done was shift our focus from the dying out manufacturing centers to skilled labor and professional jobs that the U.S excells at. Instead we began bemoaning companies that sent jobs we wouldn't work to places where people would. The US does not operate in a vacuume, manufacturing jobs were on the way out. This natural progression was turned into a crisis through irresponcible monetary policy.

[Wilsontheterrible]

@L33thalLee Jobs went overseas for a reason, labor is cheaper. The Chinese don't have a minimum wage, they don't have unions, and they don't have worker saftey regulations. Maybe we should consider reevaluating where we work instead of complaining about the jobs we can't hope to compete for. The US is all about service and high quality goods, I say let the Chinese keep their low paid manufacturing jobs we should be focusing on jobs that only we can do.

[JohnnySahn]

@Mitchapalooza23 for real, taxing marijuana would make over a billion a year in just california alone...people don't like to think outside the box though. They need the government to tell them what to do instead of us telling the government what to do.

[Ykplaya]

Cut defense back to 2000 levels. We spend 1 trillion dollars a year on our war machine. I would cut that down to 300 billion. Cut Medicare severely, at least by 50%. Raise the Social Security age. Get rid of almost all of the federal departments.

[Wilsontheterrible]

@efishunter If we default on our debt (an unlikely scenario to say the least) our bond ratings would be reduced to B+ status, the same rating as sub saharan african nations. And the financial crisis is more apt to be traced back to the bubble producing policies of the federal government in the 1990's which encouraged overly risky behavior, the creation of CDO's, and giving out unrepayable loans by the pseudo-government entities of Fannie May and Freddie Mack.

[skaterdude]

5% government is still too much but a hella lot better than OweBama's 35%

[cesar]

if you push for cut cap and balance then how are we going to pay for those nice shiny fighter jets?

[capitalistlife]

If it's really a good plan, it won't pass.

[slickrickdarula]

if the cato institute back it, it is horrible for you.

[afinger]

Don't increase the dept ceiling no matter what.
Ron Paul for President 2012!

[blrohm]

@AtlasShruggery don't consider myself a Republican and hardly ignorant of history. I'm willing to bet you're one of those liberals who runs around and still claims that Clinton had a surplus when he left office right?