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Jerry Shenk

One Cheer for the Debt Ceiling Deal

by Jerry Shenk

It's billed as the best deal possible, but nothing was solved. A modest
start, the debt-ceiling deal merely flattens the trajectory of America's
unsustainable spending.

But, the process of controlling spending in Washington and cutting the size
and cost of government may - may - start with appointment of a 12-member
bipartisan congressional "super committee" on debt control provided for in
the bill.

Frankly, because politicians are involved, expectations aren't high. Rich
Lowry of National Review writes, "The debt deal is austerity designed by
committee. It's late. It's needlessly complex. It's inadequate to our
challenges and may not prove particularly functional. But it's austerity."

Nonetheless, one positive outcome of the deal is that congressional
Republicans have exorcized the ghost of John Maynard Keynes. Democratic Sen.
Richard Durbin called the deal Keynes' "final interment." The misapplied,
discredited Keynesian economics that deepened and prolonged the Great
Depression has done the same in the current recession set to enter its
second dip.

Because President Barack Obama shares Presidents Herbert Hoover's and
Franklin Roosevelt's fundamental lack of faith in marketplaces, he's made
the same missteps. And Obama continues to advocate FDR's final mistake:
raising taxes when the economy cannot afford to sacrifice more assets from
the productive private sector.

Amity Schlaes' excellent history of the Great Depression, "The Forgotten
Man," discredits the notion that government spending is important to
recoveries. Schlaes demonstrates that "the New Deal did not bring the
country to recovery ... but ... that the country got there eventually" in
spite of FDR's policies, mostly as a result of military spending for World
War II.

Keynes may be dead, but his legacy lives on in a bloated, inefficient,
nonresponsive government and in wasteful and financially unsustainable New
Deal programs.

Though a bulldozer is needed, immediately razing government is a political
nonstarter. But, the bipartisan debt-ceiling deal presents an opportunity
for incremental reduction of government to make it more efficient and less

Government has become so large that it has reached the point of negative
returns. We've seen ample evidence that almost anything new government
attempts - and much of what it has already done - will do more harm than
good. Larger bureaucracies result in higher costs to taxpayers and
consumers. Rules and regulations bring greater intrusions into our lives
along with more restrictions on our freedoms. Feel-good but ineffective
regulation of businesses adds costs to the things we buy and results in
shortages of products and services.

We must address Washington overspending and waste. America has a Department
of Education that has never taught a single child a single fact, a
Transportation Department that has never transported anything or anybody six
inches, a Department of Agriculture having nearly as many employees as
America has real farmers, and an Energy Department, established to make
energy more available, that makes it less accessible and more expensive.

Most of us get nothing from these top-heavy, overstaffed holes into which
our government pours tax money, and we would never notice if they were gone.
The same is true of HUD, the Labor Department and many other underperforming
government money sinks.

If it is to reduce spending, Congress must exercise its responsibility for
oversight, demand that every department in every agency make a public case
for funding, and compare the functions of each to relevant private-sector
equivalents to determine proper staffing and productivity standards.
Supervisors' GS ratings can no longer be raised and their salaries increased
based on the number of employees they supervise. The practice only
encourages federal managers to slow down their staffs and create artificial
backlogs to increase headcount.

Clerks are clerks, and purchasing agents and customer-service people do the
same jobs everywhere, so federal agency staffing, salaries, benefits and
workloads must be brought into line with the private-sector workers
government employees significantly out-earn.

Competition increases choices, drives down prices and improves services.
Government at all levels could save considerable tax dollars by eliminating
union prevailing-wage and work-rule requirements for government projects.

Government agencies should outsource jobs that are not inherently
governmental. There is no reason to pay unskilled and semiskilled laborers
government union salaries and benefits when private, entrepreneur-owned
companies could do better jobs at less cost.

If it has the will, Congress can bring American finances and our economy
back from the abyss. Republicans hold only one house in a single branch of
government, but they have successfully changed the debate in Washington, if
not the immediate reality, from taxing and spending to cutting and capping -
how much and when.

It's a start.

Following congressional agreement on an imperfect debt-ceiling bill, will
America begin a return to responsible governance?

The Republican House must use its constitutional power of the purse to
reduce government. If it does not, many Republican House members will become
as politically vulnerable in 2012 as those members whose spending habits
created the debt crisis.

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