Freezer Burn

The centerpiece of US President Barack Obama’s first State of the Union address last week was a make-believe three-year freeze on “discretionary” government spending.

Make-believe? Yes. Even setting aside that fact that there’s no such thing as non-“discretionary” government spending, Obama’s proposal specifically excludes the single largest “discretionary” spending category (“defense”), ultimately encompasses only 25% of the federal budget, and leaves considerable wiggle room on that 25%.

As I write this, early on the morning of Saturday, January 30th, the “national debt” stands at more than $12.3 trillion. As January wraps up, America’s federal politicians and bureaucrats have spent more than $290 billion this month, of which they have borrowed more than $110 billion. To keep up with these and other depressing numbers, point your browser at

Set against such numbers, Obama’s proposal is proof positive that he’s not serious about balancing his administration’s budget or paying down government’s debt. An organization $12 trillion+ in debt and with tens, perhaps hundreds, of trillions of dollars in “unfunded liabilities” — promises of future payments for which money has yet to be set aside — on its planning horizon doesn’t become solvent by walling off 75% of its budget as untouchable and gaming the other 25%.

Let’s look at the two biggest chunks of “untouchable” federal spending:

First, we have “non-discretionary” spending. This mythical spending category is a way of putting government spending on auto-pilot so that nobody has to take responsibility for it.

The “non-discretion” fiction consists of legislation passed by one US Congress which purports to be binding on all subsequent Congresses.

Congress A passes “permanent” legislation authorizing the spending and deeming that spending perpetually renewable (often with built-in growth) without further action.

Members of Congresses, B, C, D, etc. reap the political benefit. One one hand, they can claim continuous credit for those expenditures when speaking to constituent blocs receiving the “entitlements.” On the other hand, they can deny responsibility — “it’s non-discretionary! I don’t get a vote on it!” — when addressing themselves to taxpayers who wonder where the hell all the money is going.

Most, if not all, “non-discretionary” spending is completely discretionary. Congress can repeal or modify the legislation enabling that spending at will. “Non-discretionary” is code for “we don’t want to.”

The second big area of federal spending — not labeled “non-discretionary” but treated as sacred and untouchable — is “defense” spending.

Regular readers of this column are well aware that the true function government is to transfer wealth from your pockets to the bank accounts of the political class. In the United States, “defense” is that function’s workhorse spending category.

The US government spends almost as much as the rest of the world’s governments combined — six times as much as the next-largest spender (the Chinese Communist Party), and 29 times as much as the six top “rogue state” hobgoblins ( the governments of Cuba, Iran, Libya, North Korea, Sudan and Syria) put together — on “defense.”

That’s a lowball estimate, by the way. It only includes spending explicitly listed the “Department of Defense” budget line. Obama’s fake “freeze” proposal doesn’t just exclude the DoD budget line proper, it excludes all “[s]pending related to our national security.” Untold billions of dollars in non-DoD “discretionary” spending will be excluded from the “freeze” on the specious claim that it’s “security-related.”

The vast majority of “defense” and “security-related” spending is just bald-faced corporate welfare — transfers of wealth to the politicians’ corporate cronies through “no-bid” contracts or “cost-plus” contracts which start with already well-padded estimates and then pile “cost overruns” on top. The politicians get their kickbacks in the form of direct campaign finance bribes, hiring dollars directed to their districts to show that they can “bring home the bacon,” etc.

Between “non-discretionary” and “security-related” spending, government expenditures excluded from Obama’s “freeze” proposal for 2011 come to about as much as total government expenditures did in 2005. Both spending categories continue to grow like Topsy with no end in sight.

It should be fairly obvious to anyone who’s paying attention that neither President Obama nor the US Congress can be trusted to even slow the growth of, let alone actually freeze or reduce, government spending.

Surprised? You shouldn’t be. Government is organized crime on the largest scale imaginable, and the final downfall of every criminal gang is the inability to restrain its own greed for bigger and bigger scores. The politicians will stop robbing you when you’ve had enough and stop letting them rob you — and not a minute sooner.

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Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory