by Robert Maynard
I have pointed out repeatedly on this site that the dreaded cuts, which would come as a result of the sequester are not really cuts at all, but merely a slow down in the planned rate of federal spending growth. They are no where near the magnitude needed to get a handle on our spending crisis. Of course a planned restructuring of the federal government would be preferable to the automatic cuts that will take place under the sequester. The problem that such a responsible restructuring is not in the cards given our current political leadership. President Obama has been continuously demagoging this issue and our own Governor Shumlin seems determined to match his irresponsible rhetoric. His latest foray in this political battle had him complaining to the Politico that the GOP House members were holding the nation hostage:
“The one thing that stands in our way of prosperity, of job creation, right now, is this Congress, which refuses to work with the president,” Shumlin said Friday on POLITICO’s State Solutions Conference, adding: “We have a Congress that is holding American prosperity hostage right now; we have Republican governors who are passing the tax policies they can’t get past a Democratic [Senate] and a Democratic president.”
I still haven’t figured out why any politician, or media figure, has not pointed out yet that the answer on the revenue side of this whole matter is not to raise taxes on alrealy over burdened taxpayers in a slow economy. There is a much better revenue source to tap if that sould enter the conversation if we could first agree to get a handle on our spending adiction. The American Thinker ran an article about this source in a May 2012 article:
Government is so far in debt that simply cutting spending less is not enough, and raising taxes is foolishness. We need to dramatically increase the sources of non-tax revenue. Fortunately, the convergence of more sophisticated technology and rising costs for natural resources makes that possible.
Anu Mittal, director of natural resources and the environment for the General Accounting Office, recently testified before Congress that the oil reserves in the Green River Formation, spanning much of the Rocky Mountain Region, are greater than all the rest of the world’s reserves combined — perhaps three trillion barrels, with about half the oil on federal land and with half of the oil extractable at current prices. The federal royalty by a rough estimate would be over $9 trillion.
As I pointed out last October, Harold Hamm, a billionaire who made his fortune finding where oil can be profitably extracted, believes that the federal royalties from the Bakken Fields in North Dakota and Montana could equal $18 trillion, which could also pay off the national debt. Of course, tapping the United States’ natural resources is the opposite of what Obama is doing. Oil and gas production on federal lands has dropped by 40% under the dreary marriage of environmentalism, puerile elitism, and Marxism which is Obamanomics.
Our Governor, our President, and a lot of others need to to a little more homework before they spout off. That is not the only area where Shumilin’s words cause one to ponder: “The most immediate threat to economic progress, he said, was the sequester, which would cut $1.2 trillion in domestic and defense spending if it goes into effect on March 1. Shumlin said the sequester would result in layoffs for firefighters and police officers in the Green Mountain State.”
Since when does the federal government pay for our “firefighters and police officers?” If a cutoff of federal funding would really result in the laying off of such state employees, we are in serious trouble when it comes to our over reliance on the federal Santa Claus. Instead of crowing to Politico about the supposed model of progressive government that Vermont represents, perhaps our Governor should ponder a bit the absolute fiscal irresponsibility of being so dependent on federal handouts at a time when the federal government is headed toward bankruptcy. Given the fact that there is absolutely NO WAY that the numbers for Green Mountain Care will work without major support from the federal government, is it any wonder that Governor Shumlin is pushing the panic button at the prospect of even a minor slowdown in the increase of federal spending?