In a recent post titled “Balancing the Budget – The Sane Approach,” I republished in its entirety an article in The Wall Street Journal titled “The Right Way to Balance the Budget” and offered a personal observation about the difficulty in trying to assimilate enough unbiased information to form an opinion about the best solution for the current fiscal nightmare in America.

A few days later I read an opinion piece that serves as a perfect example to illustrate the kind of polar-opposite thinking clouding the issue. The following is based on a NYT editorial titled, “Budget Hypocrisy.”

Let’s define something first: hypocrisy – the practice of claiming to have moral standards or beliefs to which one’s own behavior does not conform; pretense. For my purposes here, I’ll ignore the morality and belief components and deal only with behavior.

Second, let’s acknowledge that whatever you or I may think of the New York Times and how we individually might characterize its editorial bias, we know immediately with the opening of this piece where it’s going. But that’s good, right? Any editor knows to come out of the chute with guns-a-blazing (in Texas, anyway) so readers have no doubt as to the topic or the publication’s attitude toward it. To wit:

“It was not long ago that Republicans succeeded in holding unemployment benefits hostage to a renewal of the high-end Bush-era income tax cuts and — as a little bonus — won deep estate tax cuts for America’s wealthiest heirs. Those cuts will add nearly $140 billion to the deficit in the near term, while doing far less to prod the economy than if the money had been spent more wisely. That should have been evidence enough that the Republican Party’s one real priority is tax cuts — despite all the talk about deficit reduction and economic growth.”

Okay, then. If you’re an elephant-skinned conservative, you’re outa there. The tone of the paragraph will probably do that all by itself, even without addressing the mix of fact and opinion it contains. For those who stick around, we read:

“But here’s some more: On Dec. 22, just before they left town for the holidays, House Republican leaders released new budget rules that they intend to adopt when they assume the majority in January and will set the stage for even more budget-busting tax cuts.”

The Times then provides background about pay-as-you-go rules adopted by the Democratic majorities in the House and Senate in 2007, essentially creating a zero-sum relationship between tax cuts or increases in entitlement spending and tax increases or entitlement cuts. According to the Times, the new Republican rules “will gut pay-as-you-go because they require offsets only for entitlement increases, not for tax cuts. In effect, the new rules will codify the Republican fantasy that tax cuts do not deepen the deficit.”

But that’s not all. According to Congressional mandate, entitlement-spending increases must be offset by spending cuts only without raising taxes to pay for them. NYT: “Say, for example, that lawmakers want to bolster child credits for families at or near the minimum wage. One way to help pay for the aid would be to close the tax loophole that lets the nation’s wealthiest private equity partners pay tax at close to the lowest rate in the code. That long overdue reform would raise an estimated $25 billion over 10 years, but the new rules will forbid being sensible like that.”

Even worse, according to the Times, is that the new rules direct the House Budget Committee to ignore certain costs when computing the impact of future actions. “For example, the cost to make the Bush-era tax cuts permanent would be ignored, as would the fiscal effects of repealing the health reform law. At the same time, the new rules bar the renewal of aid for low-income working families — extended temporarily in the recent tax-cut deal — unless it is fully paid for. House Republicans obviously believe they have a good thing going with voters by sanctifying tax cuts and demonizing spending. That’s been their approach for 30 years after all, and it unfailingly rallies their base.”

The Times concludes with, “President Obama and the democratic lawmakers . . . need a plan for long-term deficit reduction that recognizes what the Republicans ignore: Never-ending tax cuts make the deficit worse. Prudent tax increases need to be part of the solution.”

So, what if we shred this post and the earlier one (which used historical data to justify the position that successful attempts to balance budgets rely almost entirely on reduced government expenditures, while unsuccessful ones rely heavily on tax increases), process them in a blender with some “make sense of it all” solution, and pour the mixture into a glass? We might have a best-of-both-approaches smoothie, right? Chug it down and make it all better. Or maybe not.

For me, trying to mix oil and water comes to mind. It ain’t gonna happen. We’re stuck with the status quo, which is that no one of either political party or fiscal persuasion has a clue about what to do other than doggedly pursue the same ineffective policies that have created this mess and can only keep us there. And to continue doing that, they’ll push the handy debt-ceiling reset button.

The Second Liberty Bond Act of 1917 established a statutory limit on federal debt to provide the U.S. Treasury with more leeway and allow for modern management techniques in government finance. Currently, we conduct more than 200 sales of debt by auction every year as long as the total debt does not exceed a stated ceiling. How’s that been working recently?

In the last ten years, the debt ceiling has been reset ten times, from $5.95 trillion to the most recent increase of $14.3 trillion on February 12, 2010. On Sunday, the top White House economic adviser warned lawmakers that the United States faces catastrophe if Congress does not raise the debt ceiling.

Here’s a prediction: they’ll stick their heads in the sand, push the reset button, and like voodoo magic extend the edge of the earth a bit farther to put off the day of reckoning until another tomorrow.

As a follow-up to a previous post titled, “RIP – The Best Available Version of the Truth” and an introduction to the complete text of a recent article in the Wall Street Journal below, I’d like to offer the following personal observation.

A few months ago, a friend and I were discussing the topic of truth, which for the purposes of this post I’d like to define as that which is in accordance with fact or reality. My position was that the average person can’t trust much (if anything) of what is fed to the public by the media because it’s all tainted with bias in one form or another. My friend responded by suggesting that I was a nihilist, a person who rejects all moral and religious principles, often in the belief that life is meaningless.

I have to admit that although I couldn’t have provided that specific definition at the time, I rejected his assertion because it’s not a matter of believing that meaning doesn’t exist, or that truth doesn’t exist, but that I can’t trust anyone else to provide it. It’s the difference between finding out for myself by going to the source (wherever that might be and with the assumption that it’s available out there somewhere), or accepting someone else’s version.

And so it is for trying to understand two diametrically opposed approaches to dealing with America’s looming fiscal disaster, divided along the lines of Democratic versus Republican and liberal versus conservative. Which, of course, begs the issue of truth, because neither end of this political and fiscal philosophy continuum has a monopoly on fact or reality.

I’m sure that someone can find reason to label the WSJ as biased one way or the other and reject the premise and background information contained in the following article. But when I consider them, only one thought comes to mind: Why is it that our great nation can’t do anything but continue a precipitous descent into the black pit of insolvency? We have no solution, and we won’t find one unless we cease the partisan bickering and try something that has a track record of positive results.

So, without editing or inserted illustrations, here is “The Right Way to Balance the Budget: The experience of 21 countries over 37 years yields a simple truth: Cutting spending works, and raising taxes doesn’t” by Andrew G. Biggs, Kevin Hassett, and Matt Jensen.

The federal debt is at its highest level since the aftermath of World War II—and it’s projected to rise further. Simply stabilizing debt levels would require an immediate and permanent 23% increase in all federal tax revenues or equivalent cuts in government expenditures, according to Congressional Budget Office forecasts. What’s clear is that to avoid a crisis, the federal government must undergo a significant retrenchment, or fiscal consolidation. The question is whether to do so by raising taxes or reducing government spending.

Rumors have it that President Obama will propose steps to address growing deficits in his next State of the Union address. The natural impulse of a conciliator might be to split the difference: reduce the deficit with equal parts spending cuts and tax increases. But history suggests that such an approach would be a recipe for failure.

In new research that builds on the pioneering work of Harvard economists Alberto Alesina and Silvia Ardagna, we analyzed the history of fiscal consolidations in 21 countries of the Organization for Economic Cooperation and Development over 37 years. Some of those nations repaired their fiscal problems; many did not. Our goal was to establish a detailed recipe for success. If the United States were to copy past consolidations that succeeded, what would it do?

This is an important question, because failed consolidations are more the rule than the exception. To be blunt, countries in fiscal trouble generally get there by making years of concessions to their left wing, and their fiscal consolidations tend to make too many as well. As a result, successful consolidations are rare: In only around one-fifth of cases do countries reduce their debt-to-GDP ratios by the relatively modest sum of 4.5 percentage points three years following the beginning of a consolidation. Finland from 1996 to 1998 and the United Kingdom in 1997 are two examples of successful consolidations.

The data also clearly indicate that successful attempts to balance budgets rely almost entirely on reduced government expenditures, while unsuccessful ones rely heavily on tax increases. On average, the typical unsuccessful consolidation consisted of 53% tax increases and 47% spending cuts.

By contrast, the typical successful fiscal consolidation consisted, on average, of 85% spending cuts. While tax increases play little role in successful efforts to balance budgets, there are some cases where governments reduced spending by more than was needed to lower the budget deficit, and then went on to cut taxes. Finland’s consolidation in the late 1990s consisted of 108% spending cuts, accompanied by modest tax cuts.

Consistent with other studies, we found that successful consolidations focused on reducing social transfers, which in the American context means entitlements, and also on cuts to the size and pay of the government work force. A 1996 International Monetary Fund study concluded that “fiscal consolidation that concentrates on the expenditure side, and especially on transfers and government wages, is more likely to succeed in reducing the public debt ratio than tax-based consolidation.” For example, in the U.K’s 1997 consolidation, cuts to transfers made up 32% of expenditure cuts, and cuts to government wages made up 21%.

Likewise, a 1996 research paper by Columbia University economist Roberto Perotti concluded that “the more persistent adjustments are the ones that reduce the deficit mainly by cutting two specific types of outlays: social expenditure and the wage component of government consumption. Adjustments that do not last, by contrast, rely primarily on labor-tax increases and on capital-spending cuts.”

The numbers are striking. Our research shows that the typical successful consolidation allocates 38% of the spending cuts to entitlements and 25% to reductions in government salaries. The residual comes from areas such as subsidies, infrastructure and defense.

Why is reducing entitlements and government pay so important? One explanation is that lower social transfers spur people to work and save. Reducing the government work force shifts resources to the more productive private sector.

Another reason is credibility. Governments that take on entrenched, politically sensitive spending show citizens and financial markets they are serious about fiscal responsibility.

While tax hikes slow revenue growth, policies that credibly reduce government spending in the long run boost economic growth by more than their simple effects on deficits might imply. Any attempt to address the federal government’s budget shortfall that relies on less than 85% spending cuts runs too large a risk of failure. The experience of so many other countries shows that it’s crucial for the U.S. to get this right.

Mr. Biggs is a resident scholar, Mr. Hassett is the director of economic policy studies, and Mr. Jensen is a research assistant at the American Enterprise Institute.

If you pay any attention to what’s going on in the American political arena, you probably know that the term “earmark” doesn’t refer to “a small area on the surface of the organ of hearing and balance in humans having a different color from its surroundings.”

No, it’s commonly considered synonymous with “pork barrel” legislation, the derogatory term referring to appropriation of government spending for localized projects secured to bring money into a politician’s district. Although the terms are not necessarily the same, they share two things in common: politicians love them (even when they vote against them), and they operate like a cancer in the budgetary process because they eat away at the core of fiscal responsibility by serving as the legal tender for exercising power in Congress.

One aspect of these deplorable shenanigans that elevates my blood pressure is the common practice of using legislation having nothing to do with the purpose of the earmark as the greased tongue depressor upon which to ram the expenditure down the throats of those few Americans who actually hand over their hard-earned money so politicians can play with it.

This is especially true of the defense appropriations bill, which has enough problems of its own without being held hostage to special interests. Congressmen know the bill is going to be passed, (we can’t leave our troops without bullets, now can we?), so they attach the products of their pet agendas to improve the chances of funding them.

The mid-term elections have provided a backdrop for observing how duplicitous the process really is. A recent NYT article by Ron Nixon observes that in the face of a looming ban on earmarks, lawmakers will not be deterred from business as usual.

Nixon: “No one was more critical than Representative Mark Steven Kirk when President Obama and the Democratic majority in Congress sought passage last year of a $787 billion spending bill intended to stimulate the economy. And during his campaign for the Illinois Senate seat once held by Mr. Obama, Mr. Kirk, a Republican, boasted of his vote against ‘Speaker Pelosi’s trillion-dollar stimulus plan’. Though Mr. Kirk and other Republicans thundered against pork-barrel spending and lawmakers’ practice of designating money for special projects through earmarks, they have not shied from using a less-well-known process called lettermarking [emphasis added] to try to direct money to projects in their home districts.”

Okay, so to get some wiggle room for attacking political opponents, they’ll eschew the onerous earmarks (publicly, at any rate), and mark letters instead. How does that work, exactly? Nixon goes on to tell us: “Mr. Kirk, for example, sent a letter to the Department of Education dated Sept. 10, 2009, asking it to release money ‘needed to support students and educational programs’ in a local school district. The letter was obtained under the Freedom of Information Act by the group Citizens Against Government Waste, which shared it with The New York Times. The district, Woodland School District 50, said it later received about $1.1 million in stimulus money. In response to questions about the letter, a spokeswoman for Mr. Kirk defended the practice of reaching out to federal agencies to secure financing for constituents. ‘Senator-elect Kirk became the first member of the Appropriations Committee to stop requesting earmarks and voted against the stimulus bill,’ the spokeswoman, Susan Kuczka, said in a prepared statement. ‘He has and will continue to be an advocate for his Illinois constituents before administration agencies but will not request Congressional earmarks to be included in House or Senate legislation.'”

Aha. It turns out that lettermarking takes place outside the Congressional appropriations process and is one of the many ways legislators who support a ban on earmarks try to direct money back home. But that’s not all . . .

Nixon: “In phonemarking [emphasis added], a lawmaker calls an agency to request financing for a project. More indirectly, members of Congress make use of what are known as soft earmarks [emphasis added], which involve making suggestions about where money should be directed, instead of explicitly instructing agencies to finance a project. Members also push for increases in financing of certain accounts in a federal agency’s budget and then forcefully request that the agency spend the money on the members’ pet project.”

Although these methods sidestep the regular process and are are harder to track, a NYT review of letters and emails to government agencies from members of Congress showed that the practice is widespread in spite of executive orders instructing agencies not to finance projects based on communications from Congress.

Legislators have a history of finding new ways to get money for their districts. David E. Williams, vice president for policy at Citizens Against Government Waste, likened the effort to stamp out earmarks to a game of “Whack-a-Mole.” Williams: “When one door closes, there [are] always two or three more that they can go through.” He fears that lawmakers will develop even less transparent ways to finance their special projects.

Congressional opponents of earmarks see merit in banning them even as they admit there is no way to stamp them out, and like to emphasize that lettermarking and phonemarking are not legally binding on the agency being “marked.” Maybe not, but Winston Wheeler, a former Senate appropriations and national security aide who worked for both Democrats and Republicans over three decades before stepping down in 2002, said agencies were loath to ignore requests from legislators, especially appropriators. Wheeler: “When you have people who control your budget, that you have to appear before on an annual basis to ask for funding, you listen to what they have to say.”

Patrick M. Cronin, a senior adviser at the Center for New American Security and a former administrator at the Agency for International Development, said soft earmarks were commonly used by members of Congress, especially appropriators. Cronin: “They would tell you that they wanted money to go to a particular university or group or the next time you wouldn’t get the funding in the budget you wanted. So it’s true that you can ignore some soft earmarks, but others you have to take more seriously. Agency heads are not going to put their budgets in jeopardy because of a few line items.”

Sounds like blackmail to me.

And how about the fact that military spending bills regularly contain financing that the Pentagon did not seek for projects in Congressional districts. Steve Ellis of Taxpayers for Common Sense, a nonpartisan group that tracks federal spending, refers to such financing as “undisclosed earmarks.” These expenditures end up in a bill at the request of lawmakers or military contractors, but the source of the request does not have to be disclosed because the provisions do not meet the Congressional definition of an earmark. Spending bills for 2010 contained 146 such subterranean porkers totalling nearly $6 billion.

Ellis: “If it walks like a duck and quacks like a duck, it’s a duck. These are clearly earmarks.”

To paraphrase: If it waddles like a pig and it oinks like a pig, it’s clearly pork.

Next thing you know, they’ll try to tell us a sow in a silk dress is beautiful.

Much of the controversy over airport security procedures has evaporated as Americans accept the inevitable. Some do so because they believe that whatever TSA does is necessary to ensure their safety. Others because, in spite of their objections, they don’t have the option of not flying. In any case, it’s another example of government actions that ultimately become an unavoidable part of everyday life, in this case for anyone who travels by air.

A letter to the editor in Monday’s Statesman typifies one of the main reasons Americans often resemble sheep. In it, the writer suggests that anyone who doesn’t like the security measures should take their car, the bus, the train, or charter their own plane. This last option, of course, is an absurd suggestion for the majority of the traveling public. Then the writer tells us to “stop wasting the time of our elected officials.” I can’t even begin to address all the things wrong with that last statement, so I won’t even try.

What I will do is follow up on my previous post on this subject titled “The Hidden Highway” by referring to a recent incident as reported by the online aviation news source AVweb and ABC News.

Earlier this month, an airline pilot posted a video to YouTube describing airport security practices in which he states, “As you can see, airport security is kind of a farce. It’s only smoke and mirrors so you people believe there is actually something going on here.”

AVweb: “In the videos, the pilot compares the security measures faced by passengers and flight crews with those faced by airline ground crews. He details that passengers and flight crews must remove their shoes and pass through metal detectors, and may be subjected to further screening. Meanwhile, says the pilot, ground crews swipe a magnetized card to access restricted areas that could in turn give them intimate access to baggage, aircraft, or both. The pilot also shows tools available to all cockpit crews after passing through airport metal detectors and states, ‘I would say a two-foot crash axe looks a lot more formidable than a box cutter.'”

No kidding. Think “Here’s Johnny!” in The Shining.

The pilot’s employer took no action other than to get the video removed, but TSA is all over him like a cheap suit for “violating regulations concerning disclosure of sensitive security information.” They sent six people to the pilot’s house to retrieve his firearm, and he may face civil penalties.

As mentioned in my previous post, TSA has admitted the fallacy of requiring cockpit and cabin crew members to pass through full-body scans or submit to enhanced pat-downs. The pilot’s objections to that will be overcome by events when TSA finally gets around to implementing the new procedures. But his comments about the dichotomy between security measures for passengers and those for airline ground crews are absolutely germane.

Americans need to understand something. What you see at the airport is security theater providing the illusion of safety, while underneath your feet, out of sight, another world exists on a hidden highway because of the absurd decision-making within TSA. What kind of lunacy identifies crews, little old ladies in wheelchairs, and babies in strollers as threats and totally ignores a far more dangerous loophole?

What is it about this that’s so hard to grasp? If it’s so important to irradiate and/or grope anyone who climbs on an airplane, what about the ground crew who decides to commit a terrorist act? Has anyone considered that he or she might be more tempted to bring an explosive device into the secured area of an airport and sneak it on board an airliner because they don’t have to commit suicide when it detonates at 35,000 feet? How about that baggage handler with easy access to thousands of unlocked bags per day?

To ignore the potential for a tragic security breach because the traveling public doesn’t see it is hipocrisy in the extreme, and all TSA can do is threaten someone who exposes what they want to keep secret because it’s so sensitive.

God help us if we trust these people to keep us safe.