Government Spending

TRENTON - To impose a 2 percent cap on property-tax increases without addressing what drives up government spending is "the tail wagging the dog," Cherry Hill Mayor Bernie Platt told an Assembly panel on Wednesday. Collingswood Mayor Jim Maley concurred, warning lawmakers, "The order we're doing this in is not the best way. " The Assembly Budget Committee heard testimony from representatives of towns, schools, and public employees who repeatedly questioned the effectiveness of the 2 percent cap agreement reached Saturday by Gov. Christie and legislative leaders.

Let me say this first so there can be no misunderstanding: Alan Greenspan has been wrongly bashed by liberals for years when, in fact, the Fed chairman has used his impeccable anti-inflation credentials to preside over an extended economic experiment that has pushed unemployment down to 4 percent, far lower than what economists had previously thought possible without igniting a price spiral. Almost single-handedly, in other words, Greenspan's shrewd monetary management has drawn several million less-skilled workers into the labor force, thereby helping them more than any government program could have.

Want to send an anti-tax message to elected representatives from Main Street to Pennsylvania Avenue? Look no further than Malcolm X and Thomas P. "Tip" O'Neill. So says Sean Duffy, president of the Pennsylvania Leadership Council, a Harrisburg-based group promoting greater accountability in government. Unlikely bedfellows, yes, but the two men's approach to politics was remarkably similar, said Duffy, addressing a roomful of angry taxpayers yesterday at a regional spending cuts conference.

  In dysfunctional Washington, this is what passes for a major achievement: The Republicans snatch Uncle Sam and threaten to drive him over the cliff. In response, President Obama agrees to pay a historic ransom. To please the hostage-takers, he ushers in a new era of fiscal austerity that will make it virtually impossible for the government to address what the American people want most. Namely, jobs. On Tuesday, while hailing the convoluted deal that allows America to keep paying its bills and avoid deadbeat status, Obama briefly mentioned the issue.

DOMINIC PILEGGI didn't become one of Pennsylvania's most powerful politicians by losing elections, and he wasn't about to start Tuesday in the first primary he's faced in a decade. Pileggi, 54, the state Senate majority leader and former mayor of Chester, brushed aside Republican Roger Howard in the 9th Senatorial District, which stretches from southern Delaware County past Oxford in Chester County. Howard, 66, a free-market tea-partier with a doctorate in organic chemistry, had campaigned on a platform of cutting taxes, reducing government spending and repealing the state's prevailing-wage law. He ripped Harrisburg Republicans for failing to pursue a fiscally conservative agenda following the party's success in 2010.

RIYADH MONEY TROUBLES PLAGUE SAUDIS Saudi Arabia, already paying out billions of dollars on foreign and domestic debt, may have problems meeting its obligations within a few years, due to the cost of the Gulf War, economists say. By the end of the year the oil-rich kingdom will have about $60 billion worth of outstanding debt, mainly in the form of treasury bills and bonds. It is expected to spend $5 billion to $8 billion this year alone on interest and principal. Economists say that will more than double by the mid-1990s if the Saudis do not curb government spending.

Republican congressional nominee Jon Runyan called for cuts in taxes and spending Tuesday, saying: "We have to put money back in the people's hands. " At an afternoon news conference, however, he could offer no details of the costs or consequences of his ideas. "I haven't run the whole gamut of the numbers," he said. "They're just commonsense ideas that I think will really affect people. " For individuals, Runyan would cut federal income taxes 15 percent, eliminate taxes on Social Security and unemployment checks, increase the child tax credit, cut capital gains and dividend taxes in half, ease restrictions on personal retirement plans, and repeal the inheritance tax and alternative minimum taxes.

Virtually everyone agrees something must be done to kick-start the economy. How we do this, though, is crucial. Do we respond to the terrorist attacks by building commuter rail systems? Or do we spend what we must to repair the damage, help the victims, strengthen counterterrorism and the military - and spend what we can on permanent, substantial tax cuts to stimulate the economy? You only need to know a little history to know that tax cuts - not more government spending - are the way to go. Yes, we need more spending - but by taxpayers, not by government.

The federal budget typically contains answers to a number of questions about government spending, economic assumptions and the federal deficit. President Bush's poses this question: "Where Are the Real Space Aliens?" The five-volume fiscal 2004 budget that Bush sent Congress yesterday is sprinkled with odd musings about government spending that go well beyond the usual facts and figures. The section on NASA does not reveal where the space aliens are, but it concludes: "Perhaps the notion that 'there's something out there' is closer to reality than we have imagined.

The automatic spending cuts triggered by President Reagan's activation of Gramm-Rudman yesterday could affect millions of Americans and many - but not all - aspects of federal government spending. Most notably, the automatic $23 million in spending cuts would not reduce Social Security benefits. Medicaid payments also are unchanged by the Gramm- Rudman-Hollings budget law. In fact, the $23 billion in purportedly across-the-board cuts are concentrated in about 21 percent of government spending with many programs for the poor and elderly specifically shielded from the law's harsh cutback provisions.

An alarming new study shows more New Jersey residents than ever are struggling to provide for their families. A record 885,000 people in the state lived below the poverty line in 2010, according to the study released Sunday by the Legal Services of New Jersey Poverty Research Institute. The poverty rate increased from 9.4 percent in 2009 to 10.3 percent in 2010, based on the latest census figures available. Among the poor were 300,000 children, the state's most vulnerable and neediest residents.

WASHINGTON - President Obama said Saturday his goal of defeating al-Qaeda was within reach and that it was time to turn the country's attention to domestic concerns. Just four days after his trip to Afghanistan, Obama said money saved from ending the wars in Iraq and Afghanistan should help pay down the national debt and go to health care, education, and infrastructure. "After more than a decade of war, it is time to focus on nation-building here at home," he said in his weekly radio and Internet address.

Dominic Pileggi didn't become one of the most powerful politicians in Pennsylvania by losing elections, and he wasn't about to start Tuesday in the first primary he'd faced in a decade. Pileggi, 54, the state Senate majority leader and former mayor of Chester, had a large lead Tuesday night over tea party Republican Roger Howard in the Ninth Senatorial District, which stretches from eastern Delaware County past Oxford in Chester County. Howard, 66, a free-market advocate with a doctorate in organic chemistry, had campaigned on a platform of cutting taxes, reducing government spending, and repealing the state's prevailing-wage law. He ripped Harrisburg Republicans as failing to pursue a fiscally conservative agenda following the party's success in 2010.

DOMINIC PILEGGI didn't become one of Pennsylvania's most powerful politicians by losing elections, and he wasn't about to start Tuesday in the first primary he's faced in a decade. Pileggi, 54, the state Senate majority leader and former mayor of Chester, brushed aside Republican Roger Howard in the 9th Senatorial District, which stretches from southern Delaware County past Oxford in Chester County. Howard, 66, a free-market tea-partier with a doctorate in organic chemistry, had campaigned on a platform of cutting taxes, reducing government spending and repealing the state's prevailing-wage law. He ripped Harrisburg Republicans for failing to pursue a fiscally conservative agenda following the party's success in 2010.

In the Republican primary for U.S. Senate, polls show voters don't know the candidates' names, let alone their positions on issues or qualifications for office. None of the party's better-known politicians even tried for a chance to take on Democratic U.S. Sen. Bob Casey, perhaps remembering that Casey ousted Republican former U.S. Sen. Rick Santorum by 17 points in 2006. In the Republican primary field of five, the two most credible candidates are largely self-funded millionaires: Steve Welch and Tom Smith.

NEW YORK - Stocks had their worst day of the year Friday after Greece hit a roadblock on its way to a critical bailout. The Dow Jones industrial average closed down 89.23 points, or 0.7 percent, at 12,801.23. The broader Standard & Poor's 500 finished down 9.31 points at 1,342.64. It was the first losing week for S&P this year. Just a day earlier, investors had bought stocks after Greek Prime Minister Lucas Papademos and the heads of the three parties backing his government agreed to slash wages, lay off civil service workers, and cut government spending.

The economy remains bifurcated, with large firms - many making more money overseas than in the United States - continuing to perform well while the small-business sector, accounting for half of private gross domestic product and employment, languishes. Policymakers remain divided over how to proceed. On fiscal policy, one side - largely Democrats and liberals - wants to maintain or increase government spending and finance it with higher taxes on "rich people. " The other side - largely Republicans and the more conservative - wants to trim government spending from record levels and lower tax rates, but with deductions eliminated.

THE GROSS breaches of fiduciary responsibility on the part of the school district and the School Reform Commission are simple. Conceptually, so is the solution. Return control of the schools to Philadelphia. Close about 50 charters. Consolidate the sparsely attended buildings by selling them for whatever the market will bear. Collecting the preponderance of the $500 million or so in unpaid property taxes and rescinding Imagine 2014 in its entirety would certainly help. Most importantly, rooting out the waste, fraud and abuse, starting in the uppermost levels of city government, is essential.

New York University's Thomas J. Sargent and Princeton University's Christopher A. Sims will share the 2011 Nobel Memorial Prize in Economic Science for their work in sorting out cause from effect in the economy and policy. The two, both 68, will share the $1.48 million prize that comes with the award, the Royal Swedish Academy of Sciences, which selects the winner, said Monday. "Although Sargent and Sims carried out their research independently, their contributions are complementary in several ways," the academy said.

Recent polls indicate that far more consumers are concerned about the level of our debt and deficits than they are about unemployment. Maybe that's because nine out of 10 people who want a job have a job, and 10 out of 10 understand the implications of excessive spending and debt. It would seem to follow that if consumers are most afraid of debt expansion, then more large government programs to stimulate the economy might heighten their fears and produce even more contractionary behavior - more saving, postponed buying, etc. That sentiment could offset, even overwhelm, any efforts to stimulate our sluggish economy.