Obama and Congress Can Destroy Our Country
September 10, 2010
Mort Zuckerman sums it up in this oped. I feel like I’m in a bad dream where I gave someone my credit card and I can’t get it back for two years. Who will have the courage to stop them? Marco Rubio?
“There is an instinctive conclusion among the American public that President Obama's stimulus package has failed to create a sustained recovery. Unemployment has increased, not declined; consumers have retrenched; housing starts have crashed along with mortgage applications; and there is a fear that a double-dip recession may very well be in the pipeline. The public perception, reflected in Pew Research/National Journal polls, is that the measures to combat the Great Recession have mostly helped large banks and financial institutions, and that's a view common to Republicans (75 percent) and Democrats (73 percent). Only one third of either political leaning thinks government policies have done a great deal or a fair amount for the poor.
There is another instinctive conclusion among the American people. It is that the national deficit, and the debts we have accumulated, are of critical political importance. On the national debt, the money the government has spent without the tax revenues to pay for it has produced mind-numbing numbers so large as to be disconnected from reality. Zeros from here to infinity. The sums are hard to describe; it is hard to describe an elephant, but you know one when you see one. The public knows that, shuffle the numbers as you may, the level of debt is unsustainable.
Who could be surprised since millions of voters have discovered that for themselves? As one realizes the morning after the night before, there is an unavoidable penalty for excess. It is unnerving to wake up and learn that you have a mortgage on your home that exceeds the value of the property. Or, and too often both, you have a credit card line that you cannot repay and the issuer has you on the rack for ever bigger compound interest on the debt. The lesson has been well and truly learned that debt catches up with you. Millions understand that they are just going to have to find a way to live within their means—and then still eke out some savings to pay down debt. And there are well over 14 million Americans without a paying job, so the level of discontent is very high. Just how are they going to regain control of their lives?
In a usnews.com post on July 26, Jodie Allen of the Pew Research Center reported that in recent weeks more academic and market economists have been urging the government to defer budget cuts and tax increases and instead provide additional stimulus to a still-fragile economy, some by continuing the Bush tax cuts. But among the public there has been a suggestive shift of opinion the other way, reflecting worries about debt. "Deficit and government spending" has jumped from 10th or 11th place as a priority for the federal government to one that is second only to job creation and economic growth. The drift of opinion is manifest in other recent polls. For instance, a CBS poll conducted July 9-12 assessed the most important problem facing the country as the economy and jobs (38 percent), with concern about the budget deficit and national debt way down at 5 percent. Yet CNN (July 16-21) has 47 percent preoccupied first with the economy, and 13 percent with the federal deficit. In a recent Time magazine poll, two thirds of the respondents say they oppose a second government stimulus program and more than half say the country would have been better off without the first one.
People see the stimulus, fashioned and passed by Congress in such a hurry, as a metaphor for wasted money. They are highly critical about the lack of discipline among our political leaders. The question that naturally arises is how to forestall a long-term economic decline.
The Fed has lowered rates dramatically to keep the economy ticking and maybe continue the painfully slow recovery, but at the receiving end there is no feeling of relief at all. People know that the stimulus is about to stop stimulating. They know that money is petering out. They know that states are preparing to cut $200 billion to balance their budgets. They realize that the Great Recession has wiped out huge amounts of wealth and that, unlike other recessions, this will not be followed by the kind of economic boom when people who had sat on their money during the lean years unleash pent-up demand for all sorts of goods and services.
There is no sign of that happening this time around. Households and businesses have kept their hands in their pockets. And so while many think that the only way to revive the economy and to inject more money into it is through governmental spending, the general feeling is that we can't afford that right now. The government will be writing more IOUs on top of those we already can't afford. Why plan a second stimulus if the first stimulus couldn't prevent high unemployment?
Of course, the question remains whether public sentiment coincides with sound economics. The challenge we face as a country is how to ...” READ MORE IN US NEWS ONLINE Read More...
The Most Fiscally Irresponsible Government in U.S. History
Current federal budget trends are capable of destroying this country
By MORTIMER B. ZUCKERMAN Posted: August 26, 2010 U.S. News“There is an instinctive conclusion among the American public that President Obama's stimulus package has failed to create a sustained recovery. Unemployment has increased, not declined; consumers have retrenched; housing starts have crashed along with mortgage applications; and there is a fear that a double-dip recession may very well be in the pipeline. The public perception, reflected in Pew Research/National Journal polls, is that the measures to combat the Great Recession have mostly helped large banks and financial institutions, and that's a view common to Republicans (75 percent) and Democrats (73 percent). Only one third of either political leaning thinks government policies have done a great deal or a fair amount for the poor.
There is another instinctive conclusion among the American people. It is that the national deficit, and the debts we have accumulated, are of critical political importance. On the national debt, the money the government has spent without the tax revenues to pay for it has produced mind-numbing numbers so large as to be disconnected from reality. Zeros from here to infinity. The sums are hard to describe; it is hard to describe an elephant, but you know one when you see one. The public knows that, shuffle the numbers as you may, the level of debt is unsustainable.
Who could be surprised since millions of voters have discovered that for themselves? As one realizes the morning after the night before, there is an unavoidable penalty for excess. It is unnerving to wake up and learn that you have a mortgage on your home that exceeds the value of the property. Or, and too often both, you have a credit card line that you cannot repay and the issuer has you on the rack for ever bigger compound interest on the debt. The lesson has been well and truly learned that debt catches up with you. Millions understand that they are just going to have to find a way to live within their means—and then still eke out some savings to pay down debt. And there are well over 14 million Americans without a paying job, so the level of discontent is very high. Just how are they going to regain control of their lives?
In a usnews.com post on July 26, Jodie Allen of the Pew Research Center reported that in recent weeks more academic and market economists have been urging the government to defer budget cuts and tax increases and instead provide additional stimulus to a still-fragile economy, some by continuing the Bush tax cuts. But among the public there has been a suggestive shift of opinion the other way, reflecting worries about debt. "Deficit and government spending" has jumped from 10th or 11th place as a priority for the federal government to one that is second only to job creation and economic growth. The drift of opinion is manifest in other recent polls. For instance, a CBS poll conducted July 9-12 assessed the most important problem facing the country as the economy and jobs (38 percent), with concern about the budget deficit and national debt way down at 5 percent. Yet CNN (July 16-21) has 47 percent preoccupied first with the economy, and 13 percent with the federal deficit. In a recent Time magazine poll, two thirds of the respondents say they oppose a second government stimulus program and more than half say the country would have been better off without the first one.
People see the stimulus, fashioned and passed by Congress in such a hurry, as a metaphor for wasted money. They are highly critical about the lack of discipline among our political leaders. The question that naturally arises is how to forestall a long-term economic decline.
The Fed has lowered rates dramatically to keep the economy ticking and maybe continue the painfully slow recovery, but at the receiving end there is no feeling of relief at all. People know that the stimulus is about to stop stimulating. They know that money is petering out. They know that states are preparing to cut $200 billion to balance their budgets. They realize that the Great Recession has wiped out huge amounts of wealth and that, unlike other recessions, this will not be followed by the kind of economic boom when people who had sat on their money during the lean years unleash pent-up demand for all sorts of goods and services.
There is no sign of that happening this time around. Households and businesses have kept their hands in their pockets. And so while many think that the only way to revive the economy and to inject more money into it is through governmental spending, the general feeling is that we can't afford that right now. The government will be writing more IOUs on top of those we already can't afford. Why plan a second stimulus if the first stimulus couldn't prevent high unemployment?
Of course, the question remains whether public sentiment coincides with sound economics. The challenge we face as a country is how to ...” READ MORE IN US NEWS ONLINE Read More...
Do Your Homework: Heritage Foundation "Solutions for America"
August 21, 2010
A little in-depth thinking goes a long way. As a conservatives, we are duty bound to have ‘answers’ to back up our criticism of the current administration. Reality is not a barrier to Democratic/Socialist thinking, but conservative Republicans must educate themselves in order to influence those around us about the world of social and economic reality. Do your homework!
“Washington, D.C., Aug. 17, 2010–The Heritage Foundation today released “Solutions for America,” a comprehensive policy agenda addressing the nation’s most pressing and ingrained problems.
Compiled by experts at Heritage, the leading conservative think tank, the guidebook outlines critical challenges on 23 policy fronts and makes 128 specific recommendations for Congress to confront and overcome these obstacles. Among them:
Trim excessive compensation for federal employees by bringing their salaries and benefits in line with those of private-sector pay.
Exempt those who work beyond the retirement age from paying payroll taxes.
Establish a unified budget governing all 71 federal welfare programs; cap their year-to-year growth at the rate of inflation; expand work requirements and treat a portion of benefits as loans to be repaid, not grants from taxpayers.
Spur investment, job creation and global competition by reducing the top corporate tax rate and allowing firms to deduct immediately all investments in new facilities and equipment.
“All the recommendations in ‘Solutions’ have one thing in common. They would return power to the people. And, collectively, they will put America back on the track to prosperity and greatness,” Heritage President Edwin J. Feulner said.” ... READ MORE AT HERITAGE.ORG Read More...
Heritage Foundation: Solutions for American
“Washington, D.C., Aug. 17, 2010–The Heritage Foundation today released “Solutions for America,” a comprehensive policy agenda addressing the nation’s most pressing and ingrained problems.
Compiled by experts at Heritage, the leading conservative think tank, the guidebook outlines critical challenges on 23 policy fronts and makes 128 specific recommendations for Congress to confront and overcome these obstacles. Among them:
Trim excessive compensation for federal employees by bringing their salaries and benefits in line with those of private-sector pay.
Exempt those who work beyond the retirement age from paying payroll taxes.
Establish a unified budget governing all 71 federal welfare programs; cap their year-to-year growth at the rate of inflation; expand work requirements and treat a portion of benefits as loans to be repaid, not grants from taxpayers.
Spur investment, job creation and global competition by reducing the top corporate tax rate and allowing firms to deduct immediately all investments in new facilities and equipment.
“All the recommendations in ‘Solutions’ have one thing in common. They would return power to the people. And, collectively, they will put America back on the track to prosperity and greatness,” Heritage President Edwin J. Feulner said.” ... READ MORE AT HERITAGE.ORG Read More...
Why Government Spending Does Not Stimulate Economic Growth: Answering the Critics
July 30, 2010
I could not have said it better myself. When government spends a dollar it has to come from somewhere. In the Florida legislature at least we had economists run a model to see what damage would be done to the private sector by tax and fee increases. At the local level they just have at it based upon some supposed and assumed economic benefit. That’s the way it will continue as long as the special interests who stand to receive your dollars and mine have their way with our local elected officials. The winners really win big and the losers (taxpayers) pay the bill. Who will stand up to this cycle. It used to be in Hillsborough that there was just outrigth theivery; now the special interests are much more clever at convincing the locals that they need to take money from me and you and give it to government contractors and others so they can help us in ways we did not fully appreciate.
Abstract: Despite decades of repeated failure, President Obama and Congress continue to promote the myth that government can spend its way out of recession. Heritage Foundation economic policy expert Brian Riedl dispels the stimulus myth, lays out the evidence that government spending does not end recessions--and presents the evidence for what does end recessions. Hint: It's not another "stimulus package."
Proponents of President Barack Obama's $787 billion stimulus bill continue to insist that the massive government bailout played a decisive role in moving the economy out of the recession. Yet assuming no destructive government actions, the economy's self-correction mechanism was widely expected to move the economy out of recession in 2009 anyway. With a parade of "stimulus" bills the past two years (going back to President George W. Bush's tax rebate in early 2008), it was entirely predictable that some would link the expected end of the recession to whichever stimulus bill happened to come last.
Indeed, President Obama's stimulus bill failed by its own standards. In a January 2009 report, White House economists predicted that the stimulus bill would create (not merely save) 3.3 million net jobs by 2010. Since then, 3.5 million more net jobs have been lost, pushing the unemployment rate above 10 percent. The fact that government failed to spend its way to prosperity is not an isolated incident:
During the 1930s, New Deal lawmakers doubled federal spending--yet unemployment remained above 20 percent until World War II.
Japan responded to a 1990 recession by passing 10 stimulus spending bills over 8 years (building the largest national debt in the industrialized world)--yet its economy remained stagnant.
In 2001, President Bush responded to a recession by "injecting" tax rebates into the economy. The economy did not respond until two years later, when tax rate reductions were implemented.
In 2008, President Bush tried to head off the current recession with another round of tax rebates. The recession continued to worsen.
Now, the most recent $787 billion stimulus bill was intended to keep the unemployment rate from exceeding 8 percent. In November, it topped 10 percent.
Undeterred by these repeated stimulus failures, President Obama is calling for yet another stimulus bill.[3] There is every reason to expect another round to fail as miserably as the past ones, and it would bury the nation deeper in debt.
The economic theory behind the stimulus builds on the work of John Maynard Keynes eight decades ago. ... READ MORE FROM HERITAGE.ORG Read More...
Why Government Spending Does Not Stimulate Economic Growth: Answering the Critics
Published on January 5, 2010 by Brian Riedl Heritage.orgAbstract: Despite decades of repeated failure, President Obama and Congress continue to promote the myth that government can spend its way out of recession. Heritage Foundation economic policy expert Brian Riedl dispels the stimulus myth, lays out the evidence that government spending does not end recessions--and presents the evidence for what does end recessions. Hint: It's not another "stimulus package."
Proponents of President Barack Obama's $787 billion stimulus bill continue to insist that the massive government bailout played a decisive role in moving the economy out of the recession. Yet assuming no destructive government actions, the economy's self-correction mechanism was widely expected to move the economy out of recession in 2009 anyway. With a parade of "stimulus" bills the past two years (going back to President George W. Bush's tax rebate in early 2008), it was entirely predictable that some would link the expected end of the recession to whichever stimulus bill happened to come last.
Indeed, President Obama's stimulus bill failed by its own standards. In a January 2009 report, White House economists predicted that the stimulus bill would create (not merely save) 3.3 million net jobs by 2010. Since then, 3.5 million more net jobs have been lost, pushing the unemployment rate above 10 percent. The fact that government failed to spend its way to prosperity is not an isolated incident:
During the 1930s, New Deal lawmakers doubled federal spending--yet unemployment remained above 20 percent until World War II.
Japan responded to a 1990 recession by passing 10 stimulus spending bills over 8 years (building the largest national debt in the industrialized world)--yet its economy remained stagnant.
In 2001, President Bush responded to a recession by "injecting" tax rebates into the economy. The economy did not respond until two years later, when tax rate reductions were implemented.
In 2008, President Bush tried to head off the current recession with another round of tax rebates. The recession continued to worsen.
Now, the most recent $787 billion stimulus bill was intended to keep the unemployment rate from exceeding 8 percent. In November, it topped 10 percent.
Undeterred by these repeated stimulus failures, President Obama is calling for yet another stimulus bill.[3] There is every reason to expect another round to fail as miserably as the past ones, and it would bury the nation deeper in debt.
The Stimulus Myth
The economic theory behind the stimulus builds on the work of John Maynard Keynes eight decades ago. ... READ MORE FROM HERITAGE.ORG Read More...
Why Obamanomics Has Failed
July 02, 2010
Why Obamanomics Has Failed
Uncertainty about future taxes and regulations is enemy No. 1 of economic growth.
By ALLAN H. MELTZER June 30, 2010 Wall Street Journal
Without beating a dead horse, Keynesian economics is killing America. You can’t drink yourself sober, and you can’t borrow, tax and spend your way out of debt. I just hope there is something left of our economy and country when the socialists get finished with it.
“The administration's stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible.
But they want new stimulus measures—which is convincing evidence that they too recognize that the earlier measures failed. And so the U.S. was odd-man out at the G-20 meeting over the weekend, continuing to call for more government spending in the face of European resistance.
The contrast with President Reagan's antirecession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9% and it continued to expand above trend rates.
Two overarching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future. High uncertainty is the enemy of investment and growth.
Most of the earlier spending was a very short-term response to long-term problems. One piece financed temporary tax cuts. This was a mistake, and ignores the role of expectations in the economy. Economic theory predicts that temporary tax cuts have little effect on spending. Unless tax cuts are expected to last, consumers save the proceeds and pay down debt. Experience with past temporary tax reductions, as in the Carter and first Bush presidencies, confirms this outcome.
Another large part of the stimulus went to relieve state and local governments of their budget deficits. Transferring a deficit from the state to the federal government changes very little. Some teachers and police got an additional year of employment, but their gain is temporary. Any benefits to them must be balanced against the negative effect of the increased public debt and the temporary nature of the transfer.
The Obama economic team ignored past history. The two most successful fiscal stimulus programs since World War II—under Kennedy-Johnson and Reagan—took the form of ...” READ MORE IN THE WALL STREET JOURNAL ONLINE Read More...
Under Pressure from Obama to Spend Big, Germany Defends Budget Cuts
June 25, 2010
This seems to be a fairly minor news clip, but it isn’t. Germany has come around to the understanding that more and more taxing and spending (Keynesian economics) is only going to plunge Germany into bankruptcy, like Greece. Of course, reading the article closely, Merkel is not yet ready to return tax dollars to the taxpayers through tax cuts.... yet. Ask yourself why Obama is trying to ‘bully’ Merkel on this point? Well, Obama and his socialist enablers are not and will never be interested in tax cuts, much less government austerity. That sounds too much like capitalism. Obama wants Germany to join the US in creating a national debt so large that it will prevent future leaders from turning away from the big government. Sadly, capitalism and the American entrepreneur will eventually have to generate the wealth to dig us out of the huge, bottomless pit of debt being created by the Democratic US Congress.
“BERLIN — Chancellor Angela Merkel vowed Thursday to defend Germany's planned austerity measures at this weekend's G-20 summit as she shrugged off U.S. concerns that budget cuts could threaten the global economic recovery.
"We, the Europeans and the Germans in particular, think that reducing the deficits is indispensable for achieving sustainable growth," the chancellor told journalists.
Merkel's government has pledged to save euro80 billion ($100 billion) by 2014 by cutting welfare benefits and raising new taxes. But U.S. President Barack Obama has urged leaders to refrain from pushing through austerity plans in a bid not to threaten the recovery.
Merkel acknowledged that there are differences "about the philosophy, the approach of how to overcome the financial crisis," and said she expects discussions at the summit of the world's wealthiest nations plus emerging economies in Toronto to be "fruitful, but very controversial."” READ MORE HERE
See also “Merkel Defends Spending Cuts” Read More...
Germany defends budget cuts ahead of G-20 summit
Google News By JUERGEN BAETZ (AP) – 21 hours ago“BERLIN — Chancellor Angela Merkel vowed Thursday to defend Germany's planned austerity measures at this weekend's G-20 summit as she shrugged off U.S. concerns that budget cuts could threaten the global economic recovery.
"We, the Europeans and the Germans in particular, think that reducing the deficits is indispensable for achieving sustainable growth," the chancellor told journalists.
Merkel's government has pledged to save euro80 billion ($100 billion) by 2014 by cutting welfare benefits and raising new taxes. But U.S. President Barack Obama has urged leaders to refrain from pushing through austerity plans in a bid not to threaten the recovery.
Merkel acknowledged that there are differences "about the philosophy, the approach of how to overcome the financial crisis," and said she expects discussions at the summit of the world's wealthiest nations plus emerging economies in Toronto to be "fruitful, but very controversial."” READ MORE HERE
See also “Merkel Defends Spending Cuts” Read More...
2011 Economic Collapse
June 11, 2010
Laffer is best known for his anti-intuitive, but accurate, economic theory that when taxes are cut, government revenues increase, known as the “Laffer Curve” If more politicians would educate themselves about the Latter Curve we would have a stronger, more vibrant economy. I suggest that all local Hillsborough County, Florida politicians who are supporting the insane transportation sales tax increase be required to read an article in the Heritage Foundation site entitled, “The Laffer Curve: Past, Present and Future.”
“It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.
Likewise, who is gobsmacked when they are told that the two wealthiest Americans—Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it's also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter.
People can also change the timing of when they earn and receive their income in response to government policies. According to a 2004 U.S. Treasury report, "high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992—over $15 billion—in order to avoid the effects of the anticipated increase in the top rate from 31% to 39.6%. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994."
Just remember what happened to auto sales when the cash for clunkers program ended. Or how about new housing sales when the $8,000 tax credit ended? It isn't rocket surgery, as the Ivy League professor said....READ MORE Read More...
Tax Hikes and the 2011 Economic Collapse
By ARTHUR LAFFER Wall Street JournalPeople can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies.
“It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.
Likewise, who is gobsmacked when they are told that the two wealthiest Americans—Bill Gates and Warren Buffett—hold the bulk of their wealth in the nontaxed form of unrealized capital gains? The composition of wealth also responds to incentives. And it's also simple enough for most people to understand that if the government taxes people who work and pays people not to work, fewer people will work. Incentives matter.
People can also change the timing of when they earn and receive their income in response to government policies. According to a 2004 U.S. Treasury report, "high income taxpayers accelerated the receipt of wages and year-end bonuses from 1993 to 1992—over $15 billion—in order to avoid the effects of the anticipated increase in the top rate from 31% to 39.6%. At the end of 1993, taxpayers shifted wages and bonuses yet again to avoid the increase in Medicare taxes that went into effect beginning 1994."
Just remember what happened to auto sales when the cash for clunkers program ended. Or how about new housing sales when the $8,000 tax credit ended? It isn't rocket surgery, as the Ivy League professor said....READ MORE Read More...