Archive for the '2010' Category

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You Try And Fix The Federal Budget

Published by steve on July 15, 2010 in 2010, Democrats, economy and video. 13 Comments

Nothing is so permanent as a temporary government program.

Milton Friedman

There has been a noticeable push back from many Democrat / Liberal quarters working to rationalize the reckless spending that Obama and the Democrats in Congress* have been engaged in.

Not to be left out, the liberals at the GOOD blog have linked to the Committee for a Responsible Federal Budget (aka a liberal group pushing for higher taxes) new widget they call the budget simulator. The crew at the GOOD blog offer this granola of wisdom:

Right now, the United States’ federal debt is about 66 percent of GDP. It’s projected to grow to 100 percent by 2022, and keep growing thereafter. Fixing it should be easy, right? We just raise the gas tax. Or let the Bush tax cuts expire. Or maybe we just cut those expensive entitlements.

Well, the peanut gallery can now give it a try.

The Committee for a Responsible Federal Budget has a simulator (some are calling it a “game”) that will let you run through a list of major programs and decide which to cut. Your goal: Lower the debt to 60 percent of GDP by 2018.

Some choices are easy (do you want to “Eliminate Certain Outdated Programs”? Sure!) but most are not. Who wants to end school breakfast programs? And many choices that would help reduce the debt—passing a cap-and-trade bill or raising the corporate tax rate—would be hard to do politically anyway.

The conclusion from the granola crowd is that “this balancing the budget thing is tough.” However, the reason this is difficult is they are doing a static calculation and not factoring increased economic growth due to tax and spending cuts.

The budget calculator and GOOD blog post are designed to fire up the liberal Democrat base to demand that we send more of our money to Washington for increased ‘services.’ To reinforce this message, the CFRB is planning to send its leftist skewed results from it web calculator to Congress as evidence that we the people want higher taxes.

You can try the goofy CFRB calculator here. And to help explain the Laffer Curve and how to look at our economy as a dynamic system check out this video from the CATO Institute:

*Pelosi and Reid have been in charge of Congress since 2007.

Video: Obama Recycles The “I will not rest” Line. Often.

Published by steve on July 13, 2010 in 2010, Democrats and video. 1 Comment

Have you ever noticed that Obama uses the line “I will not rest” almost as often as he says “I”?

*video shamelessly lifted from Flopping Aces

First Oil Rig Leaving The Gulf Of Mexico Due To Obama ‘Moratorium’

Published by steve on July 11, 2010 in 2010, Green Energy, Progressives and economy. 1 Comment

The first oil rig in the gulf has set sail to Egypt due to the legal battle that Obama is waging. Via Ace:

The Gulf economy won big when the district court knocked down Obama’s drilling ban as “arbitrary and capricious” and won again at the Fifth Circuit, which refused to keep the ban in effect during the appeal. Unfortunately, the Obama Administration keeps signaling that it won’t allow drilling no matter what the courts say. On the day the Fifth Circuit ruled against, the Administration announced that if any company attempted to resume drilling it would reissue its drilling moratorium, forcing the issue back to the courts again.

That is the very definition of “arbitrary and capricious” government action, but the uncertainty it creates is more than enough to depress economic activity in the Gulf.

This is going to cost tens of thousands of jobs and will cause serious long term economic damage.

State Governors Asking Washington For Handouts Adding To Federal Debt

Published by steve on July 10, 2010 in 2010, Progressives, economy and news. 0 Comments

This is not helpful. Via Pat Dollard:

But both men said states can’t continue to climb out of the recession alone, and a majority of governors renewed their bipartisan appeal for Congress to pass stalled jobs legislation that includes billions of dollars in aid to states.

Just days before the new budget year began July 1, the House and Senate failed to complete legislation that would have extended, through June 2011, important parts of the federal stimulus program enacted last year to provide unemployment insurance and help offset recession-driven cuts to education, health care and public safety.

The measure offered $35.5 billion for unemployment benefits for the long-term jobless and $16 billion for Medicaid, the public health care program for the poor. It also would have added an estimated $33 billion to the deficit.

Even so, several Democratic and Republican governors suggested in interviews and during panel discussions that the short-term gain was worth the long-term pain.

“We need more help from Washington to protect against job cuts and health care cuts,” Gov. Pat Quinn, D-Ill. “”If we don’t do that, we’re following Herbert Hoover economics.” (emphasis added)

We are not following Herbert Hoover economics. We are implementing FDR economics. You know, the economics that extended the Great Depression.

Liberals In Michigan Are Unhappy That Granholm Was Unable To Extend Taxes To Services

Published by steve on July 10, 2010 in 2010, Democrats, Progressives and economy. 8 Comments

With opinion leaders* in our state thinking like this, it is no wonder Michigan is in the shape it is. Via MLive:

Take her proposal for extending the sales tax on services, something just about every economist not on the payroll of one of the countless right-wing think tanks thinks is a good idea. Our economy is service-based, so it makes sense for the tax code to catch up.

Back in February, the guv popped a modest plan to drop the sales tax rate to 5.5 percent and extend it to some services in exchange for phasing out the hated Michigan Business Tax surcharge. It would have raised an extra $400 million or so this year and been revenue-neutral in a few years.

I’m going out on a limb, but I’m reasonably sure the IMF (International Monetary Fund) is not on the payroll of the Heritage Foundation and the IMF has found that for every $1.00 of ‘stimulus’ spending by a government will only produce $0.70 of economic activity (i.e. GDP). Furthermore, economists have know for a long time that tax cuts increase tax cuts and in a recent study economists have calculated that for every every dollar of corporate tax cuts, $2.76 of new GDP is created.

If Granholm would’ve cut taxes (even modestly) for all business in Michigan several years ago rather providing ‘green energy’ project grants (stimulus spending), our economy would be in much better shape today.

The balance of this article is really bizarre as one of Michigan’s opinion leaders* bounces randomly from bashing Granholm for not raising taxes to bashing Sarah Palin for no real reason.

The most likely landing place for Granholm is cable TV. MSNBC would be a logical ideological match, but CNN’s cringe-worthy “Odd Couple” paring of conservative columnist Kathleen Parker and hooker-befriending Eliot Spitzer is sure to fail, so there could be an opening there.

I’d personally like to see Granholm kick Sarah Palin’s “mama grizzly” butt in a new version of “Crossfire,” but the half-term Alaska governor is at least smart enough not to go toe-to-toe with a Harvard-trained attorney who bested Joe Biden in VP debate prep.

While its amazing that Liberals can’t get Sarah Palin out of their minds for a second, the more astounding point is that Michigan’s economy is a disaster due to its high tax rates and a general lack of competitiveness and Michigan’s opinion leaders* are calling for more of the same.

*I realize that the author of the MLive article, Susan J. Demas, is not exactly a household name but she mirrors the thinking of many liberal “opinion leaders.”

Obama Supports Business… Only The Businesses He Likes

Published by steve on July 9, 2010 in 2010, Democrats, Progressives and economy. 2 Comments

Obama and his economic wrecking crew (9.4% Unemployment and 2.2 million fewer jobs) has “launched a coordinated campaign to push back against the perception taking hold in corporate America and on Wall Street that President Obama is promoting an anti-business agenda.”

To prove his point he is calling on congress to provide $5 billion dollars in tax credits for clean energy technology. Via CNSNews:

Obama told an audience at the University of Nevada that a $5 billion increase in clean energy manufacturing tax credits could generate nearly 40,000 jobs. Some of those could arrive in Nevada, where 14 percent unemployment threatens to undermine Reid’s argument that his position as majority leader pays dividends to his state.

“If an American company wants to create jobs and grow, we should be there to help them do it,” Obama said.

Setting aside the facts that Spain has proven that ‘green energy’ costs 2.2 non subsidized private sector jobs for every 1 heavily subsidized ‘green energy’ job created and the technology can’t reliably provide electricity for a community of 87 people, this is nothing more than pandering it worst.

Why does the ‘green energy’ industry get even more tax breaks? Why are they more deserving than any other industry? Why not you an me, the average consumer? Because Obama only supports business he likes.

If Obama truly supported business he would drop the pursuit of the off shore drilling moratorium, the ‘Wall Street’ regulation legislation and the largest tax hike in American history that is going to hit January 1, 2011.

116 days until November 2nd, 2010

Per IMF Economic Model: Every $1.00 Spent On ‘Stimulus’ Creates $0.70 Of GDP

Published by steve on July 7, 2010 in 2010, Democrats, History, economy and video. 3 Comments

Spend $1.00 of ‘Stimulus’ to create $0.70 in GDP is not exactly what I would call a very good ‘multiplier effect.’

Via Larry Kudlow:

In a watershed study, former Treasury economists Gary and Aldona Robbins argued a few years ago that tax cuts aimed at capital and business produced the biggest economic benefits. For example, for every tax-cut dollar on capital gains, $10.61 of new GDP is created. For every dollar of accelerated business-investment tax write-offs, $9 of new GDP is created. And for every dollar of corporate tax cuts, $2.76 of new GDP is created.

This bang-for-the-buck analysis contrasts sharply with estimates for increased government spending. According to the White House, every dollar of new government spending creates about $1.50 of new GDP — much weaker than the effects of business tax cuts. And the White House analysis looks like a stretch. The IMF has a model that says every additional dollar of government spending creates only $0.70 of new GDP. So you have to borrow a buck to get 70 cents back. Not a good trade.

Clearly, neither of these spending multipliers holds a candle to the benefits of lower business tax rates. Incidentally, for deficit worriers, corporate tax cuts pay for themselves, as do lower tax rates on capital gains.

Fred Smith, the CEO of FedEx, does not have a Nobel Prize in economics. But he founded from scratch a gigantic global transportation and delivery company that has employed tens and tens of thousands of workers, something the Nobelists have never done. And Smith argues that the best job-creating measure would be a significant reduction in the corporate tax rate and a move to full expensing for business-investment tax write-offs. He’s exactly right. (emphasis added)

I was in a ‘discussion’ with a liberal not too long ago about the economy. I made the assertion that tax cuts are the quickest way to improve the economy. The Liberal rolled his eyes… Sighed…..Then went on the “tax cuts! All you conservatives ever offer is that old saw” rant.

Tax cuts might be an old saw, but they work. Every time. Just ask JFK:

A Glimpse of Our ObamaCare Future

Published by steve on July 7, 2010 in 2010, Democrats, Progressives and economy. 1 Comment

Via Spiegel International:

Facing a projected shortfall of 11 billion euros for Germany’s health care system in 2011, Chancellor Angela Merkel’s government agreed on Tuesday to increase contributions. But the plan is a far cry from radical reform, leading to calls for the country’s health minister to resign.

Germany’s government has been arguing for months about how best to reform the country’s chronically indebted health care system. On Tuesday, leaders of Chancellor Angela Merkel’s coalition finally reach agreement.

The deal, presented by Health Minister Philipp Rösler — from Merkel’s junior coalition partner, the Free Democrats — calls for contributions to rise from 14.9 percent of employee income to 15.5. The contributions remain split 50-50 between workers and employers. In addition, additional charges demanded by insurers to eliminate shortfalls will no longer be capped at one percent of employee salaries.

“The expected deficit of €11 billion in 2011 will be cancelled out,” Rösler told reporters on Tuesday. He said he was optimistic that the new contribution regime would result in lasting stability for Germany’s health care finances, but added that the system for how contributions are made must still be reformed.

Rising costs have dogged Germany’s health care system for years, and multi-billion euro deficits have become the norm. As recently as 2006, Merkel — then in coalition with the center-left Social Democrats — proudly announced what she called “far reaching reform.

Remind me again how ObamaCare is going to reduce our debt.

Interesting Graph: Unemployment vs. Congress

Published by steve on July 4, 2010 in 2010, Democrats, Progressives and economy. 2 Comments

A reminder that elections have consequences:

unemployment rate vs. party that controlls congress

Remember, Liberal Democrats think unemployment checks are the fastest way to stimulate the economy:

And in related news, only 25% of Americans think 2008′s ‘stimulus’ has helped the economy. Via Rasmussen:

Just 25% of voters nationwide believe the economic stimulus package created jobs and voters are counting on decisions made by business owners more than government officials to create the jobs needed by the nation.

Those results come from a Rasmussen Reports national telephone survey conducted the night before release of the government report on job creation in June. That report showed the unemployment rate falling to 9.5% but also showed that just 83,000 private sector jobs were created.

The new survey found that just 29% believe last year’s economic stimulus plan has helped the economy while 43% believe it hurt. Not surprisingly, there is little appetite for another round. By a 69% to 15% margin, voters believe tax cuts is a better way to create jobs rather than more government spending.

Democrats are planning to let the biggest tax increase in American history occur in January 2011. Immediately after the 2010 election.

Happy Independence Day

Published by steve on July 4, 2010 in 2010 and History. 3 Comments

Our defense is in the preservation of the spirit which prizes liberty as a heritage of all men, in all lands, everywhere. Destroy this spirit and you have planted the seeds of despotism around your own doors.

Abraham Lincoln

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