Archive for the ‘Economy’ Category
You heard President Obama’s hysterical press conference yesterday about “catastrophic” spending cuts imposed by the sequester.
Note that federal spending still goes up every year under the sequester, even while household incomes continue to decline.
January posted the sharpest decline in personal incomes for Americans in 20 years, and the worst decline in after-tax incomes since 1959. American households have lost nearly $5,000 in annual income under Obama. But the federal government continues to grow and spend more regardless.
The federal government is now borrowing 46 cents out of every dollar it spends. If Obama were really concerned about the “children,” as he always claims, he’d be concerned about the mountain of debt he’s piling onto their backs.
Every baby born today in America owes $55,000 on the national debt debt. This number doubles every seven years at the current rate of spending.
If Republicans in Congress cave on this modest spending restraint mechanism known as the sequester, there really is no hope for the country.
Here was Obama’s presser on the sequester . . .
Two straight quarters of shrinking economic growth means we’re back in a recession — yup, ye ole “double dip.”
For the entire year of 2012, official U.S. GDP growth was only 1.5%.
Most recessions are followed by economic growth rates exceeding 4 percent. So this so-called “recovery” is moving at about one-third the pace of normal economic recoveries. But now the economy is shrinking again.
Meanwhile, the unemployment rate ticked back up to 7.9 percent, which means that the unemployment rate is now higher than on Obama’s first day in office.
Here are some more facts that should shock you . . .
- Since Barack Obama’s first day in office, 8.4 million Americans have left the labor force because they believe looking for work is a fruitless exercise.
- If the unemployment rate was calculated based on the portion of the population in the work force in 2008, the unemployment rate would be 10.2 percent.
- Under the Obama Presidency, the number of Americans on Food Stamps has risen from 32 million to 47 million.
- The Census Bureau informs us that 146,000,000 Americans (40 percent of the population) are now “poor” or “low income.”
- Under Obama, median household annual income has declined by $4,600.
- On Obama’s first day in office, the price of a gallon of regular gas was $1.84. Today it’s $3.51 on average across America (an all-time high for February).
- Electricity prices have risen faster than the rate of inflation every year of the Obama Presidency.
- Obama promised ObamaCare would reduce health care costs. But health insurance costs have risen 29 percent since Obama’s first day in office, mostly due to costs on insurers imposed by ObamaCare.
- Today, 77 percent of Americans live paycheck-to-paycheck.
- In America today, 41 percent of all workers make less than $20,00 per year.
- Obama has added $6 TRILLION to the national debt — which now stands at $16.4 TRILLION.
But the mainstream news media keeps talking about this economy as in “recovery.”
And America reelected Obama for another four years. Apparently, most Americans are satisfied with the current state of the union.
I favor going over the fiscal cliff. No more talks with President Obama.
It’s about time the American people (including the Middle Class) start paying for the government benefits they are demanding.
Going over the fiscal cliff means we start making that happen.
Today, the federal government is borrowing 42 cents of every dollar it’s spending. We now have a $16.4 TRILLION national debt.
Obama’s own budgets propose adding a $1 TRILLION+ to the national debt every year for as far as the eye can see.
This means the American people are enjoying lots of benefits from government without paying for them. We are passing the bill onto future generations.
That’s not fair. And it’s immoral.
Assuming there’s no fiscal cliff deal (I hope there isn’t) the tax bill for the median family or household will increase by about $3,500 in 2013.
Some mandatory spending cuts also kick in. I’m all for that.
Now, if it were up to me, I’d cut the entire federal budget by about two-thirds.
That’s about what it would take to scale our federal government back down to Constitutional size. But that’s not what the American people are voting for.
The American people want more from the government. So it’s time they start paying for it.
When you really think about it, the fiscal cliff IS the compromise.
Obama wants no spending cuts, only tax increases.
People like me want all spending cuts, no tax increases. In fact, I want tax cuts plus spending cuts, while Obama wants more spending and more taxes.
So there’s no possibility of any meeting of the minds in further discussions with Obama.
We just have a very different (polar opposite) philosophy of that the proper role of government is.
With the fiscal cliff, we get some tax increases and we get some real spending cuts. We begin the process of bringing the federal budget back into balance.
So that’s the compromise. It’s the compromise Barack Obama, John Boehner, and Harry Reid all agreed to in 2011.
It’s the compromise both chambers of Congress voted for. So let’s stick with that.
Even at this rate (of fiscal cliff-scale spending cuts and tax increases) it will take decades before we actually start paying down the national debt. But at least we’ll be heading in that direction.
But something eles may happen when we go over the fiscal cliff – something good.
Once the median family’s tax bill goes up $3,500 in 2013, more voters will start to wonder if all this government they are asking for is really worth it. As long as they can push the bill for all this government onto future generations (who have no vote), it’s fun to accept all these goodies from the government . . . because they seem free.
I’d love to have a credit card that allowed me to spend as much as I want, and have someone else in the future pay for all my spending. What a gas that would be!
That’s exactly what Congress and President Obama are doing.
At least the fiscal cliff imposes some discipline — on both Washington and the American people. Not much, but some.
Will we double-dip back into another recession if we go over the fiscal cliff?
Yup. Probably. Almost certainly . . . because the government’s credit card spending will be curbed.
When you hit your credit card limit and you’ve been living off your credit cards, your lifestyle is going to take a hit.
That’s what will happen if we go over the fiscal cliff and don’t raise the federal debt limit.
It’s tough medicine. But it is medicine. It’s ultimately good for us to live within our means. But that can be hard.
The endess deficit spending without consequences must end.
It will end eventually. The question is: When?
Will the spending end when the economy completely collapses, like a house of cards, under the weight of debt?
Or will some fiscal discipline start now — when we still have a country we can save?
I vote for starting now — which is why I hope we go over the fiscal cliff.
I vote for going over the fiscal cliff because it’s immoral to pass the bill for all these government benefits onto my children and grandchildren. It’s time to pay the Piper.
The recent election seems to indicate that America is probably over.
Unlike in 2008, we can’t say the American people just did not understand who they were electing — a socialist (at a minimum), but more likely some kind of Bill Ayers, Jeremiah Wright, Frank Marshall Davis, Saul Alinsky, Anita Dunn, Van Jones, ACORN-style neo-Marxist.
Americans knew exactly what they were doing when they reelected Barack Obama.
In 2012, America clearly chose more socialism, more deficit spending, a lifetime of debt for our children and grandchildren, and a future that looks like Greece, Venezuela, or worse.
And the election wasn’t that close. The only states Mitt Romney carried that John McCain didn’t were North Carolina and Indiana.
We have become “Food Stamp Nation.” We have become the “Entitlement Society.”
Goodbye “land of the free.”
On July 4, 1776, America declared its “Independence” from the British Empire, and fought a seven-year war to achieve that.
November 6, 2012, will mark the day that today’s Americans declared that what they really want is “Dependence” on Big Government. Most Americans don’t want “Independence” and freedom any more.
So let’s be honest and cancel July 4th celebrations — Independence Day . . . because we now have November 6th — “Dependence Day.”
Most Americans prefer to be “taken care of” by a busy body Nanny State.
Consider these discouraging facts on the state of American public opinion . . .
- A Washington Post poll shows 54 percent of the American people trust Obama more than the Republicans in Congress on the economy. Only 34 percent trust the Republicans more than Obama on the economy.
- The same poll shows six in ten Americans opposed even to raising Medicare eligibility from age 65 to age 67 as a way to save money.
- 60 percent say any changes to Social Security are unacceptable — such as raising the retirement age for receiving Social Security benefits.
- Only 29 percent of Americans think the best way to reduce the budget deficit is to cut spending.
- 74 percent support raising taxes on Americans earning more than $250,000 per year.
- 54 percent support increase taxes on Americans earning more than $50,000 per year, such as by phasing out or eliminating the mortgage interest payments deduction.
- A new Rasmussen poll shows only 37 percent of Americans consider themselves “fiscal conservatives.” The rest just want to keep on spending — keep spending about the same, or spend more.
Obama has made it clear he will accept no spending cuts whatsoever as part of the fiscal cliff negotiations, just tax increases and more debt. That’s his answer to the $17 TRILLION national debt — soon to be $20 TRILLION, then $30 TRILLION.
Yet the American people clearly like his approach far more than House Republican efforts to restore some fiscal sanity to our spending mess.
Americans appear willing to accept the current 7.8 percent unemployment rate as the new normal. The unemployment rate is over 10 percent if you use the size of the workforce that existed on Obama’s first day in office.
The U.S. economy is growing at a rate of about 2 percent a year — barely enough to keep up with population growth, and half the rate of the average economic recovery following a recession.
Almost all this meager economic growth we are seeing is occurring from government spending — that is, by deficit spending.
Almost none of the economic growth we are seeing is coming from the private sector — the wealth creating sector.
Growth that comes from government deficit spending is not real growth. I can live better for a while by running up my credit card charges. But at a certain point, my financial world implodes.
That’s how the Obama economy is achieving even the pathetic growth we’re now seeing.
The annual income of the median American household has dropped by $4,300 under the Obama Presidency.
But Americans appear satisfied with this state of affairs. Americans are giving Obama high marks for this performance.
So where’s the hope for a better future?
I’m not seeing any.
Will Republicans and conservatives win any victories in the future?
Sure, we will. We’ll win some victories here and there.
But the long-term trend is downward. The Republican candidate for President has won a majority of the popular vote just once since 1988.
What makes you think things are going to get better?
Unless we figure out away to get at least 40 percent of the Hispanic vote instead of the 27 percent Romney got, we’re doomed.
American voters are making it very clear what they want, repeatedly.
What they want is clearly not freedom.
Americans just don’t value freedom and opportunity much anymore.
They want to be taken care of by the government. And they don’t care much about what kind of a country they leave for their children and grandchildren.
Americans won’t accept one penny of cuts to their benefits even if it means saving America for future generations.
The truth is, we could solve the budget deficit crisis pretty quickly if we just . . .
1) Increase the age of eligibility for receiving Medicare and Social Security from 65 to 70 and then index that to increasing life-expectancy.
The average life expectancy in 1949 in America was to age 66.
This means people could expect to receive Social Security benefits for one year on average.
Today, the average life expectancy is age 76. But many are living into their 90s.
I’m 54 years old. I fully expect to be working until I’m dead or incapacitated . . . because I love doing what I do. I can’t stand the thought of retiring. To do what? Play golf?
How many hours a day can I play golf?
I plan on working for as long as I’m physically able to do so . . . because I love working. There’s just not enough time in life to do all I want to do.
We need to raise the age for receiving Social Security and Medicare to at least age 70 and then index the eligibility age for participating in these programs to average life expectancy, which increases every year.
Those reforms alone would mostly solve our deficit problem.
2) Cut defense spending by one third.
America now spends $950,000,000 a year on defense. That’s nearly $1 TRILLION, or about 26 percent of our $3.8 TRILLION yearly federal budget.
Right now, 43 percent of the entire world’s military spending is, well, us. We are spending six times more on our military than #2 China.
We are spending 14 times more than Russia. Both Britain and France spend more on their military than Russia.
Russia is really just a Third World country, no longer much to worry about.
There’s no Hitler on the horizon and aircraft carriers are not needed to kill terrorists.
Surely the 12 aircraft carriers we now have are enough.
No other country in the world has more than two aircraft carriers. China and Russia each have one aircraft carrier.
The main threat to us is terrorism. Aircraft carriers and enormous standing armies are not what we need to defeat terrorism. What we need to defeat terrorism are excellent intelligence, more special ops forces, more drones, and the like. But these are not high-ticket items, like aircraft carriers.
President Eisenhower (no liberal) warned America about the “military industrial complex” and the threat it presents to our liberty and wallets.
But that Washington Post poll shows that most Americans don’t want any cuts to our military either. Americans want no cuts whatsoever to anything government is doing.
The U.S. government today is borrowing 42 cents our of every dollar it spends.
But Americans won’t tolerate even modest common-sense budget reforms to put America’s fiscal house in order and save the country for future generations.
Today, it’s all about how much free stuff can I have right now from the government before the American economy completely implodes under the weight of this $17 TRILLION debt that’s going up $1 TRILLION every year, with no end in sight.
Add to this $500,000,000,000 new dollars the Federal Reserve continues to print every year like confetti. Because of all this new money the Federal Reserve has been printing under Ben Bernanke and Obama, the value of the dollar has declined by 40 percent (compared to gold and other commodities) since Obama’s first day in office.
Americans knew exactly what they were doing when they voted to reelect Obama for another four years. They want to party on someone else’s dime until the money runs out and the economy implodes.
So I’m going to be changing the focus of this blog.
This blog is no longer going to be much about day-to-day politics.
I really don’t care much what happens in the fiscal cliff negotiations.
Ideally, we will go over the fiscal cliff. We should not be negotiating at all with Obama. We should just let the fiscal cliff happen.
We should let the automatic spending cuts kick in along with all those tax increases that will also kick in on January 1 . . . because Americans should at least pay for the all the government they are demanding — not pass the bill onto future generations.
But this blog won’t be focusing much anymore on all that.
Instead, I’ll mostly focus on steps you can take to save yourself and your family from the coming inevitable economic collapse.
America appears to be over — at least for the foreseeable future.
If America is ultimately to be saved, things will need to get a whole lot worse before they get better.
Americans will need to experience true full-bloom socialism before they reject it — much as has happened in Eastern Europe. Americans will need to find out what it’s like when most of the federal budget is dedicated to paying for the national debt.
Americans will need to find out what it’s really like to lose freedom before they start to value freedom again.
It’s no fun having government bureaucrats micromanaging every aspect of your life.
People would rather live in the woods with nothing than stay in the prison.
To save America, perhaps then we should just let Obama and the Left have what they want.
Let them quickly turn America into Greece or Cuba . . . and then see how Americans like it.
Meanwhile, we can continue to talk about freedom and first principles, as articulated in America’s Declaration of Independence. Then perhaps Americans will eventually return to that . . . because it was, after all, freedom that made America the most prosperous nation in human history.
Until then, until the American people learn what socialism (prison) is really like, and start to value freedom again, it will be like “Moses in the Wilderness” for us who believe in the original American idea of limited government.
Grover Norquist has been catching a lot of heat lately for holding politicians to the pledge they signed not to vote for any net tax increases.
He was the Best Man at the wedding for my first marriage on October 10, 1987.
He may be the smartest political mind I know.
Here’s how his “No Net Tax Increase Pledge” came about.
Way back in 1984 or 1985, I was having dinner with Grover and several others at Gallagher’s on Capitol Hill when he (we) conceived of challenging all federal elected officials and candidates for federal office to sign such a pledge.
Drinks and dinner at Gallagher’s back then with Grover and our little group of pro-freedom activists was a near-nightly event — as none of us were yet married. We’d get together almost nightly to plot and scheme the rollback of socialism and big government, plus tell jokes and laugh a lot.
One of our big complaints was that President Reagan just wasn’t moving fast enough to shrink the federal government back down to Constitutional size — which would mean cutting the size of the federal government by about two-thirds. ”Why isn’t Reagan even trying to eliminate the Departments of Education, Energy, Labor, Commerce, HUD, and much of Health and Human Services?” we’d wonder.
One night, I mentioned to Grover that I grew up in Vermont and New Hampshire.
In the 1970s, New Hampshire had a great conservative governor by the name of Mel Thomson.
This then became a tradition in the state.
After that, you could not hope to win your race for Congress, for Senate, or for the Governorship in New Hampshire without putting your hand on a Bible and pledging never to vote for instituting an income tax or sales tax.
New Hampshire financed its government with a fairly stiff property tax, state-owned liquor stores, and assorted user fees.
New Hampshire has changed a lot since then. People from Massachusetts have since moved into New Hampshire to escape high taxes in Massachusetts — only to vote for Democrats and higher taxes in New Hampshire.
Southern New Hampshire is now a suburb of Boston.
So New Hampshire has become a purple state instead of a solidly red state.
But back in the Mel Thomson days (the 1970s) Dartmouth economics professor Colin Campbell conducted a study comparing the quality of government services in Vermont versus New Hampshire.
The study made sense because the states are mirror images of each other geographically and demographically. But a Vermonter paid 40 percent more taxes on average than a New Hampshirite.
Professor Cambpell’s study found, however, that government services in New Hampshire were superior to Vermont’s. And New Hampshire’s government was collecting more tax revenue.
How can this be?
Well, Professor Campbell concluded that the business climate in New Hampshire was superior to Vermont because of New Hampshire’s low (almost non-existent) taxes.
So, given a choice, why pay 40 percent more in taxes just to live in Vermont?
As a result, business boomed in New Hampshire, and New Hampshire was able to attract triple Vermont’s population.
All this economic activity then generated more tax revenue for the government of New Hampshire to spend on public services.
Grover (at our 1985 dinner at Gallagher’s) was very interested in Governor Mel Thomson’s idea of challenging politicians to take the “No Tax Increase” pledge.
So he developed a similar pledge for federal politicians to sign.
Who would have thought that 1985 dinner conversation at Gallagher’s would have turned into such a political firestorm in 2012?
Of course, no one is required to take this pledge. But if you decline, voters have a right to assume you plan to raise taxes — or, at least, want to keep your options open.
Politicians take Grover’s pledge for one and only one reason — because they believe doing so will help them win their election. So voters have a right to expect their elected representatives to keep their pledge.
Under Grover’s Pledge, you can vote for tax reform that closes loopholes if there is a corresponding decrease in tax rates. What you can’t vote for is a net tax increase.
But as Mel Thomson, JFK, and Ronald Reagan demonstrated — if you cut tax rates, this increases economic activity and economic growth. So there’s almost always an increase in tax revenue for the government. As people get richer, the government gets richer. It’s a win-win proposition.
The logic is this . . .
If taxes are 100 percent, the government will collect no revenue . . . because no one’s going to work if all their earnings are confiscated by taxation. And if taxes are zero, the government collects no revenue either.
No one knows exactly what the optimal level of taxation is to produce the fastest economic growth and most revenue for the government. Regulation also factors into this because regulation acts like a tax.
Grover’s view (and mine) is that we are a long way past this optimal point on the Laffeur Curve.
The burden of government (taxes plus excessive regulation) is deterring business and economic activity — disincentivizing work, production, and risk-taking . . . while incentivizing leisure and sloth.
If you don’t believe me, watch this video . . .
A big reason economic growth in the U.S. has been so slow in recent years is because there are other countries today that are more favorable for business — such as Canada.
Canada recently cut its top corporate tax rate to 15 percent.
The top corporate tax rate in the U.S. is 39.2 percent — now the highest in the developed world.
So why start a business in the United States if you can pay less than half the tax rate by setting up your factory a few miles to the north?
Communist China has also been cutting taxes like crazy lately — on both corporations and individuals.
Well, to spur more economic growth. That’s why.
China’s top corporate tax rate is now 25 percent — 38 percent lower than America’s top corporate tax rate of 39.2 percent. But for qualified enterprises, the top corporate tax rate in China is now 15 percent. No wonder business capital is flowing out of the United States and into Communist China.
Communist China today is a lot less Communist than we are.
In Hong Kong (now part of Communist China) the top corporate tax rate is 16.5 percent.
By the way, two thirds of Britain’s millionaires have pulled a John Galt and left Britain since the introduction of its 50 percent top tax rate.
Grover doesn’t want that to happen to America.
Paul Krugman argued recently in the New York Times that in the 1950s, the top income tax rate was 91 percent for individuals. He notes that the U.S. was then the unrivaled #1 economic superpower in the world.
JFK than cut the top rate to 70 percent. Reagan cut the top rate to 50 percent, then to 28 percent.
What Krugman misses with his 91 percent top tax rate thesis is that we had just emerged from World War Two as the big winner. The rest of the world had been destroyed, for the most part. Then most of the rest of the world was either Communist or Third World.
The U.S. (relatively unscathed by World War II) was just about the only game in town for any kind of capitalism.
The 91 percent top tax rate was a hangover from WWII when we had to fund the big war machine so we could defeat both Hitler and the Japanese.
Because of the huge tax rate in the 1940s and 50s, most corporate executives did not take much in the way of pay. Instead, companies had generous pensions and other befits that were not taxed.
And people tended to stay at the same company for their entire lives because they could not afford to leave their pensions and benefits behind. So employees were, in essence, indentured servants. So that’s not so good if you value freedom.
We actually had much faster economic growth in the 1960s than we had in the 1950s after JFK cut tax rates to a top rate of 70 percent (despite the cost of the Vietnam war and other Cold War costs).
Of course, no one ever paid close to these top rates. They hid the money in their companies and had a lot of deductions and exemptions.
I actually think that, more than the top income tax rates, over-regulation is the much bigger hurdle to starting a business.
Regulations hurt start-up businesses more because they can’t afford the lawyers to make sure they are in compliance. As a result, new business start-ups are almost non-existent today. Small business is always where the new jobs and economic growth come from.
Grover believes (quite common-sensicallly) that the emphasis should be on lightening government’s burden on new business formation and productive activity by lowering tax rates, striking down unnecessary government regulations, and reining in out-of-control federal spending.
That’s what JFK and Reagan did. The result in both cases was economic growth rates of more than four percent per year — more than double the growth rate we are seeing today.
Government at all levels is taking 40 cents out of every dollar earned in America. The federal government is borrowing 42 cents out of every dollar it spends.
Enough is enough. It’s time for government to tighten its belt and to stop strangling the goose (capitalism) that’s laying the golden eggs.
It’s both good economics and good politics. There’s absolutely no reason to strike a deal with Obama on this. Just let the Fiscal Cliff happen.
On January 1, 2013, automatic spending cuts plus Taxmageddon kick in — unless President Obama can strike a deal with House Republicans over spending cuts and taxes.
Obama wants to increase taxes, but doesn’t want to cut spending, with the possible exception of military spending. He certainly doesn’t want to cut or even limit spending on entitlements and welfare programs. He wants those expanded. Obama always wants to spend more. Obama always wants to grow government.
The Fiscal Cliff stops his spending spree.
I’m not the least bit concerned about the automatic spending cuts.
Remember, the Fiscal Cliff is not a Fiscal Cliff for you or me. It’s a Fiscal Cliff for the federal government. It requires the federal government to cut spending across-the-board if Congress and President Obama fail to hit spending cut targets they all agreed to. It requires the federal government to go on a diet.
Isn’t this exactly what we want — mandatory spending cuts?
So this is only a crisis for liberals and Leftists who want no restraints on spending.
Yes, the military will be hit by this. But, frankly, it’s high time we started scaling back our military. Not that I’m against having a huge military if we can afford it. But we can’t.
Right now, 43 percent of the entire world’s military spending is, well, us. We are spending six times more
on our military than #2 China. We are spending 14 times more than Russia. Both Britain and France spend more on their military than Russia.
Russia is really just a Third World country, no longer much to worry about.
There’s no Hitler on the horizon and aircraft carriers are not needed to kill terrorists.
Surely the 11 aircraft carriers we now have are enough.
No other country in the world has more than two aircraft carriers. China and Russia each have one aircraft carrier.
So I’m not losing much sleep over the prospect of scaling back our military some if it also means we have to cut government spending everywhere else by the same proportion.
We need to do this.
The U.S. government now has a $16.3 TRILLION debt and is borrowing 40 cents out of every dollar it spends. We need to cut and we need to cut now. If that means we go from 11 aircraft carriers to six, so be it.
Then we’d only be spending three times more on our military than #2 China.
While we’re at it, let’s also end all foreign aid. We can’t afford that either.
But what about Taxmageddon?
Starting on January 1, 2013, American households will see an estimated average tax increase of $4,223 per year.
Not only will the Bush tax cuts expire, but the patch on the dreaded Alternative Minimum Tax also expires. This will rope another 20,000,000 middle income households into paying the AMT who were never supposed to pay this brutal tax. The FICA payroll tax holiday will also expire on January 1.
The expiration of the Bush tax cuts produces about one-third of Taxmageddon’s tax increases. It’s a myth that the Bush tax cuts only reduced taxes on the wealthy. They also reduced the marriage penalty, increased the Child Tax Credit and the adoption credit, and increased tax breaks for education costs and dependent care costs.
But there’s more, much more.
Taxes on capital gains will go up to 20 percent from 15 percent. Taxes on dividend income will triple for many Americans. Instead of a top rate of 15 percent on dividend income, you’ll be paying whatever your income tax rate is on dividends. So that could be 39 percent under the new rates. And the “death tax” exclusion drops from $5,000,000 to $1,000,000 — with a mind-boggling 55 percent tax rate.
So goodbye family farm, and goodbye family business.
Then, perhaps most crushing of all, most of the 21 tax increases that are embedded in the ObamaCare legislation kick in.
So a tax increase nightmare awaits us January 1.
I say, so what?
If Americans want a gigantic social welfare and entitlement state, they need to start paying for it.
Now, I would certainly prefer there be no Taxmageddon on January 1. But I’m willing to live with it if we also get all those mandatory across-the-board spending cuts.
It would be far better just to have the spending cuts and no tax increases. The tax increases will certainly hurt the economy, probably plunge us into another recession — a double dip.
But I’ll take Taxmageddon if we get all the immediate mandatory across-the-board spending cuts.
I’ve always believed that if Americans had to actually pay for the government they are getting, they would not want this much government.
But politicians have found a way to increase government spending (especially entitlements) without requiring voters to pay the tab. They do this through deficit spending, and letting future generations pay for it — when the current crop of politicians have long since left office.
But that’s immoral. That’s stealing from future generations to pay for today’s government benefits.
It’s time to end this generational theft. It’s criminal that we are saddling babies who haven’t even been born yet with the tab for our benefits. Right now, every baby born in America owes $81,000 on the national debt. It’s time we pay the piper.
This will require brutal fiscal austerity.
But there’s also a big political benefit to going over the Fiscal Cliff and allowing all these automatic spending cuts and tax increases go into effect.
Barack Obama will get the blame.
Taxmageddon will likely push America back into another recession. But that’s, frankly, what America needs. What recessions do is blast the fat out of the economy. We then emerge stronger.
We need to get our fiscal house in order. And that’s painful.
Most Americans won’t like it and will take their anger out on Democrats in the 2014 mid-term elections and the 2016 Presidential Election.
But that’s just a side benefit. It’s also the correct economic prescription.
If you run up your credit card debt so you can live beyond your means, that eventually catches up with you. Then comes the hangover. There comes a point when you have no choice but to dramatically cut back your spending (perhaps even live like a pauper) until you can pay off your credit cards. You must learn to live with less.
That’s what America must do now.
Why not use this opportunity of the Fiscal Cliff to do these two wonderful things:
1) Put America’s fiscal house in order with across-the-board mandatory cuts in government spending; and . . .
2) Let Obama and the Democrats pay the political price for the pain.
There’s really no need to fear the Fiscal Cliff. It’s the tough medicine America needs. We have a $16.3 TRILLION national debt, for Pete’s sake. Soon the debt will be $20 TRILLION. And then we’ll be Greece.
The mandatory spending cuts will make us stronger in the long run.
The House GOP position should be no more increases to the debt ceiling. There’s nothing to negotiate. The debt ceiling should not go up again, period, ever. There’s really no reason to meet with Obama to talk over any of this. Just let it happen.
#1: Since January of 2009, the median household has lost $4,019 in income per year.
#2: Median household income has fallen every year of the Obama Administration.
#3: Our national debt recently soared past $16 TRILLION. Obama has added nearly $6 TRILLION to the national debt.
#4: Barack Obama has added more than $1 TRILLION to the national debt every year of his Presidency.
#5: The federal government is borrowing 44 cents of every dollar it spends.
#6: A gallon of regular gas cost $1.86 on average across America on President Obama’s first day in office. Today, a gallon costs $3.86 on average in America.
#7: The official unemployment rate today is 8.1% compared with 5% four years ago and 7.8% on Obama’s first day in office. The unemployment rate has been over 8% for 43 straight months.
#8: The true unemployment rate now is 11.2% if you use the size of the labor force as in stood in January 2009.
#9: If the labor participation rate was sitting at the 30 year average of 65.8 percent, the unemployment rate would actually be 11.7 percent. But people are leaving the labor market because they are too discouraged to look for work in this terrible economy, so this makes the official unemployment rate artificially low.
#10: The labor participation rate for men has fallen to 69.9 percent. This is the lowest level since the government started tracking this number in 1948.
#11: But how are we doing compared to two years ago? The percentage of working age Americans that are employed is smaller now than it was two years ago. In August 2010, 58.5 percent of working age Americans had jobs. In August 2012, 58.3 percent of working age Americans had jobs.
#12: Since Barack Obama entered the White House, the number of long-term unemployed Americans has risen from 2.7 million to 5.2 million.
#13: Today, more than half of all Americans are now at least partially financially dependent on the government.
#14: The U6 unemployment rate now stands at 14.7% when you count part-time workers who would like full-time work and when you count those who have not looked for work in four weeks or more but who want work. Many economists say this is the true unemployment rate.
#15: The percentage of working age Americans with a job has been below 59 percent for 35 months in a row.
#17: Since the Obama Administration declared the end of the recession in June of 2009, 58 percent of the jobs created have been low income jobs. (Source: National Employment Law Center)
#17: Today more than 104 million Americans are enrolled in at least one welfare program run by the federal government. We have 88 means-tested federal welfare programs.
#18: The number of Americans on food stamps has grown from 31.9 million when Barack Obama entered the White House to 46.7 million today.
#19: One quarter of all U.S. children are enrolled in the food stamp program today.
#20: Since Obama became president, the number of Americans living in poverty has risen by 6.4 million.
#21: While Obama has been president, U.S. home values have fallen by another 11 percent.
#22: More than 10 million homeowners are underwater on their mortgages.
#23: Electricity bills in the United States have risen faster than the overall rate of inflation for four years in a row. (Source: USA Today)
#24: While Obama has been President the velocity of money (one of the best measures of the economy’s overall health) has plunged to a post-World War II low.
#25: More than three times as many new homes were sold in the United States in 2005 as will be sold in 2012.
#26: The United States was once ranked #1 in the world in Gross Domestic Product (GDP) per capita. Today we have slipped to #11 — behind countries like Brunei and Norway, according to the World Fact Book published by the CIA.
#27: The United States was ranked #1 in terms of economic competitiveness when Barack Obama became President. Today, the U.S. economy has fallen to 7th place, according to a report by the World Economic Forum — behind countries like Sweden, the Netherlands, and Finland.
#28: More than 10 million U.S. households today do not have a bank account. That number has increased by one million since 2009.
#29: In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
#30: Health insurance costs have spiked up by $3,065 for the average American family since Obama took office — a 23 percent increase (Source: Kaiser Family Foundation)
#31: Health insurance costs have been spiking up even faster since ObamaCare was passed into law on March 24, 2010.
The Bottom Line . . .
The truth is Barack Obama’s so-called “recovery” is far worse than the recession that started under George W. Bush in the 3rd quarter of 2008 and that was proclaimed over by Obama in June of 2009 — before a single Obama policy had kicked in.
The “recovery” stopped in April of 2010 — two weeks after ObamaCare passed into law. See chart here >>>
Romney’s theme should NOT be “Are you better off than you were four years ago?”
That was Reagan’s line, and really doesn’t communicate the gravity of today’s economic crisis.
We’re in the midst of a full-blown economic collapse — as illustrated by Federal Reserve Chairman Ben Bernanke’s pledge today to print as much new money as needed to keep the economy afloat through Election Day.
Mitt’s theme should be: “Think things are bad now? Just imagine what America will look like if Obama is reelected and has another four years to complete his promise to ‘fundamentally transform’ America.”
Obama certainly is “fundamentally transforming” America — into Third World banana republic . . . and amazingly quickly.
This, according to Environics Analytics WealthScapes data cited in a Globe and Mail article
The average Canadian household was worth worth $363,202 in 2011 compared to $319,970 for the average U.S. household.
Canada is also economically freer than the United States. According to the 2012 Index of Economic Freedom put out by The Heritage Foundation, Canada (often thought to be more socialist than the U.S.) ranks as the world’s sixth freest economy, while the U.S. has plummeted to 10th on the index, ranking behind such counties as Ireland, Mauritius, Chile, New Zealand, Swtzerland, and Australia.
Hong Kong (now part of Communist China) and Singapore rank #1 and #2 on the Index of Economic Freedom.
Historically, the United States has ranked in the top three on this index.
Obama promised change and to “fundamentally transform” America . . . and he delivered.
“Change has come to America,” he boasted.
Well, that’s certainly true – disastrous change.
The question is: Can America ever recover to its former status as the world’s #1 economic superpower?
Romney should be rolling out new ads on this theme.
The ad should say: “Obama has wrecked America. Now we’re not even the most prosperous country in North America, thanks to ObamaCare and Obamanomics.”
Romney should use this opportunity to teach America how free-enterprise works and why Obama is an enemy of free-enterprise . . . and why, if we continue to follow Obama down the Socialist road he’s taking us, it won’t be long before we become a banana republic.
Don’t be surprised to see a big migration now from the U.S. to Canada.
But will Canada want us there?
Mitt Romney should revive Newt Gingrich’s idea of challenging President Obama to a series of 12 debates. It doesn’t need to be 12 exactly. It could be 9, 7, or 21. The idea is to have a substantive discussion on the future of the country.
The topic of one of the debates could be the respective careers of these two politicians before they ran for public office — Mitt Romney’s career at Bain Capital and rescuing the Olympics vs Barack Obama’s career as “community organizer” and Saul Alinsky disciple.
Obama, of course, won’t accept the challenge. But it would put him on the defensive.
Romney could then say continuously that he’s challenged Obama to a series of nine debates. Obama has declined, no doubt because he wants to hide behind his negative ads, diversionary side issues like Bain Capital, and distortions rather than talking about what Americans really want to hear about — which is getting our economy growing again.
Offer to Obama the prospect of having an entire debate just on Bain Capital.
Let’s discuss just that for 90 minutes.
A debate focused on Bain Capital could be a tremendous learning opportunity for voters on how capitalism works, how jobs are created, and on how wealth is generated.
Romney could contrast Bain’s record on creating jobs vs Barack Obama’s record on creative jobs.
Bain has created hundreds of thousands of jobs in America. Barack Obama has created exactly zero net new jobs for America during his 3 1/2 years in office.
Obama has added $6 TRILLION to the national debt, but still managed to create zero net new jobs. How is that even possible?
I imagine if I ran up $6 TRILLION on my credit card, I would have created quite a few new jobs. How could you not?
But somehow, Obama has managed to do it — borrow $6 TRILLION . . . and created zero net new jobs. Actually, it’s even worse than that. Obama has lost about 1,000,000 net jobs since coming into office.
That’s an incredible feat.
By the way, when Romney was running Bain Capital, he was able to get an average 113% annual return on Bain’s investments.
So let’s have this debate: Bain’s and Romney’s approach to creating jobs and growing the economy vs Obama’s approach.
Then ask: Would you prefer to have the U.S. economy run more like how Bain would run it? Or more like how Obama, ACORN, Jeremiah Wright, William Ayers, Jesse Jackson, and Al Sharpton would run it?
We could then have a debate on what records should be released.
Romney can say: “I’ll release all my tax returns when Obama releases his college and law school transcripts along with his medical records.” [Plus a true copy of Obama's birth certificate instead of the Photoshopped version the White House released]
After Obama declines Romney’s 12-debate challenge, Romney should go wherever Obama goes to give a counter speech to whatever Obama is saying. The media will have to cover both. So we can have these debates that way.
Romney should debate Obama’s empty chair every day, saying Obama was invited, but still isn’t showing.
Newt had a good idea here.
He could also borrow the red phone idea from Glenn Beck.
Romney should take the red phone with him wherever he goes and challenge Obama to debate by phone if Obama can’t get there in person. Romney would then show he’s prepared to debate Obama anytime, anywhere — with advance notice ,or with no advance notice.
Whenever Obama wants to call, we can have a debate.
This would generate a lot of media interest and add some much-needed sparkle to the Romney campaign.
President Obama revealed a lot about himself when, on the campaign trail the other day, he made this statement:
If you’ve got a business, you didn’t build that. Somebody else made that happen.”
Obama is a believer in government, not in the private sector, not in businesss.
Obama steered virtually all stimulus dollars to plug holes in state and local government (to prevent layoffs of government workers) or to his pet “green energy” projects, mostly run by his big donors (i.e. Solyndra)
Now, obviously what Obama is saying makes some sense on one level.
We certainly need government. We need police. We need roads. We need regulators. The free market cannot operate without rules and laws. No one (with perhaps the exception of a few Ron Paul supporters) is saying we don’t.
We also need government when an enormous amount of resources is required to achieve a single focused objective — i.e. win World War Two.
We can’t expect the private sector to do something like that.
We also need government to conduct other big worthwhile projects — such as build the Hoover Dam or land on the moon in the 1960s (something we haven’t done again in half a century).
Obama’s rhetorical style is to posit straw-man arguments and knock them down — that is, to misrepresent our true views.
He says conservatives (and those who love freedom) are anti-government, that we just want a dog-eat-dog society where everyone fends for themselves — sink or swim, survival of the fittest.
But that could not be farther from the truth.
Conservatives are strong believers in government. Conservatives are not anarchists. Conservatives believe in ordered liberty, not chaos, not everyone fend for himself Road Warrior-style.
Conservatives believe government should be very strong where it’s supposed to be strong. Conservatives believe government is needed to do jobs that the private sector is not set up to do, can’t do, or can’t do very well.
America’s founders did an excellent job of outlining the proper responsibilities of the federal government in the Constitution of the United States.
But to say, as Obama did, that “If you’ve got a business, you didn’t build that — somebody else made that happen” is like saying the New York Giants did not win the Super Bowl last year, the referees made that happen, or NFL Commissioner Roger Goodell made that happen.
Certainly referees were necessary to the playing of the Super Bowl. Also a stadium had to be built. The NFL brass had to decide to hold a Super Bowl on a specific date in a specific location. And there must be rules for the conduct of the game. But to suggest that, because of all this, the New York Giants did not win the Super Bowl (someone else did), is pretty silly.
People pay to watch the game. People pay to watch the players play. They don’t pay to watch the referees. Obama wants to emphasize the referees, not the game.
The main game in America is capitalism.
Capitalism is why America grew to be so prosperous so quickly.
Capitalism is what creates the products we buy, generates the wealth, and pays for all this government. Government doesn’t create wealth. The private sector does.
We could not have won World War Two if America had been a poor country.
Obama thinks wealth is a finite and constant resource that needs to be spread around evenly.
But if that were true, America would continue to look like it did in the 18th Century.
Instead, just about everyone in America today (including the poor) has a computer, a flat screen TV, a car, a washer and dryer, a refrigerator, and very few Americans go hungry or homeless (unless they have a drug abuse or mental health problem).
The rising tide of capitalist-generated prosperity lifts almost all boats.
Yes, Jesse Jackson is right when he says some boats remain stuck on the bottom and need some help. Fine. But that’s a small percentage. Maybe 10 percent, maybe 5 percent if you really look closely.
But capitalism has been very good for 90-95 percent of us.
Even the bottom 5 percent in America are far better off than if they lived a century earlier.
But Obama has an almost Medieval view of the world — an age when the world looked exactly the same for hundreds, even thousands of years — a feudal, anti-capitalist world where there was no discernible progress from century to century.
It was grinding poverty for everyone – unless you were royalty or a high-level church figure.
Capitalism and capitalist institutions (such as enforceable contract law and banks) changed all that — also the PROTESTANT ETHIC & THE SPIRIT OF ENTERPRISE (as Max Weber called it).
Obama doesn’t understand capitalism, doesn’t like it. He thinks it’s more noble to work for a non-profit or for government.
But who has done more real good for the world — the RED CROSS (one of the world largest non-profits) or Bill Gates and Microsoft?
I would argue Bill Gates and Microsoft.
Bill Gates made the world a better and more productive place by creating software for personal computers that almost anyone can afford. He created hundreds of multi-millionaires (his employees and shareholders). And now he’s set up his own non-profit foundation that’s exponentially bigger than the RED CROSS — because of the profits he made from Microsoft.
Plus, of course, the RED CROSS could not exist without donations. Where do these donations come from?
The same place taxes are generated to finance government — the private sector.
But Obama tells us “the private sector” is doing fine now. It’s government that’s hurting, in his view.
But if the private sector really were doing fine, government would not be hurting. The tax revenue would be there.
Obama doesn’t seem to know where the golden eggs come from. He just continues to keep trying to kill the goose that lays the golden eggs.
He sees the goose that’s laying the golden eggs as the enemy.
In one of his memoirs (“Dreams of My Father”), Obama talks about a job he had briefly in the private sector. He wrote that he felt like “a spy behind enemy lines.”
Obama actually sees the private sector and business as the enemy.
Obama has spent his entire life working for far-left non-profits (like the notorious vote fraud organization ACORN) and for government.
Even Communist China and most of the Communist World has woken up to the fact that its capitalism that creates the wealth. Fidel Castro and Hugo Chavez are the only true Communists left in the world — well, except also apparently Obama.
While the Communists have abandoned Communism, Obama still clings to Socialist rhetoric that was common in the 1930s. He sounds like a relic from a bygone era.
He blames ATM machines and other forms of automation for the slow economy.
He’s like a Flat Earther who refuses to let observable facts alter his thinking.
Obama doesn’t understand the American Dream, and doesn’t like it much.
He thinks everyone should be working in soup kitchens and the like.
Then he wonders why his polices aren’t creating any new jobs, aren’t generating any economic growth.
If Obama were running the NFL, there would be hundreds of referees on the field — so many you’d have a tough time finding the players. And the rule book would be thousands of pages long — to ensure fairness, of course. A flag would be thrown on every play.
And then NFL Commissioner Obama would wonder why the game has become so difficult to play, and why so few people want to play the game or watch it anymore.
That, in a nutshell, is what he’s doing to the U.S. economy.
His ObamaCare law is 2700 pages. His administration has just produced 13,000 additional pages of ObamaCare regulations under the 2700-page law.
Obama is very good at that — creating more rules, regulations and bureaucracy. That’s what he knows how to do. That’s what he loves doing.
He is now in the process of hiring 16,000 new IRS agents to enforce ObamaCare. He is now building 159 brand new government bureaucracies to administer ObamaCare.
Paradoxically, the more government has grown, the more responsibilities it has taken on, the less capable it has become in undertaking big projects.
When was the last time the U.S. government undertook a project on the size and scope of the Hoover Dam?
In what truly is the ultimate insult, American astronauts are now going into space on Russian rockets because we cancelled our space program. We have a government today that’s enormous, but really can’t do much.
It took America one year and 45 days to build the Empire State Building in 1929-1930.
It took us 11 years to build the new version of the World Trade Center. And now it’s just one building instead of two. We’ll call this World Trade Center minus one tower.
We’ve become a pathetic country, unable to do much anymore.
We’ve become a world laughingstock.
Most Conservatives, of course, believe in a safety net for the disabled and those who are incapable of providing for themselves. We don’t want people starving on the streets or granny kicked out of her house into the snow. We believe there should be a floor through which no one should fall, but there should also be no limit (no cap) on what one can earn.
We’re still a relatively rich country (not nearly as rich as we used to be). We can afford an intelligently designed safety net that has incentives for able-bodied people to get off it.
We’re happy to rescue the defenseless, but we don’t want to subsidize the lazy and clueless.
We don’t think the safety net should be gold-plated and lavish. Or why would anyone want to get off it? Why work if you don’t have to?
The safety net is not supposed to become a hammock.
But Obama has now (on his own) gutted the welfare reforms that Bill Clinton signed into law, including the requirement that you at least try to find work. That requirement’s gone. Now you can just sit on the couch, watch TV, and call that work.
He’s also running TV ads in poor communities urging people to get on Food Stamps.
In the World According to Obama, going on Food Stamps is good and noble, but working in a business is working for the enemy.
At every turn, Obama undermines the work ethic and competitive spirit that are essential to capitalism and a flourishing free-enterprise economy.
Instead of admiring a Michel Phelps and celebrating achievement, Obama’s first instinct is to tie a cement block around his ankle to make the race more fair.
And then he wonders why businesses are keeping trillions of dollars in cash parked on the sidelines until he’s gone . . . or setting up factories in places more hospitable to capitalism, such as in Communist China.