If Bigger Stimulus puts more Money into Consumers’ Pockets so will Bigger Tax Cuts

Posted by PITHOCRATES - November 19th, 2011

Week in Review

Economists are like climatologists.  They can look at a lot of data.  And come to all the wrong conclusions (see Whatever Happened to Discipline and Hard Work? by Tyler Cowen posted 11/12/2011 on The New York Times).

The second problem is that many conservatives have become so attached to their cultural vision that they have ceded sound, technocratic reasoning to the left and center. For instance there is a common willingness among conservatives to defend the Bush tax cuts, even though the evidence does not show much of an economic payoff.

Conservatives’ own culture, and the sheer desire to validate wealth, discipline and reward through law and the tax code, may have convinced them that the tax cuts have been beneficial. Measuring the actual effects of a tax cut isn’t always their main concern, even if they sometimes cite such numbers for rhetorical purposes. They feel in their bones that antagonism toward the rich is a dead end and so don’t favor highly progressive taxes.

That rhetorical line appeals to tax-weary voters, and seems part of a core conservative vision, but it is treading on dangerous ground because it moves away from testable theory: those tax cuts have already been in place for many years, yet it remains to be seen when or if they will spur the economy.

Interesting.  The Keynesians never talk this way.  When their stimulus spending hasn’t spurred the economy you know what they say?  The stimulus wasn’t big enough.  But when we’re wallowing in a recession that doesn’t want to end in large part due to the specter of Obamacare hanging over us like the sword of Damocles what does someone on ‘our’ side say?  Doesn’t look like the Bush tax cuts are working.  They don’t blame the rash of Obama policies that have squelched this economy.  No.  They go straight to the tax cuts.

Perhaps we should think like Keynesians.  And say the reason why the Bush tax cuts aren’t working is because they’re not big enough.  Make them bigger and those savings may offset the great new costs of Obamacare.  And they might just then turn this economy around.  Because if bigger stimulus puts more money into consumers’ pockets so will bigger tax cuts.

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LESSONS LEARNED #79: “Tax cuts stimulate. Not tax hikes.” -Old Pithy

Posted by PITHOCRATES - August 18th, 2011

With Bubbles the Ride Down is never as Enjoyable as the Ride Up

Bill Clinton dealt George W. Bush a horrible hand.  Clinton enjoyed the irrational exuberance.  He rode the good side of the dot-com bubble.  Saw the treasury awash in cash.  Dot-com people cashing in their stock options and paying huge capital gains taxes.  There was so much money pouring in that projections showed a balanced budget for the first time in a long time.  As long as the people stayed irrationally exuberant.  And that damn Alan Greenspan didn’t raise interest rates.  To rain on his parade.

But he did.  The days of free money were over.  (For awhile, at least).  Because people where bidding up stock prices for companies that hadn’t produced a product or provided a service.  Money poured into these dot-coms as investors were ever hopeful that they had found the next Microsoft.  These companies hired programmers.  Colleges couldn’t graduate enough of them.  To program whatever these companies would eventually do.  But with the spigot of free money turned off these companies ran out of startup capital.  As most of these businesses had no revenue they went out of business.  By the droves.  Throwing these programmers out onto the street.

And then the great contraction.  Which follows a bubble after it is a bubble no more.  Prices fell as deflation replaced inflation.  And as prices fell, unemployment went up.  The phantom prosperity at the end of the Nineties was being corrected.  And the ride down is never as enjoyable as the ride up. 

Easy Monetary Policy and lack of Congressional Oversight of Fannie Mae and Fannie Mac

And then there was, of course, 9/11.  Which further weakened an already weakened economy.  So that’s the backstory to the economic activity of the 2000s.  A decade that began with the aftermath of one bubble bursting.  And ended with an even worse bubble bursting.  The subprime mortgage crisis.  It was a decade of government stimulus.  George W. Bush used both tax cuts (at the beginning of his presidency).  And then a more Keynesian approach (tax rebates and tax incentives) at the end of his presidency.  In other words, tax and spend.

But the subprime mortgage crisis was so devastating that the 2008 stimulus urged by Ben Bernanke (Chairman of the Federal Reserve) to ward off a possible recession failed.  The easy monetary policy and lack of Congressional oversight of Fannie Mae and Freddie Mac caused big trouble.  And put far too many people into houses who couldn’t afford them.  The housing bubble was huge.  And because Fannie and Freddie were buying these risky mortgages and repackaging them into ‘safe’ securities, the fallout went beyond the housing market.  Pension funds, IRAs and 401(k)s that bought these ‘safe’ securities lost huge swaths of wealth.  The economic fallout was vast.  And global.

And then came Barack Obama.  A Keynesian if there was ever one.  With the economy in a free fall towards a depression, he signed into law an $800 billion stimulus package.  Not surprisingly, it turned out that about 88% of that was pure pork and earmarks.  Making his ‘stimulus’ stimulate even less than the George W. Bush $152 billion stimulus package.  And worked about as well.

Home Ownership was the Key to Economic Prosperity in the U.S.

So let’s look at the numbers.  Below is a chart graphing GDP, the unemployment rate and the inflation rate for the 2000s.  GDP is in billions of 2005 dollars.

(Sources: GDP, unemployment, inflation.  *Average to date (GDP – 2 quarters, unemployment rate – 7 months and inflation – 7 months).)

You can see the fallout of the dot-com bust.  The decade opens with deflation and a rising unemployment rate.  GDP, though, was still tracking upward.  After the bush tax cuts in 2001 (Economic Growth and Tax Relief Reconciliation Act of 2001) and 2003 (Jobs and Growth Tax Relief Reconciliation Act of 2003) you can see improvement.  Unemployment peaks out and then falls.  Inflation replaces deflation.  And GDP grows at a greater rate. 

Things were looking good.  But lurking in the background was that easy credit.  And federal policies to qualify unqualified people for mortgages.  To put them into houses they couldn’t afford.  All because home ownership was the key to economic prosperity in the U.S.

Which makes the rising rate of inflation a concern.  Rising inflation (i.e., expansionary or ‘easy’ monetary policy) created the dot-com bubble.  A rising inflation rate can be bad.  But at least during this period the growth rate of GDP is greater than the growth in the inflation rate.  Which indicates real economic growth.  Accompanied by a falling unemployment rate.  All nice.  Until…

Bernanke and Company Crapped their Pants

Those people approved for mortgages they weren’t qualified for?  Guess what?  They couldn’t make their mortgage payments.  And because Fannie and Freddie bought so many of these risky mortgages, these defaults weren’t the banks’ problems.  They were the taxpayers’ problems.  And anyone who bought those ‘safe’ securities.

Long story short, Bernanke and company crapped their pants.  He urged the $152 billion Economic Stimulus Act of 2008 to ward off a possible recession.  This was a Keynesian stimulus.  Remember that summer when you got those $300 checks?  This was that stimulus.  But it didn’t stimulate anything.  People used that money to pay down debt.  Because they were crapping their pants, too.

The good times were over.  That huge housing bubble was bursting.  And nothing was going to stop it.  Certainly not more of the same (Keynesian stimulus).  GDP fell.  Unemployment rose.  Inflation became deflation.  And Bernanke stepped in and turned the printing presses on.  Desperate not to make the same mistake the Fed made during the Great Depression.  When bad Fed policy caused all of those bank runs.

An Inflation Rate Greater than the GDP Growth Rate may Return us to Stagflation

The Obama administration (all Keynesians) pushed for a massive stimulus to fix the economy.  The best and brightest in the administration, Ivy League educated economists, guaranteed that if passed they could hold the unemployment rate under 8%.  So they passed it.  And Bernanke kept printing money.  In other words, more of the same.  More of what gave us the dot-com bubble.  And more of what gave us the housing bubble.  Inflationary monetary policy.  And more government spending.

Didn’t work.  It took a year for the deflation to end.  As the market corrected prices.  And readjusted supply to match actual demand.  The unemployment rate maxed out around 10%.  And the Obama stimulus didn’t move it much from that high. 

GDP growth resumed.  However, the growth of inflation is now greater than the growth of GDP.  A very ominous sign.  Indicating that GDP growth is not real.  And will likely collapse once the ‘free money’ Fed policies end.  Or the growth of inflation coupled with high unemployment return us to the Jimmy Carter stagflation of the Seventies.

Keynesian Stimulus is the way to go if you want Deflation and Recession 

Further Keynesian stimulus may only make a bad situation worse.  And prolong this economic ‘recovery’.  These policies make bubbles.  Which are fine and dandy until they burst.  Giving us deflation and recession.  And the bigger the bubble, the greater deflation and recession that follows.

Tax cuts stimulate.  They ended the dot-com recession.  All Keynesian attempts during the 2000s have failed.  Proving again that tax and spend doesn’t work.  Easy monetary policy and government spending does not end well.  Unless you want deflation and recession.  Then the Keynesian way is the way to go.  But if you want to stimulate economic activity.  If you want real GDP growth.  Then you have to go with tax cuts.  As their track record of success shows.

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The Obama Budget: High Taxes, Reckless Spending and Lies

Posted by PITHOCRATES - April 18th, 2011

Is it how Much we Give or how Much we Could Give that Counts?

Imagine, if you would, two people standing in front of an orphanage.  There’s a donation box there.  And we can see these caring people actually count out their money before placing it in the donation box.  One counts out $20.  The other counts out $100.  Who is more generous?

Is this a trick question, you ask?  Well, yes, I guess it is.  You see, normal people, like you and me, are inclined to say the person donating the $100 is more generous.  I mean, $100 is more than $20.  $100 buys more than $20.  $100 will do more for orphans than $20.  So it sure looks like to us, the normal people, that the $100 donation is the more generous donation.  But that’s not the way government would see it.  For I left out one important piece of information.  I didn’t say how wealthy these people are.  So let’s do that now.  The $20 donation is from a UAW line worker.  The $100 donation is from a rich business owner.  Now who is more generous?

$100 will still buy more than the $20 for the orphans, but $100 is a smaller percentage of the business owner’s salary.  The $20 donation is a larger percentage of the UAW line worker’s salary.  So, people in government, and those on the Left, will say the $20 donation is the more generous donation.  Even though it will buy less for the orphans.

We Pay Tax Dollars, not Tax Rates

This is a big problem clouding the debate over ‘fair’ taxation.  Devious politicians point to tax rates and cry that the rich aren’t paying their fair share.  When, in fact, they are paying far more tax dollars than those less rich.  Even in an attack on these rich bastards shows this (see Only Little People Pay Taxes by Dave Gilson posted 4/18/2011 on Mother Jones).

Leona Helmsley’s distaste for paying taxes eventually landed her in federal prison. But the rich have little need to break the law to avoid the tax collector. As Martin A. Sullivan of Tax.com recently calculated, a New York janitor making slightly more than $33,000 a year pays an effective tax rate of nearly 25%. And the effective tax rate for a resident of the Park Avenue building named after Helmsley, earning an average of $1.2 million annually? A cool 14.7%.

And the chart following this shows the income and taxes of the Janitor and the millionaire.  And even though the millionaire pays only 14.7% in taxes, the actual tax dollars paid in income taxes is $159,515.  And how much did that janitor pay?  Just $3,168.  The cheap bastard, the millionaire, paid $156,347 more in income taxes.  That’s 4,935% more than the janitor paid in income taxes.  Yes, 14.7% is a smaller percentage than 25%, but there’s no math in the world that says the janitor paid more in income taxes than the millionaire.

There’s a difference between tax dollars and tax rates.  And tax rates don’t pay the bills.  Tax dollars do.  And the rich pay more of them by far.  Anyway saying otherwise is fostering class warfare for political purposes.  Because if it was about tax dollars to pay for federal spending, $159,515 pays for a lot more spending than $3,168. 

Low- and Middle-Income Families don’t Pay their Fair Share of Taxes

So if the rich aren’t paying their fair share of taxes, who is?  And are there others, too, not paying their fair share?  Of course, that can’t be.  Because only the rich can get away with cheating the…  Hello, what’s this?  Low- and middle-income families aren’t paying any federal income taxes?  Really?  How can that be?  Wasn’t it the rich blankity blanks that were screwing the poor?  Not the other way around (see Nearly half of US households escape fed income tax by Stephen Ohlemacher, Associated Press Writer, posted 4/7/2011 on Yahoo! Finance)?

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization…

In recent years, credits for low- and middle-income families have grown so much that a family of four making as much as $50,000 will owe no federal income tax for 2009, as long as there are two children younger than 17, according to a separate analysis by the consulting firm Deloitte Tax.

Really?  They’ve told us that people flipping burgers for minimum wage were poor, but even people earning $50,000 are poor?  No wonder we have so many people in poverty.

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners — households making an average of $366,400 in 2006 — paid about 73 percent of the income taxes collected by the federal government.

The bottom 40 percent, on average, make a profit from the federal income tax, meaning they get more money in tax credits than they would otherwise owe in taxes. For those people, the government sends them a payment…

In 2007, about 38 percent of households paid no federal income tax, a figure that jumped to 49 percent in 2008, according to estimates by the Tax Policy Center.

No wonder the Democrats win elections.  You know there are a lot of Democrats in that 49% not paying federal income taxes.  That makes the Democrats a modern day Robin Hood.  Stealing from the rich.  And giving to the low- and middle-income.  And when you’re on the receiving end of this bounty, you’re all for class warfare.  Screw the rich, you’ll shout.  Until, God forbid, you become rich.  Just ask Nicholas CageSinbadWesley Snipes.  Or Willie Nelson.  And anyone who won the lotto.  Or a car.  Who did not realize that their bounty came with a hefty tax obligation (there’s no tax withholding for these people.  They have to write a check for all the taxes they owe).  People are stunned to learn the amount of their money the government wants.  And that isn’t fair.  But before they were rich, that was a different story.  Then nothing was fairer than sticking it to the rich.

The Rich aren’t Rich Enough to Pay all our Taxes

If the poorest half of all Americans aren’t paying any taxes, then who, exactly, is?  I mean, if the rich aren’t paying their fair share and the poor aren’t paying anything, who does that leave (see Where the Tax Money Is posted 4/17/2011 on The Wall Street Journal)?

Consider the Internal Revenue Service’s income tax statistics for 2008, the latest year for which data are available. The top 1% of taxpayers—those with salaries, dividends and capital gains roughly above about $380,000—paid 38% of taxes. But assume that tax policy confiscated all the taxable income of all the “millionaires and billionaires” Mr. Obama singled out. That yields merely about $938 billion, which is sand on the beach amid the $4 trillion White House budget, a $1.65 trillion deficit, and spending at 25% as a share of the economy, a post-World War II record.

That’s funny.  I thought the rich weren’t paying their fair share.  And in 2008 the top 1% paid 38% of all taxes.  I don’t know, but 38% sounds like a lot more than the 0% paid by the poorest 50%.  So the rich are paying a lot.  Can they pay more?  Can they pay all of our taxes?  Well, even if you confiscate all of the top 1%’s income, no.  They can’t.  They simply aren’t rich enough.

Say we take it up to the top 10%, or everyone with income over $114,000, including joint filers. That’s five times Mr. Obama’s 2% promise. The IRS data are broken down at $100,000, yet taxing all income above that level throws up only $3.4 trillion. And remember, the top 10% already pay 69% of all total income taxes, while the top 5% pay more than all of the other 95%.

The richest 10% of all Americans, including everyone making $100,000 or more, won’t do it either.  At least, they can’t fund a $4 trillion budget.  Which means there’s no way no how you can pay for government by taxing the rich.  Even if you tax them at 100%.  You see, these rich simply aren’t rich enough.  You know who is, though?  The middle class.

So who else is there to tax? Well, in 2008, there was about $5.65 trillion in total taxable income from all individual taxpayers, and most of that came from middle income earners. The nearby chart shows the distribution, and the big hump in the center is where Democrats are inevitably headed for the same reason that Willie Sutton robbed banks.

This is politically risky, however, so Mr. Obama’s game has always been to pretend not to increase taxes for middle class voters while looking for sneaky ways to do it…

Keep in mind that the most expensive tax deductions, in terms of lost tax revenue, go mainly to the middle class. These include the deductions for state and local tax payments (especially property taxes), mortgage interest, employer-sponsored health insurance, 401(k) contributions and charitable donations. The irony is that even as Mr. Obama says he merely wants the rich to pay a little bit more, his proposals would make the tax code less progressive than it is today.

The $100-200 thousand earners are the largest group of earners in the country.  They may each make less than each of the top 1%, but their numbers are far greater.  And it adds up.  If you drop that low end to $50 thousand and the total pot of income is close to $3 trillion dollars.  That’s a lot of money to tax.  And a lot of tax deductions to disallow.  That’s the sweet spot.  The $50-200 thousand earners.  They’re just one plump, stuffed, cash piñata.  And oh how they want to whack it open.  But how to do it?  And blame the Republicans?  That is the question that faces them.

Only the Middle Class can Fund a $4 Trillion Budget

And you do this, of course, by lying.  In his speech to offer his ‘budget’ in a response to the Ryan budget, Obama said he would cut the deficit by $4 trillion over the next 12 years.  How?  In part with $2 trillion in spending cuts.  Which aren’t exactly all spending cuts.  They’re actually tax increases.  You see, he sees tax breaks and credits as federal spending.  Because it costs government by not having that money collected as a tax.  So he will cut that ‘spending’.  By eliminating those tax breaks and credits.  Resulting in you paying higher taxes.  And that additional money the government is ‘taking back from you’ will lower the deficit.  Confused?  You should be.  This is about as devious as it gets.

And he also said he would save $1 trillion by not renewing the Bush tax cuts.  So that’s another $1 trillion in new taxes (see Obama’s $2 trillion stealth tax hike by James Pethokoukis posted 4/17/2011 on Reuters).

If you’re keeping score, what Obama is actually proposing is $1 trillion in new taxes on wealthier Americans (and small businesses) and $1 trillion in higher tax revenues by reducing tax breaks and subsidies for a total of $2 trillion in new taxes over 12 years. That means total debt reduction, not counting interest, would be $4 trillion, 50 percent of which would come from higher taxes. The econ team at Goldman Sachs ran a similar analysis and found that 56 percent of Obama savings over ten years could come from higher tax revenue.

So that’s $2 trillion in new taxes.  And where do you think that will come from?  Not the 1%, that’s for sure.  If you took all of their money it would only get you half way there.  To raise that kind of money, you have to go to the sweet spot.  The middle class.  Including those making far less than $200,000.  You have to tax everyone making $50,000 or more.  And take away their tax breaks and credits.  Where it will really hurt.  And be political suicide.  So why promise to do just that?  Simple.  He’s not. 

The Obama plan is a non-plan.  It’s just a political tool for the 2012 election.  To show that it is the Republicans that want to cut Social Security, Medicare and Medicaid.  Not him.  He’ll say he fought like a dog to save these entitlements.  Because he cares for you.  Unlike those nasty mean Republicans.  And entitlement spending will continue to grow unchecked.  Making it that much harder to save these programs down the road.  But this is what politicians do.  Kick the can down the road.  For someone else to worry about.  For by that time, many of the Democrats will be dead.  And won’t care anymore.

It’s not the Taxes, Stupid.  It’s the Spending.

There’s a difference between tax rates and tax dollars.  And it’s the tax dollars that are important, not the tax rates.  The rich may have a lower effective tax rate but they pay an awful lot in tax dollars.  And as tax dollars go, they’re paying more than anyone else.  Far more than half of all Americans.  Who pay $0.00 in federal income taxes.  If anyone is screwing anyone, it’s the lower 50% screwing the top 10%.  And the top 10% probably wouldn’t mind so much if we weren’t constantly demonizing them despite their generosity.

When you can’t pay for your spending by taxing everyone making $100,000 or more at 100%, you’re spending too much.  This is a spending problem pure and simple.  It’s not that the rich aren’t paying their fair share in taxes.  They are.  And then some.  It’s that government is just trying to buy too many votes.  If there is any greed here it is in Washington.  Their spending is out of control.  Even Standard & Poor’s Ratings Service thinks so.  They just lowered our rating from “stable” to “negative” because of the “ballooning deficit.”   Because our out of control spending threatens our future ability to service our debt.

But the Democrats have other pressing concerns on their minds.  Like winning elections.  And you win elections by spending.  Not living within your means.  And if they play it just right, the day of reckoning will come conveniently in the future.  When they’re dead.  Problem solved.  For them, at least.  Their children and grand children?  Guess they just don’t care about them.

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Obama’s Speech to cut the Deficit Appeals to Tax and Spend Liberal Base

Posted by PITHOCRATES - April 13th, 2011

Deficits are caused by Tax Breaks, not Spending

President Obama was taking some heat for not being engaged in the budget process.  So he sucked it up.  Put a plan together.  And went on television at the same time the Rush Limbaugh program aired I guess in hopes that people would be listening to Rush instead of his less than inspiring speech (see The Presidential Destroyer posted 4/14/2011 on The Wall Street Journal).

Mr. Obama did not deign to propose an alternative to rival Mr. Ryan’s plan, even as he categorically rejected all its reform ideas, repeatedly vilifying them as un-American. “Their vision is less about reducing the deficit than it is about changing the basic social compact in America,” he said, supposedly pitting “children with autism or Down’s syndrome” against “every millionaire and billionaire in our society.” The President was not attempting to join the debate Mr. Ryan has started, but to close it off just as it begins and annihilate any possibility of good-faith cooperation.

Mr. Obama then packaged his poison in the rhetoric of bipartisanship—which “starts,” he said, “by being honest about what’s causing our deficit.” The speech he chose to deliver was among the most dishonest in decades, even by modern political standards.

Attack the Republicans for being toadies of the rich in their never ending quest to kill children.  Condemn the Republican proposal as being wrong with all knowing condescension without having anything better to offer himself.  Blame the deficits on unfair tax cuts for the rich, not on the explosion in federal spending under his watch.  Same old same old.  Campaign rhetoric.  Forever the candidate.  Wholly uncomfortable in the role of president.

Mr. Obama said that the typical political proposal to rationalize Medicare’s gargantuan liabilities is that it is “just a matter of eliminating waste and abuse.” His own plan is to double down on the program’s price controls and Gosplan-like central planning. All Medicare decisions will be turned over to and routed through an unelected commission created by ObamaCare—which will supposedly ferret out “unnecessary spending.” Is that the same as “waste and abuse”?

Fifteen members will serve on the Independent Payment Advisory Board, all appointed by the President and confirmed by the Senate. If per capita costs grow by more than GDP plus 0.5%, this board would get more power, including an automatic budget sequester to enforce its rulings. So 15 Solons sitting in a room with the power of the purse will evidently find ways to control Medicare spending that no one has ever thought of before and that supposedly won’t harm seniors’ care, even as the largest cohort of the baby boom generation retires and starts to collect benefits.

Interesting.  The UK is working on revising their National Health Service (NHS), too.  Which is very similar to what Obama is proposing.  The NHS is a big centralized behemoth.  For now, at least.  You see, the British are doing the opposite of what Obama wants to do.  Because over the great many years of the NHS, they have found that the big centralized behemoth doesn’t work well.  Unless your goal is to have high costs, long waits and a rationing of health care.  And this just begs the question.  If the British couldn’t do it, why in the world would anyone believe that the Obama administration can?

Every U.S. fiscal trouble, he claimed, flows from the Bush tax cuts “for the wealthiest 2%,” conveniently passing over what he euphemistically called his own “series of emergency steps that saved millions of jobs.” Apparently that means the $814 billion stimulus that failed and a new multitrillion-dollar entitlement in ObamaCare that had nothing to do with jobs.

Under the Obama tax plan, the Bush rates would be repealed for the top brackets. Yet the “cost” of extending all the Bush rates in 2011 over 10 years was about $3.7 trillion. Some $3 trillion of that was for everything but the top brackets—and Mr. Obama says he want to extend those rates forever. According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans—most of whom are far from wealthy—were taxed at 100%, it wouldn’t cover Mr. Obama’s deficit for this year.

The cost of the Bush tax cuts per year are $370 billion.  The Obama stimulus was $814 billion.  Clearly, just looking at this alone makes the deficit Obama’s fault, not Bush’s.  In fact, Obama added some $4.3 trillion to the national debt in his first two years in office.  That’s $2.15 trillion per year.  Which is greater than $370 billion if my math is right.  In the grand scheme of things the Bush tax cuts are chump change.  But it’ll probably do a lot more to create jobs than that $814 billion waste in spending he called stimulus.

A trillion is a big number.  Taxable income of $1.582 trillion is a lot of money (the sum of income of everyone earning over $100,000).  But it’s still less than what Obama spends.  Damn these rich people.  They’re screwing this president again.  Not only do they not pay their ‘fair’ share in taxes.  They simply don’t earn enough to pay the taxes required to support his extravagant spending.  Even if Obama confiscated all of their income.

The People’s Budget: Governing against the Will of the People

All right, no one expected anything serious today.   Obama doesn’t do that.  He only campaigns.  And there’s an election coming up.  So he sure isn’t going to do anything foolish that might hurt his reelection chances.  Like governing.  And there is a good reason why he’s not trying to get serious with the budget.  Because if people found out what he really wanted to do, no one with a job would vote for him.  Because he’s a tax and spend liberal.  And that’s what he wants to do.  But can’t.  Because of those damn independent voters.  They have jobs.  And the votes that will or will not make him a two-term president.  So he can’t afford to spook them.  Which isn’t pleasing his liberal base.  They’re getting fed up.  They want the liberal they helped to elect.

Making things even more uncomfortable for him, just under half of the House Democrats are as liberal as he is.  And they have put together a budget to counter the Ryan budget.  And it’s a liberal budget.  It shows who they really are.  And what they want to do to America (see The liberals’ plan: Gut defense and tax, tax, tax by Byron York posted 4/11/2011 on The Washington Examiner).

The “People’s Budget” is the liberals’ answer to House Budget Committee chairman Paul Ryan’s 2012 budget proposal, which is “leading us down a road to ruin,” according to caucus co-chairmen Reps. Raul Grijalva and Keith Ellison. The “People’s Budget,” Grijalva and Ellison claim, would eliminate the deficit in just 10 years (Ryan’s plan would take more than 25 years) while expanding, not cutting, Medicare, Medicaid and Social Security…

How can such fiscal miracles be accomplished? By tax increases that would make even some top Democrats gasp. Perhaps the most extraordinary is the caucus plan to raise the Social Security tax to cover nearly all of a taxpayer’s income…

The caucus would create three new individual tax brackets for the highest incomes, topping out at 47 percent. It would also raise the capital gains tax, the estate tax and corporate taxes. It would create something called a “financial crisis responsibility fee” and a “financial speculation tax.” And of course it would repeal the Bush tax cuts.

As if anyone needed reminding, the “People’s Budget” is proof that the liberal idea of budget balancing is tax, tax, tax. If you’re looking for spending cuts, you’ll find just one really big one: national defense. The liberals would end “overseas contingency operations” — the wars in Iraq and Afghanistan — starting in 2013. They would save more money by “reducing strategic capabilities, conventional forces, procurement, and research & development programs.” In other words, they would gut the United States’ ability to defend itself, today and long into the future.

Confiscatory taxes.  And more spending.  The problem with this is if you take away everyone’s wealth no one will want to create wealth.  If the government is going to provide a social utopia, why work?  Why work a 50-60 hour week just so you can pay most of your earnings in taxes?  When you can push a broom and live a comfortable life?  The Romans did just this and they had a problem.  People quit being farmers because the Roman government was taking most of their crops.  So the Romans passed laws putting a stop to this.  That’s right, if you were a farmer you stayed a farmer.  Whether you liked it or not.  And this is how you make confiscatory taxation work.  You make people work against their will.

Of course, Rome had another problem.  Citizens didn’t want to serve in the military anymore.  So they had to rely more and more on hired armies.  Which cost a lot of money.  And when they couldn’t pay them it caused problems.  The mighty Roman legions weren’t so mighty anymore.  And the empire became vulnerable to attack.  And it was.  Attacked.  And, ultimately, conquered.  But that could never happen here.  Because America has no enemies.  And is loved throughout the world.

If the liberals get their way, we may very well go the way of the Roman Empire.  And spend ourselves into oblivion.  Which is what tax and spend liberals do.

What would the liberals spend money on? The “People’s Budget” is essentially a newer and bigger stimulus bill. Grijalva and Ellison pledge to “invest $1.45 trillion in job creation, early childhood, K-12 and special education, quality child care, energy and broadband infrastructure, housing, and research and development,” along with billions more for stimuluslike road and other transportation programs.

Overall, the plan shows the gaping divide between the Progressive Caucus and the Obama White House. Back in his Chicago days, Barack Obama might easily have signed on to something like this. Now, as a president desperate for the support of independent voters in 2012, he can’t.

Yes.  If only if he was back in his good old Chicago days.  Obama would then embrace this budget.  As an activist you can do that sort of thing.  Because activists don’t solve any problems.  They just agitate.  And have fun.  Presidents can’t do that, though.  Sooner or later, they have to govern.  And when you do, you can’t govern against the will of the people.  For the people will reject you.  Especially those independent voters who have jobs.

Hating Republicans:  The Democrat Strategy

So while the Republicans try to address the unsustainable cost of entitlements, Obama and his Democrats are letting them.  While attacking them.  And this will probably carry us through the 2012 election season.  They’re trying to ‘Newt Gingrich‘ the Republicans.  Dance around in useless debate until they can get a ‘wither on a vine‘ sound bite.  Sure, the country will go further down the toilet.  But the more people hate Republicans the better their chances are at the polls.  Which is all they have.  Because their policies ain’t winning them any votes.  At least, not from the people who have jobs.

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Bush Tax Cuts, the Omnibus Spending Bill and a Little Egomania

Posted by PITHOCRATES - December 17th, 2010

A Tax Cut!  A Tax Cut!  My Kingdom for a Tax Cut!

Obama begs for help in passing his deal with the GOP to extend the Bush tax cuts (see Obama tells lawmakers not passing tax deal could end presidency, Dem says by Jordan Fabian posted 12/15/2010 on The Hill).

Obama is telling members of Congress that failure to pass the tax-cut legislation could result in the end of his presidency, Rep. Peter DeFazio (Ore.) said.

“The White House is putting on tremendous pressure, making phone calls, the president is making phone calls saying this is the end of his presidency if he doesn’t get this bad deal,” he told CNN’s Eliot Spitzer.

Which the White House denies.

“The president hasn’t said anything remotely like that and has never spoken with Mr. DeFazio about the issue,” said White House spokesman Tommy Vietor.

Besides, would the president ever sink to that level?

During the end of the healthcare debate, Obama reportedly told Democrats upset that the bill did not contain a public healthcare option that not passing it could put his presidency on the line and stall the liberal agenda for decades.

Actually, the president uses this maneuver so often that we just call it the ‘Obama’ now. 

Liberals and Alice Cooper both Love the Dead

The liberals were listening to Obama.  And with the leader of their party in a vulnerable position, they pounced.  A little tit for tat.  If he was going to screw his liberal colleagues by extending the Bush tax cuts, then the liberals wanted to get in a little screwing themselves (see Congress Moves Toward Approving Tax Cut Legislation by David M. Herszenhorn posted 12/16/2010 on the New York Times).

As the House began to take up the tax deal, it hit a procedural snag. Liberal Democrats skirmished with party leaders over a proposed vote on an amendment to tax more wealthy estates and at a higher rate than was included in a provision agreed to by the Obama administration.

The Obama presidency is saved.  It appears liberal Democrats will sign off on the compromise if they can screw rich dead people.  Figuratively, of course.  So Obama may get to put this one into the ‘win’ column thanks to a little legislative necrophilia.

Porking it up in an Omnibus Spending Bill

Knowing that no one really wanted their agenda, the Democrats did little to rock the boat before the 2010 midterm elections.  They didn’t talk about Obamacare (unless they voted against it and were proud of it).  They didn’t talk about the Obama stimulus package that ended the recession and kicked off the Summer of Recovery (back when the unemployment rate was lower than it is now).  And they sure as hell didn’t write a budget. 

With their out of control spending, the less the American people saw it in print, the better it was for them.  So with government about to shut down again, they threw together a quick 2,000ish page omnibus spending bill.  But elections have consequences.  Apparently.  And some Senators chose to represent their constituents (see Senate Dem leader drops nearly $1.3T spending bill by Andrew Taylor, The Associated Press, posted 12/16/2010 on The Washington Post).

Democrats controlling the Senate abandoned on Thursday a huge catchall spending measure combining nearly $1.3 trillion worth of unfinished budget work, including another $158 billion for military operations in Iraq and Afghanistan.

The 1,924-page bill collapsed of its own weight after an outcry from conservatives who complained it was stuffed with more than $8 billion in homestate pet projects known as earmarks.

And after we said no more earmarks at the 2010 midterm elections.  Instead of losing graciously, they’re speeding up at a yellow light before it changes.  Unfortunately for them, though, the car ahead of them didn’t.

GOP leader Mitch McConnell of Kentucky threw his weight against the bill in recent days, saying it was “unbelievable” that Democrats would try to muscle through in the days before Christmas legislation that usually takes months to debate.

“Just a few weeks after the voters told us they don’t want us rushing major pieces of complicated, costly, far-reaching legislation through Congress, we get this,” McConnell said. “This is no way to legislate.”

Unbelievable?  Why wouldn’t they want to rush this 1,924 bill through Congress?  They want it passed.  And that won’t happen if they take the time to read it.  Or debate it.  I mean, if they had done that with Obamacare Congress wouldn’t have passed it.  Nancy Pelosi said we had to pass Obamacare to find out what was in Obamacare.  And we did.  And the regret and angry debate followed after it became law.  That’s how liberal Democrats pass bills.  Sneakily.  Like the devious little bastards they are.

And how will this affect the Obama presidency?

The sinking of the bill was a setback for President Barack Obama, who supported it despite provisions to block the Pentagon from transferring Guantanamo Bay prisoners to the United States and fund a program to develop a second engine for the F-35 Joint Strike Fighter, which the administration says is a waste of money.

Poor Obama.  That’s another one for the ‘lost’ column.  There’s a word for people like him.  What is it?  Begins with an ‘L’?  It was just on the tip of my tongue.  Oh well, perhaps I’ll remember later.

Go Ahead.  Make my Day.  Shut Down the Government. 

So, what happens now?  Will government shut down (see McConnell: Dems Using “Christmas Break As An Inducement” To Pass Omnibus posted 12/16/2010 on Real Clear Politics).

Sen. Mitch McConnell (R-KY) touts his one-page continuing resolution that would “simply continue the government through February 18th.”

“I would hope that it would make sense on a bipartisan basis, this one-page continuing resolution on Feb 18th as an alternative to this 2,000-page monstrosity that spends a half a billion dollars a page,” McConnell said on the Senate floor.

Guess that’ll keep the Social Security checks going into the mail.  Not bad for a single piece of paper.  You see?  Congress can govern without raping and pillaging the American people.

Obama the Great.  His Majesty.  His Pomposity.

Win some.  Lose some.  Looking at Obama’s record, you can see that he is a man who cares deeply for what he loves most.  Obama (see When it comes to politics, Obama’s ego keeps getting in the way by Michael Gerson posted on 12/17/2010 on The Washington Post).

The tax deal is reasonable policy, supported by majorities of Republicans, Democrats and independents – an easy sell by presidential standards. And still President Obama managed to blow the politics of the thing.

Rather than explaining the economic benefits of the bill and taking quiet credit for a moment of bipartisanship, Obama launched into an assault on partners and opponents. Republicans are “hostage-takers” who worship the “Holy Grail” of trickle-down economics. Liberal opponents are “sanctimonious,” preferring their own purity to the interests of the poor. The president did not just attack the policy positions of nearly everyone in the political class. He publicly questioned their motives.

The Left and Right alike are just too stupid to know what’s best for them.  If only we would listen to Obama.  Because he’s so smart.  I mean, he won the election while being the most unqualified candidate ever to run for the presidency.  You gotta be smart to pull that off.  Or at least sound smart.

Obama is professorial, cold, condescending and just plain mean.

It is the president’s favorite rhetorical pose: the hectorer in chief. He is alternately defiant, defensive, exasperated, resentful, harsh, scolding, prickly. He is both the smartest kid in class and the schoolyard bully.

There are many problems with this mode of presidential communication, but mainly its supreme self-regard. The tax deal, in Obama’s presentation, was not about the economy or the country. It was about him. It was about the absurd concessions he was forced to make, the absurd opposition he was forced to endure, the universally insufficient deference to his wisdom.

And he’s got a great big ego.  He’s pompous and conceited.  A narcissist.  A legend in his own mind.  He thinks he’s got the Midas touch.  Anything he touches, he thinks he makes better.  Well, let’s look at some of what he’s been touching.

At this point in the Obama presidency, even Democrats must be asking: Is he really this bad at politics? The list of miscalculations grows longer. To pass the stimulus package, the administration predicts 8 percent unemployment – a prediction that became an indictment. It pledges the closing of the Guantanamo Bay prison – without a realistic plan to do so. It sends the president to secure the Chicago Olympics – and comes away empty-handed. It announces a “summer of recovery” – which becomes a source of ridicule. It unveils a Manhattan trial for Khalid Sheik Mohammed – which nearly every New York official promptly turns against. Press secretary Robert Gibbs picks fights with both conservative talk radio hosts and the “professional left” – which uniformly backfire. The president seems to endorse the Ground Zero mosque – before retreating 24 hours later. He suggests that Republicans are “enemies” of Latinos – apparently unable to distinguish between hardball and trash talk.

Genius?  Or incompetent boob?  You tell me.

I especially like the joke, “summer of recovery.”  That reminds me of the The Summer of George from Seinfeld.  They were both silly.  Come to think of it, President Obama reminds me of George Costanza.  They have a lot in common.  But I think history will be kinder to George Costanza.

Why so many unforced mistakes? The ineffectiveness of Obama’s political and communications staff may be part of the problem – and the administration is now hinting at significant White House personnel changes in the new year. But an alternative explanation was on display this week. Perhaps Democrats did not elect another Franklin Roosevelt or John Kennedy but another Woodrow Wilson – a politician sabotaged by his sense of superiority.

In the tax debate, Obama has proved a quarrelsome ally and a dismissive foe, generally dismayed by the grubby realities of politics. He doesn’t suffer fools gladly. Unfortunately, he seems to put just about everyone who disagrees with him in that category.

Like a true aristocrat, Obama just hates people that aren’t his equals.  And in his mind, he has no equals.  So he hates everyone.  Which explains a lot.  The disunity in his party.  The bitter partisanship.  And the whining.

It makes one yearn for the days when an affable Texan occupied the White House.  George W. Bush may have not spoken as well or was as pretentious as Obama, but he was a nice man.  Is.  And history will remember him kindly.  Probably even more kindly than George Costanza.

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Estate Taxes – Washington’s Insatiable Greed

Posted by PITHOCRATES - December 13th, 2010

Taxing the Dead

Liberal Democrats like dead people.  Because when people die, there’s inheritance to tax (see Democrats not pleased with deal on estate taxes by Seth McLaughlin posted 12/12/2010 on The Washington Times).

“If someone leaves an estate of a billion dollars, under their proposal, they would gain $100 million over what the Democrats are proposing for the estate tax,” Rep. Jan Schakowsky, Illinois Democrat, said on MSNBC’s “The Rachel Maddow Show.” “Imagine, Paris Hilton will be able to get an extra $100 million under their plan. It’s obscene. It’s absolutely an offense to us and to most Americans.”

A levy on the transfers of big inheritances, the estate tax has become emblematic of philosophical differences that exist on Capitol Hill, where Mr. Sanders and other liberal-leaning lawmakers claim wealthy Americans simply can afford to contribute more to the national kitty and conservatives say the tax does not deliver the bang for the buck that Democrats claim and that the federal government shouldn’t have a financial stake in how people pass along their personal fortunes.

Yeah, but whose money is it in the first place?  And how many times do the rich have to pay taxes on their money?  They tax their income at the highest rates.  They tax their capital gains from Interest and dividends.  And if they’re business owners, they pay a corporate income tax, payroll taxes and other business taxes before they get to pay further taxes on the personal income their businesses pay them.  Tax, tax and tax. 

And they call the rich greedy?

There’s One for You, Nineteen for Me

All right, just how greedy are these rich? 

The first Bush cuts began phasing the estate tax out in 2001 from a top rate of 55 percent to 45 percent in 2009 and then to zero in 2010, with the per-person exemption also rising from $1 million to $3.5 million.

So, if Paris Hilton’s daddy bequeaths her a billion dollars, she gets to keep $450,000,000 while the government gets $550,000,000 (at the 55% estate tax rate).  The government gets more than half of her inheritance.  Schakowsky is right.  I am offended.  I am offended that the government can take over half of anyone’s inheritance while doing nothing to earn that money.  Like the Hiltons did. 

And my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)

(The Beatles’ Taxman).

The government wants your money.  They want it when you work.  When you retire.  And when you die.  Have you ever wondered why the government is so opposed to privatizing Social Security?  Because your Social Security ‘retirement fund’ is taxed at 100% at your death.

Public Sector Unions are Expensive

So why do they want so much of our money?  Because public sector unions are expensive (see Government Unions vs. Taxpayers by Tim Pawlenty, governor of Minnesota, posted 12/13/2010 on The Wall Street Journal).

The majority of union members today no longer work in construction, manufacturing or “strong back” jobs. They work for government, which, thanks to President Obama, has become the only booming “industry” left in our economy. Since January 2008 the private sector has lost nearly eight million jobs while local, state and federal governments added 590,000.

Federal employees receive an average of $123,049 annually in pay and benefits, twice the average of the private sector. And across the country, at every level of government, the pattern is the same: Unionized public employees are making more money, receiving more generous benefits, and enjoying greater job security than the working families forced to pay for it with ever-higher taxes, deficits and debt.

It never changes.  The politically connected always exploit the masses.  The only difference today from yesterday’s noble classes and aristocracy is that membership isn’t based on blood.  They don’t inherit title and rank these days.  Which probably explains why the ruling elite has no qualms about a confiscatory estate tax.

Public Sector Unions and Dictators

It’s not easy screwing the masses in a democracy.  You need help.  Some political muscle.  Some guns for hire.

Public employee unions contribute mightily to the campaigns of liberal politicians ($91 million in the midterm elections alone) who vote to increase government pay and workers. As more government employees join the unions and pay dues, the union bosses pour ever more money and energy into liberal campaigns. The result is that certain states are now approaching default. Decades of overpromising and fiscal malpractice by state and local officials have created unfunded public employee benefit liabilities of more than $3 trillion.

Life in Cuba and North Korea is deplorable.  And yet their rulers have held power for decades.  And how did they do this?  Well, life may suck for your run of the mill North Korean and Cuban, but life is very good for those around the dictators.  They take care of the dictators.  And the dictators take very good care of them.  One can’t survive without the other.  So they take care of each other.

Ditto for public sector unions.

Who’s Exploiting Whom?

Once upon a time factories were like Dickens novels.  So the unions organized.

The moral case for unions—protecting working families from exploitation—does not apply to public employment. Government employees today are among the most protected, well-paid employees in the country. Ironically, public-sector unions have become the exploiters, and working families once again need someone to stand up for them.

Government work.  When someone is goofing off at work, the joke is that they’re doing government work.  Because government workers get paid very well.  For phony baloney jobs.  Many of these jobs are so useless that no one would ever notice if we eliminated them.  Life would go on as before.  Well, we would probably be taxed a whole lot less.  But other than that, the elimination of these jobs wouldn’t make the slightest difference in anyone’s life.

But we’re stuck with these jobs.  And we pay for them.  With confiscatory taxes.  Even after we die.  So, like George Harrison said, you better declare those pennies on your eyes.  When they lay you in your coffin.  Because the taxman is coming for you.  And your estate.

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A Closer Look at the Obama-GOP Tax Deal Seems to Favor Obama

Posted by PITHOCRATES - December 11th, 2010

The Left May Get more Deficit Spending while Making it Look Like the Right’s Fault

As details emerge, the Obama-GOP tax deal to extend the Bush tax cuts just gets worse.  There’s a whole lot of stimulus/deficit spending in that deal.  Not quite in keeping with the spirit of 2010 when the nation rejected deficit spending in a grand way.  But now it’s as if that ‘shellacking’ never happened.

There’s a lot of debate.  Some filibustering.  And a whole lot of theatre.  The far Left is acting like Obama betrayed them worse than an adulterous spouse.  While the Right appears to have already forgotten who won the midterm elections.  Because, according to Charles Krauthammer, who’s very smart, the Right caved and the Left won but are too dumb to even know (see Swindle of the Year by Charles Krauthammer posted 12/10/2010 on The National Review Online).

Barack Obama won the great tax-cut showdown of 2010 — and House Democrats don’t have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years — which just happen to be the two years of the run-up to the next presidential election. This is a defeat?

If Obama had asked for a second stimulus directly, he would have been laughed out of town. Stimulus I was so reviled that the Democrats banished the word from their lexicon throughout the 2010 campaign. And yet, despite a very weak post-election hand, Obama got the Republicans to offer to increase spending and cut taxes by $990 billion over two years — $630 billion of it above and beyond extension of the Bush tax cuts.

Business as usual.  After a repudiation of business as usual.  This reminds me of the movie Patton

Just before Patton was relieved of Third Army, he had an angry phone call with General Beetle Smith, Eisenhower’s chief of staff.  Patton wasn’t a fan of the Russians.  He thought we would fight them sooner or later.  He wanted it to be sooner, when we had the army in Europe to do it.  He said if SHAEF (Supreme Headquarters Allied Expeditionary Forces) didn’t have the guts to do it, he did.  He could get us into a war with those ‘sons of bitches’ and make it look like their fault.  Good movie.  But, alas, Patton was relieved of command soon thereafter.  He would later die from complications from a car accident.

Now Obama doesn’t remind me of Patton in the least.  For Patton was a good leader.  But it looks like Obama is going to get his deficit spending.  And he’s going to make it look like the Republicans’ fault.

If at First You don’t Succeed, Lie, Lie Again

So much for the hope and change to change the previous hope and change that changed little as hoped in Washington. 

We elected Obama because the Republicans had lost their way.  And because of the abysmal job Obama, Pelosi, Reid et al have been doing, the American people have given the Republicans a second chance.  And what do they do?  Even before they officially take power in the House of Representatives?  They’re already caving.  I guess old habits are just hard to break.

Obama is no fool. While getting Republicans to boost his own reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, tea-party, this-time-we’re-serious persona of debt-averse fiscal responsibility.

And he gets all this in return for what? For a mere two-year postponement of a mere 4.6-point increase in marginal tax rates for upper incomes. And an estate-tax rate of 35 percent — it jumps insanely from zero to 55 percent on Jan. 1 — that is somewhat lower than what the Democrats wanted.

And, of course, another 13 months of unemployment benefits.  Exactly what is the liberal Left bitching about?  The only downside appears to be a 2 year delay in raising the top marginal tax rates by 4.6%.  And only confiscating a third of dead people’s wealth instead of half of it.  What a bunch of whiny cry babies.

Obama’s public exasperation with this infantile leftism is both perfectly understandable and politically adept. It is his way back to at least the appearance of centrist moderation. The only way he will get a second look from the independents who elected him in 2008 — and who abandoned the Democrats in 2010 — is by changing the prevailing (and correct) perception that he is a man of the Left.

The Left knows that they must lie to win elections.  And that’s what Obama is doing now.  He’s going to run for reelection in 2012.  It’s time to say he’s a centrist again.  Do they not see this?  Or is this all part of a great lie?  Just more theatre?

The Era of Big Government is Over?

The 2008 Democrat primary elections were pretty nasty.  Obama and Hillary Clinton took off the gloves at times.  The Clintons did not like this little usurper.  Obama.  For it was Hillary’s turn.  When she conceded to Obama, she and Bill announced their support for the Democrat candidate.  But there was a simmering hatred below the surface.

Obama offered Hillary Secretary of State as a consolation prize.  Partly to assuage the Clinton machine.  And partly for that reason given in The Godfather: Part II.  Keep your friends close.  And your enemies closer.  (That’s actually from the Sun-tzu’s The Art of War but I doubt Obama would have ever read that, what with it being a military book.)  To prevent a possible 2012 primary challenge from Hillary.

Now either it’s more theatre, or an attempt to hit his liberal base upside the head, but Obama called on the big dog.  Bill Clinton.  The man whose wife Obama dissed during the primary election and denied her her place in history.  And he supports the Obama-GOP deal (see Bill’s Back: Clinton commands stage at White House by Ben Feller, AP White House Correspondent, posted 12/10/2010 on Yahoo! Finance).

Clinton comfortably outlined how the pending package of tax cuts, business incentives and unemployment benefits would boost the economy — even though it included tax help for the wealthy that Obama had to swallow.

“There’s never a perfect bipartisan bill in the eyes of a partisan,” Clinton said. “But I really believe this will be a significant net-plus for the country.”

When he finished his pitch, Clinton played the role of humble guy, saying, “So, for whatever it’s worth, that’s what I think.”

“It’s worth a lot,” Obama insisted

Clinton was once right where Obama is.  Even worse.  He lost both houses of Congress after his first midterm elections because he went too left, too.  Then he moved to the center.  And, with the help of Dick Morris (then Democrat strategist), and a Republican Congress that checked his spending, he got reelected.  Is this a sign that Obama will follow Clinton’s lead?

Perhaps.  But Obama is a whole lot more arrogant than Clinton.  It just may not be in his nature to be politically expedient.  I mean, it just may not be in Obama’s DNA to say the era of Big Government is over.

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Obama: Too Liberal for the Country; not Liberal enough for his Base

Posted by PITHOCRATES - December 10th, 2010

Obama the Bridge Burner

In business, and in life in general, it is wise not to burn your bridges.  It pays to hold your tongue.  Unleashing a verbal tirade may feel good at the moment but it doesn’t make you look good.  It makes it difficult to salvage anything good out of a bad situation.  And more times than not burning a bridge will come back to haunt you.  For today’s enemy may be tomorrow’s ally.

President Obama is a smart man.  He may be pompous and arrogant, but he understands politics.  And when it comes to bridges, one would expect that he’d be prudent.  During the recent debate over extending the Bush tax cuts, however, he hasn’t.  Instead, his approach has been to basically say ‘flame on’ to friend and foe alike (see From Audacity to Animosity by Peggy Noonan posted 12/9/2010 on The Wall Street Journal).

President Obama was supposed to be announcing an important compromise, as he put it, on tax policy. Normally a president, having agreed with the opposition on something big, would go through certain expected motions. He would laud the specific virtues of the plan, show graciousness toward the negotiators on the other side—graciousness implies that you won—and refer respectfully to potential critics as people who’ll surely come around once they are fully exposed to the deep merits of the plan.

Instead Mr. Obama said, essentially, that he hates the deal he just agreed to, hates the people he made the deal with, and hates even more the people who’ll criticize it. His statement was startling in the breadth of its animosity. Republicans are “hostage takers” who worship a “holy grail” of “tax cuts for the wealthy.” “That seems to be their central economic doctrine.”

As for the left, they ignore his accomplishments and are always looking for “weakness and compromise.” They are “sanctimonious,” “purist,” and just want to “feel good about” themselves. In a difficult world, they cling to their “ideal positions” and constant charges of “betrayals.”

Waaa!  Waaa!  Waaa!  I hate you.  I hate you all.  I’m taking my legislation and going home.

The leader of the free world has spoken.

Dropping the ‘F’ Bomb on the President

And just how angry are those in his base?  Pretty darn angry (see Profanity, Anger Spill Over in House Democratic Caucus Meeting by Anna Palmer posted 12/9/2010 on Roll Call).

The frustration with President Barack Obama over his tax cut compromise was palpable and even profane at Thursday’s House Democratic Caucus meeting.

One unidentified lawmaker went so far as to mutter “f— the president” while Rep. Shelley Berkley was defending the package the president negotiated with Republicans. Berkley confirmed the incident, although she declined to name the specific lawmaker.

Not quite the ‘You lie‘ uttered by South Carolina Rep. Joe Wilson during Obama’s 2009 health care speech to the House.  Actually, “f— the president” seems a bit worse.  That’s some pretty strong language.  In fact, it would probably be harder to find stronger language. 

Dropping the ‘f’ bomb on the president.  I doubt a Republican ever said that about Ronald Reagan.  Then again, members of Reagan’s party respected him.

Closing Gitmo was a Slam Dunk

This is the problem when you try to govern to the wishes of 20% of the population.  Pleasing this 20% just pisses off the other 80%.  And then the 80% votes against you at the midterm election.

Poor 20%.  And things don’t look like they’re going to get better any time soon (see House acts to block closing of Gitmo by Stephen Dinan posted 12/8/2010 on The Washington Times).

Congress on Wednesday signaled it won’t close the prison at Guantanamo Bay or allow any of its suspected terrorist detainees to be transferred to the U.S., dealing what is likely the final blow to President Obama’s campaign pledge to shutter the facility in Cuba.

Closing Gitmo was a slam dunk.  So what happened? 

Well, no nations wanted to take the prisoners.  The American people weren’t all that keen on trying them in the U.S. legal system.  And releasing them wasn’t a good idea because many just became terrorists again (see Gitmo Recidivism Rate Soars by Thomas Joscelyn posted 12/7/2010 on The Weekly Standard).  It turns out that Gitmo was a pretty darn good place to leave these bad guys after all.  Obama no doubt rues that campaign promise.

Obama Fails to Deliver Amnesty for Illegal Aliens, Too.

But that ain’t his only failed campaign promise.  There was going to be immigration reform.  Or, rather, amnesty for illegal aliens to increase Democrat voter turnout.  But this appears to be stalling, too.  And this in a lame duck congress that his party still controls (see Democrats delay action on young immigrants bill by Julie Hirschfeld Davis, Associated Press, posted 12/9/2010 on Yahoo! News).

The Senate moved Thursday to delay a politically charged showdown vote on legislation carving out a path to legal status for foreign-born youngsters brought to this country illegally, putting off but probably not preventing the measure’s demise.

Facing GOP objections, Democrats put aside the so-called Dream Act and said they’d try again to advance it before year’s end. They’re short of the 60 votes needed to do so, however, and critics in both parties quickly said they won’t change their minds in the waning days of the Democratic-controlled Congress.

Some days it’s just not good to be a liberal Democrat trying to govern against the will of the American people.

Damned if he Does; Damned if he Doesn’t

And some days it’s just not good to be stuck with a Barack Obama (from Noonan above).

The Democrats’ problem is that most of them know that the person who would emerge, who would challenge Mr. Obama from the left, would never, could never, win the 2012 general election. He’d lose badly and take the party with him. Democratic professionals know the mood of the country. Challenging Mr. Obama from the left would mean definitely losing the presidency, as opposed to probably losing the presidency.

That’s the problem with lying to win elections.  The truth eventually comes out.  And it has.  The moderates and independents have long since learned that Obama is no moderate.  But if he wants to remain president, he’ll have to learn how to become one pretty darn fast.  And lose what’s left of his liberal base in the process.

Talk about being stuck between a rock and a hard place.

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Republicans and Obama Compromise to Extend the Bush Tax Cuts

Posted by PITHOCRATES - December 8th, 2010

It’s not that the American People Disagree with Obama.  They’re just not Smart enough to know what’s Best for Them.

Well, problem solved.  Sort of.  For a year or so.  Then they’ll have to do it all over again.

Obama will extend the Bush tax cuts.  And it will only cost another year of unemployment benefits.  That’s good because we have all grown weary of this recession (see Obama defends tax deal, says he’s kept promises by Ben Feller, AP White House Correspondent, posted 12/7/2010 on Yahoo! News).

With fellow Democrats balking, President Barack Obama declared Tuesday that a compromise with Republicans on tax cuts was necessary to help the economy and protect recession-weary Americans. He passionately defended his record against Democrats who complain he’s breaking campaign promises.

What’s this?  Some of that bipartisanship he was talking about when Obama ran as a moderate during the 2008 presidential campaign?  Can you feel the love?  You better pinch me because I must be dreaming.

Obama cast his decision to accede to the GOP position on extending the tax cuts in stark terms.

“It’s tempting not to negotiate with hostage takers — unless the hostage gets harmed. Then, people will question the wisdom of that strategy. In this case, the hostage was the American people, and I was not willing to see them get harmed.”

He said the American people agree with his position, but “I haven’t persuaded the Republican Party.” Reflecting the newly increased Republican clout in Congress, he said: “I haven’t persuaded (Senate Republican leader) Mitch McConnell and I haven’t persuaded (House GOP leader) John Boehner.”

Now there’s the Obama we all know and…., well, know.  Who else could suffer such a categorical rejection of his polices and still think the American people agree with him?  Talk about illusions of grandeur. 

It reminds me of that line in the movie Tootsie where some aging soap opera star was lamenting about being an old has-been.  Dorothy (Dustin Hoffman) soothed his feelings by saying he wasn’t an old has-been.  He couldn’t be.  Because you had to be famous first to be a has-been.

Or that scene in that classic movie This is Spinal Tap, the fake documentary about a fake, aging rock band.  The interviewer noted they were playing smaller venues instead of arenas like in their heyday and asked if that was a reflection on their popularity.  They said ‘no’.  Their audiences weren’t getting smaller.  They were just becoming more selective.

And you can forget about pinching me.

Americans Lose Faith in the Unmanly Obama

Unhappy with this compromise, the Left is questioning Obama’s manliness (see Left sees tax surrender, says Obama reelection bid now crippled by Sam Youngman posted 12/7/2010 on The Hill).

“President Obama has shown a complete refusal to fight Republicans throughout his presidency even when the public is on his side — and millions of his former supporters are now growing disappointed and infuriated by this refusal to fight,” said Adam Green, co-founder of the Progressive Change Campaign Committee.

The public is with Obama?  Talk about a struggle with reality.  Or a very, very short memory.  If the midterm elections weren’t a rejection of Obama’s liberal agenda I don’t know what rejection is.  So, no, the public is not with Obama on this.  Only the far Left is with Obama.  That 20% of the population that the other 80% can’t stand.

“This is only a tough fight [now] because Americans have lost faith that President Obama is fighting for their economic futures,” said Jamal Simmons, a Democratic strategist and former official with the Clinton administration.

Do you think?  Things have gotten worse under Obama.  Even after he spent billions of dollars to make things better.  So, yeah, most Americans have lost faith in Obama.  If they even had any in him in the first place.

Compromise is a Four-Letter Word on the Left

Bipartisanship is all well and good.  As long as you can make the other guy be bipartisan, that is.  The Democrats aren’t happy.  Especially the leadership, who usually march in lockstep with Obama (see Obama defends tax deal while Reid seeks changes by Charles Babington, Associated Press, posted 12/7/2010 on Yahoo! News).

“It’s something that’s not done yet,” said Senate Majority Leader Harry Reid, D-Nev. “We’re going to have to do some more work,” Reid said after a closed-door meeting with Vice President Joe Biden and members of the Democratic rank-and-file.

Reid isn’t happy.  Neither is Pelosi.

Across the Capitol, House Speaker Nancy Pelosi, normally one of Obama’s staunchest allies, made plain her unhappiness, issuing a statement that contained no commitment to help pass the plan. “We will continue discussions with the president and our caucus in the days ahead.”

Yes, Reid and Pelosi are all for compromise.  As long it’s not them doing the compromising.  Typical liberals.  Never happy.  Even with the most liberal president ever to inhabit the White House.  He just isn’t liberal enough for them.

The Really Sad thing is that Pelosi got Reelected with 80% of the Vote

Furious, Pelosi vented on Twitter (see Pelosi attacks Obama-GOP tax plan as House Democrats signal fight by Russell Berman posted 12/7/2010 on The Hill).

In a post on Twitter, Pelosi said the GOP provisions in the tax proposal would add to the deficit and help the rich without creating jobs. The GOP provisions “help only wealthiest 3%, don’t create jobs & add tens of billions to deficit,” the Pelosi tweet said.

Then issued a statement.

“We will continue discussions with the president and our caucus in the days ahead,” Pelosi said. “Democratic priorities remain clear: to provide a tax cut for working families, to promote policies that produce jobs and economic growth, and to assist millions of our fellow Americans who have lost their jobs through no fault of their own.”

Nevadans barely reelected Reid.  Pelosi, on the other hand, got something like 80% of the vote.  Scary.  So that means about 80% of the people in her district agree with the political philosophy of about 20% of the country.  That screwball far Left.  The same people that supported Joseph Stalin.  And Fidel Castro.  Is it any wonder that Pelosi doesn’t have the foggiest idea about creating jobs?

Pelosi and the Democrats have been in power since 2006, 2 years before Obama’s election.  That’s 4 years of legislative control.  And things have declined during those 4 years.  So why in the world would anyone believe that she and her Democrats know anything about jobs and economic growth?  I’m sure she believes they do.  They just need more time.  Because that fifth year is always the charm.  Stalin, Mao, Castro – they all had 5 year plans.  And all the magic happens in that fifth year.  Apparently. 

Elections Have Consequences

The 2010 midterm elections were a mandate to shrink the power and scope of government.  Yet you wouldn’t know that listening to Obama, Pelosi and Reid.  Even some Republicans seem a little too eager to reach across the aisle. 

The Republicans need to acknowledge that Obama was right.  Elections have consequences.  And they won this time.  Not the Democrats.  And they need to legislate like they got a pair. 

Many feel the extension of the Bush tax cuts came at a high price.  No doubt they’re wondering what they will pay to repeal Obamacare.

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