Keynesian Tax and Spend Monetary Policy will Never Overcome Ruinous Fiscal and Regulatory Policy

Posted by PITHOCRATES - September 23rd, 2011

No Theory is Sacrosanct in the Scientific Method, Even if it’s Albert Einstein’s Theory

Albert Einstein‘s Theory of Relativity has held in the scientific community for some 106 years.  It hasn’t been accepted as a matter of faith, though.  It has been tested thousands of times in attempts to debunk it.  Right up to today.  Where it now appears we may be close to debunking it (see “Faster than light” particles may be physics revolution by Robert Evans posted 9/23/2011 on Reuters).

“It is premature to comment on this,” Professor Stephen Hawking, the world’s most well-known physicist, told Reuters. “Further experiments and clarifications are needed…”

“When an experiment finds an apparently unbelievable result and can find no artifact of the measurement to account for it, it is normal to invite broader scrutiny….it is good scientific practice,” he said…

Einstein’s theory has been tested thousands of times over the past 106 years and only recently have there been just slight hints that the behavior of some elementary particles of matter might not fit into it…

Ereditato, a physicist who also works at the Einstein Institute in the University of Berne, said the potential impact on science “is too large to draw any immediate conclusions or attempt physics interpretations…”

“Only when the dust finally settles should we dare draw any firm conclusions,” said Professor Forshaw. “It is in the nature of science that for every new and important discovery there will be hundreds of false alarms.”

This is the scientific method.  No theory is sacrosanct.  Even one by the great Albert Einstein.  Even if it’s been around for 106 years.

Quite the contrast to the theory of global warming.  Accepted by government scientists as indisputable fact.  Even though it has never been given serious scientific scrutiny like that given to one of the world’s greatest scientist.  Albert Einstein.

Considering the Economics, Only a Fool would Bet Against the Chinese in the area of Solar Panels

But Al Gore is smarter than Albert Einstein.  For he says that global warming is a scientific fact.  Even though we still call Einstein’s Theory of Relativity a theory after 106 years.  But not the theory of global warming.  No.  That theory is not a theory.  It’s fact.  So certain a fact that world governments have been killing economic activity everywhere to stop the ravishes of global warming.  Even investing in companies that promise to give us renewable green energy of the future.  Like that one that just ripped off the American taxpayer to the tune of half a billion dollars (see Solyndra haunts other government-backed solar firms by Steve Hargreaves posted 9/23/2011 on CNN Money).

At least three other government-backed solar firms face the same challenging market conditions that brought down Solyndra, the now bankrupt solar panel maker that could cost taxpayers over $500 million…

The company’s downfall is generally thought to have been caused by the declining price of silicon.

Solyndra didn’t use silicon. But many of its competitors did — traditional solar firms like Sunpower (SPWRA), Trina Solar (TSL), Yingli (YGE) and Jinkosolar (JKS). Solyndra was banking that high silicon prices would give it a competitive advantage…

Are they also doomed? Experts say that if they can further develop their technology they may have a fighting chance but market conditions in the near-term are working against them…

An Energy Department spokesman said the agency was not worried about these companies failing, saying it conducts rigorous reviews of all the ventures it funds.

Of course.  There’s nothing to worry about these other companies failing.  Because the Energy Department conducts a rigorous review of all the ventures they fund.  Except Solyndra apparently.  Or they did review them rigorously.  And the Energy Department just sucks at its job.

China’s investment in silicon as well as its huge investments in solar panel makers, combined with weaker demand worldwide as subsidies expire in Europe, caused the price of traditional solar panels to plummet.

In the last year alone they fell some 40%.

All across the globe, solar panel makers, especially ones that were developing more advanced technology, are finding it hard to compete with the Chinese as the price of solar panels drops.

I guess the Energy Department just sucks at its job.  I mean, imagine you’re an investor for a moment.  And you want to invest in a store that sells home improvement stuff.  Do you invest in the Home Depot?  Or the mom and pop hardware store?  The Home Depot is much bigger.  Has a greater variety of stuff.  And sells that stuff for 40% less than Mom and Pop.  Which store would you invest in?  Of course, you would invest in the Home Depot.  But the Energy Department, the geniuses that they are, would invest in Mom and Pop.  And then act shocked when they go belly up in the face of that fierce competition.

Considering the economics, only a fool would bet against the Chinese in the area of solar panels.  Then again, no one in Washington seems to understand economics in the least.

Cheaper panels mean more people will switch to the clean technology. Work has been booming for solar installers, project developers, and financiers. Just this week the industry said solar power capacity in the United States jumped 69% in the second quarter compared to the same time last year.

The Energy Department, as part of its plan to fund R&D and commercialization of renewable and clean energy technology, has backed or is considering backing loans to 42 firms across the sector totaling $39 billion in funding.

The manufacturers are taking it on the chin.  But the installers are installing these cheap Chinese solar panels like there’s no tomorrow.  You’d think the Energy Department would be happy that these silly things are being installed and get out of the investment business.  But no.  They’re going to piss away another $39 billion to fund firms that won’t be able to compete against the Chinese either.

By a show of hands who wants the Republican president to abolish the Energy Department in 2013?

One Gets the Feeling that Government Likes Wasteful Spending as it Adds to the Deficit

We really need to cut the government off.  They just aren’t responsible with our money.  If it ain’t throwing money away on solar panels, they’re throwing it away on dead people (see Gov’t paid $600 million in benefits to dead people by Sam Hananel posted 9/23/2011 on the Associated Press).

The federal government has doled out more than $600 million in benefit payments to dead people over the past five years, a watchdog report says.

Such payments are meant for retired or disabled federal workers…

In one case, the son of a beneficiary continued receiving payments for 37 years after his father’s death in 1971. The payments – totaling more than $515,000 – were only discovered when the son died in 2008.

If you owe a dollar in taxes you can bet the IRS will find you wherever you are.  But when it comes to spending our money it’s a different story.  As they are probably afraid of any close scrutiny that might show other mishandled funds.

Last year, government investigators found that more than 89,000 stimulus payments of $250 each from the massive economic recovery package went to people who were either dead or in prison.

There’s another $22 million pissed away by Uncle Sam.  $22 million here.  $600 million there.  And $16 muffins.  Where does it stop?  They are so ruthless when it comes to taxing us.  But once they get our money they apparently don’t give a damn about what happens to it then.

One gets the feeling that they like this waste.  As it adds to the deficit.  And the greater the deficit is the greater the need for new revenue.  Higher tax rates.  And getting the rich to pay their fair share.  I say let’s raise the tax rates on those doing such a poor job handling our money.  If they have such a cavalier attitude about taxpayers’ money, let them belly up to the bar and pay for their waste with their own damn money.

If You Want Real Stimulus Repeal Dodd-Frank.  That Alone will Create 30,000 Jobs at One Bank.

So the government is horrible at picking investment winners.  And is about as responsible as a teenager with money.  But Obama is looking to spend another $450 billion in stimulus.  To create jobs.  Unlike that $800 billion stimulus that failed to create jobs.  So they don’t know how to create jobs either.  Worse, they only thing they seem to be good at is destroying jobs (see The Dodd-Frank Layoffs posted 9/13/2011 on The Wall Street Journal).

Bank of America appears to have provided part of the answer by announcing yesterday that the nation’s largest bank will cut 30,000 jobs between now and 2014…

The Fed dutifully ordered banks to cut their fees almost in half. Bank of America disclosed in its most recent quarterly report that this change will reduce the bank’s debit-card revenues by $475 million in just the fourth quarter of this year. The new rules take effect on October 1, so BofA seems to have sensible timing as it begins to shed workers from a consumer business that has become suddenly less profitable by federal edict…

But given the real-world results for bank employees, politicians should not be allowed to pretend that there are no consequences when they deliberately reduce the profitability of employers. Mr. Obama proposed last week to spend some $450 billion more in outlays or tax credits to create more jobs, but it would have cost a lot less to save these 30,000.

If they want real stimulus they should repeal Dodd-Frank.  That alone will create 30,000 jobs.  At one bank.  If this happens at other banks you’re looking at hundreds of thousands of jobs.  Now that’s stimulus.

If they really want to create jobs they ought to go big.  Abolish the EPA.  And the Energy Department.  For a start.  With that kind of uncertainty removed just think of the explosion in economic activity.  Creating jobs galore.  Hundreds of thousands.  Perhaps millions.  The oil and coal industries alone would probable wrest this country from recession.

The Economy is not Just Monetary Policy.  It’s Fiscal and Regulatory Policy, too.

So it’s clear the government doesn’t know the first thing about stimulating economic activity.  They just can’t figure that out.  But what they can do is destroy jobs.  They’re real good at that.  And the reason for all of this is that they’re Keynesians.  They worship at the altar of Keynesian Economics.  Despite its horrendous track record.  Almost three years and counting for the current administration.  But they refuse to lose faith.  Instead, when they fail, they just choose to fail again.  By pursuing more of the same failed policies (see Markets tumble after Fed says it will buy longer-term bonds to try to boost economy by Neil Irwin posted 9/23/2011 on The Washington Post).

The announcement that the Fed would buy $400 billion in long-term Treasury bonds immediately achieved its intended effect, pushing rates on these securities and other investments to their lowest level in decades.

But the stock market rendered a sharply negative verdict. The Standard & Poor’s 500-stock index tumbled almost 3 percent on the Fed’s discouraging statement that its leaders see “significant downside risks” for the economy. Asian markets closed down between 2 and 4.85 percent, and key European indexes were trading more than 4 percent lower at midday.

No one wants to borrow money.  Businesses.  Or consumers.  Because there is just too much economic uncertainty with the Obama administration.  Everybody is hunkering down.  Deleveraging.  And hoarding cash.  Until better economic times.  Times with less uncertainty.  Probably starting sometime after 2012.  When there’ll be a new Republican president.  And hopefully a Republican House and Senate.  To undo those things causing all of this uncertainty.  Dodd-Frank.  Obamacare.  Etc.

The Fed action, which capped a two-day meeting, is focused squarely on lowering mortgage rates in an effort to strengthen the ailing housing market and lighten the load of the tremendous debt weighing on consumers. The move could also make it cheaper for businesses to borrow money for investments and push more dollars into the stock market.

The housing bubble create a surplus of houses that’ll be around for a long, long time.  The country is dotted with empty homes that banks have foreclosed on.  And the banks own a whole bunch more that will be hitting the market soon.  It’s a buyer’s market out there.  But it sure sucks to be a seller.  Especially if your mortgage is under water.  Homes have lost so much value after that bubble burst that anyone selling now will lose tens of thousands of dollars.  So they’re not selling.  Or buying.  No matter how cheap mortgage rates are.

The bond-buying program that ended in the summer, though massive in scale, failed to keep economic growth from sputtering. The disappointing result showed the limits of what the Fed can accomplish at a time when consumers are struggling with enormous debts and the U.S. banking system remains traumatized. The new initiative could face the same constraints.

Quantitative easing 2 failed.  And there’s no reason to think that quantitative easing 3 won’t fail as well.  So why do it?  Because they’re Keynesians.  And their scripture says that’s what you do.  Weak demand?  Why you fix that with cheap money.  But they don’t understand that the economy is not just monetary policy.  It’s fiscal policy, too.  And their fiscal policy is killing the economy.  And what their fiscal policy doesn’t kill their regulatory policy will.

The Only Way to Fix this Economy is to Get Rid of Keynesian Policies

Tax and spend Keynesian policies are strangling the economy.  Stimulus spending doesn’t work.  If it did the economy would be reaching record heights due to that record spending.  But it’s not.  The tax and spend Keynesians explanation for this record of dismal failure?  They didn’t spend enough.

The economic malaise has a lot more to do with uncertainty than weak demand.  It’s that out of control spending.  You eventually have to pay for it.  And every business owner knows that ultimately you pay for spending with taxes.  And they see the Obama administration is hell-bent on raising taxes on anyone earning more than $200,000 a year.  Which will be a tax hike on most small business as their earnings pass through to their personal tax return.

And while they’re waiting for punitive taxes to come down the pike they’re being hammered by regulatory compliance costs.  The big one scaring the bejesus out of them is Obamacare.  And Dodd-Frank is not just for Wall Street bankers.  Not to mention the EPA’s enormous impact on business operations.  They’re being bitch-slapped left and right by these regulations.  And they are terrified by what’s next from this administration.

You see, Big Government Keynesian politicians don’t understand economics.  Or business.  They see business as cash piñatas.  That they can whack at their pleasure.  They have no idea how they make money.  But they assume that they will go on making money no matter what they do in Washington.  And being the Keynesians they are, they believe that businesses make money for government first.  And then, after government takes what they want, what they deem fair, then and only then can they use whatever they earn for their own selfish wants and pleasures.  The selfish rich bastards they are.  Those contemptible business owners.

This is how Big Government Keynesians think.  And this is why they fail miserably at creating jobs.  And economic activity.  The only way to fix this economy, then, is to get rid of Keynesian policies.  And the only way to do that is to get rid of the Keynesians.  At the voting booth.  By voting conservative.  And in our two-party system, that means voting Republican.

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A Debt Default and ‘no Social Security Checks’ only Scare Tactics in the Budget Debate to Raise the Debt Limit

Posted by PITHOCRATES - July 25th, 2011

A Summary of the Budget Debate to Raise the Debt Limit

One day making tracks in the prairie of Prax came a tax-raising Zax.  A tax-raising Zax.  And a spending-cuts Zax.  A tax-raising Zax.  And a spending-cuts Zax.  And it happened that both of them came to a place where they… *boom*  There they stood foot to foot.  Face to face.

“Look here, now,” the tax-raising Zax said.  “I say, you are blocking my path.  You are right in my way.  I’m a tax-raising Zax and I always raise taxes.  Get out of my way, now, and let me raise taxes.”

“Who’s in whose way?” snapped the spending-cuts Zax.  “I always cut spending making spending-cuts tracks.  So you’re in my way and I ask you to move and let me cut spending in my spending-cuts groove.”

Then the tax-raising Zax said with tax-raising pride, “I never have taken a step to one side.  And I’ll prove to you that I won’t change my ways if I have to keep standing here 59 days.”

“And I’ll prove to you,” yelled the spending-cuts Zax.  “That I can stand here in the prairie of Prax for 59 years.  For I live by a rule that I learned as a boy back in spending-cuts school.  Never budge that’s my rule, never budge in the least.  Not an inch to the west, not an inch to the east.  I’ll stay here not budging, I can and I will.  If it makes you and me and the whole world stand still.”

(The Zax, from The Sneetches and Other Stories by Dr. Seuss, slightly modified)

Spending worries most Americans

If neither Zax is moving, at least there’s no spending.  And it appears that it is the spending that worries most Americans.  Based on the polling.  Which shows the spending-cuts Zax gaining support (see GOP has 10-point edge on Democrats in public trust on economic issues in latest Rasmussen Reports national survey by Mark Tapscott posted 7/24/2011 The Washington Examiner).

Republicans have gained a 10 point lead over Democrats in Rasmussen Reports latest national survey on who the public most trusts to deal effectively with economic issues.

The 10 point lead is the widest margin held by either party in months and has opened up in recent weeks as President Obama and House Speaker John Boehner have become the central players in the debate over how to deal with the approaching debt-ceiling crisis.

It seems pretty clear.  The people want the tax-raising Zax to take a step to the spending-cuts side.

You can’t Fool the Bond Market

And while one Zax stands foot to foot with the other Zax, not budging, the bond market is not all that worried.  Which is kind of odd being that they hold the debt that Obama, Geithner, Pelosi, Reid, etc., warn they may default on (see U.S. bond market: Watching and waiting by Ben Rooney posted 7/25/2011 on CNN Money).

As policymakers in Washington continue to butt heads over the debt ceiling, the response in the bond market Monday was relatively subdued…

…many bond market watchers suggested that stocks are more vulnerable to the ongoing debt ceiling drama. By contrast, some say Treasuries could actually benefit from a flight to safety if the debt ceiling isn’t raised.

This seems counterintuitive.  Especially with all of the dire predictions coming out of Washington.  But it turns out that you can’t fool the bond market.

Another reason why Treasuries have held their ground is that a default would not necessarily result in huge losses for holders of U.S. debt. Treasury would probably have to furlough workers and make other adjustments if the debt ceiling is not raised, but analysts do not expect it to immediately miss interest payments on the federal debt.

The money is there.  Some money.  Tax revenue is still making it to Washington.  Almost $200 billion each month.  The bond market knows this.  They’ll get their interest payment.  Still, there could be some fallout from a downgrading of U.S. debt. 

…many institutional investors, including money market funds and pensions, are required to hold only AAA-rated securities. If the U.S. government is downgraded, those funds may be forced to dump billions worth of U.S. paper.

This could wreak a little havoc.  But probably no more than a downgrade due to the lack of resolve to restrain out of control spending which is the root cause of all these budget problems.  One way or another, we have to cut spending to ultimately calm the bond rating agencies.

Businesses are more Worried about the Tax Code

And they aren’t that worried in corporate America either (see Analysis: CEOs count on cash to cushion default risk by Scott Malone posted 7/25/2011 on Reuters).

Bankruptcy attorney Martin Bienenstock, of Dewey & LeBoeuf LLP, said it seemed like most business people were dismissing the likelihood of a default

“People still don’t think there is going to be an actual default,” Bienenstock said. “There doesn’t seem to be any domino effect brewing yet with the concept of ‘rates will rise and companies on the brink will fail and things like that.'”

If the U.S. runs out of money it is more likely that there will be a partial government shutdown.  Not a default.  And, to be frank, there isn’t a lot these businesses need from government.  Other than a simplified tax code.

While businesses would balk at paying higher taxes, CEOs have said that what they want right now is to have the tax debate settled so they know what they will be paying in taxes.

A government unable to pay its bills won’t affect them.  But not knowing what their taxes will be will.  Because the government shakes them down for a lot of money.  And they have to plan accordingly.  Like having a forklift and other heavy-lifting equipment available to lift those vast sums of cash.

Social Security Checks will go out Regardless

It would appear that most aren’t falling for the scare tactics of Obama and the Democrats.  But what about the seniors?  Will they get their Social Security checks?  Team Obama has been playing this card every chance someone places a microphone in front of them.  So what about Social Security?  Should seniors worry about not getting their checks?  As it turns out, no (see Contrary to the President, Social Security Checks Are Not At Risk by Michael McConnell posted 7/23/2011 on Advancing a Free Society).

The Social Security trust fund holds about $2.4 trillion in U.S. Treasury bonds, which its trustees are legally entitled to redeem whenever Social Security is running a current account deficit. Thus, if we reach the debt ceiling…, this is what will happen. The Social Security trust fund will go to Treasury and cash in some of its securities, using the proceeds to send checks to recipients. Each dollar of debt that is redeemed will lower the outstanding public debt by a dollar. That enables the Treasury to borrow another dollar, without violating the debt ceiling. The debt ceiling is not a prohibition on borrowing new money; it is a prohibition on increasing the total level of public indebtedness. If Social Security cashes in some of its bonds, the Treasury can borrow that same amount of money from someone else…

President Obama is therefore wrong when he says that failure to raise the debt ceiling might result in not sending out Social Security checks. Many bad things might happen, but not that.

Interesting.  So Social Security checks will go out.  Automatically.  Even if the current account is in deficit.  Because of that glorious trust fund stuffed with treasury securities.  In fact, the only way checks won’t go out is if Obama prevents this automatic mechanism to score some political points by falsely blaming Republicans.  Which will be risky.  Because people will eventually learn the truth.  If they don’t know it already.

The Tax-Raising Zax needs to Step to the Spending-Cuts Side

The tax-raising Zax had better learn to swallow his tax-raising pride and however reluctantly he should now take that first step to the spending-cuts side. 

For the people and the bond market and businesses agree.  The problem is spending.  Much too much spending as you must by now plainly see.

And leave our seniors alone and frighten them not with horrors of checks that won’t come their way.  For the trust fund is brimming with securities aplenty that can be cashed to pay all promises made without delay.

Unless Social Security has been a big Ponzi scheme all along.

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Debt Limit Talks just Theatre, Obama Determined to Emulate Greek Spending and Debt

Posted by PITHOCRATES - July 18th, 2011

The Debt Limit hasn’t Stopped the Debt from Growing

The bond ratings agencies are getting nervous.  About the inevitable default of Greece.  And the possibility that the U.S. won’t be able to accumulate the unsustainable debt like the Greeks have (see Moody’s suggests U.S. eliminate debt ceiling by Walter Brandimarte posted 7/18/2011 on Reuters).

Ratings agency Moody’s on Monday suggested the United States should eliminate its statutory limit on government debt to reduce uncertainty among bond holders…

“We would reduce our assessment of event risk if the government changed its framework for managing government debt to lessen or eliminate that uncertainty,” Moody’s analyst Steven Hess wrote in the report…

In the United States, Moody’s said the debt limit had not effectively curbed the rise in government debt because lawmakers regularly raise it and because that limit is not related to the level of expenditures approved by Congress.

They have a point.  The Economist noted (see Down to the wire posted 7/18/2011 on The Economist) “Congress has acted a total of 91 times since June 1940 to either raise, extend or alter the definition of the debt limit…”  So it would seem that the debt limit is a limit in name only.  It hasn’t stopped the debt from growing.  As their little chart shows.  So why have it?

A Debt Default will be Bad, so will continued Out of Control Spending

Because, apart from World War II, the public debt hasn’t exceeded 100% of the GDP (see The Economist chart referenced above).  George W. Bush took it close to World War II heights to pay for two costly wars (Iraq and Afghanistan) and an expensive Medicare drug plan.  Obama has taken it beyond World War II levels.  At about 140% of GDP.  And Obama wants to borrow more, taking it to 150% of GDP.  Or beyond.  The European Central Bank is forecasting Greek debt to peak at 161% of GDP.  So you can see why having a debt limit is a little more important now.  Which makes the Moody’s recommendation a bit puzzling considering their concerns over Greece (see Senate Throws Obama a Debt Lifeline by Chris Stirewalt posted 7/18/2011 on FOX NEWS).

The bond-rating agencies have spelled out the two scenarios that would result in a downgrading of U.S. creditworthiness: either an unconditional increase to federal borrowing that shows Washington sprinting toward the fiscal abyss or an unbreakable stalemate on the debt ceiling.

A debt default will be bad.  But so will be continued out of control spending.  So it makes little sense solving one problem by making another problem bigger.  Besides, the U.S. has the money to service its debt.  The only question is will Obama service it?

But, here again, Obama is the one in charge of deciding who gets paid in the event of a shortfall. While his administration might send scare letters to senior citizens as a bargaining tactic with Republicans, it’s unlikely that the president would tell pensioners that they can’t have the money they paid into the system during their working lives.

Imagine the president keeping open national parks or green energy stimulus projects while telling America’s oldsters that they aren’t getting checks. Not going to happen.

Yes, if Social Security checks don’t go out to seniors, it will be because Obama chose not to send them.  And speaking of Social Security, this brings up another point.  That it’s a Ponzi scheme. 

The money we paid into the Social Security isn’t sitting in some lockbox collecting interest.  Like those Social Security statements we get imply.  The government spends that money, our money, as soon as they get it.  Which is why they viciously attack any plans to privatize Social Security.  They want your money now.  While you’re living.  And after you die.  For if we privatize Social Security, our heirs would get our unspent retirement money.  Not the government.  As the system is now designed.

This is just another good reason not to give the government more money.  They’re just going to blow irresponsibly.  Like using our retirement money deducted from our paychecks to pay for national parks.  Or green energy.

Obama and the Democrats don’t want Deficit Reduction

Washington can’t curb it’s appetite to spend.  Doesn’t want to.  And they don’t try to hide this fact (see Obama officially threatens to veto ‘Cut, Cap and Balance’ by Sam Youngman posted 7/18/2011 on THE HILL).

The White House on Monday warned President Obama will veto GOP legislation to “Cut, Cap and Balance” spending and the budget…

The administration lambasted the “Cut, Cap and Balance” proposal as setting out “a false and unacceptable choice between the federal government defaulting on its obligations now or, alternatively, passing a Balanced Budget Amendment that, in the years ahead, will likely leave the nation unable to meet its core commitment of ensuring dignity in retirement.”

The White House also blasted some of the cuts Republicans have suggested, saying the proposal would “undercut the federal government’s ability to meet its core commitments to seniors, middle-class families and the most vulnerable, while reducing our ability to invest in our future.

“[The bill] would set unrealistic spending caps that could result in significant cuts to education, research and development and other programs critical to growing our economy and winning the future,” the SAP said. “It could also lead to severe cuts in Medicare and Social Security, which are growing to accommodate the retirement of the baby boomers, and put at risk the retirement security for tens of millions of Americans.”

Business as usual.  Scare the old people.  So they can spend more.  This is an admission that there will be no deficit reduction.  Obama and the Democrats don’t want it.  It’s all just theatre.  To amuse the public.  And buy time.  For they plan to spend, spend and spend.  On programs that are ‘critical’ to winning the future.  Despite the fortune we’ve spent already on these programs that have won jack squat so far.

The American Taxpayer paying for Irresponsible Governments Here and Abroad

So it’s on to Athens.  Push that debt up to 160% of GDP.  I mean, what really can happen that’s so bad (see Gloomy Forecast for Europe’s Banks by Jack Willoughby published 7/16/2011 on BARRON’S)?

Sean Egan, co-founder and president [Egan-Jones Ratings], has a stunning prediction for Barron’s readers: Forget about things getting better in Europe, he says; they will actually get worse. And who might be one of the patsies in all this? The American taxpayer, who could feasibly be stung as the Federal Reserve aids an ailing European Central Bank already depleted by too many bailouts. The big question: Will Europe, worn down by bailout after bailout, finally be forced to bail out the bailer—the ECB?

Oh.  As bad as things are in Europe they’re going to get worse?  And the American taxpayer may ultimately pay for these bailouts?  Lovely.  Just when you thought things couldn’t get any worse.  Not only will the American taxpayer pay for their own irresponsible government.  But Europe’s as well.

Atlas can’t Shoulder the Weight of the World Anymore

That debt limit seems more important than ever.  This out of control spending has to stop.  Before it’s too late.  Because we can’t afford our debt and Europe’s debt.   America can’t be Atlas and shoulder the weight of the world on its shoulders.  At least, not anymore.  Not with the Obama administration running things.

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The Debt Limit Debacle goes on, Obama and the Democrats unable to Govern Responsibly like Responsible State Governors

Posted by PITHOCRATES - July 17th, 2011

An Explosion of Government Spending will require an Explosion of New Taxes, Borrowing and/or Printing

Blah, blah, blah.  And the budget debate goes on.  It is interesting that it is the Republicans that are being intransigent.  They’re the reason why there is no deal.  But the Democrats aren’t intransigent when they’re being intransigent.  Funny how that works.  Well now there’s a fallback plan.  In case the Republicans refuse to compromise and agree to all of the Democrat’s terms.  Here it is (see Five questions on the debt-ceiling debate posted 7/15/2011 on The Washington Post).

The third, and increasingly likely, option is a fallback proposed by Senate Republican leader Mitch McConnell (Ky.). Congress would allow Obama to raise the debt limit in three increments totaling $2.5 trillion. It would also vote on resolutions disapproving of the debt increases, letting Republicans formally blame the increases on Obama.

To get House Republicans behind the deal, McConnell and Senate Majority Leader Harry Reid (D-Nev.) are revising it to include $1.5 trillion in cuts to government agencies and a new bipartisan committee to produce a framework for long-term debt reduction. Obama signalled Friday that he could live with the McConnell-Reid fallback.

So they will agree to disagree and let Obama do what is ‘best’ for the country.  And let him have full blame for doing it.  It’s a trap.  So when the nation implodes under unsustainable debt and a destroyed economy, the Republicans can point at Obama and say, “He did it.”  The Republicans may win the battle.  But they will lose the war.

A new bipartisan committee?  Didn’t we already do this?  The president’s own bipartisan committee of Erskine Bowles and former-Sen. Alan Simpson already did this.  And Obama promptly ignored their recommendations.  Then Joe Biden gave it a whirl.  And failed.  Then the president sat in meetings himself.  And failed. 

Another committee?  Why?  It’s just going to fail, too.  They need to cut government spending.  They know it.  All of these bipartisan committees know it.  Even the Chi-Coms know it.  But Obama and the Democrats just aren’t going to do it.  They’ll just keep wasting time with these meetings until they can get the Republicans to cave.  Because that’s their idea of compromise.

A “grand bargain” would mean settling for smaller tax increases on the wealthy than if Obama simply let the George W. Bush-era tax cuts expire at the end of 2012. And it could impede the economic recovery by ratcheting back government spending, thus reducing demand.

A bargain implies two competing viewpoints reconciled to best satisfy both sides.  It doesn’t work well when the Democrats simply reject the Republican’s views in toto.  And hold on to failed, dogmatic Keynesian economic policies.  For if government spending worked there would be no recession.  Or a budget debate to raise the debt limit. 

This pervasive view that these Keynesian policies are accepted as the only viable policies by the Democrats is the reason why we’re in the mess we’re in.  It appears that no amount of empirical evidence discrediting Keynesian economics will ever dissuade the Democrats from their reckless spending ways.  Thickheaded, stubborn and imbued with an air of all-knowing condescension and infallibility, they will let the country crash and burn before ever considering the idea that maybe they aren’t as brilliant as they think they are.

But as Obama sees it, the debt-ceiling crisis has offered an opportunity to fulfill his grand if nebulous campaign promise to get serious about attacking the nation’s fundamental problems. Being able to campaign on a major debt deal could outweigh giving up the chance to attack Republicans over Medicare. Settling now for a smaller tax increase on the wealthy would spare Obama a divisive fight over the Bush tax cuts. And getting the nation’s fiscal house in order could make it easier to win support for spending on education, research and infrastructure in a second term.

As for the economy, Obama seems to have adopted, at least to some degree, the Republican theory that businesses will invest more if they see Washington getting a handle on the debt. And a 10-year debt deal could be arranged so that few of the cuts went into effect immediately — there could even be some upfront stimulus included in the deal.

More spending?!?  You’re going to get your fiscal house in order (i.e., reduce the deficit) by spending more?  Well there’s only one way of doing that then, isn’t there?  With massive new taxes.  And not just on the wealthy.  These are going to have to reach deep into the middle class.  Because Obama has increased the deficit by a trillion dollars.  He’s the king of deficit spending.  He’s taken deficit spending to uncharted heights.  And it will take trillions in new taxes to reduce his deficits.  And this is the problem.  He is spending too much.

The Reagan Revolution was animated by “supply side” theory, but Ronald Reagan himself presided over several tax increases after his initial big cuts of 1981. He escaped GOP opprobrium, but George H.W. Bush caught his party’s ire when he signed a 1990 deficit-reduction deal with higher taxes. George W. Bush passed two big tax cuts, which nonpartisan budget experts now say were a major factor in today’s deficits.

Those ‘budget experts’ are no doubt Big Government Keynesian economists who love stroking their egos by advising governments on macroeconomics.  Talk to an Austrian School economist and you will hear a far different story.  And one that better stacks up against history.

Reagan made a deal with Tip O’Neil and the Democrats to cut $3 dollars of spending for every new $1 in taxes.  Of course, the Democrats lied.  They never honored their spending cuts promise.  Still his tax rate cuts nearly doubled tax receipts.  So tax rate cuts can and have increased tax revenue.  It was the out of control spending of Tip and company that gave Reagan those $200 billion deficits.  Chump change by Obama’s deficit standards. 

Bill Clinton fell ass-backwards into an economic boom thanks to the irrational exuberance of the dot-com bubble.  Money from capital gains tax from all those exercised stock options poured into federal coffers.  Then the bubble popped.  And George W. Bush started his presidency with the dot-com recession.  So, in response to the recession, Bush cut taxes in 2001 and 2003 to stimulate the economy.  In 2003 federal tax receipts were $1.782 trillion.  In 2008 they increased to $2.524 trillion.  That’s an increase of $742 billion.  Or an increase of 41.6%. 

So, no, the Bush tax cuts did not cause the deficit.  It was TARP (caused by the Democrat’s poor oversight of, and profiting from, Fannie Mae and Freddie Mac and their great subprime mortgage scam).  Obama’s stimulus.  And Obamacare.  An explosion of federal spending that will require an explosion of federal taxes, borrowing and/or printing to pay for.  No, this isn’t George W. Bush’s deficit.  This is Obama’s deficit.

A Shortage of Health Care Workers in Canada?

And speaking of national health care, let’s take a look at how well it is working in Canada (see Interactive Billboards: Bringing Billboards To Life by Misty Belardo posted 4/24/2011 on Bit Rebels).

An example of a great interactive campaign is this interactive billboard placed at bus stops. The campaign’s objective was to raise awareness about careers in public service. The challenge for the ad agency was to create enough interest in people so that they might seriously consider pursuing a career in public health. The big idea was to give people the feeling that they are capable of saving a life.

The billboard consisted of a huge interactive screen that illustrated a patient dying (as morbid as that may be). When a passerby pushed the hand marks on the sign, the electrocardiogram beeped, indicating that the man came back to life. Right at that moment a message read “Choose a career in public health, visit SaveLives.com.” It would be interesting to find out how many people interacted with the billboard, and even more importantly, how many of those registered and inquired about that career. Usually for campaigns like this it takes a couple months to find out the results.

The ad is apparently to attract health care workers in the province of Québec, Canada.  Which means they must have a shortage of health care workers.  And must be rationing care.  For that is an expensive way to advertise.  And you don’t do that unless the need is critical.  Whereas in America, it is one of the few growing sectors of employment.  Until the government takes it over under Obamacare, that is.  Then the Americans, too, no doubt, will be advertising to get more people to work in the bloated bureaucracy that American health care will become.

And it’s going to be bad in America.  The debate over raising the debt limit so they can pay their current bills?  Those bills don’t even include the explosive costs of Obamacare.  Those costly benefits are yet to kick in.  When they do there will be a whole lot more people covered by the same amount of health care workers, thus creating a shortage of them.  Which will require the rationing of limited health care resources.  (Unless the government finds an extra trillion dollars in some old coat in the closet.)  And then Obamacare will limp along like Medicare.  Chronically in the red.  And forever threatening to cut providers’ pay.

The State Governors know how to Govern

Part of Obama’s grand plan is to pass a lot of costs along to the states.  Because they can.  And states have to bite the bullet and absorb these costs.  Because they can’t pass them onto anyone else.  Or print money.  We call them unfunded mandates.  State governors call them bull [deleted expletive].

You see, states don’t have the options of the federal government.  They can’t be forever silly and irresponsible.  They can’t bluster in hyperbole, thump their chests with pride for a job not done and then just kick the can down the road.  They have to do what Obama and the Democrats in Washington won’t do.  Govern (see For governors, a personal toll from budget battles by Dan Balz posted 7/16/2011 on The Washington Post).

Talk to state executives gathered here at the summer meeting of the National Governors Association and it quickly becomes clear that the budget fights this year have not just left political scars, but some personal ones as well. As Washington Gov. Christine Gregoire (D) put it, “I’ve just come through a session in which I made rotten decisions.”

In Gregoire’s view, those decisions weren’t bad because they failed to solve the state’s budgetary problems or left her budget hopelessly out of balance. To the contrary, Gregoire oversaw cuts of more than $4 billion that balanced her biennial budget.

Like many governors, Gregoire cut pay for state workers, reformed the state pension system, asked state employees to pay more for health care and retirement, eliminated cost-of-living increases for some retired state employees and revamped the state’s worker compensation system.

She cut education spending and raised college tuition.

Now that’s governing.  Doing the right thing no matter how much it pains you.  This is the way it’s supposed to be.  Politics just isn’t a game, a path to riches and a fat pension.  It’s doing what’s best for the people you govern.  Even when it goes against your own personal philosophy.

We’ve come a long way from the Intent of the Founding Fathers

It’s just more of the same from Washington.  And this is what Thomas Jefferson feared.  And why he hated Alexander Hamilton so.  Permanent government debt is a dangerous thing.  It can give you an out of control federal behemoth.  Intruding ever more on our individual liberties to feed it’s appetite for ever more revenue.  Which is what Washington is today.

Jefferson cut federal spending so much he could hardly defend American shipping.  Today the federal government collects in taxes enough to pay for one Apollo moon program each month and it still isn’t enough. 

We’ve come a long way from the intent of the Founding Fathers.  Lucky for them they didn’t live to see what we’ve done to their beloved republic.

www.PITHOCRATES.com

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A Government Shutdown over the Budget Debate would be Transparent, unlike this Current White House

Posted by PITHOCRATES - April 7th, 2011

It is interesting the doom and gloom the White House is warning us about a potential government shutdown.  But as they make their case, it seems less doom and gloom and more of a good thing.  The truth is most of us wouldn’t even notice it.  And we’d save a lot of money we don’t even need to spend (see White House says shutdown will delay pay to troops by Richard Lardner and Jim Kuhnhenn, Associated Press, posted 4/7/2011 on Yahoo! News).

The Obama administration warned Wednesday that a federal shutdown would undermine the economic recovery, delay pay to U.S. troops fighting in three wars, slow the processing of tax returns and limit small business loans and government-backed mortgages during peak home buying season.

No worries here.  There is no recovery.  At least nothing worth saving.  We’ll pay the troops.  This is more of a scare tactic to scare the military wives.  Some of us may have to wait longer to write a check to the IRS for our income tax.  Those who do I’m sure will manage.  Small business loans?  Government shouldn’t be making loans.  That’s why we have banks.  And government-backed mortgages?  Really?  Come on, it was the government-backed loans that got us in the mess we’re in.  The subprime mortgage crisis wouldn’t have happened if the government wasn’t backing loans in the first place.

The dire message, delivered two days before the federal government’s spending authority expires, appeared aimed at jolting congressional Republicans into a budget compromise.

To jolt the Republicans?  Compromise is a two-way street.  Why is always the Republicans who are stubborn?  Why isn’t the other side, the stubborn side, stubborn?  What happened to President Obama’s debt commission?  The Republican budget isn’t asking more than Obama’s highly esteemed debt commission that Obama has filed away in the round file.  For he never had any intentions of making any cuts.  Because Democrats don’t make cuts.  They just talk about them.  So people can see that they’re serious.  And when people lost interest, bang went the debt commission’s report into the trash.

As the talks continued, the White House sought to put the prospect of a shutdown in terms people would care about, warning even that the beloved National Cherry Blossom Festival Parade in the nation’s capital would be wiped out. The Smithsonian Institution and national parks around the country would also be closed.

Life’s hard.  People are dying in genocide in Libya (according to the Obama administration).  If it’s not quite genocide then let’s call it civil war.  And there’s a lot of that going around.  In the grand scheme of things, missing the National Cherry Blossom Festival Parade just doesn’t seem as great a disaster as wholesale death and destruction.

Under long-standing federal rules, agencies would not be affected that provide for U.S. national security, dispense most types of federal benefit payments, offer inpatient medical care or outpatient emergency care, ensure the safe use of food and drugs, manage air traffic, protect and monitor borders and coastlines, guard prisoners, conduct criminal investigations and law enforcement, oversee power distribution and oversee banks.

That sure sounds like we’ll be paying our soldiers.  They’re providing national security.  And if Libya is a vital national security interest, so are the war zones in Iraq and Afghanistan.  If we don’t pay our military it is nothing more than a cheap partisan trick to scare people into hating Republicans.  No, it seems like we’ll pay most of the ‘important’ things in the event of a shutdown.  Other than parks and Cherry Blossom Festivals.

Mail deliveries would continue in the event of a shutdown. U.S. postal operations are not subsidized by tax dollars.

Really?  Our tax dollars don’t subsidize the U.S. Postal Service?  That same postal service that hasn’t shown an operating profit since I don’t know when?  Really?  Since when?  But I digress.  The important thing is that the mail will keep coming during a shutdown.

According to the shutdown scenario described by the administration, the government would have to significantly cut staffing across the executive branch, including workers at the White House and civilian employees at the Defense Department; close to 800,000 workers would be affected. Congress and the federal court system will also be subject to a shutdown.

Good.  Make Thomas Jefferson happy.  Well, make his spirit happy.  Cut the executive branch.  It has grown way beyond what any of the Founding Fathers ever envisioned.  I doubt if Alexander Hamilton would even approve of its size today.  Though he would be pretty impressed with the power of the military, though.  But that’s a different story.  Let’s slash the executive branch for awhile and see if anyone notices.  If not, here’s a chance for some real budget cutting.  Let’s make these cuts permanent.

At the Pentagon, defense officials were finalizing plans that would lay out how the department would deal with a shutdown. But they already have acknowledged that U.S. military troops — including those in war zones — would receive one week’s pay instead of two in their next paycheck if the government were to close.

Military personnel at home and abroad would continue to earn pay, but they wouldn’t get paychecks until there was a budget agreement and government operations resumed.

Cheap partisan scare tactics.  Whenever a government can’t get the tax increases they want, they threaten the teachers, cops, firemen and, now, the military, in a childish tantrum.  Gimme want I want or I will cut the things that are important to you.  Those things that, if cut, puts you into peril.  How do you like that, hmmm?

What makes this worse is that they’ll enjoy not paying the military.  They don’t like them.  Never have.  In fact, they almost regret repealing Don’t Ask, Don’t Tell because it took away their go-to excuse to keep these people off of their Ivy League campuses.

Key national security responsibilities, including operations in Afghanistan, Iraq and Libya and earthquake assistance to Japan, would not be interrupted by a shutdown, the Pentagon said.

So are they paying them?  Or just making them work without a paycheck?  Maybe our soldiers should go on strike.  Like the teachers.  To prevent unfair treatment.  You have to admit being forced into combat operations without pay is worse than being asked to contribute another fewer percentage points to your own health care.  Of course, these aren’t the same.  The Obama administration would not stand by and allow teachers to suffer an outrage like paying for their own health care.  Soldiers in combat?  The hell with them.

Social Security payments would continue to be delivered, and applications for benefits would continue to be processed, Social Security Commissioner Michael Astrue said.

Yes, they will sacrifice the soldiers.  And why not?  Most of them vote Republican.  But senior citizens?  Dependent on Social Security?  That’s another story.  Anyone dependent on the federal government votes to keep federal government big, i.e., they vote Democrat.  So the seniors get paid.  Always.  Unless the Republicans can be blamed.

Medicare would still pay medical claims for its 48 million recipients, who are mainly seniors but also several million younger people who are permanently disabled or have kidney failure. Payments to doctors, hospitals and other service providers could be delayed, however, should a shutdown continue for several months.

Sacrifice the soldiers (many of who vote Republicans).  Protect the seniors (many of who vote Democrat).

The Obama administration said the impact on the housing market would be more severe than in 1995, the last time there was a government shutdown. The Federal Housing Administration accounts for 30 percent of the mortgage market, nearly three times the amount 16 years ago.

And the greatest financial crisis ever (the subprime mortgage crisis) to hit the United States happened after the government backed three times as many mortgages than they did in 1995.  Having the government stop backing mortgages is a good thing.

The nation’s 15,700 air traffic controllers would keep working, as would many of the Federal Aviation Administration’s 6,100 technicians who install and maintain the equipment for the nation’s air traffic control system.

The planes will still fly in the event of a shutdown.

Operation of the International Space Station would be unaffected. NASA’s Mission Control in Houston would continue to work around the clock to keep watch.

Soldiers, no.  Astronauts, yes.  Even though the International Space Station is international.  With other nations ‘watching’ the station.  And our astronauts often catch a ride with the Russians on their Soyuz rockets.  So the space coalition could survive a few months easily without us.

Among other consequences cited by the administration:

_The Environmental Protection Agency would cease issuing permits and stop reviewing environmental impact statements, which would slow the approval of projects.

_Most government websites would not be updated, unless they were deemed essential.

_Federal courts would be unable to hear cases as clerks, stenographers, bailiffs, security guards and other employees would not be at work.

At most these are inconveniences.  Unlike the out of control spending that can “herald the end of the republic.”  As Benjamin Franklin warned us about when people learned they can vote themselves money.  And that’s where we are.  They’ve learned.  And have.  Franklin’s prophetic warning is about to play out if we don’t stop spending.  This is the choice.  Keep spending and end the republic.  Or make some serious cuts.

The Democrats have not presented a budget as called for in the Constitution since before the last election season.  Why?  It wouldn’t help them win any elections.  Further out of control spending would show them as irresponsible.  Responsible spending cuts would anger their voting base.  So they abdicated their constitutional responsibility.  They punted.  Now they’re trying to run out the clock with the Republicans on offense.  Positioning them to look like the bad guys.  No matter what happens.  Pain now (cuts).  Or greater pain later (no cuts).  It will be the Republicans’ fault.  Because they’re acting like the grownups here.  While the Democrats play their childish, partisan games.  And when the Democrats break the nation with their spending, like a child they’ll say it wasn’t them.   It was the big elephant in the room.  The big GOP elephant.

But what will the Democrats do if they win this showdown?  What will become of our country?  For if they don’t cut spending they will have to raise taxes.  But not by a little bit.  For the spending cuts proffered by the Republicans still aren’t large enough to solve the impending entitlement crisis.  So if there are no spending cuts the increase in taxes will have to be huge.  Bigger than the dollars in the current debate.  So big that they will truly undermine the anemic economic recovery underway.  Pulling the nation into a deeper recession.  So deep that we may never pull out without even more ‘draconian’ spending cuts.

In the grand scheme of things, a government shutdown is the least of our worries.

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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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Barack Obama Outspends George W. Bush and Ronald Reagan Combined

Posted by PITHOCRATES - October 20th, 2010

Spend Baby Spend

President Obama is the most liberal president ever to occupy the Oval Office.  Spending records have been set on his watch.  And he’s only been president for about 2 years.  This is quite the testament to his insatiable lust to spend.  The Left bitterly attacked Ronald Reagan for his $200 billion deficits.  Compared to Obama, though, that’s chump change.  He measures his deficits in a different kind of dollars.  He prefers trillions.  For billions are just too small.  See the sobering numbers in the Political Hotsheet blog article National Debt Up $3 Trillion on Obama’s Watch by Mark Knoller on www.cbsnews.com.

New numbers posted today on the Treasury Department website show the National Debt has increased by more than $3 trillion since President Obama took office.

If you divide this by the 2 years in office, that comes to about a $1.5 trillion deficit each year.  Or, to compare with Regan’s $200, billion, that would be $1,500 billion.  That about 8 times the deficit spending of Ronald Reagan.  All you hear from the Left about the Reagan deficits was that they were bankrupting the country.  Now that they are doing the spending, it’s spend baby spend.

Read My Lips – It’s George W. Bush’s Fault

And the numbers just keep getting bigger.

The Debt increased $4.9 trillion during President Bush’s two terms. The Administration has projected the National Debt will soar in Mr. Obama’s fourth year in office to nearly $16.5-trillion in 2012. That’s more than 100 percent of the value of the nation’s economy and $5.9-trillion above what it was his first day on the job.

Dividing Bush’s $4.9 trillion by his 8 years in office comes to about an annual $800 billion deficit.  Dividing Obama’s $16.5 trillion by the 4 years in his term ending in 2012, that comes to about an annual $4,125 billion deficit.  Holy crap!  That’s 5 times the Bush deficit.  And 20 times the Reagan deficit!  If Reagan was reckless and irresponsible with his spending, than so must be Obama.  All the bad the Left said about Reagan, then, must apply to Obama.  For his spending is 20 times worse.  Either that or the Left was wrong about Reagan.  Or lying.

Mr. Obama frequently lays blame for soaring federal deficits on his predecessor.

“By the time I got into office we already had a $1.3 trillion deficit and we had exploded the national debt,” he said last month during one of his backyard chats with Americans.

The blame George W. Bush argument doesn’t work here.  You’d have to be pretty blind, stupid or in denial if you can’t see that Obama will add another $3 trillion (or $3,000 billion) to what he ‘inherited’ from George W. Bush.  Such comments are either insincere.  Or deceitful.

Here Comes the Middle Class Tax Hike

And once again, the Left opposes those ‘unfunded’ tax cuts.  Yes, they look at a tax cut as a government benefit.  As if it wasn’t even our money in the first place.  But it’s our money.  And letting us keep our money is not a benefit.  So they don’t have to fund them.  But that’s the way the Left looks at it.  If they don’t take our money, the deficit will grow.  It’s never their out of control spending that grows the deficit.

The soaring deficit and Debt is one of the reasons Mr. Obama is adamantly opposed to extending tax cuts for Americans earning over $250,000 a year.

The ten year cost would total $700-billion and Mr. Obama says it would needlessly add to the deficit and Debt.

The ten year cost comes to $70 billion per year.  Or approximately 1.7% of his projected deficit.  This isn’t even chump change.  This is statistically insignificant.  Now, Obama denies being a socialist.  Says he believes in free-market capitalism.  But all of these numbers say otherwise.  A free-market capitalist knows that tax cuts stimulate the economy.  A free-market capitalist is against massive government spending.  Therefore, Barack Obama is not a free-market capitalist.  He’ll spend trillions on stimulus spending that doesn’t stimulate anything in our economy.  But he won’t approve tax cuts that have always stimulated economies whenever we’ve tried them.

President Obama and Congress await recommendations on ways to reduce federal deficits from the National Commission on Fiscal Responsibility and Reform.

The 18-member panel will report December 1st – after the midterm election.

And here comes the tax hikes.  The ‘bipartisan’ committee will report that there is no choice but to increase taxes.  This bombshell (Obama reneging on his no new taxes for anyone earning less than $250,000) won’t affect the midterm election result.  And they are no doubt hoping that 2 years will be enough time for the American people to forget this broken promise before Obama runs for reelection.  But I doubt anyone will forget in 2012 who gave us the 2nd Great Depression.  And that is exactly what he’s giving us with this out of control spending and massive tax hikes (coming sometime after November 2010).

There will be a middle class tax hike.  The rich just aren’t rich enough to pay for all of their spending.

www.PITHOCRATES.com

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