State of the Union, Benghazi, Sequestration and the Politics of Spending

Posted by PITHOCRATES - February 14th, 2013

Politics 101

President Obama’s Idea of Compromise and Bipartisanship is Unconditional Surrender

President Obama’s State of the Union Address was a little light on details.  But the general gist is no spending cuts.  And more taxes.  Which makes the sequestration about to hit a crisis in the making for the president.  For it was sort of his idea.  And he did sign it into law.  But to him it was more like playing a game of chicken.  Confident that the Republicans would cave and roll over.  Giving him whatever additional tax increases he wanted to prevent cuts in defense spending.  But the Republicans aren’t blinking.  Because this is the only way they’re going to get any spending cuts.  Even if it means gutting defense spending.  Something the president didn’t consider.

Despite being an architect of the sequestration he called it a stupid idea during the State of the Union.  He doesn’t care about the cuts in defense spending.  He is, after all, a leftist liberal.  And they hate defense spending.  He even denied Ambassador Stevens’ request to beef up security in Benghazi.  Which led to Ambassador Stevens’ death.  Along with three other Americans.  But it’s the equal cuts in things he does care about that has him worried.  That social spending.  The kinds of things that buy votes.  And makes people dependent on government.  Helping to endear the Democrat Party to the American people.  While making them hate the Republican Party.  Who want to take away the great things the Democrats so generously give them.  Even if the government can’t afford to give these things to the American people.

President Obama may talk about compromise and bipartisanship but he doesn’t mean it.  His idea of bipartisanship is unconditional surrender.  He has no interest in meeting Republicans halfway.  He wants to destroy the Republican Party.  And undo the Reagan Revolution.  And bring back the Big Government of the Sixties and Seventies.  When the Democrats ruled supreme.  And you do that with spending money.  Not cutting spending.  Which is why the sequestration bothers him so much.

Running Deficits is OK if it provides for Senior Citizens, Our Children and Clean Stuff

Leading Democrats are saying we don’t have a spending problem.  We’re just not paying enough for the stuff we want.  Which also happens to be the stuff that buys votes.  So the excess spending to buy votes is not the problem.  The problem is that we’re not raising taxes enough to pay for this orgy of spending that is the problem.  We’re not taxing rich people enough.  Or corporations.  And once we do then we won’t be taxing the middle class enough.  And once we do that it probably won’t matter what we do as the country will be so deep in debt that no amount of new taxes will help.  Unless they figure out a way to tax away more than 100% of a person’s earnings.

So low tax revenue is the problem.  Well, that, and spending money on the wrong things.  On things that don’t buy votes.  Things that weren’t on the laundry list President Obama rattled off during the State of the Union that we need to spend more on.  Defense spending.  And…, well, defense spending.  Which is the only thing the Obama administration is willing to consider cutting.  Because we can get a lot of free things by gutting defense.  New programs that won’t add a single dime to the deficit.  Something he said more than once during the state of the union.  Obamacare, for example, will be deficit neutral.  Because the money we were going to spend on the wars in Iraq and Afghanistan will pay for it.  So even though the spending will still add to the deficit it’s now Obamacare spending.  Not defense spending.  Which is OK.

You see, running deficits is OK if it provides for senior citizens.  Our children.  If it gives us clean water.  And air.  Invests in clean energy.  And in those jobs of the future.  If it builds roads and bridges.  For less face it, we would be nothing without our government-provided roads and bridges.  Which we simply could not have it if it weren’t for government.  (Then again railroads build and maintain their own roads and bridges.  With funds they earn operating their railroads.  But I digress.)   In fact, any deficit reduction that comes from cutting this spending is just about the worst thing in the world we could do.  According to those on the left.  So we should tax rich people and corporations more.  And cut defense spending more.  Because we spend way too much on defense spending anyway.  And for what?  It’s not like we’re going to use it for anything.  Such as protecting our ambassadors in hostile lands.

Defense Spending is the only Spending growing at a Rate less than Total Federal Outlays

If you listened to the State of the Union (and didn’t fall asleep during it) you’ve learned that we don’t spend enough on our social spending.  And too much on defense spending.  That’s what the president said.  But what do the numbers say?  To find out let’s look at federal outlays (see Table 3.1—OUTLAYS BY SUPERFUNCTION AND FUNCTION: 1940–2017).  The following chart graphs the historical data from 1958 to 2011 and the projection for 2012.  We look at 4 areas of spending: defense; education, training, employment and social services; Medicare; and Social Security.  We calculate the spending as a percentage of total spending and graph the results.

Percent of Total Federal Outlays

The one area we spend too much on that the Obama administration is willing to cut is the one area that has seen the greatest decline in spending.  Defense spending.  Which as a percentage of total outlays has fallen while non-defense has trended up or held steady.  This tells us the government has pulled money from defense to pay for these other things.  But this chart doesn’t tell the whole story.  For although Medicare and Social Security have trended up they haven’t taken as big a piece of total spending as defense gave up.  And education spending has been pretty flat.  Perhaps giving credence to President Obama’s claim that we’re not spending enough on education.  But if you look at the year-to-year growth in spending you see a different picture.

Federal Outlays as a Percentage of 1958 Outlays

Here we divide each year’s spending by the spending in 1958 (or 1966 for Medicare).  Showing the increase in spending over time.  This chart also includes total federal outlays.  Which tells a startling story.  Not only is defense spending being gutted to pay for other spending it is the only spending growing less than the growth rate of total federal spending.  While the other three areas are growing at greater rates.  In 2011 Social Security spending was 8,892% of the spending in 1958.  Medicare, which came into existence in 1965, grew at an even greater rate.  In 2011 it was 17,673% of the spending in 1966.  More than twice the growth in less time.  And education spending tracked pretty close to Medicare spending.  In 2011 it was 15,744% of the spending in 1958.  While defense spending in 2011 was only 1,509% of the spending in 1958.

Note that the general trend of increased spending holds regardless of who is in power.  That’s because of baseline budgeting.  Which provides for automatic increases in spending.  When government talks about spending cuts it not really spending cuts.  It a cut in the rate spending increases.  You can see some dips in the graphs and where they may have cut the rate of growth.  But nowhere is there really a cut that results in reducing net spending.  Except for defense.

Increases in spending on education (and training, employment and social services) has grown at a rate greater than most other spending.  And what can we learn by throwing money at education?  Well, based on the president’s remarks, it doesn’t work.  It doesn’t increase the quality of education.  At least based on the great increases year after year that only give us the need to spend more money.  And this spending doesn’t even include the bulk of education spending.  That generated from property taxes.  Which can mean only one thing.  If we’re paying more and need to spend even more the quality of education is not as good as it should be.  Or all that money is going to teachers’ salaries, pensions and health care benefits.

Of all this spending the only sustainable spending is defense spending. For it is the only one growing at a rate less than total federal outlays.  While increases in the other spending is going off the chart.  With the slopes of these graphs getting ever steeper.  And the closer they get to vertical the more impossible it will be able to pay for these programs.  That’s why Medicare is near crisis mode.  With the cost of our aging population pushing that graph closer and closer to vertical.  Where our spending obligations will approach infinity.  Which is, of course, impossible to sustain.

Of all this spending the only sustainable spending is defense spending. For it is the only one growing at a rate less than total federal outlays.  While increases in the other spending is going off the chart.  Contrary to what the president said we are increasing spending in these areas so much that we won’t be able to sustain it.  For there just won’t be enough money to tax away from the people.  Unless we figure out a way to tax away more than 100% of their earnings.

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2012 Endorsements: Adolf Hitler and Osama bin Laden

Posted by PITHOCRATES - November 1st, 2012

2012 Election

Workers Enthusiastically Supported the Nazi Party because it had the Word ‘Workers’ in It

Adolf Hitler joined the German Workers’ Party (DAP) in 1919.  The party platform included nationalist, anti-capitalist and anti-Marxist policy positions.  As well as being anti-Semitic.  A socialist party where everyone was equal.  Unless you were a Jew.  Something Hitler could wrap his arms around.  As he would blame the Jews for Germany’s loss in World War I.  A war in which Hitler served as a messenger.  Even got awarded for bravery.  And he would later blame the bad German economy on the Jews as well.  Having a scapegoat is very important if you want dictatorial powers.  For you have to attack someone as you really can’t run on a platform of wanting dictatorial power so you can oppress your people.  The DAP became the National Socialist German Workers Party (NSDAP).  And Hitler designed the party banner.  Creating the swastika.  And the Nazi Party.

Now there isn’t a whole lot of difference between socialism and Marxism.  They are both about sharing the wealth and both are anti-capitalist.  The real reason Hitler hated Marxism is that they were a strong contender for power in Germany.  Power that Hitler wanted for his National Socialists.  And for him.  Which he consolidated by scapegoating, lying and using his personal charisma.  Another important quality for one aspiring to be a dictator.  To create a cult of personality.  Hero worship.  You have to be able to charm the masses so they don’t look that close at your policies.  Or your record.  Germans voted Hitler into office.  He didn’t seize power.  They fell in love with him.  But they had no idea what they were voting for.  World War.  Genocide.  He just moved them so much that they were willing to trust him fully.  Even when some began to learn about what was happening at the death camps or what the Einsatzgruppen (mobile killing squads) were doing on the Eastern Front they told themselves that the Führer was doing what he had to do to protect the German people.  Or, at the least, they blamed these atrocities on excesses of the SS and not their beloved Fuehrer.  Or simply chose not to believe these reports.

The Nazis created an employment boom coming off of the Great Depression.  With massive public works projects.  And an aggressive rearmament program to prepare for World War II.   The war economy made industry hum.  Paid for with funds confiscated from enemies of the state.  And through massive monetary expansion.  That is, they printed a lot of money.  Causing a lot of price inflation which raised the cost of living for the working German.  Businesses were buried in red tape.  The Nazi state controlled everything.  Including the private sector.  Complying with Nazi regulations took up about half of all communications for those in business.  As one task could require up to 40 forms.  Probably in triplicate.  The Nazis shut down small businesses and small corporations.  Wanting to deal only with big industry.  So they could better control the businesses.  And the workers.  Business people once warmly supported Hitler during the ascent of his power only to discover later that Hitler was ruining German industry.  Making them to regret their previous support.  As did the workers.  Who enthusiastically supported a party that had the word ‘workers’ in it.  Only to see higher prices.  Lower wages.  Longer hours.  No collective bargaining.  No right to strike.  High income taxes.  Compulsory contributions for sickness, unemployment and disability insurance.  Union dues (for a union that represented the state, not the worker).  As time passed they even lost the ability to quit their job.  Or change jobs.  Being forever chained to the job the state chose for them.  Which worked well to maximize industrial output.  And to prepare for war.

After 9/11 George W. Bush kept America Safe from another al Qaeda Attack while he was in Office

America’s problem with radical Islam probably dates back to the Iranian Hostage Crisis (1979).  Then came the United States Embassy Bombing (1983) in Beirut.  And then the Beirut Barracks Bombing (1983) that killed 241 Americans.  Who were there in a peace-keeping mission during the Lebanese Civil War.  To be neutral referees between the warring Muslim and Christian sides.  Where the Muslims felt that although the Americans claimed neutrality in the conflict they leaned Christian.  Hence the bombing of the Barracks.  There was no real American retaliation for the attack.  As they weren’t certain who was responsible.  With other threats to American forces President Reagan eventually abandoned the mission and pulled out US forces.  One person took great interest in this American response to terror.  Osama bin Laden.  Who learned the following lesson.  When Americans suffer casualties they quit.

Islamist attacks (and plans for attacks) against American targets increased during the Nineties.  Perhaps the most shocking being the 1993 World Trade Center Bombing.  An attempt to topple the Twin Towers that failed.  Then came the New York City Landmark Bomb Plot (1993).  The Khobar Towers Bombing (1996).  The United States Embassy Bombings (1998).  The Millennium Attack Plots (2000).  The USS Cole Bombing (2000).  Then 9/11.  An attempt to topple the Twin Towers that succeeded.  Until 9/11 we treated all of these events as criminal offences.  Not acts of war.  We talked about bringing these people to justice.  In a court of law.  Despite bin Laden having declared war against the United States back in 1996.  Well, after 9/11 George W. Bush declared war against Osama bin Laden.  And his terrorist organization.  Al Qaeda.

Bush attacked bin Laden’s safe haven in Afghanistan.  Chasing him underground.  Bush invaded Iraq.  In part to pressure Saudi Arabia to crack down on the Wahhabi in their kingdom financing al Qaeda as the Saudis feared Iran filling any power void in Iraq.  Which made American success in Iraq important to the Saudis.  (The Wahhabi hated the Saudi Royal family as much as they hated America.  While the Saudis had to tread lightly around the Wahhabi lest they provoke a civil war in the kingdom).  It worked.  Bush captured Islamist terrorists and sent them to a detention center at the US Naval facility at Guantanamo Bay, Cuba.  Interrogating them for intelligence.  As enemy combatants.  Not as people with American Constitutional protections.  Which helped to thwart future terrorist plots.  Causing the Islamist world to hate George W. Bush with a passion.  But he kept America safe from another al Qaeda attack while he was in office.

If Adolf Hitler and Osama bin Laden were Alive Today they would likely Endorse Barack Obama and Joe Biden

Things changed under President Obama.  Who also hated George W. Bush.  Blaming him for the Muslim hatred against America.  So he tried to offer a softer, friendly face to the Muslim world.  He stopped using the term ‘War on Terror’.  He wanted to try some 9/11 terrorists in the civilian court system in New York City.  Instead of by military tribunal.  He said the US would no longer torture people.  And promised to close the detention center at Guantanamo Bay.  When a radical Muslim in the US Army killed fellow soldiers on an Army base because of America’s ‘crimes against Islam’ the president called that workplace violence.  Not terrorism.  A lot of these things the Islamists liked.  But President Obama also killed indiscriminately with unmanned drones.  Anyone killed that wasn’t on the kill-list was deemed an enemy combatant.  So collateral damage of innocents was greatly reduced.  By simply calling everyone killed an enemy combatant.  And by killing all terrorist and terrorist-adjacent people there were no prisoners to house.  But there was also no intelligence to gather.  Which had its drawbacks.

Years of interrogations and intelligence gathering eventually located Osama bin Laden in Pakistan.  When advised President Obama gave the ‘go’ order to kill him.  So in one day the president killed bin Laden.  Defeated al Qaeda.  And ended the War on Terror.  Something the president likes to say over and over again.  A never ending spiking of the football.  This relentless bragging and the unmanned drone attacks inflamed the Islamist world.  Providing a great recruiting tool for al Qaeda.  Possibly being the impetus for the attacks on the American embassy in Benghazi.  Which was left poorly protected.  Even after the American ambassador requested additional protection.  Especially around the anniversary of 9/11.  But someone in the Obama administration denied the request because President Obama had killed Osama bin Laden.  And defeated al Qaeda.  And having to beef up security in Benghazi would have gone against that narrative.  So they didn’t.

So if Adolf Hitler and Osama bin Laden were alive today who would they endorse in the 2012 election?  Well, Hitler would have liked the Democrat attacks on rich people.  Seeing that as good scapegoating.  He would be impressed by the cult of personality around President Obama.  Though it wasn’t as good as his.  He would like the attack on capitalists and the massive government interference into the private sector.  And the high income taxes and regulations.  As well as those public works projects.  Those roads and bridges.  No doubt Hitler would have liked a lot of what he saw in the Obama administration.  Though, perhaps, he would be confused as the ultimate purpose of this massive power grab.  And Osama bin Laden?  Well, he hated George W. Bush.  President Obama may have killed him but it was all that War on Terror stuff that brought the Americans to him in Pakistan.  He would prefer the Obama light touch over the Bush hammer.  And he’d probably prefer his people getting killed by drones instead of being captured and pumped for information.  Like the guy that gave up a name that eventually led the SEALs to his hiding place.  And he would just love the opportunity to speak in a US court.  Something that just wouldn’t have happened under Bush.  Finally he would have liked the naïveté and arrogance of President Obama.  Which would have given him a target-rich environment.  Like Benghazi.  If Adolf Hitler and Osama bin Laden were alive today they would likely endorse the Democrat candidates Barack Obama and Joe Biden.

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FT128: “Democrats use class warfare to attack and tax the rich while taking money from the working poor by selling them lottery tickets.” -Old Pithy

Posted by PITHOCRATES - July 27th, 2012

Fundamental Truth

The Inherent Contradiction of Class Warfare is that you can’t Hate the Rich while wanting to be Rich

You hear it in the news.  You can hear it in the streets.  You can feel it in the air.  It’s another election season.  And the Democrats are ramping up their class warfare to assail anyone who did what everyone in the country wants to do.  Make money and live well.  President Obama even told successful small business owners the reason for their success.  Not the 80+ hours a week they put into their business.  But because their previous taxes built roads and bridges.  Which is a puzzler.  Because there are a lot of roads and bridges across America.  So you’d think there would be no business failures.  But there are.  A lot of them.  Despite all those roads and bridges.  Like I said, it’s a puzzler.

I guess the sad truth is that it’s not only rich people who hate the poor.  But it would appear our roads and bridges hate the poor, too.  Otherwise everyone would be making money and living well.  Not just those lucky few the roads and bridges favor.  Damn roads and bridges and their hateful ways.  Then again, roads and bridges are inanimate objects.  And can’t pick winners and losers.  So perhaps it’s the government that taxes us to pay for those roads and bridges that have hateful ways.  Perhaps they’re not building them special enough to spread their magic of success to those they come into contact with.  Perhaps our government officials don’t like poor people either.  That is to say, poor people who don’t remain poor.

But that’s neither here nor there.  It’s more around the corner and down the stairs.  No, what’s at issue here is the inherent contradiction of the Democrats’ class warfare.  Namely, if having more money than others is so evil why is it that everyone wants to have more money than others?  Isn’t that the whole point of unions?  To give their members more money and better benefits than those outside their membership?  It’s why the teachers go on strike.  For more money.  And more benefits.  Including health care and pension benefits that few teachers have ever contributed to.  Which is a lot better than most poor and middle class workers.  So here is a large group of people who have more money than others and yet the president never tells the teachers that they didn’t earn their pay and benefits.  So it’s okay to elevate some people above others even though we all use the same roads and bridges.  Odd.  For that seems like the definition of class warfare.  Granting special privilege to some so they can have more money than others.

Thanks to Roads and Bridges Movie Stars and Musicians make Obscene amounts of Money

To further see the inherent contradiction in class warfare consider Hollywood.  And the young and aspiring actors who go to Hollywood.  Why do they go there?  To become rich and famous.  To have more money than other people.  So they can live in their Hollywood mansions.  And in other mansions around the world where the rich and famous like to call home.  For a few weeks out of the year at least.  Those who make it became obscenely wealthy.  And make far more in a day than regular working people earn in a lifetime.  Not only do they want more money than others.  They have more money than others.  Yet the president doesn’t tell them that they didn’t make that happen.  Or that their success was due not to talent but those roads and bridges.

Consider, too, those who enter the music industry.  Rock, pop, hip hop and rap stars.  Why do these people enter the music industry?  To become rich and famous.  To have more money than other people.  Like the Hollywood stars they, too, want mansions.  Private jets.  Boats.  And all the other toys that money can buy.  They want to eat in the finest restaurants.  And party with famous celebrities from around the world.  These musicians don’t make music for the greater good.  For the poor.  For sick children.  No.  They make music to make as much money as they possibly can.  Some even begin legal action to protect what’s theirs in the digital age.  Fighting piracy abroad and illegal downloads at home.  Because they may have a lot of money.  But more money is better.  So they sue.  Yet the president doesn’t single these people out, telling them that they didn’t make their success.  It was those roads and bridges.  And that their illegally downloaded music is due to the people downloading it.  Who paid for those roads and bridges that made their talent possible.

How about lawyers?  They’re some of the richest people in the world.  And how do they make their money?  By taking it away from others who earn it.  By suing these wealth creators.  Or insurance companies.  Especially medical malpractice attorneys.  Who earned the unflattering moniker ‘ambulance chaser’.  Because they are willing to sue anyone to make a buck.  To have more money than others.  Lawyers are in part responsible for the high cost of health care because of their fraudulent lawsuits raising the cost of medical malpractice insurance.  And the class action lawsuit raises the cost of businesses (and the price of everything we buy) while bringing in obscene amounts of money for them.  While the people they represent make a fraction of what they collect.  But the president doesn’t tell these people that they owe their success to roads and bridges.  No.  He never says a word about lawyers.  Probably because he is a lawyer.  So rich lawyers get a pass.

Being Rich can’t be Bad when the Poor Spend so Much on Lottery Tickets trying to become Rich

The Democrats use class warfare to take more money away from those who they think don’t deserve it.  Those who have more money than others.  Other than teachers, movie stars, music stars, lawyers and anyone else with more money than others who typically vote Democrat.  Which seems to make it okay to have more money than other people.  If you vote Democrat you can have as much money as the roads and bridges can make for you.  But if you’re a small business owner trying to navigate the labyrinth of regulations just so you can pay a high tax rate, well, then it’s a different story.  Because these small business owners may vote Republican.  So whatever they make they were just lucky to make.  Even undeserving.  Because they didn’t build their business.  They weren’t smarter than anyone else.  They just used our roads and bridges to an unfair advantage.  So these leeches now owe us.  The people.  And should pay a higher tax rate.  And when they try to use legal tax shelters we should change the law so they can’t.  While turning a blind eye whenever those who vote Democrat hide their income to avoid paying those high tax rates.

So they attack the successful. To help those who have less than them.  But do they really care for those who make less?  The good, decent, poor people?  Or do they try to take their money, too?  Well, it turns out they don’t.  Care for the good, decent, poor people.  And they try to take back whatever they give them.  By encouraging them to spend as much of their disposable income on lottery tickets as possible.  So the poor can be, wait for it, rich.  That’s why governments sell lottery tickets.  To give people the chance to be rich.  So they, too, can have more money than others.  So they can live well.  Even though they have a better chance of getting struck by lightning than winning a big jackpot.  Because when it comes to the lottery it’s little different than it is in Las Vegas.  The house ultimately wins.  As does the government.

Who’s buying the majority of lottery tickets?  The working poor.  So they can become what the Democrats hate.  People who have more than others.  So they can live well.  Again showing the inherent defect in class warfare.  Having more money than others can’t be bad.  Being rich can’t be bad.  Because if being rich and having more money than others was bad everyone wouldn’t be trying to be rich.  For teachers, movie stars, music stars, lawyers and anyone else with more money than others know that having money is good.  But having more money is better.  Especially when you have more than others.  And you can live a comfortable life away from those who have less than you.  While enjoying a disproportionally large share of that wealth created by all those roads and bridges.

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