Economics & Taxes Archives

Friday Link Wrap-up

The deficit commission that President Obama convened agrees that most of ObamaCare should be kept.  Unfortunately, they believe in order to keep it fiscally sustainable is for it to include Death Panels.  They laughed at Sarah Palin for predicting this.  I don’t hear anyone laughing now.

Speaking of Sarah Palin, Richard Cohen (no conservative, he) just can stop reading about (and apparently, can’t stop writing about) the former Alaska governor.  And in writing about her and her beliefs, he includes this bit of honesty:

The left just doesn’t get America. I say this as a fellow-traveler of liberalism and as one who recognizes that many liberals fear the heartland. They see it as a dark place of primitive religions and too many guns. For such a person, Palin is the perfect personification of the unknown and feared Ugly American who will emerge from the heartland to seize Washington, turning off all the lights and casting America into darkness. The left does not merely disagree with the right; it fears it.

Hospitals closing or ridden with crime.  Doctors quitting the medical practice or leaving the country to find greener pastures in which to practice.  Shortages of medical supplies.  While these are predictions of what will come with ObamaCare, we have yet another example of where socialized medicine is failing.  Mr. Obama, call Mr. Chavez to find out how well it’s working in Venezuela.  (Hint:  It’s not.)

The Christmas song “Silver Bells” was inspired by the sound of Salvation Army bell-ringers outside department stores.  But apparently familiarity breeds contempt.

The character of Aslan in the Narnia series of books, as well established in “The Lion, the Witch and the Wardrobe”, is an allegory for Jesus Christ.  That was C. S. Lewis’ purpose.  But Liam Neeson, who provides the voice for Aslan in the movie series, has apparently been infected with the political correctness syndrome that pervades Hollywood.

Ahead of the release of The Voyage of the Dawn Treader next Thursday, Neeson said: ‘Aslan symbolises a Christ-like figure but he also symbolises for me Mohammed, Buddha and all the great spiritual leaders and prophets over the centuries.

‘That’s who Aslan stands for as well as a mentor figure for kids – that’s what he means for me.’

Mohammed and Buddha died for your sins?  Really?

Does Romans chapter 1 condemn homosexuality?  Some interpret it in such a way that it doesn’t, in spite of the words chosen.  John Stott takes apart such interpretations.

Bryan Longworth had an interesting tweet the other day.  “Comprehensive sex ed has been taught in schools 4 over 40 years. The results? Epedemic #STIs. How’s perversion working 4 U?”  Not so well, judging by the results.

And finally, Chuck Asay has some words for Democrats who are ostensibly fighting for the workers.  (Click for a larger version.)

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Friday Link Wrap-up

The Left considers honest disagreement as "hate", redefining what should be a rather well-defined term.  This leads Tom Gilson at First Things to feel compelled to state that he does not hate homosexuals, despite his having signed the Manhattan Declaration.  Apparently, being associated with that stereotypes you as some sort of Westboro Church member.  Love that "tolerant" Left.

That promise from Obama that you could keep your existing plan and not be forced to change under ObamaCare(tm) has already been broken.  But now even unions realize they won’t be able to afford coverage for children, so they’re dropping it.  (But since they are unions, after all, they have to put forward a good face about this whole government takeover.)

The cost of the War on Poverty, since its inception is more than the cost of all of the actual wars in US history.  Annual spending, in 2008 and adjusted for inflation, was 13 times what it was in 1964.  Imagine if this money were to be given to private charities who waste far less of each dollar than the government does.  Imagine how much less it would cost.  It’s easy if you try.

Hmm, I feel a song coming on.

How Willing Are We To Really Cut Spending

As I noted earlier, if we stay on the same course, budget-wise, in just 5 years the interest on our national debt will approach what we spend to defend the country.  This must be dealt with.

Yesterday, a White House commission put together by President Obama released a draft proposal to do just that.

The leaders of a White House commission laid out a sweeping proposal to cut the federal budget deficit by hundreds of billions a year by targeting sacrosanct areas of U.S. tax and spending policy, such as Social Security benefits, middle-class tax breaks and defense spending.

The preliminary plan in its current form would end or cap a wide range of breaks relied on by the middle class—including the deduction for home-mortgage interest. It would tax capital gains and dividends at the higher rates now levied on wage income. To compensate, one version of the plan would dramatically lower and simplify individual rates, to 9%, 15% and 24%.

For businesses, the controversial plan would significantly lower the corporate tax rate—from a current top rate of 35% to as low as 26%—but also eliminate a number of deductions. It would make permanent the research and development tax credit.

There’s much more; cutting $100 billion from defense, raising gas taxes, raising the Social Security retirement age, cutting federal work force by 10%, and others.  It’s quite a sweeping proposal, and it’ll call on the government and the people alike to share the burden.

But what will it wind up doing?

Overall, the plan would hold down the growth of the federal debt by roughly $3.8 trillion by 2020, or about half of the $7.7 trillion by which the debt would have otherwise grown by that year, according to commission staff. The current national debt is about $13.7 trillion.

The budget deficit, or the amount by which federal expenditures exceed revenues each year, was about $1.3 trillion for fiscal year 2010, which ended on Sept. 30.

Even with all this, it’ll only cut the growth by half, with debt still rising by trillions every year.

This is where we find ourselves; overextended and really unable to do anything about it despite some Herculean efforts.  Our government has made so many promises that it can’t renege on, that the most we can hope for is "only" growing slower. Well, ya’ gotta’ start somewhere, and this is just a draft proposal.  But this is a good start.

Or is it?  How do other politicians see it?  (Warning: Easily anticipated reactions follow.)

Read the rest of this entry

Cut Defense Spending?

How much has this current spending spree put us in debt?  Enough that, in 5 years, the interest on that debt alone will approach the defense budget.

Yeah, it’s that big a deal.  We need to hold the Republicans feet to the fire (as well as Democrats who actually got the right message from the election).

Friday Link Wrap-up

Obama said that the huge electoral loss last Tuesday was essentially a failure to communicate, and not a vote of no-confidence on his policies.  The policies are sounds, so he says, but they’re not working fast enough.  Except that countries like Germany, which adopted austerity policies rather than spending ones, is going gangbusters coming out of this recession.  And we’re not.  That’s what the voters were saying.

And apparently, blaming stupid voters and their anger, rather than facing facts, is an international problem.

ObamaCare price controls will raise health care prices.  We know this because that’s what it has always done in the past.  Joseph Antos, who oversaw a study that created the Medicare reimbursement system, knows of what he speaks.  Americans are already seeing some of this, and voted out those who supported it.

Is the electorate getting more conservative?  The New Republic seems to think so.

Fox was more fair and balanced than MSNBC in covering the election.  That’s not some right-wing claim; it’s the opinion of Time magazine, NPR, Mediaite and US News.  No card-carrying members of the vast right-wing conspiracy among that group.  Of course, being less biased than MSNBC is like saying that you are located somewhat south of the North Pole, with the network having exclusively liberal commentators on for the coverage.  America apparently noticed, since Fox beat the ratings of CNN & MSNBC.  Combined.

(Still, it’s Fox that Obama chooses to do battle with.  He doesn’t want fair coverage, he wants favorable coverage.)

Sorry, no cartoon this week.  Nothing really stood out.  Try again next week.

Friday Link Wrap-up (Catch-up Edition)

More links this week since I didn’t get around to it last week.

What’s keeping this recession going for so long?  Ask James Madison. Yes, that James Madison.

The 6th Circuit judge that upheld the health care reform individual mandate to buy insurance has really redefined terms in order to make his ruling.

With that reasoning, Judge Steeh thoroughly unmoors the commerce clause from its concern with actual economic activity that Congress can regulate to a more amorphous realm of “economic decisions” which apparently include the decision to NOT enter into commerce at all.

A better example of an activist judge you’re not likely to find soon.

Roger Ebert, in reviewing “Waiting for Superman”, acknowledges that the private school highlighted does better than public school, proclaiming “Our schools do not work”.  His solution?  (Wait for it…)  More money for public schools, for the ones that don’t work instead of encouraging what does work and at typically a lower cost per student.  Liberal education policies are now just talking points rather than reasoned arguments.

Remembering a sociopathic mass murderer, who is extolled by liberal students T-shirts everywhere.  (No, not Charles Manson. I’m talking about Che Guevara.)

The Rise of the (Conservative, Christian) Woman in American politics.

Juan Williams responds to the NPR sacking.  Ah, the tolerant Left in action.

And to close it out, two cartoons to make up for missing a week.  I just love Chuck Asay.  (Click for larger versions.)

When You Take Away "Freebies"

What happens when you give all sorts of socialist "freebie" to your populace, and then realize (sooner or later) that it’s going to cost too much, and thus try to take away a tiny portion of those "freebies"?

This.

PARIS, Oct 15 (Reuters) – Striking French oil refinery workers shut down a fuel pipeline supplying Paris and its airports on Friday and airport workers grounded some flights as protests mounted to derail an unpopular pension reform.

France’s airport operator played down worries of fuel shortages, but strikes at all of the country’s 12 refineries and fuel depot blockades prompted motorists to stock up on petrol.

Truck drivers also were set to join the fray as momentum built for a day of street rallies on Saturday.

The widening protests have become the biggest challenge facing President Nicolas Sarkozy, who is struggling with low popularity ratings as he tries to appease financial markets by stemming a ballooning pension shortfall.

This is why ObamaCare is so dangerous.  It will cost too much at some point (history bears this out) and either services will have to be cut back or taxes raised or (more likely) both.  In America we don’t have the same socialist culture and expectations they have in France, but that’s our future if we continue down this road.

"Unexpected!"

The number of people filing new claims for unemployment insurance rose to a higher-than-expected 462,000 in the latest week, the Labor Department said on Thursday, while the number of people still collecting jobless benefits fell to an almost two-year low.

OK, "higher-than-expected", technically.  But if it continues the trend, and if it’s clear the stimulus hasn’t done anything to stem the tide of unemployment, why does anyone expect it to go down, or even up just a little?  Until companies are more confident that they won’t get stuck with "unexpected" costs by this administration, they’re not going to invest in expansion.

As I’ve said, the Party of No will probably solve this, just by being there.

Friday Link Wrap-up

Leave it to Newsweek to call family films "shameful" for not fulfilling their PC feminist quotas.  With so much that is actually shameful coming out of Hollywood, you’d think they’d have more to deal with than "Finding Nemo".

Robert Robb of The Arizona Republic asks:

What will it take for economic policymakers to understand that the chief problem today is uncertainty? And that until they quit moving significant pieces of fiscal, monetary and regulatory policy around, the uncertainty won’t abate?

Quite a lot, apparently.  If jobs start getting created after big Republican wins in November, it’ll likely be because the "Party of No" will be there to curb this uncertainty.

If 91% of white voters had voted against Obama, some would have called it partially due to racism.  If 91% of black support him, can that be partially attributed to racism?  Jerome Hudson considers this.

The New York Times trumpets how well the civilian court system is for dealing with terrorism it when a terrorist pleads guilty and is sentenced.  Um, that’s not a real test of the system, guys.  A trial is the way to test it, and a terrorist trial going on in the civilian system was dealt a huge blow.  Do we want to chance, perhaps, Khalid Sheikh Mohammed getting off on a technicality?

Glasses that give perfect vision for any type of eyesight, even if you need bifocals?  Looks possible!

And finally, the longest stretch of 9.5+ percent unemployment since the 1930s has not been mitigated one bit by the two highest deficits since 1945.  Given liberal claims, we ought to have been sailing out of this by now.  Can we finally put that "government spending fixes the economy" meme to bed?

History Repeating Itself?

Depends on how much of a student of history you are.  Jonathon Seidl brings up a graph put together by Donald Luskin that suggests, if we make the same mistakes right now, we could see the same outcome.

(Click for a larger image.)

The problem is, we appear to be indeed making all the same mistakes; giving everyone a pay cut (i.e. letting Bush tax cuts expire) and passing protectionist laws (i.e. pandering to unions). 

If the "Party of No" indeed makes huge gains and keeps the Democrats from enacting foolish legislation, it could keep this from happening.  "No" isn’t always a bad word.

Taxes and Wealth Inequalities

I ran across an interesting observation in Fault Lines by Raghuram Rajan (a U of Chicago economist who has the distinction of being on of the economists who clearly and unequivocally warned of and predicted the recession well in advance of its occurance). Anyhow, I thought this quote fragment was insightful when viewing the distinct difference between left and right regarding income inequality, from the beginning of Chapter Nine:

Not all forms of income inequality are economically harmful. Higher wages serve to reward the very talented and the hardworking, identify the jobs in the economy that need the most skills, and signal to the young the benefits of investing in their own human capital. A forced equalization of wages that disregards the marginal contributions of different workers will deaden incentives and lead to a misallocation of resources and effort. 

However, when the only pathways to high wages are seen to be birth, influence, luck, or cheating, wage differentials may not act as a spur to effort. Why bother when effort is not the route to rewards? Ineed, as the political economists Alberto Alesina and George-Marios Angeletos argue, perception in a democracy as to how high wages or wealth are obtained can create self-reinforcing patterns. If society believes people earn high wages as a result of their training and hard work, it is less willing to tax high earners, thereby ensuring they have strong incentives to acquire skills and exert effort. If society believes people earn high wages because of connectedness, chance, or crookedness, then it will tax incomes more heavily, and since few of the honest will then bother to work hard, only those with influence, the lucky, or the cheats will flourish. 

The left and right in the US are distinguished in part by their willingness (or lack thereof) to tax high earners. The left like to pretend that the middle class right is “duped” into wanting to lower taxes on the wealthy because they are just stupid when in reality what is going on is that the middle class believes that the wealthy got that way in the main part due to their training and hard work. One might also observe that the left’s willingness to punish the wealthy will have its own negative social repercussions as noted above as well. 

Mr Rajan also points out that the willingness to tax high earners is higher than it was in the past and the above observation might be a clue to why that might be, that is our perception of who the wealthy consist as well as how they got that way is moving. This is unfortunate. 

 

Unintended Consequences … To the Children

From James Taranto’s "Best of the Web Today" column:

• "Many provisions of the Patient Protection and Affordable Care Act of 2009 won’t be implemented until 2014, but much of the low-hanging fruit started Thursday. One such juicy apple is that insurers will no longer be allowed to deny coverage to children on the basis of pre-existing conditions. . . . To review: As of this week, insurers will be unable to refuse to do business with children."–Matthew Yglesias, TheDailyBeast.com, Sept. 24

• "Refusing to Play: Health Insurers That Won’t Offer Child-Only Policies"–headline, San Francisco Chronicle website, Sept. 24

If you punish it, you get less of it.

Friday Link Wrap-up

Photonic computers, that use light rather than electrical signals to do the work, may actually be on the horizon.  This will be huge.  While it’s still a few years down the road, the number of years is in the single digits at this point.

Let’s be more like Europe! “The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and pay the employees by bank transfer.”  Even a little socialism can be a dangerous thing.  Exhibit A.

Obama supporters are “exhausted of defending” him.  If this turns into an exhaustion of voting for Democrats, House and Senate seats polling close now may yet be a big win for Republicans.  Obama only has himself to blame; supporters are not exhausted of defending “the mess” he inherited, they’re tired of defending his “accomplishments”.  If you’ve lost Jon Stewart, you’ve lost a lot of folks who think he’s a news anchor.  (Which is, unfortunately, quite a lot of people.)

No, ACORN isn’t really dead, it’s just changed its name.  And it’s still breaking the law, so says federal investigators who are urging that the funding moratorium be made permanent.

Obama says the stimulus kept the recession from falling into a depression.  But economists are now saying that, technically, we came out of the recession in June, 2009.  That’s before the stimulus really kicked in.  We spent $800 billion on measures to save the economy from something it had recovered from on its own.  Under that guise, we got record- and precedent-setting debt.

Which is why the Tea Party influence in the Republican party is so needed now, even if the GOP goes kicking and screaming.  (Click for a larger image.)

Chuck Asay cartoon

Friday Link Wrap-up

I’ve been on the road this week, and by the time this posts I’ll be heading home.  I haven’t done much blogging as a result, but I have collected a few links.

Remember all the riots, protests and violence when the US military burned Bibles?  Or when Muslims blew the doors off churches, burned Bibles and destroyed every cross they could find?  Yeah, me neither.  Define for me “religion of peace” again?  The actions that the Left calls “Islamophobia” in America don’t hold a candle to what gets done to Christians by Muslims elsewhere, but somehow “Christophobia” hasn’t entered their vernacular yet.

The amount of money the United States now owes is more than all the money in the worldThat’s how bad it is.

Christians protest abortion, the media yawns.  One pro-abortion protestor hits the streets, you get an article with pictures.

Gun owner ship goes up.  Violent crime goes down. If the Left was right about poor economic times causing crime, and that more guns cause more crime, there ought to be more heads exploding on that side of the aisle, if they’re being intellectually honest.

The return of no-money-down mortgages.  Um, that’s what got us into this mess in the first place!

The disappearing homeless.  Well, they’re still there, and likely there are more now that the housing bubble popped.  But the media has gone silent on them.  Guess they’re waiting for a Republican President, like they did before.

And finally, from Chuck Asay, some advice about getting your religion hijacked.  (Click for a larger version.)

Friday Link Wrap-up

Media Bias Dept.:  The Left got upset when Rupert Murdoch gave money to right-wing groups.  No mention, of course of the 88% of TV network donations go to Democrats.  And how much coverage did you hear about the BBC’s Director General admitting that the state-run news organization has had a “massive” left-wing bias?  Yeah, me neither.  Also, Patterico explains how the media has shaped the national discussion by selective coverage.

Market Watch:  The market is doing more for troubled homeowners than the government it.  CNN is, apparently, shocked to discover such a thing can happen.

“Recovery” Summer Dept.:  Germany’s recover has been fueled to a large extent by private sector consumption and growth, as opposed to the graph I posted earlier showing most of our jobs went to the government.  And irony of ironies, a French bureaucrat had to tell the US about cutting spending spurs growth.  Why can our own guys understand that?

ObamaCare Dept.:  After helping pass the health care bill, one Democratic Senator, using language he helped craft in the bill, is trying to use it to exempt his state from the individual mandate.  “Yeah, it’s a great idea … for everyone else but me.”  Also, reality is putting the lie to the promise that nothing was going to change for you if you like the health care you have.

Film Corner:  The trailer us up for “Blood Money”, an expose of the abortion industry.

Government (In)action Dept.:  The Justice Department is refusing to enforce voter fraud laws, and they’ve plainly said as much.  So one lawyer is using a provision of the law to file the lawsuits the Obama’s Justice won’t.  Our President respects the rule of law insofar as it furthers his own agenda.  No good can come of that.

Gossip Column:  Fidel Castro himself admits that the communist economic model doesn’t work.  It “works” only insofar as you get influxes of cash from, say, a beneficiary either internally (the “rich”) or externally (the USSR).  But on its own, it is an abject failure.  Would that the Left would hear this and stop trying to move us closer to it.

And finally, the last word on the “Ground Zero Mosque” and the burning of Korans, from Rick McKee.  (Click for a larger image.)

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