Out of one side of his mouth:

WASHINGTON, June 9 (Reuters) – President Barack Obama sought on Tuesday to show he was serious about improving the U.S. budget picture as he called on Congress to pass new limits on tax cuts and spending programs to avoid adding to deficits.

Obama urged passage of "pay-as-you-go" legislation that would require any new tax cut or automatic spending program to be paid for within the budget.

"The ‘pay as you go’ principle is very simple. Congress can only spend a dollar if it saves a dollar elsewhere," Obama said in a speech at the White House attended by several Democratic members of Congress.

Out of the other side:

WASHINGTON (AP) — President Barack Obama on Tuesday proposed budget rules that would allow Congress to borrow tens of billions of dollars and put the nation deeper in debt to jump-start the administration’s emerging health care overhaul.

The "pay-as-you-go" budget formula plan is significantly weaker than a proposal Obama issued with little fanfare last month.

It would carve out about $2.5 trillion worth of exemptions for Obama’s priorities over the next decade. His health care reform plan also would get a green light to run big deficits in its early years. But over a decade, Congress would have to come up with money to cover those early year deficits.

Congress (under either party) is extremely adept at spending up front, promising to make up for it later, and then subsequently forgetting those promises.

And Obama knows this full well. 

"Buyer’s remorse" is a phenomenon where, once a purchaser gets a product home and uses it, they decide it’s not living up to its potential, the advertising hype, or their expectations (realistic or otherwise).  According to Rasmussen, looks like America is getting a case of "Voter’s remorse".

Voters now trust Republicans more than Democrats on six out of 10 key issues, including the top issue of the economy.

The latest Rasmussen Reports national telephone survey finds that 45% now trust the GOP more to handle economic issues, while 39% trust Democrats more.

This is the first time in over two years of polling that the GOP has held the advantage on this issue. The parties were close in May, with the Democrats holding a modest 44% to 43% edge. The latest survey was taken just after General Motors announced it was going into bankruptcy as part of a deal brokered by the Obama administration that gives the government majority ownership of the failing automaker.

Voters not affiliated with either party now trust the GOP more to handle economic issues by a two-to-one margin.

If voters didn’t realize that a President and a Congress in the hands of Democrats was going to be a big-spending perfect storm, they were just reading the advertising hype before casting their ballots.  Republicans certainly tarnished their "fiscal conservative" image in the last 8 years, no doubt about it.  But claims of "It would be worse with Democrats" is ringing true right on cue. 

And how about that "culture of corruption" that the Democratic party has tried hard to pin on Republicans?

Republicans also now hold a six-point lead on the issue of government ethics and corruption, the second most important issue to all voters and the top issue among unaffiliated voters. That shows a large shift from May, when Democrats held an 11-point lead on the issue.

There are others, and it’s worth reading.  Again I will say that most polls (or as fellow Stone Mark refers to them as, "cricket races") are simply a measure of emotion, and it’s also true in this case.  Polls that ask whether or not the economy is getting better measure what people think is happening.  What is really happening may be completely opposite to that. The general public, myself included, don’t know enough about economics to make the answer anything but a hunch.  But this poll is asking who people trust, which they, in fact, are experts on.  If the winds blow a different way tomorrow, these numbers could in fact change again.  However, the trend right now is that folks see where we’re heading, and they don’t like it.

Neither do the folks in Europe, where EU Parliamentary elections finished up recently.  This election, following the global financial crisis, shows which way the world leans when the find themselves in an economic pickle; to the Right.  The love affair with the Left and the Socialists has grown cold — more voter’s remorse — especially in France, which started a move to the Right with Sarkozy and continued with a crushing defeat for the Socialists, losing almost 20% of its French seats.  They may cheer Obama on the Left, but then they go home and vote Right when the chips are down.

In a post from about a month ago, I noted that the Obama administration put out a prediction of what would happen if the stimulus bill was passed and if it wasn’t.  They predicted a smaller bump in the unemployment rate if their stimulus plan passed.  Spend the money, they said, and the pain would be eased. 

Those on the Right, however, said that trying to spend our way out of this wouldn’t work, and suggested that "stimulus" spending in the 1930s put the "Great" in "Great Depression".  Instead, we’d be saddled with government debt for a generation.

In that previous post, I noted that Geoff of the Innocent Bystanders blog had put up a graph showing that unemployment looked like it was about to get worse than even the Obama administration’s worst-case, no-stimulus scenario.  Well, May’s numbers are in, and he’s updated the graph.

Those red dots rising up, month after month, are the actual unemployment figures.  So we get record-setting debt and an unemployment curve worse than predicted for doing nothing.  Government intervention is sounding worse with each passing month.

Eric Scheie posting at "Classical Values" asks how do we have a legitimate conversation about socialism — do we have it, do we want it — without sounding like some conspiracy theorist.

Unfortunately (as I have pointed out in several posts), the "s" word is so fraught with problems that it might be too contaminated to use. I worry that "socialist" within five words of "Barack Obama" has become code language for belief in various popular far-right conspiracy theories. The "Obama is a secret Muslim sleeper agent born in Kenya" stuff. After all, who but a secret Muslim sleeper agent born in Kenya would want to impose socialism on the United States?

In theory, "socialism" is still a perfectly legitimate word, but I worry that it is becoming delegitimized. As it is, the responsible critics of Barack Obama’s economic programs are very, very careful not to use the word "socialist," and if they do, it is only to distance themselves from those who call Barack Obama a socialist.

An old adage is "you’re not paranoid if they’re really out to get you."  Use of a particular word ought to be acceptable if it describes things accurately.  I’ve been using the word "socialism" here for a couple months, but only after describing a recent event that, in my mind, continues to push our country in that direction.  Eric has this feeling, however, that anytime someone uses the S-word, they get labeled a kook and ignored. 

Marginalizing a word is an easy way to avoid debate.  I hope this isn’t happening.

From Larry Wright:

(Click for a larger image.)  All this promise of rescuing GM and Chrysler, and yet, as of this morning, both are in Chapter 11 bankruptcy protection.

"The General Motors board of directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many," GM Chairman Kent Kresa said in a written statement. "Today marks a new beginning for General Motors. … The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world."

Please note 2 things:  First, a government handout failed to both avoid bankruptcy and produce an automaker that could compete.  Second, if this is what bankruptcy will do for GM, this should have been the first option.

A bankruptcy that comes post-bailout, however, creates a GM that looks something like this:

(Click for a larger image.)  As you’ll notice, the government is in the driver’s seat.

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

Emphasis mine.  There’s a word for when the government owns a controlling interest in (what was) a private company, but it’s not coming to me at the moment. 

From Chuck Asay:

What’s that definition of “insanity”, again?  Ah yes, doing the same thing over again and expecting different results.

Just ask California and New York.  Attempts to balance the budget by taxing the rich even more has resulted in states in crisis.  Arthur Laffer and Stephen Moore, writing in the Wall St. Journal, have the details.

Here’s the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

And the evidence that we discovered in our new study for the American Legislative Exchange Council, "Rich States, Poor States," published in March, shows that Americans are more sensitive to high taxes than ever before. The tax differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax California or Ohio, to no-income tax Texas or Tennessee, is all the more financially profitable both in terms of lower tax bills and more job opportunities.

Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair? No. Dozens of academic studies — old and new — have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.

And yet, as the article notes, some governors still listen to the siren’s song sung "by recent studies by left-wing groups like the Center for Budget and Policy Priorities that suggest that ‘tax increases, particularly tax increases on higher-income families, may be the best available option.’"  Siphoning off existing economic activity is less useful than increasing overall economic activity. 

The rich are able to move away because, well, they’re rich.  They can afford it. 

What does this mean for those states with low or no income taxes?  Do they have to cut services, such as police and education?  Some say they do, but…

They’re wrong, and New Hampshire is our favorite illustration. The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation — even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.

Or consider the fiasco of New Jersey. In the early 1960s, the state had no state income tax and no state sales tax. It was a rapidly growing state attracting people from everywhere and running budget surpluses. Today its income and sales taxes are among the highest in the nation yet it suffers from perpetual deficits and its schools rank among the worst in the nation — much worse than those in New Hampshire. Most of the massive infusion of tax dollars over the past 40 years has simply enriched the public-employee unions in the Garden State. People are fleeing the state in droves.

It only seems counterintuitive if you don’t understand that taxation changes behaviors.  People avoid pain, and over time higher taxes are a pain.  This will modify behavior.  Penalize something more, you get less of it.  It’s a human truism that the Left needs to learn.

Hugo Chavez would be proud.

A report Friday said federal officials are pressuring Bank of America Corp. to revamp its board and bring in directors with more banking experience.

The story in The Wall Street Journal called the regulators’ move "unusual" as the government does not own a stake in the company, and most of the bank’s problems are the result of its purchase of Merrill Lynch & Co., which was advised by regulators.

Bank of America said last week it was looking for new directors, but gave little detail. The announcement came as the government, after completing its stress test of the bank and 18 other financial companies, said Bank of America needed to raise nearly $34 billion. The bank has received $45 billion in government funds as part of the Treasury Department’s $700 billion financial rescue package.

The government is pulling the strings to change the makeup of the board, but it doesn’t even own any part of the company.  There’s nothing wrong with a bank having more experience on its board.  The question is, should the government be exerting pressure to do so? 

Amazing.

President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

How someone can first create quadruple the deficit of his immediate predecessor, and then say this is beyond me.

Back in January, the Obama administration put out a prediction of what would happen if the stimulus bill was passed and if it wasn’t.  It was called "The Job Impact of the American Recovery and Reinvestment Plan".  In it, they predicted that, while unemployment figures would ultimately recover from this recession, the stimulus bill would flatten out the peak they would otherwise reach.  They even put in a graph to demonstrate their prediction.

Geoff, one of the many writers at the Innocent Bystanders blog, noted in April, and again last week when the April numbers were official, that the unemployment figures are precisely following the Obama administration’s graph of what would happen … without the recovery plan.

So we’re spending 3/4ths of a trillion dollars, and according to Obama’s own economic experts, the job impact of the American Recovery and Reinvestment Plan was nothing.  But this is government, and no matter how poor the results, they’ll keep on doing the same thing; printing money, spending unlike any other time in history, and telling us that they know what they’re doing. 

Oh yeah, and they’ll tell us to live within our means.  We need an irony graph.

For a very modest definition of the word "trim".  This administration has said it would be more fiscally responsible than the last, and then proceeded to put us into debt in a way never before seen.  Well then, it made a promise about cutting the budget.  So how’s that going?

President Obama has said for weeks that his staff is scouring the federal budget, "line by line," for savings. Today, they will release the results: a plan to trim 121 programs by $17 billion, a tiny fraction of next year’s $3.4 trillion budget.

About 1/2 of 1%.  Well, one might say, that’s probably better than what Bush did.  And one might be wrong.

The plan is less ambitious than the hit list former president George W. Bush produced last year, targeting 151 programs for $34 billion in savings. And like most of the cuts Bush sought, congressional sources and independent budget analysts yesterday predicted that Obama’s, too, would be a tough sell.

With a much smaller budget, Dubya found double the cuts he wanted. 

But just because the President wants a cut, no matter his party, that isn’t the end of the story.

"Even if you got all of those things, it would be saving pennies, not dollars. And you’re not going to begin to get all of them," said Isabel Sawhill, a Brookings Institution economist who waged her own battles with Congress as a senior official in the Clinton White House budget office. "This is a good government exercise without much prospect of putting a significant dent in spending."

The problem is that our federal government is simply too big.  So much responsibility has been given up voluntarily by, or taken by force from, states and the private sector, and once it goes to Washington, it virtually always stays there, where it grows and costs more money while becoming less and less efficient and nimble.  Whatever the good intention, the more Washington does for us, the more it costs and the less anybody wants their piece of the pie slimmed.  Consolidation of this power means lobbyists only have to convince a few Washington Senators and Representatives to keep their money flowing rather than legislatures in 50 states. 

This is the result; a budget where only the most microscopic pieces can ever hope to be trimmed. 

Near the beginning of this Wall St. Journal opinion piece, noting how car companies have been "bailed out" for decades, is this breakdown of who will own General Motors once the new restructuring is in place.

The United Auto Workers (UAW) would own 39% of GM. The federal government would own 50%. The creditors will be shafted with just 10%.

Emphasis mine.  And then there’s this, from Merriam-Webster.

Main Entry:

so·cial·ism 

Pronunciation:

\?s?-sh?-?li-z?m\

Function:

noun

Date:

1837

1: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

Emphasis mine, again.  The two emphases appear to be synonymous.  When speaking of the problems in the auto industry back in November, Rahm Emanuel was quoted.

“Rule one: Never allow a crisis to go to waste,” Mr. Emanuel said in an interview on Sunday. “They are opportunities to do big things.”

Yeah, I’d say remaking the entire American economy qualifies as a "big thing".  The only way I see this as not becoming a permanent thing is if the experiment fails because GM (and the UAW) still fails.  If not, it’s going to be a wild ride as the government decides to nationalize more and more "for the good of the people".

Health care and any overhauling thereof should not be done lightly.  It should not be rushed through Congress, like, say, the TARP bill was.  This is a big deal.

Well, apparently Obama thinks it’s too big to fail.

President Obama and his Democratic allies in Congress are poised to trample Republican opposition to his health care bill with a controversial legislative tactic known as reconciliation.

The fast-track process would protect Obama’s ambitious plan to overhaul the U.S. health care system from a potential GOP filibuster and limit the Republicans’ ability to get concessions. It also would give Democrats far more control over the specifics of the health care legislation.

Under typical Senate rules, 60 votes are needed to advance a bill, but reconciliation would enable Democrats to enact the health care plan with just a simple majority and only 20 hours of debate.

Democrats hold 56 seats in the Senate, and two independents typically vote with the party. Republicans have 41 seats, and there is one vacancy.

Republicans have complained furiously about the prospect of health care reform passing under fast-track rules. But they’re not planning to go down without a fight.

And that’s not the only ill-considered option not being properly considered.

But Democrats aren’t stopping at health care. Obama’s plan to cut private banks and other lending institutions out of the market for student loans would also move on a filibuster-free path.

Senate Majority Leader Harry Reid, D-Nev., said Friday that most House and Senate negotiators have resolved most of their differences over a congressional budget blueprint designed to advance Obama’s agenda through Congress. The measure will set the rules on how Congress considers Obama’s agenda for the rest of the year.

Lawmakers are rushing to agree on the budget framework in time to give Obama a victory within his first 100 days in office.

The negotiations have centered on the annual congressional budget resolution, which sets the parameters for the legislation that follows. Congressional votes next week would provide a symbolic victory for Obama’s sweeping agenda to enact a universal health care system, invest in education and clean energy and cut the exploding budget deficit to manageable levels.

Obama marks his 100th day in office on Wednesday.

This is big government run amok.  All Republicans can do at this point is try to get in amendments to ameliorate the damage.  Some Congressman, and many constituents, including those at the recent Tea Parties, complain that far too many legislators didn’t actually read the bill or know what was in it.  And yet they’re going to do it again; make the same mistake twice, very deliberately.

A government big enough to make these sweeping changes in the blink of an eye is big enough to foul it up in a big way.  And there’s a better than even chance it will be fouled up the faster it’s done and the less debate there is.

No, this isn’t a comparison of the Earth to the Sun.  Take a close look.  (Click on it for the source.)

In 90 days, Obama’s Cabinet has to come up with what amounts to a gnat’s worth of saving.  At this rate, by the time Obama’s first term is up, we might have saved a fly. 

In the meantime, they gleefully swallow the camel.