Economics & Taxes Archives

Whom Would Jesus Indebt

Timothy Dalrymple starts out by noting that the Budget Control Act just signed by the President really only shaves off a bit of the manic growth of the federal budget; it doesn’t really cut anything. Instead, we continue to mortgage our childrens’ futures. He continues:

One of the great difficulties of this issue, for Christians, is that the morality of spending and debt has been so thoroughly demagogued that it’s impossible to advocate cuts in government spending without being accused of hatred for the poor and needy.  A group calling itself the “Circle of Protection” recently promoted a statement on “Why We Need to Protect Programs for the Poor.”  But we don’t need to protect the programs.  We need to protect the poor.  Indeed, sometimes we need to protect the poor from the programs.  Too many anti-poverty programs are beneficial for the politicians that pass them, and veritable boondoggles for the government bureaucracy that administers them, but they actually serve to rob the poor of their dignity and their initiative, they undermine the family structures that help the poor build prosperous lives, and ultimately mire the poor in poverty for generations.  Does anyone actually believe that the welfare state has served the poor well?

Read the whole thing. Seems some Christians see any attempt to reign in entitlements or reform these program ergo an un-Christian attack on the poor. It isn’t.

Civility Watch and the Debt Ceiling Debate

Ah, the civil discourse of the Left.

Vice President Joe Biden joined House Democrats in lashing tea party Republicans Monday, accusing them of having “acted like terrorists” in the fight over raising the nation’s debt limit, according to several sources in the room.

Biden was agreeing with a line of argument made by Rep. Mike Doyle (D-Pa.) at a two-hour, closed-door Democratic Caucus meeting.

“We have negotiated with terrorists,” an angry Doyle said, according to sources in the room. “This small group of terrorists have made it impossible to spend any money.”

Biden, driven by his Democratic allies’ misgivings about the debt-limit deal, responded: “They have acted like terrorists.”

This is the very type of rhetoric that conservatives were accused of, supposedly leading to the shooting of Gabriel Giffords. Ironically, while Biden was describing Republicans has having a "gun to their heads", Giffords showed up for the first time since the shooting. A rather foolish turn of a phrase, especially on that day.

The Left would rather point the finger at entertainers like Rush Limbaugh and be willfully ignorant of eliminationist rhetoric at the highest levels of government, especially when it’s their guys holding those positions. Hopefully, the public will remember this the next time liberals try to portray conservatives as the sole owner of uncivil discourse.

On Sunday evening, I was following the hashtag "#compromise" on Twitter. Folks who were begging, pleading, pontificating and yelling at their elected representatives for a debt ceiling compromise used that tag on their posts. "Get it done!", some whined. "#compromise #compromise #compromise #compromise", some less articulate folks said, trying to bring the point home. Last night, after a compromise was reached, the hashtagged messaged now complained loudly about the particular deal that was worked out, some following VP Biden’s "terrorist" rhetoric. So the true colors came out. "Compromise", to the Left, means "do it my way, or you’re a terrorist!"

You may want to bookmark this link to my "Civility Watch" entries for the future. The Left has often leveled the "hate speech" charge at conservatives to blame them for some event that has happened. It’ll happen again.

Best. Ad. Ever.

Hats off to Concerned Women of America for coming up with a humorous way to address the very serious debt crisis our country is facing. This is without a doubt one of the most clever ads I have ever seen.

Hat tip: Ed Morissey

Paved With Good Intentions

An interesting, and accurate (given history), pair of pictures describe how the welfare system starts and how it ends. Take a look for yourself, but the description says it all.

The welfare state starts with small programs targeted at a handful of genuinely needy people. But as  politicians figure out the electoral benefits of expanding programs and people figure out the that they can let others work on their behalf, the ratio of producers to consumers begins to worsen.

Eventually, even though the moochers and looters should realize that it is not in their interest to over-burden the people pulling the wagon, the entire system breaks down.

There’s no doubt that the intentions are good at the start of some new program, but when you give this power to the government, it will misuse it. It’s always better, in the long run, to leave this to the people, fallible though they may be.

Friday Link Wrap-up

Post-war (i.e. WWII) marginal tax rates (the top individual tax bracket) have fluctuated from above 90% to below 30%, but W. Kurt Hauser noted that, in 1993, the total tax revenue, as a percentage of GDP, stayed virtually constant. Really. The data has been updated to 2007 and the observation holds. You can’t soak the rich. Raise their rates, and GDP goes down to match, in addition to the tax shelters that suddenly become very popular. Social engineers who want to use the tax code to implement what they want ought to be very disturbed, if they even know about this.

In terms of absolute dollars, federal revenues have tripled in the last 50 years (quadrupled if you consider the amount just before the recession). The problem is, federal spending has outpaced even that. Ed Morrissey has the charts to show that we don’t have a revenue problem.

Homeschooling is such a success that liberals at the NEA, in the Dept. of Education and in Congress are "troubled" and "concerned" by it, and of course consider it racist. Yes, really.

The pro-life cause continues to advance, recently in Ohio. And Americans United for Life has put out a scathing 181-page report on abuses and law-breaking at Planned Parenthood, and is taking it to Congress.

Global warming seems to have stopped. Well, Scientific American says, "Blame Asia!"

Obama, in prosecuting war, embraces his inner Dubya.

Just like the press (and the anti-war movement) has gone very quiet about wars, old and new, being prosecuted by this President, the NY Time even notices that the press has been ignoring the poor during this recession. And they’re part of the press to blame for it! What a difference a Democratic President makes!

Andres Oppenheimer says it best. "What Chavez has done in Venezuela over the last 12 years is nothing short of an economic miracle: Despite benefiting from the biggest oil boom in Venezuela’s history, he has somehow managed to turn the country into a shambles." Read the whole thing. It’s amazing to see truly how much money socialism can spend on people, only to make their lives worse.

Comparing and contrasting the economic stimulus under Clinton (that got rejected) to the economic stimulus under Obama (which passed) and which was actually better for unemployment.

If the debt ceiling is not raised by August, we would still have enough money coming in to not default on interest payments on the debt, and cover Social Security, Medicare, and "essential" defense. Don’t let Obama’s threat about withholding Grandma’s check scare you.

The ban on circumcision that will be on the San Francisco ballot in November is rife with anti-Semitism. That’s just about all you need to know about it, but here’s more.

And some more slipper slope for you. (Click for a larger image.)

Taxes in a Recession

According to this expert, what the Democrats are proposing — new taxes to deal with the budget crisis — is the absolute wrong thing to do.

“First of all, he’s right. Normally, you don’t raise taxes in a recession, which is why we haven’t and why we’ve instead cut taxes. So I guess what I’d say to Scott is – his economics are right. You don’t raise taxes in a recession. We haven’t raised taxes in a recession.”

[…]

“We have not proposed a tax hike for the wealthy that would take effect in the middle of a recession. Even the proposals that have come out of Congress – which by the way were different from the proposals I put forward – still wouldn’t kick in until after the recession was over. So he’s absolutely right, the last thing you want to do is raise taxes in the middle of a recession because that would just suck up – take more demand out of the economy and put business further in a hole.”

This economics "expert" is the August, 2009 version of President Obama. That was then, this is now.

In a 75-minute meeting Sunday night, President Obama once again demanded that more than $1 trillion in tax increases be part of any deficit reduction package attached to a vote on the debt ceiling. In the session, Obama rejected a Republican proposal to seek $2.5 trillion in spending cuts and reforms, and insisted on higher taxes on businesses and wealthy individuals.

Apparently, economic principles have an expiration date.

Back From Vacation

I was at a client site for most of last week and on vacation the rest up until yesterday. That’s why I didn’t do much on the blog; I was busy, and then I was taking it easy.

Democrats in Congress have apparently been taking for over 2 years now, not passing a budget in all that time. Did any of you folks on the Left notice? Or care? Congressman Paul Ryan did.

Friday Link Wrap-up

Relative bias in the media vs actual bias. A new book from a UCLA political science professor demonstrate how, because the media is so generally slanted to the left, outlets like Fox appear more right-slanted, when in reality they’re far more centrist.

Rosalina Gonzales had pleaded guilty to a felony charge of injury to a child for what prosecutors had described as a "pretty simple, straightforward spanking case."

Trevor Phillips, chairman of Obama’s Equality and Human Rights Commission accused Christians, particularly evangelicals, of being more militant than Muslims in complaining about discrimination, arguing that many of the claims are motivated by a desire for greater political influence. Hmm, define "militant".

What if Charles Schultz had done cartoons of Doctor Who characters? The result would probably have looked like this.

"Smart" diplomacy; cozy up to dictators, snub our friends.

Democrats pilloried George W. Bush for "not listening to his generals" when he made decisions counter to the Pentagon. When Obama does it, not so much.

Would ID requirements for voting amount to a Jim-Crow-style poll tax on blacks? E. J. Dionne thinks so. James Taranto wonders if ID requirements for Amtrak, hotels, air travel and employment are equally as "racist"?

Nancy Pelosi said that they had to pass the bill before we could find out what’s in it. Apparently, some surprises are buried in there.

President Barack Obama’s health care law would let several million middle-class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed.

The change would affect early retirees: A married couple could have an annual income of about $64,000 and still get Medicaid, said officials who make long-range cost estimates for the Health and Human Services department.

Whenever there is a budget shortfall, taxes are always on the table. How about we take them off just this once?

Medicare spending is unsustainable, and the CBO itself admits that its tools for determine any consequences from Obamacare are flawed. Yeah, that should "fix" health care.

And finally, define "emergency" (click for a larger version):

In Red States, Schools Rule

Newsweek and the Washington Post (no members of the Vast Right-Wing Conspiracy, they) both have polls that put schools in Red states at the head of the class.

When it come to excellence in education, red states rule — at least according to a panel of experts assembled by Tina Brown’s Newsweek.  Using a set of indicators ranging from graduation rate to college admissions and SAT scores, the panel reviewed data from high schools all over the country to find the best public schools in the country.

The results make depressing reading for the teacher unions: the very best public high schools in the country are heavily concentrated in red states.

Three of the nation’s ten best public high schools are in Texas — the no-income tax, right-to-work state that blue model defenders like to characterize as America at its worst.  Florida, another no-income tax, right-to-work state long misgoverned by the evil and rapacious Bush dynasty, has two of the top ten schools.

Newsweek isn’t alone with these shocking results.  Another top public school list, compiled by the Washington Post, was issued in May.  Texas and Florida rank number one and number two on that list’s top ten as well.

There’s something else interesting about the two lists: on both lists only one of the top ten public schools was located in a blue state.  (Definition alert: on this blog, a blue state is one that voted for John Kerry in 2004; red states cast their electoral votes for Bush.)

There were no top ten schools on either list from blue New England states like Massachusetts, Vermont and Connecticut.  Nor were there any in the top 25.  By contrast, Alabama made both the Newsweek and the Washington Post top ten.  Only two public schools from these states made the Washpost top fifty list; zero made it into Newsweek‘s elite.  150 years after the Civil War, South Carolina is kicking New England’s rear end when it comes to producing great public schools.

More interesting details at the link. So what are the implications of these list?

Defenders of the high tax, high regulation, highly unionized model of state governance that characterizes the blue states like to point to their higher quality of government services as justification for the taxes they pay and the regulations they accept.

Let those crackers and hillbillies in the red states wallow in their filth and their ignorance, say proud upholders of the blue state model.  We blue staters believe in things like quality education — and that costs money.

In theory, perhaps, but in practice the extraordinary achievement of so many red state schools strongly supports the idea that blue state governance is no friend to excellence in education.  Having low taxes and governors descended from George H. W. Bush seems to offer students more hope than having high taxes and strong teacher unions. At the very least, the rankings suggest that blue state taxes and management philosophies aren’t knocking the stuffing out of their allegedly underfunded and poorly run red state competitors.

Indeed, taxes are the payment for living in a free society, but, as with many things, it can be overdone, or not done well. Cutting taxes, or shifting revenue, to put dollars (perhaps fewer dollars) into better programs is not cutting the budget on the backs of the poor.

When the Gravy Train Reaches the End Of the Line

That’s where Greece is.

ATHENS/LUXEMBOURG (Reuters) – Prime Minister George Papandreou asked Greeks on Sunday to support austerity steps and avoid a "catastrophic" default, as European finance ministers discussed extending tens of billions of euros of aid to Athens.

Addressing the Greek parliament, Papandreou appealed for the nation to accept deeply unpopular tax hikes, spending cuts and privatisation plans which international donors have demanded as a condition for the aid.

"The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks and the country’s credibility," Papandreou said at the start of a confidence debate on his new crisis cabinet.

Greek officials have said the country will face default in mid-July if the European Union and the International Monetary Fund do not hand over a 12 billion euro tranche of emergency loans by then.

But when that happens, the passengers insist that the train keep moving anyway.

Athenians used to stop off at Syntagma Square for the shopping, the shiny rows of upmarket boutiques. Now they arrive in their tens of thousands to protest. Swarming out of the metro station, they emerge into a village of tents, pamphleteers and a booming public address system.

Since 25 May, when demonstrators first converged here, this has become an open-air concert – only one where bands have been supplanted by speakers and music swapped for an angry politics. On this square just below the Greek parliament and ringed by flashy hotels, thousands sit through speech after speech. Old-time socialists, American economists just passing through, members of the crowd: they each get three minutes with the mic, and most of them use the time alternatively to slag off the politicians and to egg on their fellow protesters.

And Don Surber does some digging and notes that Nobel-Prize-winning, former Enron advisor Paul Krugman was all behind the taxing and spending in Europe because deficits didn’t matter. But all of a sudden, for Greece, now, they do, according to that same Krugman. But since the solution is to do precisely the opposite of what he’s told us in the past, he won’t supply his answer to the crisis. This time. He’ll just lecture the US to do the same things that Greece did that got them into this mess.

Sometimes it seems he deserved that prize in Economics as much as Obama deserved his prize in Peace.

Friday Link Wrap-up

The Dalai Lama calls himself a Marxist.

An "unexpectedly" we could do with down here. "Canada Jobless Rate Unexpectedly Declines in May to Its Lowest Since 2009" It’s down to 7.4 percent. We’re adding government jobs and they’re adding private sector jobs. Our dollar is getting weaker while theirs gets stronger. “Our economy has one of the best records in the area of job creation in comparison with other industrialized countries and this is why we will continue to keep our taxes low,” Prime Minister Stephen Harper told lawmakers on June 8. Lessons to be learned  here.

Obama finally figures out, "Shovel-ready was not as shovel-ready as we expected." Which is one big reason why the stimulus didn’t stimulate.

Civility Watch: “Good afternoon brothers and sisters. Welcome to Nazi Germany….Brothers and sisters, this is not going to be an easy fight,” he shrieked. “It took World War II to get rid of the last Adolf Hitler. It is going to take World War III to get rid of Adolf Christie. Are you ready for World War III?” Union leaders are setting the example in New Jersey.

Soaking the rich won’t work the way the Left intends. Historical tax rates vs actual receipts put the lie to the idea that raising rates will necessarily bring in more revenue.

When even actor Aston Kutcher comes to the aid of Sarah Palin, you know the media has gone way too far.

And speaking of which (click for a larger version):

Not Just "Unexpectedly"

…but unexpectedly again.

The number of Americans filing new claims for unemployment aid unexpectedly edged higher last week, stoking fears of a stalled economic recovery even as a separate report showed record U.S. exports in April.

Initial claims for state jobless benefits increased 1,000 to 427,000, the Labor Department said. However, economists polled by Reuters had forecast claims dropping to 415,000 from a previously reported count of 422,000.

The rise kept first-time claims perched above the 400,000 mark for the ninth week in a row. Analysts normally associate a level below that with steady job growth.

"It’s the same dismal trend continuing. It’s not getting worse, but it’s not getting better either," said Keith Hembre, chief economist at Nuveen Asset Management in Minneapolis.

Emphasis mine. The Obama administration chart of what would happen in unemployment without their plan vs what would happen with their plan vs reality continues to show how wrong they have been all along.

The Great Vanish

Megan McArdle  notes one of the badly blown predictions of ObamaCare.

There were supposed to be millions of people who were uninsurable because of pre-existing conditions.  We heard lengthy testimony about their terrible plight.  I don’t think it’s too strong to say that this fear–that you could get sick and no one would insure you, that’s right, you, Mr. & Mrs. Middle-Class Voter–was one of the main reasons offered for the health care overhaul.  It was estimated by Medicare’s Chief Actuary that around 400,000 would sign up (the CBO estimated 200,000, but only because they assumed that HHS would use its authority to limit enrollment in order to stay within the $5 billion budgeted for the program).

So how many have signed up for this badly needed program? 18,000, less than of the lower CBO estimate. So, in true government fashion, they’ve decided, not to save money, but spend it anyway, which is what governments do best.

The administration is now loosening the requirements (you just need a note from a doctor or nurse saying you’ve been sick in the last year) and lowering premiums.  But this doesn’t mean that they’re finally covering more "uninsurables"; it just means they’ve decided to use the money allocated for those people to cover someone else.  They’re changing the "high-risk pools" to something that looks a lot more like simply subsidizing insurance.  But the goal wasn’t to spend the $5 billion that HHS got in its budget; the goal was to provide insurance for people who want to buy insurance, but can’t find a company willing to write it. 

If anyone tries to argue that some government program, this one especially, will stay within its legislative boundaries, they really have no idea how governments are addicted to your money.

Weekend Links

Some links of interest for your weekend reading:

Four words: He made it worse.

Making a case for tort reform.

The candidate who can win.

Time to end Medicare.

Baseball players are better athletes.

Friday Link Wrap-up

When you politicize health care, you get government-style efficiency. "NHS budget squeeze to blame for longer waiting times, say doctors."  And for those already in hospitals, doctors are having to prescribe water to make sure the elderly stay hydrated.

If the liberals are to be believed, poverty causes crime. And yet, in this tough economic time, the FBI reports a 5.5% drop in violent crime.

In economic news, Democrats are dead set against voting for any 2011 budget. There’s been a lot of hoopla surrounding the "repayment" of the General Motors loan from the auto bailout, except that it’s just a lot of smoke and mirrors. Indeed, GM has a sweetheart tax deal that is saving it $14 billion, not to mention another $14 billion is being lost in general on those bailouts.

The Obama economic "recovery" turned 2 years old in May. Upwards of a trillion dollars spent, for what? The number of people with jobs hasn’t changed, unemployment is far worse than they said it would be if we did nothing, median incomes are down, housing prices are down 10%, and I don’t need to tell you about gas prices. If George W. Bush were President, you just know he’d be personally blamed for this, but Obama gets a pass.

Canada, by the way, has been leading the US out of this mire by reducing debt and spending, even with a socialized medicine albatross around its neck.

Immigrants are turning to that "racist" Tea Party.

When we elected Obama, that was when "the rise of the oceans began to slow and our planet began to heal", right? So why does he not get slammed for not signing the updated Kyoto Protocol? Bush got criticized for it, even though it was Clinton who originally didn’t sign it. Nah, couldn’t be the double-standard, liberal media.

When you make entitlements untouchable, you risk hurting those you purport to be concerned about because economic collapse hurts us all, including and especially the poor. The idea that it couldn’t happen here is severely myopic.

And finally, "smart" diplomacy". (Click for a larger version.)

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