'From 2008 to 2009, federal spending increased 18 percent. This was a budget year that straddled the Bush and Obama presidencies. But the spending increase was driven by anti-recession measures, predominately the Bush stimulus and bailouts. Obama supported these measures. In fact, his complaint about the Bush stimulus was that it was too small. This raises a question of political ontology: If Obama agreed with Bush, is it still just Bush's fault? ... Obama proposes that the federal government spend over 25 percent of GDP in 2011, compared to a historical average of around 20.5 percent. He justifies this as necessary to continue to fight the recession. Obama, however, projects that the recession will be fully over in 2011 and robust growth under way. Yet he proposes that federal spending continue to be nearly 24 percent of GDP through 2020. In other words, rather than wind down the additional recession spending after recovery, Obama is proposing that it simply become a new, higher base. After the World War II debt was reduced, accumulated federal debt never exceeded 50 percent of GDP until 2009, when it reached 53 percent. Under Obama's recommendations it would grow to 77 percent by 2020. If Obama were to recommend a path to return spending to its historical share of economic output, in 2020 the deficit would be just $255 billion, about what the federal government spends each year on large capital projects, and just 1 percent of GDP. In other words, not a problem. And federal spending would have still increased by more than 4 percent a year since 2008. Instead, Obama recommends a 2020 deficit of over $1 trillion and a troubling 4.2 percent of GDP.'Scary stuff indeed. Unfortunately, the president seems to feel he only needs to 'explain' things a little more clearly for the public to get over its annoying habit of judging his fiscal policy based on these numbers.
Showing posts with label spending. Show all posts
Showing posts with label spending. Show all posts
03 February 2010
Comparing Relative Deficit, Debt and Spending Levels
This article from Robert Robb provides a good comparison between the relative debt, deficit and spending levels of the Bush and Obama Administrations, as well as providing several historic benchmarks. The entire article is well-worth reading, but these points jumped out (apologies for excessive quotation):
20 July 2009
40th Anniversary of the Most-Watched Walk
Today is the fortieth anniversary since Neil Armstrong and Buzz Aldrin took their famous walk on the moon. Newly restored, high-definition video from NASA can be seen here.
Most of the media is covering this anniversary to some extent or another, but there seems to be a major question being asked in that coverage along the lines of: 'should we have bothered to go, and should we cancel future plans?' It's a disturbing question. Apart from the push forty years ago to be the best in the world (a drive the West in general seems to be losing on many different fronts), the question assumes that we can not or should not value endeavor. In a deep recession, it's easy to see why we wouldn't want to expend the funds right now, but in ten years? It's hard to see how we're going to accomplish anything further in space with the budget for NASA taking the brunt of science-spending cutbacks (over a decade). At a certain point, programs and personnel are cut to the point where the programs can not be easily restarted and important institutional knowledge is lost.
Most of the media is covering this anniversary to some extent or another, but there seems to be a major question being asked in that coverage along the lines of: 'should we have bothered to go, and should we cancel future plans?' It's a disturbing question. Apart from the push forty years ago to be the best in the world (a drive the West in general seems to be losing on many different fronts), the question assumes that we can not or should not value endeavor. In a deep recession, it's easy to see why we wouldn't want to expend the funds right now, but in ten years? It's hard to see how we're going to accomplish anything further in space with the budget for NASA taking the brunt of science-spending cutbacks (over a decade). At a certain point, programs and personnel are cut to the point where the programs can not be easily restarted and important institutional knowledge is lost.
11 May 2009
Oh, is that all? - a $1.84 trillion deficit
The White House prediction for the deficit is growth to $1.84 trillion. The LA Times reports:
'The projected deficit for 2012 stands at $557 billion in the new report, which still will represent a larger dollar figure than any deficit the former administration projected in setting its own records during the eight years of George W. Bush's presidency. The new record deficit this year -- driven by the federal government's efforts at bailing out financial institutions and automakers, the $787-billion economic stimulus act that Congress approved one month into Obama's term and slumping federal tax revenue -- will amount to 12.9% of the nation's Gross Domestic Product.'
Of course these numbers are significantly higher than originally predicted by the Obama Administration, and much higher than any other administration including the final Bush term. For crying out loud, a deficit equivalent to 12.9% GDP, and they think they'll fix it by the end of the term? What fantasy land are they living in? And of course, these are the rosy predictions by the WH-OMB. Other, somewhat more sober, analyses place the deficit much higher.
The Congressional Budget Office predicts that the economy will not recover at the pace that the OMB predicts, and that the massive growth in spending will consume any recovery that does occur for quite some time. In fact, the CBO's predictions look down
right gloomy next to those of the OMB. The CBO Director's blog does a nice job of summarizing their outlook, and is worth reading in full, but the this morning's report ('Budget and Economic Outlook: Fiscal Years 2009 to 2019') gives the full details. A small snapshot encapsulating surplus vs/vs deficit is at right (click to enlarge). Not a pretty picture.
'The projected deficit for 2012 stands at $557 billion in the new report, which still will represent a larger dollar figure than any deficit the former administration projected in setting its own records during the eight years of George W. Bush's presidency. The new record deficit this year -- driven by the federal government's efforts at bailing out financial institutions and automakers, the $787-billion economic stimulus act that Congress approved one month into Obama's term and slumping federal tax revenue -- will amount to 12.9% of the nation's Gross Domestic Product.'
Of course these numbers are significantly higher than originally predicted by the Obama Administration, and much higher than any other administration including the final Bush term. For crying out loud, a deficit equivalent to 12.9% GDP, and they think they'll fix it by the end of the term? What fantasy land are they living in? And of course, these are the rosy predictions by the WH-OMB. Other, somewhat more sober, analyses place the deficit much higher.
The Congressional Budget Office predicts that the economy will not recover at the pace that the OMB predicts, and that the massive growth in spending will consume any recovery that does occur for quite some time. In fact, the CBO's predictions look down
right gloomy next to those of the OMB. The CBO Director's blog does a nice job of summarizing their outlook, and is worth reading in full, but the this morning's report ('Budget and Economic Outlook: Fiscal Years 2009 to 2019') gives the full details. A small snapshot encapsulating surplus vs/vs deficit is at right (click to enlarge). Not a pretty picture.
28 February 2009
The Problem is Us
The Planet Money segment on yesterday's Morning Edition (NPR) had one of the most succinct, accurate and chilling descriptions of why we're in our current economic mess, and what we'll have to do to fix it. You can read the transcript at the title link, and listen to it here, but I've pasted in the most salient portion of the discussion below.
"That chart is the most striking piece of evidence that I have that what is happening to us is something that goes way beyond toxic assets in banks. It's something that has little to do with the mechanics of mortgage securitization, or ethics on Wall Street, or anything else," Beim says. "It says: The problem is us. The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us."
We have overborrowed, Beim says: "We've been living very high on the hog. Our living standard has been rising dramatically in the last 25 years. And we have been borrowing much of the money to make that prosperity happen."
In other words, the problem the banks are facing is the problem we, as a society, are facing: We all have too much debt. And getting rid of it is going to be painful.
If you want a solution in which those who bear the most guilt for the financial crisis pay the most to fix it, while the innocent don't have to pay anything, that's not going to happen.
It seems that the U.S. economy is way past that point. Americans are going to spend a lot of money. The government may bail out some banks that some people wish it wouldn't. There is no magical solution where the U.S. gets out of this mess without any pain.
While they might disagree on who will bear the brunt of that pain, all the experts interviewed for this report say the longer the U.S. waits, the worse it will be for everyone.
If only we'd all be willing to face the fact that this mess isn't just about corporate greed, poor regulation, too much regulation, or failure to help out the 'little guy.' It's about our national addiction to easy credit, an economy based solely on debt, and our love of spending. Until we come to grips with that, we'll never solve our problems.24 February 2009
UPDATE 1: Jindal strikes back
Gov. Jindal of Louisiana is delivering the GOP response. He certainly has an interesting personal story and a bright future in the party.
He nails it: "The strength of America is NOT found in our government .... the way to lead is not to raise taxes ... The way to lead is to empower you." The Democratic leadership, "... instead of trusting us with our money ... passed the largest spending bill in history."
I love the hit on Sen. Reid's mag-lev train to Disney Land.
He then lays out the alternatives: tax cuts, promoting business and industry to grow jobs, increased energy development combined with conservation and innovation, universal health care access that is privately run, performance-based education, etc.
He calls for a true transparency in government - one which rejects political favors for money and rejects the corrupting earmark process.
I'm looking forward to seeing his career evolve.
The text of the entire response is here.
He nails it: "The strength of America is NOT found in our government .... the way to lead is not to raise taxes ... The way to lead is to empower you." The Democratic leadership, "... instead of trusting us with our money ... passed the largest spending bill in history."
I love the hit on Sen. Reid's mag-lev train to Disney Land.
He then lays out the alternatives: tax cuts, promoting business and industry to grow jobs, increased energy development combined with conservation and innovation, universal health care access that is privately run, performance-based education, etc.
He calls for a true transparency in government - one which rejects political favors for money and rejects the corrupting earmark process.
I'm looking forward to seeing his career evolve.
The text of the entire response is here.
We can do it all, now, and eliminate the deficit - in four years (and I have a nice bridge for you)
President Obama is currently addressing Congress, and has just stated that health care reform must be done this year, that the auto industry must and will be saved, that the spending spree must continue, and that anything wrong is the fault of the prior Administration (well, that was more implied than said, but was obvious). All this, AND we'll halve the deficit within 2 years and eliminate within 6 (implying a second term). Anyone interested in the Brooklyn Bridge? All-in-all, it's a speech that promises all things to all people with no explanations as to how and what the costs will be. In other words, a typical political nothing.
A few musings along the way.
The checks are in the mail for the tax cuts: all $13 per household.
Ahh - bribery for service - a higher education for all. I'm not totally opposed as long as service is determined by the individual and not the state, and no brown shirts or jack boots are required. I'm still a little worried about that non-voluntary, as-strong-as-the-military, not-the-police, civilian 'security force' the President talked about on the campaign trail.
The markets were up for the first time a few weeks today after the Fed Chair, Ben Bernanke, managed to calm fears that the Administration is planning on a wholesale takeover of the banking sector. Instead, Bernanke implied, there would be a partial and temporary government stake in the most troubled institutions.
Note to the President: find a way to not have Nancy Pelosi smirking at the Republicans right behind you when you're trying to look dignified and Presidential. She either looks like she's in rictus, or trying not to sneer. Either way, it's really undignified.
A few musings along the way.
The checks are in the mail for the tax cuts: all $13 per household.
Ahh - bribery for service - a higher education for all. I'm not totally opposed as long as service is determined by the individual and not the state, and no brown shirts or jack boots are required. I'm still a little worried about that non-voluntary, as-strong-as-the-military, not-the-police, civilian 'security force' the President talked about on the campaign trail.
The markets were up for the first time a few weeks today after the Fed Chair, Ben Bernanke, managed to calm fears that the Administration is planning on a wholesale takeover of the banking sector. Instead, Bernanke implied, there would be a partial and temporary government stake in the most troubled institutions.
Note to the President: find a way to not have Nancy Pelosi smirking at the Republicans right behind you when you're trying to look dignified and Presidential. She either looks like she's in rictus, or trying not to sneer. Either way, it's really undignified.
I think we can safely bury that notion of transparency
After declaring that the stimulus bill would have no earmarks (achieved only by redefining earmark), President Obama will soon be signing a stop-gap 'spending bill' with more than 9,000 official earmarks in it.
Remember that second debate when Sen. McCain slammed the earmark process of an example of wasteful spending in Washington? The one where the President poo-pooed the notion of earmarks contributing all that much, but than said he would be the better champion against them? That was the same debate (the video of the entire debate is in my blog archive) where the now President claimed he would go through the entire budget "line by line." Now we have a 'stimulus' bill that was never read or parsed, a new $410 billion spending bill (that by the way was introduced while the President was conducting the "Fiscal Responsibility Summit" - see yesterday's blog), and talk of yet another stimulus bill for later in the year.
From the title linked article:
"We need earmark reform," Obama said in September during a presidential debate in Oxford, Miss. "And when I'm president, I will go line by line to make sure that we are not spending money unwisely."
I don't believe anyone read anything line-by-line, will do so or had any intention of every doing so. I think we can put the whole promise of transparency in the ground now.
Remember that second debate when Sen. McCain slammed the earmark process of an example of wasteful spending in Washington? The one where the President poo-pooed the notion of earmarks contributing all that much, but than said he would be the better champion against them? That was the same debate (the video of the entire debate is in my blog archive) where the now President claimed he would go through the entire budget "line by line." Now we have a 'stimulus' bill that was never read or parsed, a new $410 billion spending bill (that by the way was introduced while the President was conducting the "Fiscal Responsibility Summit" - see yesterday's blog), and talk of yet another stimulus bill for later in the year.
From the title linked article:
"We need earmark reform," Obama said in September during a presidential debate in Oxford, Miss. "And when I'm president, I will go line by line to make sure that we are not spending money unwisely."
President Barack Obama should prepare to carve out a lot of free time and keep the coffee hot this week as Congress prepares to unveil a $410 billion omnibus spending bill that's riddled with thousands of earmarks, despite his calls for restraint and efforts on Capitol Hill to curtail the practice.
The bill will contain about 9,000 earmarks totaling $5 billion, congressional officials say. Many of the earmarks — loosely defined as local projects inserted by members of Congress — were inserted last year as the spending bills worked their way through various committees.
Here's what Obama promised on the stimulus bill (from the Change.gov website, which perversely still says the Office of the President-Elect):No earmarks
Tuesday, January 6, 2009 02:24pm EST / Posted by Dan McSwain
President-elect Barack Obama said today in a meeting with members of his budget team that he will ban earmarks from the American Recovery and Reinvestment Act that will soon go before Congress.
The President-elect also said he expects his administration to inherit a budget deficit of up to $1 trillion.
He was joined in the meeting by Peter Orszag, Director-designate, Office of Managment and Budget; Christina Romer, Christina Romer, Director-designate, Council of Economic Advisors and Lawrence Summers, Director-designate, National Economic Council, among others.
I don't believe anyone read anything line-by-line, will do so or had any intention of every doing so. I think we can put the whole promise of transparency in the ground now.
18 February 2009
Money Grows on Trees in the Land of Nod
UPDATE:
The GOP is raising important questions about the foreclosure plans.
The Obama Administration apparently thinks that money grows on trees!
Doubling the aid to Fannie and Freddie, propping up failing industries no matter the cost, $75 billion in foreclosure backing (separate from the Fannie/Freddie bailout), a stimulus bill with little in the way of direct stimulus spending - it never ends.
The President has made it clear that this is only the beginning.
The GOP is raising important questions about the foreclosure plans.
The Obama Administration apparently thinks that money grows on trees!
Doubling the aid to Fannie and Freddie, propping up failing industries no matter the cost, $75 billion in foreclosure backing (separate from the Fannie/Freddie bailout), a stimulus bill with little in the way of direct stimulus spending - it never ends.
The President has made it clear that this is only the beginning.
12 February 2009
Senator Gregg gets a spine
NPR is reporting that Judd Gregg is withdrawing his name as the nominee as Secretary of Commerce, 'citing "irresolvable conflicts" with President Barack Obama's handling of the economic stimulus and 2010 census."' Sen. Gregg, we're proud of you.
In particular, the Senator has been known to be uncomfortable with the gigantic spending bill otherwise known as a stimulus, and abstained from the vote yesterday. Given the continued widespread opposition to the frivolous spending provisions in the bill, it's not surprising that any Republican would be concerned about taking on this particular position, but it's gratifying that the senator was willing to take a public stand.
Almost as important in the long run, is the power grab by the White House, which is attempting to move control of the census from Commerce to the White House. Some have speculated that part of this move was due to the nomination of Sen. Gregg to Commerce, but the White House has yet to make any announcement reversing its position.
Given the Gov. Richardson withdrew under a cloud last month, one wonders if President Obama will be able to fill this position anytime soon. Since he's now 'met' his promise of a bipartisan cabinet, he may feel no obligation to select another Republican.
In particular, the Senator has been known to be uncomfortable with the gigantic spending bill otherwise known as a stimulus, and abstained from the vote yesterday. Given the continued widespread opposition to the frivolous spending provisions in the bill, it's not surprising that any Republican would be concerned about taking on this particular position, but it's gratifying that the senator was willing to take a public stand.
Almost as important in the long run, is the power grab by the White House, which is attempting to move control of the census from Commerce to the White House. Some have speculated that part of this move was due to the nomination of Sen. Gregg to Commerce, but the White House has yet to make any announcement reversing its position.
Given the Gov. Richardson withdrew under a cloud last month, one wonders if President Obama will be able to fill this position anytime soon. Since he's now 'met' his promise of a bipartisan cabinet, he may feel no obligation to select another Republican.
10 February 2009
NPR calls it: The stock market reacts negatively
Right after Sec. Treas. (I can't pay my own taxes) Geithner announced plans to use up to $2 trillion in NEW money to prop up failing banks, bank stocks led the way in a massive drop. A trillion here, a trillion there, pretty soon we'll be talking real money, along with generations of debt. NPR noted that the market drop is in large part due to the total lack of specificity (or limits) in the plan. No kidding!
Meanwhile, our erstwhile President seems content to blame President Bush and the GOP, despite the massive Congressional spending under a Democratic Congress (of which he was a part).
Meanwhile, our erstwhile President seems content to blame President Bush and the GOP, despite the massive Congressional spending under a Democratic Congress (of which he was a part).
Presidency for life?
No, I'm not talking about Chavez, whose made it more than clear that he wants to be President for Life.
I'm talking about the Democratic Party, which is making a grab for control of the census by having it run out of the White House. This would mean data used to determine the composition of the Electoral College, re-districting maps, and government spending programs would be managed and determined by a partisan for the first time. In a power-grab intended in part to make Judd Gregg's new position, peripheral, the White House has announced that the hyper-partisan, Rahm Emanuel, will now run the census as part of
You can link to the Census Bureau performance assessment at "ExpectMore.gov." It would be just perfect if they'd expand it to: Expect More Government. Their 'mission' statement reads:
Now, why don't I take that seriously? Is it just me, or have two whole branches of the government been completely co-opted by power-hungry hacks?
Anyone get the feeling that they want the Presidency for Life?
I'm talking about the Democratic Party, which is making a grab for control of the census by having it run out of the White House. This would mean data used to determine the composition of the Electoral College, re-districting maps, and government spending programs would be managed and determined by a partisan for the first time. In a power-grab intended in part to make Judd Gregg's new position, peripheral, the White House has announced that the hyper-partisan, Rahm Emanuel, will now run the census as part of
You can link to the Census Bureau performance assessment at "ExpectMore.gov." It would be just perfect if they'd expand it to: Expect More Government. Their 'mission' statement reads:
Now, why don't I take that seriously? Is it just me, or have two whole branches of the government been completely co-opted by power-hungry hacks?
Anyone get the feeling that they want the Presidency for Life?
12 November 2008
Fluidity: The Ever Changing Bailout Plan
Henry Paulson defended himself before Congress today, arguing that the original concept of the bailout plan (excuse me, economic recovery plan), which largely involved buying up 'toxic securities' (tied to unknown amounts of bad mortgages), is no longer the best solution to the credit and financial crises. Paulson now argues that $700 billion in tax dollars should be used to buy partial ownership stakes in the banks themselves. Nationalization of banks in the good 'ole USA? The idea boggles the mind. Perhaps it'll mean better management; at least AIG won't use any more of the loan to take its Exec's on nice spa trips; but I can't help thinking that this trip down socialism's memory lane it just going to keep getting darker.
In the meanwhile, AIG is getting another $40B, while American Express convinced the Fed. to allow them to become a real bank in record time, which may now use that status to request a share of the pie. And to top it all off, the Dynamic Duo of Henry Reid and Nancy Pelosi, backed by that happy socialist, Barney Franks, is demanding to bailout the auto industry, mortgage-holders, and just about anything not nailed down, while increasing spending at an enormous pace, deficit-be-damned.
Most of us are sensible enough to cut back on spending when times get tough - to be a little more thrifty. Not the Congress. They seem to think that increasing spending, increasing taxes, and taking over private industry is just the ticket to fix the economy. Now where have we heard this before?
In the meanwhile, AIG is getting another $40B, while American Express convinced the Fed. to allow them to become a real bank in record time, which may now use that status to request a share of the pie. And to top it all off, the Dynamic Duo of Henry Reid and Nancy Pelosi, backed by that happy socialist, Barney Franks, is demanding to bailout the auto industry, mortgage-holders, and just about anything not nailed down, while increasing spending at an enormous pace, deficit-be-damned.
Most of us are sensible enough to cut back on spending when times get tough - to be a little more thrifty. Not the Congress. They seem to think that increasing spending, increasing taxes, and taking over private industry is just the ticket to fix the economy. Now where have we heard this before?
01 November 2008
Reason 3 of 7 to Vote McCain: Taxes and Revenue Streams
One year ago, the Wall Street Journal reported on the inverse relationship between higher taxes rates and revenue streams (click the title link to see the original). In short, they reported an often observed truth - within limits, tax rate reductions lead to better reporting and more complete payment, thus increasing government income streams. This should make sense even on a basic and general level. If one is not taxed unreasonably, one is more likely to report full income, and not attempt to evade one's tax burden. If one is taxed at the 70% level, however, 'escape and evasion' becomes the modus operandi. That is exactly what Obama is proposing to do, and its only real effect is going to be to raise the deficit.
The current deficit is expected to top $ 1 trillion shortly, and even if Obama can get Congress to limit tax increases to the $120 K mark of income (yes, the goal has moved again), and even if not one household in that income bracket made any attempt to evade taxation, that tax burden will not overcome the current deficit. If all of Obama's spending proposals go through, the deficit is likely to top $4 trillion in short order, leaving two choices: increases taxes on everyone from $40K/annually on up, or leave a huge deficit that will be the responsibility of several generations to pay. This is not a fiscal policy that will lead to increased employment and growth - it's a jobs-killer. If one adds in the increased taxes on Capitol Gains, Medicare, health insurance, etc., it becomes impossible to maintain a limit on who sees a tax increase and who pays. In fact, those additional tax burdens ensure that everyone sees a tax increase, and that our grandchildren will be paying for the country's addiction to easy spending and welfare. John McCain is right - what we need is a return to fiscal discipline, limited spending, and the right policy to grow jobs and the economy, namely a freeze or reduction in taxes. Do the right thing for your country and your children - Vote McCain.
The current deficit is expected to top $ 1 trillion shortly, and even if Obama can get Congress to limit tax increases to the $120 K mark of income (yes, the goal has moved again), and even if not one household in that income bracket made any attempt to evade taxation, that tax burden will not overcome the current deficit. If all of Obama's spending proposals go through, the deficit is likely to top $4 trillion in short order, leaving two choices: increases taxes on everyone from $40K/annually on up, or leave a huge deficit that will be the responsibility of several generations to pay. This is not a fiscal policy that will lead to increased employment and growth - it's a jobs-killer. If one adds in the increased taxes on Capitol Gains, Medicare, health insurance, etc., it becomes impossible to maintain a limit on who sees a tax increase and who pays. In fact, those additional tax burdens ensure that everyone sees a tax increase, and that our grandchildren will be paying for the country's addiction to easy spending and welfare. John McCain is right - what we need is a return to fiscal discipline, limited spending, and the right policy to grow jobs and the economy, namely a freeze or reduction in taxes. Do the right thing for your country and your children - Vote McCain.
25 October 2008
Fuzzy Math
Sen. Obama's tax and spending proposals have been dissected in this blog and elsewhere ad nauseum, so I will not dwell on all of them here. My concern in this article is to specifically address the blatant attempts on the part of the Obama campaign do deceive through fuzzy math. The deception specifically relates that most basic of household activities, balancing a checkbook. A caveat: I do not always succeed at this activity myself (mostly from failure to take time), so I can relate to someone who might struggle to do so. I can not however, excuse a planned, deliberate national policy that is not only designed to end in imbalance, but is designed to deceive the public.
Our national debt currently stands at over $1 trillion. Obama's proposed plans for tax rebates and increased spending, amount to around $1.6 trillion. Additionally, he proposes an additional $1.4 trillion according to the National Taxpayers Union. Multiple reports have stated that Obama's proposals would dramatically increase the deficit, would eventually increase taxes on the very middle class he purports to protect, and would slow growth just as we're entering a global recession. Would people get money from from the government under Obama's plans? Yes they would. Would these policies be the best way to grow the economy and spread opportunity (rather than 'the wealth')? No they would not. It is physically impossible for 5% of the populace to take care of a $4 trillion + deficit, and the demands that the Obama policies place on business and individuals in exchange for the benefits they supposedly will receive are onerous at best. The government should be in the business of creating a favorable climate for growth, and then allowing that to succeed or fail, not ensuring that everyone is the same. Freedom and equality depend on limits on government action as much as they do on government action.
How are we going to pay for this massive deficit under the Obama plan? We don't know for certain since Obama has been particularly vague (even more than normally) in stating if he would cut any spending, and what his intentions toward the deficit are. We might have some clues however. In an interview on CNBC the other day, Rep. Barney Franks alternately said we should forget the deficit for awhile and find the 'plenty of other rich people' out there to increase taxes on. There have been several reports examining a possible market reaction to the anti-growth nature of the Obama proposals recently, and of course, we Obama's promise to spread the wealth and Biden's statement that paying taxes is our religious and patriotic duty.
I would agree that paying taxes are necessary and important for government functions. I would even agree that there's a case to be made for increasing the tax rate somewhat on higher income levels. But I find it ludicrous that liberals are constantly referring to all increased taxes as 'progressive' and all decreased taxes as 'regressive' (particularly as concerns higher income tax brackets). The higher the burden a small or middle-sized business has to bear, the less they'll be able to pay for additional work-force. If a small business is pulling in a million a year, after paying the additional taxes under the Obama plan (which the owner is charged at an individual rate as if the business income is a personal take for the owner), the additional health care, the additional Medicare, overhead costs, and reinvestment in the business, there would be precious little left to make the business worthwhile. If the owner then invested what little he or she took home, Obama would then increase the rate of the capitol gains tax paid upon those investments, and increase the tax rate upon the inheritance built over the years.
The Obama policies are quite simply, anti-growth. They are socialist in nature, but worse, they will hand a tremendous deficit down at least several generations. What really bothers me the most, is the consistent attempt by Obama and Biden to sell these policies, in the vaguest of terms, as helpful to the middle-class. These proposals simply don't add up, and are deceptive. This is not change we can believe in. In fact, it's our patriotic duty to vote against it.
Our national debt currently stands at over $1 trillion. Obama's proposed plans for tax rebates and increased spending, amount to around $1.6 trillion. Additionally, he proposes an additional $1.4 trillion according to the National Taxpayers Union. Multiple reports have stated that Obama's proposals would dramatically increase the deficit, would eventually increase taxes on the very middle class he purports to protect, and would slow growth just as we're entering a global recession. Would people get money from from the government under Obama's plans? Yes they would. Would these policies be the best way to grow the economy and spread opportunity (rather than 'the wealth')? No they would not. It is physically impossible for 5% of the populace to take care of a $4 trillion + deficit, and the demands that the Obama policies place on business and individuals in exchange for the benefits they supposedly will receive are onerous at best. The government should be in the business of creating a favorable climate for growth, and then allowing that to succeed or fail, not ensuring that everyone is the same. Freedom and equality depend on limits on government action as much as they do on government action.
How are we going to pay for this massive deficit under the Obama plan? We don't know for certain since Obama has been particularly vague (even more than normally) in stating if he would cut any spending, and what his intentions toward the deficit are. We might have some clues however. In an interview on CNBC the other day, Rep. Barney Franks alternately said we should forget the deficit for awhile and find the 'plenty of other rich people' out there to increase taxes on. There have been several reports examining a possible market reaction to the anti-growth nature of the Obama proposals recently, and of course, we Obama's promise to spread the wealth and Biden's statement that paying taxes is our religious and patriotic duty.
I would agree that paying taxes are necessary and important for government functions. I would even agree that there's a case to be made for increasing the tax rate somewhat on higher income levels. But I find it ludicrous that liberals are constantly referring to all increased taxes as 'progressive' and all decreased taxes as 'regressive' (particularly as concerns higher income tax brackets). The higher the burden a small or middle-sized business has to bear, the less they'll be able to pay for additional work-force. If a small business is pulling in a million a year, after paying the additional taxes under the Obama plan (which the owner is charged at an individual rate as if the business income is a personal take for the owner), the additional health care, the additional Medicare, overhead costs, and reinvestment in the business, there would be precious little left to make the business worthwhile. If the owner then invested what little he or she took home, Obama would then increase the rate of the capitol gains tax paid upon those investments, and increase the tax rate upon the inheritance built over the years.
The Obama policies are quite simply, anti-growth. They are socialist in nature, but worse, they will hand a tremendous deficit down at least several generations. What really bothers me the most, is the consistent attempt by Obama and Biden to sell these policies, in the vaguest of terms, as helpful to the middle-class. These proposals simply don't add up, and are deceptive. This is not change we can believe in. In fact, it's our patriotic duty to vote against it.
23 October 2008
Other People's Money
We are in the midst of an election, spread out over several weeks (counting early voting), where the debate about the nature and morality of taxation, wealth-creation, jobs-creation, and individual rights have become very stark. On the left, we have Sen. Obama, who proposes that spreading wealth from higher income brackets to lower is a patriotic duty. In addition to proposed tax giveaways (since 40% of recipients do not pay taxes to begin with), he proposes massive spending increases, all of which is to be balanced on higher taxes among the top 5% of earners in the country. I would argue that such a system would not only dramatically increase the deficit, pushing off payment by two generations, but would move us into a genuine welfare state, and prolong the recession (if not push us into a recession as Steve Forbes argues). In the center, we have Sen. McCain, who while (in my opinion) making too many concessions to populist impulses, resists tax increases, emphasizing instead spending cuts.
I'm a happy fiscal conservative - I strongly oppose what Pres. Bush and the former Republican Congress did to balloon the deficit, and expand government. But the trillion-plus dollar deficit facing us today is nothing compared to what will occur if Sen. Obama is elected and the Democrats have a super-majority in Congress. Rep. Franks made that abundantly clear in his interview on CNBC the other day (see my posting of two days ago for the video). He wants to take actions that will immediately increase deficit spending pushing us into the multi-trillion dollar range. He also strongly implied that this spending will be only partially offset by, you guessed it, higher taxes at increasingly lower brackets. We have had a relatively long period of growth in this country precisely by ridding ourselves of regressive taxation and spending schemes. Now we face the spending proposals of Sen. Obama and Congressional leaders, and it's clear that these increases can not be accomplished without dramatically increasing taxes within the middle-class brackets as well as the 5% proposed. Additionally, why should we be punishing those 5%. Shouldn't we make it easier for them to create jobs and wealth?
Neal Boortz made an excellent case in his article on RCP today for avoiding such 'tax-and-spend' policies, particularly when we're in a nasty recession. They destroy wealth, rather than create it, and they create a culture of dependency. Policies such as these are a disincentive to work, expansion, and investment. Sadly, the well-noted biases of the wider media make it difficult to get this message out. People are hurting. I have friends and family facing job and housing losses. These are painful times for many. But, pain is not a reason to shoot ourselves in the national head. Rather, we should be looking for national policies that allow for greater opportunity, wealth and job creation. The government should have the fiscal policies and discipline to create the environment, not manage the process. Finally, the government should not be burdening my future grandchildren with debt from welfare passed out today in the interest of buying an election and sewing up power. That's just not the hope we need.
I'm a happy fiscal conservative - I strongly oppose what Pres. Bush and the former Republican Congress did to balloon the deficit, and expand government. But the trillion-plus dollar deficit facing us today is nothing compared to what will occur if Sen. Obama is elected and the Democrats have a super-majority in Congress. Rep. Franks made that abundantly clear in his interview on CNBC the other day (see my posting of two days ago for the video). He wants to take actions that will immediately increase deficit spending pushing us into the multi-trillion dollar range. He also strongly implied that this spending will be only partially offset by, you guessed it, higher taxes at increasingly lower brackets. We have had a relatively long period of growth in this country precisely by ridding ourselves of regressive taxation and spending schemes. Now we face the spending proposals of Sen. Obama and Congressional leaders, and it's clear that these increases can not be accomplished without dramatically increasing taxes within the middle-class brackets as well as the 5% proposed. Additionally, why should we be punishing those 5%. Shouldn't we make it easier for them to create jobs and wealth?
Neal Boortz made an excellent case in his article on RCP today for avoiding such 'tax-and-spend' policies, particularly when we're in a nasty recession. They destroy wealth, rather than create it, and they create a culture of dependency. Policies such as these are a disincentive to work, expansion, and investment. Sadly, the well-noted biases of the wider media make it difficult to get this message out. People are hurting. I have friends and family facing job and housing losses. These are painful times for many. But, pain is not a reason to shoot ourselves in the national head. Rather, we should be looking for national policies that allow for greater opportunity, wealth and job creation. The government should have the fiscal policies and discipline to create the environment, not manage the process. Finally, the government should not be burdening my future grandchildren with debt from welfare passed out today in the interest of buying an election and sewing up power. That's just not the hope we need.
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