RAHN: Obama has no Plan B – Washington Times

RAHN: Obama has no Plan B – Washington Times.

Budget fantasy won’t help us cope with coming fiscal disaster

By Richard W. Rahn – The Washington Times

President Obama has just presented his new budget, which again ignores reality. It contains another trillion-dollar deficit, which assumes a large increase in revenue resulting from a tax-rate increase on “the wealthy” and corporations. He knows, and so does everyone else, that Congress is not going to pass the tax increase. Even if it did, the projected revenues would not be forthcoming because the “wealthy” people would change their behavior and find other ways to obtain income, and economic growth would decline, costing tax revenue. Corporate taxes are paid by consumers in higher prices and by workers in lower wages – so much for the promise not to increase taxes on those making less than $250,000. Every good tax economist knows this, but the president chooses to ignore reality and demagogue the issue.

Even more disturbing is the lack of discussion about a contingency plan if his projected economic scenario does not work out – and the probabilities are that it will not work out. The reality is that the United States and most other governments, particularly the Europeans, have reached or are close to reaching the limits of their ability to tax and borrow. This situation means there is going to have to be either massive cutbacks in government spending or very high inflation.

Everyone knows that if an individual or a business takes on too much debt, the interest payments on the debt eventually will crowd out all other spending unless one radically cuts spending or declares bankruptcy. Governments differ. The ones that print their own money, such as the United States, usually resort to inflation as a way to reduce the real value of government payments and the real value of the debt, leaving bondholders holding the bag. Governments that do not print their own money, such as Greece, California and Illinois, are forced to cut spending radically – whether they want to or not – or default on their debt, unless some other government or international agency chooses to bail them out.

The United States has been able to get away with greater-than-trillion-dollar deficits per year and a big increase in the ratio of gross domestic product to debt because the U.S., even though it’s in great fiscal trouble, is not as bad off as many European countries and others, so money still comes into this country. Also, the United States has been able to keep its debt-service interest payments low because the Federal Reserve has been buying the debt and now is the single biggest holder of the U.S. government debt. The Fed injects cash into the economy to pay for the government bonds it buys, which normally would result in higher inflation rates. But the banks, financial institutions and others have been increasing their cash balances (absorbing the Fed cash), in part because the government increased reserve requirements and there are so few low-risk lending opportunities.

However, this game has limits. At some point – next month, in six months or next year – the private economic players will stop hoarding cash and inflation will break out, or there will be a massive cut in government spending to reduce government borrowing.

Think about the following scenario. A war erupts involving Iran, most Iranian oil shipments cease, and shipping in the Persian Gulf is disrupted. As a result, oil prices soar, driving up the cost of almost everything. With the spike in inflation, bondholders refuse to lend at close-to-zero interest rates. The cost of financing government debt then also soars, and the government is forced either to reduce spending greatly or to print dollars (greatly reducing their value and making everyone poorer).

One can construct many scenarios that would trigger the fiscal crisis. With the high probability of a crisis, a prudent person, business or government would have a contingency plan in place to deal with the disaster when it comes. The Obama administration apparently has no contingency plan, other than wishful thinking. At the moment, almost 40 percent of federal spending is financed with debt. When the crisis comes, new low-cost debt cannot be sold and, because of the hit to the economy, tax revenues will fall. The federal government may then be forced to cut spending in half in real terms (either through explicit budget cuts or through inflation).

Almost two-thirds of government spending ($2.1 trillion) goes to Social Security, Medicare, Medicaid, food stamps, unemployment insurance and other income transfers. The other third of government spending ($1.3 trillion) is considered discretionary (in fact, it is all discretionary) and more than half of this is for defense-related items.

Business executives often are faced with having to make drastic cuts in the size of their operations – because of changes in technologies or markets – in order to preserve and rebuild the company. Good executives have contingency plans that include keeping only the most vital parts of the business and getting rid of the stuff that is not contributing to profit. Politicians and government executives often attempt to avoid hard choices – the new Obama budget being Exhibit 1. A fiscal contingency plan is needed now to avoid additional pain from the coming economic disaster.

Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

EDITORIAL: Spend more – or we’ll riot – Washington Times

EDITORIAL: Spend more – or we’ll riot – Washington Times.

Leftists peddle Big Government as the cure for political instability

Liberals want you to believe the cure for civil unrest throughout the world is increased government expenditures. Whether it’s the takeover of the capital building in Madison, Wisc., or the riots in the streets of Athens and London, the message is that any attempt at cutting back on government excess will spark a violent response.

Last week, for example, Harriet Harman, the Labour Party’s deputy leader, sneakily attempted to pin the blame for looting in the British capital on conservative policies. “There is a sense that young people feel they’re not being listened to,” she said on BBC’s “Newsnight.” “When you’ve got the trebling of tuition fees, they should think again about that. When you’ve got the (Education Maintenance Allowance) being taken away, when you’ve got jobs being cut and youth unemployment rising and they’re shutting the job center in Camberwell – well, you should think again about that because this is going to cost money.” Ms. Harman backed down somewhat after a Conservative cabinet member questioned how reduced spending on government programs justified people smashing the windows of a Foot Locker to grab a box of new sneakers or raiding an electronics store for a plasma TV.

A study published Thursday by London’s Centre for Economic Policy Research attempted to discern the link between central government outlays and the number of strikes, demonstrations and assassinations. The researchers did find a substantial connection between instability and fiscal consolidation, but that, “There are relatively few protests that are caused by austerity measures.” Between 1980 and 1995, one would be almost five times more likely to be injured at a pro-pacifism rally than an anti-austerity rally, for example.

England’s recent unrest is better seen as the ultimate expression of what happens when a value-free leftist society collapses on itself. As London Mayor Boris Johnson noted, 69 percent of the hooligans arrested in the riots had prior convictions. Mr. Johnson, a Tory, blamed the society and educational system that “failed to give them discipline, or hope, or ambition, or a simple ability to tell right from wrong.” Britain’s unarmed storekeepers had no way to defend their shops, and the police were too busy attending diversity workshops to crack down on the criminal behavior.

Such disasters are not the consequence of a government cutting back on spending, but of a soft government that has grown too big for anyone’s good.

Obama’s New Spending Proposal: An Infrastructure Slush Fund – Lurita Doan – Townhall Conservative

Obama’s New Spending Proposal: An Infrastructure Slush Fund – Lurita Doan – Townhall Conservative.

With the U.S. economy in disarray, it is becoming increasingly obvious that Team Obama has no new ideas to help spark economic growth. The various rounds of stimulus had little positive effect and left the nation with an additional $5 trillion in debt. So, it should come as no surprise that the president’s “best” idea is another round of “infrastructure spending”. Here we go again.

Obama’s latest, pathetic prattling about infrastructure and a third (or fourth by my count) stimulus shows that Obama has learned nothing during his thirty months in office. Only recently, Obama admitted he had learned the painful lesson that many of the proposed “shovel ready” projects weren’t shovel ready.

Obama seemed to understand that the $787 billion dollar stimulus bill that he had pushed with wild conviction did not have the intended impact. Unemployment rates have remained high. While small and mid- sized construction firms never experienced the promised building boom, but, instead, went out of business or were forced to cut additional workers. In short, Obama’s plan failed.

Yet, a scant two months later, Obama is spouting the same gibberish, the same hollow promises and the same band-aid solutions to our nation’s economic problems. Obama’s latest attempt, at re-gifting the American people with tempting platitudes of infrastructure spending as a way to create jobs, comes with a new twist. Democrats in congress are offering American businesses with an international presence a chance to repatriate their overseas profits without confiscatory taxes.

Obama is now proposing to allow some of our most successful American companies repatriate profits earned overseas without forcing them to pay double taxes. It is a lot of money too, somewhere between $800 billion and 1 trillion. But here is the catch. Team Obama wants all of that money deposited into an Infrastructure Fund.

First, let’s call the “infrastructure account” what it is—a slush fund for Democrat spending, a personal piggy bank for politicians to dole out largesse to favorites. Top Obama priorities are old standby Democrat hobbyhorses such as green energy, high speed rail and wind farms.

Obama hopes that few will remember what happened with the $787 billion in stimulus that had similar goals. Those taxpayer dollars funded a whole slate of dubious pet projects such as the “Save the Harvest Marsh Mouse” in Pelosi’s district, as well construction of tennis courts and water parks.

Does anyone have any doubts that a new slush fund might be squandered in a similar fashion?

The proposal to create an Infrastructure Fund reveals all too clearly that President Obama has learned nothing from his last, failed effort. More taxpayer dollars is not what is needed to get infrastructure projects going and create a building boom in the United States. What is needed is regulatory reform.

At any time, should he desire, President Obama could unleash a building boom across the nation that would create millions of jobs and spark genuine economic growth. All Obama need do is roll back the thicket of burdensome regulations and stifling bureaucracy that has tangled federal construction efforts.

More often than not, it’s regulatory issues that restrict and delay construction and repairs of badly needed infrastructure across the country.

Power and electricity-generating plants that could be built quickly and with the latest technology remain on the drawing boards because of an inability to successfully navigate the maze of regulatory requirements.

Ditto oil wells and refineries. In fact, much to the dismay of anyone advocating the construction of new infrastructure, building projects routinely require years of regulatory review before construction can ever begin.

Small and mid-sized construction companies with the skills and idle workers that could be used to build new roads, repair bridges, expand ports, and erect new government buildings, face additional regulatory burdens, such as the archaic Davis-Bacon Act. This legislative monstrosity was first passed in 1931 with the goal of preventing blacks and other minorities from working on construction projects.

Unfortunately, the Davis Bacon Act has been fully embraced by Democrats and Team Obama as a fail-safe scheme to reward union supporters by requiring union participation in all governmental projects. This results in ballooning costs, to the tune of some $1 billion a year, while small and mid-sized companies are frozen out.

Davis-Bacon is just one of many regulatory issues that hinder honest infrastructure development.

Currently, it takes the government an average of 7 years to construct a new federal building. EPA requirements and environmental concerns have morphed into an array of stupidity that slows construction without considering costs and benefits in proportion to the environmental issue.

Federal construction projects, such as federal office buildings, federal court houses and land border ports of entry are ways to create jobs in local communities throughout the United States, since most of these types of projects would utilize local labor, local, skilled craftsmen and local, licensed construction professionals, many of whom are small and minority businesses.

These projects don’t need more money; they need more understanding of the federal construction process and its bottlenecks, as well as leadership willing to remove those bottlenecks. Most Americans are commonsense, practical people who understand legitimate oversight and regulatory reviews to safeguard our wildlife and environment. But that regulatory system has gotten wildly out of control and is now one of the core problems preventing the construction of badly needed infrastructure.

President Obama could, with the sweep of a pen, order regulatory relief. He would also find kindred spirits in congress to, once and for all, eliminate problematic barriers to construction such as the Davis-Bacon Act. Put another way, it is within the President’s power to create a real building boom and put thousands of small and mid-sized construction firms back to work.

But don’t hold your breath. Either Obama doesn’t know how, or does not want, to put millions of workers in small and mid-sized companies back to work in America. Instead, Team Obama plans to resurrect the “shovel ready” zombie.

Baseline Bamboozle – Tea Party Nation

Baseline Bamboozle – Tea Party Nation.

Posted by Charlie Earl

For several years I was an umpire for baseball and softball games. We had two clearly defined baselines and two more subjectively defined base paths. To compound the issue, the foul line is in reality a fair line. So, let’s discuss government and clarity of language regarding the term “baseline.” A baseline as defined by the federal government is not as firm or as permanent as a 3” line of white chalk that runs from home plate to first base or from third base to home plate. The government’s baseline is repositioned every year, and, on occasion, is moved more than once per year.

Our inspired leaders of the federal government have apparently determined that the budgeting process is too difficult and acrimonious. To expedite the process they have implemented the baseline budgeting system wherein each item in the budget automatically qualifies for a nearly 8% increase from the previous year. Through the magic of compounding, a simple annual increase of 8% will result in a given line item appropriation nearly doubling after 10 years. This increase continues without regard for the efficacy or necessity of the program. Baseline budgeting is the fiscal version of the “In-laws from Hell” who come to your peaceful home to visit but refuse to leave. In baseline budgeting terms the words “merit and value” are alien concepts. Since the “Control Act of 1974” our elected public officials have allowed this fiscally irresponsible and politically unaccountable method of budgeting drive our nation toward the cliff of financial and economic disaster.

Clearly thirty-seven years of a failed mechanism that is unresponsive to economic conditions or to actual requirements for government sustainability is long enough. The GOP House majority should make baseline budgeting a sensible target for elimination…..not tweaking, eliminating. If an agency, program or department cannot justify and detail budget items on an annual basis, they do not warrant any funding….let alone an automatic 8% increase. If the Members of Congress believe that requiring justification for every agency or program would be too time consuming for the budgeting process, then obviously the government and the budget are too large. No one, I repeat, no one….no Corporation, no household has the benefit of an “automatic pilot” annual increase in funding. To the contrary most of our citizens and companies must struggle year after year in an unfriendly taxation environment and coping with an overburdening regulatory situation. Government should not ever enjoy an imperial status that far exceeds the circumstances of the people.

The baseline budgeting system immunizes government and government beneficiaries from all of the many intervening disruptions those of us in the private sector regularly encounter. It creates an artificial justification for additional and usually excessive government spending. An historical and efficiency analysis of many government programs or agencies would discover that their effectiveness and usefulness are of minimal value. Yet…the money train continues running as their budgets escalate with no consideration of the programs’ value or need. That’s no way to run a railroad, but our elected officials are too lazy and uninspired to thoughtfully examine each line item and appropriation, so they set them on automatic pilot. Most of us are either personally or anecdotally familiar with the public agency that scrambles to spend its excess at the end of a budget cycle in order to qualify for the increased funding of the next budget. Those types of fiscal and mental gymnastics are a direct result of the baseline budgeting madness.  Thus, the two primary motivations for implementing such a stupid and irresponsible system are: cowardly politicians and big-government advocates…..neither of which serve the best interests of the nation, our fiscal security or individual freedom. In essence, the baseline budgeting system guarantees that the cost and size of government will routinely grow without any justification….feeble or valid.

There are thirteen congressional committees that deal with various appropriations throughout the federal government. The chairs of those august committees are euphemistically described as the “Cardinals” because of their power to impact our lives through the appropriations process. It seems however, that they are opposed to reducing expenditures and budgets because their power may be diminished. Baseline budgeting has given the “Cardinals” the cover to allow for automatic increases in spending and power, and it also offers the flexibility to insert individual expenditures to bolster the reelection chances for members (baseline plus pork). The additional targeted expenditures merge into the baseline to ratchet the base upward for the next budgetary cycle. The pork spending is added to the automatic increases to form a new “minimum” for the following budget. But that’s not all…..

President Obama’s politically-laden stimulus spending was dispersed through various departments and agencies. In every case the additional funding through borrowed stimulus funds increased the baseline for the affected department, agency or program. In effect, our excessive indebted spending has been radically increased with no inherent mechanism for reducing it. Fiscally, this is a tragic and deadly consequence of Washington’s spending addiction, but even more troubling is the failure of the GOP House to address this travesty. They promised to repeal ObamaCare, and they have not. They haven’t even attempted to defund it. All of the facets of the Healthcare monstrosity are integrated into the baseline budgeting system. Also, we have not heard anyone from Congressional leadership suggest that the budget-busting 1974 Act should be repealed. Why not? Are they contented with this system and the growing power over our lives that it promotes?

Bottom line: If the GOP House leadership were absolutely serious about reining in our spending explosion, they would seek to repeal The Control Act of 1974 and defund Obamacare and other budget-busting programs, agencies and departments. The power of the purse should be used to change the direction of our country….not on a glide path, but with a “180” directional shift. Government bureaucracies should be put on notice that the gravy train has been sidetracked, and the Constitution of the United States is the new sheriff in town. Duty calls, Congress, please stop ducking your responsibility.

Tea Party Terrorists – Cal Thomas – Townhall Conservative

Vice President Joe Biden L'68

Is your Village Idiot Missing??

Tea Party Terrorists – Cal Thomas – Townhall Conservative.

According to the website Politico, Vice President Joe Biden agreed “with a line of argument made by Rep. Mike Doyle (D-Pa.) at a two-hour, closed-door Democratic Caucus meeting” that congressional tea party members “acted like terrorists” in the way they stood against attempts to raise taxes and force spending reductions as part of the debt-ceiling deal.

Biden denied making the comparison. Given the heated rhetoric behind and in front of the scenes, the use of such a phrase, particularly in light of Biden’s known salty language, has credibility.

Apparently tea party critics are constitutional illiterates. The Preamble to the U.S. Constitution begins, “We the people.” Rights come from God, not politicians who think they are God. We grant power to our leaders to serve us. We are not their slaves.

The arrogance in the reported slander by Biden and Doyle is what voters hate most about many politicians. They see them as out of touch and unwilling to face challenges average citizens must confront when it comes to their personal budgets and behavior.

It is not tea party people who are the “terrorists.” A terrorist seeks to destroy. Who is the real destroyer in the debt-ceiling debate? Who wants to continue spending money we don’t have, borrowing it from nations like China that would be happy to destroy us if our politicians don’t do it first? Tea party people simply want to make their government accountable again and for this they are called “terrorists”?

Senate Minority Leader Mitch McConnell acknowledged there would not have been a deal in which taxes are not raised and spending curtailed had it not been for tea party members. He is right. Asking career politicians not to spend other people’s money is like asking Lady Gaga to sing from the Great American Songbook, dressed in conservative clothing. For her, that would be an unnatural act. What we are witnessing in America is a re-awakening to the idea that the people own the power and do not have to sit idly by while the country they love and often sacrifice for is torn apart by irresponsible political leaders who wouldn’t have their jobs if the rest of us weren’t paying their salaries and benefits. The debt-ceiling debate showed that more people are demanding their government live within our means. WE ARE TIRED OF SPENDING MONEY WE DON’T HAVE ON THINGS WE DON’T NEED.

Instead of hacking away at defense, should this “bipartisan commission” not reach the bill’s spending targets, how about closing the DEPARTMENT OF EDUCATION, which does not educate, the DEPARTMENT OF ENERGY, which produces no energy, and the DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, which builds no homes?

Far from being a spent force, as many predicted, individual citizens are rediscovering a power many may have thought they no longer possessed. Heading into the 2012 election, this renewed sense that the power to make or break a nation does not reside in Washington, but rather in the hearts and minds of its citizens, will add to a sense of hope that real change is about to happen.

While tea party critics are re-reading the Constitution, they should also consult the Declaration of Independence. That philosophical foundation of the Constitution reserves the right of the people to change their government when it no longer serves the interests of its citizens. The Declaration outlined the proper relationship between government and citizens, noting that government derives its “just powers from the consent of the governed” (and) “whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

The British no doubt considered those who wrote and believed such things “terrorists.” We call them patriots. And those patriots just might force the vice president and his boss out of a job next November. That is their right. They have it in their power.

(Direct all MAIL for Cal Thomas to: Tribune Media Services, 2225 Kenmore Ave., Suite 114, Buffalo, N.Y. 14207. Readers may also e-mail Cal Thomas at tmseditors@tribune.com.

It’s Now or Never – Ken Connor – Townhall Conservative

It’s Now or Never – Ken Connor – Townhall Conservative.

Another week has come and gone, and our government still cannot agree on a plan for addressing America’s impending financial disaster. Each day, Wall Street and Main Street draw closer to the brink while the Poobahs on the Potomac concern themselves with political angles and public relations strategies. To say we are witnessing politics as usual is an understatement. What is occurring in Washington today is politics on steroids. The fact that our representatives have allowed the country’s financial situation to deteriorate to this point is a testament to how out of touch with reality they are. Even now they seem to be operating under the deluded assumption that there is a painless path out of the financial quagmire America has gotten itself into.

We are in for a rude awakening.

Truth be told, it will be impossible to undo the damage that’s been done to our government, our economy, and our culture without significant sacrifice, prolonged hardship, and a radical attitude adjustment. For too long we have plowed along with the casual arrogance of a spoiled teenager – oblivious to our worsening condition, devoid of discipline, and utterly self-centered. We’ve suffered from a woeful inability to take the long view, preferring immediate satisfaction to delayed gratification, the fate of future generations be damned.

For us, just like for that teenager, it is inevitable that our insular universe will one day be shattered by the hard cold facts of reality. For many, that day has already come. The unemployment rate continues to hover at historic highs, many areas of the economy remain sluggish, and confidence in the U.S. dollar continues to weaken. If we don’t get serious about our debt and deficit – and get serious NOW – there will be financial hell to pay. In many ways it is already too late. Hell is on the horizon and there can be no avoiding serious discomfort all the way around. At least, however, we are still at the point where we have the liberty to decide how we want to bite the bullet. Delay much longer and we run the danger of hitting the bottom so hard that recovery becomes impossible.

Dan Balz of the Washington Post gives President Obama some credit for taking both sides to task for their rigidity in the face of looming disaster. To fiscal conservatives, Obama insists that tax hikes must be part of any compromise. To liberals, he stresses the need to trim entitlement fat or run the risk of systemic program collapse. The President argues that in light of the fact that we have a divided government, some measure of compromise on taxes is critical to securing aggressive cuts in spending. There is no way, he maintains, that Senate Democrats will support a bill that does not include tax hikes on the wealthiest Americans.

The Democrats fixation with taxes notwithstanding, our current economic woes do not stem from the fact that Americans are not taxed sufficiently. We do not have a taxing problem, we have a spending problem. The root of our current economic woes is that we have been unwilling to live within our means. That is true for government and it is true for individuals. We have wanted it all and we have wanted it now – whether we could afford it or not! To get it all, we have been willing to plunge into debt, mortgaging our future and the future of our children and their children. We have been in denial that our account would one day come due. Now our financial chickens are coming home to roost.

In pushing for tax hikes, Democrats seek to undermine the need for meaningful spending cuts and the adverse political consequences that would inevitably result. If we can generate new sources of revenue, they maintain, it will not be necessary to cut government spending as dramatically as would otherwise be required. That is undoubtedly true, but spending cuts are what we need. And in the current environment, nothing will quench the prospects of a financial turnaround quicker than taking more money out of the pockets of the American people. If we are to recover our financial footing, it will come by instituting fiscal discipline, tightening our belts and curbing spending. More taxes will not yield the desired result.

The time for political posturing and half-measures is over. The cancer has metastasized. We need radiation, chemo, and surgery. Unless we are willing to pursue a radical course of treatment we can kiss the American dream of yesteryear goodbye.

Budget Lies and Distortions – Bruce Bialosky – Townhall Conservative

President Obama talks alone with Senate Majori...

Image via Wikipedia

Budget Lies and Distortions – Bruce Bialosky – Townhall Conservative.

It’s amazing how often an absurd idea becomes an article of faith among Democrats, who then – with the help of their puppets in the media – repeat it over and over again. Not too long ago, seemingly intelligent adults believed that playing dodge ball at elementary school was the causing undo harm to the psyche of American youth. Today’s nightmare – and if you believe our President, the reason for the budget imbalance – is corporate jets. Obama has become so fixated on the subject that he mentioned it six times – yes, six times! – in one press conference.

The President seems to have a short memory. In 1991, George H.W. Bush mistakenly agreed to a 10% luxury tax on autos, furs, boats, and jewelry. The tax brought in almost no revenue while destroying thousands of good manufacturing jobs, including 480 well-paid positions at the Beech Aircraft Company. The tax, which some propeller-head economists projected would collect $6 million every year, actually brought in the princely sum of $53,000. Fortunately, a wiser Congress repealed the tax shortly thereafter.

President Obama and his over-educated cronies think that potential jet buyers will behave in the same manner after the depreciation schedule for these non-commercial jets is revised. That is never true. This change will bring in nowhere near the $3 billion over ten years that its proponents claim. The supporters of this ludicrous proposal never once considered the revenue lost as a result of decreased economic activity, the (predictable) reduction in manufacturing and service jobs in the airline industry, and higher costs for unemployed workers.

Then there’s the budgetary practice of projecting revenues for ten years, which leads many people to speculate whether they have Sister Anasztazia and her Ouija Board locked in a basement somewhere. These people really think we should fall for this fantasy – as if anyone knows what economic conditions will be like ten years from now. After all, Congress has this bad habit of changing tax laws and budget priorities every year, so what good are these ten- year projections anyway? The federal government rarely even get one-year budgets accurate! This could be vastly improved if the government adopted zero-based budgeting, in which every agency and department starts from zero each year. Right now, it’s “We spent $10 billion last year, so give us $11 billion this year. Don’t worry, we’ll spend it responsibly.”

There’s been some talk of changing to two-year budget cycles. Democrats in the Senate, led by the always dependable Harry Reid, clearly endorse this idea, seeing as they haven’t even submitted a budget for over two years. They probably really like the CBO’s (Congressional Budget Office) projections, which go out 35 years. Hopefully, we’ll be retired by then, even though we’ll all be paying for these ridiculous deficits for the rest of our lives. Maybe even longer than that – this tends to dampen one’s desire for reincarnation.

But I digress. Our President still hasn’t identified any specific cuts in expenditures, claiming only that we need increased revenues as part of a balanced approach to a budget resolution. He has perfected the art of keeping a sober face while delivering the same tired liberal nonsense about all the imminent anguish for babies, puppies, college students, grandmas, disabled children, aardvarks and a myriad of other helpless creatures if “The Rich,” Hedge Fund operators, corporate jet flyers, and Oil Barons don’t pony up more money.

Obama’s goal is not to increase economic growth, like the Bush Administration did from 2003-2006, when federal revenues shot up $750 billion even while tax rates were lowered. What Obama wants is a permanent expansion of government. With the help of Reid and Nancy Pelosi, he has overseen an explosion in federal spending. And now what he craves are new taxes to pay for everything, all the while warning of impending doom if any government program – no matter how pointless or inconsequential – is reduced or, God forbid, eliminated. Only because the public is so agitated about the tremendous deficits is Obama even suggesting $3 expenditure reductions for every $1 of additional revenue.

Let’s hypothetically say that Republicans agree to Obama’s 3-to-1 ratio (unlikely as that may be), and that they decide to cut the $1.5 trillion deficit by $600 billion next year. Under this proposal, the federal government would take $150 billion in additional taxes out of the private sector (accompanied by $450 billion in spending cuts) to reduce the deficit by $600 billion. Now seriously, do any of you really believe that $150 billion would be better spent by the federal government than by individual Americans? Is there anyone – other than perhaps Paul Krugman – who believes that having Obama and his cronies squander this money would be better for the economy than having it spent or invested by private citizens? But more to the point, does anybody still believe that if the government imposes new taxes that will supposedly bring in $150 billion, people will not alter their behavior in response, resulting in revenue far short of what was projected?

In addition let us focus on the new in vogue term – tax expenditure. THERE IS NO SUCH THING AS A TAX EXPENDITURE. The person who came up with this odious term should be shackled in the town square and flogged for their manipulation of the English language and the development of this pathetic term. In its essence it means that all monies belong to the government and any means by which it ends up in your hands is a gift from the anointed.

Then there’s the issue of borrowed money. A good chunk of our debt is owned by the Chinese, but actually more is owned by U.S. citizens. When so much debt is issued to cover federal deficits, capital markets that finance private industry become squeezed, and businesses can no longer grow (nor hire new employees). Liberals just don’t understand that using debt to finance their cherished programs cripples growth in the private sector, and ultimately reduces the tax revenue needed to pay for these programs.

For the first time in many, many years, we have elected public officials standing up at the federal and state level and telling us the truth: we cannot have our cake and eat it too.

People like Paul Ryan, Scott Walker, Chris Christie, and even the mayor of Atlanta, Kasim Reed, have put their necks out and told people that we cannot continue this pattern of debt and overspending. Many other Americans are emboldened by the courage and honesty of these men. Every responsible citizen hopes that their message seeps its way into our national principles before it’s too late.

Regrettably, there are still people like President Obama, Harry Reid, and Chuck Schumer who prefer to use fear to maintain the status quo. Now is the time for the grown-ups to stand tall and firm, and not be swayed by demagoguery. Victory is in sight for the American people – let us march forward together and slay the deficit dragon.

Government Spending: The Black Hole of the Economy (via Rogue Operator)

Government Spending: The Black Hole of the Economy During America’s Independence Day weekend, the Obama administration slipped a firecracker into the public tailpipe and set off for multiple rounds of golf and posh backyard barbecues with all the fixin’s.  As American citizens glumly contemplated their economic futures over styrofoam plates of store-bought hot dogs and potato salad, the word has been leaked that Obama’s “stimulus” cost taxpayers around $278,000 per job.  At an astronomical price- … Read More

via Rogue Operator