Michael Barone makes a great point in his Washington Examiner blog post with respect to the on-going debt ceiling arguments. The real issue is: What is the appropriate size of the national government.
Politics
The “eat our peas” President
Why is the mainstream media trying to portray the person who drove the train off the rails as the savior? Whether you watch MSNBC, read the blogs of the Washington Post or CBS News, they are trying to help the White House position the President as trying to save us from this problem.
The President and his policies have created the economic circumstances we have. Remember, he and his fellow Democrats have not submitted a budget in two years so as to not to suffer politically from their actual policy goals. The Democrats continue operating under continuing resolutions in abrogation of their Constitutional responsibilities.
The mainstream media figures are calling Republicans terrorists or suicide bombers as they show their ignorance on economic matters and attempt to incite violence. Remember, liberals always say the words can cause people to react and act out. Remember the rhetoric after the Gifford’s shooting? Remember the Democrat’s and their mainstream media sycophants saying we need to be civil? Well, how is this incendiary language civil?
The keys to remember in the whole debate are as follows:
- Talking about saving money over ten years really means saving nothing today.
- Raising tax rates does not guarantee increases in revenue thereby reducing the deficit assuming spending remains at the same level. The projected revenue increases are fiction and should not be counted until realized.
- Spending cuts do guarantee reduced deficits assuming all other spending remains constant.
- There is enough revenue coming into the Treasury today to service the debt and stave off a default. Claiming otherwise is lying and an attempt to use they same tactic they used to create panic and pass Obama’s other spending programs.
Remember how TARP, QE 1, QE 2 and the other spending programs were passed? It was said that if we don’t do this, all will implode. Well, they’re trying the same here. Don’t believe them because they’re lying again. If they don’t pass the debt ceiling increase what will happen? Well, spending will have to be cut automatically so as to allow room to service the debt and repay the debt coming due. Perhaps, this is all a ploy to have this automatic spending cuts happen so as to get the fiscal house in order without actually having to vote on it in an attempt to provide political cover to the Democrats and allow the Democrats can blame the Republicans for this.
Note to Republicans: If there is ever time to take one for the team, it is now. You will be rewarded for standing firm. Let the cuts begin.
Spending Cuts vs. Tax Increases
The media is playing up the current debt cieling debate with the Dems and their media sycophants claim that you need to increase taxes to solve the problem. Well, let’s look at the two extremes of the argument.
As is quoted on a lefty blog Alternet, the net worth of the 400 wealthiest citizens was estimated to be $1.57 trillion. This would lead to a ONE TIME inflow to the Treasury of $1.57 trillion. The 2009 budget deficit was $1.4 trillion. This means that after barely covering the deficit for one year, the income taxes paid by these individuals would be $0 from that point forward. This would reduce the Treasury’s receipts increasing the deficit after year one.
Compare this to spending. If you did not spend anything, then current tax revenues coming into the Treasury was approximately $2.5 trillion which would be used to pay down the debt already incurred.
Obviously, by measuring the problem at the two extremes to determine where the problem is, we have a spending problem, because income is what it will be. There is very little control the government has over how much it will receive in taxes in any one year. There are many varilables that go into the equation. Spending is something that can be controlled.
Easy solution, we should limit spending in any year to the prior year’s tax receipts.
Obama Intentionally Destroying America
Say what you will, but the President has been true to to campaign promises. The problem is, many of those nieve voters who did vote for him thought his promise to change America was something positive. I guess it really depends on your view of what is good for America. If you view
- systemically higher unemployment,
- lower wages and wage growth,
- higher costs of energy,
- higher food costs,
- higher costs of imports due to the deprciating dollar, and
- reduced standard of living for your children and grandchildren
then you should love what Obama’s policies have done. The latest example is the new EPA regulations which we’ll discuss in detail in a later post.
If you recall, during his campaign, he promised to bankrupt the coal industry and raise the cost of everyone’s electricity. As the price of gasoline spiked, he said he didn’t have a problem with the price being over $4.00 per gallon only at that the price spike happened so quickly. Now, he has put into place regulations that will definately raise the price of electricity, which will raise the price of every good, service and product made in the U.S. I think this will further
So, those of you who voted for Obama, I hope you like the change you have put us through. As for me, I’m looking to head back to reality instead of the false land of liberalism that has been tried.
Walter Williams Hits A Home Run
Once again, Walter Williams’Examiner column highlights the ignorance of those in the media and the elistists. It is a must read for everyone.
Why do citizens let those in DC and the media influence their opinion?
Solvency v. Liquidity
Michael Barone has an article in which he articulates a belief I have long held: We weren’t as rich as we thought we were prior to the current depression. The government tried all the tricks in the playbook to reinflate the bubble, the the good old market would have none of that. I submit that had we not tried all of those old tricks and just let the market fix the problems, we would be in a better position today and not another $5 trillion in debt.
We don’t have a liquidity problem. We have a solvency problem. Until the balance sheets of consumers and the federal/state/local governments get trued up, we won’t get out of this mess. Sellling this solution is difficult, especially with the economic illiterates on the Left and their voting block.
Obama gets bin Laden
News reports have it that Obama authorized a strike against the compound where it was believed that bin Laden was hiding. If the reports turn out to be true, then hats off to Obama for making the call to strike and continuing the hunt for Osama.
Hey, since I agree with Obama on this matter, am I no longer a racist?
Well alrighty
The messiah finally released his long-form birth certificate. So, why wait so long?
Barach Bush
I always find it amusing in politics that those so vo’ciferously opposed to the policies of the then current administration often make those same choices when faced with similar circumstances.
The only difference is that Bush actually consulted with Congress.
Where’s all the outrage?
Too Many Laws & Regulations
Glenn Reynolds has a great Op-Ed in today’s Washington Examiner. His premise is that if you need a lawyer to figure out how to operate in a country’s economic environment, in all likelihood, the country will have limited economic upside. He cites Greece and the number of lawyers per capita and the 19th centry laws still on the books there.
I would extend this further to say this leads to black markets operating outside the legal and tax systems affording the participants therein with no protection from the very laws and regulations of the political establishment. It sets up the classic legal conundrum: how to I get my government/legal system to help me resolve an illegal contract?