by | ARTICLES, ECONOMY, GOVERNMENT, OBAMA, TAX TIPS, TAXES
The Weekly Standard does a great analysis of the growth of food stamps in comparison to the growth of jobs during the Obama Administration. Using FNS, BLS and USDA data, they calculated that food stamp enrollment was 75 times faster than job creation. This visual puts it into perspective:
I have written on this trend before in the last few months; as unemployment has remained high, we recently passed the point where more people have been added to the dependency rolls than payrolls. This has a high impact on our crushing deficit and is directly attributable to Obama’s legacy. The article sums it up:
Welfare spending is projected to remain permanently elevated; for instance, at no point in the next 10 years will fewer than 1 in 9 Americans be on food stamps. In fact, the Administration has actively sought to boost food stamp spending and enrollment, including through a partnership with the Mexican government to advertise benefits to foreign nationals, as well as materials that teach outreach workers how to “overcome the word ‘No.’” USDA even goes so far as to argue that the program is “the most direct stimulus you can get.”
Overall, in the last four years, the United States’ gross federal debt has increased 53 percent, food stamp enrollment has increased 46 percent, and the number of employed persons has increased just 0.15 percent. This picture, however, is even more ominous than it looks. While only 194,000 net jobs have been created since 2009, the working age population has increased by approximately 5 million—almost 25 times that amount. In other words, a shrinking share of working age adults have or are even looking for a job. The real unemployment number (U-6), therefore, is 14.6 percent.
To put this month’s job creation in historical perspective, in October of 1984, 286,000 jobs were created—67 percent more—at a time when the U.S. working age population was 26 percent smaller than it is today.
Over time, these trends, if not reversed, spell economic disaster for the United States and its citizens.
Be sure to read the article in its entirety.
by | ARTICLES, ECONOMY, ELECTIONS, POLITICS, TAXES
Krauthammer does a fine analysis on the importance of this election from a ideological perspective.
The commentary first appeared in the Washington Post on November 1. I have reposted it in its entirety below.
“Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not.” That was Barack Obama in 2008. And he was right. Reagan was an ideological inflection point, ending a 50-year liberal ascendancy and beginning a 30-year conservative ascendancy.
It is common for one party to take control and enact its ideological agenda. Ascendancy, however, occurs only when the opposition inevitably regains power and then proceeds to accept the basic premises of the preceding revolution.
Thus, Republicans railed for 20 years against the New Deal. Yet when they regained the White House in 1953, they kept the New Deal intact.
And when Nixon followed LBJ’s Great Society — liberalism’s second wave — he didn’t repeal it. He actually expanded it. Nixon created the Environmental Protection Agency (EPA), gave teeth to the Equal Employment Opportunity Commission and institutionalized affirmative action — major adornments of contemporary liberalism.
Until Reagan. Ten minutes into his presidency, Reagan declares that “government is not the solution to our problem, government is the problem.” Having thus rhetorically rejected the very premise of the New Deal/Great Society, he sets about attacking its foundations — with radical tax reduction, major deregulation, a frontal challenge to unionism (breaking the air traffic controllers for striking illegally) and an (only partially successful) attempt at restraining government growth.
Reaganism’s ascendancy was confirmed when the other guys came to power and their leader, Bill Clinton, declared (in his 1996 State of the Union address) that “the era of big government is over” — and then abolished welfare, the centerpiece “relief” program of modern liberalism.
In Britain, the same phenomenon: Tony Blair did to Thatcherism what Clinton did to Reaganism. He made it the norm.
Obama’s intention has always been to re-normalize, to reverse ideological course, to be the anti-Reagan — the author of a new liberal ascendancy. Nor did he hide his ambition. In his February 2009 address to Congress he declared his intention to transform America. This was no abstraction. He would do it in three areas: health care, education and energy.
Think about that. Health care is one-sixth of the economy. Education is the future. And energy is the lifeblood of any advanced country — control pricing and production, and you’ve controlled the industrial economy.
And it wasn’t just rhetoric. He enacted liberalism’s holy grail: the nationalization of health care. His $830 billion stimulus, by far the largest spending bill in U.S. history, massively injected government into the free market — lavishing immense amounts of tax dollars on favored companies and industries in a naked display of industrial policy.
And what Obama failed to pass through Congress, he enacted unilaterally by executive action. He could not pass cap-and-trade, but his EPA is killing coal. (No new coal-fired power plant would ever be built.) In 2006, liberals failed legislatively to gut welfare’s work requirement. Obama’s new Health and Human Services rule does that by fiat. Continued in a second term, it would abolish welfare reform as we know it — just as in a second term, natural gas will follow coal, as Obama’s EPA regulates fracking into noncompetitiveness.
Government grows in size and power as the individual shrinks into dependency. Until the tipping point where dependency becomes the new norm — as it is in Europe, where even minor retrenchment of the entitlement state has led to despair and, for the more energetic, rioting.
An Obama second term means that the movement toward European-style social democracy continues, in part by legislation, in part by executive decree. The American experiment — the more individualistic, energetic, innovative, risk-taking model of democratic governance — continues to recede, yielding to the supervised life of the entitlement state.
If Obama loses, however, his presidency becomes a historical parenthesis, a passing interlude of overreaching hyper-liberalism, rejected by a center-right country that is 80 percent nonliberal.
Should they summon the skill and dexterity, Mitt Romney and Paul Ryan could guide the country to the restoration of a more austere and modest government with more restrained entitlements and a more equitable and efficient tax code. Those achievements alone would mark a new trajectory — a return to what Reagan started three decades ago.
Every four years we are told that the coming election is the most important of one’s life. This time it might actually be true. At stake is the relation between citizen and state, the very nature of the American social contract.
letters@charleskrauthammer.com
by | ECONOMY, GOVERNMENT, TAXES
One of the most commonly heard criticisms on the Ryan plan is that even though it will reduce the cost of Medicare to the government and move us more toward solvency, it will increase the amount of medical care that will have to be paid for by seniors.
The answer to this critique is not that they won’t be paying more, but rather, of course they will be paying more. Medicare is going broke, and the reason why is that it is unaffordable in its current form to the government. Paying more by seniors is certain – both by Ryan’s plan but also by doing nothing — because the system right now is almost bankrupt.
Ryan is trying to minimize the extra cost to those 55 and over by modifying how the system is subsidized by the government. The Ryan plan is the best one out there right now because it will allow the seniors to choose the kind of coverage options they want. Democrats try to say that the insurance companies will gouge seniors, but you simply can’t engage in price gouging when there are competing businesses. The people will select the health the coverage they want for their particular needs and ability.
The rational view for the future of health care is that the retiree will want to have choices for medical care, such as choosing a private room or shared, a hip replacement or hobbling a bit. It should be up to the individual if they want a procedure that is more or less invasive, standard or innovative. Having choices drive competition, which will in turn drive down the cost.
The hysteria that costs are going to rise is absurd because, although the Democrats won’t say so, costs will rise regardless of any plan because the system is broken. At least the Ryan plan is an alternative solution to Medicare, which, according the very trustees of Medicare, is completely unsustainable in its present form:
Medicare and Social Security “are on unsustainable paths” and will be insolvent within a few decades, according to the 2012 annual report of trustees of the funds. Since 1970, Medicare trustees have predicted the end is near and then nearer. The program must soon face up to demographic realities: Americans are living longer and fewer workers are paying Medicare and Social Security funds per retired citizen.
And in a letter to the Senate Budget Committee, in fact, the actuary at the Center for Medicare & Medicaid Services proffered a different set of more realistic circumstances—that the trustees themselves are being far too optimistic with their projections. In the actuary’s scenario, wherein we discount next year’s imaginary 30 percent rate cut to doctors and Obamacare’s supernatural ability to hold down costs, there will be an additional $10 trillion unfunded obligation over that 75 years.
Medicare trustees have warned that the program is facing more than $36 trillion in unfunded obligations. There needs to be a major change to the way it works but the Democrats are unwilling to acknowledge this fact or provide any solutions – only attacks. In doing so, the Democrats are really saying that they don’t care if they destroy Medicare.
It is imperative that the Republicans stand by Ryan and continue to hammer home the point that the Democrats have no Medicare plan, just like they have no budget plan (for 1200 days and counting). But by doing nothing and keeping Medicare the way it is, the Democrats will surely hasten the demise of the program within ten years. What will happen to the seniors then?
by | ARTICLES, ECONOMY, POLITICS, TAXES
The Feds are complaining that those experiencing economic difficulties don’t ask for a lot of help from….the government.
The government assistance website, USA.gov, helpfully and cheerfully reminds us that
“Given that only 15 percent of you turn to government assistance in tough times, we want to make sure you know about benefits that could help you,” USA.gov announced today. The ”government made easy’ website has created a “help for difficult financial times” page for people to learn more about the programs.
As if we don’t have enough deficit already.
So, let me get this straight:
The economic downturn has financially burdened millions of Americans
The (government) solution is to seek assistance from the very administsration and policies who have prolonged and stymied our recovery?
by | ARTICLES, ECONOMY, TAXES
I have to give Congress at least a little credit here.
The U.S. Ambassador to the UN, Terry Kramer, announced this week that there is growing momentum worldwide for a “internet tax” of sorts which would affect companies such as Google who do business internationally.
Thankfully, the Hill reports
Democrats and Republicans in the United States are united against proposals to increase international control of the Internet. Congress passed a non-binding resolution earlier this year urging the United States delegation to “promote a global Internet free from government control and preserve and advance the successful multistakeholder model that governs the Internet today.”
This tax would be implemented through the U.N.’s International Telecommunications Union (ITU) authority, thereby expanding its authority over the Internet. A treaty conference scheduled for December is the first likely date during which action could be taken.
Let’s hope that Congress continues to reject any proposal which involves internet taxing and/or UN control over the internet. In fact, let’s get out of the UN all together.
by | ARTICLES, ECONOMY, HYPOCRISY, TAXES
QE3 started this week — $40 billion a month for an unlimited amount of time.
According to Bloomberg, Bernanke said, “We’re looking for ongoing, sustained improvement in the labor market,”. “There’s not a specific number we have in mind. What we’ve seen in the last six months isn’t it.”
So here we have a Federal Reserve who is supposed to be independent. It’s clear instead that the Fed is just doing the bidding of Obama — whose policies have failed to produce the results that the Fed is now trying to now create with another round of quantitative easing.
But support for quantitative easing is just another blatant example of political hypocrisy. The rationale behind quantitative easing – that it spurs investment – is vilified by the Democrat leadership when the same strategy is applied to “tax cuts for the wealthy”.
Bernanke, Geitner, the Fed, and the liberal members of Congress all supported and pushed QE2. They argued that purchasing huge amounts of Treasury securities would reduce long term interest rates. The effect would be stimulative because this action forces the other potential buyers to do something else with their money – invest in higher risk and more economically stimulative activity.
Yet aren’t these the same people who are against tax cuts for the highest-income earners? Their argument is that those higher income earners would not put their tax savings for economic stimulative use. This is simply untrue.
The supporters of quantitative easing praise lower interest rates but not lower tax margins? They laud investment as a key strategy for economic recovery – but only when it is artifically and unconventionally controlled by the government? “The rich” should not be able to invest their own money, but have to give the government more (for them to invest it)? This patent double standard is both calculated and conniving — and it ultimately endangers the economic future of this country.
QE3 just makes the economic situation worse, especially because of its open-endedness. We now face the growing threat of inflation and the fall of the value of the dollar, a cut in our credit rating, and increased federal debt (as if we don’t already have enough). Couple that with our looming tax increases for 2013, and we have both consumers and investors who are uncertain about what to do with their money anymore. . Plain and simple. That hurts, not helps.
More government interference is not the solution to our economic problems.
by | ARTICLES, ECONOMY, POLITICS, TAXES
US Credit Downgraded again on QE3 move: From MarketWatch
“SAN FRANCISCO (MarketWatch) — Egan-Jones Ratings Co. said Friday it downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed’s new round of quantitative easing, or QE3, will hurt the U.S. economy. The ratings agency said the Fed’s plan of buying $40 billion in mortgage-backed securities a month and keeping interest rates near zero does little to raise GDP, reduces the value of the dollar, and raises the price of commodities. “From 2006 to present, the US’s debt to GDP rose from 66% to 104% and will probably rise to 110% a year from today under current circumstances; the annual budget deficit is 8%,” Egan-Jones said in a note. “In comparison, Spain has a debt to GDP of 68.5% and an annual budget deficit of 8.5%.”
by | ECONOMY, GOVERNMENT, HYPOCRISY, TAXES
Over at Red State, Dan Spencer calls attention to the fact that today is a notable day:
“Deficit Day” is the date by which federal tax revenues run dry and the federal government begins adding even more debt on top of our exploding $16 Trillion national debt. This year Deficit Day falls on September 10th.
Two economists, James R. Harrigan & Antony Davies, stress the importance of this observance in their great article:
If lawmakers produced a balanced budget, Deficit Day would occur on December 31st, when the government spent the last dollar of its annual tax receipts at the stroke of midnight on New Year’s Eve. But we haven’t seen a balanced budget since the Eisenhower administration.
Conventional wisdom holds that the Clinton administration ran surpluses. But this is a twisting of the facts. It is true that the debt held by the public-which excludes money the government borrows from the Social Security trust fund-declined by $433 billion from 1997 to 2001. But, over those same years, the government borrowed $827 billion from the Social Security trust fund. In other words, the only way to claim that the Clinton administration ran surpluses is to admit that the government has no intention of paying back that $827 billion it borrowed from Social Security.
The latest that Deficit Day has fallen in the past 40-some years has been mid-December, at the end of the Clinton administration. The earliest was the beginning of July, during the Great Recession in 2009.
I particularly like the part about the Clinton surplus and Social Security. The logic of declaring Clinton surpluses is the same logic inherent in the idea that Social Security is Pay-as-you-go (PAYGO), about which I have written many times.
The gimmick accounting that our federal government employs would get you thrown in jail in the private sector. The gimmick borrowing-plus-money-printing that our government employs would make you ineligible to be credit-worthy for anything.
It’s Deficit Day!
by | ARTICLES, BUSINESS, ECONOMY, HYPOCRISY
During recent campaigning, Obama has continuously exhorted the value of the auto industry. He went so far as to use their success as an example for bailing out other industries. During his famous “You Didn’t Build That” Speech, Obama said something that has been somewhat overlooked by his other immortalized phrase:
“I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
You can view the video here
But a couple of weeks ago, the Treasury Department issued an updated report on the auto industry bailout.
The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.
The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.
Shares that day were at $20.49
Under Obamanomics, a $25 Billion loss of taxpayer money is considered “a success” and “roaring back”. The spin is that the losses are less than the estimated $44 Billion, so hey, it’s okay! We saved the taxpayers $19 Billion!
Then, at the end of August, it was announced that the production of the highly touted Chevy Volt was to be suspended for a month. From Automotive News report:
“GM will close its Detroit-Hamtramck plant from Sept. 17 until Oct. 15, one of the sources said. Union representatives last week told the plant’s roughly 1,500 workers about the scheduled downtime, the source said.
It’s the second time this year that GM has throttled back on Volt production. The Detroit-Hamtramck plant was idled from March 19 until April 16 amid swollen Volt inventories.
But we didn’t hear about any of that at the Democrat Convention last week, did we?
And now this morning, Reuters is reporting that
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
Our taxpayer money. Sucked down the drain. Propping up an industry that couldn’t make it anymore on its own merits and produces a product that no one wants.
Why do the Democrats keep lying about it?
Remember what he said:
“ I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
If he wins a second term, what will Obama do with other fledgling sectors?
More bailouts? Nationalizing other industries? This is legal plunder. This is government welfare. This is wrong.
crossposted at Redstate
by | ARTICLES, ECONOMY, OBAMA, POLITICS
Obama’s speech didn’t sound like an incumbent President. It sounded like defensive one.
On Romney/Ryan: They want your vote, but they don’t want you to know their plan.…but Obama didn’t give us a plan, only class warfare and hope. The only “plan” he has is to hopefully tax the wealthy.
The stinging class warfare quote stuck with me because it was so contradictory:
My grandparents were given the chance to go to college, buy their own — their — their own home, and fulfill
the basic bargain at the heart of America’s story: the promise that hard work will pay off; that responsibility will be
rewarded; that everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same rules
The promise that hard work will pay off….for the government, who want to tax you more for your success (Buffett Rule, millionaire surtaxes, etc)
That responsibility will be rewarded…and so will irreponsibility (Sandra “pay for my contraception Fluke”, anyone?)
And the gem: “that everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same rules ….especially those darned wealthy who need to “pay their fair share”, to cover the 47% who didn’t pay taxes at all last year.
More on that theme:
I want to reform the tax code so that it’s simple, fair, and asks the wealthiest households to pay higher taxes on
incomes over $250,000, the same rate we had when Bill Clinton was president; the same rate we had when our economy created
nearly 23 million new jobs, the biggest surplus in history, and a whole lot of millionaires to boot
…so we can tax them more!
Daniel Horowitz had an excellent analysis of the problem of the idea of fairness and taxes. I highly recommend it.
What else is there to say?
“I” was mentioned 72 times.
“HOPE” was mentioned 17 times
“Tax” was mentioned 12 times
“Fair” was mentioned 7 times
“Economy” was mentioned 6 times
“Constitution” was mentioned 0 times
“You elected me to tell you the truth“….no, we elected you to uphold the Constitution and lead the country back on a path to prosperity. You have not done so, and that is the truth.
