Nov
5
From AP, via Tom Jackson on TBO:
TALLAHASSEE - Gov. Charlie Crist is saying he did not endorse the $787 billion federal stimulus bill, a statement that might confuse some voters. [Confuse is putting it mildly; irritate, astonish, infuriate, flabbergast, now those are more appropriate terms—Ed.]
Crist appeared with President Barack Obama in February to support the bill, asked Florida members of Congress to vote for it and previously told The Associated Press that he would have voted for it if he had been in the Senate.
But when the Republican governor talked about the bill Wednesday on CNN, he said he didn’t endorse it. Crist told CNN he understood that the bill was going to pass and wanted to use it for the benefit of Florida.
Crist has tried to distance himself from Obama and the stimulus bill since entering the 2010 Senate race in the spring.
Crist is a complete joke. He hugs the Spender in Chief at rallies and works to hamstring Florida’s economy in the name of the “environment” when it’s politically convenient. Then he runs deceptive radio ads to make him look like Mr. Conservative:
Florida’s airwaves are alive with the sound of Governor Charlie Crist’s radio advertisement trumpeting his grade of “A” on Cato’s “Fiscal Policy Report Card on America’s Governors.”
I am pleased that Gov. Crist values Cato’s ratings because we work hard to make them accurate and nonpartisan. But the radio ad is making many fiscally conservative Floridians scratch their heads because of the governor’s recent policy actions.
The governor earned his Cato grade in last year’s report mainly because of his large property tax cuts and moderate spending approach. The grade was based purely on quantitative data on revenues, general fund spending, and tax rate changes.
However, since I wrote the report in mid-2008, the governor seems to have fallen off the fiscal responsibility horse.
In particular, Crist approved a huge $2.2 billion tax increase for the fiscal 2010 budget, even though he had promised that $12 billion in federal “stimulus” money showered on Florida over three years would obviate the need for tax increases.
Crist is a spender, a central planner, and a nanny-statist. Marco Rubio better pull this thing out.
Apr
30
Don’t Let the Door Hit Ya’…
Filed Under Uncategorized | 5 Comments
… where the Good Lord split ya.
On Tuesday, RINO Senator Arlen Specter switched parties to become a Democrat. He cited the fact that the GOP had moved too far to the right, had become too intolerant of moderates, and that he was ”…not prepared to have my 29 year record in the United States Senate decided by the Pennsylvania Republican primary electorate.” Am I the only one that finds it wrong that an incumbent politician refuses to subject himself to voters?
This will give GOP challenger Pat Toomey a clear path to the Republican nomination to challenge Specter in the general. Pat Toomey is a former member of the House of Representatives and headed the Club For Growth after losing to Specter in the GOP primary in 2004. I have followed Toomey’s career with interest, and the Club For Growth (of which I am a member) was one of the organizations that I researched and eventually led to me leaving the Democrat party . I was already planning on supporting and donating to Toomey’s campaign, and will be doing so with even more enthusiasm now.
The reactions to this defection have been pretty much as one would expect. Conservatives have echoed my sentiments above, while moderates have seen it as another red flag of the waning GOP.
Moonbattery: “Only by ridding itself of the lowly likes of Specter will Republicans reemerge as the party that can rebuild the country by upholding the principles that made it great.”
Rush Limbaugh: “This Arlen Specter business. Maybe I’m outta touch. I am stunned at the way the political class, both Republicans and Democrats, are dealing with this defection of Arlen Specter to the Democrat Party. It’s almost like a religious leader abandoned the religion, which is not the case. We got rid of some dead weight.”
RedState: “A “moderate” Republican, Specter has long been at odds with mainstream Republicans on spending and life issues, as well as several other positions.”
R. Stacy McCain: “Exit lying. One less member of the Senate Republican “Jellyfish Caucus.” Specter reminds me of the high-school slut trying to sleep her way to popularity — a weak reed, blown by the shifting winds. The fact that the national GOP apparatus lined up behind this venomous crapweasel in 2004 is all you need to know about what a worthless waste of time the national GOP apparatus was during the Bush/Mehlman era.”
If Al Franken (D-MN) is seated in the Senate, the Democrats will have a filibuster-proof majority. Many see this as opening the door to an avalanche of big-government liberalism that could have been avoided had the Republicans been able to keep Specter. The question I have is this:
What the hell else can they do?
Now don’t get me wrong. Card check, universal health care, and cap-and-trade are all disastrous proposals. But lets not forget what Specter has already done. Specter voted for Obama’s $787,000,000,000.00 ’stimulus bill.’ It is the single most expensive piece of legislation in U.S. history. What exactly are we keeping this ace in the hole for? To sponsor, “A resolution honoring the important contribution to the Nation of the Academy of Music in Philadelphia, Pennsylvania, on its 150th Anniversary”??? Some more of Specter’s highlights, from Ed Morrissey at Hot Air:
What did his Porkulus vote tell us about his core values? He doesn’t support the social-issues positions of some conservatives, nor does he support fiscal constraint and responsibility. I’m looking for any corner of a Republican tent that could possibly cover where Specter stands, and I’m not seeing any. Taxes? He voted to water down the Bush tax cuts. Judges? Specter went along with the Borking of, well, Robert Bork. Specter in 1990 opposed parental notification on abortions — not consent, but notification.
In an op-ed in the New York Times, fellow ‘moderate Republican’ Senator Olympia Snowe of Maine bitched and moaned:
IT is disheartening and disconcerting, at the very least, that here we are today — almost exactly eight years after Senator Jim Jeffords left the Republican Party — witnessing the departure of my good friend and fellow moderate Republican, Senator Arlen Specter of Pennsylvania, for the Democratic Party. And the announcement of his switch was all the more painful because I believe it didn’t have to be this way.
…
There is no plausible scenario under which Republicans can grow into a majority while shrinking our ideological confines and continuing to retract into a regional party. Ideological purity is not the ticket back to the promised land of governing majorities — indeed, it was when we began to emphasize social issues to the detriment of some of our basic tenets as a party that we encountered an electoral backlash.
It is for this reason that we should heed the words of President Ronald Reagan, who urged, “We should emphasize the things that unite us and make these the only ‘litmus test’ of what constitutes a Republican: our belief in restraining government spending, pro-growth policies, tax reduction, sound national defense, and maximum individual liberty.” He continued, “As to the other issues that draw on the deep springs of morality and emotion, let us decide that we can disagree among ourselves as Republicans and tolerate the disagreement.”
So how is voting for TARP and the stimulus advocating ”restraining government spending, pro-growth policies, [and] tax reduction,”?
I get the ‘big-tent’ strategy. I believe in it. As a small ‘l’ libertarian and registered Republican, I get that there must be diversity of opinion. None of our goals will be realized if we don’t win elections and forge coalitions. But there must be some core brand that the GOP can offer voters. There must be a point where a line is drawn. Specter is not a ‘moderate Republican.’ He is a centrist Democrat, or a liberal. If you cannot offer a compelling, base-line philosophical reason why you are a Republican and not a Democrat, then get the hell out.
Apr
29
Make-Work Courtesy of the Stimulus
Filed Under Liberalism | Leave a Comment
Its great to see the stimulus money changing the way the fundamentals of free-market capitalism are perceived by the youngins in Boston. From TJIC:
So we’re going to teach kids that a “job” isn’t a mutually beneficial transaction where you deliver value to a willing buyer in return for cash, but we’re going to instead teach them that a job and a paycheck is an unearned benefit that you get for backing the right political horse.
Apr
27
Back on April 9th, Communism Now! was brodcasting from North Carolina and hosts Amy Goodman and Juan Gonzalez interviewed writer Chris Kromm. The show focused on the way the recession had impacted the economy of the Carolinas, North Carolina in particular. After criticizing South Carolina governor Mark Sanford for opposing the stimulus bill and initially refusing to take any funds, they then began to get fiscally conservative.
JUAN GONZALEZ: And your state has also, obviously for years, been known as a military-friendly state, and the presence of military bases there has a huge impact on the economy. And with the continuing wars in Iraq and Afghanistan, has that been one of the few bright sides, in terms of employment opportunities for the state?
CHRIS KROMM: Yeah, well, as much as you can say that depending on the military for your economy is a bright side.
Kromm added later (emphasis mine):
But yeah, clearly, and this is another way in which—it’s just kind of part of the fabric in many communities in the South, that the military is just part of it. And I think that’s—what people don’t quite understand is, people sometimes assume that Southerners just have a more conservative bent and embrace the military. I think it has more to do with the fact that many of them depend on the military. I know I have lots of relatives who are in the service or are connected to it somehow, and it’s just part of the way of life here. And I think that’s what people have to understand. And until you give people economic alternatives, ’til you find a way out for these Southern states being so dependent on the military, that’s where you’re going to find these situations where these states seem to embrace the foreign policy agenda, where I think in reality they don’t.
Hasn’t it been the conservative argument that welfare does not help the poor because it makes them dependent on the government rather than on themselves? That government spending crowds out investment in more productive areas? That people come to support a particular group of people or a political party not out of ideology but out of rational self-interest?
When South Carolina Rep. James Clyburn (D) insinuated that conservative governors like fellow South Carolinian Sanford were racist because they opposed funding that would in fact bog their states down with mandatory spending expansions, did Kromm object? As he explained in the quote above, “…until you give people economic alternatives, ’til you find a way out for these Southern states being so dependent on the [government program], that’s where you’re going to find these situations where these states seem to embrace the [domestic] policy agenda, where I think in reality they don’t.” By this logic, is Kromm a racist because he wants to cut off funding for the state?
I wrote earlier about the apparent clash of beliefs about government intervention by liberals. I referenced these inconsistencies from Americans United for the Separation of Church and State:
Here’s an excerpt from the Faith-Based Initiatives section, a policy most notably supported by George W. Bush but also by Barack Obama:
Americans in need of social services, such as welfare support, job training, emergency shelter and food/clothing supplies, should be able to get the help they need without being pressured to take part in religious activities. “Faith-based” initiatives, which propose turning the provision of social services over to religious groups, threaten individual rights and could lead to taxpayer support of religious ministries.
Bingo. Citizens on the taxpayers dime should not be in an indoctrination camp where they are forced to subscribe to a certain set of beliefs in exchange for aid.
I then used this argument for the separation of church and state to advocate the separation of economy and state, warning that this
argument could very well apply to President Obama’s plans for “national service,” which has yet to really be defined. The moral hazzard also exists for whatever kind of “green jobs” Obama wishes to create. Will we really be helping youths and those out of work? No. Their economic livelihood will become linked with that of the state and the re-election of certain officials. That is not empowerment. That’s slavery. As I said earlier, “Citizens on the taxpayers dime should not be in an indoctrination camp where they are forced to subscribe to a certain set of beliefs in exchange for aid.”
Government intervention harms the entity they are trying to assist by making them dependant on the government. Government aid may, at times, help a person or company get back on its feet, but it never ends there. They are indebted to the state and when faced with a decision between their own interest and those of the state, cannot bite the hand that feeds it.
We can get into the debates about spending, welfare, federalism, and defense another time. All I’m looking for here is consistency. Do government handouts foster dependency? Is this bad?
The answer to both is yes.
Apr
8
Conservative Protest Dilemma
Filed Under Uncategorized | 3 Comments
Hello readers. I apologize for not being able to get a lot of content up in the past week. I’ve had a lot going on, but don’t worry blogosphere, I’m not going anywhere!
As the April 15th tax day draws near, the Tea Party Movement is picking up steam to hold mass protests to the massive government spending and involvement that has manifested itself over the last six months. While I want to attend the one in Tampa:
City: Tampa
When: April 15, 5:00pm
Where:Lykes Gaslight Park, 401 N Franklin Street, Tampa, FL 33602
… I am facing the conservative protest dilemma of having to find a way to work around my employer’s schedule. Oh, to be a liberal college student without a care in the world, knowing that I am free to attend any protest I want and know my needs will be picked up by taxpayers! But alas, my individual responsibility requires I work for a living, so I am still unsure if I will be able to make it (I usually work until 10pm on Wednesdays).
I would encourage any freedom-minded citizen to attend their local event if at all able. We will be dealing with the bailouts, spending, and stimuli that the Bush/Obama regimes have crammed down our throats for decades, if not centuries, to come. If you are able, The First Conservative offered a few tips:
1. Make sure you attend. Journalists are big on making events seem larger or smaller depending upon the nature of the event. Bob Beckel, a long-time liberal stalwart and news commentator said yesterday that he didn’t believe there would be much of a turn out. Lefties don’t believe conservatives have the time to show up. (As most conservatives are employed, this is frequently true.)
2. Bring a sign. Thoughtful quips and bumper sticker-type quotes are useful, but also provide the kind of short message journalists are capable of understanding.
3. Beware of ‘plants’ in the crowd that will attempt to keep the event off-message or cause some type of trouble. Be advised that the Huffington Post – among other organizations – is recruiting volunteers to infiltrate the event.
4. Seek out the television cameras! The lefties have no problem with this. Tea Party participants shouldn’t be bashful either. Engage with interviewers as they will be seeking out the least informed put on camera. If you are prepared, get in front of the camera! Besides, going to them makes the journalists’ job easier and we all know that journalists enjoy easy work.
5. Remember that Obama isn’t giving the middle class a tax cut. 2010 will see a huge middle class tax increase. INFLATION IS A TAX INCREASE! Barack Obama and Democrats have chosen the strategy of massive spending increases that they cannot possibly pay for either through taxation or by borrowing. In 2010, when they resort to printing the money they will need for the Stimulus package and Budget bills, your dollar will be worth less on a day by day basis. LBJ invented inflation as a way to pay for the Vietnam War without a direct tax increase. Obama is following this well-worn and disastrous path. Democrats should be called on it. Inflation will hurt the poor and middle classes the most.
I’m still trying to figure out what kind of catchy sign I can make. Any suggestions? If you do, leave a comment!
Mar
19
On the Obama ‘Town Hall’ (Rally)
Filed Under Economics | 2 Comments
Yesterday, President Obama held a rally in California (he called it a town hall) to garner support for his budget. While a lot of topics were covered, I want to focus on one important part:
Let’s talk tax policy for a second, because, again, some on the other side have said, oh, Obama, he’s a tax-and-spend Democrat — tax and spend. Well, it turns out, yes. You know, what I’ve said is we should return to the tax rates that we had under Bill Clinton, which means — which means this: which means that for people who are making more than $250,000 a year, they would pay instead of 36 percent, they’d pay 39 percent. Like, a 3 percent increase on their tax rate.
Now, these folks can afford it. They were rich — they were rich back in the ’90s. It’s not like suddenly they’re going to have to go to the poor house. But what that does is it allows us to pay for health care reform for a lot of people who are out there working every day but are just one illness away from bankruptcy.
Now, that’s — I don’t think that’s unreasonable. I don’t think that’s socialism. I think that’s part of understanding that we’re all in this together and that if the middle class is working well, if working people are doing well, then everybody does well. (Applause.) Then they can buy products and services, and businesses will succeed. That’s the philosophy that we are pursuing in this budget; that’s why I need your support.
This is where The One shows that class-envy is at the center of his politics. “These folks can afford it,” he says. Is affordability the qualifier we look at when determining tax policy? If I happen to have an extra $10 at the end of the week, does that mean I have any less claim to it than if I needed it?
Then Obama tries to pass the fallacy that if we tax one individual and give to another, it will stimulate the economy. How does this make sense? If Jack is buying $500 worth of goods and Jill is buying $100 worth of goods, does that make any difference than if they were both buying $300 worth of goods? No. Progressives and Socialists care little about economic growth. They care about shared misery. In a capitalist society, some folks are more adept at finding new products and services, and get richer than others. If we try to ’spread the wealth around,’ these producers will have less capital and incentive to drive this innovation and prosperity. Is equality (if it could be achieved) worth sacrificing all of the benefits we reap from the innovations of the “rich”? Yes, Bill Gates is ridiculously wealthy, but aren’t our lives much better off because of the PC revolution (Mac fans can substitute Jobs for Gates and the iPod for PC)?
Mar
19
It’s Called A Correction
Filed Under Economics | 2 Comments
You can call the economic quagmire the world is in right now a “recession,” “downturn,” or even a “depression.” However, in the world of professional finance and economics, especially when dealing with stocks, a downfall is referred to as a “correction.” What is being corrected are the poor investments and behaviors of agents in the economy. When the government conspired to fuel an unsustainable housing bubble, that was incorrect. When banks made loans to people who couldn’t pay them back, that was incorrect. When these people took these loans to achieve the “American Dream” or whatever else kind of excuse they can think of to become the next Carlton Sheets, that was incorrect.
So naturally we should welcome a correction, correct? Not exactly. As Moonbattery reports:
Anyone who doubts that our current economic crisis was largely brought on by liberals forcing banks to apply Affirmative Action to mortgages under the deranged Community Reinvestment Act is referred to one small bank that resisted pressure to make bad loans, the East Bridgewater Savings Bank in Boston. From the Boston Business Journal, via Capital Commerce:
Bad or delinquent loans? Zero. Foreclosures? None. Money set aside in 2008 for anticipated loan losses? Nothing. … The bank even squeaked out a profit of $87,000. And its Tier 1 risk-based capital ratio was 31.6 percent, or more than three times higher than many community banks in Massachusetts. “We’re paranoid about credit quality,” [CEO Joseph] Petrucelli said.
Companies that make bad loans are showered by the government will $billions stolen from us, our children, and our grandchildren. Responsible banks that only make loans that might be repaid are treated very differently. The FDIC is crawling all over Petrucelli’s bank, accusing it of “not advertising and marketing its loan products enough” and giving it a “needs to improve rating” under the disastrous and still operative CRA.
For those unfamiliar, the CRA refers to the Community Reinvestment Act, signed by President Jimmy Carter in 1977. It gave the government authority to pressure banks to make loans in areas they otherwise would not, in the interest of ending perceived discrimination. As usual, the government solution to a problem turned out to be much worse than the problem in the first place. It also set a dangerous precedent for the federal government to make lending decisions based on lofty social goals instead of realities in the housing and credit markets. This led to some very incorrect lending practices.
As the above post shows, even when a correction is trying to take place through the free market, government is there to make sure this doesn’t happen. As I said here, the Obama administration would much rather repeat the mistakes of the past.
What about other efforts to stimulate the economy? From the Conspiracy to Keep You Poor and Stupid:
THAT WAS THE WHOLE POINT! Even the Wall Street Journal doesn’t get it:
Troubled insurer American International Group Inc., now 80% owned by U.S. taxpayers, spent the weekend deflecting mounting criticism of how government funds have been funneled to various banks…After calls for more transparency, AIG disclosed Sunday that roughly two-thirds of the $173.3 billion in federal aid it received has been paid out to trading partners such as banks and municipalities in the U.S. and abroad.
But that’s what it means for a company to be “systemically important” — that it has obligations to third parties, the failure of which would set off a domino effect of continuing collapse. When it is said that these “funds” are “funneled,” that’s just provocative language for saying that AIG was able to pay its debts, which was the whole purpose of the bail-out.
So it turns out that not only is the free market not allowed to work out our obvious missteps, neither are government initiatives, which were poor ideas to begin with.
Feb
13
Something Stimulating This Way Comes
Filed Under Uncategorized | 1 Comment
Today the House passed a $787 billion stimulus bill that could become law if the Senate takes it up today. With the arrogance that comes from being avowed statists, Obama and the Democrats completely ignored a pledge to allow taxpayers to review where their money is being spent. I guess this bill was ‘too important’ for public scrutiny. Oh well.
The speed and fearmongering used to pass this bill would make the PATRIOT Act blush.
Feb
10
Anatomy Of A Collapse
Filed Under Economics | Leave a Comment
From Newsbusters:
CONTRARY TO A VIEW POPULARIZED DURING THE 2008 presidential election season, the current economic crisis was not the result of deregulation.
The Bush administration made many mistakes, but deregulation was not one of them.
…
Our present crisis began in the 1970s, during the Carter administration, with passage of the Community Reinvestment Act to stem bank redlining and liberalize lending in order to extend home ownership in lower-income communities. Then in the 1990s, the Department of Housing and Urban Development took a fateful step by getting the GSEs to accept subprime mortgages. With Fannie and Freddie easing credit requirements on loans they would purchase from lenders, banks could greatly increase lending to borrowers unqualified for conventional loans. In the name of extending affordable housing, this broadened the acceptability of risky loans throughout the financial system.
The risk lurking in the GSE portfolios was acknowledged in the Bush administration’s first fiscal-year budget, released in April 2001. It stated that Fannie and Freddie were “a potential problem” because “financial trouble of a large GSE could cause strong repercussions in the financial markets, affecting federally insured entities and economic activity.”
The above quotes are from an editorial by Scott S. Powell. You should read both pages completely. When Barack Obama is using fearmongering to crush dissent and warning Republicans to not bring “old,” “failed,” or “rejected” free market policies that “got us into this,” he is lying. And he knows it.
Feb
9
This video is from What You Ought To Know, and was posted at Coyoteblog. Watch the whole thing:
In a nutshell, the current financial crisis was caused by Republican cronyism and failure to keep the Democrat social engineering policies in check. A ‘bailout’ only exacerbates the problem by encouraging the behaviors that led to the crisis in the first place.
There are several other videos at the site, so I think I’ll check ‘em out.
Feb
4
What They Said
Filed Under Economics | Leave a Comment
Feb
4
Cars for everyone!
Filed Under Economics | 3 Comments
Now it appears that Washington will be subsidizing new cars:
WASHINGTON - The Senate voted Tuesday to give a tax break to new car buyers, setting aside bipartisan concerns over the size of an economic stimulus bill with a price tag edging above $900 billion. The 71-26 vote came as President Barack Obama said he lies awake nights worrying about the economy and signaled he’ll try to knock out “buy American” provisions in the legislation to avoid a possible trade war.
Sen. Barbara Mikulski led the successful effort to allow many car buyers to claim an income tax deduction for sales taxes paid on new autos and interest payments on car loans.
She said the plan would aid the beleaguered automobile industry as well as create jobs at a time the economy is losing them at a rapid rate. “I believe we can help by getting the consumer into the showroom,” she said.
The provision was attached to the economic stimulus bill at the heart of Obama’s economic recovery plan and is subject to change or even elimination as the measure makes its way toward final passage.
But wasn’t it not that long ago that liberals were claiming that tax incentives for specific purchases were fueling unsustainable bubbles?
Couldn’t the mechanism that leftists claim helped fuel the housing bubble also do the same thing to automobiles? Not only that, the argument once again comes up as to what degree the federal government should be subsidizing organizations (GM, Ford, UAW) that have proven incapable of handling basic economics. One Republican voiced concerns:
Sen. Charles Grassley, R-Iowa, sought unsuccessfully to derail the proposal, saying it would only increase consumer debt in a time of recession and adding that there were other provisions in the legislation to help the auto industry.
What is so hard about this, folks? The cause of this problem was too much debt and spending by businesses, individuals, and government. So why do we insist on increasing debt and spending by businesses, individuals, and government?
Here’s another conundrum for the liberal logic behind such a proposal: If tax cuts will aid the economy by reducing the burden to purchasing a vehicle, couldn’t that same logic be applied to the economy at large? Couldn’t we reduce burdens on working, saving, producing, hiring, and investing by cutting income, payroll, estate and capital gains taxes across the board?
Also, I think it may be the less-than-adoration that President Obama is getting from the World Community that he so wants to be a part of that is “keeping him up at night”.
For some crazy reason, the EU is not taking kindly to Obama’s open detest for international trade. But I thought that this guy was supposed to bring the entire globe to one big rendition of Kumbaya?! And they said George Bush was the Herbert Hoover of our generation.
As Ed Morrissey points out, Obama is much closer to Hoover than Dubya ever was. For it was the disastrous Smoot-Hawley tariffs that made protectionism official national policy and initiated a global trade war that made a recession into the Great Depression. From the post:
Instead of working cooperatively, the major trading nations had to respond to American penalties with more penalties, and the Buy American provisions of the New Deal entrenched those divisions, making recovery impossible. The rest of the world — Europe, Asia, Latin America — would likely shut out the US and trade amongst themselves, and we would lose decades of work in building American economic strength abroad.
These actions by the President and Congress are only to give the appearance of action on our behalf. The real goals of the Democrat party are to use the recession as an excuse to consolidate power by the state and gain ground on causes they have been harping on for decades. To be honest, I am very, very worried about the next four years.
Jan
29
Thoughts on the Stimulus
Filed Under Economics | 4 Comments
Yesterday the House passed an $819 billion ’stimulus’ bill, with 11 Democrats and all Republicans (way to go folks!) voting against it. I detailed some of my thoughts on an economic stimulus in an earlier post, and two inimitable conservative thinkers had their say on a possible stimulus. From Thomas Sowell:
Out of $355 billion newly appropriated, the Congressional Budget Office estimates that only $26 billion will be spent this fiscal year and only $110 billion by the end of 2010.
Using long, drawn-out processes to put money into circulation to meet an emergency is like mailing a letter to the fire department to tell them that your house is on fire.
If you cut taxes tomorrow, people would have more money in their next paycheck, and it would probably be spent by the time they got that paycheck, through increased credit card purchases beforehand.If all this sound and fury in Washington was about getting an economic crisis behind us, tax cuts could do that a lot faster.
As Mr. Sowell illustrates, if this crisis is so ‘dire,’ why not do that which puts money into the economy faster? It would be a lot more justifiable to rush a tax cut bill through congress. Not that I support any legislation being rushed through without its consequences studied. But if it has to be done this way, a tax cut bill is preferential. But, Sowell goes on to illustrate the Democrat Party’s real motives at the fast action. In the vein of Rahm Emmanuel’s quote, “”A crisis is a terrible thing to waste.” Adds Sowell:
This administration and Congress are now in a position to do what Franklin D. Roosevelt did during the Great Depression of the 1930s— use a crisis of the times to create new institutions that will last for generations.
To this day, we are still subsidizing millionaires in agriculture because farmers were having a tough time in the 1930s. We have the Federal National Mortgage Association (”Fannie Mae”) taking reckless chances in the housing market that have blown up in our faces today, because FDR decided to create a new federal housing agency in 1938.
Who knows what bright ideas this administration will turn into permanent institutions for our children and grandchildren to try to cope with?
Another way to slow the recession would be the Obama-Limbaugh Stimulus Plan of 2009:
Fifty-three percent of American voters voted for Barack Obama; 46% voted for John McCain, and 1% voted for wackos. Give that 1% to President Obama. Let’s say the vote was 54% to 46%. As a way to bring the country together and at the same time determine the most effective way to deal with recessions, under the Obama-Limbaugh Stimulus Plan of 2009: 54% of the $900 billion — $486 billion — will be spent on infrastructure and pork as defined by Mr. Obama and the Democrats; 46% — $414 billion — will be directed toward tax cuts, as determined by me [Limbaugh].
El Rushbo added:
I say, cut the U.S. corporate tax rate — at 35%, among the highest of all industrialized nations — in half. Suspend the capital gains tax for a year to incentivize new investment, after which it would be reimposed at 10%. Then get out of the way! Once Wall Street starts ticking up 500 points a day, the rest of the private sector will follow. There’s no reason to tell the American people their future is bleak. There’s no reason, as the administration is doing, to depress their hopes. There’s no reason to insist that recovery can’t happen quickly, because it can.
In this new era of responsibility, let’s use both Keynesians and supply-siders to responsibly determine which theory best stimulates our economy — and if elements of both work, so much the better. The American people are made up of Republicans, Democrats, independents and moderates, but our economy doesn’t know the difference. This is about jobs now.
The economic crisis is an opportunity to unify people, if we set aside the politics. The leader of the Democrats and the leader of the Republicans (me, according to Mr. Obama) can get it done. This will have the overwhelming support of the American people. Let’s stop the acrimony. Let’s start solving our problems, together. Why wait one more day?
Sounds bi-partisan and non-divisive to me!
Jan
26
Even the Crapperty File Can See How Stupid the ‘Stimulus’ Is Becoming
Filed Under Uncategorized | Leave a Comment
It appears that even a liberal moron like CNN’s Jack Cafferty can see that the Democrat stimulus bill will do nothing to stimulate the economy, and is in fact an enormous socialist free for all. Said Cafferty:
On ABC, House Speaker Nancy Pelosi defended hundreds of millions of dollars in the stimulus package earmarked for family planning.
She said family planning reduces costs and explained that the stimulus plan includes assistance to states and part of that includes children’s health and education. That includes contraception, which she said will, “reduce costs to the states and to the federal government.”
For those of you unfamiliar with this blowhard, he basically explains some current event, complains about it, and asks a pointless question to elicit a knee jerk reaction out of knee jerk liberals. However, he wasn’t too kind to Speaker Pelosi on this round. He even compares her to “Chairman Mao.”
The first odd thing is that I never thought I’d have The Crapperty File and Moonbattery echoing the same sentiment.
The second odd thing is that if this mess of a bill is so transparent that Cafferty can pick up on it, how bad could this possibly get before it is inevitably forced down our throats?
Jan
26
A Stimulus Bill, Wal-Mart Style
Filed Under Economics | 4 Comments
Currently our politicians in Washington are debating how to pass a “stimulus” to help the economy. The main debate seems to be whether government spending (proposed by Democrats) or tax cuts (proposed by Republicans) will do the job better. The secondary concern is how such action will affect the budget deficit of the federal government, which is slated to be over $1 trillion in 2009.
Tax cuts are the only way to improve both situations.
Let’s start with the budget deficit. In case you don’t know, the U.S. federal deficit is the difference between what the federal government takes in and what it spends. If spending is higher, it is a deficit. If revenues are higher, then we have a surplus. It really is not very complicated, folks. The government acts pretty much like a regular person when it comes to money (with the exception of the ability to create money, but that would be a whole other post). If you don’t make enough money to cover your expenses, you either dip into savings (like the Social Security Trust Fund) or you use a credit card (like borrowing from investors and foreign governments though treasury securities, basically a government I.O.U.). So, just like anybody looking at their finances and seeing that they have a deficit, the culprit either has to be spending or revenue. Well, take a look at this chart detailing government revenue (income taxes only):
Let’s assume you were at your kitchen table going over your finances and you had a ton of credit card debt, just like the federal government. If the above chart were your personal income, what would you conclude your problem was? Spending! That kitchen table of yours would probably be mahogany wood, and your house would be full of all sorts of expensive stuff. In addition, you probably had kept making financial commitments you couldn’t afford, such as expensive car and house payments, whose payment obligations stretched far into the future.
Well this is pretty much the story of the federal government. We’ve spent money on everything including the military, infrastructure, health care, government employees to enforce regulations, clean-energy subsidies, NASA, law enforcement, scientific research and lots of other things. We’ve also made commitments on Medicare, Medicaid, and other programs stretching infinitely into the future absent significant reform (Social Security is not included in the chart above so I’m not including it here, as it operates slightly differently, but with much the same success).
Only a Democrat could look at the above chart and attribute the deficit to decreased revenue. I can’t help but laugh when big-government Democrats harp about “fiscal responsibility” and “tax-cuts we can’t afford,” thinking that nesecarrily cuts revenue.
That mentality is wrong because tax cuts help the economy by encouraging producers to create more wealth, therefore increasing the tax base. The government will get more revenue by taxing a large economy at a small rate than a small economy at a large rate.
This principle is illustrated by the Laffer Curve:
Basically it illustrates the taxation rate’s effect on government revenue. Two universal truths can be gained from the Laffer Curve: first, that a taxation rate of 0% will obviously result in no revenue, and second, that a rate of 100% will also result in no revenue because producers will have no incentive to work. The key contention about the Laffer Curve is where the peak is, or at what rate of taxation begins to harm the economy. Note: the above chart would make 50% appear to be the peak, but this is not known. The chart is for illustration purposes only. Lest anyone think I support the government confiscating half of your paycheck!
To illustrate why tax cuts can both help the economy and lower budget deficits (as long as spending is decreased), I’d like to make a little retail-sector analogy.
Let’s say that there is a big store, Wal-Mart perhaps. Except instead of selling goods like shirts and food and cheaply-glued furniture, they sell income. The store is a metaphor for the market at large. So the customers (us) go into the store (the market), find the goods (income) using our shopping carts (our labor, capital, innovation), and go to the checkout (the government), where we pay for the goods at the price (rate of taxation) determined by the store.
So what are the goals of Wal-Mart if they are in the business of selling income? Well, because they want the consumers to be happy, they want them to have as much goods (income) as possible. That’s what we’re trying to do with a “stimulus” bill, right? Improve the economy and raise incomes. Now Wal-Mart also has to remain profitable and not have deficits like the government currently has.
Now, if the liberals get in charge of the store, they would make the asinine proposition of just raising the prices of the goods (raising taxes on income). If we’re running a deficit when the shirts are priced for $15, we should raise it to $20. Hell, if this logic works, why not raise it to $100?! $1000!
That is ridiculous because of supply and demand. Higher prices result in lower demand, whether Wal-Mart is selling shirts or income. So what should Wal-Mart do in this case to achieve its goals of increasing the amount of goods for the consumers and remaining solvent? Have a sale!
The income store can have a sale by lowering the prices (taxes) on the goods (income). Therefore more consumers will pick up their idle shopping carts (labor, capital, innovation) to go get the goods. The income store benefits because even though their prices and profit margins are slightly lower, there are more gross sales and therefore more revenue.
If things are really dire, as it appears right now, maybe the income store should have a clearance sale, where the prices are really low.
This is exactly how the real Wal-Mart is so successful. It is more profitable to sell 20 shirts at $10 than 5 shirts at $20. Budgets will remain balanced -unless the store spends a whole bunch of money on plush new offices, company cars, and exorbitant benefits.
Unfortunately, the stimulus bill currently being debated doesn’t include a clearance sale. In fact, I wouldn’t even really consider this pork monster Keynesian. It is just one big Liberal wish list.
Keynesian economics basically says that the consumers are hoarding their shopping carts because they’re too scared, which makes sense. But, as a solution, Keynesians say we should borrow their carts (at interest) and do their shopping for them. Then, presto! The store has more revenue. But obviously then the store just has to recoup the money they spent borrowing the shopping carts, and the only way to do that is to raise prices, meaning the consumers won’t buy as many goods. Everyone loses.
So how do we get all of those scared consumers to use their carts? It is obvious in the private sector - by going on sale. Everyone wins.
But, as I said earlier, the stimulus bill is just a bunch of boondoggles. It is not even Keynesian. In our store metaphor, the board of directors is basically saying we’re going to raise the goods to the consumers (individual incomes) and the store’s revenues by painting the offices, hiring more employees, and making sure the shopping carts are fuel efficient.
This won’t work because not only will it cost too much, but it will do nothing to get the consumers to buy more income.
However, this is exactly why government does such a poor job compared to the private sector. They are not subject to the same rules. Where a business like Wal-Mart is bound by budgets and the laws of supply and demand and makes decisions based on cost, government can demand more funds at will (until the economy collapses) and makes decisions based on what sounds good.
Example: Only at the government-run income store do those who buy in bulk (high earners) pay a higher price (because of progressive taxation). You wanna buy three shirts? $30. Six shirts? $100. If you support charging those who buy in bulk the same price as everyone else, you support “tax cuts for the rich.” That’s liberal logic for you.
A spending stimulus bill will not work because we cannot afford to exacerbate the federal budget deficit, it will take too long to reach people, and it will do nothing to incentivize producers to create more wealth.
Cutting both taxes and spending will work because it will improve the fiscal health of the federal government, reach people’s pockets immediately, and encourage growth of the economy at large.
Donald Luskin had a piece refuting the current stimulus here.
Maybe later I’ll use my Wal-Mart metaphor to tackle regulation, where the cashiers leave their registers and dictate to the customers how they should shop……
But this is enough for now. Enjoy!
