Exodus 18:21  21 "But choose men of ability from all of the people. They must have respect for God. You must be able to trust them. They must not try to get money by cheating others. Appoint them as officials.   
Obamanism: Skyrocketing energy costs, Spending, Debt, Unemployment. Compare Obama to JFK & others.

Titus 3:14 (New International Version 1984)  14 Our people must learn to devote themselves to doing what is good, in order that they may provide for daily necessities and not live unproductive lives.

 Insanity: doing the same thing over and over again and expecting different results. http://www.brainyquote.com/quotes/quotes/a/alberteins133991.html   


So much for hope, it’s time for a change in Washington.

http://blog.heritage.org/2009/01/14/were-spending-more-than-ever-and-it-doesnt-work/        FDR's Treasury Secretary Morgenthau Concluded that Big Spending Stimulus "Does Not Work" 

We have tried spending money. We are spending more money than we have ever spent before and it does not work. And I have just none interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job, I want to see people get enough to eat. We have never made good on our promises. . . . I say after eight years of this administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!  Henry Morgenthau Jr. — close friend, lunch companion, loyal secretary of the Treasury to President Franklin D. Roosevelt — and key architect of FDR’s New Deal.  The date: May 9, 1939. The setting: Morgenthau’s appearance in Washington before less influential Democrats on the House Ways and Means Committee.  Morgenthau made this “startling confession,” as historian Burton W. Folsom Jr. calls it, during the seventh year of FDR’s New Deal (“Raw Deal”) programs to combat the rampant unemployment of the Great Depression.       

Why hasn’t Obama and the Democrats learned from History and doomed us to repeat past mistakes and failures??  I thought he was supposed to be so smart; How smart can he or the Democrats be??  Look at the terrible results of Obama and the Democrat’s failed Keynesian policies that have produced high unemployment and enormous debt just like FDR. 

Add to the irresponsible and reckless spending, the Democrat’s destructive laws and agencies like the EPA, making the Democrat created bad situation worse.  As only one example--The National Federation of Business ( JOB CREATORS ) , the only private party participating in a lawsuit out of Florida that also included representatives from 26 states, today filed a request for the case to be heard immediately in the Supreme Court.

“The 11th Circuit ruling confirmed NFIB’s view that the individual mandate in the health-care law is unconstitutional. It is now imperative that the Supreme Court rule on whether the entire law can stand without the mandate,” said Karen Harned, executive director of NFIB’s Small Business Legal Center. “The sooner the court takes up this case, the sooner small businesses and individuals will know whether they will have to bear the full weight, financially and economically, of this bad law. “While the survival of the new health-care law remains an open question, small businesses and individuals will continue to face uncertainty and trepidation, hesitant to hire or expand,” Harned said. “In filing our petition today, we are attempting to impress upon the court the urgency of this issue.”

Thankfully the Fed is doing what it can to offset the inexcusable devastation of Obama and the Democrat’s horrific policies.  The Fed, however has its own problematic policies too, but at least it hasn’t compounded the Democrat’s high unemployment as it did back in the Great Depression. 

Voters wake up, learn from history and vote out Obama, the Democrats and any Republican that voted for the “stimulus” and that continue to vote for emergency 2008 levels of spending.  2008 is over, why are we spending at these bankruptcy (Greek style) levels?  Taxpayers, businesses, JOB creators and Investors know this has to be paid back and are hunkering down.  We can’t afford the first 4 years of Obama and we certainly can’t afford 4 more years of Obama and the Democrats.




http://news.investors.com/Article/588006/201110131835/Truthiness-Problem-Spoils-Teachable-Moment-On-Jobs.htm                     "If spending money would solve our problems and crisis in America, we wouldn't have a problem right now because we sure did our share of spending money in the last few years," Sen. Joe Manchin, D-W.Va., said last month in casting doubt on the doomed Obama jobs bill. "It's just common sense to me. If some of the recommendations that are out there hadn't worked in the past, why would we do them over again?"



http://www.heritage.org/research/reports/2008/12/learning-from-japan-infrastructure-spending-wont-boost-the-economy             Hey Obama, Democrats, an education is a precious thing to waste,  how about taking a history lesson first.  I thought they were so smart?  Why doom us to repeating history?  http://thinkexist.com/quotation/those_who_don-t_know_history_are_destined_to/346796.html                How smart can they be????  They tried their failed experiment and we pay the price.             

            Beginning in 1991-1992, Japan adopted the spending approach now advocated by many in the U.S. Congress when it embarked on a massive nationwide program of infrastruc­ture investment. Between 1992 and 2000, Japan implemented 10 separate spending stimulus packages in which public infra­structure investment was a major compo­nent. Excluding the 2000 program, for which final costs are not yet available, addi­tional spending on the infrastructure com­ponent alone amounted to 30.4 trillion yen, or $254 billion at the current exchange rate.

            the Japanese government imple­mented such a program during the 1990s, and the consequence was two decades of economic stagna­tion. Less ambitious infrastructure stimulus pro­grams have been implemented in the United States over the past few decades, and numerous indepen­dent and government studies have concluded that these programs had little impact on economic activity or jobs.

            It is worth remembering that the New Deal of the 1930s substantially and permanently increased the scope of the federal government as Congress and the President attempted to spend their way out of the Depression. After the stock market collapse in 1929, the Hoover Administration increased federal spending by 47 percent over the following three years. As a result, federal spending increased from 3.4 percent of GDP in 1930 to 6.9 percent in 1932 and reached 9.8 percent by 1940. That same year-- 10 years into the Great Depression--America's unemployment rate stood at 14.6 percent.

            It is important to recognize that our infrastruc­ture and the continued investment in it are impor­tant underpinnings of future economic growth and sustained prosperity. But it is equally important to recognize that the long-term nature of these bene­fits to cost-effective mobility and quality services, and the need to choose carefully


http://www.canadafreepress.com/index.php/article/42326                                Guess who the Obama administration called for advice about the economy immediately upon taking office. Yep, Jon Corzine (Democrat). How “smart” are these Democrats??  Look at the Democrat’s disaster and incompetence with our economy, debt, unemployment, job killing policies & gov’t agencies etc. Explains a lot. You just can’t make up stuff like this. Catch this video of Joe Biden campaigning for Gov. Jon Corzine in 2009. Voters…wake up!

            MF Global, the securities firm headed by former Governor Jon Corzine, has filed for bankruptcy. It’s 1,000 employees have been laid off, and it is under investigation by the FBI and federal regulators because $600 million of client funds have disappeared. http://www.washingtonpost.com/politics/jon-corzines-remarkable-descent/2011/11/01/gIQAvX0kfM_story.html                        In April, Jon Corzine hosted President Obama at his home in Manhattan for the first fundraiser of the president’s re­election campaign. To many power brokers in Washington and on Wall Street, the event signaled Corzine’s desire to return to Washington, perhaps even as Treasury secretary during a second Obama term.  The former Goldman Sachs chief executive (Fat Cat Banker anyone?), U.S. senator and New Jersey governor

http://www.constitution.org/fed/federa62.htm                              In another point of view, great injury results from an unstable government.  The want of confidence in the public councils damps every useful undertaking, the success and profit of which may depend on a continuance of existing arrangements. What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed? What farmer or manufacturer will lay himself out for the encouragement given to any particular cultivation or establishment, when he can have no assurance that his preparatory labors and advances will not render him a victim to an inconstant government? In a word, no great improvement or laudable enterprise can go forward which requires the auspices of a steady system of national policy.   (Obama & the Democrats come to mind?  TARP, "Stimulus", Cap & Trade, EPA, "Justice" Dept, ObamaCare, NLRB, Dodd-Frank, Solyndra, Fast & Furious etc... History lesson from our Founders on jobs.. Obama and Democrats are supposed to be so smart??  Vote them out so they can have some time to gain "some" wisdom ).

http://faculty.chicagobooth.edu/steven.davis/pdf/PolicyUncertainty.pdf              Charts on pages 25 & 26, plus 41 & 42 show that uncertainty about the direction of future government policies can weigh on the economy. While uncertainty can be difficult to quantify, a team of professors from Stanford and the University of Chicago have created a policy uncertainty index that looks at the frequency of articles on the issue of policy uncertainty in the news, page 26, expiring federal tax provisions (there are 41 in 2012) and disagreement among forecasters over inflation and federal government purchases. The increase in policy uncertainty in recent years ( thank you Obama & his Democrats) has increased overall economic uncertainty, which the authors estimate has resulted in the loss of 2.5 million jobs. One clear implication of this study is that more clarity on tax and spending policies over the years ahead could contribute to an acceleration in economic growth and JOBS!




http://www.constitution.org/fed/federa58.htm                              ( History lesson on budgets, taxes etc. ) The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse -- that powerful instrument by which we behold, in the history of the British Constitution, an infant and humble representation of the people gradually enlarging the sphere of its activity and importance, and finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other branches of the government. This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.


http://www.constitution.org/fed/federa62.htm                              Another advantage accruing from this ingredient in the constitution of the Senate is, the additional impediment it must prove against improper acts of legislation. No law or resolution can now be passed without the concurrence, first, of a majority of the people (House of Representatives), and then, of a majority of the States (Senate). It must be acknowledged that this complicated check on legislation may in some instances be injurious as well as beneficial ( The House controlled by Republicans pass a budget, then it goes to the Senate controlled by Democrats and from there either passed or vetoed by President Obama, also a Democrat. )

http://haltingarkansasliberalswithtruth.com/2011/08/21/democrats-lied-about-spending-cuts-in-1982-and-1990/            Democrats lied about spending cuts in 1982 and 1990  (look at the spending levels, was it cut??)  http://www.cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables[1].pdf           What kind of intervention does Congress need to stop its spending addiction? Back in 1982 Reagan was promised $3 in cuts for every $1 in tax increases, BUT the cuts never came. In 1990 Bush was promised 2 for 1 but they never came either. HOW LONG DOES IT TAKE FOR PEOPLE TO REALIZE THAT THE LIBERALS IN CONGRESS ARE ADDICTED TO SPENDING?Read My Lips’ Won’t Happen Again  Trading immediate tax hikes for promised spending cuts is a sucker’s bargain.  Cuts must come first, then tax hikes as needed. http://en.wikipedia.org/wiki/United_States_presidents_and_control_of_congress   



Why didn't the Democrat congress under Reagan cut spending?

Let’s go through the numbers. Domestic spending in 1980 was at $128.9 Billion, during the last year of the Carter Administration. In the last year of the Reagan Administration, Domestic spending was at $168.2 Billion. Domestic spending, by itself, was only $122.7 Billion dollars less than the defense spending. Now let’s look at Social spending, like Medicare, Medicaid, Social Security, and other entitlement programs. In the last year of the Carter Administration (1980) Social or “Mandatory” spending was at $262.1 Billion dollars, close to the amount of money spent on defense in 1988. At the end of Reagan’s administration, Social spending was at $486 Billion! Add the Domestic and Social spending together and you get $654.2 Billion, a figure that is far greater than Reagan’s defense spending.
              Now, since democrats are the one's who attacked Reagan for spending - why didn't they propose a balanced budget???If they love their country sooooo much and if they are sooooo fiscally responsible, why didn't they cut spending???

Under Clinton we had a REPUBLICAN congress, which cut spending by 3.5% of the GDP. Welfare reform was passed, NAFTA was passed, S.S. reform was passed. Capital Gains was CUT. Clinton was smart in moving to the middle – THANK the REPUBLICAN congress for that surplus. Sources:  http://www.cbo.gov/ftpdocs/100xx/doc1001… Revenues, Deficits, Budget 1965-2008 http://en.wikipedia.org/wiki/United_States_presidents_and_control_of_congress     





http://www.americanrhetoric.com/speeches/jfkeconomicclubaddress.html         John F. Kennedy

Address to the Economic Club of New York  (Heard any Democrats talk this way lately?  Has the Democrat Party left JFK too??  Isn't Obama supposed to be so smart and the Democrats too??  Why didn't they know this lesson from JFK?? )  Delivered 14 December 1962  I am glad to have a chance to talk to you tonight about the advantages of the free enterprise system.  On our strength and growth depends the strength of others, the spread of free world trade and unity, and continued confidence in our leadership and our currency. Therefore, the subject to which we address ourselves tonight concerns not merely our own well-being, but also very vitally the defense of the free world.  In the last two years we have made significant strides. Our gross national product has risen eleven percent, while inflation has been arrested. Employment has been increased by one point three million jobs. Profits, personal income, living standards all are setting new records. Most of the economic indicators for this quarter are up and the prospects are for further expansion in the next quarter. But we must look beyond the next quarter, or the last quarter, or even the last two years. For we can and must do better, much better than we've

been doing for the last five and a half years. This economy is capable of producing, without strain, 30 to 40 billion dollars more than we are producing today. Business earnings could be seven to eight billion higher than they are today.  Utilization of existing plant and equipment could be much higher and,

if it were, investment would rise. We need not accept an unemployment rate of five percent or more, such as we have had for 60 out of the last 61 months. There is no need for us to be satisfied with a rate

of growth that keeps good men out of work and good capacity out of use. Our choice, therefore, boils down to one of: doing nothing, and thereby risking a widening gap between our actual and potential growth in output, profits, and employment or taking action, at the federal level, to raise our entire

economy to a new and higher level of business activity. If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency. And I shall say more on this in a moment.  The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system and this Administration pledged itself last summer to an across the board, top to bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.

            I'm not talking about a "quickie" or a temporary tax cut, which would be more appropriate if a

recession were imminent. Nor am I talking about giving the economy a mere shot in the arm, to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk taking.  In short, to increase demand and lift the economy, the federal government's most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures.

            But you can understand that, under these circumstances, in general, that any new tax legislation enacted next year should meet the following three tests:

            First, it should reduce the net taxes by a sufficiently early date and a sufficiently large amount

to do the job required. Early action could give us extra leverage, added results, and important

insurance against recession. Too large a tax cut, of course, could result in inflation and insufficient future revenues but the greater danger is a tax cut too little, or too late, to be effective.

            Second, the new tax bill must increase private consumption, as well as investment.

Consumers are still spending between 92 and 94 percent on their after tax income, as they have every year since 1950. But that after tax income could and should be greater, providing stronger markets for the products of American industry. When consumers purchase more goods, plants use more of their capacity, men are hired instead of laidoff, investment increases, and profits are high. Corporate tax rates must also be cut to increase incentives and the availability of investment capital.

            We shall, therefore, neither postpone our tax cut plans nor cut into essential national security programs. This administration is determined to protect America's security and survival, and we are also determined to step up its economic growth. And I think we must do both.

It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget — just as it will never produce enough jobs or enough profits. Surely the lesson of the last decade is that budget deficits are not caused by wild-eyed spenders but by slow economic growth and periodic recessions, and any new recession would break all deficit records.

            In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now. The experience of a number of European countries and Japan have borne this out. This country's own experience with tax reduction in 1954 has borne this out. And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.

            I repeat: our practical choice is not between a tax-cut deficit and a budgetary surplus. It is between two kinds of deficits: a chronic deficit of inertia, as the unwanted result of inadequate revenues and a restricted economy, or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, increase tax revenues, and achieve, I believe — and I believe this can be done — a budget surplus. The first type of deficit is a sign of waste and weakness; the second reflects an investment in the future.

            In addition, I have directed all heads of government departments and agencies to hold federal employment under the levels authorized by congressional appropriations, to absorb through greater efficiency a substantial part of this year's federal pay increase, to achieve an increase in productivity which will enable the same amount of work to be done by less people, and to refrain from spending any unnecessary funds that were appropriated by the Congress.




John Adams quote "There Are Two Ways To Enslave A Country.... One Is By The Sword. The Other Is By Debt." 





“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

 Thomas Jefferson quotes (American 3rd US President (1801-09). Author of the Declaration of Independence. 1762-1826)

Similar Quotes.

"The problem with socialism is that you eventually run out of other people's money. "
Margaret Thatcher





http://news.investors.com/Article/588558/201110181856/900-Days-Of-Irresponsibility.htm    You have to go all the way back to April 29, 2009 — just three months after President Obama took the oath of office — to find the last time Senate Democrats managed to discharge their legal obligation to produce a budget plan.  That's right — legal obligation. It says right in the Congressional Budget Act of 1974  that the Senate must produce a budget resolution by April of each year. Instead, all the country has gotten from Senate Democrats are excuses.


In early July, Republicans sent a letter to Reid asking where the Democrats' budget was. Turns out, Senate Budget Committee Chairman Kent Conrad, D-N.D. ( How’s the budget looking?  Conrad isn’t running is he??), had a plan ready to be unveiled, but Reid forced him to keep it locked up. Ostensibly that was because of the then-ongoing debt ceiling talks. Democrats did, however, find the time in May to force a vote on the House Republican budget plan, but only in hopes of embarrassing their Senate counterparts.  Obama's hardly been any better. His latest budget was so outrageously irresponsible that the entire Senate, including every single Democrat, voted against it.  Earlier this year, Obama said that "families across this country understand what it takes to manage a budget," and that "it's time Washington acted as responsibly as our families do."  He's right. Except that it's members of his own Democrat party who refuse to act like responsible adults.




http://www.fairtax.org/site/PageServer?pagename=about_main               Everyone should pay their FAIR share of taxes.


http://www.openbible.info/topics/giving_10_percent        If a Flat10% is good enough & FAIR enough for God, why isn’t it good enough & FAIR enough for our Government??

http://news.investors.com/Article/599237/201201271850/obama-tax-hikes-would-hit-economy.htm?Ntt=taxing-success           Talk about taxing success. Talk about taxing growth.

The capital gains tax is the single most important economywide tax on wealth, risk taking and investment. It's a tax on seed corn. What a brilliant idea, Mr. President.  I remember the late Jack Kemp always saying you can't have successful capitalism without capital.

compare Obama's 2.4% with the 4.6% post-WWII average recovery rate after 10 quarters. The average is twice as good as Obama. But Obama is only roughly a third of Reagan. That tells you something.  Why is it "fair" or "equal" to create a lower tide that pulls down all boats?  Voters, do you want more trickle down government poverty, hopelessness and unemployment of Obamanomics or is it time to shed Obama and the Democrats???




Had Obama's recovery been as powerful as Reagan's, the economic pie would be $1.2 trillion bigger today.  And had job growth under Obama kept pace with job growth during the Reagan recovery, there would be 10 million — yes 10 million — more people with jobs today.

So what explains the difference between these two recoveries? First, the 1981-82 recession was almost as long (16 months vs. 18 months), and as deep (unemployment was actually higher, peaking at 10.8% in that earlier recession). But even that didn't stop a rip-roaring comeback.

Second, a recent Federal Reserve Bank of Atlanta report found: "U.S. history provides no support for linking low employment and high unemployment in the current recovery with the financial crisis of 2007-2008." Plus, nobody at the time expected the Reagan recovery to be as fast and as powerful as it was.

So what's different? The presidents' policies.



http://finance.yahoo.com/news/5-myths-obamas-economic-recovery-164300445.html       But while the so-called Great Recession lasted 18 months and sent unemployment to 10.1%, the 1981-82 recession was comparable in length and severity. That one lasted 16 months, and pushed unemployment even higher, to 10.8%.

The difference is that today under the Obama “recovery” unemployment is still at an historically high 8.6%, and it's only that low because the labor force has declined. Real GDP is a mere 0.04% above its pre-recession peak. At the comparable point in the Reagan recovery, unemployment had plunged to 7.3%, while the economy had grown 12% above its pre-recession peak, and was still climbing fast.  It’s the Policies Stupid!  an Atlanta Federal Reserve paper in October challenged that claim (Recoveries from financial crises are inherently slower.)  After looking at U.S. recessions before and after the Great Depression, it concluded that "U.S. history provides no support for linking low employment and high unemployment in the current recovery with the financial crisis of 2007-2008.




http://www.usatoday.com/money/perfi/taxes/story/2011-09-20/buffett-tax-millionaires/50480226/1 WASHINGTON – President Obama says he wants to make sure millionaires are taxed at higher rates than their secretaries. The data say they already are.

On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.

The 10% of households with the highest incomes pay more than half of all federal taxes. They pay more than 70% of federal income taxes, according to the Congressional Budget Office.

There may be individual millionaires who pay taxes at rates lower than middle-income workers. In 2009, 1,470 households filed tax returns with incomes above $1 million yet paid no federal income tax, according to the Internal Revenue Service. But that's less than 1% of the nearly 237,000 returns with incomes above $1 million.

This year, households making more than $1 million will pay an average 29.1% of their income in federal taxes, including income taxes, payroll taxes and other taxes, according to the Tax Policy Center, a Washington think tank.  Households making between $50,000 and $75,000 will pay an average of 15% of their income in federal taxes.  Lower-income households will pay less. For example, households making between $40,000 and $50,000 will pay an average of 12.5% of their income in federal taxes. Households making between $20,000 and $30,000 will pay 5.7%.

The latest IRS figures are a few years older — and limited to federal income taxes — but show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4% of their income in federal income taxes, according to the IRS.  Those making $100,000 to $125,000 paid on average 9.9% in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3%.

Obama's claim hinges on the fact that, for high-income families and individuals, investment income is often taxed at a lower rate than wages.

The top tax rate for dividends and capital gains is 15%, but this has already been taxed as corporate profit and then taxed again as dividends.  (this is like your real estate tax that you pay every year and then when you sell the property if you have a gain you pay even more with another capital gain tax.  How much should the gov’t take as you pay taxes as you go, you take the risks, you do the work??http://www.ehow.com/info_7858821_double-taxation-dividends.html        The top marginal tax rate for wages is 35%, though that is reserved for taxable income above $379,150.


http://newsbusters.org/blogs/noel-sheppard/2011/09/20/ap-debunks-obamas-claim-millionaires-dont-pay-their-fair-share-taxes            On Monday, NewsBusters debunked the media myth that millionaires pay less in taxes as a percent of income than lower earners.Rather surprisingly, the Associated Press followed suit Tuesday with a stunning piece that began, "President Barack Obama makes it sound as if there are millionaires all over America paying taxes at lower rates than their secretaries":The data tell a different story. On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.The AP shared actual data to support its totally correct conclusion.  So the cat is now officially out of the bag with the largest wire service telling America the truth.There is therefore no reason every other news outlet in this nation doesn't follow suit by properly informing the public of what millionaires really pay in taxes compared to lower earners.Not doing so would be yet another example of media malpractice.  Did you get this from your newspaper, radio station or TV news??  If not you are being misinformed and lied to and you need to find another channel.
Read more:



http://www.taxfoundation.org/blog/show/27899.html        The table also shows the average, or effective, tax rate that taxpayers in each income group pay. For the entire universe of American taxpayers, the average tax rate is 11 percent of our AGI. The highest average tax rate paid by anyone earning under $100,000 is 8 percent. That shows the power of the sundry tax credits available to the "middle-class."

By contrast, millionaires pay an average rate of 25 percent. Although taxpayers earning between $2 million and $5 million pay an average tax rate of 26 percent, while those earning more than $10 million pay an average of 22 percent. We can speculate that one of the reasons for this is that much of their overall income comes from capital gains, which is taxed at 15 percent (only 20 percent of the total AGI for these $10 million-plus taxpayers is from salaries). However, even with this "preferential" tax rate on capital gains, the data clearly shows that their overall average tax rate is at least twice that of the nation as a whole.   http://www.taxfoundation.org/          http://www.ntu.org/tax-basics/who-pays-income-taxes.html            http://mercatus.org/publication/breakdown-federal-personal-income-taxes            According to the Tax Policy Center, this tax season, an estimated 45% of tax units will pay no federal income taxes.   http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html 


Income Tax Summary Statistics for 2009


All Returns

AGI ($Billions)

Taxable Returns

Income Tax After Credits ($Billions)

Average Tax Rate

Share of total taxes

Share of all AGI

All returns, total








No adjusted gross income








$1 under $5,000








$5,000 under $10,000








$10,000 under $15,000








$15,000 under $20,000








$20,000 under $25,000








$25,000 under $30,000








$30,000 under $40,000








$40,000 under $50,000








$50,000 under $75,000








$75,000 under $100,000








$100,000 under $200,000








$200,000 under $500,000








$500,000 under $1,000,000








$1,000,000 under $1,500,000








$1,500,000 under $2,000,000








$2,000,000 under $5,000,000








$5,000,000 under $10,000,000








$10,000,000 or more









Summary for $1 Million+








Source: IRS 2009 Data, Table 1.2 http://www.irs.gov/pub/irs-soi/09in12ms.xls




Fact is, unlike most other folks, Warren Buffett gets most of his income from dividends and capital gains, which are nominally taxed at 15 percent.

Left unsaid is that much of that is taxed at 35 percent (via the corporate income tax) before he even gets his hands on it. So in effect, he’s paying taxes twice (that is, when his companies actually pay, anyway). Counting both taxes, his effective rate would really be well north of 40 percent for a big chunk of his income.

There’s more. Obama, and co-conspirators like Buffett, claim to want to slap only “millionaires and billionaires.” But in 2009, for instance, fewer than a quarter-million taxpayers (less than two tenths of 1 percent) reported income over $1 million -- and their combined bill was less than $200 billion.

Raise the top tax rate on them by 13 percent, as Obama wants (from 35 percent to 39.6 percent) and you bring in only another $26 billion, tops -- and that’s if your tax hike doesn’t stifle the economy and kill jobs (which it surely would). Yet what’s $26 billion in a world of $4 trillion federal budgets with trillion-dollar-plus deficits? http://taxprof.typepad.com/taxprof_blog/2011/08/warren-buffetts.html    



http://www.endthespending.com/           Washington’s crushing debt burden now totals $47,000 for every man, woman, and child in America. And that doesn’t include our even larger unfunded long-term debt. This is catastrophic and unsustainable.  Get informed & Take action at this site.



CAGW’s Prime Cuts 2011 provides an antidote to the spending addiction that continues to plague the federal  government. The report has 691 recommendations that would save taxpayers $391.9 billion in the first year and $1.8 trillion over five years.

On February 23, 2009, President Barack Obama pledged to cut the deficit in half over four years. The President continued his tough rhetoric on November 3, 2009 when he stated that “…government is going to have to get serious about reducing our debt levels.” On August 27, 2010, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen asserted that the national debt constitutes the biggest national security threat to the United States. On March 10, 2011, the world’s largest bond company, Pimco, said it would stop buying U.S. bonds





=                        This is the slowest "recovery" since the 1930s, if it can be called that (see chart above), as businesses beset by the highest corporate tax burden in the world, the looming job-killing presence of ObamaCare and cap-and-trade by regulation sit on the sidelines, fearing the future.

 http://www.ftportfolios.com/Commentary/EconomicResearch/2011/7/11/jobs-versus-government   Liberal economists have argued that recoveries from financial crises are always slow. But this covers up the fact that government always grows in a crisis – no matter which party is in power. And it is this growth in government that slows the recovery, not the crisis that preceded it.

http://www.investors.com/NewsAndAnalysis/Article/573386/201105251834/Government-Doesnt-Create-Jobs.aspx in an op-ed in the Times of London by President Obama and British Prime Minister David Cameron. But there it was: "Governments do not create jobs; bold people and innovative businesses do."For once, the president is spot on. Businesses create jobs to fill a need, and their incentive is profit. Businesses invest; governments can only spend. Businesses create wealth, as do their employees.Government consumes wealth and sucks the economic oxygen out of the room. Its employees create paperwork and regulations that restrict economic growth.This is the slowest recovery since the 1930s, if it can be called that (see chart above), as businesses beset by the highest corporate tax burden in the world, the looming job-killing presence of ObamaCare and cap-and-trade by regulation sit on the sidelines, fearing the future.a record number of Americans — 1-in-6 — are dependent on government anti-poverty programs. Nearly half of Americans, 47%, pay no income tax at all. More people than ever are riding the wagon rather than pulling it.Obama and Cameron are right: Government doesn't create jobs.But it can destroy them through taxes, regulations and misallocation of resources. 

http://www.investors.com/NewsAndAnalysis/PhotoPopup.aspx?path=ISSjob0715_4100714.png&docId=540392&xmpSource=&width=831&height=545&caption=              chart of unemployment over the last 10 recessions that shows the miserable failure of Obama, Obama's inexperience, the Democrats and Obamanomics.  We need people who know what they are doing.




http://www.investors.com/NewsAndAnalysis/Article/555735/201012031901/The-Audacity-Of-Economic-Ignorance.aspx                        From 2002, the last year before the cuts, to 2007, the last year before the financial meltdown, the real economy expanded by $1.77 trillion, or 15.2%. "Very little" growth? Jobs increased by 7.77 million, business investment surged 38%, and personal net worth soared 56%. Brown is wrong on every point.  Yes, gross domestic product did fall sharply in 2008 as the financial meltdown hit. But no reputable economist maintains the financial panic was a result of the Bush tax cuts.  "No real history"? Taxes were cut on high-income earners in the 1920s (Coolidge), 1960s (Kennedy), 1980s (Reagan) and again in the 2000s (Bush). These cuts benefited the rich and everyone else. In all these cases, jobs boomed after tax cuts. In fact, history shows that the best way to boost jobs is to cut taxes on the rich (aka Employers, Investors).  "Extending unemployment benefits" stimulates nothing. It merely takes money from one person's hand and puts it into another.  Economies grow mainly because of business investment. The chart above shows how consumer spending barely budged in the last two recessions while business investment plunged. Today we're still 14% below our peak on business investment, while consumer spending has bounced all the way back.  If we want a strong expansion, business investment must grow.





 http://www.heritage.org/Research/Reports/2003/08/The-Historical-Lessons-of-Lower-Tax-Rates        history tells us that tax revenues grow and "rich" taxpayers pay more tax when marginal tax rates are slashed. This means lower income citizens bear a lower share of the tax burden - a consequence that should lead class-warfare politicians to support lower tax rates.Conversely, periods of higher tax rates are associated with sub par economic performance and stagnant tax revenues. In other words, when politicians attempt to "soak the rich," the rest of us take a bath. Examining the three major United States episodes of tax rate reductions can prove useful lessons.

  Get the Rich to pay more in taxes by lowering the tax rates.  Look at the tax revenues for the years there were tax cuts; if you want the rich to pay more in taxes, then do what has worked in the past looking at the revenue in the Coolidge, Kennedy, Reagan and Bush years after the rates kicked in and lower the tax rates.  This brings in more revenue, but you have to have discipline on the spending side.  If you get a raise or bonus, you may have noticed how easy it is to spend what you have earned; well, it is even easier to spend other people's money isn't it?  consider if your work or someone else is picking up the tab, what do you eat, where do you stay vs. if you were going to have to pay for it?  Congress is addicted to spending, give it more and it will spend more on top of that. 


 http://www.investors.com/NewsAndAnalysis/Article/546396/201009081903/Same-Old-Game.aspx                                        As for Democrats' claim that the tax cuts "benefited only the wealthy," 7 million new U.S. jobs were created from 2003 to 2008. How's that stack up to Obama's record of 4 million lost and counting?

 http://www.econoclast.com/images/Is_Jobless_Rate_Just_Bad_Luck_For_President-05-31-11.pdf            Net new jobs increased by over 20 million during Clinton's time in office. In contrast, fewer people are employed now than when President Obama took office. Is it that Clinton was lucky and Obama is unlucky?
    Clinton campaigned on national health care, and during the campaign Gov. Clinton said he would never support the North America Free Trade Agreement. After the election Clinton made  NAFTA passage one of his top legislative priorities. Mandated health care for all workers was going to be the theme of Clinton's first term. Clinton's health care plan was defeated in 1994. After that, the U.S. economy boomed for the remainder of the 1990s.
    Was that luck or did Clinton, once president, decide to take a different economic path?
Sen. Obama campaigned on the message that the federal government should provide health care for everyone, and he opposed free-trade agreements with countries that do not live up to certain labor standards. But Obama was not as lucky as Bill Clinton. ObamaCare passed and created a major roadblock for those wanting to start and/or expand a business. Job growth is slow at best and housing prices are falling.

http://www.investors.com/NewsAndAnalysis/Article/515491/200912161855/JFK-iDefiedi-Samuelson-Setting-Off-Boom.aspx                        JFK wanted to eclipse that mark in a big way. He put together a dream team of economic advisers to tell him how, and he chose Samuelson to anchor it.  JFK's "Camelot," has been cited far and wide as the cause of the incredible run of growth in the American economy from 1961 to 1968, when GDP increased by 5.1% per year, real federal revenues went up by more than a third, unemployment fell to 4%, and the Dow Jones industrial average hit 1000 for the first time. The economy continued to teeter in 1961 and early 1962 as JFK considered this advice but enacted no policy. The economy sensed the president's lack of surety. The Dow lost 28% in a six-month span, and forecasts came out that the Kennedy years were likely to be worse than Eisenhower's.JFK ordered his advisers to start taking suggestions from the business community, and a bombshell came from the Chamber of Commerce: a permanent 26% reduction in the marginal rate. Kennedy promptly indicated that this should become law, and it essentially did in the Revenue Act of 1964, which took the top rate down to 70% for good. The Fed, for its part, reacted negatively and tripled the federal funds rate.The boom started just as JFK indicated that he was dumping the neo-classical synthesis for its opposite. Robert Mundell, was at the time a young staffer at the International Monetary Fund and urging just that.  As Mundell wrote years later, in the wake of his own Nobel Prize, "at first (my advice) wasn't popular. This was because it recommended a complete reversal of the ... neo-classical synthesis. . .. Fortunately for the United States (and me), President Kennedy reversed the policy mix to that of tax cuts to spur growth in combination with tight money to protect (the dollar). The result was the longest expansion ever ... unmatched until the Reagan expansion of the 1980s."  Mundell would reiterate his ideas in the 1970s, under the name "supply-side economics," and see them implemented again the following decade.




http://news.investors.com/Article/589337/201110251850/Better-In-Rwanda.htm            JOBS WANTED???  The U.S. has slipped again in world rankings that assess the ease of starting a new business. If we're to bring down our stubbornly high unemployment rate, this trend has to be reversed.  According to the World Bank's "Doing Business 2012" report, America is 13th among 183 countries ranked in the "Starting a Business" category. In the 2011 report, the U.S. ranked 11th. The year before, it was No. 8.  In 2009, the U.S. was ranked No. 6. It was fourth in 2008 and third in 2007.  In the 2012 ranking, the U.S trailed such job creators as Macedonia, Georgia, Rwanda, Belarus, Saudi Arabia, Armenia and Puerto Rico, which are ranked No. 6 through No. 12.

Yet it's the small and new businesses that are being choked by government policy. The capital gains tax rate on investments held more than a year, Lohr wrote, directly impacts angel investors' role in providing seed capital for startups.

That's just a single instance of poor public policy. There are many more in the 160,000 pages of federal regulation and in the web of state and local rules that squeeze small businesses and start-ups so tightly that they simply cannot hire. Until this burden is lifted, America's jobs problem isn't going to get any better.



http://news.investors.com/Article/583401/201108311840/Investors-Matter.htm         A Rasmussen survey taken Aug. 20 and 21 found that 64% of the country thinks that the most basic goal of businesses is "to create jobs for the overall economy." Only 25% of the 1,000 respondents got the question right and knew the "primary objective of a business" is "to create value for the shareholders."

Americans need jobs. But businesses are not charities established simply to employ people. Businesses have to create wealth for investors or those businesses will cease to exist.  A company that focuses on hiring without concern for profit would soon go out of business. No one goes into business or runs one simply to employ workers. Everyone goes into business or manages one to make money.

Companies exist for one reason: Someone invested in a promising idea. This investment can be from a group of shareholders providing the company's financial capital. Or it can come from a person or a group that invests their savings and labor.  Either way, those investors have to be paid for what they put into a business. If they're not, they have no reason to invest.

Without the profit motive, mankind would be living today just as it had in the beginning. A man's life would be more poor, nasty, brutish and short than it was in the day when Thomas Hobbes wrote those words in the middle of the 17th century.  It's people who have sought profit who have financially backed and created the innovations that define the luxuries, conveniences and health of modern life.

It's important that Americans understand what the primary objective of businesses is. If they don't, then we are doomed to keep electing politicians whose perverse understanding of business is poison to our economy.




Most Americans are unaware that about $700 billion a year of federal taxpayers' money is handed out to nontaxpayers who are allegedly below the poverty line (in addition to $250 billion a year given out by the states).  The No. 1 reason people are below the poverty line is what a group in St. Louis labels "marriage absence." They have created a new organization called the Center for Marriage Policy http://marriagepolicy.org/    to design for Missouri a model to deal with this problem. At a conference this October to launch its proposals, founder David Usher said, "Marriage absence is driving America's greatest problems, including out-of-control spending, much of the home-loan foreclosure crisis, poverty, children who fail in school, lack of health care coverage, and personal bankruptcy." 

The temptation to cheat is ever present. The Census Bureau just reported that one-quarter of the single moms receiving generous taxpayer cash and benefits actually have a partner living in the house whom she doesn't marry because marriage would cut off her government handouts.

What is now called the hidden welfare state (because so few Americans know about its enormity) is the fastest-growing component of government spending, and this does not include Social Security or Medicare payments. The total of these means-tested handouts is greater than what we are paying for our entire public school system and greater than what we spend on national defense.



http://www.investors.com/NewsAndAnalysis/Article/519631/201001291905/-Dow-Dives-53.aspx              Obama’s cabinet has the LEAST private sector experience…WE pay the price for their Inexperience, stupidity and On The Job Training......Experience does matter!!  Also, the market seems to be saying: "It's the policies, stupid." Specifically, the socialistic policies that the Obama administration keeps pushing  http://www.investors.com/NewsAndAnalysis/Article/543650/201008121904/The-Cabinet-From-Another-World.aspx    

   The deficit he inherited was created by the Congressional Democrats, including Senator Barack Obama, who did absolutely nothing to oppose the runaway spending. He was one of the biggest of the big spenders. The last time the federal government had a budget surplus, Bill Clinton was president, so it was called "the Clinton surplus." But Republicans controlled the House of Representatives, where all spending bills originate, for the first time in 40 years. It was also the first budget surplus in more than a quarter of a century. The only direct power that any president has that can affect deficits and surpluses is the power to veto spending bills. President Bush did not veto enough spending bills but Senator Obama and his fellow Democrats in control of Congress were the ones who passed the spending bills.



http://www.investors.com/NewsAndAnalysis/Article/522949/201003041514/Both-Parties-Bear-Part-Of-Deficit-But-Dems-Is-Quadruple-The-GOPs.aspx             As Alexander Hamilton wrote, Congress "commands the purse." And both Democrats and Republicans have controlled Congress in recent years, during which time our national debt has skyrocketed.

During the most recent seven years that the Democrats have controlled Congress, their deficits have averaged $619 billion a year, or 5.3% of the gross domestic product (GDP). During the most recent seven years that the Republicans have controlled Congress, their deficits have averaged $93 billion a year, or 0.6% of GDP. Over their entire seven-year spans, the Democrats' deficit spending has totaled $4.3 trillion, the Republicans' $651 billion.

And none of this counts the 2011 budget. If the Democratic Congress passes a budget similar to what President Obama has proposed, it will increase deficits by another $1.3 trillion, or 8.3% of GDP (even with growth in GDP projected at a healthy 4.6%). That's 14 times the average deficit under Republican control of Congress.

The simple truth is this: If you take all of the deficits accumulated over the last seven years in which the Democrats and Republicans, respectively, have controlled Congress (14 years in total), $8.70 out of every $10 in deficit spending has been racked up by a Democratic Congress, $1.30 by a Republican Congress.

President Obama, who according to White House figures will post more deficit spending in his first two years than any other president in U.S. history has posted in eight, said last week that "my administration is doing what families and businesses all across the country are doing during these difficult times — we're tightening our belts."

evidence of belt-tightening in Washington has proven to be quite elusive — especially when the Democratic Party has been in control of the purse strings.




http://weissratings.com/news/articles/u-s-sovereign-debt-rating-close-to-junk/                   “Weiss Ratings is very close to downgrading the sovereign debt rating of the United States one more notch to a ‘C –’, which will put it just one notch above junk,” Martin Weiss, President of Weiss Ratings told CNBC on Wednesday. 

            “In April, Weiss Ratings gave the U.S. sovereign debt rating a ‘C’.  A ‘C’ is equivalent to approximately a triple-B on the S&P, Moody’s and Fitch scales.  Its two notches above junk, Weiss told CNBC in May.  Weiss added that while the rating was weak, the debt situation was not in a danger zone that should trigger panic. 

            Weiss believes a downgrade by the large rating agencies is long overdue, noting that the top-notch standard assigned to the U.S. is unfair to investors and savers as they are not being compensated for the level of risk they are taking. 

            “The U.S. has a huge debt load compared to most other countries,” he said.  “And, has a very unstable economy over the last 10 years compared to most other countries.”   The U.S. ratio of debt-to-gross domestic product is currently over 90 percent.

            “The only thing that’s really holding up the U.S. debt rating is a widespread international acceptance for U.S. Treasury securities and nice strong liquid market.  But even that might be coming into question,” according to Weiss.   

http://www.freedomworks.org/issues      As one of our million-plus FreedomWorks members nationwide, I urge you to contact your representatives and ask them to support H.R. 1848, the One Percent Spending Reduction Act of 2011. Introduced by Rep. Mack (R-FL), the “penny plan” would balance the federal budget beginning in FY 2019 by cutting spending by one percent each year for six fiscal years and capping overall spending at 18 percent of Gross Domestic Product (GDP) beginning in FY 2018. It would reduce overall federal spending by $7.5 trillion over the next ten years.

Washington is on an unprecedented spending binge. Our national debt has skyrocketed to nearly $14.4 trillion. The Republican Study Committee has listed the One Percent Spending Reduction Act as a bold solution in their “Cut, Cap and Balance” proposal letter to House leadership. Using the Ryan budget’s tax policies, the One Percent Spending Reduction Act would bring the budget into balance by 2019.

The one percent spending cuts will be achieved one of two ways. The Congress and the President could work together to cut federal spending by one percent each year. If they are unable to reach a compromise, the bill triggers automatic, across-the-board spending cuts to ensure the one percent reduction is met.

It is urgent that we cut federal spending for the sake of our future prosperity. Reducing spending to 18 percent of GDP by 2018 is a good start. I urge you to call your representatives and urge them to cosponsor the One Percent Spending Reduction Act of 2011.   http://www.investors.com/NewsAndAnalysis/Article/567805/201103311843/A-Cut-Of-089-Cant-Be-Serious.aspx                                     Sixty-four economists and ex-budget officials sent a letter this week to President Obama, hoping he can light a fire under Congress' do-nothing Democrats.  Sadly, the spender-in-chief is a big part of the problem. He's virtually ignored his own Deficit Commission's suggestions. Heck, he's the inspirational ringleader of the Fiscal Irresponsibility Caucus.



http://news.investors.com/Article/599393/201201301801/mack-plan-simply-cuts-trillions.htm?Ntt=mack-plan           Mack has introduced legislation (H.R. 1848) to balance the budget by cutting one penny out of every dollar of federal spending (excluding net interest) each year for six consecutive years.  The legislation — widely known as the "Mack Penny Plan" — would eventually cap total federal spending at 18% of gross domestic product.

The problem Mack proposes to solve is immense. Last year the federal government spent $3.6 trillion, borrowing 36 cents of every dollar it spent.   Is it possible to balance the budget without raising taxes? The Mack Penny Plan shows not only is it possible, but it's possible to balance the budget while cutting the tax burden to its 30-year historical average.  The Mack Penny Plan, however, won't do away with the need for Congress to make tough choices. Federal spending is on course to grow nearly 46% over the next decade. Mack's legislation would limit the increase to about 19%.

But either Congress will resize the federal government's responsibilities and reform its programs or, by refusing to change course, it will lead this country into bankruptcy.  Alarmed by the dire fiscal outlook, more than 70 economists recently signed a petition calling upon Congress and President Obama to "reduce aggregate federal spending by one percent each year until the budget is on a path to balance." Sound familiar?




http://cowboybyte.com/2150/obamas-executive-order-13575-rural-council-%e2%80%93-agenda-21/          Obama’s Executive Order 13575 Rural Council….  Agenda 21??  Who is making up the rules? Is it the same people who said we are causing global warming? The same people who said no more mining for coal or oil? The same people who said we can’t build pipe lines? The same people who are in control of our government that want to give money to anyone that will back their agenda? The same people who have failed to provide jobs with stimulus that we paid for? The same people who want to take God out of our heritage? The same people who want to control our schools so that they can indoctrinate our children? The same people who want you to registrar all your guns?

Then once they have all they want they will be able to do exactly what Hitler did prior to World War II: Take your guns, take your property, take anything and do anything they want. They will be able to move you to a central community as they did the Jews and Christians, make you disappear if they want and nobody is going to be able to stop them. May be that I am reading a lot of stuff that is between the lines but it is looking a lot like the beginning of a socialistic dictatorship to me.



https://peregrine5700.wordpress.com/2011/04/04/the-budget-pie-illustrated/                                         2011 Budget Pie Illustrated

http://www.investors.com/NewsAndAnalysis/Article/567894/201104011939/Editorial-When-Inflation-Comes-Blame-Big-Government.aspx        Obama's Big Democrat Government

http://www.investors.com/NewsAndAnalysis/Article/568384/201104061838/Adults-Only.htm Last year, Democrats controlled both houses of Congress and the presidency. By law, they were required to pass a budget. They didn't. Why? Like children running from a broken cookie jar, pointing fingers as they go, they were afraid of being punished by the voters.   And while we're talking childish — isn't a looming government shutdown a bit more important than raising still more political cash? Can't it wait, Mr. President? Apparently not.

http://www.cbo.gov/ftpdocs/120xx/doc12085/03-10-ReducingTheDeficit.pdf              Congressional Budget Office    Revenue vs. Spending.

http://www.cbo.gov/ftpdocs/120xx/doc12039/HistoricalTables[1].pdf                Revenues, Outlays, Deficits, Surpluses, and Debt Held by the Public


Fault Congress, Not President, For Federal Budget Problems

By WALTER WILLIAMS Posted 03/14/2011 06:14 PM ET    View Enlarged ImageWithin the past decade, I've written three columns — titled "Deception 101," "Stubborn Ignorance," and "Exploiting Public Ignorance" — explaining which branch of the federal government has taxing and spending authority.How can academics, politicians, news media people and ordinary citizens get away with statements such as "Reagan's budget deficits," "Clinton's budget surplus," "Bush's budget deficits and tax cuts" or "Obama's tax increases"?Which branch of government has taxing and spending authority is not a matter of rocket science, but people continue to make these statements. The only explanation that I can come up with is incurable ignorance, willful deception or just plain stupidity; if there's another answer, I would like to hear it.Let's look at the facts.   http://www.usconstitution.net/xconst_A1Sec7.html    Article I, Section 7, of the U.S. Constitution reads: "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills."Our Constitution grants the president absolutely no authority to raise or lower taxes. The president is permitted to propose tax measures or veto them. Congress can ignore proposals and override vetoes.The Constitution grants Congress the final and ultimate say on taxes.  The same principle applies to spending. A president cannot spend one dime that Congress does not first appropriate.Therefore, statements such as "Under Barack Obama, government spending has increased 21%" and "Under Barack Obama, welfare spending has increased 54%" are just plain nonsense, if they are suggesting that Obama has increased spending.Credit or blame, whether it's a balanced budget, budget surplus, budget deficit or national debt, lies with the U.S. Congress. Knowing where constitutional authority for taxing and spending resides is vital to our nation.  No matter how we feel about President Obama, if we buy into the notion that it's he who's doing the taxing and spending, adding to our debt and deficits, we will focus our attention on trying to restrain the president.That will leave Congress less politically culpable for our deepening quagmire. Of course, if you're a congressman, not being held accountable is what you want.Adding to the political deception in Washington is the notion that nearly 60% of the federal budget is off limits for spending cuts, the so-called nondiscretionary spending such as Social Security, Medicare and Medicaid. Congress has the constitutional authority, through a simple majority vote, to change whatever laws are associated with those "nondiscretionary" spending programs.As an example, the U.S. Supreme Court held in Flemming v. Nestor (1960) that there are no "accrued property rights" to a Social Security check.  That means Congress can do anything it wishes with Social Security, and that includes means-testing payments, raising the eligibility age, reducing payments, increasing "contributions" or eliminating the program altogether. The same applies to any of the other so-called nondiscretionary spending programs.By the way, thinking about the looming Social Security disaster, I believe that a person who's 65 years old and has been forced into Social Security is owed something.  But who owes it to him?  Congress has spent every penny of what he put into Social Security.Any check he receives comes out of the hide of young workers in the labor force. I think that's unfair. The young worker has no obligation to that senior citizen, but Congress has.I have a one-time fix to give us some breathing room to make reforms. The federal government has huge quantities of wasting assets — assets that are not producing anything — 650 million acres of land, or almost 30% of the land area of the United States. It owns 80% of the land in Nevada, 70% in Alaska, 60% in Idaho and 50% in California and Oregon. I, and I suspect many others, would be willing to make a deal with Congress whereby I forsake all Social Security and Medicare benefits for, say, 50 acres of land in Alaska. • Williams is a professor of economics at George Mason University.




http://econfaculty.gmu.edu/wew/articles/10/PoliticiansExploitEconomicIgnorance                  Suppose your local politician tells you, as a homeowner, "I'm not going to raise taxes on you! I'm going to raise taxes on your land." You'd probably tell him that he's an idiot because land does not pay taxes; only people pay taxes. That means a tax on your land is a tax on you. You say, "Williams, that's pretty elementary, isn't it?" Not quite. 
            What about the politician who tells us that he's not going to raise taxes on the middle class; instead, he's going to raise corporate income taxes as means to get rich corporations to pay their rightful share of government?            If a tax is levied on a corporation, and if it is to survive, it will have one of three responses, or some combination thereof. One response is to raise the price of its product, so who bears the burden? Another response is to lower dividends; again, who bears the burden? Yet another response is to lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of the tax. 
    We raise taxes on things we want to discourage, like cigarettes, and we lower taxes on things we want to encourage, like education.  The problem is Obama treats job creators like cigarettes.




    http://www.investors.com/NewsAndAnalysis/Article/569126/201104141826/Tax-Days-Forgotten-Lesson.aspx               the 16th Amendment passed on July 2, 1909, and ratified by the states on Feb. 3, 1913, the original targets of this amendment were the corporations and trusts of the day that had gained too much power at the expense of consumers and workers.  But once ratified, it was immediately utilized to tax individual income. The initial tax rate was 2%. Doesn't that sound quaint compared to today's top rate of 35%?  Like most creations of government, once initiated, the income tax had a strong propensity to grow.  Small businesses are the engine of our economy and drive job growth. They create 64% of all net new jobs and produce 13 times as many patents as larger businesses per worker. Over half of private sector employees work for small businesses, and everyone benefits from their ingenuity and high-quality service.  Small businesses and their workers are especially hard-hit by high taxes. Every dollar of additional tax that a business pays is a dollar that cannot be spent on increased wages, health insurance, retirement savings, investment in equipment and the hiring of new workers.  That's a lot of income that is NOT available for business expansion and job creation.  politicians and governments don't create jobs — businesses do. Government can only maintain an environment that encourages entrepreneurs to invest and hire.  Instead, the Obama Democrat government is producing more spending, more regulation, more taxes, bigger deficits and higher levels of debt. For the working people who run small businesses, Obama, Pelosi, Reid and the Democrat’s policies do not inspire confidence. Its definition of wealthy targets small businesses. Included in this category are 750,000 small businesses that employ 25% of American workers. These are firms that organize as sub-chapter "S" corporations and LLC's and report income and pay taxes at the individual rate.  You don't help the people riding the wagon by punishing the people pulling it. But Obama does.

What would you do with $228,055 to $586,428?  This needs to be paid for by you.    the $821 billion cost of the stimulus divided by the maximum of 3.6 million jobs the CBO believes the stimulus may have saved or created equals an average of $228,055 per job.  At the lower end of the CBO's top job-creating-and-saving estimate for the stimulus -- 1.4 million jobs -- the jobs would cost an average of $586,428 a piece, says CNS News.Source: Matt Cover, "CBO: Jobs Created and Saved By Stimulus Cost At Minimum an Average of $228,055 Each," CNS News, February 24, 2011.



http://news.investors.com/Article/586070/201109261837/Believing-The-Big-Lie.htm               In the fall of 1995, the GOP Congress passed a continuing resolution spending bill to keep the federal government open. Bill Clinton vetoed it.  Polls, in some cases more than 2-1, showed the public blamed the subsequent shutdowns — one in November 1995, the other from Dec. 16, 1995 to Jan. 6, 1996 — on the Republicans. The fact that the public believed as it did is nearly inexplicable, since it was the GOP that passed the spending bill and a Democrat who vetoed it.

But there is an explanation. The media used its power to convince the public that somehow the man who rejected the legislation that would have kept the government running was not responsible for the shutdowns.  The media were able to shift the blame to the GOP for the 1995-96 shutdowns by incessantly telling the public that the Republicans' spending bills would cut "critical" services and portrayed Clinton as a hero who was merely trying to preserve those services and the status quo.

It's maddening to see such shenanigans rewarded time and time again.

Last week, the GOP majority passed a spending bill in the House where, by constitutional requirement, all money bills must begin. But the Democrats who run the Senate rejected it the next day.

That didn't stop Senate Majority Leader Harry Reid of Nevada from planting seeds of deception, though.

"Do (the Republicans) want the government to shut down?" he asked during a news conference last week.



http://townhall.com/columnists/larryelder/2011/09/01/the_welfare_state_too_many_takers_--_not_enough_givers     Hollywood left-wingers understand the corrosive effect of burdensome government on their own industry. Those working in Hollywood long complained about "runaway" productions, where other states and countries lured television and movie productions away from California by offering tax incentives and less restrictive union rules. What did Hollywood do about this? The industry lobbied state and city lawmakers to lower the tax and regulatory burden on production companies in order to keep the work local. It worked. Still the left screams at "Big Oil" for taking advantage of legal tax breaks -- offered to other companies -- to reduce their tax burden, just as Hollywood producers try to do.  

The Founding Fathers conceived a brilliant document to restrain the federal government and allow maximum freedom for the people to make their own way. It leaves people the power to make their own decisions and to deal with the consequences.

 As governments take more away from their producing citizens and give it to their nonproducers, growth stagnates and opportunities dry up.



http://newsbusters.org/blogs/walter-e-williams/2011/10/26/silly-leftists-profits-are-people      Profits represent the residual claim earned by entrepreneurs. They're what are left after other production costs — such as wages, rent and interest — have been paid. Profits are the payment for risk taking, innovation and decision-making. As such, they are a cost of business just as are wages, rent and interest. If those payments are not made, labor, land and capital will not offer their services. Similarly, if profit is not paid, entrepreneurs won't offer theirs. Historically, corporate profits range between 5 and 8 cents of each dollar, and wages range between 50 and 60 cents of each dollar.

The pursuit of profits forces producers to be attentive to the will of their customers, simply because the customer of, say, a supermarket can fire it on the spot by taking his business elsewhere. If a state motor vehicle department or post office provides unsatisfactory services, it's not so easy for dissatisfied customers to take action against it. If a private business had as many dissatisfied customers as our government schools have, it would have long ago been out of business.
              If General Motors and Chrysler had been allowed to go bankrupt, it wouldn't have meant that their productive assets, such as assembly lines and tools, would have gone poof and disappeared into thin air. Bankruptcy would have led to a change in ownership of those assets by someone who might have managed them better. The bailout enabled them to avoid the full consequences of their blunders.
              By the way, we often hear people say, with a tone of saintliness, "We're a nonprofit organization," as if that alone translates into decency, objectivity and selflessness. They want us to think they're in it for the good of society and not for those "evil" profits. If we gave it just a little thought and asked what kind of organization throughout mankind's history has accounted for his greatest grief, the answer wouldn't be a free market, private, profit-making enterprise; it would be government, the largest nonprofit organization.

http://www.washingtonpost.com/opinions/job-creation-101/2011/09/09/gIQAhEHILK_story.html          Recall that the private sector is the main employment engine. Businesses create jobs when two conditions are met. First, extra demand for their products justifies more workers. Second, the extra demand can be satisfied profitably. There are qualifications to these generalizations (start-ups, for instance), but these are the basics. 

By contrast, government is less a job creator than a job changer. It supports jobs (soldiers, teachers, scientists) by taxing, borrowing and regulating. If government taxed, borrowed or regulated less, that money would stay with households and businesses, which would spend it on something else and, thereby, create other jobs. Politics determines how much private income we devote to public services.



http://townhall.com/columnists/thomassowell/2011/08/16/social_degeneration/page/full/            Philadelphia's black mayor, Michael A. Nutter, ordered a police crackdown and lashed out at the whole lifestyle of those who did such things.  "Pull up your pants and buy a belt 'cause no one wants to see your underwear or the crack of your butt," he said. "If you walk into somebody's office with your hair uncombed and a pick in the back, and your shoes untied, and your pants half down, tattoos up and down your arms and on your neck, and you wonder why somebody won't hire you? They don't hire you 'cause you look like you're crazy," the mayor said. He added: "You have damaged your own race."

While this might seem like it is just plain common sense, what Mayor Nutter said undermines a whole vision of the world that has brought fame, fortune and power to race hustlers in politics, the media and academia. Any racial disparities in hiring can only be due to racism and discrimination, according to the prevailing vision, which reaches from street corner demagogues to the august chambers of the Supreme Court of the United States.

The prevailing social dogma is that disparities in outcomes between races can only be due to disparities in how these races are treated. In other words, there cannot possibly be any differences in behavior.

The Chinese minority in Malaysia has long been more successful and more prosperous than the Malay majority, just as the Indians in Fiji have long been more successful and more prosperous than the indigenous Fijians. At various places and times throughout history, the same could be said of the Armenians in Turkey, the Lebanese in Sierra Leone, the Parsees in India, the Japanese in Brazil, and numerous others. There are similar disparities within particular racial or ethnic groups. Even this late in history, I have had northern Italians explain to me why they are not like southern Italians. In Australia, Jewish leaders in both Sydney and Melbourne went to great lengths to tell me why and how the Jews are different in these two cities.

In the United States, despite the higher poverty level among blacks than among whites, the poverty rate among black married couples has been in single digits since 1994. The disparities within the black community are huge, both in behavior and in outcomes. Behavior like effort, working smart, working hard, putting time in to learn & study can make a big difference.



http://www.washingtonpost.com/opinions/why-are-we-in-this-debt-fix-its-the-elderly-stupid/2011/07/28/gIQA08LtfI_story.html                        In 1960, national defense was the government’s main job; it constituted 52 percent of federal outlays. In 2011 — even with two wars — it is 20 percent and falling. Meanwhile, Social Security, Medicare, Medicaid and other retiree programs constitute roughly half of non-interest federal spending.   By now, it’s obvious that we need to rewrite the social contract that, over the past half-century, has transformed the federal government’s main task into transferring income from workers to retirees.

This tidal wave of spending means one or all of the following: (a) much higher taxes; (b) the gutting of other government services, from the Weather Service to medical research; (c) a partial and dangerous disarmament; (d) large and unstable deficits.

Obama poses as one brave guy for even broaching “entitlement reform” with fellow Democrats. What he hasn’t done is to ask — in language that is clear and comprehensible to ordinary people — whether many healthy, reasonably well-off seniors deserve all the subsidies they receive??  That would be leadership. Obama is having none of it.  a mythology holding that, once people hit 65, most become poor.  We need to ask how much today’s programs constitute a genuine “safety net” to protect the vulnerable (which is good) and how much they simply subsidize retirees’ private pleasures.

Our politicians make perfunctory bows to entitlement reform and consider that they’ve discharged their duty, even if nothing changes. We need to recognize that federal retiree programs often represent middle-class welfare. Past taxes were never “saved” to pay future benefits. We need to ask the hard questions: Who deserves help and who doesn’t?

http://townhall.com/columnists/thomassowell/2011/08/03/misleading_words_part_ii/page/full/       Why should the average taxpayer be subsidizing people who have much more wealth than they do?

If we are concerned about those particular elderly people who are in fact poor -- as we are about other people who are genuinely poor, whatever their age might be -- then we can simply confine our help to those who are poor by some reasonable means test. It would cost a fraction of what it costs to subsidize everybody who reaches a certain age.  But the political left hates means tests. If government programs were confined to people who were genuinely poor in some meaningful sense, that would shrink the welfare state to a fraction of its current size. The left would lose their human shields.

It is certainly true that the elderly are more likely to have more medical problems and larger medical expenses. But old age is not some unforeseeable misfortune. It is not only foreseeable but inevitable for those who do not die young. It is one thing to keep people from suffering from unforeseeable things beyond their control. But it is something else to simply subsidize their necessities so that they can spend their money on other things and leave a larger estate to be passed on to their heirs.  People who say they want a government program because "I don't want to be a burden to my children" apparently think it is all right to be a burden to other people's children.  Among the runaway spending behind our current national debt problems is the extravagant luxury of buying political rhetoric.




Under federal tax laws, the richest Americans — the top 1% of earners — pay roughly 38% of the federal income tax revenue while earning only 20% of the national adjusted gross income, according to Internal Revenue Service data.

Meanwhile, the bottom 50% pays less than 3% of federal income tax revenue while earning almost 13% of the national adjusted gross income. And almost all of that small slice is paid by just a few at the top of that bottom-50% bracket: About 47% of U.S. households pay no federal income tax at all.

So which group isn't paying its fair share? Which cohort is not sharing in the sacrifice? The facts show that the richest Americans are the ones who have been largely financing Washington's careless spending and the buildup of the soul-killing welfare state. Why should they have to pay even more?

We would also like to know why the president gets to define "fair" for the purposes of tax collecting. Why does his definition and that of his party outweigh any other definitions of what is fair? That seems like the job of an emperor, not an elected president who swore that he would uphold the Constitution and its 14th Amendment requirement that everyone receive equal treatment under the law.


http://news.investors.com/Article/568928/201104121859/Its-Date-Night-For-Capitalists-Atlas-Shrugged-Opens-Friday.htm?Ntt=its-date-night           "Atlas Shrugged," Ayn Rand's legendary novel, was published in 1957. Instead of focusing on the old tale of victimized workers and greedy owners, the story turns the tables and shows what happens to the world when the innovators and producers go on strike, when the capitalists and owners turn out the lights and disappear.

The question has been asked on billboards, T-shirts and bumper stickers for half a century: "Who is John Galt?" In "Atlas Shrugged," he's the man who initiates and leads the strike of the producers.

The shrugging comes when men of achievement refuse to accept their unearned guilt, refuse to have their strengths and accomplishments turned into weaknesses and sins.

"All your life, you have heard yourself denounced, not for your faults, but for your greatest virtues," Francisco d'Anconia says to successful industrialist Hank Rearden in the novel. "You have been hated, not for your mistakes, but for your achievements.



http://news.investors.com/Article/597353/201201101843/startups-bull-bear-job-growth.htm?Ntt=govt-endangers     a lesser-known animal metaphor economists like to use is "gazelle" — referring to a small business that, like the animal, is known for being lean and swift.  Most small businesses stay small, but not the gazelles; they run fast. Unfortunately, America's gazelles are now under attack, and the hunter is the U.S. government.

Horribly overreaching legislation such as the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010 have had the unintended but incredibly ignorant consequence of cutting small businesses, and consequently the gazelles, off from markets and making it increasingly difficult for them to access capital. Capital is the gas of business, and a Ferrari without gas is nothing more than an expensive coffee table.

There are generally three ways a small business can obtain the capital it needs to grow. First, it can launch itself on the stock market, through an IPO (initial public offering). Second, it can pursue conventional commercial bank lending. And third, it can seek private equity.

So if you want to kill the gazelles, then the perfect plan would be to make all three of these options overly difficult. Sarbanes-Oxley, which was passed after the Enron and WorldCom scandals, has made it incredibly tough for small businesses to go public. Dodd-Frank, intended to regulate large banks "too big to fail," acting in tandem with a risk-averse OCC, have made Main Street banks wary of lending to the gazelles. Finally, the tax code is pretty harsh on deducting private investment losses, and recent years have seen private investment in the gazelles retreat.

President Obama's own Council on Jobs and Competitiveness recently wrote the following in its interim report to him:  "Well-intentioned regulations aimed at protecting the public from the misrepresentations of a small number of large companies have unintentionally placed significant burdens on the large number of small companies. As a result, fewer high-growth entrepreneurial companies are going public."

As the Economist reveals, companies with a valuation of less than $50 million have gone from comprising 80% of IPOs in the 1990s to just 20% today. The federal government's own IPO Task Force October report noted the average cost of achieving initial regulatory compliance is $2.5 million, followed by an ongoing average annual compliance cost of $1.5 million. That's serious coin.

Now couple these dismal statistics with the fact that 90% of the jobs in newly public gazelles are created after the IPO, and you get a lot fewer jobs.

And recently, in a poll by Pepperdine University, 61% of bankers said they had not made a loan they wanted to because of the fear of being second-guessed, and punished, by the feds. Now add Dodd-Frank regulations and you really have Bonnie and Clyde — hitting the Main Street banks that lend to small businesses much harder than the behemoths on Wall Street.



http://news.investors.com/Article/590863/201111071901/Its-Very-Easy-To-Tell-Big-Lies-With-Statistics.htm?Ntt=its-very-easy-to-tell-big-lies                    The relationship between age and income is not hard to understand. It usually takes years to acquire the skills and experience that high-paying jobs require, or to build up a clientele for those in business or the professions.

But those in the media and in politics who are currently up in arms, denouncing income inequalities, seldom mention age as a factor in those inequalities.  The shrill rhetoric about differences in income proceeds as if they are talking about income inequalities between different classes of people.

It would be hard to get the public all worked up over the fact that young people just starting out in their careers are not making nearly as much money as their parents or grandparents make.  Differences in wealth between the young and the old are even greater than differences in income.  Differences in age are just one of the reasons why the insinuations about income and wealth that are thrown around in the media and in politics are often remote from reality.

While the rhetoric is about people, the statistics are almost invariably about abstract income brackets.  It is easier and cheaper to collect statistics about income brackets than it is to follow actual flesh-and-blood people as they move massively from one income bracket to another over the years.

A University of Michigan study showed that most of the working people who were in the bottom 20% of income earners in 1975 were also in the top 40% at some point by 1991.

Only 5% of those in the bottom quintile in 1975 were still there in 1991, while 29% of them were now in the top quintile. People in the media and in politics choose statistics that seem to prove what they want to prove. But the rest of us should become aware of what games are being played with numbers.






http://news.investors.com/Article/595412/201112201853/anti-chinese-made-china-economy-jobs-unemployment.htm?Ntt=china-economy-isnt-the-threat        Let's look at the magnitude of our trade with China. An excellent place to start is a recent publication (8/8/2011) by Galina Hale and Bart Hobijn, two economists at the Federal Reserve Bank of San Francisco, titled "The U.S. Content of 'Made in China.'"

One of the several questions they ask is: What is the fraction of U.S. consumer spending for goods made in China? Their data sources are the U.S. Census Bureau, the Bureau of Labor Statistics and the Commerce Department's Bureau of Economic Analysis.  Hale and Hobijn find that the vast majority of goods and services sold in the United States are produced here.  In 2010, total imports were about 16 percent of U.S. gross domestic product, and of that, 2.5% came from China.

A total of 88.5% of U.S. consumer spending is on items made in the United States, the bulk of which are domestically produced services — such as medical care, housing, transportation, etc. — which make up about two-thirds of spending.  Chinese goods account for 2.7% of U.S. personal consumption expenditures, about one-quarter of the 11.5% foreign share.

They point out that most of that price goes for transportation in the U.S., rent for the store where they are sold, profits for shareholders of the U.S. retailer, and marketing costs, which include the salaries, wages and benefits paid to the U.S. workers and managers responsible for getting sneakers to consumers.  On average, 55 cents of every dollar spent on goods made in China goes for marketing services produced in the U.S.

Going hand in hand with today's trade demagoguery is talk about decline in U.S. manufacturing.

For the year 2008, the Federal Reserve estimated that the value of U.S. manufacturing output was about $3.7 trillion. If the U.S. manufacturing sector were a separate economy — with its own GDP — it would be tied with Germany as the world's fourth-richest economy.

Today's manufacturing worker is so productive that the value of his average output is $234,220, three times higher than it was in 1980 and twice as high as it was in 1990.  That means more can be produced with fewer workers, resulting in a precipitous fall in manufacturing jobs, from 19.5 million jobs in 1979 to a little more than 10 million today.

The bottom line is that we Americans are allowing ourselves to be suckered into believing that China is the source of our unemployment problems when the true culprit is Congress and the White House with its taxes, regulations, super spending and big government statists mainly Democrats in nature.


http://news.investors.com/Article/591333/201111101851/Still-Factory-Champs.htm?Ntt=still-factory-champs                      But the U.S. is still the world's factory champion. September was the country's 14th straight month of industrial growth. America's share of global manufacturing was 20% in 2009, not far off the 21% portion of 1990. Our manufacturing base is so large that if it were an economy on its own, it would be the eighth largest in the world.

Put another way: This country made $2.15 trillion (in 2005 dollars) worth of manufactured goods two years ago, while China, the world's No. 2 producer, made $1.48 trillion in goods. China, where labor is cheap, might be growing. But this country still has the edge by nearly 50%.

An August report prepared by the Federal Reserve Bank in San Francisco says Chinese-made goods and services accounted for a mere 2.7% of all personal consumption spending in the U.S. last year. On the other side of the ledger, it turns out that 88.5% of the personal consumption spending in this country goes for U.S.-made goods and services. As for the trade deficit that gets so many people worked up: Don't worry about that either.

Cheap imports are good for American consumers. Let other countries make simple, low-value things. That frees our industrial base to focus on innovative products that mature economies need to develop.


http://townhall.com/columnists/anncoulter/2011/11/23/ill_gladly_pay_you_tuesday_for_a_tax_increase_today/page/full/            Blitzer cited Ronald Reagan's statement in his autobiography, "An American Life," that he would happily compromise with Democrats if he could get 75 or 80 percent of what he wanted -- implying that today's Republicans were nuttier than Reagan if they'd refuse a dollar in tax hikes for $10 in spending cuts.  Wolf should have kept reading. As Reagan explains a little farther in his autobiography: He did accept tax hikes "in return for (the Democrats') agreement to cut spending by $280 billion," but, Reagan continues, "the Democrats reneged on their pledge and we never got those cuts."

Maybe that's why Republicans won't agree to raise taxes in exchange for Democratic promises to cut spending.  So in 1982, Reagan struck a deal with the Democrats to raise some business and excise taxes -- though not income taxes -- in exchange for $280 billion in spending cuts over the next six years. As Reagan wrote in his diary at the time: "The tax increase is the price we have to pay to get the budget cuts."

But, of course, the Democrats were lying. Instead of cutting $280 billion, they spent an additional $450 billion -- only $140 billion of which went to the Reagan defense buildup that ended the Evil Empire.

Meanwhile, Reagan's tax cuts brought in an extra $375 billion in government revenue in the next six years -- as that amiable, simple-minded dunce Reagan always said they would. His tax cuts funded the entire $140 billion defense buildup, with $235 billion left over.

Even the gusher of revenue brought in by Reagan's tax cuts couldn't pay for all the additional spending piled up by double-crossing Democrats -- more than twice as much as Reagan's spending on defense.  Apparently, Republicans can read the Democrats' record, too. They know that Democrats will promise to cut spending in exchange for tax increases and then screw Republicans on the spending cuts.


            The nation is in bad shape, Daniels said, and he cited two reasons upfront: persistent unemployment and "an unprecedented explosion of spending, with borrowed money."  Then he made an important connection: "The president's grand experiment in trickle-down government has held back rather than sped economic recovery."

That is, the lavish public spending that purports to put people back to work costs more jobs than it creates.  Such is the path to stagnation and bankruptcy. Greece has gone down it already. Italy and some other European countries may soon follow.


    Virginia has a car tax. Does the car pay the tax? In most political jurisdictions, there's a property tax. Does property pay the tax? You say: "Williams, that's lunacy. Neither a car nor property pays taxes. Only flesh-and-blood people pay taxes!"  If a tax is levied on a corporation and if it is to survive, it will have one of several responses or some combination thereof.

One response is to raise the price of its product, so customers share part of the burden. Another response is to lower dividends, so shareholders share a part of the burden. And a considerable portion of reduced dividend burden falls on ordinary non-rich people.

According to the Tax Foundation, 19% of federal tax returns report dividend income, but 42% of taxpayers older than 65 report dividend income. Therefore, it is people, not some legal fiction called a corporation, who bear the burden of the tax.  Because corporations have these responses to the imposition of a tax, they are merely government tax collectors.

The largest burden of corporate taxes is borne by workers. We discover that by asking a simple question, such as: Which workers on a road construction project earn the higher pay — those employed moving dirt with shovels and wheelbarrows or those doing the same atop giant earthmovers?  You'd guess the guys operating the earthmovers, but why? It's not because they're unionized or because construction contractors have a fondness for earthmover operators. It's because those workers have more capital (tools) to work with and are thereby more productive. Higher productivity translates into higher wages.

Tax policies that raise the cost of capital formation — such as capital gains taxes, low depreciation allowances and corporate taxes — reduce capital formation. As a result, workers have less capital, lower productivity and lower wage growth.  In 1980, Joseph Stiglitz, now a Nobel laureate, said that workers share the highest corporate tax burden in the form of lower wages. A number of economic studies, including that of the Congressional Budget Office, show that workers bear anywhere from 45% to 75% of the corporate tax burden.

Adding to the burden is the fact that capital has the kind of mobility that labor doesn't. Corporate capital can flee to other countries easily, but workers cannot.

 http://www.investors.com/NewsAndAnalysis/Article/541918/201007281900/An-Unserious-Presidency-On-View.aspx                        The president played more than two dozen rounds of golf in his first year in office — as many as George W. Bush did over his entire eight years.  the man elected on a platform of "Change" with a capital C seems to think his job is to neglect his job and have a blast.

His vacation in Bar Harbor, Maine is followed by another vacation in that elitest of lefty locales, Martha's Vineyard, where he can tee off on Mink Meadows, a "classic 1936 Wayne Stiles design" that "is a challenge to both novices and low-handicappers."  Next month, the first lady and nine-year-old Sasha will meet the king and queen of Spain on yet another vacation.

At taxpayer expense, this president flies to Broadway to take the first lady on a date.  Among the stars he's summoned to the White House to play court jester are Paul McCartney, Stevie Wonder, Emmylou Harris, Herbie Hancock, Elvis Costello, Jerry Seinfeld, "three of country music's biggest acts" including Charley Pride, and earlier this month a Broadway cavalcade of stars that was "the sixth in a series of evenings celebrating the music that helped to shape America."

Why so much luxury as so many suffer and there are so many monumental problems to solve? Because, according to the president, "part of what gets us through tough times is music, the arts, the ability to capture that essential kernel of ourselves, that part of us that sings even when times are hard."


http://www.investors.com/NewsAndAnalysis/Article/540548/201007151900/The-White-House-Against-The-World.aspx                     indeed, the changes have been epic, whether it's the nationalization of health care, the $700 billion in bailouts, the $862 billion in failed stimulus, the takeover of the car industry or attempts to control Wall Street.

What's surprising is that so many others also now find themselves in sharp disagreement and near open revolt with Obama & Co., from businesses to average voters to foreign countries that once revered our new president as some kind of global savior.

Meanwhile, with average Americans angry about the economy, illegal immigration and the incompetence in handling the BP oil spill, among other things, the Tea Party movement has surged.

Despite attempts to tar the Tea Partyers as racists, rednecks and shills for the GOP, Obama's poll readings across all groups have never been weaker. A shock poll by Gallup showed he now trails virtually all would-be contenders in 2012 in head-to-head contests. For many voters, it's already Anybody-But-Obama time.  In recent weeks, business groups that weren't unfriendly to Obama have sounded alarm bells about the damage being done by the administration and its allies in Congress.

The Business Roundtable, a CEO group of major U.S. companies with more than $6 trillion in sales; the U.S. Chamber of Commerce, and the small-business oriented National Federation of Independent Business have all warned that current policies — taxes, regulations, bailouts — are killing economic growth and job creation.

Even among the states, President Obama faces a growing revolt. Some 39 are fighting ObamaCare in court, calling it a violation of their rights. And after the Obama Justice Department tried to politically isolate Arizona over its new immigration law, nine states immediately stepped up to support it.

Foreign nations were among Obama's most ardent supporters following the two terms of George W. Bush, who was mercilessly caricatured overseas as an unlettered cowboy. But this week, EU President Jose Manuel Barroso warned: "The transatlantic relationship is not living up to its potential."

Even Britain, once the staunchest of allies, now talks of an end to the "special relationship." Leaders in Russia, Iran, North Korea, Pakistan, Saudi Arabia, the West Bank and Gaza, Venezuela and other countries now routinely snub or reject Obama's policy overtures, and deride him behind his back for being weak.

http://www.investors.com/NewsAndAnalysis/Article/540126/201007122007/Boot-On-Neck-Policies-Choke-US-Recovery.aspx                        With the Obama administration being on an anti-business kick, boasting of putting their foot on some business' neck, and the president talking about putting his foot on another part of the anatomy, with Congress coming up with more and more red tape, more mandates and more heavy-handed interventions in businesses, would you risk $26 billion that you might not even be able to get back, much less make any money on the deal?


 http://www.investors.com/NewsAndAnalysis/Article/534171/201005141842/Alinskys-Star-Pupil-Uses-Rules-As-A-Manual-For-Social-Surgery.aspx           Obama took a break from his Harvard studies to travel to Los Angeles for eight days of intense training at Alinsky's Industrial Areas Foundation, a station of the cross for acolytes. In turn, he trained other community organizers in Alinsky agitation tactics. In 1988, he even wrote a chapter for the book "After Alinsky: Community Organizing in Illinois," in which he lamented organizers' "lack of power" in implementing change.


Alinsky was more than a socialist. He was a moral anarchist.  Alinsky was a big fan of Lenin, whom he called a "pragmatist." He claimed that his own philosophy was anchored in "hope" for a more just world. "Agitate," he egged on fellow radicals, "create disenchantment and discontent with the current values," even if none exist.

Alinsky describes "the Haves" of American society as having fallen "asleep" — ripe for slaughter. "It is as though the great law of change had prepared the anesthetization of the victim prior to the social surgery to come."

Is Obama acting as Alinsky's star social surgeon, the first to possess the necessary power to carve up the American economy for mass redistribution? If so, "Rules for Radicals" may be his operating manual. More of us should read it.



http://www.investors.com/NewsAndAnalysis/Article/567312/201103281759/Mass-Migration-Of-Americas-Golden-Geese.aspx                    In short, with blacks, as with other racial or ethnic groups, those with better prospects are leaving the states that are repelling their most productive citizens in general with liberal policies.  Detroit is perhaps the most striking example of a once-thriving city ruined by years of liberal social policies.  Before the ghetto riot of 1967, Detroit's black population had the highest rate of homeownership of any black urban population in the country, and their unemployment rate was just 3.4%. It was not despair that fueled the riot. It was the riot that marked the beginning of the decline of Detroit to its current state of despair.  Detroit's population today is only half of what it once was, and its most productive people have been the ones who fled.

http://townhall.com/columnists/thomassowell/2009/03/31/a_rookie_president/page/full/                        He has never had any position of major executive responsibility in any kind of organization where he was personally responsible for the outcome.  

Other first-term Presidents have been governors, generals, cabinet members or others in positions of personal responsibility. A few have been senators, like Barack Obama, but usually for longer than Obama, and had not spent half their few years in the senate running for President. Barack Obama is following a long practice among those on the left of being hard on our allies and soft on our enemies.  We can lose some very big games with this rookie.



http://www.investors.com/NewsAndAnalysis/Article/567311/201103281759/Dependency-Redistribution-And-The-Rising-Price-Of-Gas.aspx                                              Every price increase of just a dime per gallon of gasoline at the pump extracts approximately $5 billion from the pockets of U.S. consumers over the course of a year.  Oil price hikes deliver less job growth, less demand for labor, more unemployment, more poverty, more inequality, more inflation, lower real income increases and smaller advances in the standard of living.  Additionally, higher oil prices directly cause greater amounts of U.S. capital to be exported, both to pay the higher prices and to pay for the growing levels of imported oil.     Of all the places for candidate Obama to kick off his political career in 1995 in his first run for the Illinois state senate, he picked the living room of Bernardine Dohrn and husband Bill Ayers, co-founder of the Weather Underground and, more recently, the national vice president for curriculum studies at the American Educational Research Association.

http://www.investors.com/NewsAndAnalysis/Article/567530/201103291852/Caterpillars-Alarm-Bell-For-Illinois.aspx                      Caterpillar Chief Executive Doug Oberhelman had starkly warned in a letter to Gov. Pat Quinn that he'd been "cornered in meetings" and "wined and dined" to relocate his company to Wisconsin, Texas, South Dakota, Nebraska and other states lining up in the wake of Illinois' massive tax hike this year on business.  "I want to stay here," the CEO wrote. "But as the leader of this business, I have to do what's right for Caterpillar when making decisions about where to invest. The direction that this state is headed in is not favorable to business

http://www.investors.com/NewsAndAnalysis/Article/569537/201104181908/Palin-Fresh-Breeze-In-Wisconsin.htm                    "What I have to say today I say it to our good patriotic brothers and sisters who are in unions ... a pension is a promise that must be kept. Now, your Governor Scott Walker understands this. He understands that states must be solvent in order to keep their promise. And that's what he's trying to do. He's not trying to hurt union members. Hey, folks, he's trying to save your jobs and your pensions!" She put her finger on the two things that matter most to workers across the country — saving their jobs and their pensions — and decisively linked it with the reduction in the size of government sought by the Tea Party taxpayers.  (The Federal government also has to be solvent to pay for its benefits: Social Security, Medicare, Medicaid etc. and so the federal problem has the same solution as the states)

http://www.investors.com/NewsAndAnalysis/Article/544983/201008251845/CEOs-Speak-Up.aspx                          comments of Intel CEO Paul Otellini this week at the Technology Policy Institute's Aspen Forum quite enlightening.  "I can tell you definitively that it costs $1 billion more per factory for me to build, equip and operate a semiconductor manufacturing facility in the U.S.," he said. And 90% of that added cost, he said, is due to taxes and regulations that other countries don't have.  Otellini isn't alone in his frustration.  The anger's been building. In June, Ivan Seidenberg, CEO of Verizon Communications and head of the Business Roundtable, warned of a growing anti-business slant in both Congress and the White House. Tax hikes, regulations and constant policy shifts, he said, "harm our ability ... to grow private-sector jobs in the U.S."  Over the next decade, businesses expect soaring government spending, $13 trillion added to our national debt, more regulations, higher taxes on individuals, investors and businesses, and, oh yes, new laws that impose strict new rules on entire industries — as has already happened to Wall Street, the auto industry and health care.

http://www.investors.com/NewsAndAnalysis/Article/519631/201001291905/-Dow-Dives-53.aspx              Obama’s cabinet has the least private sector experience…Experience does matter!!  Also, the market seems to be saying: "It's the policies, stupid." Specifically, the socialistic policies that the Obama administration keeps pushing  http://www.investors.com/NewsAndAnalysis/Article/543650/201008121904/The-Cabinet-From-Another-World.aspx          

http://www.investors.com/NewsAndAnalysis/Article/568737/201104111831/Tax-The-Rich-Good-Luck-With-That.aspx                      This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money?  According to IRS statistics, roughly 2% of U.S. households have an income of $250,000 and above.  All told, households earning $250,000 and above account for 25%, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100% tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year. How about corporate profits to fill the gap? Fortune 500 companies earn nearly $400 billion in profits. Since leftists think profits are little less than theft and greed, Congress might confiscate these ill-gotten gains so that they can be returned to their rightful owners.  Taking corporate profits would keep the government running for another 40 days, but that along with confiscating all income above $250,000 would only get us to the end of June. Congress must search elsewhere.  According to the Forbes 400, America has 400 billionaires with a combined net worth of $1.3 trillion. Congress could confiscate their stocks and bonds, and force them to sell their businesses, yachts, airplanes, mansions and jewelry. The problem is that after fleecing the rich of their income and net worth, and the Fortune 500 corporations of their profits, it would only get us to mid-August.  The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress' voracious spending appetite. They're going to have to go after the non-rich.

http://www.investors.com/NewsAndAnalysis/Article/553838/201011151853/Getting-Tax-Cuts-For-Rich-Backward.aspx                   Letting people keep what they earn is not giving them anything; it's their money.  The Obama administration's problem is it's so focused on the distribution of the golden eggs, it's neglected the health of the goose.

http://www.investors.com/NewsAndAnalysis/Article/552336/201011011850/Outsourcing-Myths.aspx                     A 2005 study of the high-tech industry by Global Insight Inc., for instance, found that outsourcing was a "net positive for American workers and the U.S. economy," responsible for creating hundreds of thousands of U.S. jobs and boosting pay here.  And as Dan Griswold, a trade expert at the Cato Institute, recently noted, 90% of what U.S. companies make overseas is sold abroad — not imported to the U.S. In 2008 alone, U.S. firms sold $6 trillion in goods and services abroad — three times what we exported.  Nor is it all a one way street. From 2005 to 2009, foreigners poured an average of $87 billion year into U.S. manufacturing. We invested just $45 billion a year overseas. So who's outsourcing?  Yes, some people suffer from outsourcing. But overall, it's a benefit. Our real problem is Washington's excessive spending, taxing and regulating, which have hamstrung economic growth and encouraged U.S. companies to look abroad for growth.

http://www.investors.com/NewsAndAnalysis/Article/518327/201001151853/A-Dollar-Crisis-.aspx                           Indeed, we've been hearing for years the dollar is already in crisis. But as the chart shows, the trade-weighted dollar index shows the greenback is actually higher than during the 1990s Internet boom. Foreign investors hold trillions of dollars in U.S. debt. They could decide to dump them, putting severe pressure on our currency. But that would also do damage to their own balance sheets.Moreover, roughly two-thirds of the total $857 billion in U.S. currency in circulation is held overseas — a de facto global currency. Foreign countries won't give up their dollars easily, especially with no real replacement available. Finally, believe it or not, debt woes are worse elsewhere.

http://www.investors.com/NewsAndAnalysis/Article/516039/200912221838/Escaping-Recession.aspx                     The study, by economists Alberto Alesina and Silvia Ardagna, is based on the experiences of the 21 most wealthy countries from 1970 to 2007. As such, it represents the most complete and relevant fiscal policy review to date. Its findings are unambiguous:  "Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. ... The current stimulus package in the U.S. is too much tilted in the direction of spending rather than tax cuts." Cutting spending seems to enhance growth.  Government spending doesn't end recessions, but tax and spending cuts do.

http://www.investors.com/NewsAndAnalysis/Article/547207/201009141849/Polarizer-In-Chief.aspx                        Obama applies two of the late Chicago socialist Saul Alinsky's "Rules for Radicals:" "Pick the target, freeze it, personalize it and polarize it," and "Ridicule the opposition."  Alinsky, who despised American capitalism, also advised community organizers like Obama to co-opt the middle class in their revolution to bring about "economic justice." If they could get the middle class, along with the poor, to envy the rich, they could control the largest voting bloc and seize all the power they'd need.

http://www.investors.com/NewsAndAnalysis/Article/550274/201010131830/A-Plan-To-End-Failed-Federal-Programs.aspx                   How can failing programs be identified? Congress and presidents of both parties have tried.  The Government Performance and Results Act (GPRA) passed during the Clinton administration directed federal agencies to produce strategic plans, annual performance reports and outcome-based measures of performance.  President Bush implemented the Performance Assessment Rating Tool (PART) to rate all federal programs on their effectiveness at delivering results to the public.  These efforts have been worthwhile. GPRA enabled the public to find information about federal agency performance on each agency's Web site. And this information has gotten better over time.  Congress rarely uses the publicly-available information about federal program performance when allocating taxpayer funds.

http://www.investors.com/NewsAndAnalysis/Article/530939/201004211812/The-Governor-Who-Roared-In-New-Jersey.aspx   He inherited a $2.2 billion deficit, and next year's projected deficit of $10.7 billion is, relative to the state's $29.3 billion budget, the nation's worst. Democrats, with the verbal tic — "Tax the rich!" — that passes for progressive thinking, demanded that he reinstate the "millionaire's tax," which hit "millionaires" earning $400,000 until it expired Dec. 31. 

Instead, Christie noted that between 2004 and 2008 there was a net outflow of $70 billion in wealth as "the rich," including small businesses, fled. And he said previous administrations had "raised taxes 115 times in the last eight years alone."So he closed the $2.2 billion gap by accepting 375 of 378 suggested spending freezes and cuts. In two weeks. By executive actions. In eight weeks he cut $13 billion — $232 million a day, $9 million an hour. Now comes the hard part.  Government employees' health benefits are, he says, "41% more expensive" than those of the average Fortune 500 company. Without changes in current law, "spending will have increased 322% in 20 years — over 16% a year." There is, he says, a connection between the state being No. 1 in total tax burden and being No. 1 in the proportion of college students who, after graduating, leave the state. 

Partly to pay for teachers' benefits — most contribute nothing to pay for their health insurance — property taxes have increased 70% in 10 years, to an average annual cost to homeowners of $7,281. Christie proposes a 2.5% cap on annual increases.

Challenging teachers unions to live up to their cloying "it's really about the kids" rhetoric, he has told them to choose between a pay freeze and job cuts.

New Jersey's governors are the nation's strongest — American Caesars, really — who can veto line items and even rewrite legislative language.

Christie is using his power to remind New Jersey that wealth goes where it is welcome and stays where it is well-treated. Prosperous states are practicing, at the expense of slow learners such as New Jersey, "entrepreneurial federalism" — competing to have the most enticing business climate.

This is the struggle to break the ruinous collaboration between elected officials and unionized state and local workers whose affections the officials purchase with taxpayers' money.

http://www.investors.com/NewsAndAnalysis/Article/556811/201012141847/The-Greediest-People.aspx            Notice the word "give." Nadler thinks taxpayers are "given" something when they get tax cuts. What kind of logic leads someone to believe that when taxpayers are allowed to keep more of their own money, they are being given something by the government? Sanders goes on about "reckless, uncontrollable greed" that's "almost like a disease," apparently giving no thought to how easy it is to make the case that members of Congress are the greediest people on earth. Millionaires and billionaires don't demand anyone else's money. But Congress lusts for it, demands it and treats it as its own.

http://townhall.com/columnists/thomassowell/2009/01/27/what_are_they_buying               “Stimulus Plan???”  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, we the 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.  We the people would decide how to spend the money, not our careless, wasteful, hurry up and wait government.  If this is about spending, who should do it--Taxpayers or our wasteful government?


Whether Buffett recognizes it or not, rich Americans' investments are needed to push the economy ahead. Taking more from them deprives the private sector of the fuel it needs to expand. Government cannot boost growth by increasing taxes.

Nor does giving more money to the government create jobs. All it does is cause the government to spend more. Economists Richard Vedder and Lowell Gallaway found in a well-known study that for each dollar in new taxes raked into the Treasury, Washington increases spending by $1.58.

An updated study by Vedder and Stephen Moore, an economist who writes for the Wall Street Journal's editorial pages, found that for every dollar in new taxes, the government spends $1.17.  Either way, increases in tax revenues won't close the deficit. They will only widen it.

Economist Arnold Kling, in a working paper for George Mason University's Mercatus Center, confirms that higher tax rates won't eliminate the deficit because taxpayers, especially those at the top end, will alter their behavior by shifting income into forms that are taxed at lower rates.

When income tax rates have been cut, the economy has responded with growth. This well-documented phenomenon happened in the 1920s under Calvin Coolidge, the 1960s when Congress passed tax cuts that John Kennedy had asked for, the 1980s when Ronald Reagan promoted supply-side economics and, most recently, during the George W. Bush administration.

The data also show that tax cuts, by creating greater prosperity, increase tax revenues over time. While that may help close the budget deficit, we don't see it as a compelling argument for lower rates. Feeding the federal beast more is not our goal. If you want the deficit cut, spending should be reduced dramatically.




Imagine several people shipwrecked on an uninhabited island. Nothing survives the wreck, save only one item: a printing press filled with paper. As the people crawl to safety, they're exhausted. They stare in disbelief and shock.  But soon they begin to realize that they're hungry, thirsty, cold, unprotected from the elements. They're in dire poverty. They must think and act, or die. What shall they do?

Suppose one of them happens to be a member of the Obama economic team. He eyes the printing press and gets an idea: An economic stimulus plan of the kind he learned from his days in government. He quickly prints lots of dollar bills and distributes them (unevenly) to his fellow castaways. They now have more money than they did before, true. But has any wealth been created? No. They still have no food, no water, no heat, no shelter, no anything. They remain as poor as they were before receiving the dollars. The stimulus plan stimulated nothing.

Suppose another castaway surveys the surroundings and figures out how to catch fish.

By ingenuity and sweat, he catches lots of fish, more than he can eat. Another sets out on her own to find fresh drinking water, collecting and storing more than she needs, while someone else gathers firewood, and another designs a shelter while yet another builds it.

Unlike the government economic advisor, these entrepreneurial castaways are not making, i.e. printing, money. Instead, they're creating new wealth by producing things that others find valuable.

But how will the others obtain some of the valuable things being produced? Unless they resort to stealing, they must produce something of value themselves in order to engage in exchange. Production of wealth stimulates production of more wealth.

Our motley crew of imaginary castaways began desperately poor, but now they are wealthy, relatively speaking. They prove an economic truth of human life: Production precedes consumption. Contra Keynesianism, it makes no more sense to "stimulate" consumption by printing more dollars than it does to hand a starving, dehydrated castaway a crisp new dollar bill. They also prove that the creation of new wealth is the solution to problem of poverty.

The genesis of all new wealth is the mind, not money. Wealth is born as an idea, and made real through work, whether physical or intellectual.  Wealth does not grow on trees — even apples remain worthless for human beings until someone thinks to pick them, eat them, and cultivate the growth of more. Wealth must be produced, and production requires work.

But people are unlikely to work productively if they have good reason to believe they'll be punished for their work product (say, in the form of progressive taxation), or it will be taken away (whether by force or regulations).

Individual freedom, property rights that allow a person to keep what he acquires, the rule of knowable, fair, stable laws that provide equal protection for all who live under them, and minimal government interference in the economy led to increases in the production of new wealth, living standards, and levels of philanthropic aid for the poor unknown in the annals of history.

Occupying Wall Street and envying the "rich" for not paying their "fair share" creates no wealth. It does not alleviate the plight of the poor.  But we know what does: Let's restore the conditions that stimulate the creation of wealth and provide have-nots an opportunity to become haves and a “fair shake”.



Too much economic power is in too few hands.  It's unfortunate indeed that the Occupiers have so far ignored the country's most egregious concentration of economic power.

In 2010, a tiny cabal of 535 individuals — just 0.00017% of the population — spent $3.5 trillion, or about 23% of the $14.5 trillion U.S. economy. That leaves 77% for the other 99.99983% of us.

The group is the U.S. Congress — whose members have enormous powers to tax and spend. And they've used them to grab economic power well beyond anything found in the private sector.

If we look at the richest 535 private citizens, measured by the Forbes 400 list combined with estimates for the nation's next 135 wealthiest people, we estimate these rich people probably have about $166 billion in spendable income each year. Internal Revenue Service data from the 535 highest tax returns give a somewhat lower figure of $135 billion.

Thus, the members of Congress wield 20 to 25 times more economic power than the same number of richest private citizens in the country. The lawmakers even put the richest 1% to shame. The Occupiers' bogeymen earn a combined $1.3 trillion a year in income, or less than 40% of what Congress spends each year.

If rich people invest in producing products no one wants, they lose money and find themselves replaced in the economic pecking order by people who made wiser choices.  In the past year alone, 18 new members climbed into the Forbes 400, nearly all of them self-made entrepreneurs.

In contrast, Congress takes its money from taxpayers by force and meets regularly to conspire on how to spend these immense sums of money.  Yet there is little guarantee that they will create value with their spending. If their politically motivated "investments" fail, as with Solyndra or the various "bridges to nowhere," taxpayers lose but politicians suffer no consequences. Members of Congress keep their jobs and move on to spend trillions more. But it gets even worse. In addition to commanding vast sums of money, members of Congress also claim the power to regulate everything — our light bulbs, our showerheads, the price we pay for sugar, our health care choices, and on and on and on.

Rich people can't force anybody to stop buying 100-watt incandescent light bulbs as an example, but Congress sure can.  If concentrated income and power in the hands of a few elites is really a problem, we should direct our ire toward the U.S. Capitol, not Wall Street.





http://www.investors.com/NewsAndAnalysis/Article/468522/200902112104/Taxing-The-Truth.aspx        As history shows, lower taxes, not more government, work best:

The 1920s: When the income tax was established in 1913, the rate was 7%. But it quickly soared, especially for the rich, and by 1918 the top rate was 77%. Unfortunately, coming out of the war the economy was a mess, with prices falling, unemployment soaring and nominal GDP dropping by more than 15% in just one year.

From 1921 to 1925, under Presidents Harding and Coolidge, tax rates were slashed to 25%, and GDP rose at an annual rate of 3.4% in the four years after the tax cuts vs. 2% before. All told, GDP swelled more than 50% during the 1920s.

All this was undone, however, on a bipartisan basis — first by President Hoover, a Republican, then by the Democrat FDR. Hoover boosted the top income tax rate to 63%. Then, FDR took it to 79%, while also doubling the corporate tax to 24%, imposing a Social Security tax of 2% and raising taxes on stocks and dividends, estates, and "excess" profits. Is it any wonder the economy went nowhere in the 1930s?

The 1960s: President Kennedy, a Democrat, believed strongly that lower taxes meant higher growth, and he was soon proven right. Before he was assassinated, JFK proposed cutting top tax rates from a punitive 91% to 70%. In 1965, his cuts were enacted under President Johnson by a Democratic Congress.

Once again, growth took off, along with private investment. Real GNP, which averaged just 2.4% from 1952 to 1960, expanded at 4.5% during the '60s. The expansion that began in 1961 and ended in 1970 was, at the time, the longest ever.

The 1980s: President Reagan took over an economy with a 21% prime interest rate, double-digit unemployment and inflation, slowing productivity and flagging economic growth.  But he too was a big tax cutter. His 25% across-the-board rate cuts snapped the economy out of its funk, creating the longest peacetime expansion ever at the time. During Reagan's two terms real GDP growth averaged 3.2% compared with 2.8% in the preceding eight years.  After stagnating through most of the 1970s, real median family income grew $4,000 under Reagan. Investment boomed, as did the stock market, business creation and innovation. Some 20 million new jobs were created, due to the increased incentives to work, save and invest resulting from lower tax rates.

We all want our new president to succeed. But to do so, he needs to drop the class-warfare rhetoric on taxes and cut them instead. Like Coolidge. Like Kennedy. Like Reagan.


http://www.investors.com/NewsAndAnalysis/Article/560909/201101251855/Editorial-Obamas-Orwellian-Language-.aspx                             Two years before writing "1984," George Orwell wrote an essay titled "Politics and the English Language."  In "1984," the great warning novel of a dark future where the party has total authority over society, Orwell showed how a regime can control people through the perversion of words. Engraved on the wall of the mythical Oceania's "Ministry of Truth" are the slogans "War is Peace," "Freedom is Slavery" and "Ignorance is Strength."

A new slogan can now be added to that wall: "Spending is Investment."

Orwell pointed out that "political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind."

But it was this president and the Democratic Congress that agreed to spend trillions on a taxpayer-financed stimulus that didn't stimulate job growth, and pushed health care "reform" in which the federal regulatory behemoth takes over the private health insurance industry and sends insurance premiums skyrocketing when the promise was that they would be brought down.

The "investment" the president touted Tuesday night is the opposite of true investment. It is Uncle Sam maxing out all of his unborn nieces' and nephews' credit cards in exchange for a one-way ticket to the poorhouse, a destination that is getting closer.




http://www.investors.com/NewsAndAnalysis/Article/542781/201008051824/Rewriting-The-History-Of-The-30s-To-Justify-More-Spending-In-2010.aspx                In 1938, the deficit, spending and economy all did decline. But Krugman leaves out crucial elements of the story. Federal spending fell 10% ($740 million) in 1938. On the other hand, thanks to FDR's imposition of a corporate tax on retained earnings and a comprehensive Social Security tax, revenues increased 25% ($1.36 billion).

Additionally, even though Krugman compliments today's Fed for not making the mistakes of its predecessors, he makes no mention of the fall in the money supply. But another Nobel economist, Milton Friedman, did in a seminal study five decades ago.

"The sharp retardation in the rate of growth of the money stock must surely have been a factor curbing expansion, and the (later) absolute decline, a factor intensifying contraction. Though the decline (in the money supply) may not seem large in absolute amount, it was the third-largest cyclical decline recorded (during his 1867-1960 study)."

Friedman's work toppled prevailing Keynesian orthodoxy. Today Krugman is not simply seeking to restore Keynes, but recreate him in his own more liberal image.  This is why it is insufficient just to give fiscal policy primacy over monetary policy; spending must have greater emphasis than taxes — despite the fact that in Krugman's example, tax policy had twice spending's impact!

From 1934 through 1937, the U.S. economy grew in real economic terms — averaging 9.5% growth. If, as Krugman claims, a 10% cut in spending was the culprit for 1938's recession relapse, what was the preferred federal spending level that fueled such economic growth? From 1934 through 1937, federal spending averaged 9.8% of America's GDP.

Fast-forward 72 years later, Krugman now warns of "austerity." And what is federal spending during this period of parsimony? Over the last two years, federal spending has averaged 24.5% of GDP — well over twice the ratio prevailing during 1934-37. In fact, the average deficit over the last two years is only slightly less (9.7% of GDP) than the 1934-37 federal spending average!

And today's federal spending is not even diminishing. After subtracting bailout spending, federal spending is 11% higher than last year's, according to the nonpartisan Congressional Budget Office.

Yet despite government consuming over twice the share of the economy it did in the New Deal heyday, the economy has mustered just three consecutive quarters of growth


http://townhall.com/columnists/walterewilliams/2010/12/08/moral_or_immoral_government/page/full/                        Where does Congress get handout money? One thing for sure, it's not from the Tooth Fairy or Santa Claus nor is it congressmen reaching into their own pockets. The only way for Congress to give one American one dollar is to first, through the tax code, take that dollar from some other American. It must forcibly use one American to serve another American. Forcibly using one person to serve another is one way to describe slavery.

But my question to you is: When congressmen and presidents take their oaths of office, is that oath to uphold and defend good ideas or the U.S. Constitution?

 In 1794, when Congress appropriated $15,000 to assist some French refugees, James Madison, the father of our Constitution, stood on the floor of the House to object, saying, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." Did James Madison miss something in the Constitution?

You might answer, "He forgot the general welfare clause." No, he had that covered, saying, "If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one."



http://www.marklevinshow.com/goout.asp?u=http://www.dailymarkets.com/economy/2011/04/27/gasoline-taxes-vs-exxon-profit-per-gallon/            The map above from API shows gasoline taxes by state (combined local, state and federal), which range from a low of 26.4 cents per gallon in Alaska to a high of of 66.1 cents per gallon in California, averaging 48.1 cents per gallon across all states.  How does that compare to oil company industry profits per gallon of ONLY 2 cents….yes  ONLY 2 cents…


http://townhall.com/columnists/phyllisschlafly/2010/04/20/some_pay,_and_some_receive/page/full/      According to the Tax Foundation, married taxpayers pay three-fourths of all federal income taxes, whereas two-thirds of single parents who file as head-of-household pay no income tax at all. According to a Heritage Foundation report, taxpayers (mostly those who are married) will spend more than $300 billion providing welfare aid to single parents (mostly women).

In 2008, 40.6 percent of children born in the United States were born outside of marriage; that's 1,720,000 children. This is not, as the media try to tell us, a teenage problem.

Only 7 percent of those illegitimate babies were born to girls under age 18, and over three-fourths were born to women over age 20. The problem is the collapse of marriage as the social institution responsible for the costs of the care of children.

LBJ's Great Society set up a grossly immoral system whereby millions of people were taught that they had an "entitlement" to pick the pockets of law-abiding, taxpaying families if they met two conditions: They didn't work, and they were not married to someone who did work. This destroyed the work ethic and subsidized illegitimacy by giving single moms money and scores of benefits, such as welfare, food stamps, Medicaid, housing, utilities, WIC and commodities.

LBJ's welfare system undermined marriage and greatly increased all the social problems that flow from fatherless homes, such as drugs, sex, suicide, runaways and school dropouts. The feminists rejoiced because all the cash went to women, thereby deconstructing what they called the oppressive patriarchy, and the liberals rejoiced because these handouts required more bureaucrats and higher taxes.

The goal of Republican welfare reform was to help families move to employment and self-sufficiency and end long-term dependence on government assistance. This policy was repealed by Obama's stimulus, which will add more families to welfare dependency by paying bonuses to states that increase their welfare caseloads.

Obama's real goal is a permanent expansion of the welfare system. Nothing promotes that goal as much as discouraging marriage and providing financial incentives to increase the number of single moms.   Single moms have become a fast-growing demographic group that demands a growing welfare industry. They look to Big Brother government (aka the Obama administration) as a provider and the solution to their problems.


 http://www.investors.com/NewsAndAnalysis/Article/522584/201003011837/Govt-Dependents-The-New-Majority.aspx                  We Americans pride ourselves on our independence. Our nation's founding document even uses that in its title — the Declaration of Independence. But this spirit is fading with each new year, each new state and federal program, each new unkeepable promise made to a growing throng of citizens looking to government — not their own abilities, savvy, learning and hard work — to get by in life. A Washington Times report underscores this shift. Last year, "for the first time since the Great Depression, Americans took more aid from the government than they paid in taxes," it has determined.Transfer payments — unemployment, Social Security, food stamps, Medicaid, Medicare and other forms of government welfare — grew $231 billion last year to just over $2.1 trillion. Meanwhile, individual taxes shrank $325 billion to $2.1 trillion, slightly less (before rounding) than transfer payments.Let that sink in for a moment: We, as a people, are taking more in welfare than we're paying in taxes.The Heritage Foundation tracks annual changes in the use of government services and entitlements. Its yearly report creates a "dependency index" that gauges just how much we lean on government for our well-being.In 2008, the most recent year for which data are available, the index stood at 238 — compared with a starting value of 100 in 1980.



January 20, 2012

Do you realize that when President Obama delivers his State of the Union address on Jan. 24 it will mark 1,000 days since Congress last passed a federal budget?! Yes, it's been just shy of three years since Congress took action on the most important duty they have. To be fair, the House of Representatives controlled by Republicans has passed a couple of budget proposals, but the Senate controlled by Democrats has passed nothing. No wonder the government has a spending problem!  Would you go three years without balancing your check book? I sure wouldn't!

In the State of the Union address we'll likely hear a lot about the economy and job creation, but the government needs to stick to business and pass a budget. As far as the economy is concerned, if the government would quit micro-managing through onerous taxes and regulations, and let the markets work <http://www.ncpa.org/pdfs/Jobs-NCPA-Brief.pdf> , we'd probably see some progress.


Now, Obama is asking for additional borrowing power of $1.2 trillion. This will bring our national debt to $16.4 trillion. Since Obama took office on January 20, 2009, the national debt has increased by $5.8 trillion -- or nearly 60 percent in just three years, from $10.6 trillion to $16.4 trillion.
           THIS IS INSANE. Thankfully, a new bill has just been introduced -- that would END this out-of-control spending, by STOPPING these automatic debt ceiling hikes! But we need to TAKE ACTION NOW to get it passed QUICKLY!
CLICK HERE to send Blast Faxes to EVERY SINGLE U.S. SENATOR AND REPRESENTATIVE, to DEMAND that Congress PASS H.R. 3778, the "Budget Before Borrowing Act," to PREVENT debt limit hikes without a BUDGET in place!
           Washington, D.C. newspaper The Hill is

"Rep. Doug Lamborn (R-Colo.) on Wednesday introduced a bill that would prevent Congress from considering an increase in the debt ceiling unless both the House and Senate have approved a concurrent budget resolution, something, the Senate has not done in nearly three years."

Lamborn said his bill would at least require a budget to be in place before these debt ceiling increases can occur.   "Today I have introduced a bill to stop this madness," he said on the floor. "The Budget Before Borrowing Act," H.R. 3778, is a straightforward, no-gimmicks approach to spending money. It very simply says that the nation cannot raise the debt ceiling limit unless the House and the Senate have agreed on a budget resolution."
              Under this bill, it would "not be in order" to consider ANY extension of the public debt limit unless a concurrent budget resolution were in place. This could only be waived with a two-thirds vote in both the House and Senate.
              You may be shocked to learn that the Senate, controlled by Democrats,  has not passed a budget in three years.   Despite that -- or perhaps because of that -- Washington's borrowing and spending continues out of control.   Can you imagine going into a bank, asking for a loan, and not having ANY kind of budget plan to show how it would be spent? 
http://www.ehow.com/about_6472545_personal-budget-important_.html       Barack Obama has no business asking Congress to increase the nation's borrowing limit, when the Senate hasn't even put forward ANY kind of spending plan!


http://www.wnd.com/2012/01/obama-is-a-vulture-socialist/                       Obama took money from Americans by force (did you think the IRS was voluntary?) and borrowed money from the Chinese when taxation did not yield enough money. Obama then applied the money to create/subsidize companies to make products he knew people didn’t want at prices they could not afford.

Bought a Volt yet? Not only more expensive (at $42,000) to the consumer than comparable hybrid cars from both domestic and foreign companies, the Volt’s real cost is estimated at $250,000 each when all the costs/subsidies are counted. Do you think the $56 billion “invested” by Obama in the Volt’s maker, General Motors, was really worth it?

Obama has been on a spending spree with you as the forced partner. Solyndra, Beacon Power, Evergreen Solar, Spectrawatt and Eastern Energy are just a few of the dozens of companies that have received more than $6.5 billion in grants and loans to create the green energy of Obama’s fantasy future. Obama embarked on the same government-knows-best program that has impoverished countries from Zimbabwe to Cuba to North Korea.



Imagine if your neighbor's house was on fire and they were unaware; would you just sit there and let it burn? No! You would let them know. At this time, our country is on fire, and we need you to send this message to everyone you know and ask them to join the fight in taking back America from Obama's lawlessness.

Please - before it's too late - send your faxes to Congress and tell them to expose Obama's unconstitutional actions and unappropriate his inappropriate behavior. <http://news.dienerconsultants.com/ct/7630168:10944748950:m:1:198481479:D45370B227C5FCEFA951EAE17E2F9700:r

During Obama's "reign," even liberals and the mainstream media have become alarmed at his brazen disregard for the Constitution. The late Senator Robert Byrd was concerned about all the czars Obama had appointed and wrote him a letter, saying they could "threaten" the Constitutional system of checks and balances. The Los Angeles Times reported that some lawmakers were concerned that Obama was "subverting the authority of Congress and concentrating too much power in the presidency." Senator Russ Feingold also wrote Obama, asking him to provide more information on his czars and specifically asking him to identify the legality of the appointments.   But, none of these whispers of discontent have made any difference! Obama is still circumventing Congress on issues that he cannot pursue through legislation.

The United States government now controls healthcare, banks, General Motors, the Internet, the food you eat, undeveloped land, gun registration, union organization, military culture and climate regulation. What will the king come for next?

Congress will do nothing if We the People are silent - because they have no reason to. The only true change we will ever see in America will come from us, and we must begin this new year determined and ready to make it Obama's last in office.   Please send your Faxes to Congress right now, and make sure to send this message to your friends and family members, asking them to do the same. <http://news.dienerconsultants.com/ct/7630168:10944748950:m:1:198481479:D45370B227C5FCEFA951EAE17E2F9700:r>   Conservative Americans, we cannot ignore Obama's dictatorial rule. We cannot ignore his blatant disregard for our system of government. We cannot allow him to turn America into something unrecognizable and completely against the principles upon which we were founded.


http://www.investors.com/NewsAndAnalysis/Article/570140/201104251858/China-As-No-1-Give-Us-A-Break.aspx                          One has to wonder, too, about a politically motivated IMF "report" that predicts U.S. decline. Our troubles are many, but we've heard all this before.

The fact is, China itself faces formidable hurdles that will make it tough to keep growing at current rates.

But real wealth and productivity are measured on a per-person basis. And based on that, China won't catch the U.S. anytime soon. In fact, it may never catch us.

As the chart shows, China is way behind the U.S. in per-person income. Per-capita GDP in the U.S. is $42,517 in 2005 dollars. In China, it's about $2,802. Even by 2030, China doesn't get close to U.S. per-person output, not even at current growth rates.  This is important, because per-capita GDP is a rough proxy for productivity.

But, as we've noted before, due to its notorious "one-child" policy, China is aging fast. By 2040, its elderly population will exceed the total population of Germany, France, Britain, Italy and Japan today.

Today, things aren't so bad: China has six workers for every elderly retiree, a manageable ratio. But in 2040, that will drop to two workers per retiree. Meanwhile, as of last year just 12% of China's population was over 60, but that will surge to 24% by 2040.


http://www.investors.com/NewsAndAnalysis/Article/525658/201003051926/A-Big-Snow-Job.aspx                        But so far since the recession ended last summer, the Obama recovery has included average GDP growth of 4% and close to 1.1 million jobs lost. At this point after the 1982 recession, following President Reagan's across-the-board tax cuts of 25% and cuts in spending growth, the economy was growing at a 7%-plus clip with 1.7 million new jobs. You tell us: Which is better?

Unless we act, and soon, to cut taxes and reduce the size of government, the U.S. will enter a protracted period of slow economic growth, stagnant wages, and permanently high unemployment.


http://www.investors.com/NewsAndAnalysis/Article/569754/201104201842/President-Likes-Taking-Away-Peoples-Money.aspx Did Barack Obama take Tax 1 in law school? I did. High earners don't sit around waiting to have their money confiscated any more than chickens sit around and let you pluck out all their feathers.

This is most obvious when you think about capital gains. The federal government doesn't try to tax capital gains — the increase in values of your stocks or your house — every year (Prof. Bittker had us in knots explaining how it might do this).  You pay capital gains on a stock or house only in the year you sell it.

What happens if the capital gains tax goes up from 15% to 50%?  People stop selling stocks and hold onto their houses if they possibly can.  And when cap gains rates go down?  They're more willing to sell, pay the lower tax and invest in something else.

That's why the government's total revenues from capital gains have tended to rise when the capital gains tax rate is lowered. And why increases in the capital gains tax rate never raise the amount of revenues static models estimate they will.

But perhaps Barack Obama understands this. In 2008, he told ABC's Charlie Gibson that he wanted to raise capital gains rates even if the government got less revenue, because of "fairness."  Evidently he likes taking people's money away. What he doesn't explain is why this makes anyone better off.




http://www.investors.com/NewsAndAnalysis/Article/474081/200904151806/How-To-Judge-Elected-Representatives.aspx                        in 1817, South Carolina's John C. Calhoun proposed to use $1.5 million to improve the nation's fledgling system of roads and canals.  But then Calhoun got a real shock.

President James Madison drew him aside at a reception at the president's temporary quarters — the Executive Mansion was still being re-constructed from its torching by the British—and told Calhoun point blank that he could not sign the bill on constitutional grounds.  Architect of the Constitution and strict constructionist that he was, Madison felt that such an appropriation for internal improvements was not within the enumerated powers granted Congress.  He also feared that it would dangerously disrupt the partition of powers and the intended focus between the state and federal governments. Madison vetoed the bill one day before his term ended.  Thereafter, federal funding of internal improvements became a hotly debated issue, with Henry Clay's emerging Whig Party being generally in favor and Andrew Jackson's Democrats opposed to such appropriations.

In 1846, Jackson's handpicked political heir, James K. Polk, vetoed a then-staggering appropriation of $1,378,450 (the entire national debt was only about $17 million) for forty separate improvement projects to rivers and harbors on the Great Lakes.

"Should this bill become law," President Polk prophetically told Congress, "the principle which it establishes will inevitably lead to large and annually increasing appropriations and drains upon the Treasury, for it is not to be doubted that numerous other localities ... will demand, through their representatives in Congress, to be placed on an equal footing with them."  Polk stopped the pork in 1846, but Congress has let the pig loose again and again.


http://www.investors.com/NewsAndAnalysis/Article/470841/200903101818/Davis-Bacon-Pork.aspx    The stimulus bill wastes billions by requiring that labor on funded construction projects be paid a "prevailing," meaning union, wage. Why should our infrastructure be rebuilt under a Jim Crow era law intended to block minorities?

The Depression-era Davis-Bacon Act is applied throughout the American Recovery and Reinvestment Act (H.R. 1). The original law, passed in 1931, required federal construction contractors to pay what is determined to be the "prevailing wage" in a given area.

The law was introduced and passed to block wage competition from black construction workers following an Alabama contractor's successful bid on a federal construction project on Long Island in 1927.

At the Department of Labor, two agencies gather information related to wages and labor: the Wage and Labor Division (WHD) as well as the Bureau of Labor Statistics (BLS). It is the WHD that has the job of calculating the prevailing wage under the Davis-Bacon Act.

A 2008 study by Suffolk University and the Beacon Hill Institute found that WHD prevailing wage estimates were 22% higher than the BLS average reported wages paid in various cities. The reason is madness in the WHD's method.  According to the Suffolk study, the structure of the WHD methodology results in lower participation from small and midsize firms, provides an opportunity for unions to dominate the process of reporting wages, and lets as few as 12.5% of survey respondents set wages for the entire universe of workers.

In contrast, the BLS uses the Occupational Employment Survey, which collects wage data from more than 1.2 million establishments. Thus BLS wage estimates rely on a much larger sample that better represents wages that prevail in the labor market.

The application of the Davis-Bacon Act to stimulus projects ensures that stimulus dollars will not go as far as they otherwise could. That will result in fewer people getting jobs while raising the cost of everything we build.

The differences between the two can be significant.  On Long Island, N.Y., for example, market rates for plumbers calculated the BLS way are $29.68 an hour. Davis-Bacon rates calculated by the WHD are $44.75 — 51% higher.

The infrastructure money in the stimulus could have gone further if we had ignored the WHD's pro-union "prevailing wage" and did a better job of spreading the wealth around.


http://www.investors.com/NewsAndAnalysis/Article/555462/201012011900/George-Soros-And-Food-Safety.aspx            S510 is not really about food safety but about government control of agriculture and the nation's food producers. The Food Safety Modernization Act would give the Food and Drug Administration unprecedented power to govern how farmers produce their crops. The FDA would be able to control soil, water, hygiene, and even temperature, on farms. Through the law, the agency could regulate animal activity in the fields.

One interesting feature of the bill is a bunch of new regulations regarding seeds and seed cleaning that requires expensive equipment. Smaller concerns might not be able to handle the added burden, concentrating the handling of seed production in the hands of corporate giants like Monsanto.  Curiously, George Soros' hedge fund has just bought 897,813 shares (valued at $312.6 million) of Monsanto.

Thomas Jefferson once said: "If people let government decide what foods they eat and what medicines they take, their bodies will soon be in as sorry a state as are the souls of those who live under tyranny."


http://townhall.com/columnists/larryelder/2011/01/06/top_10_political_lies_of_2010/page/full/             1. Ninety-five percent of "working families" received a tax cut.  No. The bill gave tax cuts to those who pay taxes -- and gave money, "tax credits," to those who pay little or nothing in taxes. We used to call this welfare.

8.  The 111th Congress was the "most productive" since -- pick one -- the New Deal, LBJ's Great Society or the beginning of the republic.  Define "productive." The deficit tripled from the '08 budget. The past two years produced almost $4 trillion in new debt, more than any Congress in history. This congressional "productivity" cost the Democrats their House majority and their Senate supermajority.


http://www.investors.com/NewsAndAnalysis/Article/560303/201101191859/China-Isnt-Ready-To-Lead-The-World.aspx            China has 1.3 billion people. So you're spreading that economy among one-sixth of the world's humanity. As the chart shows, China's economy on a per-person basis — the real measure of success — doesn't even come close to ours. The average American produces over $42,000 a year in goods and services; the average Chinese produces $2,800. That's an enormous gap in productivity.

Moreover, in its recent rankings of economic freedom  http://www.heritage.org/index/  , the Heritage Foundation put China 135th out of 179"What Is Plan B If China Dumps Its U.S. Debt?" a recent Reuters headline asks.

The question isn't what we would do — it's what China would do. Dumping U.S. debt would push the dollar down sharply. Since dollar-based assets make up the bulk of China's portfolio, they'd be shooting themselves in the foot by dumping them on the market.  We now buy $330 billion of Chinese goods each year. That too would plunge if the dollar weakened. China's entire economy is built on U.S. trade and investment.

 countries. The U.S., even with all its current problems, ranks ninth. Who's the leader?


Finally demographics. China's population will peak in about 15 years at about 1.395 billion, according to U.S. government projections, and then begin a long, steady decline, the result of the one-child policy in place since the mid-1970s. Meanwhile, the average age of its population will soar. That is, they'll have fewer workers and more retirees.  History shows that countries with aging, shrinking populations lose economic vigor.

http://www.thenewamerican.com/opinion/ralph-reiland/10161-qsoak-the-richq-policies-and-the-great-depression        In fact, the 1929 stock market crash turned into the long-running Great Depression because the counterproductive soak-the-rich policies of the federal government hadn’t “triumphed” in reversing the downturn.

Franklin Roosevelt’s forceful expansion of federal regulations and confiscatory taxation, his intimidation of “the rich,” encouragement of labor strikes, and half-baked policy experiments discouraged employers from hiring workers and provided strong disincentives to new business investment.

“From 1929 to 1940, from Hoover to Roosevelt, government intervention helped make the Depression Great,” writes Amity Shlaes in The Forgotten Man: A New History of the Great Depression. “The trouble, however, was not merely the new policies that were implemented but also the threat of additional, unknown, policies. Fear froze the economy, but that uncertainty itself might have a cost was something the young experimenters simply did not consider.”

Roosevelt’s goal was to enlarge the power of the public sector, increase revenues to the government, and expand the economic controls of the centralized bureaucracy, even for dubious projects.

As Roosevelt stated it in his second inaugural address, he sought “unimagined power.”

Those two words alone were enough to turn employers and investors into John Galt, the fictional character in Ayn Rand’s novel Atlas Shrugged who, refusing to become a cog in an anti-individualist society, urges the world’s producers, including businessmen, to strike, to withdraw their talent and investments from society in order to bring about the collapse of collectivism.

In their 2010 book, Return to Prosperity: How America Can Regain Its Superpower Status, Stephen Moore and Arthur B. Laffer summarize the Roosevelt legislative victories that deepened and lengthened the Great Depression.

Draining investment capital from the system, the top income tax rate was raised from 25 percent to 63 percent in 1932, and then to 79 percent, creating clear disincentives for business expansion and ever-higher obstacles to capital accumulation and new investment.  The corporate tax rate was raised from 11 percent to 12 percent in 1931, 13.75 percent in 1932, and 15 percent in 1936 with a 27 percent surtax on undistributed profits.

The highest inheritance tax rate was more than doubled in 1932, from 20 percent to 45 percent, raised to 60 percent in 1934 and 70 percent in 1935. In 1932, a gift tax was reinstated with a top rate of 33.5 percent, raised to 45 percent in 1934 and 52.5 percent in 1935.
The result was enduring stagnation, just like the results of the trickle down government of Obamanomics.

http://news.investors.com/Article/594568/201112121848/gridlock-is-obamas-best-hope.htm?Ntt=gridlock-may-be            Back in the 1930s, John Maynard Keynes cautioned President Roosevelt about demonizing and threatening business. Yet FDR, who said in his famous first inaugural address, "We have nothing to fear but fear itself," spent the rest of the decade spreading fear to businesses and investors — and wondering why there was still mass unemployment, despite his record-breaking spending.

Back in 1920-21, there was a sharp economic downturn, with unemployment spiking to 11.7%. President Warren G. Harding did nothing, except for cutting government spending. Yet the economy quickly recovered and annual unemployment rates ranged from a high of 6.7% to a low of 1.8% in the rest of the decade.

In the mid-1940s, as World War II neared its end, Keynesian economists were frantically trying to come up with postwar plans to prevent massive unemployment when 12 million people were to be discharged from the military and millions of civilians would lose their jobs when plants producing military supplies shut down.

Two things prevented those “wonderful” Keynesian plans from being put into operation.

First, the atomic bomb brought the war to an end much sooner than anyone expected.

Secondly, the Republicans got control of Congress, producing the "do-nothing 80th Congress" that President Harry Truman excoriated during his 1948 election campaign.  (sound familiar)

In short, plans for vastly expanded government intervention were thwarted — and the "problem" that such intervention was supposed to solve did not materialize. There was a G.I. Bill of Rights for returning military veterans but this was a fraction of what liberal Keynesians had been contemplating.

Anticipating postwar employment problems, former Vice President Henry A. Wallace wrote a book titled "60 Million Jobs," advocating sweeping government interventions to achieve this otherwise unattainable goal.

Wallace's interventions never took place, but the free market created 60 million jobs anyway.

A stock market crash in 1987 broke some records set in 1929.  But Ronald Reagan did nothing, despite howls from the media, and the economy recovered — leading to 20 years of prosperity.


http://www.steynonline.com/4615/diaper-change-we-can-believe-in           Stanley Thornton Jr. of California receives Supplementary Security Income disability checks from the Social Security Administration in order to sit around the house all day wearing a giant diaper and a giant onesie, sucking on a giant pacifier and playing with a giant baby rattle. Stanley Jr. runs a website for fellow "adult babies" called BedWettingABDL.com. I believe I first heard of the "adult baby" phenomenon some years ago in London. If memory serves, there was a club, and the members lay around in giant cribs being read bedtime stories by a bosomy nanny. Minor celebrities and possibly backbench Tory members of Parliament may have been involved. In those days, it was what we called a "fetish" and you had to do it on your own dime. Now it's a "disability" and the United States government picks up the tab. And, if that's not progress, what is?

Sen. Tom Coburn happened to catch Stan with his babysitter and fellow disability-check recipient on a reality show, and wondered how a chap capable of running a popular website and doing such complicated carpentry jobs as his own giant highchair could be legitimately classified as "disabled." But the Social Security Administration said Junior qualifies, and Senator Coburn was condemned as heartless: Why, if those mean Republicans got their way, the streets would be crawling with giant babies bawling, "I want my mommy!" Conversely, if Congresswoman DeLauro gets her way and the stampede for government Huggies gets going, Stanley Thornton Jr. will still be entitled to park his giant pedal car in the disabled space while the penniless single mom from Hartford has to leave the Toyota at the back of the lot and hike in.

An able-bodied man paid by the government of the United States to lie in a giant crib wetting his diaper week in week out is almost too poignant an emblem of the republic at twilight. But, as Hillaire Belloc wrote, "Always keep a hold of Nurse / For fear of finding something worse."

Only last week, ABC News reported:  At a million-dollar San Francisco fundraiser today, President Obama warned his recession-battered supporters that if he loses the 2012 election it could herald a new, painful era of self-reliance in America.  Oh, no! The horror!

"Self-reliance" is now a pejorative? Nice to have that clarified. And San Francisco, a city that registers more dogs than it has kids enrolled in its schools and in which adults are perforce the children they never bothered having, seems as good a place as any to make it official. In less enlightened times, "self-reliance" was the great animating principle of the American experiment. By the standards of the day, George III was one of the most benign, caring rulers on earth: You were his mewling charges, and he was the regal babysitter. Then a bunch of settlers in small towns clinging to wilderness and thousands of miles from His Majesty the Nanny decided they didn't need him and they could stand on their own. What's the word for that? Oh, yeah: self-reliance.

Is it too late for a Self-Reliance Awareness Day? No, there's no ribbons. Make your own damn ribbon. If that's too much to hope for, how about a Multi-Trillion-Dollar Debt Awareness Day? The ribbon starts out black but turns deeper and deeper red. How about a We've Spent All the Money Including the Money for an Awareness-Raising Ribbon Day? An Impending Societal Collapse Awareness Day?

Yes, yes. I'm aware the cost of diapers adds up over a month, and you can't use your food stamps to pay for them. Tough. This country's broke. As I said last week, it has to pay back $15 trillion just to get back to having nothing at all. And that's more money than anyone ever has had to pay back. Were you aware of that? Distressingly large numbers of Americans still pining for ever more swaddling in the government cradle seem entirely unaware.


http://news.investors.com/Article/595125/201112161854/obama-avoids-personal-contact-democrat-lawmakers.htm?Ntt=obamas-aloofness  But His Highness has only himself to blame.

Obama doesn't put in the effort past presidents have put in to get things done. He simply refuses to get his hands dirty, preferring to give lectures and leave the heavy lifting to others.

This is not an observation on the right. His aloofness is frustrating members of his own party and even staff.  "Another former Obama staffer confided to me that it was clear to him that the president didn't mind giving speeches, but really avoided personal contact with members of Congress and folks outside the Beltway," noted Rep. Dennis Cardoza, D-Calif., in a Hill column this week.  A proven ally, Cardoza now refers to the president derisively as "Professor Obama."

Sen. Dianne Feinstein, another Democrat leader, agrees Clinton got more personally involved in the legislative process.  "One of the problems with the White House is that it's been too set apart. It needs to get out," she said. "Clinton didn't just talk to four leaders. He picked up the phone and he kind of said, 'I really need your vote on this.'"

Sen. Joe Manchin, D-W.Va., expected Obama to call him during the deficit-reduction talks, since the former West Virginia governor knew something about balancing budgets. But Manchin's phone never rang.  "If he would call and say, 'Joe, how in West Virginia did y'all have six straight years, through the toughest recession, of record surpluses?How'd you do it?'" Manchin said this week on MSNBC.  The senator says Obama ignored him and his advice, as well as that of the Simpson-Bowles Commission that the president impaneled.

"I haven't had interaction with him," Manchin said, adding that "it's not the leadership I'm used to."

Indeed, real leaders unite people and build consensus around issues. They roll up their sleeves and solve problems rather than subcontracting out the work (and responsibility) to others.

Obama seems content to just read agitprop from his ubiquitous teleprompters. And divide people into groups. And breed resentment between labor and management. And foment class envy between Main Street and Wall Street.  This really shouldn't surprise anyone.  As we warned before the 2008 election, demagoguing and demonizing are what Obama was trained to do as a community organizer. He is simply doing on a national scale what he was taught to do as an Alinskyite street agitator in South Side Chicago.


http://news.investors.com/Article/592963/201111281800/occupy-wall-street-free-lunch-far-too-costly.htm?Ntt=what-ows-doesnt            There ain't no such thing as a free lunch. Everything demanded by the Occupy Wall Streeters — whether "free" health care ( greedy doctors and nurses) , a "world-class education" ( greedy teachers and professors) or a "guaranteed living-wage income regardless of employment" status — costs money.  Government possesses no money of its own. It raises money by taxing, borrowing or printing.  The bigger the government, the smaller the private sector.

Individuals can spend their money more wisely, efficiently and more humanely than can government.  People value and spend their money more wisely when they acquire it by their own efforts — also known as work. There are real-world, direct consequences on you for squandering your own money, as opposed to when government squanders the money of its people.

Government employees enjoy job security unknown in the private sector and are often paid more than their private-sector counterparts. Greed?

People spend their money more humanely because they won't waste as much of it.

Consider that to deal with "the poor," the federal government has a vast array of agencies, programs and policies. But only about 30 cents of each dollar designated for the poor actually gets in the hands of the recipient. Contrast this with the United Way, Salvation Army and other private charities where 90 cents of each dollar donated gets to a beneficiary.

Americans agree that some people — whether faultless or irresponsible — need assistance, if only occasionally. The only issue is how they will be helped.

The U.S. Constitution isn't just any ordinary document. It is the contract between the government and its people, the ones who empower government and who — once upon a time — expected the Constitution to restrain government, not empower it.

When you rob Peter to pay Paul, you can always count on the support of Paul. But at some point Peter begins to feel taken advantage of.


http://news.investors.com/Article/593098/201111291733/income-inequality-harry-potter-rowling-wal-mart-99-percenters-lebron-james.htm?Ntt=blame-the-99      Joanne Rowling was a welfare mother in Edinburgh, Scotland. All that has changed. As the writer of the "Harry Potter" novels, having a net worth of $1 billion, she is the world's wealthiest author. More importantly, she's one of those dastardly 1-percenters condemned by the Occupy Wall Streeters and other leftists.

How did Rowling become so wealthy and unequal to the rest of us? The entire blame for this social injustice lies at the feet of the world's children and their enabling parents. Rowling's wealth is a direct result of more than 500 million "Harry Potter" book sales and movie receipts grossing more than $5 billion.

In other words, the millions of "99-percenters" who individually plunk down $8 or $9 to attend a "Harry Potter" movie, $15 to buy a "Harry Potter" novel or $30 to buy a "Harry Potter" Blu-ray Disc are directly responsible for contributing to income inequality and wealth concentration that economist and Nobel laureate Paul Krugman says "is incompatible with real democracy."

In other words, Rowling is not responsible for income inequality; it's the people who purchase her works.

Basketball great LeBron James plays forward for the Miami Heat and earns $43 million for doing so. That puts him with those 1-percenters denounced by Wall Street occupiers. But who made LeBron a 1-percenter?

In other words, I'd like Krugman to tell us what should be done to stop the millions of children who make Joanne Rowling rich, the millions who fork over their money to the benefit of LeBron James and the hundreds of millions of people who shop at Wal-Mart.


http://news.investors.com/Article/590606/201111041732/A-Closer-Look-At-Fat-Cat-Few-Who-Did-Us-In.htm?Ntt=a-closer-look-at  First lady Michelle Obama the other day railed at "the few at the top," who do all sorts of bad things. A few months ago, we began hearing of the "1%" who are responsible for the current economic mess.  "They" apparently make all their money at the expense of the other 99%. Are they the same as last year's villains, who had not paid "their fair share" in making over $200,000 in annual income?

Do they include the greedy doctors, who, the president once asserted, recklessly lop off limbs and yank tonsils for profits? Is my urologist a dreaded one-percenter? He found out what was causing my kidney stones but probably makes good money.

Was a nearby farmer one, too? I bet he makes over $200,000 but, like many other growers in this area, has found a way to produce beef and cotton more cheaply and efficiently than farmers in almost any other part of the world, thereby enriching his county, state and nation.

So I wonder, was the late Apple CEO Steve Jobs a suspect billionaire? Should I be mad or grateful that he made billions by permanently replacing my old scissors, paste and bottle of liquid paper of the 1970s?

Did Johnny Depp really have to earn $50 million last year alone — or Leonardo DiCaprio $77 million? Couldn't they have settled for $2 million in salary in 2010, and thereby passed on a little bit of the savings to their ticket-buying fans?  What kind of system would allow Oprah Winfrey or the late Michael Jackson each to accumulate nearly $1 billion? Is left-wing filmmaker Michael Moore — reportedly worth $50 million — a one-percenter? Why does such an enemy of capitalism need so much capitalist largesse?  Are liberals like Sens. John Kerry or Dianne Feinstein — among the richest in the U.S. Senate — in that elite group?  How about Warren Buffett and Bill Gates, together worth over $100 billion? They are certainly philanthropists. But their charities are predicated on two assumptions:  They both apparently trust the private sector more than government to administer their vast estates, and neither sees much of a problem in avoiding billions in inheritance taxes that would one day be due to a now-broke federal treasury.  Is George Soros a "corporate jet owner"? He nearly broke the Bank of England by shorting the British pound and was convicted in France of insider training. Rather than comply with new federal financial-disclosure regulations, he told some of his outside investors just to keep their money.  Is Obama's former director of the budget, Peter Orszag, a "fat-cat banker"? He left the administration to enter the "revolving door" of Wall Street, where he is now a rich banker for Citigroup.

Those most likely to fly corporate jets are precisely the elite who show up at the president's mega-fundraisers and play golf with him on the world's most exclusive courses — or visit Martha's Vineyard and Vail, where the first family sometimes vacations.  How about the actors, rappers and filmmakers in jeans and baseball caps.  And if we really want more tax revenue, there is far more to be had from the nearly 50% of American households that pay no federal income tax than from the 1% that now pays 37% of all the collected revenue.  In short, a confident, successful society neither idolizes nor demonizes its rich, but instead believes that wealth can be created rather than taken from others. And it simply judges the better-off by the content of their characters, not the size of their wallets.

Feb 2, 2012    Even at 14%, Romney Pays a Higher Rate than 97 Percent of His Fellow Americans

Americans following the current GOP brawl witnessed a series of attacks on Mitt Romney for the low effective tax rate he pays on his personal income.  Many are quick to emphasize that with an effective rate of 14 percent, Romney must be a grand exploiter of loopholes and tax shelters.  However, such conclusions are premature, as they confuse marginal and effective rates and fail to account for the fact that Romney's effective rate is still relatively high, says Scott A. Hodge, president of the Tax Foundation.

It is necessary to explain that, because of the United States' progressive tax system, the marginal rate that one pays is not the same as his or her effective rate.  While one may make $120,000 per year (placing that person in the 25 percent tax bracket), that person's effective rate is much lower.  This is because their first $17,000 is taxed at a rate of 10 percent, their next $52,000 is taxed at 15 percent and only their last $51,000 is taxed at 25 percent.  Thus, their effective tax rate would be 18.5 percent.

Following this distinction, and including various deductions and exclusions claimed by most Americans, it is easier to compare Mitt Romney with his fellow taxpayers.  Using the aforementioned example of a person making $120,000 and allowing for normal exemptions, credits and deductions, which lower their taxable income to $90,000, their effective rate falls yet again: this time to 12 percent.

Millionaires pay an average effective rate of 25 percent, while the average taxpayer who makes less than $100,000 pays an effective rate of 8 percent.  A recent Tax Foundation study found that even Americans who make between $100,000 and $200,000 average an effective rate of 12 percent.

Given that 97 percent of Americans make less than $200,000, this suggests that Mitt Romney pays a higher effective rate than 97 percent of Americans, on average.

This important comparative analysis underlines the fact that Romney should receive little criticism for his exceptionally low rate, as it remains among the highest paid by all U.S. taxpayers.

Source: Scott A. Hodge, "Even at 14%, Romney Pays a Higher Rate than 97% of His Fellow Americans," Tax Foundation, January 24, 2012.  For text:  http://www.taxfoundation.org/blog/show/27911.html


http://news.investors.com/Article/589975/201110311848/Education-Vs-Bureaucracy.htm?Ntt=education-vs-bureaucracy                 Waste: How can a 375% education spending increase over four decades result in flat-lined reading, math and science scores? Because all that largesse feeds a bureaucratic monster sheltered from competition.

McCluskey made no bones about federal education spending being bad for kids and bad for the economy — a big reason being that much of the spending goes not to real teachers or principals but to those holding an array of bureaucratic "support" positions.

Overall, per-pupil spending has risen from $5,671 in 1970, according to McCluskey, to $12,922 in 2007-08 — a 128% rise — and public school employment has been 10 times the rate of student enrollment. Meanwhile, school district administrative staff per pupil has doubled.

What has all that presumably well-intentioned government education spending and "hiring of teachers" bought the American taxpayer? Stagnant reading, math and science scores for 17-year-olds over the last 40 years, as irrefutably shown in statistics from the National Assessment of Educational Progress, which McCluskey concedes is "a very incomplete measure, but is also Washington's own measuring stick."





Prove evolution, you have had plenty of time since 1859;  show us your fossil record proof in detail and your probability of evolution.   http://www.darwins-theory-of-evolution.com/        .  Here is what we have.

Darwin confessed, "To suppose that the eye with all its inimitable contrivances for adjusting the focus to different distances, for admitting different amounts of light, and for the correction of spherical and chromatic aberration, could have been formed by natural selection, seems, I freely confess, absurd in the highest degree." [6]  Charles Darwin, "On the Origin of Species by Means of Natural Selection, or the Preservation of Favoured Races in the Struggle for Life," 1859, p. 155.



http://www.usatoday.com/money/economy/story/2012-01-24/regulations-kids-farm-work/52778304/1                             After four years of silence on the issue, the Labor Department has released a swathe of new regulations governing child labor in the agriculture sector.  Citing injury and fatality reports from recent years, labor officials state that the new rules were proposed in order to protect youths from activities that have proven to be exceedingly dangerous, says USA Today.

Children under age 16 who are being paid will not be allowed to operate most power-driven equipment, including tractors and combines, with some exceptions for approved vehicles.

Those under age 18 will be prohibited from working at grain elevators, silos, feedlots and livestock auctions, and from transporting raw farm materials.

Youths under age 16 will be barred from cultivating, curing and harvesting tobacco to prevent exposure to green tobacco sickness.

Youths will not be allowed to use electronic devices while operating power-driven equipment.

These proposed regulations will not apply to children who are employed by their own parents.  Nonetheless, many agricultural workers point out that their children will be limited from working on neighbors' and relatives' plots because of the burdensome new regulations.




http://www.manhattan-institute.org/html/miarticle.htm?id=6866                         The NIT is easy to describe. “The basic idea,” Friedman wrote in a 1968 Newsweek column, “is to use the mechanism by which we now collect tax revenue from people with incomes above some minimum level to provide financial assistance to people with incomes below that level.”  Already, he pointed out, no one pays taxes on the first few thousand dollars of income, thanks to personal exemptions and deductions. Most earners pay a fraction of their “positive taxable income” — that is, the amount by which their earnings exceed that first few thousand dollars.

In Friedman’s plan, the poor would similarly receive a fraction of their “negative taxable income” — the amount by which their earnings fell short of that level. This direct cash grant would replace all otTo limit the disincentive, Friedman argued, the NIT should be progressive. Say the government drew the income line at $10,000 for a family of four and the NIT was 50%, as most economists recommend. If the family had no income at all, it would receive $5,000 — that is, 50% of the amount by which its income fell short of $10,000.

If the family earned $2,000, it would get $4,000 from the government — again, 50% of its income shortfall — for a total post-tax income of $6,000. Bring in $4,000, and it would receive $3,000, for a total of $7,000. So as the family’s earnings rise, its post-tax income rises, too, preserving the work incentive.

Robert Moffitt, an economist at Johns Hopkins University and a leading authority on the NIT, notes another advantage of the program over other forms of state assistance: “No stigma attaches to the NIT.” Everyone fills out the same forms, and no infantilizing government meddles with a household’s food, shelter and health care, as under the current system.

Yet another NIT advantage is a freer labor market. No minimum wage would be necessary, since a minimum income would now be guaranteed. This would boost employment: as economists recognize, a legal minimum wage tends to increase joblessness by discouraging employers from recruiting unskilled labor.

The NIT would reduce illegal immigration, too. Managed by the IRS, it would apply only to citizens and legal residents, and since it would eliminate welfare programs, aliens would have less incentive to cross the border illegally for government benefits.

But the biggest advantage of the NIT is that it requires the smallest possible bureaucracy to implement. The IRS already exists; it knows how to assess income statements; and, to run the NIT, it has only to take money or pay it out.  No longer would the federal and state governments maintain the sprawling multiple agencies needed to distribute food stamps, public housing, Medicaid, cash welfare, and a myriad of community development programs. Nor would they need to pay the salaries and enormous future pensions of the public employees who run all these programs.

George Shultz — who, before serving as Ronald Reagan’s secretary of state, was chairman of his Economic Policy Advisory Board, where Friedman was a major intellectual force — calls the NIT “a brilliant and unworkable idea.” Among the reasons why: “Most Americans believe that nonworking welfare recipients should get programs and not cash,” and “the bureaucrats who manage the current welfare state like the power it grants them.”

her welfare programs for the poor.




The Federal Reserve. "(T)he very people who devised the policies that produced the mess are now posing as the wise public servants who will show us the way out," writes Thomas Woods in "Meltdown."   Already in its sixth week on the New York Times best-seller list, this eminently readable book traces the Fed's role in every financial crisis since this creature was spawned on Jekyl Island in 1913.

The "forgotten depression" of 1920-21 was caused by a huge increase in the money supply for President Wilson's war. When the Fed started to tighten at war's end, production fell 20 percent from mid-1920 to mid-1921, far more than today.   Why did we not read about that depression?

Because the much-maligned Warren Harding refused to intervene. He let businesses and banks fail and prices fall. Hence, the fever quickly broke, and we were off into "the Roaring Twenties."

But, the Fed reverted, expanding the money supply by 55 percent, an average of 7.3 percent a year, not through an expansion of the currency, but through loans to businesses.

Thus, when the Fed tightened in the overheated economy, the Crash came, as the stock market bubble the Fed had created burst.   Herbert Hoover, contrary to the myth that he was a small-government conservative, renounced laissez-faire, raised taxes, launched public works projects, extended emergency loans to failing businesses and lent money to the states for relief programs.

Hoover did what Obama is doing.   Indeed, in 1932, FDR lacerated Hoover for having presided over the "greatest spending administration in peacetime in all of history." His running mate, John Nance Garner, accused Hoover of "leading the country down the path to socialism." And "Cactus Jack" was right.   Terrified of the bogeyman that causes Ben Bernanke sleepless nights -- deflation, falling prices -- FDR ordered crops destroyed, pigs slaughtered, and business cartels to cut production and fix prices.


http://www.investors.com/NewsAndAnalysis/Article/536304/201006031854/Bloody-Minded-Union.aspx           Demanding higher wages and better benefits, the Service Employees International Union on Wednesday launched a three-day strike against the Red Cross' blood donation operations. The job action comes as the nonprofit, in a realistic response to the weak economy, is cutting salaries, ending bonuses and reducing pensions.

SEIU thinks its members should not only be exempt from the Red Cross' efforts to live within its means, but actually get a raise.  So SEIU's way to get a safe blood supply is to pay higher union wages? It's hardly compassion for consumers to hold 40% of the nation's blood supply hostage.

The union's strike probably won't affect blood supplies much, but it sends a message: Consumers who need transfusions come second to union wish lists. Feel safer now? 

            Last November, the SEIU targeted a 17-year-old Eagle Scout who spent 200 hours cleaning up walking paths in pursuit of a badge.


http://www.investors.com/NewsAndAnalysis/Article/539749/201007081859/All-Talk-No-Action.aspx                  That's why House Speaker Nancy Pelosi refuses to permit any vote on the Colombian pact, which was submitted to Congress two years ago. She doesn't fear it'll fail; she fears it'll pass.

That brings us to the speech on Wednesday in which Obama claimed only a few "glitches" hold up the deals. In fact, the president is just playing to anti-free-trade backers in Big Labor.

For Obama, however, there's now a monster more foreboding than Big Labor. It's called The Economy. Overall joblessness of 9.4% is bad enough. But among blacks, male unemployment is averaging 19.5%, and the 13.2% rate for Latinos is double what it had been most of the decade. Then there's the 52% of young people who can't find work.


 http://townhall.com/columnists/thomassowell/2009/01/27/what_are_they_buying              “Stimulus Plan???”  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, we the 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.  We the people would decide how to spend the money, not our careless, wasteful, hurry up and wait government.  If this is about spending, who should do it--Taxpayers or our wasteful government?



 http://townhall.com/columnists/walterewilliams/2010/04/21/taxes_and_voting/page/full/         Tax cuts to many Americans mean just one thing: They pose a threat to the federal handouts they receive.  According to the Tax Policy Center, a Washington, D.C., research organization, nearly half of U.S. households will pay no federal income taxes for 2009.  Having 121 million Americans completely outside the federal income tax system, it's like throwing chum to political sharks. These Americans become a natural spending constituency for big-spending politicians. After all, if you have no income tax liability, how much do you care about deficits, how much Congress spends and the level of taxation? Political calls for tax cuts and spending restraints have little appeal.  I'm not proposing that we take voting rights away from those who do not pay taxes. What I'm suggesting is that every American gets one vote in every federal election, plus another vote for each $20,000 he pays in federal taxes. With such a system, there'd be a modicum of linkage between one's financial stake in our country and his decision-making right. Of course, unequal voting power could be reduced by legislating lower taxes.

http://townhall.com/columnists/walterewilliams/2010/04/14/minimum_wage_cruelty/page/full/            The unemployment effect of minimum wages isn't restricted to American Samoa but to the mainland U.S. as well. Overall teenage unemployment stands at a record 25 percent while adult unemployment hovers around 10 percent. Also at a record high is the 50 percent unemployment rate among black teenage males. One might ask why teen unemployment, particularly that among black teens, is so much higher than adult unemployment. The answer is simple. One effect of a minimum wage law is that of discrimination against the employment of less-preferred workers. Within the category of less-preferred workers are those with low skills.  Tragically, minimum wages have the unquestioned support of good-hearted, well-meaning people with little understanding who become the useful idiots of charlatans, quacks and racists.


http://www.investors.com/NewsAndAnalysis/Article/517421/201001071906/Poverty-Canard.aspx                      Using the State Department's own data, scholars including D.D. Laitin and J.A. Piazza have challenged the view in 2003 and 2004 studies that poverty breeds terror.

Harvard's Alberto Abadie, in his 2004 "Poverty, Political Freedom, and the Roots of Terrorism," took their work a step further: It wasn't poverty but an absence of political freedoms showing the highest correlation to terror.

Most poor people are interested in making themselves less poor, so it stands to reason that tyrannies and other failed states happen to breed terrorists.  The real task of the State Department in the war on terror is fostering democracy, not delivering aid.



http://townhall.com/columnists/phyllisschlafly/2009/12/15/who_has_the_solution_for_unemployment/page/full/                            Young people voted for Obama for President by 66 percent to 32 percent, but they made a bad bargain because 3 million of them now have no jobs. According to the Center for Labor Market Studies at Northeastern University in Boston, the percentage of young men actually working is the lowest in the 61 years of recordkeeping.

A more biting criticism was leveled at Obama by the left-wing journal Rolling Stone in its Dec. 10 issue, which lambasts the president in an eight-page attack article called "Obama's Big Sellout." Rolling Stone is in shock at discovering that Obama's socialism means payoffs to his rich friends and Wall Street contributors while spreading the poverty around (instead of the wealth).

The health care bill is another direct attack on the young people who voted for Obama. The Democrats' plan will force young people to buy insurance they don't want in order to subsidize expensive care of seniors. Of course, young people will be stuck with a staggering debt hanging over them for the rest of their lives.

To understand and reverse Obama's attack on American jobs, which is dashing hopes and opportunities for the young, all congressional candidates should read Jerome Corsi's newest book, "America for Sale."   Corsi also explains Obama's policies that are destroying the dollar and wiping out the middle class by exporting blue-collar and white-collar jobs while importing an underclass. Economic hard times are ahead unless the voters call a halt in the 2010 congressional elections.


http://www.investors.com/NewsAndAnalysis/Article/512767/200911171927/Perspective-Of-A-Russian-Immigrant-No-3.aspx                        "Sacrifice for the collective good" is one of the founding principles of socialism, where the collective, not the individual, is the basis of society.

Revolutionaries in Russia did not go around boasting about destruction; they made inspiring speeches about fairness, equality, justice and the greater good. After securing power and their own access to material goods, government officials decided what to give and take from the masses, according to their definition of what is good.

When party leaders talk about the "collective good," what they are really talking about is their right to determine what is good for the collective. Government bureaucrats decide what level of sacrifice is needed and who needs to sacrifice. They replace voluntary charity with the forceful redistribution of other people's private property.

Why do people born into a free society accept a failed 100-year-old ideology? It seems Americans are simply unaware of modern history. They don't know the theory behind slogans such as "fairness and equality" and "sacrifice for the collective good," much less how it works when implemented. They buy into old utopian slogans masquerading as new progressive ideals for "Hope and Change."

Americans are not different from people in Russia, Germany, China, Korea or anywhere else. It is human nature to seek power and control, just as it is human nature to seek profit. Deny profit and you destroy any incentive for people to produce and innovate. Give up enough of your liberty to any centralized power and the result is entirely predictable.

Compare North Korea to South Korea, East Germany to West Germany before the fall of the wall — these are examples of the same people living under two different systems: socialism vs. capitalism.

Laws are necessary in a civil society, and this includes laws that regulate the free market. But a government takeover of the economy will result in the transformation of the land of opportunity into a land of apathy and stagnation, a land in which individuals become cogs moving and turning according to government regulations.  In the USSR, they taught us in school that socialism is good and capitalism is bad. That they now teach the same in American schools I find strange.


http://townhall.com/columnists/larryelder/2010/02/11/krugman_bushs_deficit_bad,_obamas_deficit_good/page/full/   Left-wing economist, Nobel laureate and New York Times columnist Paul Krugman hates deficits in tough economic times -- when the president of the United States is named George W. Bush.

Krugman, in a November 2004 interview, criticized the "enormous" Bush deficit. "We have a world-class budget deficit," he said, "not just as in absolute terms, of course -- it's the biggest budget deficit in the history of the world -- but it's a budget deficit that, as a share of GDP, is right up there."

The numbers? The deficit in fiscal year 2004 -- $413 billion, 3.5 percent of the gross domestic product.   In October 2004, unemployment was 5.5 percent and continued to slowly decline. At the time, Krugman described the economy as "weak," with "job creation ... essentially nonexistent."  Fast-forward to 2010.

The numbers: projected deficit for fiscal year 2010 -- over $1.5 trillion, more than 10 percent of GDP.  This sets a post-WWII record in both absolute numbers and as a percentage of GDP. And if the Obama administration's optimistic projections of the economic growth fall short, things will get much worse. So what does Krugman say now? We must guard against "deficit hysteria." In "Fiscal Scare Tactics," his recent column, Krugman writes.

Let's review. In 2004, an unhappy Krugman criticized Bush's "weak" economy and "miserable" job creation. Running an "enormous" deficit was a bad thing. Times were awful -- "by a large margin" the worst job crash and performance since Herbert Hoover. Today the deficit is four times as large in an even weaker economy with much higher unemployment. Times are awful. Now, though, the deficit is a good thing and should be even bigger.           Krugman's flip-flop on the deficit demonstrates a modern economic equation. Hatred of Bush + love for Obama = intellectual dishonesty.


http://www.investors.com/NewsAndAnalysis/Article/504244/200908241834/Romer-A-Study-In-Contradictions-Pirouettes-Yet-Again-On-Stimulus.aspx                In fact, there were 12 recessions or depressions just from 1850 to 1900, according to the National Bureau of Economic Research, and plenty before that. All before government could even pretend to do much about them. As for actually ending the Depression, "currency devaluations and monetary expansion became the leading sources of recovery throughout the world," wrote a highly regarded economic historian in 2003. "Fiscal policy, in contrast, contributed almost nothing to the (U.S.) recovery before 1942," she asserted in a 1992 paper. Yes, that was Christina D. Romer — back when she was just a humble Berkeley economics professor.

http://www.investors.com/NewsAndAnalysis/Article/534274/201005171833/Left-Begrudges-To-The-Death-Others-Wealth.aspx                 Off the teleprompter for a few seconds while stumping recently for a financial overhaul, President Obama had this to say about money and success:

"Now, what we're doing, I want to be clear, we're not trying to push financial reform because we begrudge success that's fairly earned. I mean, I do think at a certain point you've made enough money."

No begrudging of success? That's what the left does — begrudge and resent, robotically. It's what makes them leftists — and bitter.

Steeler quarterback Ben Roethlisberger got a $25 million signing bonus while the median salary last year for physicians practicing family medicine was $160,000? So 156 family doctors worked all year and their combined paychecks were slightly lower than Ben's bonus. Is the White House OK with that? Should the central committee of White House czars decide how much of Ben's $25 million was due to the lucky inheritance of a good throwing arm and how much was "fairly earned" due to hard work?

And what'll they do about Lady Gaga earning more than General Motors?  So who decides when we've "made enough money"? Should we tell Julia Roberts not to make another movie, tell her she's "made enough"? How about Oprah?  And what about the stage hands and popcorn sellers who lose their jobs as a result?

Should the czars tell Tiger Woods that he's way past that "certain point" when he's earned "enough," unless he wants to play for free or donate 100% of the winnings to the needs of the collective?

Should the government have told the owners of Pittsburgh-based 84 Lumber to stop at 83? At last count, the company had about 4,000 employees in 289 stores in 34 states.

Rather than worrying about who has too much, Obama should be thinking about what made America the most successful nation in human history, in terms of economic prosperity and individual freedom.

Instead of giving greater power to the central government, the power to decree what we should drive, what we should eat, what we'll be permitted to hear and see, what income has been "fairly earned" and when at "a certain point" we've "made enough money," the founding philosophy of the U.S. called for a society based on an exactly opposite set of principles.

"Were we directed from Washington when to sow and when to reap, we should soon want bread," warned Thomas Jefferson. It was a lesson learned firsthand by millions of starving farmers in China and the Soviet Union.


http://www.newsweek.com/2009/02/21/the-stunted-economic-stimulus.html     Obama's package is too focused on political goals and projects. The effect is to weaken the program's basic purpose--to jolt the economy.  (Page 1 of 2)

Judged by his own standards, President Obama's $787 billion economic stimulus program, which he signed into law last week, is deeply disappointing. For weeks, Obama has described the economy in grim terms. "This is not your ordinary, run-of-the-mill recession," he said at his Feb. 9 press conference. It's "the worst economic crisis since the Great Depression." Given these dire warnings, you'd expect the stimulus package to focus exclusively on reviving the economy. It doesn't, and for that, Obama bears much of the blame.


http://www.investors.com/NewsAndAnalysis/Article/474218/200904161809/Tea-Party-System.aspx                   "Don't Spread My Wealth. Spread My Work Ethic," "Who'll Bail Me Out?" "Atlas Will Shrug," "Tea Today. No Kool-Aid," and "Acorn Didn't Have To Bus Us Here," referring to the left-wing activist group that specializes in voter registration drives benefiting liberal Democrats.

During 12 years of dominance in Congress and eight years in the White House, the GOP failed to kick its addiction to pork and make tough decisions on controlling entitlement spending. It found it too politically risky to secure the U.S. borders — even in the post-9/11 years when homeland security trumped all other concerns.

            The tea party movement proves that even in the left-leaning Northeast, a huge natural constituency exists for these bread-and-butter American issues — lower taxes, less government, a strong military that's allowed to win, tough measures to end illegal immigration, term limits and family values.


http://www.investors.com/NewsAndAnalysis/Article/479613/200906151917/VPs-Guess-Services.aspx               On Feb. 18, we said: "The (stimulus) bill Congress hurried to pass late last week without anyone having read the entire 1,434 pages will in fact not stimulate much of anything."

We further noted that the $787 billion package would not be an economic stimulus but a spending bill filled with "pork and outright waste."

We were not alone. Some 330 economists signed a statement last winter saying that President Obama's claim — that "there is no disagreement that we need action by our government, a recovery plan that will help to jump-start the economy" — simply "is not true."

This statement, in an ad paid for by the Cato Institute, appeared on full pages in 24 major newspapers across the country, including the New York Times and Washington Post.

The economists were not crackpots but respected scholars, including Nobelists James Buchanan, Vernon Smith and Edward Prescott, as well as Reagan Office and Management of Budget Director James Miller, Walter Williams and John Lott.  Also opposed to the stimulus are the nonpartisan Congressional Budget Office and a core of mainly Republican U.S. representatives and senators, too small unfortunately to change the outcome, who saw through the smoke and weren't fooled by the mirrors.


Obama's party lashes out when even partial privatization is brought up.

But taking retirement out of government's hands works. It has worked in Chile. It has worked in Britain.  It's worked, as well, in Texas, where in 1981, Galveston County employees voted 78% to 22% to opt out of the Social Security system and put their trust in a private retirement plan. Brazoria and Matagorda counties followed Galveston out of Social Security before Congress outlawed in 1983 the option of leaving Social Security.  Now more than 5,000 Texas participants are in a private plan where the rate of return far exceeds that of Social Security's average of 1.25%.

The Institute of Policy Innovation, a Texas think tank, reports that a low-income worker making $17,124 a year and retiring at 65 will get $782 per month from Social Security while someone with an identical salary retiring at the same age would receive $1,285 a month from the plan the Texas county workers invest in. A retiree who earned roughly $51,000 a year will get $1,540 monthly from Social Security, $3,846 from the Texas plan.

In September, Obama referred to President Bush's "failed privatization scheme" for Social Security, indicating that his administration would never consider private plans.  If overhauling entitlements is truly "a central part" of his administration's attempts to tame federal spending, he must be open to ideas beyond cutting benefits, raising taxes and shifty budgeting.  Better to be known as the president who saved the nation from an entitlement disaster and economic doom than the President who had the chance and failed because of inexperience and incompetence.  Voting “Present “ won’t work.



http://www.investors.com/NewsAndAnalysis/Article/502442/200908041840/Revenue-Plunge-Is-Nothing-New.aspx                    the now-infamous Revenue Act.  At the time, it seemed reasonable. Faced with a downturn in the economy and shriveling revenues, President Hoover worried about a growing budget deficit. He signed tax hikes into law, and FDR, who entered office in 1933, kept them in place.

The bill ravaged the economy by raising the top tax rate on the "rich" from 25% to 63%, doubling the estate tax and boosting corporate taxes by nearly 15%. It also raised sales taxes on all sorts of things that average (read: "nonrich") Americans bought, including gum, soft drinks, gasoline, tires, trucks and jewelry.

Meanwhile, Roosevelt began a series of massive spending projects to "stimulate" the economy — following Hoover's tragic lead. The result? A serious recession turned into the Great Depression, an epic downturn lasting a decade into the early 1940s, when the entire economy was put on a war footing.

Contrast that with what happened just 11 years before. The U.S. had entered a serious recession in 1919, with real GDP (in 2000 dollars) dropping 3.2% and per-person income down 6.4% by 1921. To some, it looked like the start of a depression.  Instead, it lasted just two years. Why? Then-Treasury Secretary Andrew Mellon engineered a series of tax cuts in 1921, 1924, 1926 and 1928.

In response, the economy boomed, with one of the largest increases in both economic activity and entrepreneurship in our nation's history. From 1921 to 1929, real GDP rocketed 45%, while personal incomes climbed 29%. It's not for nothing that the 1920s were called the "Roaring Twenties."

As we've noted repeatedly, this wasn't an isolated instance. Tax cuts in the 1960s, 1980s and even 2000s led to rising economic output. Usually, they led to higher tax revenues.

By contrast, tax hikes almost always bring the opposite — lower output, or even recession, and slowing tax receipts.  It's shocking that today's policymakers, searching desperately for revenues to fund a $10 trillion expansion in federal government, seem willfully ignorant of such clear lessons in our history.

As Mellon put it, "It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the government, and that more revenue may actually be obtained by lower rates." And yet, that's the truth.



http://www.investors.com/NewsAndAnalysis/Article/511396/200911041853/The-Ghosts-Of-38.aspx       a tale of overreach and hubris — one that holds lessons for today's Democrats.

It starts with a series of far-reaching changes to the economy that FDR initiated after entering office in 1933. They included the Agricultural Adjustment Act, which slapped new taxes on farm goods and forced prices to go higher, and the National Industrial Recovery Act, which created business cartels, set prices and imposed more than 500 "codes" governing prices, wages and workweeks.

Both the NIRA (1935) and AAA (1936) were found unconstitutional. But they set the tone for economic tinkering. In a 2007 landmark study, economists Harold Cole and Lee Ohanian calculated that without these restrictive policies, the economy would have recovered in 1936 — seven years before it actually did recover.  Conditions only got worse in 1936 and 1937. Worried about budget deficits and the possibility of inflation, the Fed contracted the money supply.   As it did, the newly enacted Wagner Act raised labor costs, encouraging many companies to lay off workers. Those who still had jobs noticed that their paychecks had shrunk, as Social Security withholding kicked in for the first time ever.

The Roosevelt Democrats also unveiled a 5% tax on corporate dividends, and raised the top income tax rate to 90% from 63%.

As today, anti-business rhetoric was rife. FDR called businessmen "economic royalists." Congress imposed new taxes on corporate earnings and put more restrictions on the stock market.

By 1937, notes the Mackinac Center for Public Policy's study "Great Myths of the Great Depression," the economy had scored a first — a "depression within a depression." Real output fell in 1938 by 6%, as business investment shrank by a third.

Democrats are following the same playbook today, spending wildly, trying to raise taxes and imposing government control over vast swaths of the U.S. economy. They'd be wise to back off. If they don't, 2010 could turn into a repeat of 1938.


http://www.investors.com/NewsAndAnalysis/Article/515491/200912161855/JFK-iDefiedi-Samuelson-Setting-Off-Boom.aspx                        JFK wanted to eclipse that mark in a big way. He put together a dream team of economic advisers to tell him how, and he chose Samuelson to anchor it.  JFK's "Camelot," has been cited far and wide as the cause of the incredible run of growth in the American economy from 1961 to 1968, when GDP increased by 5.1% per year, real federal revenues went up by more than a third, unemployment fell to 4%, and the Dow Jones industrial average hit 1000 for the first time. The economy continued to teeter in 1961 and early 1962 as JFK considered this advice but enacted no policy. The economy sensed the president's lack of surety. The Dow lost 28% in a six-month span, and forecasts came out that the Kennedy years were likely to be worse than Eisenhower's.

JFK ordered his advisers to start taking suggestions from the business community, and a bombshell came from the Chamber of Commerce: a permanent 26% reduction in the marginal rate. Kennedy promptly indicated that this should become law, and it essentially did in the Revenue Act of 1964, which took the top rate down to 70% for good. The Fed, for its part, reacted negatively and tripled the federal funds rate.

The boom started just as JFK indicated that he was dumping the neo-classical synthesis for its opposite. Robert Mundell, was at the time a young staffer at the International Monetary Fund and urging just that.  As Mundell wrote years later, in the wake of his own Nobel Prize, "at first (my advice) wasn't popular. This was because it recommended a complete reversal of the ... neo-classical synthesis. . .. Fortunately for the United States (and me), President Kennedy reversed the policy mix to that of tax cuts to spur growth in combination with tight money to protect (the dollar). The result was the longest expansion ever ... unmatched until the Reagan expansion of the 1980s."  Mundell would reiterate his ideas in the 1970s, under the name "supply-side economics," and see them implemented again the following decade.


http://www.investors.com/NewsAndAnalysis/Article/517432/201001071906/Congress-Bernanke-Should-Know-That-Regulators-Arenand8217t-Soothsayers.aspx                 Requiring homebuyers to make a 10% or 20% down payment to purchase a house, for starters, would have had the same effect as margin requirements do for stocks. Buyers wouldn't have had enough cash in hand to keep up with bubble prices; the result would have been a smaller bubble.  And when that bubble burst, homeowners would have had their own money in the game, reducing their incentive to walk away from their homes and bankrupt their lenders.

If regulators had properly governed derivatives such as credit-default swaps, AIG couldn't have made $500 billion in promises without putting consistent cash down and clearing its trades on exchanges.

AIG could have failed, because its failure wouldn't have endangered the rest of the economy. Investors would have known where the risk lay, and known, too, that there was a set level of cash down to cover some losses. They wouldn't have panicked and pulled their funds indiscriminately from the financial system, necessitating a bailout.

if the Fed wasn't thinking about how things like trillions of dollars in mortgages could affect the entire economy, it should have been.

In 2000, the Fed willingly surrendered its power to regulate credit-default swaps.

market discipline. Millions of investors can monitor the financial system better than Washington can, but only if they operate under the credible threat of failure.  Such discipline is lacking now. Lenders know that big or complex financial companies are "too big to fail,


http://www.investors.com/NewsAndAnalysis/Article/568766/201104111904/Cal-Vs-Krug.aspx                Today, after years of unchecked Democratic control of Congress and the White House, the problem of untamed government spending has become a runaway locomotive hurtling us toward a fiscal cliff.

a paper for the Cato Institute, "detailed Internal Revenue Service data show that the across-the-board rate cuts of the early 1920s — including large cuts at the top end — resulted in greater tax payments and a larger tax share paid by those with high incomes."

De Rugy found that as "the marginal tax rate on those high-income earners was cut sharply from 60% or more (to a maximum of 73%) to just 25%, taxes paid by that group soared from roughly $300 million to $700 million per year." From 1922 to 1929, real GNP grew 4.7% a year and unemployment fell from 6.7% to 3.2%.





 http://townhall.com/columnists/walterewilliams/2006/05/03/disappearing_manufacturing_jobs                              In 1900, 41 percent of the U.S. labor force was employed in agriculture. Now, only two percent of today's labor force works in agricultural jobs. If declining employment is used as a gauge of an industry's health, agriculture is America's sickest industry.   Let's not stop with agriculture. In 1970, the telecommunications industry employed 421,000 workers in good-paying jobs as switchboard operators. Today, the telecommunications industry employs only 78,000 operators. That's a tremendous 80 percent job loss. What happened to all those agriculture and switchboard operator jobs? Were they exported to China and India by rapacious businessmen?  Here's my question to you: Should Congress do something to restore all of those jobs lost in agriculture and telecommunications, and what might that something be? How about the claim that our manufacturing jobs are going to China? The fact of business is, since 2000, China has lost 4.5 million manufacturing jobs, compared with the loss of 3.1 million in the U.S.



http://www.shadowstats.com/       Analysis Behind and Beyond Government Economic Reporting


 http://www.moneynews.com/StreetTalk/Gramm-Obama-Recovery-Reagan/2011/04/19/id/393326?s=al&promo_code=C1BD-1            Economist and former U.S. senator Phil Gramm says this recovery really is different: If Barack Obama matched Ronald Reagan's post-recession recovery rate, 15.7 million more Americans would have jobs.   “A compelling case can be made that Reagan's tax cuts, Social Security reforms, regulatory reforms, and limits on the growth and power of the federal government not only helped the economy shake off the malaise of the 1970s but generated an economic growth premium that bore dividends for Americans until 2007,” Gramm writes in The Wall Street Journal.  “Had the U.S. economy recovered from the current recession the way it bounced back from the other 10 recessions since World War II, our per-capita gross domestic product (GDP) would be $3,553 higher than it is today, and 11.9 million more Americans would be employed.”  Read more: Gramm: Obama Recovery Trails Reagan's by 15.7 Million Jobs


http://www.downsizinggovernment.org/           A department-by-department guide to cutting the federal government's budget.



To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page at  www.creators.com . Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com .

http://townhall.com/columnists/thomassowell/2010/06/17/a_mind-changing_page/page/full/   one page that can undermine or destroy a widely-held belief. But there is such a page-- page 77 of the book "Out of Work" by Richard Vedder and Lowell Gallaway.

The widespread belief is that government intervention is the key to getting the country out of a serious economic downturn. The example often cited is President Franklin D. Roosevelt's intervention.  Although the big stock market crash occurred in October 1929, unemployment never reached double digits in any of the next 12 months after that crash. Unemployment peaked at 9 percent, two months after the stock market crashed-- and then began drifting generally downward over the next six months, falling to 6.3 percent by June 1930.

This was what happened in the market, before the federal government decided to "do something."   What the government decided to do in June 1930-- against the advice of literally a thousand economists, who took out newspaper ads warning against it-- was impose higher tariffs, in order to save American jobs by reducing imported goods.

Within six months after this government intervention, unemployment shot up into double digits-- and stayed in double digits in every month throughout the entire remainder of the decade of the 1930s, as the Roosevelt administration expanded federal intervention far beyond what Hoover had started.

If more government regulation of business is the magic answer that so many seem to think it is, the whole history of the 1930s would have been different. An economic study in 2004 concluded that New Deal policies prolonged the Great Depression. But the same story can be found on one page in "Out of Work."


http://www.investors.com/NewsAndAnalysis/Article/517564/201001081913/How-Data-On-Income-Distribution-Are-Misunderstood-And-Misapplied.aspx          In terms of statistical categories, it is indeed true that both the amount of income and the proportion of all income received by those in the top 20% bracket have risen over the years, widening the gap between the top and bottom quintiles.

But Internal Revenue Service data following specific individuals over time show that, in terms of people, the incomes of those particular taxpayers who were in the bottom 20% in income in 1996 rose 91% by 2005, while the incomes of those particular taxpayers who were in the top 20% in 1996 rose by only 10% by 2005 — and those in the top 5% and top 1% actually declined.

While it might seem as if both these radically different sets of statistics cannot be true at the same time, what makes them mutually compatible is that flesh-and-blood human beings move from one statistical category to another over time.

When those taxpayers who were initially in the lowest income bracket had their incomes nearly double in a decade, that moved many of them up and out of the bottom quintile — and when those in the top 1% had their incomes cut by about one-fourth, that may well have dropped them out of the top 1%.

Internal Revenue Service data can follow particular individuals over time from their tax returns, which have individual Social Security numbers as identification, while data from the Census Bureau and most other sources follow what happens to statistical categories over time, even though it is not the same individuals in the same categories over the years.   (look at your social security statement and see if your income has changed over the years with your education, hard work and experience)

Next: How intellectuals misuse data to mislead the public about the gap between "the rich" and "the poor."



http://www.investors.com/NewsAndAnalysis/Article/517702/201001111830/How-Media-Misuse-Income-Data-To-Match-Their-Preconceptions.aspx            What happens to the income of the category over time is not the same as what happens to the people who were in that category at any given point in time. But many among the intelligentsia are ready to seize upon any numbers that seem to fit their vision.

Behind many of those numbers and the accompanying alarmist rhetoric is a very mundane fact: Most people begin their working careers at the bottom, earning entry-level salaries.

Over time, as they acquire more skills and experience, their rising productivity leads to rising pay, putting them in successively higher income brackets.

These are not rare, Horatio Alger stories. These are common patterns among millions of people in the United States and in some other countries.  More than three-quarters of those working Americans whose incomes were in the bottom 20% in 1975 were also in the top 40% of income earners at some point by 1991.  Just over half of all Americans earning at or near the minimum wage are from 16 to 24 years of age — and of course these individuals cannot remain from 16 to 24 years of age indefinitely, though that age category can of course continue indefinitely, providing many intellectuals with data to fit their preconceptions.

Only by focusing on the income brackets, instead of the actual people moving between those brackets, have the intelligentsia been able to verbally create a "problem" for which a "solution" is necessary. They have created a powerful vision of "classes" with "disparities" and "inequities" in income, caused by "barriers" created by "society." But the routine rise of millions of people out of the lowest quintile over time makes a mockery of the "barriers" assumed by many, if not most, of the intelligentsia. For example, over the entire period from 1967 to 2005, median real household income — that is, money income adjusted for inflation — rose by 31%. For selected periods within that long span, real household incomes rose even less, and those selected periods have often been cited by the intelligentsia to claim that income and living standards have "stagnated."

Meanwhile, real per capita income rose by 122% over that same span, from 1967 to 2005. When a more than doubling of income is called "stagnation," that is one of the many feats of verbal virtuosity. household or family income statistics continue to be widely cited in the media and in academia — and per capita income statistics widely ignored, despite the fact that households are variable in size, while per capita income always refers to the income of one person.

However, the statistics that the intelligentsia keep citing are much more consistent with their vision of America than the statistics they keep ignoring.

Just as household statistics understate the rise in the American standard of living over time, they overstate the degree of income inequality, since lower-income households tend to have fewer people than upper-income households. While there are 39 million people in households whose incomes are in the bottom 20%, there are 64 million people in households whose incomes are in the top 20%.





Hollow Victory
Saturday, April 9th, 2011

As you know by now, Speaker Boehner has reached a deal with Senator Reid and President Obama to only cut $38.5 Billion of your tax dollars this fiscal year.  While the federal government "for the first time in history" is cutting $38,500,000,000 in spending in one fiscal year, in the past 7 days, the federal debt increased $54,100,000,000. 
Senator Reid has called you extreme for wanting the government to cut 2.6 pennies out of every dollar the federal government spends.  They think 2.6 pennies is extreme.  They wound up only voting for 1 penny in every tax dollar to be cut.  We are confident that Senator Reid and Senator Schumer will look for ways to continue to paint us as extreme. Do you think Sens. Reid and Schumer and others like them are out of touch with the vast majority of Americans who understand that the extreme government spending must be brought under control? Do you think it is extreme behavior for US Senators to mock and publicly criticize average, hard-working Americans?President Obama was willing to let the military not be paid this week when he publicly said he would veto a short term continuing resolution that the House passed.  President Obama was willing to let the troops he commands not be paid so he could have a bargaining chip to continue spending our money. Does this sound like business as usual in Washington, DC? Are you tired of business as usual in DC? Were there any other examples you know of that indicate it is business as usual in DC?Elmer Davis is known for 2 specific quotes:  "This Republic was not established by cowards; and cowards will not preserve it."   "This nation will remain the land of the free only so long as it is home of the brave."


http://www.investors.com/NewsAndAnalysis/Article/540392/201007141854/Jobbing-America.aspx       This is a key part of the Keynesian idea of a government "multiplier," whereby one dollar given to the government to spend magically turns into $2.50 in the private economy. This simply isn't believable — either in concept or reality.  Referencing the best study done on the multiplier effect so far — by economists Robert Barro and Charles Redlick of Harvard University — de Rugy notes that history not only shows no positive multiplier effect, but a negative one.  That is, a dollar given to the government actually reduces GDP, due to the waste, inefficiency and dead-weight tax loss of removing money from productive uses in the private sector.  

http://www.investors.com/NewsAndAnalysis/PhotoPopup.aspx?path=ISSjob0715_4100714.png&docId=540392&xmpSource=&width=831&height=545&caption=              chart of unemployment over the last 10 recessions that shows the miserable failure of Obama, the Democrats and Obamanomics.  We need people who know what they are doing.

http://visiontoamerica.org/story/obama-ill-shut-down-the-government-and-suspend-military-pay.html#                        Rather than accept a meager few billion in budget cuts, President Obama has signaled his willingness to shut down the federal government.  For those keeping score at home, any government shutdown that happens is on Obama’s plate as the House has passed a continuing resolution and has a budget plan.  Obama is the President. All on him.  The worst part of this whole debate is the Obama Administration’s decision to hold military pay hostage to the budget debate. For the last few decades, government shutdowns have been guided by an OMB directive issued during the Reagan Administration. Under this directive, military personnel would continue to receive the paychecks while politicians argued about the budget. The Clinton Administration, during the last government shutdown, kept the paychecks flowing.    But, not Obama.    The Obama Administration has overturned the old OMB directive and has decided to suspend military paychecks if there is a government shutdown raising the stakes considerably.   (Everything else would be like a Federal Holiday, with nonessentials closed.)

http://www.investors.com/NewsAndAnalysis/Article/568580/201104081719/Big-Govt-Edges-Ever-Closer-To-Self-Destruction.htm                        Well, if you can't change big programs or small programs, what can you do? Not much.  The great threat is a future debt crisis, with investors balking at buying all the Treasury bonds the government requires to operate.  Compared to Democrats, Paul Ryan is a model of intellectual rigor and political courage. Obama would run huge deficits from now to eternity; the CBO has projected $12.2 trillion of added debt from 2010 to 2021 under his policies. Obama urges an "adult" conversation and acts like a child, denying the unappealing choices.  Government is suicidal because it breeds expectations that can't be met.

  http://townhall.com/columnists/thomassowell/2010/10/26/brass_oldies      One of these brass oldies is a phrase that has been a perennial favorite of the left, "tax cuts for the rich." How long ago was this refuted? More than 80 years ago, the "tax cuts for the rich" argument was refuted, both in theory and in practice, by Andrew Mellon, who was Secretary of the Treasury in the 1920s. When Mellon took office, there was a large national debt, the economy was stagnating, and tax rates were high, though the tax revenues were still not enough to cover government expenditures. What was Mellon's prescription for getting out of this mess? A series of major cuts in the tax rates!  more revenue may often be obtained by lower rates."  How can that be? Because taxpayers change their behavior according to what the tax rates are. When tax rates are reduced, investors have incentives to take their money out of tax shelters and put it into the private economy, creating higher returns for themselves and more production in the economy. Andrew Mellon understood this then, even though many in politics and the media seem not to understand it now.

Between 1921 and 1929, tax rates in the top brackets were cut from 73 percent to 24 percent. In other words, these were what the left likes to call "tax cuts for the rich."

What happened to federal revenues from income taxes over this same span of time? Income tax revenues rose by more than 30 percent. What happened to the economy? Jobs increased, output rose, the unemployment rate fell and incomes rose. Because economic activity increased, the government received more income tax revenues. In short, these were tax cuts for the economy, even if the left likes to call them "tax cuts for the rich."

John Maynard Keynes pointed out in 1933 that lowering the tax rates can increase tax revenues, if the tax rates are so high as to discourage economic activity.

President John F. Kennedy made the same argument in the 1960s -- and tax revenues increased after the tax rates were cut during his administration. The same thing happened under Ronald Reagan during the 1980s. And it happened again under George W. Bush, whose tax rate cuts are scheduled to expire next January.

The rich actually paid more total taxes, and a higher percentage of all taxes, after the Bush tax rate cuts, because their incomes were rising with the rising economy.

Do the people who keep repeating the catch phrase, "tax cuts for the rich" not know this? Or are they depending on your not knowing it?


http://townhall.com/columnists/thomassowell/2010/10/27/brass_oldies_part_ii      Some people point to the history of the Great Depression of the 1930s, when unemployment peaked at 25 percent, as proof that the government cannot simply stand by and do nothing when so many millions of people are out of work.

If we are going to look back at history, we need to make sure the history we look at is accurate. First of all, unemployment never hit 25 percent until after-- repeat, AFTER-- the federal government intervened in the economy.

What was unemployment like when the federal government first intervened in the economy after the stock market crash of 1929? It was 6.3 percent when that first intervention took place in June 1930-- down from a peak of 9 percent in December 1929, two months after the stock market crash.

Unemployment never hit double digits in any of the 12 months following the stock market crash of 1929. But it hit double digits within 6 months after government intervention-- and unemployment stayed in double digits for the entire remainder of the decade, as the government went in for one intervention after another.  The idea behind these higher tariffs was that reducing our imports of foreign goods would create more jobs for American workers. It sounds plausible, but more than a thousand economists took out newspaper ads, warning that these tariffs would be counterproductive.

That was because other countries would retaliate with their own import restrictions, reducing American exports, thereby destroying American jobs. That is exactly what happened. But there are still people today who repeat the brass oldie that restricting imports will save American jobs.

 A statistical analysis by economists, published in 2004, concluded that federal interventions had prolonged the Great Depression of the 1930s by several years. How long will future research show that current government interventions prolonged the economic crisis we are living through now?


Like at home or at business, we have to prioritize spending, so when all the revenue/income is spent that is it, the rest has to be cut.  Live below our means, so we can start to pay off our debt, so then we can live within our means.  "The proposal won't balance the budget any time soon, if at all. It starts out with $110 billion in initial cuts when the spending caps goes into place. The fact is, by Chairman Ryan's own numbers, the proposal will add more than $8 trillion to the gross national debt over 10 years. If $500 billion of initial cuts were made for 2012 instead of $110 billion, and then Ryan's spending cap was implemented, instead of an average deficit of $508 billion under the proposal, the average deficit would be reduced to $130 billion, and the budget would be practically balanced by 2018." You know what to do! The 2012 budget is a step in the right direction, and if the American people can persuade the House to make initial 2012 cuts of $500 billion instead of $110 billion, the House can take credit for putting the nation on a path to a balanced budget in just a few years.  That's the power of compound savings.  Let's get on CapWiz and urge the House to cut $500 billion or more out of the 2012 budget! The more they cut, the sooner we get to a balanced budget under the Ryan proposal.  In today's Liberty Action Report, House Republicans should cut at least $500 billion from the 2012 budget, Democrats are not taking the spending crisis seriously, the NLRB is collaborating with UniteHere to get card-check implemented for Hyatt Hotels Corporation, and Tim Pawlenty proposed restricting carbon emissions in a little-seen video.



“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”
 Thomas Jefferson quotes (American 3rd US President (1801-09). Author of the Declaration of Independence. 1762-1826)
Similar Quotes.

  http://culturaloffering.com/2008/10/27/wealth-redistribution--the-grades-example.aspx   imagine your teacher or professor announcing that those students getting A's will have two grade points deducted so that the students getting F's and D's can have their grades lifted to a C.  The individuals getting B's will have one grade point deducted and used for the same purpose.  After all, it isn't fair that those students getting A's and B's should help out students who aren't as fortunate?  Make sense?" I asked. 

"No.  The reason we get A's and B's is that we are working harder or maybe we are smarter.  It isn't our fault that some kids are getting D's and F's," he answered.  "Well, you'll still do okay.  Getting a C is still passing, and you will have helped out the other students," I argued.

 "If you do that, there is no reason for me to study hard," he reasoned.  "I'll take it easy."  "But if you take it easy, where will we get the grade points to help those D and F students?" I asked.  "We have to get the points somewhere."  "I don't know," he said.  He now understands the economic effect of redistribution through taxation.  

(The College Republicans at the University of California-Merced ask fellow students, who support raising taxes on the rich, if they would be willing to redistribute their GPAs. They don’t think it’s a good idea because they earned their grades.) Read more: http://dailycaller.com/2011/04/20/students-not-eager-to-redistribute-gpa-scores/#ixzz1KAckeFqh








http://americancenturyblog.com/2010/08/comparing-our-path-to-recovery-with-past-recessions-and-recoveries/   Could it be Obamanomics and Democrat policies?

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=531839  Obama’s salary cap






http://www.investors.com/NewsAndAnalysis/Article/531811/201004291815/Too-Big-To-Fail-Fannie-And-Freddie-Are-Dodd-Frank-Model-For-Reform.aspx   Without their allies in Congress, Fannie and Freddie would not have been able to continue their reckless ways and engage in arbitrage with leverage ratios of 100-to-1.


http://www.investors.com/NewsAndAnalysis/Article/504749/200908281827/Government-Isnt-The-Only-Answer-To-Helping-Needy-Get-Health-Care.aspx                 The Founding Fathers vigorously debated the role of the federal government and defined it in Article I, Section 8 — spelling out the specific duties and obligations of the federal government.

Most notably, these included providing a military for national security, coining money, establishing rules for immigration and citizenship, establishing rules for bankruptcy, setting up a postal system, establishing trademark and copyright rules, and setting up a legal system to resolve disputes.

Charity is not there.

Congress began ignoring its lack of authority for charity before the ink dried on the Constitution. When Congress appropriated $15,000 to assist French refugees in 1792, James Madison — a Founding Father and principal author of the Constitution — wrote:  "I cannot undertake to lay my finger on that article of the Constitution, which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."

What about the Constitution's general welfare clause?

Madison said: "With respect to the words general welfare, I have always regarded them as qualified by the detail of powers (enumerated in the Constitution) connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators."

And consider government welfare's effect on people's willingness to give. During the Great Depression — before the social programs that today we accept as givens (Social Security, Medicare, Medicaid) — charitable giving increased dramatically.  After FDR began signing social programs into law, charitable giving continued, but not at the same rate. People felt that they had given at the office and/or that government was handling it.

Government "charity" is simply less efficient than private charity. Every dollar extracted from taxpayers, sent to Washington and then routed to the beneficiary loses about 70 cents in transfer costs — salaries, rent and other expenses.

The Salvation Army, by contrast, spends 2 cents in operating costs, with the remainder going to fundraising and the beneficiary. It achieves this, among other ways, by relying on volunteers to do much of the work.

Three in four families donate to charity, averaging more than 3% of their income, with two-thirds going to secular charities. In total, Americans give more than $300 billion a year — more than the gross domestic product of Finland or Ireland. More than half of families also donate their time.

Absent (unconstitutional) government programs, individuals and charitable organizations can, will and — in many cases — already do provide services to the needy. A limited government — one that taxes only to fulfill its permissible duties — would allow even more disposable time and money.

People-to-people charity is more efficient, less costly, more humane and compassionate, and more likely to inspire change and self-sufficiency in the beneficiary.


  A new report from Stanford University economists John Cogan and John Taylor says, "There was little if any net stimulus," resulting from President Obama's $862 billion package. Worse, say the authors, the White House should have known it would not work.  "The irony," they write, "is that basic economic theory and practical experience predicted this would happen."But why the stimulus didn't work is a little more complex.  The authors break down the three kinds of Keynesian stimulus packages.·         In one, government gives money to consumers and hopes they spend it. ·         In another, the federal government directly buys goods and services, ranging from computers to building infrastructure. ·         In the third, government hands money to state and local governments to spend. The $862 billion stimulus package passed by Congress and signed into law by the president tried to do all three things.  Unfortunately, none of them worked, says Investor's Business Daily.·         In the case of money handed over to consumers, "It went to pay down some debt or was simply saved rather than spent on consumption." ·         At the federal level, the stimulus generated just $20 billion in added government purchases, about 3 present of the total spent;of that amount, only $4 billion was spent on infrastructure. ·         Then there were the grants to state and local governments, which were expected to get local economies revving again, but were unsuccessful, according to Cogan and Taylor. Source: "The Economic Stimulus That Wasn't," Investor's Business Daily, January 25, 2011. http://www.investors.com/NewsAndAnalysis/Article.aspx?id=560910&p=1

 Democrats argue that the U.S. unemployment rate, still stuck at 9.6 percent, is reason to try "a second fiscal stimulus" to raise "aggregate demand."  That's wrong, says Alan Reynolds, a senior fellow with the Cato Institute.  Unlike the rapid recoveries from other recessions in 1975-76 and 1981-82, this anemic recovery is the first time the United States has ever experimented with "fiscal stimulus" on a large scale.·         FDR did not use fiscal stimulus (despite what many people think) and the budget deficit peaked at 5.9 percent of gross domestic product (GDP) in 1934, falling to 4 percent in 1935. ·         Today, the Congressional Budget Office (CBO) adjusts such deficits for the impact of recession, meaning the U.S. economy actually grew by 10.9 percent in 1934 and 8.9 percent in 1935 without any "fiscal stimulus." ·         After the stagflationary recession of 1974-75, federal spending was cut from 21.4 percent of GDP in 1976 to 20.7 percent in 1977 -- and economic growth averaged 5 percent in those years. ·         In 2009, by contrast, spending jumped to 24.7 percent of GDP from 20.7 percent in 2008 -- up four points in a single year. Even the CBO's cyclically adjusted budget deficit was 7.5 percent of potential GDP -- nearly 3 percentage points above the previous all-time high. Yet Democrats want even more "fiscal stimulus" in order to boost domestic demand -- that is, total spending by U.S. consumers, business and governments.  They point to the second quarter's weak 1.6 percent growth in real GDP, but GDP doesn't measure domestic demand.  As the second quarter GDP report clearly stated, "Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 4.9 percent in the second quarter, compared with an increase of 3.9 percent in the first."  Whatever the problems of the U.S. economy, slowing growth of demand is not one of them, says Reynolds. Source:  Alan Reynolds, "'Stimulus' snake oil," New York Post, September 7, 2010. http://www.nypost.com/p/news/opinion/opedcolumnists/stimulus_snake_oil_RySPWcspAZ79U9cskrpHUK

The federal debt is at its highest level since the aftermath of World War II -- and it's projected to rise further, says Andrew G. Biggs, resident scholar, Kevin Hassett, director of economic policy studies, and Matt Jensen, research assistant, at the American Enterprise Institute.  Stabilizing debt levels would require an immediate and permanent 23 percent increase in all federal tax revenues or equivalent cuts in government expenditures, according to Congressional Budget Office forecasts.In new research Biggs, et al., analyzed the history of fiscal consolidations in 21 countries of the Organization for Economic Cooperation and Development over 37 years.  If the United States were to copy past consolidations that succeeded, what would it do?This is an important question, because failed consolidations are more the rule than the exception:·         To be blunt, countries in fiscal trouble generally get there by making years of concessions to their left wing, and their fiscal consolidations tend to make too many as well. ·         As a result, successful consolidations are rare: In only around one-fifth of cases do countries reduce their debt-to-GDP ratios by the relatively modest sum of 4.5 percentage points three years following the beginning of a consolidation. ·         Finland from 1996 to 1998 and the United Kingdom in 1997 are two examples of successful consolidations. The data also clearly indicate that successful attempts to balance budgets rely almost entirely on reduced government expenditures, while unsuccessful ones rely heavily on tax increases.  On average, the typical unsuccessful consolidation consisted of 53 percent tax increases and 47 percent spending cuts.  By contrast, the typical successful fiscal consolidation consisted, on average, of 85 percent spending cuts.Any attempt to address the federal government's budget shortfall that relies on less than 85 percent spending cuts runs too large a risk of failure. The experience of so many other countries shows that it's crucial for the U.S. to get this right.Source:  Andrew G. Biggs, Kevin Hassett and Matt Jensen, "The Right Way to Balance the Budget," Wall Street Journal, December 29, 2010.

Governor Chris Christie is embracing privatization as part of his larger efforts to streamline state government in New Jersey.  In March 2010, less than three months into his first term, Christie issued an executive order creating the New Jersey Privatization Task Force, a short-lived advisory body established to identify a comprehensive set of privatization tools and strategies the state could apply to save at least $50 million in fiscal year 2010-2011, says the Reason Foundation.The Task Force outlined a series of institutionalization strategies designed to make smart privatization a routine part of public management in Trenton.  Notably, the Task Force recommended that Governor Christie announce as an administration priority that achieving efficiency through private sector competition become standard policy for all state agencies.·         One of the key recommendations for doing so involves the establishment of a centralized privatization entity for the state that would fulfill functions similar to Florida's Council on Efficient Government. ·         Florida's Council on Efficient Government is a privatization "center of excellence" established in 2004 during former Governor Jeb Bush's tenure, and is a key component of a strategy that ultimately helped his administration realize over $550 million in cost savings through over 130 privatization and competition initiatives. ·         Additional Task Force recommendations on institutionalization include applying a set of best practices in project selection and contracting, creating a process for unsolicited privatization proposals and ensuring that privatization initiatives reflect the state's environmental policy priorities. Source: Leonard Gilroy, Harris Kenny, Lisa Snell, Shirley Ybarra and Tyler Millhouse, "State Government Privatization:  Governor Christie Advancing Privatization in New Jersey," Reason Foundation, February 16, 2011.

"Hauser's Law" (named after W. Kurt Hauser of the Hoover Institution) states that there has been a close proportionality between revenue and gross domestic product (GDP) since World War II, despite big changes in marginal tax rates in both directions.  The law states that there is a kind of capacity ceiling for federal tax receipts of about 19 percent of GDP.  This should be the budget to prioritize spending.In short, Hauser's Law provides a simple basis for testing the validity of any government's revenue projections, says David Ranson, president and director of research of H.C. Wainwright & Co. Economics: ·         Today, since the U.S. economy already suffers from a large output gap that is expected to take many years to close, 18.3 percent must be a realistic upper limit on the ratio of budget revenues to GDP for years to come. ·         Any major tax increase will reduce GDP and therefore revenues too.  How long does it take to fire up the economy once capital is more readily available?  The answer is: Longer than it takes to close it down.  According to Congressional Budget Office (CBO) projections based on the current budget: ·         The revenue-to-GDP ratio could reach 18.3 percent as early as 2013 and rise to 19.6 percent in 2020. ·         Such numbers implicitly assume that the U.S. labor market will get back to sustainable "full employment" by 2013 and that GDP will exceed its potential thereafter.   However, when the projections are tempered by the constraints of Hauser's Law, it is clear that deficit spending will grow faster than the official estimates show, says Ranson. For budget planning, it is wiser and safer to assume that tax receipts will remain at a historically realistic ratio to GDP no matter how tax rates are manipulated.  That leads to the conclusion that current projections of federal revenue are, once again, unrealistically high, says Ranson. Source: David Ranson, "The Limit of Tax Revenues," National Center for Policy Analysis, August 4, 2010. http://www.ncpa.org/pub/ba716 

During fiscal year 2010 the government spent around $3.6 trillion, or 25 percent of gross domestic product (GDP), while collecting $2.1 trillion in tax revenue, or 14.5 percent of GDP.  The resulting deficit was $1.5 trillion.  The total debt held by the public -- the sum of all accumulated annual deficits and interest payments -- reached 63 percent of GDP.  You have to go back to 1946 to find spending that was as large a percentage of GDP, say Nick Gillespie, editor-in-chief of reason.com, and Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University.·         In 2007, the debt was just 36.2 percent of GDP. ·         If current trends continue, the Congressional Budget Office (CBO) projects, the number will reach 87 percent in 2020. Annual federal revenue since 1950 has averaged just under 18 percent of GDP.  Under the CBO's basic projection federal revenue will rise to 20 percent of GDP in 2015 and then climb even higher, reaching 21 percent in 2020 and 22.3 percent in 2030.  Under the CBO's more realistic "alternative scenario," federal revenue will equal about 19 percent of GDP within a few years and then stay around that level.In absolute dollars, getting to 19 percent immediately would mean cutting $829 billion out of the budget, which isn't a politically realistic target at the moment.  Getting to 19 percent within a few years, though, would require a series of far smaller cuts because of the expected economic recovery, say Gillespie and de Rugy.Until federal spending is brought down to 19 percent of the economy or less -- something that was accomplished with little trouble for the years 1997 through 2002, not to mention most of the period between 1950 and 1970 -- no serious solution to balance the budget will be possible.Source: Nick Gillespie and Veronique de Rugy, "The 19 Percent Solution," Reason Magazine, March 2011.http://reason.com/archives/2011/02/14/the-19-percent-solution/print

The U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.  These are a few of the findings in a massive study of overlapping and duplicative programs that cost taxpayers billions of dollars each year, according to the Government Accountability Office (GAO), reports the Wall Street Journal.The GAO examined numerous federal agencies, including the departments of defense, agriculture and housing and urban development, and pointed to instances where different arms of the government should be coordinating or consolidating efforts to save taxpayers' money.  The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances.·         The report says there are 18 federal programs that spent a combined $62.5 billion in 2008 on food and nutrition assistance, but little is known about the effectiveness of 11 of these programs because they haven't been well studied. ·         The report took particular aim at government funding for surface transportation, including the building of roads and other projects, which the administration has made a major part of its push to update the country's infrastructure. ·         The report said five divisions within the Department of Transportation account for 100 different programs that fund things like highways, rail projects and safety programs. Instances of ineffective and unfocused federal programs can lead to a mishmash of occasionally arbitrary policies and rules, the report says.  It recommends merging or consolidating a number of programs to both save money and make the government more efficient, says the Wall Street Journal.Source: Damian Paletta, "Billions in Bloat Uncovered in Beltway," Wall Street Journal, March 1, 2011.

A new report from Verso Economics examines the costs and benefits of government policy to support the renewable energy industry in Scotland and the United Kingdom (England, Wales and Northern Ireland).  The report's key finding is that for every job created in the United Kingdom in renewable energy, 3.7 jobs are lost.  In Scotland there is no net benefit from government support for the sector, and probably a small net loss of jobs, says Verso Economics.·         The main policy tool used to promote renewable energy generation is the Renewables Obligation, which effectively raises the market price paid for electricity from renewable sources. ·         This scheme costs electricity consumers £1.1 billion (about $1.8 billion) in the United Kingdom and around £100 million (about $163 million) in Scotland in 2009-2010. ·         In addition, both the U.K. and Scottish Governments have introduced a wide range of grants and subsidies for the renewables industry. ·         These are estimated at £188 million (about $306 million) U.K.-wide and an additional £22 million (about $36 million) in Scotland in 2009-2010. ·         The renewable energy sector imposes other indirect costs on the economy, mainly from its impact on the local environment and landscape. ·         In total, measurable policies to promote renewable energy cost £1.4 billion (about $2.3 billion) U.K.-wide and £168 million (about $274 million) in Scotland in 2009-2010. Source: Richard Marsh and Tom Miers, "Worth the Candle?" Verso Economics, March 2011.

Major federal intervention into local schools began with the Elementary and Secondary Education Act of 1965 (ESEA).  Since then, a half-century of continually expanding, ever-shifting federal intervention into local schools has failed to improve American academic achievement, says Jennifer A. Marshall, director of domestic policy at the Heritage Foundation.But it has caused an enormous compliance burden, dissipating dollars and human capital that could have been more effectively directed to achieve educational excellence.  The damage should be calculated not only in terms of decades of wasted fiscal and human resources and on-going opportunity costs.The financial innovations that propelled the boom and collapse of the commercial real estate securities market in the last decade parallel those of that same market in the 1920s, says the National Bureau of Economic Research (NBER). Issuance of commercial mortgage-backed securities financed the construction of most of the U.S. skyscrapers in the 1920s, and led to overbuilding and then widespread vacancies.  The price declines in the mortgage-backed securities market in the late 1920s preceded the crash of the equity markets and the start of the Great Depression.  Analyzing the events of the earlier crisis can provide insights to regulators and financial institutions struggling with solutions to the current one, say NBER researchers William Goetzmann and Frank Newman.  For example, the researchers observe that by nearly every measure, real estate securities were as toxic in the 1930s as they are now: ·         Widespread economic optimism after World War I fueled demand for office space, boosting average commercial rents 168 percent nationally from a pre-war base through 1924. ·         That kicked off a speculative commercial real estate construction boom not matched until the mid-2000s. ·         New York and Chicago were the primary focus of the real estate run up; more office buildings taller than 70 meters were constructed in New York between 1922 and 1931 than in any other ten-year period before or since. ·         Real estate bond issuance, which accounted for nearly 23 percent of all corporate debt issued in 1925, fell to just 0.14 percent of the debt market by 1934 and some days no bonds traded. ·         The real estate bond market soon vanished, as did many of the bond houses that created them, among them many of the most trusted names on Wall Street; that was followed by public outrage over institutional corruption.   Ultimately, the size, scope and complexity of the 1920s real estate market undermined its merits, causing a crash not unlike the one underpinning the nation's current financial crisis, due in part to a commercial construction boom matched only in the mid-2000s. The researchers conclude that publicly-issued real estate securities affected real construction activity in the 1920s and that the breakdown in their valuation, through the mechanism of the collateral cycle, may have led to the subsequent stock market crash of 1929-1930. Source: Frank Byrt, "Securitization in the 1920s," NEBR Digest, May 2010; based upon: William Goetzmann and Frank Newman, "Securitization in the 1920s," National Bureau of Economic Research, Working Paper No. 15650, January 2010. http://www.nber.org/digest/may10/w15650.html   

a stagnant 9.5 percent unemployment rate are bad enough.  But a deeper look shows how hard it's going to be to pull out of our crisis, and why the Obama administration's policies are unlikely to do the job, says Henry Olsen, vice president at the American Enterprise Institute. History delivers sobering news on how long it might take to recover our economic health.  There is only one instance since World War II of the U.S economy increasing the employment-population ratio (the percentage of working-age Americans who have a job, whether they are seeking one or not) by 5 percentage points in a decade: the recovery that followed Ronald Reagan's tax cuts in 1983.  ·         In the mid-1980s, the employment-population ratio recovered less than two years after hitting bottom. ·         The momentum continued for the rest of the decade, fueled by the 1986 tax reform that lowered the top marginal income tax rate to 28 percent, allowing America to employ the millions of late baby boomers, women and immigrants who sought jobs. ·         By the time the boom ended in 1990, the employment ratio had rocketed to 63 percent from 57 percent.  An administration that pursued job creation -- not ideology -- would note this history and see how individuals and companies can create wealth and jobs quickly if they have the right incentives.  Instead, we have policies that are uncertain and portend higher taxes and greater regulatory burdens.  This is causing business and consumers alike to restrain spending, creating a drag on the economy too great for any government stimulus to reverse, says Olsen. Someone once said that we should never let a crisis go to waste.  In this historic employment crisis, we have no time to waste.  Rather than tear down Reaganism, our leaders in Washington should heed its lessons and unleash the private sector that alone can pull us out of our doldrums, says Olsen. Source: Henry Olsen, "Unemployment: What Would Reagan Do? No other recession in the last 60 years saw such rapid job destruction," Wall Street Journal, August 10, 2010. http://online.wsj.com/article/SB10001424052748704388504575419280283794598.html 

 Obama’s most self-indulgent moment was broadcast on national television this week when, in the midst of numerous crises crying out for American leadership, he took time to film his picks for the NCAA basketball tournament brackets for broadcast by the ESPN sports network.This follows a two-year string of self-indulgences by Obama since he became president that has demonstrated to the world that nothing comes before Obama’s me-time.Most famously, Obama did not interrupt his 2009 luxury Christmas vacation in Hawaii when an Islamist terrorist tried to blow a passenger jet out of the sky over Detroit on Christmas Day. Obama could barely be moved to speak to the nation about the attack which came within a failed detonator of succeeding.Now, with the Middle East in flames and America’s closest Asian ally teetering on collapse from the triple-whammy of a 9.0 earthquake, subsequent apocalytic tsunami and multiple nuclear power plant failures, Obama has spent his time golfing, partying with the press, fundraising, hanging out with athletes, prepping for his NCAA brackets presentation and getting ready for the Obama family taxpayer funded Spring Break trip to Rio de Janeiro this weekend.The White House Web site proudly displays Obama’s picks for the men’s and women’s tournaments. You, the U.S. taxpayer, paid for the posting and hosting of Obama’s picks in pdf format.The posting includes Obama’s conscience-cleansing nod to Japan in his ESPN presentation:As he does every year, the President filled out his brackets predicting the winners of the men’s and women’s NCAA basketball tournaments, but discussing it with Doris Burke of ESPN, he began with a call to stand with the people of Japan:One of the things I wanted to do on the show was, as people are filling out their brackets — this is obviously a national pastime; we all have a great time, it’s a great diversion. But I know a lot of people are thinking how can they help the Japanese people during this time of need. If you go to usaid.gov — usaid.gov — that will list all the nonprofits, the charities that are helping out there. It would be wonderful for people to maybe offer a little help to the Japanese people at this time — as they’re filling out their brackets. It’s not going to take a lot of time. That’s usaid.gov. It could be really helpful.•Go to usaid.govHow insulting. But that’s Obama. At least he didn’t say, “As you are filling out your brackets, say a quick prayer for the Libyans I betrayed by spending more time working on my brackets than on figuring a way to depose Qaddafi without getting him replaced by radical Islamists.”Or, “As you are filling out your brackets, try not to think about the skyrocketing price of gasoline and food. Let’s party March Madness style. Woot!”Even the lapdog White House press corps has complained about the difficulty of providing cover for Obama on his creepy bracket presentation:Q.    And final question: Is it entirely appropriate for the President to be addressing a crisis of this gravity as he’s standing before a white board talking about a basketball tournament?MR. CARNEY: There are crises all the time and for every President. And again, this one is happening halfway around the world, and it is severe and it is important and it is the focus of a great deal of the President’s attention — as are the events in the Middle East; as are the agenda items that he is pursuing to grow the economy and increase jobs in America, make sure we out-innovate, out-build and out-educate the competition in the 21st century. It’s a hard job that requires a lot.It is also important — one of the things I would note that the President did in that very brief interview on ESPN and ESPN2 was ask Americans, as they were filling out their own brackets, take the time to go to usaid.gov and make donations to a variety of charitable organizations that are organizing donations to help the Japanese in this very serious situation that they find themselves in. And so, yes, I do think it was appropriate.The Obamas have told Americans they need to cut back on vacations, business travel and spending to deal with the ongoing economic crisis. Yet the Obamas themselves have shown no sign of sacrificing anything. Michelle Obama wears clothes, shoes and accessories that cost thousands of dollars and lives a jet set lifestyle. Barack Obama has spent over 300 hours–the equivalant of seven-and-a-half 40 hour work weeks–playing 61 rounds of golf since becoming president two years ago.In just the past few weeks, Barack Obama has hosted parties at the White House for Motown and pro basketball, attended parties with the press and has hosted several Democrat fundraisers in D.C. and around the country. All while allies and critics alike have complained about the lack of leadership by Obama on pressing national and foreign issues.Never mind all that, Spring Break is here and surf’s up in Rio.The Rogues' Gallery Of Government Posted 08/06/2010 06:56 PM ET Washington: Social Security is deep in the red, the post office is losing billions, and Fannie Mae's back for another handout. These and other examples speak volumes about government fecklessness and negligence.Social Security checks mailed in 2010 will total $41 billion more than the program will collect in payroll-tax revenues, trustees reported last Thursday. The program will also run a deficit next year, before briefly returning to surpluses for a few years. Then the red ink will be back — for good — starting in 2015, a year earlier than previously projected.Some analysts believe that while deficits begin this year, 2015 is key because that's when Social Security will need permanent injections of cash from general revenues. The billions the program will require, says David C. John of the Heritage Foundation, "will make it harder to find money for other government programs or require large and growing tax increases."Over the long haul, Social Security is liable for paying out $7.9 trillion more in benefits than it will receive in tax revenues.While digesting that grim news, don't forget Thursday's report that the U.S. Postal Service lost $3.5 billion for the quarter that ended June 30. Over the same quarter last year, the post office lost only $2.4 billion. Three-fourths of the way through its current fiscal year, losses at the Postal Service have totaled $5.4 billion.The post office's future is as dim, if not dimmer, than its past."Given current trends, we will not be able to pay all 2011 obligations," said Joseph Corbett, chief financial officer of a government agency — forget its claims of independence — that has lost money in 14 of its last 16 quarters despite its legal monopoly."It is clear that a liquidity problem is looming and must be addressed through fundamental changes requiring legislation and changes to contracts," he said.That's in the near term. After that, the outlook only gets worse. The Postal Service, beneficiary of $27 billion in taxpayers' money since 1970, could lose $238 billion or more over the next decade.Obviously there's something wrong with the way the post office does business, a fact that hasn't gone unnoticed by an auditor's report earlier this year — or by the typical American who just wants to mail a parcel.While most of Washington is taking the month off, on Aug. 17 the White House will host a conference on the future of Fannie Mae and Freddie Mac, the troubled government-controlled home mortgage giants. A variety of academics, consumer and community organizations, industry groups and others who have an interest in the issue will attend the Conference on the Future of Housing Finance.One topic sure to come up is the continuing losses by Fannie Mae and Freddie Mac. On Thursday, Fannie reported that it lost $1.2 billion in the second quarter. While losses are never acceptable, at least it didn't bleed as profusely as in the first quarter, when it lost $11.5 billion, or in the same quarter last year, when $14.8 billion slipped through its hands.The report also noted that Fannie Mae wants an additional $1.5 billion in federal aid as a follow-up to the $8.4 billion it received on June 30. Overall, Fannie Mae has received $86.1 billion "from Treasury to eliminate the company's second-quarter 2010 net worth deficit," according to its documents.Freddie Mac has yet to report its second-quarter loss. But no one will be surprised it if takes a big hit and asks for more money as well. Through the first quarter, it's devoured $63 billion in bailout funds from taxpayers.It doesn't inspire confidence when the people who are driving these institutions — Social Security, the Postal Service, Fannie and Freddie — into the ground are the same ones who believe they should control and manage the economy.It's no coincidence that for all their planning, everything they have placed themselves in charge of, or refused to turn over to the private sector, is failing.Not one of the services that these exhausted organizations provide has to be performed by the federal government. Each of them — pensions, mail correspondence and home mortgages — can be handled more effectively by private enterprise.While it's well past the time that all should have been sold or turned over to the market, that doesn't mean that it's too late.But one day it will be. Our next set of lawmakers need to understand: The deadline for doing something is fast approaching. http://www.investors.com/NewsAndAnalysis/Article/543020/201008061856/The-Rogues-Gallery-Of-Government.aspx

     Q125. "On the Checks and Balances Page, it says that a legislative check on the legislature is that only the House can originate revenue bills. I've been told that only the House can originate spending bills, too - is this true?"A. In my opinion, the Constitution is unambiguous on the point: "All bills for raising Revenue shall originate in the House of Representatives" (Article 1 Section 7). Thus, I've listed the House's "original jurisdiction" over revenue bills (laws that affect taxes) as a check. The House, however, views this clause a little differently, taking it to mean not only taxation bills but also spending bills.The plain language of the clause would seem to contradict the House's opinion, but the House relies on historical precedent and contemporaneous writings to support its position. In Federalist 66, for example, Alexander Hamilton writes, "The exclusive privilege of originating money bills will belong to the House of Representatives." This phrase could easily be construed to include taxing and spending. The Supreme Court has ruled, however, that the Senate can initiate bills that create revenue, if the revenue is incidental and not directly a tax. Most recently, in US v Munoz-Flores (495 US 385 [1990]), the Court said, "Because the bill at issue here was not one for raising revenue, it could not have been passed in violation of the Origination Clause." The case cites Twin City v Nebeker (176 US 196 [1897]), where the court said that "revenue bills are those that levy taxes, in the strict sense of the word."However, the House, it is explained, will return a spending bill originated in the Senate with a note reminding the Senate of the House's prerogative on these matters. The color of the paper allows this to be called "blue-slipping." Because the House sees this as a matter of some pride, the Senate is almost guaranteed not to have concurrence on any spending bill which originates in the Senate. This has created a de facto standard, despite my own contention (and that of the Senate) that it is not supported by the Constitution.  http://www.usconstitution.net/constfaq_a7.htmlhttp://en.wikipedia.org/wiki/United_States_presidents_and_control_of_congress While not defending the increase of the federal debt under President Bush, it's curious to see Clinton's record promoted as having generated a surplus. It never happened. There was never a surplus and the facts support that position. In fact, far from a $360 billion reduction in the national debt in FY1998-FY2000, there was an increase of $281 billion.

Verifying this is as simple as accessing the U.S. Treasury (see note about this link below) website where the national debt is updated daily and a history of the debt since January 1993 can be obtained. Considering the government's fiscal year ends on the last day of September each year, and considering Clinton's budget proposal in 1993 took effect in October 1993 and concluded September 1994 (FY1994), here's the national debt at the end of each year of Clinton Budgets:

As can clearly be seen, in no year did the national debt go down, nor did Clinton leave President Bush with a surplus that Bush subsequently turned into a deficit. Yes, the deficit was almost eliminated in FY2000 (ending in September 2000 with a deficit of "only" $17.9 billion), but it never reached zero--let alone a positive surplus number. And Clinton's last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion deficit. The growing deficits started in the year of the last Clinton budget, not in the first year of the Bush administration.

Keep in mind that President Bush took office in January 2001 and his first budget took effect October 1, 2001 for the year ending September 30, 2002 (FY2002). So the $133.29 billion deficit in the year ending September 2001 was Clinton's. Granted, Bush supported a tax refund where taxpayers received checks in 2001. However, the total amount refunded to taxpayers was only $38 billion . So even if we assume that $38 billion of the FY2001 deficit was due to Bush's tax refunds which were not part of Clinton's last budget, that still means that Clinton's last budget produced a deficit of 133.29 - 38 = $95.29 billion.

Clinton clearly did not achieve a surplus and he didn't leave President Bush with a surplus.

So why do they say he had a surplus?

As is usually the case in claims such as this, it has to do with Washington doublespeak and political smoke and mirrors.

Understanding what happened requires understanding two concepts of what makes up the national debt. The national debt is made up of public debt and intragovernmental holdings. The public debt is debt held by the public, normally including things such as treasury bills, savings bonds, and other instruments the public can purchase from the government. Intragovernmental holdings, on the other hand, is when the government borrows money from itself--mostly borrowing money from social security.

Looking at the makeup of the national debt and the claimed surpluses for the last 4 Clinton fiscal years, we have the following table:

Notice that while the public debt went down in each of those four years, the intragovernmental holdings went up each year by a far greater amount--and, in turn, the total national debt (which is public debt + intragovernmental holdings) went up. Therein lies the discrepancy.

When it is claimed that Clinton paid down the national debt, that is patently false--as can be seen, the national debt went up every single year. What Clinton did do was pay down the public debt--notice that the claimed surplus is relatively close to the decrease in the public debt for those years. But he paid down the public debt by borrowing far more money in the form of intragovernmental holdings (mostly Social Security).
Update 3/31/2009: The following quote from an article at CBS confirms my explanation of the Myth of the Clinton Surplus, and the entire article essentially substantiates what I wrote."Over the past 25 years, the government has gotten used to the fact that Social Security is providing free money to make the rest of the deficit look smaller," said Andrew Biggs, a resident scholar at the American Enterprise Institute.
Interestingly, this most likely was not even a conscious decision by Clinton. The Social Security Administration is legally required to take all its surpluses and buy U.S. Government securities, and the U.S. Government readily sells those securities--which automatically and immediately becomes intragovernmental holdings. The economy was doing well due to the dot-com bubble and people were earning a lot of money and paying a lot into Social Security. Since Social Security had more money coming in than it had to pay in benefits to retired persons, all that extra money was immediately used to buy U.S. Government securities. The government was still running deficits, but since there was so much money coming from excess Social Security contributions there was no need to borrow more money directly from the public. As such, the public debt went down while intragovernmental holdings continued to skyrocket.

The net effect was that the national debt most definitely did not get paid down because we did not have a surplus. The government just covered its deficit by borrowing money from Social Security rather than the public.

Consider the following quotes (and accompanying links) that demonstrate how people have known this for years:
In the late 1990s, the government was running what it -- and a largely unquestioning Washington press corps -- called budget "surpluses." But the national debt still increased in every single one of those years because the government was borrowing money to create the "surpluses." So the table itself, according to the figures issued yesterday, showed the Federal Government ran a surplus. Absolutely false. This reporter ought to do his work. This crowd never has asked for or kept up with or checked the facts. Eric Planin--all he has to do is not spread rumors or get into the political message. Both Democrats and Republicans are all running this year and next and saying surplus, surplus. Look what we have done. It is false. The actual figures show that from the beginning of the fiscal year until now we had to borrow $127,800,000,000. - Democratic Senator Ernest Hollings, October 28, 1999 An overall "downsizing" of government and a virtual end to the arms race have contributed to the surplus, but the vast majority is coming from excess Social Security taxes being paid by the workforce in an attempt to keep Social Security benefit checks coming once the "baby-boomers" start to retire. Of the $142 billion surplus projected by the end of 2000, $137 billion will come from excess Social Security taxes. When these unified budget numbers are separated into Social Security and non-Social Security components, however, it becomes evident that all of the projected surplus throughout this period is attributable to Social Security. The remainder of the budget will remain in deficit throughout the next decade. Despite a revenue shortfall, full benefits are expected to be paid out between 2017 and 2041. The system will draw on its trust fund, a collection of special-issue bonds from the government, which borrowed prodigiously from the program's surplus over the years. But since the country is already running a deficit, the government will have to borrow more money to pay back its debt to Social Security. That's a little like giving with one hand and taking away with the other. The surplus deception is clearly discernible in the statistics of national debt. While the spenders are boasting about surpluses, the national debt is rising year after year. In 1998, the first year of the legerdemain surplus, it rose from $5.413 trillion to $5.526 trillion, due to a deficit of $112.9 billion... The federal government spends Social Security money and other trust funds which constitute obligations to present and future recipients. It consumes them and thereby incurs obligations as binding as those to the owners of savings bonds. Yet, the Treasury treats them as revenue and hails them for generating surpluses. If a private banker were to treat trust fund deposits as income and profit, he would face criminal charges.

Are intragovernmental holdings really debt?

Yes, intragovernmental debt is every bit as real as the public debt. It's not "a wash" simply because the government owes the money to "itself."

As I explained in a previous article, Social Security is legally required to use all its surpluses to buy U.S. Government securities. From Social Security's standpoint, it has a multi-trillion dollar reserve in the form of U.S. Government securities. When the Social Security system starts to falter due to insufficient contributions to pay for all the benefits of retiring baby-boomers, probably around 2017, it will start cashing those securities and will expect the U.S. Government to pay it back, with interest. The problem is, the government doesn't have the money. The money has already been spent--in part, effectively, to pay down the public debt under Clinton.
Ever since I wrote an article that demonstrated that President Clinton never had a surplus, people have been skeptical. After all, Clinton's alleged surpluses have been accepted by the media and repeated so much that it's taken as gospel truth.

The claim is made that in Fiscal Year 2000, President Clinton ran a budget surplus of $236 billion. My previous article demonstrates that far from a surplus, the government had to increase the national debt by $18 billion. How can you claim a surplus when you have to borrow more money?

Indeed, citizens that hear about the Clinton "surplus" but also know the national debt never went down may legitimately ask, "How can the national debt increase even when the government supposedly has a surplus?" This article will provide a detailed explanation of how Clinton claimed a surplus even when the government borrowed $18 billion more the same year.

Going to the Source: Monthly Treasury Statements

Once per month the U.S. Treasury's Financial Management Service releases a Monthly Treasury Statement. This is a 32-page document that reports all of the government's financial activities for the previous month along with year-to-date totals. It also provides information about the government's borrowing activities or, in the case of a surplus, an explanation of what was done with the surplus. The current issue can be found here while historic reports for previous months can be found here.

In order to analyze what happened in fiscal year 2000 (the year with the claimed $236 billion surplus) we need to refer to the MTS for September 2000. The government's fiscal year runs from October of the previous year to September of the year in question--so Clinton's fiscal year 2000 went from October 1, 1999 to September 30, 2000. By looking at the monthly report for September 2000 we're looking at the summary for the last month of the fiscal year; thus all the "year-to-date" totals in this report reflect the totals for fiscal year 2000.

Right away we can find references to the claimed $236 billion surplus: In table 1 on page 2 we can see the $236,993 surplus on the "year-to-date" surplus value at the bottom of the table. However, there's more to the story.

How the National Debt Is Calculated

The national debt obviously isn't calculated the same way we would think. If there's a $236 billion surplus then most people would think the national debt would go down by $236 billion. Instead it went up by $18 billion. This is the difference that must be explained.

Public Debt is calculated by taking the previous year's public debt and adding the total unified budget deficit (or subtracting the surplus), and then adding any "other means of financing."

Intragovernmental Debt is calculated by taking any trust fund surpluses and adding it to the previous year's intragovernmental debt.

Total National Debt is calculated by adding the public debt to the intragovernmental debt. As a result, the national debt can increase even when the public debt decreases if the intragovernmental debt increases by a larger amount.

Why? When a trust fund (such as social security) takes in more money than it pays out in benefits, it takes the extra money and "invests" it in government bonds. Essentially social security says "We received $100 billion in social security contributions but only paid out $80 billion in benefits, so we take the extra $20 billion and buy U.S. government bonds." Social security doesn't keep the extra cash but rather loans it to the U.S. government and, in return, it gets a U.S. government bond. That means the U.S. government can immediately spend that $20 billion on normal government operations but owes that $20 billion to Social Security. Hence one part of the government (the U.S. Federal Government general fund) owes $20 billion to another part of the government (Social Security). That is intragovernmental debt.

Whenever a trust fund has a surplus intragovernmental debt will increase because the surplus money is automatically loaned to the federal government's general fund. That money is then used by the federal government for its normal operations. The fact that a trust fund has a surplus simply means the federal government doesn't need to borrow as much money directly from the public since it's receiving extra money from the trust funds. It's still borrowing money--just from a trust fund rather than the public.

If the combined surplus from general taxes plus the total surplus of trust funds actually results in a surplus, that means the government received more money than it needs that year. In that case it will pay down the public debt--even if intragovernmental debt has increased. That's what happened in 2000. The combined total of taxes and trust fund surpluses exceeded the amount of money the government needed that year, and some of the extra amount was used to pay down the public debt.

Isn't That a Surplus?      No, that's not a surplus.

If in a given year you earn $30,000 and a friend loans you $5,000, and you spend $32,000, is that a surplus? While you can claim "I received $35,000 and only spent $32,000, thus I have a surplus," that's a pretty weak argument when you know that $2,000 of the money you spent was actually borrowed and has to be paid back later. That's pretty much what happened in 2000.

An article at Factcheck is often used to respond to my original article. The article cites Congressional Budget Office (CBO) numbers that cite an on-budget surplus of $87.2 billion and an off-budget (Social Security) surplus of $149.8 billion. The Factcheck article says: "But even if we remove Social Security from the equation, there was a surplus of $1.9 billion in fiscal 1999 and $86.4 billion in fiscal 2000."

The above Factcheck statement acknowledges the fact that Social Security trust fund surpluses really don't have anything to do with the president's budget, nor can they really be considered part of a surplus since they'll have to be paid back to Social Security later. So they argue that even if you don't count the $149.8 billion Social Security surplus, President Clinton was still responsible for an "on-budget" surplus of $86.4 billion (actually the numbers are $87.2 billion on-budget and $149.8 billion off-budget/Social Security according to to table 2 of the MTS ; I'm not sure where Factcheck got its numbers... but their numbers are close enough).

What Factcheck does not mention, however, is that while Social Security is the only off-budget trust fund, it's not the only trust fund. Just as surpluses caused by Social Security should not be considered a real surplus caused by a president's budget, nor should surpluses caused by other trust funds be considered. The following table shows the major trust funds that contributed to surpluses in 2000. These numbers come from Table 6 Schedule D of the MTS for September 2000 . That table contains a complete list of all the trust funds and government accounts that contributed to the "surplus" due to their excess funds.
 As can be seen from Table 6 Schedule D of the Treasury Department's MTS , all the government's trust funds contributed a total of $246.5 billion to the "surplus." That is extra money that was contributed to trust funds for the specific trust fund purposes, not as taxes, and is $246.5 billion that the U.S. government now owes to those trust funds and will have to pay back in the future. And although the government took in that extra $246.5 billion in non-tax revenue from those trust funds, the MTS indicates it only reduced the public debt by $223 billion. That's why even with all the excess money coming in from the trust funds, the national debt went up. The government received extra money from trust funds but didn't use all of it to reduce the public debt. Some of it was used on normal government spending during 2000.

If all of the extra money coming from trust funds had been used to pay down the national debt, intragovernmental debt would have increased by $248.7 billion and the public debt would've decreased by the same amount--and it would have resulted in no change to the total national debt from 1999 to 2000; that would have arguably been balanced government spending (though not a surplus). Instead, the government received $248.7 billion in extra trust fund income but only spent $230.8 billion of that on reducing the public debt. The remaining $17.9 billion was spent and represents, as indicated in my original article, a deficit.

The Confusion: On-Budget/Off-Budget vs. Trust Funds

I believe the underlying confusion comes from the fact that the government produces financial reports that differentiate between "on-budget" and "off-budget" spending. People (including Factcheck, apparently) then mistakenly believe that "off-budget" represents all the government income that "doesn't count" and isn't controlled by a president's budget while "on-budget" represents all the government income that does count and is controlled by the president's budget.

The reality, though, is that that's not the case. As shown above, most trust funds are "on-budget" even though they generate revenue that the government literally has to borrow in order to use. The government is actually borrowing money from trust funds and then reporting that borrowed money as income!

It would be far more reasonable for the government not to report on-budget/off-budget income and spending but rather to report non-trust fund/trust-fund income and spending. That would provide the public with a far more accurate picture of the fiscal responsibility of the government.

There Was No Surplus

There is no two ways about it: A real surplus would cause the total national debt to go down.

Had the trust funds contributed $248.7 billion in excess funds and the government had reduced the public debt by $250 billion, that would mean it used all of the trust funds' excess funds to reduce the public debt and also used a real $1.3 billion federal surplus to reduce the public debt. That would've reduced the national debt by $1.3 billion and been a real surplus.

But if intragovernmental debt goes up faster than the public debt goes down (as it did in 2000), it means the government is simply borrowing and spending money from trust funds and will have to pay it back later. That's not a surplus, it's just borrowing money from trust funds instead of the public. The money was still borrowed to make up a deficit in the government's general fund.

Total National
FY1997 09/30/1997   $3.789667T $1.623478T $5.413146T
FY1998 09/30/1998 $69.2B $3.733864T $55.8B $1.792328T $168.9B $5.526193T $113B
FY1999 09/30/1999 $122.7B $3.636104T $97.8B $2.020166T $227.8B $5.656270T $130.1B
FY2000 09/29/2000 $230.0B $3.405303T $230.8B $2.268874T $248.7B $5.674178T $17.9B
FY2001 09/28/2001   $3.339310T $66.0B $2.468153T $199.3B $5.807463T $133.3B



TRUST FUND SURPLUSES IN 2000 (table 6 schedule D)
Social Security $152.3 billion
Civil Service Retirement Fund $30.9 billion
Federal supplementary medical insurance Trust fund $18.5 billion
Federal Hospital Insurance Trust Fund $15.0 billion
Unemployment Trust Fund $9.0 billion
Military Retirement Fund $8.2 billion
Transportation Trust Funds $3.8 billion
Employee life insurance & retirement $1.8 billion
Other $7.0 billion
TOTAL $246.5 billion
National Debt Deficit
FY1993  09/30/1993  $4.411488 trillion  
FY1994  09/30/1994  $4.692749 trillion  $281.26 billion
FY1995  09/29/1995  $4.973982 trillion  $281.23 billion
FY1996  09/30/1996  $5.224810 trillion  $250.83 billion
FY1997  09/30/1997  $5.413146 trillion  $188.34 billion
FY1998  09/30/1998  $5.526193 trillion  $113.05 billion
FY1999  09/30/1999  $5.656270 trillion  $130.08 billion
FY2000  09/29/2000  $5.674178 trillion  $17.91 billion
FY2001  09/28/2001  $5.807463 trillion  $133.29 billion







































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