Archives for January 2013

Jobs, not government spending, lift Americans out of poverty

jobs

During his inaugural address, President Barack Obama launched a defense of entitlement programs and spoke about income equality. But despite the rhetoric and increased spending on welfare programs during his first four years, the poverty rate in the United States hasn’t declined.

Writing at US News and World Report, Keith Hall, a senior research fellow at the Mercatus Center, explains that government spending won’t lift people out of poverty, noting instead that Congress should pursue policies that create private-sector jobs to lift Americans out of poverty:

Since the start of the recession, the number of Americans in poverty has grown by 9 million. This increase has come at a time when government spending on the poor has also reached record levels. In 2011, more than 100 million people lived in households that received some kind of low-income government assistance; spending on these programs at the federal, state, and local level combined now exceeds $1 trillion annually. Government assistance for low-income families now equals a shocking 10 percent of all household spending.

It has been long recognized that recessions can increase the number of families in poverty, and over the past 20 years it has become clear that the rising and falling poverty rate correlates directly with the jobless rate. The graph below shows this relationship.

Americans Say They Don’t Trust Their Government

A long time ago, I asked people “Why Do You Trust Your Government?” It appears I now have an answer: they don’t.

As Barack Obama begins his second term in office, trust in the federal government remains mired near a historic low, while frustration with government remains high. And for the first time, a majority of the public says that the federal government threatens their personal rights and freedoms.

1-31-13 #1The latest national survey by the Pew Research Center for the People & the Press, conducted Jan. 9-13 among 1,502 adults, finds that 53% think that the federal government threatens their own personal rights and freedoms while 43% disagree.

In March 2010, opinions were divided over whether the government represented a threat to personal freedom; 47% said it did while 50% disagreed. In surveys between 1995 and 2003, majorities rejected the idea that the government threatened people’s rights and freedoms.

The growing view that the federal government threatens personal rights and freedoms has been led by conservative Republicans. Currently 76% of conservative Republicans say that the federal government threatens their personal rights and freedoms and 54% describe the government as a “major” threat. Three years ago, 62% of conservative Republicans said the government was a threat to their freedom; 47% said it was a major threat.

We Are All Modern Monetary Theorists Now

As a consequence of loose monetary policy with a fiat currency, the United States is rapidly descending into an economic reality of Modern Monetary Theory, or MMT.  While MMT (also known as Chartalism) is typically associated with its Keynesian predecessor and the policies of the Left, new developments reveal that both parties are responsible for the slip into a brave new economic world.

Essentially, there are four preconditions in Modern Monetary Theory:

1) Money enters the economy through government spending, as the total amount of money is constrained not by gold but by the total output of the national economy;
2) Government spending is speculative as it prints as much money as it needs to control production and, as a byproduct, employment, and spending beyond productive capacity leads to inflation;
3) Taxes do not pay for expenditures but are instead a way to throttle private sector demand; and
4) The government is the issuer of the currency, sovereign governments that issue their own currency are never insolvent, so debts essentially don’t matter.

Rand Paul offers amendment to ban giving F-16s to Egypt

Rand Paul

Sen. Rand Paul (R-KY) has been making a big foreign policy push lately. Paul, who is thought to be considering a bid for the GOP presidential nomination in 2016, went on a trip to Israel earlier this month and skewered Sen. John Kerry (D-MA) over the Obama Administration’s foreign policy during his confirmation hearing. More recently, Paul declared support for Israel if they were to come under attack from enemies in the tumultuous Middle East.

Paul is looking to make another strong statement on foreign policy by offering an amendment to ban the Obama Administration from sending F-16 fighter jets to Egypt, a country that has been a concern recently.

While presenting his amendment on the floor this morning, Paul explained that much has changed in Egypt since the so-called “Arab Spring.”

“Hundreds of thousands of people gathered in Tahrir square to protest a government that was instituting martial law,” explained Paul. “Ironically the current President now has instituted martial law and once again the dreaded indefinite intention is threatened to citizens in Egypt.”

Sequestration Cuts Will Lead to Floods, Plagues, and Pestilence

Written by Tad DeHaven, a budget analyst at the Cato Institute. Posted with permission from Cato @ Liberty.

The odds that $85 billion in “unthinkable, draconian” sequestration spending cuts will go into effect in March as scheduled are looking better. The odds must be getting better because, as if on cue, the horror stories have commenced.

A perfect example is an article in the Washington Post that details the angst and suffering being experienced by federal bureaucrats and other taxpayer dependents over the mere possibility that the “drastic” cuts will occur. You see, the uncertainty surrounding the issue has forced government employees to draw up contingency plans. Contingency plans? Oh, the humanity!

From the article:

Sequestration, as the law is known, has sent agencies scrambling to buffer themselves, spending time and money that ultimately may be for naught. Even if cuts take effect, it might not be for long — making the hiring freezes, canceled training, deferred projects, and lengthy planning for furloughs and other contingencies an exercise in inefficiency.

Occupy Wall Street: White and Rich

OWS goons

Occupy Wall Street became part of the political discussion at the end of 2011. They railed against what they saw as corporate greed and capitalism. However, what they really had a problem with was corporatism, not capitalism, as Daniel Hannan has so eloquently explained.

And while they complained about government being part of the problem, Occupy Wall Street’s answer was, ironically, more government. But Occupy was conundrum, not just because of the answers they offered, but all because they, despite their “we are the 99%” chant, are part of the 1% of the world’s income earners. They not only live in a country where they have a right to protest their grievances, but also happens to be one of the most prosperous countries in the world with a high standard of living.

But with their protests and complaints about income inequality and, at times, racism, a recently released study from the City University of New York found that Occupy Wall Street was not only disproportionately white, but also rich:

Americans don’t understand the “assault weapons” ban they support

assault weapons

While the White House is touting support in the polls for its gun control proposal, including renewal of the Assault Weapons Ban, Jacob Sullum notes a new poll conducted by Reason-Rupe that shows that Americans don’t really know what an “assault weapons” is:

Reason-Rupe Public Opinion Survey conducted this month suggests such misconceptions are common. After asking the 1,000 respondents if they thought people should be “prohibited from owning assault weapons,” the survey (which is sponsored by my employer, the Reason Foundation) asked half of the sample to “describe an assault weapon.” The answers are illuminating.

About two-thirds of the respondents described “assault weapons” as guns that fire rapidly, guns that can fire a large number of rounds without reloading, guns with a lot of “power,” or guns used by the military. More than a quarter described them as “machine guns,” “automatics,” or the equivalent (e.g., “multiple rounds with just one pull of the trigger”).

Overall support for banning “assault weapons” was only 44 percent, considerably lower than the 60 percent or so in recent Gallup and ABC News polls. But there was majority support—53 percent and 59 percent, respectively—among people whose descriptions of “assault weapons” emphasized rate of fire (including those who mistakenly described them as machine guns) or ammunition capacity.

A few more thoughts on the Reince Priebus and GOP Liberty situation

Yesterday, United Liberty Editor Jason Pye did a write-up on Reince Priebus and his recent attempts to reach out to the Ron Paul Republicans/Liberty wing of the GOP. This action has naturally been met with much skepticism from the Freedom forces of the GOP. As a member of that group, I just wanted to expound on a few things:

First off, with all due respect, for those thinking that Priebus did this solely because he was concerned about keeping his position, that just isn’t the case. No one, and I really mean no one (including potential challenger Mark Willis), had any real hope that Priebus would be unseated. Of the 168 members of the RNC, there might have been upwards of two dozen or so that could be counted on to vote against Priebus. However, Mark Willis, the Liberty GOPer from Maine, wasn’t able to get the majority vote of the 3 different state RNC memberships to even be placed on the ballot.

Secondly, Priebus has been reaching out to the Ron Paul/Liberty people before, during, and after this most recent RNC meeting. The writing is on the wall - the Liberty forces have the momentum. And even though they’ve been the ones most involved in the degradation of the GOP for the last decade, the establishment GOP is now exhibiting what might be the strongest and most intense of human instincts - self-preservation.  It’s also just common sense, as evidenced by this recent quote from long-serving, social conservative RNC Iowa Committeeman, Steve Scheffler:

“If you don’t start including new people, you’re going to die on the vine…the old guard needs to be inclusive.”

Cartoon of the Day: What happened to the anti-war left?

During George W. Bush’s presidency, anti-war activists were out in force to protest the policies expansive foreign policy views and trampling of civil liberties protected by the Constitution. But during they’ve been oddly silent during the Obama Administration, despite unilateral war in Libya and drone strikes in foreign countries that have killed scores of innocent people.

While there are some groups — such as AntiWar.com — that are working to hold politicians accountable for their actions, the folks at NoodleDoodles came up with this cartoon that pretty much sums up the state of the anti-war movement in the age of Obama:

Anti-War Left

GDP contracts in the fourth quarter

Don’t look now, but the economic recovery that we’ve been constantly told is upon us may unsurprisingly be fading away. The Commerce Department released less-than-stellar numbers this earlier today showing that gross domestic product (GDP) contracted in the last quarter of 2012:

The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.

The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

Oh, and by the way, you’re taxes have gone up. That’s right, Americans will have less money to spend as the affects of the tax increases that hit at the beginning of the year are felt. When money is removed from the economy, it will translate into slower economic growth or even, given that the economy contracted, a recession.

Rick Santelli, the CNBC contributor whose rant on the floor inspired the Tea Party movement in 2009, summed up the news best:

“Hey Joe,” Santelli said, “when you act like Europe, you get growth rates like Europe, and our discussions with economists sounds like we’re in Europe. They have the same discussions constantly.”

 
 


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