budget deficits

Freedom…It Doesn’t Mean What You Think It Means

Last week, the Democrats held their Winter Meeting at the Capital Hilton, where Emperor Obama, Slayer of Insurance Companies, Defender of the Poor (and making more every day), the Duke of Deficits, addressed his faithful assembled minions, dispensing tidbits of propaganda like an imperial Pez dispenser, reeling them in with promises of endless supplies of government candy, assuring them it is oh so good for them.

Obama declared that “[a]s Democrats, we’ve let the other side define the word ‘freedom’ for too long…freedom for ordinary Americans to honestly pursue their dreams, that’s what we believe.” He went on to define freedom as the power of government to protect you from any adverse circumstance that may arise in your life, and as the ability for government to provide for your health care, your retirement, food, housing, and so on and so forth.

To quote the inimitable Inigo Montoya, the glorious Spaniard from one of my all time favorite movies, The Princess Bride…Mr. Obama, “You keep using that word [freedom]…I do not think it means what you think it means!’” What Obama is describing is not freedom; it is lifelong dependency on the gargantuan Nanny State, with promises of cradle-to-grave nurturing no matter how irresponsible the decisions you make in your life. Of course, the only way for government to protect you from your own mistakes is by forcing others to pay the price for you. Every action has a consequence, and just because you don’t suffer does not mean that someone does not suffer. Someone has to pay the piper. There is no free lunch.

Report: Long-term budget issues present fiscal threat to U.S.

National Debt

TL;DR version: This is a pretty long post dealing with a subject that generally fascinates only those interested in fiscal policy. The short of what you need to know is that the CBO expects the economy to perform better in the short-term, with higher revenues and lower budget deficits. But the rising costs of entitlements and the cost of servicing the national debt will drive up spending substantially over the long-term with the public’s share of the national debt becoming equal to the size of the economy (or GDP). As if the baseline scenario isn’t concerning enough, the alternative fiscal scenario is even more of a disaster. All charts below come directly from the CBO’s report.

Forget Syria or the still ongoing war on terrorism. The real security threat is the national debt. That’s what Admiral Mike Mullen warned in 2010. Those words still ring true today, especially after reading the latest long-term budget projections released yesterday by the Congressional Budget Office (CBO).

The annual report presents the federal budget outlook for the next 10 years (2013-2023) as well as provides a look into long-term projections relative to both current law and alternative scenarios, the latter of which most economists believe present a more realistic view of the United States’ fiscal health.

CBO Director Doug Elmendorf told reporters yesterday that the “federal budget is on a course that cannot be sustained indefinitely.”

Despite Outcry, Our Infrastructure is Not Crumbling

Skagit Bridge

In the aftermath of last week’s bridge collapse in Washington state, there have been a number of news reports and editorials on the need to address “America’s crumbling infrastructure” and they’ve declared that Congress needs to take action.

“It’s almost as if Washington has seen this movie before: a bridge collapses, groups decry the nation’s crumbling infrastructure and Congress does nothing,” lamented Abby Phillip at ABC News. John Nichols of the leftist publication The Nation carried the water of labor unions, and asked, “Is Washington ready to listen to the people who have been saying for years that we can’t afford to keep neglecting and shortchanging our nation’s infrastructure?”

Brian Levin of the Huffington Post was even more direct. He declared a state of emergency, writing that [w]e should treat our decaying infrastructure as the national security threat that it is and dispatch troops to the ground.”

“And by troops, I mean the million-man strong regiment of unemployed construction workers — 13.2 percent of people in the industry,” he added. “There is no logical reason why anyone from any party or persuasion would oppose the president’s plan, except to say that it should go even further.”

Hyperbole, much?

Who I Support For President?

Vote No One 2012Election Day is November 6 and I need to decide who I’m going to support for president.

There’s the incumbent, Barack Obama. Should I give him four more years? However, the problem is, I don’t approve of the four years he has already served. His signature law is Obamacare which is a tax increase on the middle class and the government takeover of our healthcare system. Nor do I approve of his administration continuing to enact budgets that increase the national debt by $1 trillion every year he has been office. I also do not approve of his administration’s foreign policy which is an incoherent continuation of the Bush foreign policy.

I do not approve of this administration’s social policy which appears to support a nanny state to combat everything from obesity to bullying, nor am I impressed with his very recent, election change of heart on gay marriage. I am also opposed to the continued funding of Planned Parenthood, the crack down on medical marijuana in states where it is legal, and the nationalization/federalization of just about everything. I definitely will not support Barack Obama’s reelection.

Barack Obama: Don’t worry about the national debt

Barack Obama with David Letterman

Back during the 2008 campaign, then-candidate Barack Obama told Americans on more than one occasion that they would see a net-spending cut during his first-term in office. But nearly four years, that promise hasn’t come to fruition. In fact, the national debt has grown by more than $5 trillion as spending was increased, as is taught in the Keynesian school, to “prime the pump” of the economy. Obama once said such out of control spending was “unpatriotic.” My, how things have changed.

During an interview on The Late Show on Tuesday night, President Obama told David Letterman that the national debt really isn’t a big deal:

President Obama said that the U.S. does not have to “worry” about its $16 trillion debt in the “short term.” He also could not “remember” what the nation’s total debt figures were when he entered office.

“I don’t know remember what the number was precisely,” Obama told talk show host David Letterman during an interview.

Letterman asked him if Americans should be “scared” of the trillions of dollars it owes to other countries.

“A lot of it we owe to ourselves. Because if you invest in a treasury bill or something like that then essentially you’re loaning the government money. In fact, the majority of it is held by folks who live here, but we don’t have to worry about it short term,” Obama responded.

America Survived 9/11, But Will It Survive Obama?

Eleven years ago, America was attacked by bloodthirsty Muslim terrorists who hijacked commercial jetliners and flew them into the World Trade Center towers, the Pentagon, and failed in a fourth attack on the Capitol Building or the White House. Three thousand Americans died that day in the most horrific and hateful attack on American soil in history, an attack injuring not only the American economy, but the American psyche. We felt vulnerable and afraid. However, if we are to be honest with ourselves, we will acknowledge the attacks of 9/11 as only the second most destructive event during that span and, in terms of long term damage to the stability of the United States, paling in comparison to the damage inflicted upon us by the Obama administration.

Now, I am well aware this will be considered a hyper-partisan attack on our president, but I believe the facts will justify the claim. The terrorist attacks were brutal to watch, and we could witness the devastation and destruction wrought with our own eyes. The terrorists desired to crush our economy and undermine our faith in our government, to weaken us. You might even say that they wanted to “fundamentally transform” America. Yet within two years America was well on her way to recovering from those events.

It was understandable that the economy was severely damaged that day. As noted in Kiplinger Financial, on the day of the attacks, the unemployment rate was just below 5%, and in the aftermath, with hundreds of thousands of jobs lost in the travel, tourism, and financial industries alone, it would rise to just over 6% in 2003. However, by 2007, the unemployment rate was back down to just over 4%, and America had come roaring back.

Guess who else thinks Social Security is a Ponzi scheme?

The bruhaha over Rick Perry’s comments that Social Security is a Ponzi scheme have taken a backseat to the remembrance of 9/11 and the Redskins’ first win in about 90 years, but let’s fan the flames a bit. Thanks to the erudite Don Boudreaux over at Cafe Hayek, it has come to my attention that a highly visible economist at one of the nation’s largest papers agrees with Gov. Perry’s assertion:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

And yes, you’ve probably guessed it: it’s Paul Krugman. And yes, you’ve probably guessed it, but the above emphasis is mine.

The essay was written in the December 1996/January 1997 edition of the Boston Review, as a response to Richard Freeman’s suggestions on fixing inequality. I profess to not having read Freeman’s work entirely, though mostly it was more of the same “we need to take the wealth from the top 20% and give it to the bottom 20%” nonsense.

Mr. President, Think of the Children

In his press conference, President Barack Obama said that we must close the deficit by tackling everything—naturally, with as many contradictions as possible—including entitlements, though we must still “keep faith with seniors and children with disabilities.”

It sounds grand and noble, but the problem is that if Obama decides to “keep faith” with seniors, he’s going to have to do that by vigorously screwing over the next generation. As Professor Lawrence J. Kotlikoff of Boston University points out in a recent Bloomberg column, we’re broke. (Yes, I know that’s his schtick. But he’s absolutely right.)

How big is the fiscal gap? By my own calculations using the CBO data, it now stands at $211 trillion — a huge sum equaling 14 times the country’s economic output. To arrive at that figure, I assumed that annual noninterest spending, as well as taxes, would grow indefinitely by 2 percent a year beyond 2075, the point at which the CBO’s estimates end.

Most of that comes from entitlement spending, which was where Cato policy analyst Michael Tanner came up with the $119.5 trillion in the hole figure just a few months ago. Obviously, it’s getting worse all the time.

CBO long-term budget outlook shows nothing new

The Congressional Budget Office (CBO) released the 2011 Long-Term Budget Outlook yesterday. As you might expect, both sides are talking up the aspects of the report that play to their talking points. For example, if you listen to our progressive/liberal friends, they’re quick to point to charts in the report showing that budget deficits wouldn’t be as large if the 2001/2003 tax cuts hadn’t been extended. Of course, most, if any at all, don’t acknowledge that the CBO also says this in the report:

Changes in marginal tax rates (the rates that apply to an additional dollar of a taxpayer’s income) also affect output. For example, a lower marginal tax rate on capital income (income derived from wealth, such as stock dividends, realized capital gains, or the owner’s profits from a business) increases the after-tax rate of return on saving, strengthening the incentive to save; more saving implies more investment, a larger capital stock, and greater output. However, if that lower marginal tax rate increases people’s after-tax returns on savings, they do not need to save as much to have the same future standard of living, which reduces the supply of saving. CBO concludes, as do most analysts, that the former effect outweighs the latter, such that a lower marginal tax rate on capital income increases saving. A higher marginal tax rate on capital income has the opposite effect.

Was it all worth it?

As every last soul has surely heard by now, Osama bin Laden is dead.  Finally located and taken out by American special forces, the death of bin Laden marks a significant moment for America.  The occasion was marked by numerous celebrations and expressions of profound relief and satisfaction, coupled with a harsh brushing of the wounds left by 9/11.  Whether it helps Obama’s political fortunes is yet to be seen, but it surely has raised Americans’ spirits.

But one question still remains in the minds of many - were the sacrifices we have made up to this point worth it?  Over the past nine years Americans have had their privacy invaded, their values called into question, and their coffers tapped to fund two wars expensive in both treasure and blood.  We’ve certainly engaged in some ugly practices in our anger over what bin Laden did to us on that fall day in 2001.  Your average citizen may never know the true extent of the things done in the name of fighting terrorism.

It’s clear to me then that we have paid an immense price for this victory, one that is hard to justify in retrospect.  It’s hard to look at the way our lives have profoundly changed and not say that, despite the fact that his life ended at the point of an American rifle, Osama bin Laden will go down as a victor.  His actions have altered the American landscape permanently and have led us to do things that we ought be ashamed of.


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