Rick Perry has found himself at the bottom of the second tier after what seemed like a cake walk to the presidency. But the Rick Perry bankroll has pundits on the ready for the next move upward. On Monday, Perry tickled the media with a preview of his 20/20 Flat tax. His overall plan which is named “Cut, Balance and Grow” seems much less catchy, especially if he has his eye on a primetime ABC host slot.
If one were going to summarize the plan, they might suggest that Perry believes in “caps”. His 20% flat tax is optional, so essentially everyone paying more than 20% currently can move to 20% while everyone paying less can still pay their current rate. It also moves the corporate rate to 20%, kills the death tax, and removes taxes from qualified dividends and capital gains. The plan also includes capping spending at 18%. I believe talking about caps on spending as a percentage of GDP are a mistake for the simple fact that if you do this, what are the odds that congress will ever spend less than this amount? Then again, after what we’ve seen in the last three years, it doesn’t sound half bad.
James Pethokoukis breaks down Perry’s plan over at The American:
—A choice between a new, flat tax rate of 20 percent or their current income tax rate.
—The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.
—Abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses.
—Lowers the corporate tax rate to 20 percent—along with a tax holiday for foreign earnings—and moves toward territorial taxation.
Though I didn’t notice it at the time, techPresident’s Nick Judd makes a very astute observation about the recent Bloomberg/Washington Post GOP presidential debate on the economy:
- Number of times the Internet was mentioned by name in a debate about the economy: 2.
- Number of jobs that were in the American information sector in 2007: 3,496,773.
Texas Governor Rick Perry will unveil his economic plan in Pittsburgh (emphasis mine):
My plan is based on this simple premise: Make what Americans buy. Buy what Americans make. And sell it to the world. We are standing atop the next American economic boom…energy. The quickest way to give our economy a shot in the arm is to deploy American ingenuity to tap American energy. But we can only do that if environmental bureaucrats are told to stand down. My plan will break the grip of dependence we have today on foreign oil from hostile nations like Venezuela and unstable nations in the Middle East to grow jobs and our economy at home.
President Barack Obama made his pitch yesterday to jack up tax rates on high-income earners and bring a host of new fees that will reach across income groups — offering $3 in tax hikes for every $1 in spending cuts:
Drawing clear battle lines for next year’s elections, a combative President Barack Obama on Monday demanded that the richest Americans pay higher taxes to help cut soaring U.S. deficits by more than $3 trillion. He promised to veto any effort by congressional Republicans to cut Medicare benefits for the elderly without raising taxes as well.
“This is not class warfare. It’s math,” Obama declared, anticipating Republican criticism, which was quick in coming.
The president’s proposal, which he challenged Congress to approve, would predominantly hit upper-income taxpayers and would also target tax loopholes and subsidies used by many larger corporations. It would spare retirees from any changes in Social Security, and it would direct most of the cuts in Medicare spending to health care providers, not beneficiaries.
Benefit programs wouldn’t be unscathed. Obama’s plan would reduce spending for those, including Medicare and Medicaid, by $580 billion. But with Republicans calling for massive cuts in entitlement programs, Obama said he would veto any legislation that cut Medicare benefits without raising new revenue.
President Obama claimed last night that his jobs plan would be paid for. “Everything in this bill will be paid for. Everything,” he said. In politics, it never gets more clear than that. Of course, obviously I question it. I question everything any politicians says. What surprised me was that even the Associated Press is questioning it.
THE FACTS: Obama did not spell out exactly how he would pay for the measures contained in his nearly $450 billion American Jobs Act but said he would send his proposed specifics in a week to the new congressional supercommittee charged with finding budget savings. White House aides suggested that new deficit spending in the near term to try to promote job creation would be paid for in the future – the “out years,” in legislative jargon – but they did not specify what would be cut or what revenues they would use.
Essentially, the jobs plan is an IOU from a president and lawmakers who may not even be in office down the road when the bills come due. Today’s Congress cannot bind a later one for future spending. A future Congress could simply reverse it.
Thank you AP.
For the record, this is the same problem one runs into when talking about spending cuts. Most of those cuts are deferred to the out years to ease the pinch in the short term, and most never materialize because, as the AP points out, Congress can’t tell a future Congress what they have to spend.
Regardless of what you think of the President’s jobs plan, his claim it will be paid for is dubious at best. As the AP piece points out, Obama must send his proposal to the Super Committee – which he does not control – and hope they accept it, then get it through Congress and then hope that these proposals are adhered to in the future.
We can only hope the president will have time to preview this video before his address — but really, would it matter?
Video produced by Caleb Brown, host of the Cato Daily Podcast, and Austin Bragg.
Apparently, President Obama is a little pissed right now. After all, his partisanship was trumped by Speaker of the House John Boehner’s partisanship. For those who missed it, President Obama wanted to speak to a joint session of Congress. Per usual, the President asked the Speaker of the House if that was all cool. Boehner said no. That’s the Reader’s Digest version anyways.
Obama’s timing of his speech coincided with a debate between GOP candidates, a move many considered to have been strategic in nature rather than coincidence. I’m inclined to agree. Boehner, a Republican after all, said, “Nah. How about the next day?” The White House agreed.
However, all doesn’t seem to be puppies and daisies in the nation’s capital. Politico has learned from a White House source that apparently the President and his staff are more than a little upset.
“It is a big deal that the House said ‘no’ to the president from our end,” a White House source with intimate knowledge of what took place between the House and the president told me Thursday. “This confirms what we all know: They will do anything in the House to muck us up.”
Indeed. After all, a 24 hour delay will kill the whole deal, right? I mean, everything in his proposals was calculated to the exact position of the moon and the stars in relation to Jupiter or something, right? The source went on to comment about the debate conflict.
Yet the White House did not see this as an obstacle. “With all due respect, the POLITICO-MSNBC debate was one that was going on a cable station,” the White House source said. “It was not sacrosanct. We knew they would push it back and then there would be a GOP debate totally trashing the president. So it wasn’t all an upside for us.”
Welcome, Instapundit readers!
The folks over at Learn Liberty bring a new lesson from George Mason University economist Donald J. Boudreaux (who blogs at Cafe Hayek) on free trade and protectionism as matters of policy, and their impacts on wealth creation:
Protectionism today comes in the form of Buy American restrictions (which were reinforced in the so-called stimulus bill), whose proponents argue that forcing manufacturers to produce goods using inputs created by American firms, or that the government buy/contract goods and services solely from American firms through its procurement process, will help preserve and create jobs at home.
I have to disagree with Dave Weigel here. He wrote on Friday in Slate that the stimulus bill really didn’t fail, although everyone is saying it is:
Veterans of the stimulus wars talk about it that way—as a war. They lost. The implication of the loss is that Keynesian economics are, arguably, as discredited with voters as neoconservative theories were discredited when the invasion of Iraq failed to turn its neighbors into vibrant democracies, highways clogged with female drivers.
This week, we got a concrete example of what it meant to lose. The Weekly Standard published a back-of-the-cocktail-napkin analysis of the seventh quarterly report on the stimulus, stipulating that every job created by its spending has cost $278,000. Republicans, who’d previously said the stimulus created no jobs, immediately started repeating the $278,000 figure. They kept doing it even after the magazine followed up, suggesting that the cost-per-job could have been as low as $185,000. $278,000, $185,000. $0.00? It didn’t really matter, because the White House and liberal response was perfunctory. As the stimulus winds down, with most of the money spent, everyone knows that it failed.
No doubt all of us would take some good economic news right now, but that won’t come from the jobs report for June, which was released this morning showing the unemployment rate rising slightly to 9.2% and adding only 18,000 jobs:
U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.
Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, well below economists’ expectations for a 90,000 rise.
Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.
The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent in May.
Numbers from the two previous months were revised down by 44,000 jobs; April dropped from 232,000 to 217,000 and May from 54,000 to 25,000. In case you’re wondering, the economy needs to create around 120,000 jobs each just to keep up with population growth.
Another bad sign is the U-6 rate, what many economists call the “real unemployment rate,” jumped from 15.8% to 16.2%.
Just like government intervention in the economy in the 1930s prolonged the Great Depression, intervention and uncertainty with President Barack Obama’s economic policies are slowing the pace of recovery today.
Now that Weiner is out of the way, let’s get back to a more pressing issue: jobs. It’s something that Obama and the Democrats haven’t been doing well on (though I’m not convinced the Republicans have the silver bullet, either.) The most recent unemployment figure rolled out has it back up at 9.1%. But that’s not really a big problem. The real big problem is here is what unemployment is doing to our youth, those aged 16-19. Looking at Table A-16 and doing a little math to combine enrolled and unenrolled, it’s 24%.
And that’s only today’s problem. Like most things political, it’s an even bigger and more disastrous issue for our country down the road. That’s why just tinkering at the edges isn’t going to help; we need to do drastic things. My solution: totally overhaul how minimum wage works, with an eye towards helping youngsters find employment.
You need a combination of two things to land a job: education and experience. As a teenager, you really don’t have experience, and whatever you’re getting out of school, its not an education. An employer could hire you, at at least $7.25 an hour, but when there are older, more experienced workers jostling for any job in this economy, why? You have no skills, no record, and who knows if you’ll be at work on time. It’s a vicious Catch-22, where you need skills and experience to get a job, and a job to get skills and experience. The only role the minimum wage law plays in this is keeping these kids unemployed and unemployable.