Entitlements Will Be the Death of Our Economy

President Obama recently released his proposed budget, a $3.73 trillion monstrosity that is a monument to his own arrogance and complete inability or refusal to understand the concerns of the American people. After a historic tail-whipping of his party in November, Obama decided to engage in a little rhetorical compromise, and then turned around and doubled down on the disastrous policies that have kept this country in a long recession followed by a jobless recovery.

Simply put, even if we tax the “millionaires and billionaires” at 100% of earnings, it still won’t put much more than a dent in our $14+ trillion national debt. Within a decade we’ll be spending more than $800 billion (conservatively) for interest payments on the debt, and even more if interest rates rise, which they surely will. The fact is that our road to economic recovery lies down the path to drastically reduced spending.

The problem we have as a nation is that Democrats embrace fiscal irresponsibility; a policy of tax, borrow and spend (as if we can keep borrowing to pay for lavish welfare and entitlement programs and the bill will never come due) and Republicans claim the mantle of fiscal responsibility, but engage in a policy of borrow and spend. Yes, cutting tax rates stimulates the economy, but even with increased gross revenues, spending more than you raise still leads to deficits. Republicans are half right, refusing to raise taxes, but drop the ball by not making the case for spending cuts. Republicans, fearing Democrats will demagogue them as heartless to the plight of the poor, back off of spending cuts at the first sign of trouble.

Liberty Links: Morning Reads for Monday, February 21st

Below is a collection of several links that we didn’t get around to writing about, but still wanted to post for readers to examine. The stories typically range from news about prominent figures in the liberty movement, national politics, the nanny state, foreign policy and free markets.

Obama fails to “win the future” with budget proposal

Over at Downsizing Government, Chris Edwards shows how President Barack Obama’s budget proposal does little to change the course the nation is on. In fact, his deficits are higher than pre-recession level run up by George W. Bush, who was certainly no penny pincher.

Edwards notes:

While the numbers drop from their stimulus- and recession-induced highs, it is not because the president has suddenly decided that he desires a less active government. Rather, optimistic economic assumptions largely account for the slight retrenchment.

Tax increases and optimistic economic assumptions explain the projected rise in revenue as a share of the economy. While the president would like the country to believe he’s found religion on spending cuts, he’s actually relying on a rosy economic forecast and sucking more money out of the private sector to reduce annual deficits.

The Wall Street Journal is calling Obama’s budget the “Cee Lo Green Budget” because it is a “F**k You” to voters. And believe it or not, we will have a cabinet level agency that will have a budget of over a trillion dollars…and it’s not the Department of Defense.

Obama spends too much, taxes too much. His budget doesn’t “win the future,” it keeps us stuck in the past.

Ron Paul chats with Morning Joe

Yesterday, Rep. Ron Paul (R-TX) joined Morning Joe to discuss spending and economics, foreign policy, Donald Trump and his straw poll victory at CPAC:

CPAC 2011: Podcast with Dan Mitchell

Dan Mitchell, an economist at the Cato Institute, stopped by Bloggers Row in between panels to talk spending, ObamaCare and the purpose of our nation’s military (our intervention and nation-building in other countries).

You can download the podcast here (4.6MB/5min).

Rand Paul’s maiden speech on the Senate floor

“As long as I sit at Henry Clay’s desk, I will remember his lifelong desire to forge agreement, but I will also keep close to my heart the principled stand of his cousin, Cassius Clay, who refused to forsake the life of any human simply to find agreement.” - Rand Paul

Sen. Rand Paul (R-KY) gave his maiden speech yesterday on the Senate floor where he explained that he wouldn’t be a “great compromiser” on issues, such as taxes and spending. He explained that compromise in the past, pointing to slavery, has often lead to more problems for the country.

Here’s the video (transcript here):

Senate Appropriations chairman to deny earmarks for two years

Because of the earmark ban put in place by House Republicans and President Barack Obama’s pledge to veto bills containing them (though the White House did step back from that after the State of the Union address), Senate Appropriations Chairman Dan Inouye (D-HI) has gotten the message:

Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii Tuesday said he would not accept requests for earmarks for the next two years – a move that comes after President Obama said in his State of the Union address that he would not sign any bills with earmarks.

“The President has stated unequivocally that he will veto any legislation containing earmarks, and the House will not pass any bills that contain them,” Inouye said in a statement. “Given the reality before us, it makes no sense to accept earmark requests that have no chance of being enacted into law.”
“The Appropriations Committee will thoroughly review its earmark policy to ensure that every member has a precise definition of what constitutes an earmark,” Inouye added. “To that end, we will send each member a letter with the interpretation of Rule XLIV (44) that will be used by the Committee. If any member submits a request that is an earmark as defined by that rule, we will respectfully return the request.”

Inouye expects leader to revisit the issue next year.

Balancing the budget without tax hikes

On last week’s report from the Congressional Budget Office that shows budget deficits of nearly $7 trillion over the next 10 years and also very bad news for Social Security, economist Dan Mitchell explains how Congress can balance the budget without tax hikes:

The chart below shows that revenues are expected to grow (because of factors such as inflation, more population, and economic expansion) by more than 7 percent each year. Balancing the budget is simple so long as politicians increase spending at a slower rate. If they freeze the budget, we almost balance the budget by 2017. If federal spending is capped so it grows 1 percent each year, the budget is balanced in 2019. And if the crowd in Washington can limit spending growth to about 2 percent each year, red ink almost disappears in just 10 years.

These numbers, incidentally, assume that the 2001 and 2003 tax cuts are made permanent (they are now scheduled to expire in two years). They also assume that the AMT is adjusted for inflation, so the chart shows that we can balance the budget without any increase in the tax burden.

Jon Huntsman for President?

Early yesterday, rumblings of a bid for the Republican nomination for president by Jon Huntsman, a one-term Governor of Utah and current Ambassador to China, were growing loud. By the end of the day, Huntsman had resigned his post giving the impression that such a bid was likely:

Jon M. Huntsman Jr., the U.S. ambassador to China, sent a resignation letter to President Barack Obama on Monday, the White House said. Huntsman now is likely to explore a Republican presidential bid, according to supporters.

In a letter hand-delivered to the White House, the former Utah governor said that he wants to return to the United States by May. The letter thanks Obama for the opportunity to serve the country and praises the U.S. embassy staff in Beijing.

If Huntsman won the GOP nomination, he would be challenging the reelection of his former boss. White House officials are furious at what they consider an audacious betrayal, but know that any public criticism would be likely to benefit Huntsman if he enters the primaries.

Huntsman boasts the most foreign policy experience of any of the likely GOP candidates, and would be a formidable entry to the unformed GOP field. He had a fiscally conservative record as governor, opposes abortion and is a strong supporter of gun owners’ rights.

The ambassador has moderate views on gay rights and the environment, which would be an asset in a general election but could be a hurdle in the primaries. In a campaign, Huntsman could be expected to point out that he has created jobs in both the private and public sectors.
He may form an exploratory committee this spring, with a final decision expected by summer. Allies have begun building the nucleus of a potential campaign.

Liberty Links: Morning Reads for Tuesday, February 1st

Below is a collection of several links that we didn’t get around to writing about, but still wanted to post for readers to examine. The stories typically range from news about prominent figures in the liberty movement, national politics, the nanny state, foreign policy and free markets.

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