Spending

Fiscal realities of ObamaCare

Over at Investors Business Daily, Douglas Holtz-Eakin, a former head of the Congressional Budget Office, and Paul Howard warn that ObamaCare could bring us back to where we just left…in another financial crisis:

Layering a new entitlement program with essentially unknown costs on top of the two programs that are already draining the federal Treasury — Medicare and Social Security — is the height of legislative irresponsibility. ObamaCare also reached a new low in Washington’s perennial budget games.

The $138 billion in estimated first-decade savings is illusory. It includes $53 billion in Social Security revenue that should go to that program, and $70 billion in premiums for a new federal long-term care program.

Counting these as health care “savings” merely generates a deficit somewhere else.

Program costs to get ObamaCare up and running — which aren’t appropriated in the bill — could easily add $110 billion or more in additional spending and wipe out any remaining savings. Democrats are also desperately trying to double-count $500 billion in Medicare cuts in ObamaCare as both shoring up Medicare’s long-term finances and funding a new entitlement program.

The CBO has ruled that it can only do one — not both. After ObamaCare becomes law, Democrats are expected to vote on a “doc fix” for increasing Medicare physician payments that will add another $371 billion to the price of health care reform.

When the $500 billion in Medicare cuts are added into the mix (remember, they can’t be counted twice) deficit costs in the first 10 years alone could easily approach $900 billion. The president and Democrats in Congress, of course, promise to get spending under control later, perhaps through a bipartisan commission.

Paul Ryan gives Chris Matthews a lesson in economics

Rep. Paul Ryan (R-WI) appeared on Hardball on Monday and discussed taxes, the debt and spending cuts with Chris Matthews, who demagogues tax cuts, and wound up giving him a lesson on economics:

WSJ slams Obama Administration on stimulus

The Wall Street Journal is less than impressed with the performance of the stimulus package passed last year and the rhetoric used by the Obama Administration to defend it:

We almost feel sorry for Ms. Romer having to make this argument given that since February 2009 the U.S. economy has lost a net 2.35 million jobs. Using the White House “created or saved” measure means that even if there were only three million Americans left with jobs today, the White House could claim that every one was saved by the stimulus.

The White House also naturally insists that things would be much worse without the stimulus billions spent on the likes of Medicaid payments, high speed rail projects, unemployment benefits and windmills. Mr. Obama said recently in Racine, Wisconsin that the economy “would have been a lot worse” and the unemployment rate would have gone to “12 or 13, or 15 [percent]” if government hadn’t spent all of that money.

This is called a counterfactual: a what would have happened scenario that can’t be refuted. What we do know is what White House economists at the time said would happen if the stimulus didn’t pass. They said the unemployment rate would peak at 9% without the stimulus (there’s your counterfactual) and that with the stimulus the rate would stay at 8% or below. (See the nearby chart.) In other words, today there are 700,000 fewer jobs than Ms. Romer predicted we would have if we had done nothing at all. If this is a job creation success, what does failure look like?

More Government Spending Ahead?

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George Will at CPAC: “Dependency on Government Is the Liberal Agenda”

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Elections, And Why The American Economy Will Collapse

I know what you’re thinking: man that Pete is a positive guy. I like to describe myself as realistic, with a bit of fatalism throw in. Either way, I find it hard to look at the economic landscape and have any hope. It is especially dreadful when politicians have to get re-
elected, AND said politicians consult certain “economists”.

Economists have for years looked at what is happening in a society and sought to come up with solutions as to how an economic crisis can be “fixed”. The problem is, like in all fields, you have good economists, and you have the not so good (The latter seem to be the ones that always find their way onto the public payroll).

In extremely broad terms economists can be split into two categories:

1. The “good” economist traces what a policy can do not only in the present, but 
in the future; AND what it does for not only one segment of society, 
but the whole.

2. The “bad” economist does the exact opposite; they examine only what 
will fix the present issue and usually concentrate on only one segment of 
the population.

If you are a student of American history your eyes should be opening as to which economist is most often chosen by our elected officials. The real question is “why”?

Well, why wouldn’t a politician pick economist #2?

Controlling Leviathan: The Battle for Limited Government

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Tea Party Speech in Montgomery, AL

This past Wednesday, millions of Americans attended Tea Party rallies across these United States. The seed of these protest rallies was the Ron Paul movement from 2008, the most vocal effort against big government in years. While Ron Paul did not sell to the masses of conservatives, the message that government is bloated and out-of-control is resonating with average citizens in all fifty states.

Tea Party Post-Mortem

Numbers are still coming in, but it looks like somewhere in the neighborhood of 300,000 people showed up in more than 700 locations around the nation for a Tax Day Tea Party. The Atlanta Tea Party was politician heavy; several speakers either currently hold or have held elected office. Among them were rising conservative state legislators, Sen. Chip Rogers and Rep. Tom Graves, US Reps. Tom Price and Lynn Westmoreland and former US Rep. Dick Armey, now head of FreedomWorks (one of the groups responsible for the protests around the nation).

Tea Parties in Alabama

It appears that the Tea Parties held in Alabama yesterday were a rousing success.  It’s reported by ABC News (and my friend and attendee Shirrell Roberts) that the Montgomery Tea Party held at noon on the Capital steps had about 1,000 people (*Update- Organzier Cindy Wright says attendance was closer to 2,500).  Great job, Matt Givens and Cindy Wright, in organzing and promoting this event!  This is what Shirrell said after the event-

It really fired me up just seeing common everyday folks give a rip about the direction this country is headed.  Sometimes it is easy to become cynical. Yesterday restored my faith in the people of this country.


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