Spending

“Super Committee” members named

All of the Members of Congress that will serve on the so-called “Super Committee,” the group created as part of the debt deal between the White House and Congress to find $1.5 trillion in “deficit reduction” in the coming months, have been made public:

The top Republicans in the House and the Senate appointed six more lawmakers on Wednesday to the bipartisan committee that is supposed to recommend steps to reduce federal budget deficits by at least $1.5 trillion over 10 years.

Speaker John A. Boehner chose three senior Republican House members: Jeb Hensarling of Texas, and Dave Camp and Fred Upton, both of Michigan.

Mr. Hensarling, who is chairman of the House Republican Conference, will be co-chairman of the new panel, along with Senator Patty Murray, Democrat of Washington.

The Senate Republican leader, Mitch McConnell of Kentucky, chose Senators Jon Kyl of Arizona, Rob Portman of Ohio and Patrick J. Toomey of Pennsylvania for the 12-member panel.

As noted, Sen. Patty Murray (D-WA), who hasn’t been one to restrain spending, was named by Senate Majority Harry Reid. She will serve with Sens. John Kerry (D-MA) and Max Baucus (D-MT). House Minority Leader Nancy Pelosi named her picks today:

House Minority Leader Nancy Pelosi (D-Calif.) has selected Rep. Jim Clyburn (D-S.C.), Rep. Chris Van Hollen (D-Md.) and Rep. Xavier Becerra (D-Calif.) for the so-called “supercommittee” on Thursday.

The progressive Contract for America

Could they at least get an original name?

On Monday afternoon, MoveOn.org and Rebuild the Dream announced a campaign to build up a popular movement that could match (if not surpass) the debt reduction crowd in both size and energy. And they have borrowed a concept from former House Speaker Newt Gingrich (R-Ga.) as their organizing principle.

The campaign, led by Van Jones, President of Rebuild the Dream; Justin Ruben, Executive Director of MoveOn.org; and Rep. Jan Schakowsky (D-Ill.), among others, is debuting a new Contract for the American Dream. They describe it as “a progressive economic vision crafted by 125,000 Americans … to get the economy back on track.” Its debut will involve a nationwide day of action, as well as an ad in The New York Times to run sometime this week, organizers said.

This “Contract” is very illustrative of the core tenets of modern liberalism – that it is the government that drives the economy, and that the government has every right to commandeer your money if it believes it has a better means of using it. Remember that the government is not some abstract and omniscient system; it is merely a group of power-hungry individuals with enough naivete to believe they know more than the rest of us:

The basic premise of the campaign is that America isn’t broke, it’s merely imbalanced. In order to stabilize the economy, politicians should make substantial investments in infrastructure, energy, education and the social safety net, tax the rich, end the wars, and create a wider revenue base through job creation.

Confessions of an OPM Addict

I am an addict. A junkie. For years I’ve maintained an air of respectability in public, while behind closed doors I’m always looking for my next fix. With every year that passes it takes more and more for me to satiate my need. I will tell any lie, distort any claim, and do whatever I need to do to maintain my habit. I used to be embarrassed about it, covered it up, but no longer. I am who I am and everybody can just deal with it. I used to be able to shuffle the finances around to fund my habit, hide it so that no one would notice. Now, my habit is so bad that I can’t cover the cost with what I earn. I had to find a way to pay for it.

I took out a second mortgage on my house, telling myself that my habit was not so bad, that I could quit whenever I wanted; that this was only a short term solution and I’d pay it back quickly. That is what I told myself anyway. But days turned to weeks, weeks turned to months and months turned to years, and I’m more addicted than ever, with no way to pay for my fix. I’ve maxed out my credit cards, emptied my savings account, borrowed from family and friends. I’ve emptied the trust funds that were supposed to be for my kids. I’ve stolen anything I could get my hands on that I could sell. I’ve gone to loan sharks.

Senate kills “Cut, Cap and Balance”

The Senate voted along party lines this morning to table “Cut, Cap and Balance,” the budget plan offered by House Republicans that passed that chamber on Tuesday evening:

The Senate voted 51-46, along strict party-lines Friday to kill the House Republicans “cut, cap and balance” legislation.

The measure would have cut spending by $111 billion in 2012, capped spending over the next decade and prohibited more borrowing until Congress passes a balanced-budget amendment to the Constitution.

President Obama had threatened to veto the bill, which was dead on arrival in the Senate.

Senate Majority Leader Harry Reid (D-Nev.) called the legislation “very, very bad” and said it was a waste of the upper chamber’s time.
[…]

During the debate on “cut, cap and balance,” Senate Minority Leader Mitch McConnell (R-Ky.) argued the GOP plan would solve the nation’s deficit crisis if Democrats would join Republicans in supporting it.

“This isn’t rocket science,” said McConnell. “We could solve this problem this morning if Democrats would…join us in backing this legislation that Republicans support.”

Supporters of the proposal have cited a CNN poll in recent days showing that voters support some parts of it, specifically the Balanced Budget Amendment (BBA). That’s not a surprise since BBA proposal are politically popular. However, the “Cut, Cap and Balance” proposal passed by the House only called for a BBA. It didn’t attain the 2/3 requirement to pass a constitutional amendment.

The Debt Debate, “Cut Cap Balance,” and Bush (Video)

As the debt debate continues with no end in sight (not even Aug. 2nd) some people are getting understandably upset. They want to know who to blame, and if anything that’s come up so far will actually fix the problem. Well, I have good news and bad news.

The good news is that the Cato Institute has come out with another outstanding video on the situation. The bad news is that you have to blame everybody, and no, there isn’t really a good solution coming out yet:


Again, there will be no dismantling of unconstitutional (or just flat out bad) programs and departments, just “trimming” around the edges, which won’t be good for the long term as they’ll a piece of cake to overcome. The “Cut Cap Balance” idea is a good start, but the Democrats will never go for it, and it’s only that—a start.

Coming to Expect the Unexpected

Shortly after the 2008 presidential election, historian Michael Bechloss gushed with praise for President-Elect Barack Obama, declaring him to be “probably the smartest guy ever to become President”, and raving that his IQ is “off the charts”. When interviewer Don Imus inquired as to what Obama’s IQ is, Bechloss admitted that he did not know, but that did not keep him from gushing effusive praise. We are left to take a historian’s word for it, because Obama has steadfastly refused to release his college transcripts, and his policies while in office certainly do not lend credence to the claims of his brilliance. In fact, if we had to judge the president by the effectiveness of his policies, Obama would be the functional equivalent not of the class valedictorian, but of that weird kid that sat in the corner and ate paste while talking to himself.

On matters of the economy, the president and his advisors seem to be particularly clueless. Consider some statements from the administration of late:

In a recent video clip making the rounds, Obama responds to a question about the near $1 trillion “stimulus” package and its effect on the economy by laughing and then declaring “ ‘Shovel-ready’ was not as shovel-ready as we expected.” This is, you will recall, the same stimulus package that Obama demanded must be passed immediately if we were to stem the possibility of another Great Depression. We were promised (by Christina Romer, the first chairman of Obama’s Council of Economic Advisors) that if we passed it, unemployment would stay below 8%. Well, we DID pass it, and we have been rewarded with unemployment levels between 9-10+% for well over two years. Now, we have high unemployment AND staggering quantities of additional debt crippling the economy.

The Summer of Wreckovery continues

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.

A Long Train of Abuses and Usurpations

This week we celebrate the 235th anniversary of the signing of the Declaration of Independence, the act of which broke ties with King George’s England and gave birth to a new nation. The decision to break with England was not one made lightly, but one that came after “a long train of abuses and usurpations” which finally made the oppression unbearable. And what comprised this long train of abuses? In part, it was the denial of self-governance and obstruction of the administration of justice. It was the erecting of “a multitude of New Offices, and [sending] hither swarms of Officers to harass our People, and eat out their substance”, the subjection of citizens “to a jurisdiction foreign to our constitution”, and cutting off our trade. It was imposing taxes on us without our consent, and exciting domestic insurrections.

It was this and more that led us to dissolve our political bands with England, declare our independence, and shed our collective blood in defense thereof. Yet, if we truly believed that “all men are created equal, that they are endowed by their Creator with certain unalienable rights”, including life, liberty and the pursuit of happiness, what else could we have done? When we truly comprehend that we are all children of God, sovereign by virtue of our very creation, how can we be content to be slaves? How can we be content to suffer the indignities of oppression?

It was this new philosophy that emboldened the hearts and minds of Americans. It was this belief that led Patrick Henry to declare “give me liberty or give me death!”, and that led Nathan Hale to proclaim moments before his execution by the British that “I only regret that I have but one life to give for my country”.

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.


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