TARP

Can we stick a fork in 9-9-9 yet?

Coming off what was arguably his worst debate performance, Herman Cain’s 9-9-9 plan is still taking fire from conservatives and libertarians over the fact that the national sales tax portion of the plan is essentially a value added tax (or VAT).

Chris Edwards, an economist at the Cato Institute, is the latest to express concern with Cain’s pitch for a VAT:

The Herman Cain campaign released details of the revenue expected to be collected from his 9-9-9 tax plan. Here are the estimates for 2010:

  • $701 billion from the 9 percent personal income tax.
  • $753 billion from the 9 percent retail sales tax.
  • $863 billion from the 9 percent business VAT.

Yikes! By far the largest tax haul under the Cain plan would be from the business VAT—a tax which would be hidden from most voters.

By the way, the Cain business tax is not a tax on “corporate income,” as some media stories are identifying it. The new revenue data makes it clear that it is a tax on all value added by all businesses in the nation—corporate, partnership, and proprietorship.

GOP Presidential Power Rankings

It’s been a couple of weeks since our last round of the GOP Presidential Power Rankings. Rick Perry has dropped off dramatically, though his fundraising is very solid, and Herman Cain has risen substantiall in the polls. Mitt Romney’s support has remained steady, but that’s not exactly a promising sign. But we’ll get to that in a minute…

The News

Herman Cain overplayed his hand

While his numbers have been rising after a straw poll win in Florida, Herman Cain may have overplayed his hand in his criticism of Rick Perry, who was the subject of a recent Washington Post story dealing with hunting ground with a racially insensitive name. Matt Lewis gives us a rundown of what happened:

After Sunday’s Washington Post reported that Texas Governor Rick Perry had utilized a Texas hunting camp named “N*****head,” GOP candidate Herman Cain (a former pizza exec. and the only black candidate running for the GOP presidential nomination) wasted little time in accusing Perry of being insensitive to racial issues.

“Since Gov. Perry has been going there for years to hunt,” Cain told ABC’s “This Week,” think that it shows a lack of sensitivity for a long time of not taking that word off of that rock and renaming the place.”

When anchor Christiane Amanpour pushed back — noting that the rock had actually been painted over — Cain doubled-down, saying: “But how long ago was it painted over? So I’m still saying that it is a sign of insensitivity.’’

(Cain made similar comments on Fox News Sunday — demonstrating that this was not a gaffe made in response to a question that simply caught him off guard.)

Lewis explains that Cain’s comments, essentially allowing himself to be used to by the media to further a misleading piece on Perry, may show that he isn’t ready for this latest round of press:

Yes, Rick Perry backed TARP

Rick Perry was asked last week if the supported the Wall Street bailout — also known as TARP. That bill, passed in November 2008, has been frequently criticized by libertarians, fiscal conservatives and tea partyers as it was corportism at its worst. However, several of the candidates seeking the nomination - including Mitt Romney, Jon Huntsman and Herman Cain, supported the bailout.

Perry responded, in his usual Texas drawl, “No, ma’am.” But Perry has played both sides of the issue:

As chairman of the Republican Governors Association, Perry co-signed a letter with Joe Manchin, the Democrat Governors Association chairman encouraging leaders in Washington to, “leave partisanship at the door and pass an economic recovery package.”

Later that day, Perry issued a second statement, that read, “In a free market economy, government should not be in the business of using taxpayer dollars to bail out corporate America.”

The letter signed by Perry and then-Gov. Joe Manchin (D-WV) is very clear in its support of the bailout, though they called it the “recovery package” (emphasis mine):

We strongly urge Congress to leave partisanship at the door and pass an economic recovery package. We both believe that it’s time to stand together for our country.

There is a time for partisanship and there is a time for getting things done. No one likesthe hand they’ve been dealt, and now is not the time to assign blame. It is time forWashington, D.C. to step up, be responsible and do what’s in the best interest of American taxpayers and our economy.

Government sues banks over mortgages

The Federal Housing Finance Agency announced Friday that it was suing several financial institutions for risky loans made in the lead up to the 2008 financial crisis:

The federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.
[…]
The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

Of course, there is much more to the story than banks making bad loans. As Jon Berlau notes over at Market Watch, the government is complict just as guilty as anyone since it was involved in crafting the loans and mandated them on mortgage companies:

A more apt description would probably be that Fannie and Freddie are suing the banks for selling them the very loans the GSEs helped designed and that government mandates encourage — and are still encouraging them to make. These conflicted actions are just one more of the government’s contributions to the uncertainty that is helping to keep unemployment at 9 percent.

Alan Krueger hasn’t been a friend of taxpayers

If there was any question that the man appointed this week by President Barack Obama to serve as his chief economic adviser, is just another corporatist looking to stick taxpayers with a hefty bill, check out these comments Alan Krueger made hailing TARP as a success of our legislative system:

Tim Carney explains why Krueger is bad news:

Tim Geithner’s deputy, Alan Krueger, is a fitting pick to lead President Obama’s Council of Economic Advisers — which is to say he believes in the same noxious collusion of Big Business and Big Government that has dominated the Obama administration’s economic policy.

The Wall Street bailout, cash for clunkers, the stimulus, subsidized municipal bonds, an infrastructure bank: Anytime you find the big business lobby rallying behind a proposed expansion of federal spending, you’re likely to find Krueger’s fingerprints, or at least the sound of his hands clapping.

Krueger’s pet policy at Treasury, a convoluted program called Build America Bonds, amounted to a taxpayer subsidy for big banks and other corporate giants that increased public indebtedness. In other words, typical Obamanomics.

Like I noted a few days ago, Krueger is just more of the same from the Obama Administration. And that’s why all this talk about job creation is a joke since it will be the same policies that they’ve been pushing for nearly three.

FreedomWorks to protest Romney’s tea party speech

As Mitt Romney tries to do more to appeal to the tea party movement, a sizeable and influential voting bloc looking to make its mark on the Republican primary, FreedomWorks is putting a target on his back:

A top tea party organizing group, FreedomWorks, is planning to protest Mitt Romney’s appearance this weekend at a New Hampshire stop of a bus tour intended to encourage tea party sympathizers to participate in the Republican presidential nominating process.

Romney, a former Massachusetts governor, is among the leading candidates for the GOP presidential nomination but is viewed warily by tea party activists, who believe him to be insufficiently conservative and particularly blame him for the Massachusetts state health care overhaul he signed into law.

And Romney, for his part, hasn’t focused much energy on appealing to the movement. So it attracted considerable attention — both within the tea party and among the GOP operative class — when it was announced Tuesday that he intended to speak at a Sunday evening rally being staged by the Tea Party Express in Concord, N.H., as part of a cross country bus tour set to culminate in Tampa, Fla., ahead of a Sept. 12 GOP presidential debate co-sponsored by the Tea Party Express and CNN.

FreedomWorks, which had been participating in the Tea Party Express’s tour and had helped turn out activists at rallies during prior stops, decided it could no longer be affiliated with the tour, said Brendan Steinhauser, a lead organizer for FreedomWorks.

Paul Ryan rules out bid for GOP nomination

Despite speculation - largely due to the folks at The Weekly Standard - that he was considering a bid for the GOP nomination for president, Rep. Paul Ryan (R-WI) put the rumors to rest yesterday:

GOP congressman Paul Ryan said Monday he has ruled out running for president in 2012, amid another round of political speculation about his potential interest in the campaign.

“I sincerely appreciate the support from those eager to chart a brighter future for the next generation.  While humbled by the encouragement, I have not changed my mind, and therefore I am not seeking our party’s nomination for President,” Ryan said in a statement.
[…]
The House budget chairman from Janesville has been urged to jump into the race by some GOP insiders dissatisfied with the current field, which is led by former Massachusetts Gov. Mitt Romney, Texas Gov. Rick Perry and U.S. Rep. Michele Bachmann from Minnesota. Ryan’s fans within the party see him as a skilled, swing-state politician who can make the party’s best case for attacking the federal debt and overhauling entitlement programs. At the same time, some Democrats have argued that the Medicare changes he’s proposing would be a huge liability for a GOP ticket.

“I remain hopeful that our party will nominate a candidate committed to a pro-growth agenda of reform that restores the promise and prosperity of our exceptional nation,” said Ryan in the statement.

In an earlier interview this summer with the Journal Sentinel, Ryan cited at least two reasons for not running: his family (he has three young children) and wanting to see through, in Congress, the debate he started there with his controversial House budget plan, which makes sweeping changes to Medicare and Medicaid.

UT Senate: Chaffetz will not run against Hatch

Count me among the people that are disappointed that Rep. Jason Chaffetz will not challenge Sen. Orrin Hatch in the Republican primary next year:

In bowing out of a U.S. Senate clash with Orrin Hatch on Monday, Jason Chaffetz avoided what he said would be a “multimillion-dollar bloodbath,” but predicts Hatch is not in the clear.

“I think he’s vulnerable,” Chaffetz said. “He’s got a major task ahead of him in convincing Utahns he’s still the right guy for that job. I think he’s got a serious threat of [Democratic Rep.] Jim Matheson running against him, a serious campaign, and another insurgent campaign on the Republican side.”

Chaffetz ended months of speculation Monday, announcing that he would pass on a Senate bid and instead seek re-election to his House seat.

“If I were to run an interparty battle it would be a multimillion-dollar bloodbath,” Chaffetz said Monday. “I don’t think that’s necessarily in my best interests. I don’t think it’s in the best interest of our party, the nation or our state.”

It looked likely that Chaffetz was going to challenge Hatch. He talked like a candidate and received nudges from grassroots activists and national groups, including the Club for Growth. In fact, poll commissioned by the Club for Growth indicated that Chaffetz would be off to a solid start.

Holding the Line for Fiscal Sanity

Perhaps nothing more acutely demonstrates the divide between the political class and the rest of America that the ongoing debate over raising the debt ceiling. With less than two weeks to go before the August 2nd deadline designated by Treasury Secretary and tax cheat Tim “Turbo Tax” Geithner as the date when America runs out of money, there is still no deal for raising the debt limit. House Republicans, swept into power in November 2010 on the TEA Party/anti-spending tidal wave, have held the line admirably. Even Speaker of the House John Boehner has been more resolute than I would have expected in insisting that there be no new taxes as part of the deal (although this could be less from principle than the realization that to cave in on the tax issue would guarantee a challenge to his Speakership).

At the center of the controversy are the terms of raising the debt ceiling, which currently stands at $14.3 trillion, with President Obama asking for trillions more. Republicans demand a deal which allows the debt limit to be increased in exchange for cuts in spending. Democrats just want the debt ceiling to be raised period, and loathe spending cuts because it would reduce the size and scope of the imperial federal government, and in doing so take away from their ability to dole out taxpayer dollars to favored constituencies in exchange for votes.

It has been an established understanding for decades now that the Democrats can’t be trusted with national defense. It should be clear now to every sane American that Democrats can no longer be trusted with economic matters either.


The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.