Category Archives: Fiscal Policy

Normalizing Relations with Cuba is Long Overdue

mandela-obama-castro

Today, the White House announced that they were looking to thaw relations with Cuba for the first time since President John F. Kennedy severed diplomatic relations with Cuba in January of 1961, which preceded the disastrous Bay of Pigs invasion that following April. In their statement, the White House noted that fifty years of sanctions and other actions against Cuba have failed to achieve their stated means. This seems to be inarguable; ever since those severed ties, the relationship between the United States and Cuba has been highly antagonistic, with America using its financial and political clout to install strict financial sanctions against them, largely punishing them for adopting a communist government and aligning with the Soviet Union until the latter’s dissolution.

Under the terms laid out simultaneously by the White House and Cuban President Raul Castro, US residents could travel to Cuba for tourism, and Cuba would be allowed to accept United States credit cards. President Obama has also requested Secretary of State John Kerry to begin a review of Cuba’s standing on the list State Sponsor(s) of Terrorism, and some prisoners – most notably American Alan Gross – have been exchanged.

Of course, everything is not as cut and dried as Obama simply waiving his hands and saying “make it so”. For one, most Cuban sanctions are codified in American law, per Doug Mataconis. The number one opponent is going to be Senator Marco Rubio (R-FL), whose views echo those of many Cuban exiles and their family members who refuse to deal with Cuba so long as the Castro brothers are in power. Combined with Congress’s total inability to get anything done of note, there is going to be resistance before relations can be formally normalized.1 Naturally, when diplomacy is on the table, there is also a contingent of Americans – the hawks – that are not satisfied unless we’re blowing someone up.

Frankly, it’s well past time for us to normalize relations with Cuba. We had better relations with Russia – the number one antagonist in the Cold War – for a time than we did with Cuba, and all because of… what? The Cuban Missile Crisis, which we instigated with the Bay of Pigs invasion? Punishment for dealing with the Soviet Union back in the early 60s? Some assassination attempts against Presidents, by a country that we invaded? That stupid picture of noted murderer and tyrant Che Guevara being printed on T-shirts and postcards? Actually, that might be a really good reason after all…

Don’t mistake this for altruism. The intention here is definitely to line the pockets of private industry as the mandate’s stated goals of increasing internet penetration and American tourism start to take seed. There’s also the view that ending the embargo will hurt Raul and Fidel Castro as people start to realize the magic of capitalism, a view that seems to be shared by Hillary Clinton. Lastly, our request for Cuba to improve their human rights record is pretty funny, contextually speaking. But even if it’s bad for Cuba’s leaders, opening up relations with Cuba is not only the best thing for Cuba’s people, it’s the best thing for America, as well. We not only get a fertile ground for business dealings – a problem only for hard-core communists and socialists – but we look much better to the United Nations, now that it’s not just us and Israel holding out.

Ultimately, the end of the embargo, and the surety of the overall improvement to both the Cuban economy and the quality of life of its people, will prove one key point: America, and capitalism, won the Cold War, and it was a rout. The Soviet Union’s been dead for over twenty years, replaced by a plutocracy. Cuba will fundamentally change after holding out for decades purely out of spite. And other countries such as China are communist in name only. If the Cold War was a fight between American capitalism and communism, it’s over, and it was a slaughter.

1 – I would not be surprised if a Republican controlled Congress put the brakes on this for at least two years so as not to give Obama credit.

Christopher Bowen covered the video games industry for eight years before moving onto politics and general interest. He is the Editor in Chief of Gaming Bus, and has worked for Diehard GameFan, Daily Games News, TalkingAboutGames.com and has freelanced elsewhere. He is a “liberaltarian” – a liberal libertarian. A network engineer by trade, he lives in Derby CT.
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Government Spending Has Been Flat The Past 5 Years. No, Really!

Revenue and Spending 2000-2019 (estimated)

Back in 2011, I looked at some CBO projections, and said that the country was in dire straits financially. Spending seemed to be on an absolute tear, and revenue–even if it lived up to wildly optimistic projections–wasn’t going to come close to keeping up.

Essentially, the CBO projections pointed to spending occurring at absolutely unprecedented levels, and relied on completely unrealistic projections of economic growth to [not quite even] pay for it. At the time, I said:

Even with those assumptions, where does spending fall historically? Even at these rosy projections, it never falls under 22% of GDP (on par with the highest spending the country has seen since WWII), and those rosy projections came in January 2010. A year later, in January 2011, the CBO outlook got worse. It now shows spending never falling under 23% of GDP during the decade 2011-2020. Historically, spending has not exceeded 23% of GDP for a single year between 1946 and 2008.

Where has revenue been over the last few decades? Well, for the years 1991-2000, during which time we suffered one mild recession followed by the tech bubble, total government revenue averaged 18.75% of GDP. For the years 2001-2010, where we dealt with the tech bubble collapse followed by the subprime bubble and then crash, total government revenue averaged 17.07% of GDP. A sizeable drop, to be sure (the worst spots being 2009 & 2010, where the financial crash slammed revenue below 15% of GDP). But fundamentally not that far out of line with historical precedent.

Now, I hadn’t gone back to look at the numbers since then. So I was very surprised to read a Cato post suggesting that spending was stagnant and was sitting at a mere 20.3% of GDP, not the 23%+ area that the CBO was projecting. As Daniel Mitchell from Cato puts it (emphasis added):

Here are some specific numbers culled from the OMB data and CBO data. In fiscal year 2009, the federal government spent about $3.52 trillion. In fiscal year 2014 (which ended on September 30), the federal government spent about $3.50 trillion.

In other words, there’s been no growth in nominal government spending over the past five years. It hasn’t received nearly as much attention as it deserves, but there’s been a spending freeze in Washington.

I was frankly shocked. So I ended up going straight to the OMB data (note: it’s an .xls file) to confirm.
Revenue and Spending 2000-2019 (estimated)
Looks pretty legit. Spending was pushing well above 23% GDP for a few years due to the economic meltdown, the stimulus, and the continuing effects of global war.

What’s interesting, and I pulled this out of the graphic for clarity (go download the original source data if you want to confirm) is that this is NOMINAL spending. Considering there has been inflation since 2009, it’s actually fair to say that spending has decreased in real dollars over the last 5 years.

Spending is well below the CBO projections from 2010 that I used in my previous post. And frankly, revenue is WELL below their projections as well. But the spending restraint is sufficient to keep both spending as a percentage of GDP and deficits as a percentage of GDP in reasonable territory.

Now, there are always devils in the details. Mitchell points out a few in his post at Cato, and has even more to say on the subject here. But either way you slice it, the fiscal meltdown that many (including me 3 1/2 years ago) were predicting hasn’t come to pass.

Some on the left will credit Obama (even though they’ve never seen spending they didn’t like). Some on the right will credit the Tea Party (even though they spent the 8 years prior to Obama spending like a Kardashian wedding).

As for me, I’m just going to say that I’m glad my predictions–based on CBO projections–didn’t come to pass.

Community Conservatism – Reviving the Middle Class Economy

median_income

Governing for a Healthy Middle Class Economy

Conservatives do not believe that the government can “create” jobs directly. This canard of the left does nothing but destroy market-driven, sustainable jobs at the expense of increasing the national debt and attaching an anchor to GDP growth in exchange for short term government employment and expanded private sector government influence. That doesn’t mean that a conservative Congress can’t stand for job creation. The way we get there is by providing the modern infrastructure, economic freedom, and competitive tax code that attract, rather than repel the world’s wealth. We want to decrease the cost of doing business here at home and focus government resources on business-supportive roles, rather than coercive ‘partnerships’. It begins with a smarter tax code.

A) Pass Corporate Tax Reform (dare Obama to veto)

I don’t recommend settling for half-measures here and I recommend putting this near the top of the agenda for 2015. Obama has, on multiple occasions, put Corporate tax reform in his state of the union address in his 6 years in office (five addresses, 4 mentions). Corporate tax reform that accomplishes the closing of certain loopholes, the ending of certain forms of corporate welfare, and the reduction of rates to something that competes with the rest of the developed world has broad, bipartisan support among the voting middle class. In Washington, such measures have met with stiff resistance from corporate lobbies who do not want to see the corporate tax base broadened to include them, specifically (through the removal of loopholes). Let the GOP stand for the voters, not for special interests, and pass comprehensive corporate tax reform that does the following:

• Cuts the corporate tax rate to 25% at most
• Creates a two-tiered capital gains tax bracket, where all capital gains are taxed at a much lower rate below $250,000 each year
• Excises many of the tax-sheltering loopholes used by the biggest corporations to avoid paying; in particular, the shelters to profits earned overseas by American companies
• Gives corporations a ‘tax holiday’ to repatriate foreign capital until January of 2021
• Creates a lower corporate tax rate for wealth generated by manufacturing concerns – 15%, perhaps

There are, I’m certain, other great ideas that could be included in a sweeping change like this, and we’re all ears. This is just a start. The goal is to create an environment that encourages businesses to take risks and expand their workforce here at home without taking the punitive approach championed by Obama (penalize companies that keep their money overseas, rather than improve the economic climate at home).

B) Pass the REINS Act (obtain Obama’s veto)

REINS is a relatively simple piece of legislation passed in the GOP-controlled house and left to gather dust in Harry Reid’s file cabinet. It requires congress to approve all regulations in excess of $100M as scored by the Congressional Budget Office each year. If said regulations cannot be approved, they are immediately stricken. This is good policy on so many levels, not the least of which is that it maintains the separation of the non-political government agencies from the political process in the drafting of public policy regulations but forces Congress to exercise some oversight on those regulations that are particularly costly. We recognize that regulatory science should not be trapped by the political process, but we also believe that unelected agencies should not have carte blanche to pass regulatory rules without oversight that serve as a huge burden to economic growth. It will give the voters some ability to hold their representatives responsible for the regulatory state and encourage those who draft said regulations to minimize their costs or garner broad public support for their necessity. It will also make public the CBO scoring of the cost of every major regulation, helping the public to get a sense for the true costs and benefits of each.

C) Return the Full-Time Workweek to 40 Hours

We’ll talk more about the Affordable Care Act when we get to healthcare, but one of the most pernicious things the ACA accomplished was to effectively reduce the American workweek to 30 hours in the eyes of the law. Democrats supported this concept to avoid the tendency of corporations to get 39 hours of work per week out of employees to avoid having them counted as full time and thus be forced to offer benefits. The problem, of course, is that reducing the workweek to 30 hours meant a lot of people just got cut down to 29 hours. If you’re a struggling poor or working class American, this tends to drive you to take two part time jobs and you end up working more and still not getting benefits, or working drastically less and not making enough money to survive. If all else fails, regarding the ACA, increasing the workweek back to 40 hours at least offers some relief for people in this situation (and the CBO projects a big surge in part time labor under the ACA as it currently stands).

D) Expand the Earned-Income Tax Credit

Right now, if you earn less than $11,000 for an individual or $88,000 for a family filing jointly, and are legally eligible for that work, you can claim an earned-income tax credit (variable by family size and earnings). The EITC is good policy for the poor and working classes and should be expanded with increased credit sizes (perhaps another 30-40% proportionally) and availability (up to incomes of less than $125,000 for a family filing jointly). Make this revenue neutral by creating a “super-wealthy” tax bracket (>$1,000,000) that is taxed at a slightly higher rate and by eliminating eligibility for certain tax credits for people in this new upper tax bracket. Normally, the GOP is not associated with eve the smallest of tax increases for the wealthy, but if we reduce corporate taxes as previously outlined, this sort of minor compromise will come out in the wash while selling as good, fair tax policy to middle class voters.

E) Exempt Small and Moderate-sized Businesses from Burdensome Regulation

Small business start-ups are responsible for the majority of new jobs that pay above the media household income. They’re also in sharp decline here in the US. One of the major reasons for this is that, when Congress enacts legislation to regulate business, it does so with larger businesses in mind. We recognize that it is indeed necessary to regulate larger corporations, because they can have disproportional impacts on the environment, the free market, and the welfare of the people. We also recognize that big business can absorb the cost of our most aggressive regulations, but small business cannot. We also believe it is unreasonable for small businesses, frequently run by citizens without the resources to educate themselves on the full extent of the regulatory state cannot be expected to comply to the same degree as larger corporations, and that their likely impact on people, the market or the economy is greatly reduced. We, therefore, must pass a law stating that regulations determined to be of great impact by the CBO as in the REINS act, should be applied only to corporations with greater than 250 employees or more than a negotiable amount of total assets.

F) Repeal Sarbanes-Oxley and Replace with Common Sense Reporting

Again on the subject of over-regulation, this panic-move following Enron’s collapse is among the worst offenders for needless corporate regulatory burden, annually costing billions in the private sector for compliance and producing no change in accounting transparency. It reminds us of the mindless and often pointless busywork we used to get in school, and compliance requires companies to hire a fleet of folks who are specifically experts in the labyrinthine letter of this law. It must go and be replaced by much simpler-to-follow guidelines for financial reporting.

G) Greenlight Keystone XL and Other Energy Infrastructure Projects on Federal Lands

The latest estimate by industry sources is that Keystone XL pipeline would create in excess of 20,000 good paying jobs immediately and have extensive multiply impacts on the job market, not to mention making it cheaper to move oil to high-demand parts of the country where oil prices are currently far too high. Our best environmental impact studies conclude that the XL pipeline would be a net positive for the environment if you assume that the alternative is transport by rail, rather than non-use. This is a no-brainer.

H) Abolish the Nuclear Regulatory Commission and Allow Nuclear Energy Expansion – Complete Yucca Mountain Facility for Waste Management

As the science improves to reduce waste products from nuclear fission power, and as the EU and Japan continue to move ahead of us on safe, clean nuclear energy, our ability to innovate and, perhaps, solve the problem of excessive fossil fuel emission is stymied by the anti-science left’s crusade against Nuclear Energy. It’s time to stop being parochial and superstitious in the face of overwhelming evidence that nuclear energy is, by far, our best source of affordable, clean energy.

I) Abolish the Export/Import Bank

It may not be immediately apparent how ending this brand of corporate welfare can help create jobs, but it becomes clearer when you realize that many of the businesses that benefit from Ex/Im assistance are the non-dynamic, struggling corporations not likely to hire a large labor force, and it always seems to come at the expense of healthy competition. Again, the key to job creation is a competitive, free market that rewards well-run companies, not the ones out begging for federal dollars to stay afloat and squash upstarts.

How Do You Measure The ‘American Dream?’

The question of class mobility has come to define the “American Dream” in political discourse. And, although this post will take a bit of a contrarian position, it is absolutely inarguable that there is a problem with economic immobility today that is having a very depressing impact on the way we communicate to solve problems and on our freedoms in general. But this is not how you go about making that point.

There are many accepted indicators of whether a person has “done everything right” but the most important such indicators have traditionally included college advancement (graduation and especially graduate degrees), marriage, and home ownership.

The original graphic is a classic example of a complex topic simplified into uselessness. When I look at the graph, I see that, in fact, college grads who started poor move up to the middle classes and stay there at much higher rates than rich kids who drop out of high school (yay!)…but somehow the Post comes away with the misleading headline: Poor kids who do everything right don’t do better than rich kids who do everything wrong.

Really? This only looks at the shear proportions who “graduate college” vs. “drop out of high school” – that can hardly be seen as “doing everything right” vs. “getting everything wrong”. What did the college grads major in? There is ample research supporting the conclusion that most college majors these days are bad long term investments. What did the rich kids who didn’t finish HS go on to do? Were they drop-outs because they had alternative plans? Did they pick up a trade?

And more to the point – how many of those poor kids had good parenting examples at home upon which to build the foundations of healthy marriages?

Slate takes on many of my same talking points here. They mention other confounding factors, and note the misleading nature of the Post’s article title. Props to them!

But they make the unfortunate logical leap that there is something inherently wrong with a system where not all poor college grads do well later in life, or that the forces leading to their remaining in poverty are things we can fix.

An excerpt:

The real issue, as O’Brien points out, is that rich kids enjoy lots of advantages that keep them from falling to the very bottom of income distribution, and sometimes those advantages keep them at the very top. They might be able to go to work for family businesses, for instance, or family friends. Researchers like Brookings’ Richard Reeves call that collection of advantages “the glass floor.” Educated poor kids are in the exact opposite position. Many attend second- or third-rate (and possibly for-profit) colleges that churn out less-than-useful degrees. And instead of a floor propping them up, their families and friends can act like an anchor pulling them down. A classic example: a college-educated woman who goes home and marries a boyfriend who never made it past high school and has trouble holding down a job.

Emphasis mine. Notice the not-so-subtle insinuation that colleges that operate for profit are bad for the poor, and that the less-useful degrees are not to be found in the halls of elite, expensive colleges, only those second rate low-end state schools or the aforementioned dirty capitalist institutions. Of course, even top end colleges (including the ivy leagues) are now offering degrees in a wide array of financially useless liberal arts curricula. Also notice the suggestion that the problem isn’t with the failure of people raised in poverty to establish and keep stable families, but that those families are holding them back. They’re getting it exactly backwards. Every credible study on the persistence of poverty finds that single parents and people who suffer divorce are the most likely to get stuck in poverty.

So let’s summarize the position of Slate’s team (and likely that of the Washington Post):

1) Economic mobility continues to be problematic at best for the poorest Americans, even with hard work.
2) Graduating from college is a mark of hard work.
3) Hard work should be rewarded with a high rate of success.
4) If we could separate the poor from the things that hold them back (especially their struggling families and their alternative education sources), they would thrive.

If the writers at Slate would like to address the problem of hard-working, driven poor people being less able to move up the economic ladder than (perhaps) would be ideal, I suggest that they stop grinding political axes and start looking at the hard data. The data all indicates that the leading indicator for economic immobility is single parenthood, and that children of single parents are more likely to also be single parents themselves later in life. Get to the root of the problem and you find that this is not something that government can forcefully correct – and frankly, I’d be terrified if they tried.

Watch A Couple Of Millennials Talk About Barack Obama’s Policies Have Harmed Their Generation

A couple of young Millennial women, Alyssa Lafage and Elly Mae, appeared on “The Rick Amato Show” on the One America News Network (don’t worry, you probably don’t even get the channel). Amato had both young ladies on to talk about how the policies of President Obama and progressives have harmed the Millennial generation.

Some reports show that Millennial unemployment remains high at 15% in September. This summer, it was estimated that Millennials are 40% of the overall unemployed in this country. Millennials still cannot afford health insurance, despite Obamacare’s promises.  Finally, Millennials are trapped by high amounts of student loan debt, which cannot be discharged in bankruptcy, in order to obtain near worthless degrees.

Watch these two Millennial women describe how the polices of President Obama and progressives have harmed their generation and made their generation worse off than ever. Also, check out our own Quincy’s takedown of Obama drone Paul Krugman’s proclamation of Obama as one of the greatest presidents ever which touches on some of these same issues.

h/t: Wayne Dupree

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at IJ Review.com and Rare. You can also find me over at the R Street Institute.

Cost is NOT Price, and Neither Cost, nor Price, are Value

Prices Provide a Misleading Measure of Dollar Devaluation
Forbes Magazine Online – Keith Weiner

There’s not a human being alive who doesn’t know the dollar is falling. Everyone over 25 has stories of what prices were like, way back when (and younger people have heard them). I remember when gasoline was 60 cents a gallon, and my mom remembers when it was 20 cents.

Federal Reserve Chair Janet Yellen acknowledges the official objective to push the dollar down by 2 percent per year. This intention is behind the Fed’s ill-conceived loose money policy.

It’s important to measure each drop. This is not just to keep a scorecard on the Fed, but because a change in the dollar skews historical comparisons and distorts business decisions, like giving increases to workers and pensioners….

Read the whole piece, and then come back…

The thesis statement of the piece is correct, in that prices provide a misleading indicator of currency valuation (and that our weak dollar policy, as pursued by every administration since Bush 1 to some degree or another, is fundamentally wrong and destructive for that matter).

Unfortunately the author suggests that simply using a different price denomination and comparison (to gold) is a less misleading indicator… In this, he’s absolutely incorrect.

What you really want to compare is purchasing power parity (PPP) as measured by equivalent standard of living, expressed as a dollar cost in constant dollars normalized to average labor hour wage or compensation.

i.e. this item costs 5 minutes of average labor, this costs 8 hours, this costs 20 years; the cost to maintain this equivalent normalized standard of living across an aggregate population is 1940 hours of median labor wage etc… etc…

Note, this is NOT an expression of the fallacious labor theory of value, it is an explicit measure of purchasing power parity as actual cost, INCLUDING opportunity cost (in terms of time), not currency denomination.

The critical function isn’t price, and it isn’t wage… it’s cost, in this case expressed as a cost to value ratio as a normalized dollar (to make it easy to relate to wages and prices).

Cost is not price; it’s a totalized measure of inputs including resources, time, and opportunity.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Tax Hike Mike Threatens To Take His Toys And Go Home

Former Arkansas Governor “Tax Hike Mike” Huckabee was a guest on the American Family Association’s “Today’s Issues” program where he ripped into the Supreme Court’s decision this week to not hear gay marriage cases, which essentially increased the number of states in which gay marriage became legal to 30 plus the District of Columbia.

Here’s a video of Tax Hike Mike threatening to leave the GOP over gay marriage:

For those of you who prefer to not watch the Huckster, Rare has transcribed what he said:

“If the Republicans want to lose guys like me and a whole bunch of still God-fearing Bible-believing people, go ahead and just abdicate on this issue,” Huckabee said.

“And go ahead and say abortion doesn’t matter, either, because at that point, you lose me, I’m gone, I’ll become an independent, I’ll start finding people that have guts to stand. I’m tired of this,” he said.

Poor Tax Hike Mike is not getting his way so he’s going to take his toys and go home. Well, the problem for Tax Hike Mike is that the Republican Party and the country are changing and it’s not to his liking.

Young Republicans are overwhelmingly in support of gay marriage for example. Pew Research Center found that 61% of young Republicans support gay marriage.

Gay marriage isn’t the only issue where young Republicans are bucking social conservatives. Young Republicans are also bucking social conservatives on marijuana as the AP reported back in May.

Beyond being a generational issue, young Republicans say their positions stem from the party’s belief that government shouldn’t intrude on people’s lives. Ron Paul’s 2012 presidential campaign got most of its following from younger Republicans attracted by his libertarian message that allowed for gay marriage and the legalization of marijuana.

It’s not just Tax Hike Mike’s increasingly out of date positions on social issues that should stop anyone who loves liberty from shedding tears over his departure from the GOP, it’s his terrible positions on just about everything. Here’s a brief summary:

  • There’s a reason why we call him Tax Hike Mike around here, because as Governor of Arkansas, he loved to raise taxes
  • Tax Hike Mike increased spending by 65% as Arkansas governor and Cato gave his overall reign a “D” on their grade for fiscal policy.
  • Tax Hike Mike continues to defend his fiscal progressivism.
  • Tax Hike Mike has supported cap and trade in the past and says “God wants us to fight global warming.
  • Who can forget Tax Hike Mike’s support of Common Core
  • Oh social conservatives, do you know that Tax Hike Mike signed a law in 2005 that mandated contraception coverage, even for religious organizations?
  • For more goodies about Tax Hike Mike, please visit this blog that has compiled a list of the numerous times Mike Huckabee has supported big government.

    After the disaster that was the presidency of George W. Bush and “big-government conservatism”, the last thing the Republican Party and the country needs is for that banner to be carried to victory in an election. It’s time to show Tax Hike Mike and those who support the big government nanny state the left does, except their own version of it, the door.

    I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at IJ Review.com and Rare. You can also find me over at the R Street Institute.

    As Painful As Possible, For As Many As Possible

    I haven’t blogged about the shutdown, because, well, I haven’t blogged much about anything. Mea culpa.

    I haven’t had time because I’m, quite frankly, not personally or professionally affected. Warren Meyer of Coyote Blog, however, is very personally AND professionally affected. Warren operates private concession operations that handle all on-site activities at parks, with a good portion of his business based upon federal parks.

    These parks use no federal employees. They don’t require any federal dollars to operate. In fact, they pay rent to the federal government as part of the terms of their lease. So of all things, you’d think that the Feds would want them to remain open. In fact, in all previous shutdowns (including 1995 & 1996), they have remained open.

    Not this time. They’ve been ordered to close.

    I can’t do justice to all the coverage that already exists for this. While I assume many of my readers are also daily readers at Coyote Blog (and Popehat), I can’t be sure.

    All of Warren’s post on this topic can be found here. Check them out, please. You will not be disappointed.

    As it pertains to the shutdown, I have little patience for the Republicans here. The Republicans are playing a gambit they can’t win. The Dems are NOT going to defund or delay Obamacare. This is stupid on strategic and tactical levels. You can’t win and you’re going to damage your brand in the process. WTF are you thinking?!

    But what I see from the Obama administration is wrong on many more levels. It seems that the administration’s tactic here is to screw as many people as possible, to make this as painful as possible, and then hope the blame rests only on the Republicans for what the administration has done. There is no reason to close these privately-operated parks. There’s no reason to throw people out of their homes because they rest on federal land. There’s no reason to close open-air memorials that don’t require human workers to operate. While I’m not sympathetic to Republican partisans, I have to say that naming the barriers that closed the World War II memorial “Barrycades” is quite smart.

    I’m still filled with nothing but disgust for everyone in Washington. Both sides are angling for a “win”. I want to see both sides lose, dammit!

    Unfortunately, I know that in Nov. 2014, lawmakers from both parties will probably enjoy >90% re-election rates. And people wonder why I say that democracy doesn’t work?

    It isn’t, wasn’t, aint ever gonna be…

    I mentioned Social Security as an entitlement payment in my post on the government shutdown, and it raised a fairly common objection in several who read it:

    They don’t think of Social Security as an entitlement, or a welfare payment; they view it as their right, by virtue of having contributed to the system for their entire working life.

    So, time to correct a very major, and unfortunately common, misconception.

    Social Security, is NOT a pension, nor is it insurance.

    Now, I realize that the majority of the American public believe this is so, because they have been deliberately defrauded by our government…

    First read this to understand the scope and scale of the fraud, and the problem it (now only vestigially) masks:

    The Greatest Fraud in the History of the Human Race

    Ok… so, by now, most people understand that Social Security, as it is, is essentially a legal Ponzi scheme (whether they accept that, or admit it… if they can do basic match, they at least understand it).

    What I really didn’t fully appreciate until recently, is that often, even people who understand this is true, don’t understand why or how it got that way.

    There is a very common misconception, even among otherwise economically, historically, and legally well informed and educated people, that the current state of Social Security is somehow a twisting of what it was intended to be, or taking advantage of loopholes etc…

    Many people believe that Social Security was set up to be an annuity based insurance and pension plan. That paying FICA contributions was supposed to buy you into a long term annuity, or investment plan, and that your Social Security payments were intended to be the product of that investment.

    They think that the “trust fund” exists, and was set up to collect and invest the contributions of the workers who paid into it, so that the investments would fund the workers retirements.

    They believe that the problem with Social Security is that congress has been raiding the trust fund since 1958 (most don’t know it was since ’58, but they are sure that’s why Social Security is broke).

    Unfortunately, every bit of this idea is entirely incorrect… and people who hold that idea generally do so, because they were deliberately misled.

    I’s simply not true… though many… perhaps most… people believe it is; but in fact, Social Security was always nothing more than a pyramid scheme, and an entitlement.

    They misunderstand entirely… Because they have been deliberately deceived; as has been the majority of the population.

    Social Security was NEVER, EVER, an annuity, pension, or insurance.

    Actual insurance, annuities, pensions etc… were not part of the legislation that created it, or anything thereafter.

    Also, there never was an actual “trust fund” as such… simply an accounting of surplus contributions which were, in theory, to be placed into low yield “no risk” treasury bonds.

    Note, I said “surplus contributions”… this means contributions in excess of payouts to existing recipients. Because benefit payments are not made from the proceeds of investment, they are made using the payroll taxes of those currently paying in today (this is why we call Social Security a ponzi scheme… When Bernie Madoff does it, it’s fraud and he goes to jail. When the government does it, it’s… well it’s still fraud, even worse fraud… but no-one goes to jail sadly).

    The sham of it, particularly the sham of the accounting trick they called the “trust fund” was publicly proclaimed as early as 1936 (by Alf Landon in his presidential campaign).

    Social Security is, and always has been, a tax and entitlement distribution scheme.

    The government lied, and called it insurance, but in fact it has never been anything other than a payments and distributions pool, funded by taxes.

    You can look it up, in 42usc (the section of U.S. code defining the various programs known as Social Security).

    The programs collectively known as Social Security are referred to as insurance several times, but in fact they very clearly are not. The legal definitions and descriptions make this very clear. Social Security is a tax and entitlement disbursement scheme, by act of congress.

    There is no individual ownership, no accrued value, no capital gain, it cannot be transferred, and it can be changed (or removed), at will, by congress; without being construed as a taking without due process.

    It is NOT INSURANCE.

    Perhaps I am not explaining this properly…

    It’s not that congress went against the intent, or written provisions of the law, and changed Social Security from what it was supposed to be, to what it is…

    It’s that in fact, the law was NEVER what they told the American people it was.

    In fact, if the law HAD been what they sold it as, then that law would have been declared unconstitutional by the supreme court (as had the earlier railroad pensions act, which actually DID created a property based pension scheme). It was specifically because it WAS a tax and distribution, that congress had the power to do it; and was argued thus before the court in 1937.

    Helvering v. Davis clearly defines Social Security “Contributions” as a tax, and social security “benefits” as welfare payments. This is the basis for it’s constitutionality.

    Fleming v. Nestor in 1960, reaffirmed that FICA is a tax, and that the “contributions” are government property, to be done with as the government sees fit; and that “contribution” through FICA did not cause one to accrue a property right to any asset, pension, or insurance scheme, nor did it create a contract consideration, right, or obligation on the part of the government. Further, it affirmed that “benefits” were NOT insurance or pension disbursements, but entitlements by act of congress, and that congress could change them at any time in any way they chose, without being construed as a taking under the 5th amendment (though they did say that they must have cause and due process to do so… but any legitimate cause within their purview would do).

    Justices Black and Reich, specifically dissented from the majority opinion, explicitly and expressly addressing the issue of property rights. They believed that such contributions, to such a program, SHOULD as a matter of moral and public good, be considered property, and have property rights attached. They acknowledged however that the law as written did not, and that by strict interpretation the majority was correct… They just thought it was better to make it property anyway.

    Unfortunately, it’s not… It is neither a pension or insurance, and never has been, from the very beginning.

    However, almost every explanation ever given the public, and in most documentation, it is referred to as insurance, or even a pension.

    All as part of the greatest fraud in the history of the human race.

    I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

    Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

    Defunding and Debt Limits and Shutdowns Oh My!

    Welcome to the sideshow folks…

    Step right up and enjoy the posturing, rhetoric, and antics of our congressional clown crew…

    Over to your right you’ll see the amazing vocal endurance of Republican Senator from Texas Ted Cruz as he tosses red meat to the base…

    … To be serious, there are a large group of people, who don’t understand why the rest of us consider what Ted Cruz did (a 21 hour “filibuster” of a motion in relation to items within a continuing resolution for funding the federal government for the next six months), both harmful to the country, and nothing more than grandstanding.

    For them, it looks like Cruz was (in the composite words of many Americans on the right):

    “Taking a brave and principled stand against the funding of a bad law that will harm our country.”

    In reality, he was doing no such thing.

    Cruz is being maligned by his own party because he was being a clown. This “filibuster” was nothing but a clown show.

    It may be viscerally satisfying, but it’s idiotic. It will do absolutely NOTHING for the Republicans, of for those against Obamacare, except throw red meat to the stupider side of the base.

    This is underpants gnomes strategy.

    Step one: “Non-filibuster a piece of already passed legislation that I can’t stop by doing this… but that’s OK I wasn’t really trying to, really I was just trying to get media attention and attract donations from the less intelligent and aware side of my political base”.

    Step two: … uh….

    Step three: Electoral Victory?

    “But, one brave man, standing up for what he believes in, can do amazing things. A small group of patriots can change the world, just look at the American revolution.”

    No, they can’t. No guns involved in this one. No big foreign war distracting the occupying power. No actual fight going on among the actual fighters… just a series of bargaining and trading; while the rhetorical fight goes on among the spectators.

    It may be emotionally satisfying rhetoric, but that’s all it is, rhetoric.

    You are not a member of the patriotic few, bravely standing up against the despotic elite, risking all for freedom.

    In fact, unless you support drug legalization, getting the state out of marriage…and almost everything else… giving up legislating morality and goodness entirely… You AREN’T EVEN ON THE GOOD GUYS SIDE.

    You’re just another guy on the badguys side, who wants the badguys to tax the tea a little differently.

    Oh and as “just another guy”, you actually aren’t on their side at all…

    You’re a spectator rooting for your team from… not even the stands… from the comfort of your own home; with the game streamed lived via satellite into your living room.

    “But what would you have us do? Just give up, let the Democrats run the country into the ground”

    Nope… Not at all…

    I’d have you stop assuming the rhetorical mantle of revolutionary patriot because it makes you feel good; and stop supporting things which reinforce that feeling, without actually DOING anything.

    If you buy Ted Cruz’s stunt, you are perpetuating this crap.

    If you want to actually do something… ACTUALLY DO SOMETHING. Get involved with your political party on a local level. Get onto policy committees. Become a subject matter expert for the party on something you know, and use that position to help steer the party, and the politicians in the party, in the right direction.

    That’s actually doing something. This thing with Cruz? It’s just something you can say you supported so you can feel morally vindicated while not actually doing anything.

    “You’ll see… Cruz was right, this is bad law and we must stop it. Cruz will be vindicated, time will tell”

    Well of COURSE he’s RIGHT, we all know that… it’s AWFUL law… even Jon Stewart thinks it’s bad law… but that doesn’t mean he was doing any good… or even try to for that matter.

    Vindicated how?

    Sure he’s increasing his own fundraising, and certainly he’s right about Obama care… but to be vindicated you have to have done or said something substantive, and then been proven right later.

    How has he done that?

    He’s hurt the Republican party badly with the center, and provided yet another target for mockery and ridicule… and to scare those who think this sort of thing is either stupid or crazy…

    Yes, he’s increased his own fundraising… and tripled that of everyone on the left.

    This is not some brave heroic last stand. This was a foregone conclusion. Obamacare would never, under any circumstances, be defunded. This wasn’t a filibuster. This wasn’t moral courage.

    If it was a serious attempt to stop Obamacare, fine, that would be great. Even if it were a futile attempt, if it were even structurally capable of stopping it, sure… it wasn’t and isn’t.

    It wasn’t really even a symbolic gesture.

    It was pandering, to the lowest common denominator. It was Ted Cruz setting himself up to be the poster boy for the low information voters of the right.

    And he knew EXACTLY what he was doing… By all accounts Cruz is a brilliant man.

    “It doesn’t matter if he was doomed to fail, it was the right thing to do anyway. Standing up for what’s right is never wrong”

    If that’s what he was actually doing, I wouldn’t be so irritated by this.

    I’m irritated because this is what they do instead of something useful. “I supported Ted Cruz’s filibuster but those nasty democrats and RINOs passed it anyway”

    The people who believe this, don’t seem to understand that what Cruz did actually hurt us. Us being those of us who really fight against government overreach, and bad law.

    It gave cover to the people who wanted to do nothing anyway, it encouraged a few whackjobs to make spectacles of themselves, and it INCREASED the morale and assumed moral authority of the other side.

    Do you not realize how stupid and ridiculous this makes anti-obamacare people to the middle? How hysterical it makes them appear to the other sides donors? How this is a permanent harmful soundbite/video clip?

    It’s idiots like this that made them able to paint Mitt Romney as an ultraconservative ultra right damn near American Taliban…

    When in fact, he wasn’t conservative enough for a lot of people to bother even coming out, and they just stayed home rather than vote.

    This is NOT a dedicated small group of principled people fighting against government overreach… That would be excellent.

    This is the Republican equivalent of a college student “sticking it to the man” by wearing Che Guevara t-shirt an shouting about oppression and justice, out in front of the admin building.

    “You don’t understand… Cruz is different… he’s the only one of the Republicans with the guts and the principle to stand up and do something”.

    If he had actually done that, I would more than agree… I’d be cheering him on too.

    But he didn’t.

    If he were actually different… I’d be 100% behind him… Hell, I think he’s a good man, and in general he will probably be a good senator, though it’s a bit early to tell. If nothing else, he’s a LOT smarter than most Senators.

    But really… other than that… he’s not much different than any other professional politician.

    I’ve read the mans bio, read some of his speeches, hell I was even on a conference call with him and Marco Rubio at some party event during the campaign last year.

    Yeah, he’s accomplished, and he’s got a hell of a back story (great family tale), but… what is it you think makes him so special?

    He’s a smart guy, apparently a great legal mind, clerked for Rehnquist, editor of the Harvard law review… which are great things sure… but but I don’t see what you seem to see that makes him particularly exceptional among senators. He’s been a politician basically since law school; either full or part time.

    He spent less than a year in private practice before going into an administration job, then less than 4 years out of the fedgov, where he ran for office twice, before going back to the fedgov.

    He’s a professional politician.

    I think he’s probably going to be a good senator (kinda hard to tell 9 months in), but I don’t see anything there that says anything other than professional politician… He’s a smart man and seemingly a good man… and those are great things… but he’s still a professional politician, and has never been anything but a professional politician.

    I mean… he actually voted… in fact the senate voted unanimously 100-0… for the motion he was supposedly filibustering…

    How can you even call it a filibuster if you’re going to vote for it?

    So… In the next show, we have the “Government Shutdown”.

    As of right now, the Republicans in congress have refused to sign any continuing appropriations bills that require the raising of the U.S. federal debt ceiling, and which fund Obamacare.

    Therefore, the Republicans are trying to pull a repeat of 1996 and “shut down the government”; again to foster the illusion that they are taking a principled stand against excess spending and government waste etc… etc…

    They aren’t.

    “Why can’t they just balance the budget, instead of raising the debt ceiling again… That’s not a solution, that’s just making the problem worse?”

    That’s the question of a well meaning, intelligent person, looking at this problem from a rational perspective…

    So it’s completely irrelevant to anything they do in Washington of course.

    First thing, the whole “Defund Obamacare” spiel is, and always has been, a sham. It’s more redmeat for the base. It’s not going to stop Obamacare, never was going to, never could; and even if it could, the republicans couldn’t get it past the senate, or a presidential veto, or an override etc… etc…

    It’s just PR.

    The Republicans saw what happened to Mitt Romney. They know that a large portion of the electorate doesn’t think they’re conservative enough and so won’t bother to vote for them… This is how they’re trying to address that issue. Nothing more substantive than that.

    This still leaves the debt ceiling issue… and of course, incurring yet more federal debt is a bad thing. We are already at more than 105% of GDP (of course, that’s far lower than most other nations, but it’s still quite bad).

    However, since it is quite literally impossible for any continuing appropriation to be passed that doesn’t require increasing the debt ceiling… In fact, even without a continuing appropriation the debt ceiling will need to be increased (because of credit payments, entitlements, and other already legislated spending); the debt ceiling is GOING to be raised.

    Either that, or an accounting trick will be used to do the same thing.

    It’s not a solution. It’s a requirement of the circumstances.

    Balancing the budget… that’s a joke; given that we haven’t actually PASSED a budget or OPERATED under a budget , since 1997. From 1998, the government hasn’t been funded with a passed budget, it’s been funded with omnibus spending and special appropropriation bills, and continuing resolutions.

    In fact, since Obama was elected, we haven’t even managed to pass an omnibus spending bill, and have exclusively funded the government with special appropriations and continuing resolutions.

    The reality of the “debt ceiling” is, the U.S. is NOT going to default on its credit payments, under any circumstances.

    In the first place, a U.S. credit default would trigger a world wide economic collapse and long term depression the likes of which have not been dreamed of outside of dystopian fiction.

    So yeah… that’s bad… let’s not do that.

    Even if that weren’t true, the politicians in this country are not going to let people miss entitlement payments… which is the whole reason why we don’t have a budget in the first place…

    Every politician in America knows that if they get blamed for their constituents missing a social security check, they are done… dead… never to be elected to anything, even dog catcher, again.

    So, any threat not to raise the debt ceiling, or to have a true and complete government shutdown, really is just grandstanding.

    Until we make serious cuts to entitlements, we are not going to have anything close to a balanced budget. No politician in this country who has actually managed to get elected and wants to be re-elected is going to EVER under any circumstances, vote to cut entitlements. Therefore we are never going to have a balanced budget again… or at least not until there is a real unavoidable crisis, where they can cover themselves by saying “we had to do it to save the country”, and their opponents can only look like irresponsible liars if they try to say otherwise…

    Of course, if this country weren’t filled with economically and politically ignorant “citizens”, then perhaps the electorate as a whole would understand that we’ve long past the point at which such a crisis could be avoided, and that something really needs to be done right now…

    Unfortunately, what looked like it was going to be the first major group of voters working for entitlement cuts in this country, the “tea party”; was quickly overrun by a huge number of these idiots who, completely un-self aware were saying, with complete sincerity “get the government out of healthcare and welfare… but don’t touch my social security and medicare”.

    The politicians noticed this… Particularly the smart ones… Like, say, Ted Cruz.

    I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

    Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

    Congress: Replace 1 Year Of Modest Cuts With 10 Years Of Miniscule Cuts And We’ll Call It Even

    This is absurd.

    Brad Plumer at WaPo recounts the 4 plans in play to stop the sequester. And it’s astounding. It’s made ever more clear to me that nobody in Washington is serious about cutting spending. Right now we’re 15 days away from the implementation of $85.3B in 2013 spending cuts. Oh, for the record, that’s roughly in the realm of 2 fucking percent of this year’s budget.

    First, there are three Democrat plans; the Senate plan, the House plan, and the President’s plan. So what are the Democrats proposing? Small spending cuts and modest tax increases. Exactly what you’d expect. Both plans seem to take spending cuts out of farm subsidies, which tells me one thing: they know farm states are red states and they’re gonna punish them for it.

    But what’s notable about those plans? They replace $85.3B of cuts this year with spending and taxation over 10 years. Talk about playing kick the can! In fact, both Congressional Democrat plans really do almost nothing to affect the 2013 deficit. They’ll gladly pay you Tuesday for a hamburger today.

    Second, we’ve got the Republicans. They know they can’t touch entitlements. They absolutely refuse to take a penny out of defense. So what’s left? Cuts to a whole host of social programs that they know they can’t actually pass, so they get red meat for the base without actually having to cut a single thing.

    And the President? Well, if we can’t solve the sequester, he’s not even talking about kicking the can out to next year, he’s talking about kicking it merely a few months:

    “If Congress can’t act immediately on a bigger package, if they can’t get a bigger package done by the time the sequester is scheduled to go into effect,” Obama said in the White House briefing room, “then I believe that they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months.”

    As I said last fall, maybe the best answer is to just let the sequester happen.

    Dr. Ben Carson Speaks Truth to Power

    Until yesterday, if someone asked me what I thought about Dr. Ben Cason, I would have had no idea who you were talking about. After listening to his speech (below) from the National Prayer Breakfast from a few days ago with President Obama just a few feet away, I thought this speech was too good not to share.

    As an atheist, there were obviously some points I disagreed with. Theological disagreement notwithstanding, overall there was a great deal of wisdom in what he had to say about history, political correctness, personal responsibility, morality, education, healthcare, the national debt, and the tax code. There was easily more intelligent ideas being spoken here than last night’s State of the Union.

    If you don’t watch any other part of this speech, start watching around the 18 minute mark where Dr. Carson talks about the immorality of class warfare the progressive tax code and watch the president’s face (spoiler alert: he doesn’t seem too amused). I honestly don’t know how this guy got in the room, much less had the opportunity to speak!

    Recovered from the Memory Hole: Inaugural Rhetoric vs. Reality

    Expect more of the same.

    More Than One Class of Parasite

    The welfare state is a problem in America, there’s no question about it. When you have a country were nearly 49 million people are dependent on food stamps as of this writing, that is a problem. We libertarians as well as conservatives lament the growing welfare state because of what it is doing to the economic health of this country and the negative incentives (i.e. the moral hazard) to discourage people from working when it’s easier to get a check from the government. That being said, I think we libertarians could do a better job with the messaging on this particular issue.

    Today’s episode of the Neal Boortz show is a perfect example of what I’m referring to. Boortz’s personality is that of a curmudgeon. Over the years he has referred to himself as the “High Priest of the Church of the Painful Truth.” I usually enjoy his blunt, non-P.C. style but sometimes I think he goes a little overboard when he calls people who are on one type of welfare or another “parasites” regardless of their individual circumstances. I missed the first part of his show (which is normal) but I tuned in about the time a caller who said the only government assistance he was receiving was food stamps called in. He went on to explain that he worked 3 minimum wage jobs at about 120 hours a week to support his 5 kids (I think that was the right number). After explaining his circumstances, he asked Boortz: “Do you think that I am a parasite?” Boortz responded “yes.” Boortz went on to criticize the man for having children he couldn’t afford to support and told him that perhaps since he still couldn’t support his children on his three jobs that perhaps he should give them up.

    Taking the caller’s word at face value that he works 120 hours a week, I have to disagree somewhat on Boortz’s characterization that the man is a parasite. I also think that telling someone who really is trying to support his children but still coming up short and supplementing his income with food stamps to give up his kids is an unreasonable suggestion. How much would it cost taxpayers if every person who struggled with supporting their children put their children in the foster care system or an orphanage? We hear all the time from conservatives – especially social conservatives* that the ideal situation for raising children is a household with a mother and a father. I have heard some social conservatives say that the reason the state shouldn’t recognize gay marriage or civil unions is that the purpose of marriage is procreation. They also argue for the child tax credit and favorable tax treatment for married couples to encourage more people to have families**.

    I don’t know to what extent Boortz agrees with these notions as he doesn’t seem to talk about these issues much. I do think there is something to say about children growing up in a stable environment, however. I haven’t done much research at all about the foster care system but from what I understand, it’s far from ideal. How many children in the foster care system find themselves in the criminal justice system whether on probation or incarceration versus those who are raised by at least one loving biological parent? I don’t happen to know the answer but I suspect that there are more of the former than the latter. Again I ask, how much would this man giving up his children possibly cost the taxpayers? I suspect it would be more than whatever he is getting in food stamps.

    To some degree***, this man is a parasite but certainly not to the extent some people I have met are. There are the single dads who have too many children to too many baby mamas who don’t take responsibility for their children and have no shame about going on the dole. There are also far too many single moms out there who have made some very bad choices who basically marry the government. If anything, the caller is probably receiving less government support because he is working so many hours. Slacking is rewarded while trying to better oneself is punished – this in of itself is a major part of the problem, I think.

    While I agree with Boortz in principle that one man’s need does not mean he has a claim on another’s money, there are more classes of parasites I think are even more offensive than poor people on welfare. I am much more offended by the corporate welfare and the welfare for the rich. I’m not talking about tax cuts or anything like that but subsidies. I’m talking about billionaire sports franchise owners who have their stadiums built by taxpayer dollars so they can pay millions more to their millionaire athletes. I’m talking about TARP, the auto bailouts, QE 1, QE2, QE 3 and other policies the Federal Reserve has used to make our dollars worth less and less every day. I’m talking about corporate lobbyists who write regulations in their favor to make it difficult for competitors to enter the market place. I’m talking about lawyers.

    Yes there are more than one class of parasite bringing our economy down. When it comes to going after those who are using taxpayer money for their benefit, I think it’s high time we libertarians say women and children last.

    Point of Clarification: It wasn’t fair to lump all lawyers together as parasites. Lawyers are necessary in our system to take out some of the parasites I mentioned above (the white blood cells, if you will). Like any profession, there are bad apples. When I think of parasitic lawyers, I think of the likes of John Edwards and the ambulance chasers on late night TV. There are plenty of heroic lawyers who truly fight for liberty and justice such as those at the Institute for Justice and The Innocence Project. I’m sure we can count fellow Liberty Papers contributor Doug Mataconis among them as well (though I know nothing about his work as an attorney, he’s a good person and I’m sure that’s reflected in his profession as well).

    » Read more

    Thoughts on the fiscal cliff

    Just some quick thoughts on the fiscal cliff…

    IT’S THE SPENDING, STUPID

    It’s frustrating that no one is discussing the fact the the Obama plan for deficit reduction actually increases spending with the inclusion of a stimulus package in 2013. Raising taxes and borrowing more money for more stimulus not debt reduction. It’s just more debt.

    The political failure from Republican leaders in the House is staggering. Republicans should have been hammering Obama’s plan so damn hard even the media had to listen. The ad writes itself: “Obama’s plan is tax now, borrow now, spend now. Is that a balanced approach?” It’s a compelling message, a potent political weapon, and it’s true. Had Boehner been looking for any of those, he would have figured this out. Unfortunately for the American people, Boehner felt it was more important to compromise with Obama.

    At this point, if I were Boehner, I would actually give into Obama on tax increases but insist that tax increases be met dollar-for-dollar with spending cuts. If suddenly there were no conflict about tax rates but there was no deal, it would force people (even reporters) to ask what the remaining barriers were. This would allow Boehner to shift the conversation where it needs to be… on spending. (Yes, I know this plan is insane. However, when you’re negotiating someone who’s view of compromise is “heads, I win; tails, I win”, there is no such thing as sanity.)

    NEWSPEAK OF THE DAY

    From the WaPo article linked above:

    Boehner’s latest offer calls for $2 trillion in savings over the next decade, half from higher taxes and half from cuts to the fast-growing health and retirement programs that are the federal government’s largest expense. All told, Obama’s latest offer calls for about $2.15 trillion in savings.

    Taking more money from the citizens is “savings”? Who knew bank robbers were being so darn responsible, saving all that money?

    The accurate description of Boehner’s plan would be $1.2 trillion in savings and $800 billion in taxes. Obama’s plan would accurately be described as $1.5 trillion in new taxes, $80 billion in new spending in 2013, and $570 billion in cuts thereafter. The truth, of course, would disrupt the narrative that the President’s plan is balanced while Boehner’s is not. Therefore, spending cuts and taxes are all called savings.

    In other news, the English Language filed assault charges against the Washington Post after reading the article. (If only.)

    WHAT IF GOING OVER THE CLIFF ISN’T THAT BAD?

    The conventional wisdom is that going over the cliff will be an economic nightmare. But what if it isn’t? There are a some positives in going over the fiscal cliff:

    1. Government spending will go down.
    2. The debt limit will not need to be increased.
    3. Americans will actually be impacted by the cost of government.

    Might these mitigate the harms of going over the cliff? In the short term, I don’t think so. The financial hit taken by Americans coupled with the continued economic uncertainty of a government groping for a solution will cause a lot of pain.

    In the long term, the pain might (notice I said “might”) produce a healthy skepticism of government spending among the citizens. A 2011 Gallup poll already indicated that the public overwhelmingly favors spending cuts in the abstract. However, they tend not to favor cutting things that benefit them directly. Since different people benefit from different programs, this produces an unwillingness for politicians in either party to cut spending. If people suddenly become concerned with the economic pain of the fiscal cliff, they just might be receptive to a trade-off of reduced government benefits for decreased taxes and increased economic stability.

    Of course, there has to be support from the GOP in Washington for this, since it certainly won’t come from the Democrats. Well, there goes that idea…

    CONCLUSION

    Take these thoughts for what they are… frustrations and wild speculations about the fiscal cliff. Hopefully they start a good discussion on the subject. Maybe they’ll even open a few eyes to facets of the situation left unreported by the mainstream media.

    Let me steal adapt a song title from Avenue Q for a closing thought: There is life outside of the Beltway. This country has survived a hell of a lot and it still can. The will of the American people to be successful and prosperous has survived recessions and depressions and governments more suffocating than what we have today. We can do it again, even if we go over the cliff.

    Your Incredibly Stupid Progressive Economic Propaganda for the Day

    There is so much economic ignorance/stupidity in this video (below), I wouldn’t even know where to begin. John Maynard Keynes himself would probably be embarrassed by this video courtesy of the California* Federation of Teachers and narrated by the great economist of our time Ed Asner.

    I don’t have much else to say about this video right now, it’s too easy (though feel free to rip it apart here…or defend it). Actually, I am in the planning stages of writing a book that challenges this sort of mentality (I’m shooting for a release date about May 2013). I’m hoping Liberty Papers readers will buy it; I will have discounts for Liberty Papers readers.

    And now for your, um…enjoyment[?]: Tax the Rich: An animated fairy tale**

    WARNING: This is 7 minutes and 50 seconds of your life you will never get back.

    *Oh yes, the state of California which is being run by people with this kind of mentality! Yeah, their economic policies have been working great, haven’t they?

    **Fairy tale is actually a very good description.

    The Modern Republican Party is a Special Kind of Suck (Part 2 of 3)

    Part 1

    Confusing Economic Policy of Suck
    I’m sure there are many other areas where Romney went wrong but I think most of the rest of this special kind of suck is courtesy of other Republicans. During the Republican primary, the “anyone but Romney” crowd was so desperate to eliminate Romney that they resorted to a line of attack one would expect to come from Democrats. Many Republicans seem to forget that the attacks against Romney concerning Bain Capital were first leveled by Newt Gingrich and Rick Perry at campaign rallies, in the primary debates, in their campaign ads, and in anti-Romney super PAC ads. Perry called Romney a “vulture capitalist.” The Obama campaign picked up this line of attack where Gingrich and Perry left off. In swing states like Ohio, this message had basically been pounded since before the state’s primary and never let up for the rest of the campaign.

    Once charges like these are made by Republicans who are supposed to be proponents of free market capitalism, it’s kind of difficult for people who actually understand how the free market works to explain why business practices employed by Bain Capital are not only legitimate, but also necessary. In this Occupy Wall Street era we live in, there seems to be an attitude that no one is ever supposed to lose his or her job and that every job is not only necessary but equally valuable.

    Companies like Bain invest in businesses in trouble and try to make them profitable. In making a business profitable, sometimes this means that some people are going to lose their jobs. Like a doctor who is trying to save the patient’s life, sometimes a limb needs to be amputated. No one wants to lose an arm or a leg in such a scenario but most who face such a dilemma would rather lose an arm or leg than lose his or her life. If the amputation is done soon enough and correctly, the patient lives. Other times, however; even despite taking such drastic measures, the patient still dies. The same is true for some of the companies Bain tried to rescue. Of course no one wants to think of themselves as a limb that needs to be amputated in order to save their company*.

    Immigration Policy of Suck
    In addition to the mixed messages concerning Capitalism, the Republican Primary debates took on a very harsh tone concerning immigration. Any candidate who suggested that the idea of rounding up each and every illegal immigrant was impractical and that perhaps deporting individuals who were otherwise productive members of our society, said candidate would be accused of advocating “amnesty” – a four letter word among conservative Republicans.

    Such harsh anti-illegal immigration rhetoric carried over into the general campaign when President Obama (rightly, in my view) made an executive order to allow individuals who were brought here illegally as children under the age of 16 to stay and have temporary work permits. This was an outrage among Republicans because, you know, the law is the law.

    As Gary Johnson pointed out on several occasions during the campaign, while it’s true that we live in a nation based on the rule of law, too many Republicans fail to understand that the laws are changeable. And as I pointed out at the time, when there are more than 27,000 pages of federal law on the books with over 4,500 criminal laws, this necessarily means that any president would have to prioritize and choose which laws he will enforce and which he will not. When the number of laws is this numerous, it’s the same as having no rule of law at all.

    Immigration is an issue the GOP needs to figure out and figure out quick as the Hispanic population will become an increasingly major factor in future elections (even GOP strongholds like Texas might eventually turn blue due to this demographic reality). Should we be surprised that the Hispanic population overwhelmingly supported Obama over Romney given the rhetoric?

    It’s time to reexamine the notion that the border should be secure first before any comprehensive reforms are made. I think this is exactly backwards. If the legal immigration process wasn’t such a bureaucratic nightmare to begin with, I doubt seriously that illegal immigration would remain an issue.

    This much needed debate** is not going to be very productive if every time someone proposes something other than building a 20’ tall fence along the Southern border, checking ID’s of everyone with brown skin, and rounding up every illegal immigrant regardless of circumstances, s/he is accused of promoting amnesty. Even more importantly, whatever the GOP decides immigration policy should be, they need to soften their tone and be mindful that we are talking about human beings here. I think it’s safe to assume that just about every legal immigrant (especially from Mexico) has at least a few family members who are here illegally. They do not like to think of their relatives as “invaders” who need to be rounded up. These people vote too.

    *And I’m writing as someone who has been the limb being amputated. Just a couple of years ago, it was my department that needed downsized to save the company…at Christmas time no less. I’m happy to say that the downsizing measure did in fact save the department and six months later, they called me back and have been working there ever since.

    **Doug and Kevin have each offered up some ideas for immigration reform that I think warrant consideration.

    Part 3

    The Modern Republican Party is a Special Kind of Suck (Part 1 of 3)

    Barack Obama’s Record of Suck
    Four years ago, Barack Obama was elected the 44th President of the United States. He promised hope n’ change from the failed policies of George W. Bush. His policies were going to lower the debt, reduce unemployment to around 5%, become the “most transparent administration in U.S. history,” close Guantanamo Bay, and restore the damaged international relations around the world.

    Four years later, Obama has increased the debt by $6 trillion (the national debt is now over $16 trillion), kept unemployment hovering around 8% for nearly his entire first term despite his Keynesian efforts to stimulate the economy, and punished whistleblowers for daring to shed light on what has arguably been one of the least transparent administrations in history. Guantanamo Bay is not only still open but now with Obama’s signing of the NDAA, even American citizens can be taken there and detained indefinitely without charge or trail. If this wasn’t enough, the Obama administration also developed a “secret kill list” from which drones search for and kill targets from that list– including American citizens, who are sought out in Yemen, Pakistan, Libya, Syria, and who knows where else without any Constitutional authority whatsoever.

    Then there’s “Fast and Furious,” an operation of Eric Holder’s Justice Department in which the BATFE purposely gave weapons to Mexican drug cartels resulting in untold deaths including a Border Control Agent by the name of Brian Terry. Obama has since invoked executive privilege to protect Holder from congress getting too close to the truth.

    Finally, there are the terrorist attacks in Libya and Egypt on September 11, 2012. Rather than admit the obvious, President Obama and his administration lied to the American public concerning the nature of the attack claiming the attacks came from spontaneous protesters who were angry about an obscure YouTube video that “slandered” the prophet Mohammad.

    A Special Kind of Suck
    This is only a thumbnail sketch of the failures and malfeasance of the Obama administration in one term of office. Today the news should be about the Romney/Ryan transition team after a slam dunk landslide victory. But that is not the news today, is it? Yes, the Republican Party sucks but for the Republican challenger to be beaten despite Obama’s record, an advantage the last Republican challenger did not have, that takes a special kind of suck.

    How exactly did the Republican Party achieve this special kind of suck? That is the question political observers are asking and what the party needs to answer if the GOP wants to win future elections. Reflexively, many on the Right are blaming the main stream media for its pro-Obama bias. There’s no question the MSM was more critical of Romney than Obama. They downplayed team Obama’s missteps but never missed an opportunity to report each and every gaffe of team Romney. Romney was also running against history – America’s first black president. While this is all true, it’s also true that Republicans won control of the House in the 2010 midterm elections on a wave of Tea Party fervor. The MSM had just as much of an Obama/Left wing bias then as they do now yet the Republicans gained ground. What was different this time?

    Mitt Romney, the Nominee of Suck
    No doubt, Gov. Mitt Romney is probably getting most of the blame and he deserves much of it. That being said, the reasons Romney failed to beat a failed president go well beyond Romney or his campaign. Maybe, Romney is a good place to start though.

    Rather than make a choice that would be a champion of the limited government issues Republicans claim to care about (like say Gary Johnson or Ron Paul), the GOP decided they would go with Mitt Romney. Never mind that he authored the forerunner to ObamaCare (RomneyCare) or that he was a political chameleon (does anyone seriously think he made a principled change, as opposed to a political calculation, on abortion when it was time to run in 2008?). No, Romney was “electable” and by gosh, it was “his turn.”

    Much of the destructive foreign policy of the Obama administration was right in line with what Romney said he would do. Romney had no problem with the NDAA, Guantanamo Bay, the secret kill list, or renewing the Patriot Act, therefore; these areas which were ripe for criticism were off the table. Other than the question of defense spending, they seemed to both have identical policies concerning Iran acquiring a nuclear weapon and both pledged they would “stand with Israel”…whatever that means. In the foreign policy debate, the moderator handed Romney a golden opportunity to go after Obama on the recent terror attacks but decided not to do so. On another occasion, Romney did casually bring up Fast and Furious in response to a question about gun control but didn’t ask Obama some of the hard hitting questions many Americans were dying for Romney to ask.

    On domestic issues, Romney allowed his opponents to define him as an out of touch millionaire who didn’t care about the 47% of the people he determined wouldn’t support him. Romney did a very poor job of defending free market capitalism* in general and his record both as governor and as a businessman in particular. When asked about the alleged gender pay gap in one of the debates, rather than explaining that the statistic doesn’t actually compare women and men of comparable occupation or work experience he said he asked for “binders full of women” from which he picked to be in senior positions when he was governor of Massachusetts. The Democrats took that line and demagogued** the hell out of it and made it part of their “war on women” mantra. If Romney didn’t want to go through the trouble of explaining why the gender pay gap is a myth, he could have respectfully asked Obama why the women on his staff and why female staffers for Democrats in the Senate are paid far less than their male counterparts. Another hanging curveball that Romney didn’t even take a swing at.

    The Romney campaign was ultimately a campaign of missed opportunities; a campaign in which the candidate failed to make the case that he would be a better alternative to the incumbent. When asked how his “numbers would add up” concerning his economic policy, his answer was basically “trust me, the numbers add up.” Barack Obama could get by with his slogans and his platitudes as MSM dutifully filled in the details. But to run against an incumbent who the MSM clearly supported, the challenger apparently made the mistake that the MSM would do the same on his behalf. When you are running against an incumbent and the MSM, you better understand that you have to explain your positions yourself (particularly in the debates) rather than hope others will carry your message for you.

    *Though really, I’m not sure how much Mitt Romney really believes in free market capitalism given his desire to start a trade war with China.
    ** Frankly, I never quite understood what their criticism was in this instance. Was it just that “binders full of women” sounds funny?

    Part 2

    Rand Paul on Why Foreign Aid Should be Cut to Libya, Egypt, and Pakistan

    On Saturday, September 22, 2012 Rand Paul’s S.3576, a bill that would have “provide[d] limitations on United States assistance” (i.e. placed conditions on aid to Libya, Egypt, and Pakistan) was soundly defeated by a 81-10 vote. On the day before the vote, Paul gave an hour long speech (truncated, 10 minute version in the video below) on the Senate floor explaining to his colleges why sending tax dollars to foreign countries is a terrible idea, particularly foreign countries which are openly hostile to the US in word or deed. In the speech, Paul reminds us that the foreign policy of recent history that has far too often been forgotten by the American public pointing out that some of the recipients of our aid eventually became our enemies. The notion of “the enemy of my enemy is my friend” has been counterproductive. Saddam Hussein, Omar Qaddafi, the Mujahideen anyone? Anyone? Bueller? Bueller?

    Why The Big, Dumb Spending Cuts Nobody Wants Are A Good Idea

    Ezra Klein’s believes that it’s a horrible thing that the big, dumb spending cuts that nobody wants might actually happen:

    The initial idea was that if the supercommittee failed, there would be automatic spending cuts and automatic tax increases. This way, both parties would have an incentive to reach a deal. But Republicans refused the tax increases side. So instead, the two sides settled on automatic spending cuts to domestic programs to hurt Democrats and automatic spending cuts to defense to hurt Republicans. And thus the big, dumb spending cuts that no one wants came into being.

    …snip…

    You might wonder why Republicans and Democrats, both of whom agree we should cut spending, are so dead-set against these particular spending cuts. The answer is that they are very, very dumb. A certain number of programs — Social Security, Medicaid, Medicare beneficiaries and nearly all spending directly benefiting low-income Americans — are exempt, but beyond that, everything gets pretty much the same size cut.

    As a senior administration official said on a conference call today: ”The administration has no discretion in deciding the cuts identified in this report. The exempt versus non-exempt determinations are based on the requirements in the law. The administration can’t choose which programs to exempt or what percentage cuts to apply.” You can see exactly where those cuts would fall here.

    In other words: Spending we consider essential gets the same size cut as spending we consider wasteful. There’s no ability to make the cuts to farm subsidies a bit bigger and the cuts to, say, the FBI a bit smaller. It’s $1.2 trillion in deficit reduction in which we pretty much don’t make a single choice about what is and isn’t worth funding.

    I think that Ezra is right: these cuts are dumb. After all, that was the point. The point was to ensure that we’re going to get $1.2T of spending cuts, come hell or high water. And the fact that they’re dumb is a great incentive to find better ones.

    So the options are:

    1. Get $1.2T in spending cuts that we don’t really want, but which are better than not cutting spending at all.
    2. Get $1.2T in nice, targeted spending cuts that make a lot of sense.

    Contrast this to what would have happened if the sequester didn’t get put in place:

    1. Don’t get $1.2T in bad spending cuts.
    2. Don’t get $1.2T in good spending cuts, because Congress has no incentive to do anything.

    I personally believe that cutting spending by $1.2T over 9 years is a good thing. I would prefer that Congress actually try to figure out where cutting that spending is most effective, slashing unnecessary and outmoded programs and departments while leaving the necessary stuff (assuming it exists!) untouched. But I’d still prefer $1.2T in “bad” cuts over not cutting spending at all.

    Failure to make a deal on finding $1.2T in “good” cuts only serves as more evidence that Congress is a bunch of morons and that their collective approval rating should dip from the low teens to single digits. Frankly, that should bother them, but it doesn’t bother me.

    Either way, the American taxpayer wins.

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