Wednesday, August 31, 2011

Obama Makes the Case for State Control of Surface Transportation

Abolishing the federal gas tax will spawn real innovation in road construction.
Earlier today, Barack Obama decried the gridlock that has prevented Congress from passing a long-term surface transportation bill (highway bill) as unacceptable and inexcusable.  He also asserted that we must formulate a policy in which funding would be directed to those districts that need it the most, instead of politically motivated pork, such as the bridge to nowhere (which he supported in the Senate).  Well, unknowingly, Obama has made a strong case for transferring surface transportation funding, and its accompanying revenue source; the gasoline tax, back to the states.

The Highway Trust Fund was established in 1956 to fund the Interstate Highway System.  The fund, which is administered by the DOT’s Federal Highway Administration, has been purveyed by the federal gasoline tax, which now stands at 18.4 cents per gallon (24.4 for diesel fuel).  Beginning in 1983, Congress began siphoning off some of the gas tax revenue for the great liberal sacred cow; the urban mass transit system.  Today, mass transit receives $10.2 billion in annual appropriations.  Additionally, funding is misallocated for all sorts of local pork projects, such as bike paths and roadside flowers.

This inevitable cycle of federal government mission creep has led to the depletion of the Highway Trust Fund in recent years.  Much like the so-called Social Security Trust Fund, Congress is forced to fund its assortment of profligate and superfluous transportation projects with general fund revenues because gasoline tax revenues are insufficient.  In 2008, the trust fund was completely depleted, impelling Congress to replenish the fund with an additional $35 billion over the past few years.

Tuesday, August 30, 2011

Baltimore: A Case Study of Failed Government

In case anyone was wondering how such failures as Mayor Stephanie Rawlings-Blake can continue to get reelected in Baltimore, yesterday's Wall Street Journal has the answer.  In a piece titled, "How Property Taxes and the 'Curley Effect' are Killing Baltimore," two economics professors offer a trenchant explanation of the circuitous cycle of failed statism and electoral politics in cities like Baltimore.  Of course, Baltimore is the paradigm for such corrupt and odious leadership:

Away from the waterfront, this strategy's failure is apparent. The city has lost 30,000 residents and 53,000 jobs since 2000, marking the sixth consecutive decade of population and employment exodus. About 47,000 abandoned houses crumble while residents suffer a homicide rate higher than any large city except Detroit. The poverty rate is 50% above the national average.
Much of this decline is a result of the city's exorbitant property-tax rates, which are twice as high as any other jurisdiction in Maryland and Washington, D.C. The encouraging news is that all four major mayoral candidates are promising property-tax relief. [...]

In modern Baltimore, the machine has exploited class divisions, not ethnic ones. Officials raised property taxes 21 times between 1950 and 1985, channeling the proceeds to favored voting blocs and causing many homeowners and entrepreneurs—disproportionately Republicans—to flee. It was brilliant politics, as Democrats now enjoy an eight-to-one voter registration advantage and no Republican has been elected mayor in 48 years.

Be sure to read the full article here.

Monday, August 29, 2011

OK, Obama, Repeal the Entire Payroll Tax..But Save Social Security

After Labor Day, Obama plans to unveil his highly unanticipated jobs plan.  Much like his first jobs plan, this one will include massive stimulus handouts to special interests, prodigal infrastructure spending (as much as $556 billion), unprecedented extensions of unemployment benefits, and more welfare transfer payments.  Concurrently, he will inveigh against "rich" job creators and offer a healthy dose of vapid rhetoric regarding regulatory reform.  However, there will be something new – something more appealing to the skeptical electorate; extending the one-year cut in payroll taxes.

Obama intuitively knows that his failed Keynesian policies have been checkmated, and will no longer resonate with the public.  Accordingly, he plans to one-up Republicans in their own playbook, by offering a tax cut.  He will request that Congress renew the payroll tax cut for another year, keeping the employee's share of the tax at 4.2%.

While conservatives support any and every tax cut they can achieve, Obama knows that they are tepid regarding the payroll tax holiday.  Unlike most other broad-based, universal taxes, the payroll tax is used to fund a specific expenditure, and perhaps, the most important one – Social Security.  As Congressman Jeb Hensarling observes, “not all tax relief is created equal.” If we fail to collect such a whopping sum of the tax that purveys the trust fund, won't we bankrupt Social Security even further?  At a time when Social Security Disability Insurance is already running dry, Obama plans to bankrupt the old age trust fund by another $120 billion.

Oh, whoops, I forgot; there is no trust fund.  It has been run like a Ponzi scheme all along.

Sunday, August 28, 2011

Rick Perry Nails it on Social Security

Rick Perry, more than any other candidate, has had the courage to call out Social Security for the Ponzi scheme that it is.  Yesterday, he made it clear that he is not backing away from the position he articulated in his book that Social security must be reformed for the younger generation:

(Video-courtesy of the left-wing site, Think Progress, that thinks there is something wrong with reforming Social Security so young workers aren't forced into a Ponzi scheme.)

Thursday, August 25, 2011

Heritage Action's Legislative Scorecard

Not all tea is created equal

Well, the first comprehensive conservative report card of Congress is out, and we can now determine which members of the “Tea Party Congress” drink a hardcore brew.

Today, Heritage Action for America released their legislative scorecard for the pre-recess 1st session of the 112th Congress.  Unlike most other scorecards, this one was designed to separate the men from the boys.  Most traditional scorecards, and most prominently, the ACU annual report, tend to focus primarily on those votes which fundamentally divide the two parties.  They fail to probe some of the more courageous conservative votes against party leadership.

To that end, any Republican who is even minimally conservative is expected to score at or near 100%.  After all, at a minimum, any Republican should oppose Obamacare, vote down tax increases, and support the Republican annual budget.  This is how the likes of McCain, Graham, and Chambliss have been able to achieve stellar scores.  Except for those like Olympia Snowe, Susan Collins, and Dick Lugar, most Republicans will vote with their party on the final roll call of major bills.  In fact, anyone who is not on the list of 100% is someone who has voted with the Democrats in contravention to fundamental Republican values.  A perfect ACU score should be the floor, not the ceiling, for a conservative voting record.

The Heritage Action scorecard digs much deeper.

Perry vs. Obama at Age 22

A picture is worth a thousand words.

Wednesday, August 24, 2011

Roger Williams (R CAND, TX CD-33) Pins the Tail on the Donkey

Roger Williams, former Secretary of State under Rick Perry in Texas, is running for Congress to teach the young donkeys about the values of this country.  The newly-created 33rd district will cover the staunchly conservative suburbs of Fort Worth.  The Republican nominee will be a shoo-in for the general election, and it appears that we just might have our man in Roger Williams.

Here is Roger Williams’s epic campaign ad:

Texas Republicans have really exhibited good judgement in utilizing their talent this year.  Originally, there were several solid candidates running for the Senate seat being vacated by Kay Bailey Hutchison.  Once it became clear that there would be four new congressional districts, former Railroad Commissioner Michael Williams opted to run for Congress in the newly 25th district, while Roger Williams (not related to Michael) is beating up the donkeys in district 33.  This has left former Solicitor General Ted Cruz with the inside track for the Senate seat.  Good work, Texas Republicans.

If you want to help Roger Williams spread his message of self-reliance to the parasitic donkeys, you can check out his website and send him a donation.

CBO’s Latest Budget and Economic Outlook is Unrealistic

 If Obama's policies are the baseline, this outlook is way off line

The latest CBO budget and economic outlook is using baseline assumptions that are as realistic as flying unicorns.  Although they project a decade of mediocre growth and moderate deficits, even such a dismal projection is a pretentious view of reality.

On the budget side, CBO’s baseline outlook portends a $1.284 trillion deficit this year, and $3.487 worth of deficits over the ten-year budget frame, from 2012-2021.  The ten-year deficit predictions assume that the annual deficit will dramatically drop to $265 billion in just two years, and remain below $300 billion for the rest of the decade!  The previous baseline outlook in March foresaw a $1.4 trillion deficit in 2011 and $6.7 trillion in deficits for the subsequent ten years.  Even the March outlook was a lowball figure because the report presumed an unrealistic improvement in economic output, dramatic spikes in revenue, long-term record low interest rates, while obfuscating the costs of Obamacare all along.  The updated baseline outlook makes those assumptions on steroids.

The CBO gets their unrealistic budget estimates from predictions of economic growth that run counter to all of the current economic reports.  In turn, the robust unicorn economy will rapidly increase revenue, while decreasing spending on anti-poverty and unemployment programs.  CBO is predicting GDP growth of 2.3% this year, even though it has only grown by 0.8% for the first half of the year.  Additionally, they are predicting 8.5% unemployment by 2012.  Then, from 2013-2016, CBO is predicting an average of 3.6% GDP growth and 5.3% unemployment!  No wonder they predict revenues to rise to 20.2% of GDP – near historic records – by 2014.

For some perspective, compare those numbers to the estimates by other economists.  JP Morgan is predicting 1.3% GDP growth and 9.5% unemployment by the end of next year, while Goldman Sachs is predicting 2.1% GDP growth and 9.25% unemployment.

Tuesday, August 23, 2011

$500,000 of Green for Green Jobs, Red for the Rest of Us

It certainly pays to go green.  Well, at least until the greenbacks stop flowing – and bankruptcy kicks in.

Last year, the Competitive Enterprise Institute’s Chris Horner estimated that the $30 billion green handout in the stimulus bill cost taxpayers roughly $475,000 per job created.  According to the Wall Street Journal, that’s quadruple the cost of creating a job in a nonsubsidized private firm.  It turns out that Horner was right on the money, even for non-energy related “green” jobs.

Yesterday, Fox News reported on the results of a tree planting stimulus program in Nevada – and it’s not pretty:
In 2009, the U.S. Forest Service awarded $490,000 of stimulus money to Nevada’s Clark County Urban Forestry Revitalization Project, aimed at revitalizing urban neighborhoods in the county with trees, plants, and green-industry training.
According to, the U.S. government’s official website related to Recovery Act spending, the project created 1.72 permanent jobs.  In addition, the Nevada state Division of Forestry reported the federal grant generated one full-time temporary job and 11 short-term project-oriented jobs.

Supporters of the program claim that there was an unspecified amount of jobs created from “Spanish-language training for Hispanics in the landscaping and tree care industry.”  After all, these are probably jobs that Americans won’t do anyway.

Monday, August 22, 2011

The Entitlement Leviathan in Numbers

We need bold free-market, liberty-promoting solutions from our POTUS candidates.

Immediately prior to breaking for the August recess, Congress passed a bipartisan agreement to cut spending.  Well, sort of.

Leaders in both parties got together to do something evil and stupid; they agreed to the largest increase in the debt ceiling, without solving our debt problem.  They cut discretionary spending by $6.67 billion for FY 2012, from $1.0497 trillion to $1.043 trillion.  That's a bit more than half a percentage point.  Worse, discretionary spending (budget authority) only accounts for roughly 28% of our projected $3.7 trillion in outlays for FY 2011.  So we cut about 0.6% of 28% of our federal budget for next year!

But, fear not; the best is yet to come.  The mandatory entitlement spending reforms will be tackled by the super committee.  The only problem is that a committee with such luminaries as John Kerry, Patty Murray, and James Clyburn – will never cut a dime from mandatory spending.

Where does this leave us?

Here is a brief overview of our giant entitlement/dependency/welfare state, which if left unreformed, will lead to insolvency, engendering public riots to the degree that we have seen in Europe this year.

Friday, August 19, 2011

Ray LaHood Does Not Have Blank Check to Grant Waivers for EAS Program

Earlier this month, Senate Democrats brazenly forced a two-week partial shutdown of the FAA.  They were willing to hold 4,000 employees hostage and forgo millions in revenue from airline tickets, all for the purpose of securing their inveterate pork projects.  Democrats refused to pass the House extension bill because Republicans inserted minor limits on a rural pork program, better known as Essential Air Service (EAS).  They also blocked the bill because of an anti-labor provision that never existed in this stopgap bill.

The House-passed bill had two provisions to limit EAS: 1) It established a $1,000-per-ticket subsidy cap, which affects subsidized service at three airports.  2)  The extension eliminated subsidies for service to airports that are 90 miles or less from a large or medium hub airport.  This provision affects ten locations.

Originally, Harry Reid opposed the bill because his airport in Ely, Nevada, which enjoys a $3,720 per passenger subsidy, would be cut off under the first provision.  However, two weeks later, Reid admitted that "$3,500 per passenger is a little extreme," and was ready to pass the bill by unanimous consent.  A few hours later, Reid seemed to have amnesia of his earlier statement, and continued to block the bill on behalf of his colleague, John Rockefeller.  You see, Morgantown Municipal Airport, which enjoys a $1.5 million annual subsidy, is 75 miles away from the nearest medium hub airport in Pittsburgh.  As such, it would have suffered a cut under the second provision of the bill.  Rockefeller, the post-Byrd king of pork, was having none of that.

Finally, Rockefeller and Reid agreed to pass the House bill because they discovered language in the bill that grants the Secretary of Transportation authority to waive the restriction on subsidies for those within 90 miles of larger airports.  They were clearly anticipating that Secretary Ray LaHood, who used to be a Republican, would completely vitiate the intent of the bill.

There is only one problem: LaHood does not have a blank check to grant those waivers.  Pursuant to the text of the bill, the Secretary may grant a waiver only to those airports in which "geographic characteristics of the location result in undue difficulty in accessing the nearest medium or large hub airport."

I Refuse to Obey the Law

What's good for the goose...
In yet another demonstration of contempt for the rule of law and the separation of powers, the Obama administration has announced that it will no longer enforce our immigration laws.  Secretary of Homeland Insecurity Janet Napolitano proclaimed in a letter to the Senate that she will suspend deportation proceedings and grant amnesty to those who ostensibly fit the criteria of the Dream Act – a bill that was defeated with overwhelming bipartisan support of Congress.  Hence, Obama is publicly declaring that he will ensure our laws are not executed faithfully.

This unprecedented abdication on the part of the president begs the question – what sort of message does this convey to our youth regarding the inviolability of the rule of law?

What other laws will this president refuse to execute faithfully?  Will he direct the EPA to enforce cap and trade, or instruct the DOI to block the issuance of drilling permits?  Oh, he is already doing that.

And, most importantly, if the president is above the law, then why should any of us be compelled to adhere to laws that we regard as undesirable or unfair?  If Obama can refuse to enforce his core constitutional duties, why can’t we disregard his individual insurance mandate – a law that is an anathema to the constitution?

Ironically, the very illegals that remain in the country as a result of Obama’s shirking of his constitutional duties, will receive healthcare benefits from the unconstitutional Obamacare.  Remember when Obama claimed that illegals would be barred from those benefits?  Well, as Congressman Joe Wilson so presciently and succinctly declared, “YOU LIE.”  I guess the real question is this: does an illegal have the authority to opt out of the individual mandate?  Or can they play both sides of this lawlessness?

Not only has this president refused to uphold our immigration laws; he has thwarted the states and law enforcement agencies from doing so.  He has taken the unprecedented step of siding with foreign nations and suing two of our states for upholding the laws that he refuses to recognize.  This is the most profound and dangerous form of extremism in our government today, as it undermines the very core of our political system.

What if citizens would stop paying taxes, or refuse to participate in Social Security?  If the executive branch can countermand a law of Congress, why can’t the voters – those who grant Congress its authority – do the same?

This administration is setting a dangerous precedent.

Congress must reassert its constitutional authority over immigration law.  They should hold public hearings and shed some light on the darkest corners of this administrative power grab.  Additionally, as part of any budget negotiations for the FY 2012 continuing resolution, Republicans should ensure that no funds are allocated for the joint DOJ-DHS task force charged with granting these administrative amnesties.

This extreme president is beneath contempt.  He must be stopped.

Cross-posted to

Thursday, August 18, 2011

Chart of the Day

Anyone who thinks that Obama is a shoo-in for reelection is woefully uninformed and incorrigibly naive.

Wednesday, August 17, 2011

The Food Stamp Party is Stimulating Poverty

The loss of jobs is only half of the result of the government interventionist equation.  The other casualty of an economy driven by taxation, regulation, litigation, subsidization, monetary intervention, and debt is the crippling cost of living for all Americans.  [Yes, I was about to say middle class, but we would be wise to eradicate that sort of socialist innuendo from our vernacular.]

Earlier today, the latest wholesale inflationary numbers were released.  The core PPI rose 0.4% in July, while year over year PPI is now close to a three year high at 7.2%.  Additionally, food prices rose another 0.6% in July.  These numbers are quite disconcerting, given the sharp slowdown in economic activity.  The higher wholesale costs are inevitably passed down to consumers, forcing them to pay more for basic products, such as energy, food, and transportation.

While there are many cyclical factors that affect the price of food and fuel, and by extension, everything else; nonetheless, clearly central planning from the government has kept prices artificially high.

Tom Vilsack Calls for Another Stimulus..Food Stamps!

Folks, you can't make this stuff up.  Obama's Secretary of Agriculture Tom Vilsack is claiming that record food stamp enrollment in stimulating the economy.  He was actually bragging about the fact that there are 45 million people on the program:

Tuesday, August 16, 2011

GOP Must Hold the Line Against Obama’s ATM Politics With Free Trade

Obama imposing his bad luck on job creation and economic growth 

As Obama travels through America’s heartland on his teleprompter tours bus, he is touting a new plan to create jobs.  While he has offered few specifics thus far, Obama is calling for the ratification of the free trade agreements (FTAs) with Columbia, Panama, and South Korea as vehicles for job creation.  The rest of his jobs (killing) plan will be released at some later date, possibly at the time when Huntsman releases his proposal.

This newfound support for free enterprise is quite perplexing, given that he has held the FTAs hostage for a pet welfare program, Trade Adjustment Assistance (TAA), since the day he became president.
Democrats, at the behest of their Big Labor puppet masters, have held up the FTAs with three allied nations for over four years.  Now, amidst growing pressure to create jobs and keep up with other allied nations like Canada, Obama is willing to send the trade pacts to Congress on condition that they reauthorize the TAA.  The TAA is a subsidy program created in 1962, which arbitrarily rewards job training, relocation allowances, loans, grants, and unemployment pay to workers who supposedly lost jobs from FTAs.

So Obama is holding up a free market policy, which he readily admits will create jobs, for a program that indiscriminately throws money at obsolete jobs of special interests that are dubiously connected to FTAs.  What a jobs plan, Mr. President.

Monday, August 15, 2011

George W. Bush in 1999 vs. Rick Perry in 2011

How Much We Have Grown As Conservatives 

Watching Governor Rick Perry’s speech at the Red State Gathering, I was struck by the degree to which conservatism has grown at the highest levels of electoral politics, including presidential elections, over the past decade.

Twelve years ago, another Texan, George W. Bush, announced his presidential bid by ushering in a new era of conservatism.  At the time, following the longest Republican exile from the presidency since the ’60s, many conservatives were willing to jump on the bandwagon of the first viable Republican candidate, irrespective of his veiled insults to conservatism.

Here is an excerpt from President Bush’s announcement speech in Cedar Rapids, Iowa, on June 12, 1999:
“I’m running because my party must match a conservative mind with a compassionate heart. [...]
It is conservative to insist on education standards, basics and local control. It is compassionate to make sure that not one single child gets left behind.
I know this approach has been criticized. But why? Is compassion beneath us? Is mercy below us? Should our party be led by someone who boasts of a hard heart? I know Republicans – across the country — are generous of heart. I am confident the American people view compassion as a noble calling. The calling of a nation where the strong are just and the weak are valued.
I am proud to be a compassionate conservative. I welcome the label. And on this ground I’ll take my stand.”
The inconspicuous implication of Bush’s newfound dictum was that pure, unadulterated conservatism, while perspicacious in theory, lacked inherent compassion in its application.  He felt that it must be tempered with big government handouts and control over the educational system.  Consequently, upon assumption of the presidency, President Bush ushered in a new era of big government conservatism; an oxymoron, if there ever was one.  He governed with a muddled concoction of conservatism (pro-life and tax cuts) mixed with “compassion” aka statism (the largest expansion of government at the time).  And as the saying goes, the rest is history.

Sunday, August 14, 2011

Rick Perry's Announcement in South Carolina

In case you missed it, here is Rick Perry's announcement speech at our very own Red State Gathering in Charleston, South Carolina:

You can read the full text of this historic announcement here.

Friday, August 12, 2011

Let's Replace EPA With Employment Protection Agency

We must link the budget crisis with job creation and the cost of living.

When members of Congress return to Washington in September, they must confront the next budget challenge; a Continuing Resolution for FY 2012.  While the top line discretionary spending level has already been agreed upon through the debt ceiling agreement, the specific levels of funding for each department and agency are still up for debate (or closed-door negotiations, in this case).  Unfortunately, instead of prudently analyzing each line item of the budget through individual appropriations bills, as prescribed by the 1974 budget act, Congress will be forced to impetuously consider the entire federal budget in one bill.  There is one line item that should not be disregarded throughout the process; cutting down the EPA.

Obama and his socialist minions at the EPA intuitively understand that energy production in general, and fossil fuels, in particular, serve as the lifeblood of a free and prosperous economy.  This is why they have launched an inexorable war against our energy producers.  By disrupting our energy productivity, and replacing it with no-growth, impotent green energy sources, Obama plans not only to destroy thousands of jobs within the energy sector, but millions of jobs throughout every facet of the economy – jobs that are so reliant on reliable and cheap energy. The only jobs that will be sparred are the ones of his green corporate cronies, such as Johnson Controls, the electric car battery manufacturer in Michigan that was paid a visit by Obama on Thursday.

Let's review some of the most recent sinister attempts by the EPA to discomfit our energy producers, kill jobs, and raise the cost of living on the very objects of their reprehensible class warfare.

The EPA has considerably diminished the volume of oil production in Alaska over the past view years.  They are refusing to issue permits for drilling on and offshore, while encumbering the process with unrealistic regulations.  These actions have triggered an alarming decrease in the flow of oil through the Alaska pipeline, threatening its future sustainability.  Additionally, the EPA has delayed the construction of the Keystone XL pipeline for years, costing us thousands of jobs, cheap imports of oil-sands oil from our Canadian friends, and much-needed revenue to some heartland states.

What about natural gas?  Even though shale fracking for natural gas has produced an unprecedented amount of jobs in North Dakota and Texas, while producing cheap energy for our hungry markets, EPA Director Lisa Jackson is seeking to destroy it.  She is now collaborating with environmental extremists to terminate this revolutionary means of energy exploration indefinitely.

Thursday, August 11, 2011

Maryland is Still Most Democrat State in the Nation

OK. The District of Columbia is more Democratic than Maryland, and Hawaii Democrats enjoy a slightly larger registration gap over Republican in their state.  But Maryland is still at the top of the list., according to Gallup.  Click on the chart to view the partisan breakdown of each state:

Wednesday, August 10, 2011

GOP Picks for Super Duper Committee Won't Make a Difference

Forget about the tax issue; what happened to the spending cuts?

Well, the much anticipated picks for the debt deal Super Committee have been announced.  There will be much ink spilled over who was chosen and who was rejected.  However, the salient point is not the orientation of the committee, but the entire premise behind the committee itself.

Many conservatives will laud the choice of Pat Toomey for the committee; others will decry the pick of light bulb ban man, Fred Upton.  The reality is that none of this matters.

The Democrats have picked three radical leftists in the Senate, and are expected to follow suit with their House picks.  There is no way that Democrats on the committee will ever support meaningful spending cuts, repeal of Obamacare, or entitlement reform.  Harry Reid made sure to keep the likes of Kent Conrad and Mark Warner - senators, who have expressed some support for minor entitlement reforms – off the committee.

Even if the committee would miraculously approve some real spending cuts, does anyone really believe that Obama would support the recommendations more than he did Simpson-Bowles?  That blue-ribbon panel identified policy changes that both parties liked and hated; it called for some cuts and entitlement reform – and more taxes; nevertheless, Obama threw his own commission under the bus.  We are really to believe that Obama would approve a commission report that calls for good entitlement reforms with or without tax hikes?

Summer of Recovery 2.0

Tuesday, August 09, 2011

Conservative Confronts McCain for Attacks on Tea Party

Remember when John McCain read a Wall Street Journal op-ed on the Senate floor impugning the motives of tea partiers who opposed the Boehner debt plan.  Yes, the same debt plan that failed to preclude a credit downgrade, while punting all of the major cuts to a committee that will never cut anything - except defense.  Well, he is now taking some heat for those remarks at home.  Here is what a tea partier had to say to him at a town hall meeting:

Monday, August 08, 2011

It’s Time for a Balanced Approach to Deficits and Green Energy

We should raise revenue from green energy - to the extent that it exists.

The Democrats think the American people are stupid.  Throughout the debt ceiling imbroglio, Obama and every single elected Democrat have regurgitated their talking points about a balanced solution to the debt crisis.  They have insulted the intelligence of every voter by intimating that the budget can be balanced by eliminating a few tax credits.  No, they don’t want to talk about the tens of trillions in unfunded liabilities to Medicare and Social Security.  They refuse to confront the ballooning cost of all the welfare programs.  The only thing they want to discuss is eliminating a few tax credits for oil companies and corporate jets.

In May, the Senate took up a bill to eliminate $2 billion worth of tax credits for the gas and oil industry.  Let’s overlook their fallacious charges that these are unique handouts to the industry – and treat them as if they are expenditures.  We are slated to spend over $3.7 trillion this year, yet the Democrats are obsessing over $2 billion in tax credits.  Here are some of the major expenditures for this fiscal year, including the so-called handouts to big oil (in billions):

Yes, these tax credits barely register among our major expenses.

During the debate over the oil tax credits, Democrats tossed around the $21 billion figure that we will supposedly gain from increased revenues, if these credits are eliminated.  Again, let’s assume they are correct.  Using a 10-year budget frame, we are expected to spend another $46 trillion.  Democrats claim that their bill would have saved us $21 billion over 10 years.  That amounts to .00045% of our estimated outlays.

What about the much beleaguered corporate jet tax deduction?  That would save $3 billion over ten years!
So in the spirit of bipartisanship, let’s forge a deficit reduction deal that will truly achieve balance.  Since the Democrats hold these tax loopholes on the same level as the largest expenditures, let’s agree to terminate them.  In return for our acquiescence to “revenue increases,” they must accede to our demands for free market healthcare reform, private Social Security accounts, and welfare reform.

Sunday, August 07, 2011

The Consequences of a Credit Downgrade

After years of socialism and profligate spending, the chickens have come home to roost in DC.  S@P has downgraded the superpower from AAA to AA+, with a veiled threat of future downgrades, unless something is done to move towards balanced budgets.  There are going to be many ancillary consequences of this ominous fiscal calamity.  The Cato Institute has put out a useful 2-minute video explaining what to expect from the new reality.

Friday, August 05, 2011

Roundup of the Unemployment Numbers

For those who are interested in the wonky numbers of the unemployment report, here is a brief presentation of some of the more ominous figures.  The latest unemployment report shows that we are living through the quintessential Keynesian economic recovery.  We are not shedding more jobs at a terribly fast pace, but, instead of adding jobs by a pace of 500-800,000, we are stagnating at the bottom of the employment trench created by the recession.

  • Jobs created in July:  The net increase in new jobs this month was 117,000.  There were 154,000 jobs added to the private sector, while the public sector shed 37,000.  As such, the number of unemployed declined from 14.087 million in June to 13.931 million, lowering the unemployment rate from 9.2% to 9.1%.
  • Size of civilian labor force:  So why is this report such bad news?  Well, if you shrink the size of the pool, the unemployment rate will actually go down.  While a net-117,000 jobs were added in July, 193,000 long-term unemployed persons left the labor force.  In May, the civilian labor force stood at 153.693 million.  Now, there are only 153.228 in the labor force, a shrinkage of 465,000 people.  Of the remaining 153.228 in the labor force, there were 139,296,000 people working in July, down 38,000 from 139,334,000 in June.  There are 490,000 less workers than there were in May.  This is where you get the 9.1% figure.
  • Size of working age population:  While the number of people looking for jobs has shrunk, the population continues to grow rapidly.  The size of the civilian noninstitutional population grew from 239.489 million in June to 239.671 in July, an increase of 182,000.  Consequently, the employment-population ratio now stands at 58.1%, the lowest level since 1983.  We need almost 200,000 new jobs just to break even, yet we only gained 117,000 new jobs, and actually lost 193,000 from the labor force.  This is a recipe for disaster.
  • Comparison to January 2009-Obama’s inauguration date:  In January 2009, the labor force stood at 154.185.  This means that a net 957,000 people have left the labor force since Obama was inaugurated.  Concurrently, the size of the working age population grew over 4.9 million from 234.739 million at the time Obama was sworn in.  Also, in January 2009, 142.201 million were employed, almost 2.9 million more than today.   So we have a larger population, a smaller workforce (resulting from discouraged workers), and more unemployed.  As a result, there are almost 5.9 million more working age people who are not in the labor force today.  Also, there are 885,000 more people not in the labor force who want a job as compared to January 2009.
  • Duration of unemployment: The average (mean) duration of unemployment is 40.4 weeks, a record high. By comparison, the average duration was 19.9 weeks in January 2009.
Consider this your summer of recovery, data crunching open thread.

Thursday, August 04, 2011

The Debt Rises, The Economy Sinks

Not even a debt increase cheered by Wall Street can override the debt-induced economic stagnation. 

Despite being dispirited by the one-sided nature of the debt ceiling deal, most of us were looking forward to reaping the rewards from its only ancillary benefit; the impending stock market rally.  Much to our chagrin, the Dow dropped precipitously, losing over 600 points since the opening bell on Monday.  After the initial euphoria from the debt ceiling hangover began to subside, people have been forced to confront an inconvenient reality.  The problem with the economy is not the debt ceiling; it is the debt – and all that it represents; overbearing and job-killing government.

Late Sunday night, Republican leaders forged a bipartisan deal with the president to raise the debt ceiling another $2.4 trillion without any preconditions for the second tranche.  Despite pretentious claims that we were entering a new era of austerity, the debt deal has charted us on a trajectory to incur $7 trillion more in debt, even considering the unrealistic baseline projections of economic growth and revenue.

Well, the Treasury wasted no time utilizing its new credit card and devouring the spoils like the starved beast that it has been for the past few months.  On Tuesday, Treasury Secretary Tim Geithner issued $239 billion in new debt, almost 60% of the entire $400 billion increase in borrowing authority that Congress granted for the first round of the debt limit hike.  To put that in perspective with the “austerity side of the debt deal,” it will take 4.5 years to achieve a commensurate degree of savings from the discretionary caps imposed in the bill.  I guess that is one way of measuring dollar-for-dollar cuts.

Our total cumulative debt (including the intragovernmental share) now stands at $14.58 trillion, approaching 100% of out GDP for the first time.  We have joined the failed socialist experiments of Europe in this ominous distinction.

Nevertheless, at the very least, we should have enjoyed the inevitable market rally that was so eagerly anticipated by the bipartisan cheerleaders on Wall Street.  After all, our borrowing authority is inviolable, as we are slated to borrow trillions more over the next few years.  Hey, a few billion dollars of debt a day keeps the default away – and will forestall the greatest market crash ever.  Won’t it?

Party Loyalty Trumps Ideology for Cardin and Mikulski

While the debt ceiling deal contains very little in real spending cuts, for socialists like Maryland's two senators, the bill cuts too much.  As such, one would have expected them to join the likes of Bernie Sanders - and oppose the bill.  However, after vacillating back and forth Cardin decided that if his party leaders needed his vote, by George, they were getting his vote.  The Baltimore Sun has the report:

Sen. Benjamin L. Cardin rarely embraces drama, but as the denouement of the debt ceiling debate played out Tuesday, the Maryland Democrat became something of a mystery — undecided up until the very last minute on how he would vote.[...]

Cardin said he supported the measure in part because it includes language that protects Social Security, Medicare and Medicaid beneficiaries from direct cuts.
He noted that the automatic cuts, if triggered by inaction, would also fall on defense spending, traditionally a priority for Republicans.

And that, Cardin said, would put Democrats and Republicans on more equal footing than they have been all year.
"I know the base is angry," Cardin said. "I've been through enough tough votes to know that a few weeks from now, a few months from now, maybe, it'll be a little bit different."

Then again, what can you expect from someone who sees no connection between the debt ceiling and spending?

Wednesday, August 03, 2011

Harry Reid Admits He’s a Terrorist Hijacker of FAA Funding

Calling Joe Biden's counterterrorism unit

Update: Despite admitting that his demands are extreme, Harry Reid refused to approve the stopgap funding measure for the FAA, thereby ensuring a partial shutdown until September.

Throughout the debt ceiling fight, Harry Reid purported to be the only true compromiser, while painting the Tea Party as extreme hostage takers.  However, unlike most hostage takers, tea partiers made no demands of government for their own personal gain.  They simply wanted to preclude their children and grandchildren from incurring permanent indebtedness.  Harry Reid, on the other hand, has shown us the true meaning of hostage taking.  And he is now admitting it.

While the public was focused on the potential government shutdown over the debt ceiling debate, Harry Reid quietly forced a partial shutdown of the FAA.  For months, Reid has blocked a long-term extension of the FAA reauthorization, while forcing Congress to pass reckless short-term measures that lacked much-needed reform.

The last extension expired July 23, but Harry Reid has refused to consider the House-passed extension through September.  The House bill cut a subsidy program to three rural airports, where the cost of subsidized flights was hopelessly uneconomical.  One of those airports, White Pine County Airport in Ely, Nevada, enjoys a subsidy to the tune of $3,720 per passenger!  [Read more about it here]  Yet, Reid refused to relinquish his selfish pork, causing a partial shutdown of the FAA and the furloughing of 4,000 employees.  Additionally, the shutdown has cost the government millions in lost revenue from taxes on airline tickets.  So much for a balanced approach on revenue.

Airport in Ely, Nevada

Tuesday, August 02, 2011

Thank You Congressman Andy Harris

It is quite inspiring to have such an unvarnished conservative like Andy Harris representing Maryland.  In this blue oligarchy, we are lucky to elect any Republican, let a along a true conservative.  Yesterday, Congressman Harris opposed his own leadership and joined 65 other members in opposing the bill to raise the debt ceiling.  This bill handed Obama his full lifeline until after the election, without imposing any enforceable and transformational change (other than cutting defense and creating a 19th debt commission).

Most people don't appreciate how hard it is to oppose one's leadership, especially at such a pivotal time.  It is all the more inspiring that Harris is a freshman member who is willing to expend his political capital standing on principle.  Harris was also part of the select group of congressmen that opposed the CR deal in April.  Keep fighting on, Congressman Harris.

Now, if only we had people in leadership who exhibited such intrepid determination to limit the size of government!

Monday, August 01, 2011

9 Reasons to Oppose Boehner 4.0 Debt Deal

1) Obama gets his full lifeline, long-term debt limit increase that will take him beyond the election ($2.1-2.4 trillion), without making any transformational concession.  There is no realistic roadmap to entitlement reform; not a single agency or program, domestic or mandatory, will be eliminated; Obamacare is off limits; there will be no balanced budgets, ever.  We will still add trillions more to the debt over the next ten years.  Yes, there is a second tranche that will trigger the latter $1.2-1.5 trillion increase, but unlike previous versions of Boehner's plan, Republicans have no control over that trigger to use it as a precondition.

2) The only real cuts will be in 2012, when we cut $21 billion in outlays (just $7 billion in budget authority).  The rest of the $917 billion will be baseline cuts that permanently lock in the fundamentals of the Obama era.  This will overwrite and override the House-passed budget that remanded spending to pre-Obama levels.  In addition, the extra faux cuts create self-fulfilling fake interest savings, thereby double counting total savings.  Furthermore, how much of the discretionary cuts agreed upon for the first tranche of the debt increase will be from defense?  The White House put out a memo saying that "the discretionary savings are spread between both domestic and defense spending."

3) What about the $1.2-$1.5 trillion in savings and entitlement reform from the super duper debt commission 19.0?  Does anyone really believe that this commission will be more successful than Simpson-Bowles?  That blue-ribbon panel identified policy changes that both parties liked and hated; it called for some cuts and entitlement reform – and more taxes; nevertheless, Obama threw his own commission under the bus.  We are really to believe that Obama would approve a commission report that calls for the good entitlement reforms without tax hikes?  Oh, but then there would be an automatic sequestration that would cut a commensurate amount of spending.  Really? See #4

Why We Fight

Extraordinary times require extraordinary measures and lots of courage

Over the past week, the Tea Party has been impugned and maligned with more ferocity than ever before.  Amidst our push to balance the budget, downsize job-killing government agencies and programs, and preserve our AAA credit rating, we have been condemned as extremists, suicidal, and traitors.  Sadly, most of these acrimonious ad hominem attacks were propagated by those who purport to share the aforementioned goals, but feel repulsed by our “intransigent” sense of urgency.  Some have even regurgitated Democrat talking points suggesting that Reagan would be labeled a RINO by the Tea Party.

These writers and commentators who supposedly share our ultimate goals for limited government, yet condemn our tactics and sense of urgency, are lacking a sober understanding of the severity of our current predicament in relation to Reagan’s era.

As grim as the situation was at the time of Reagan’s inauguration in 1981, it simply doesn’t compare to the magnitude of our problems precipitated by the growth of the federal government, the insolvent debt, and rampant government dependency.  Reagan came to power and fought for limited government in order to preclude the very eventuality that we are experiencing today.  Today, in 2011, we are suffering under every pernicious effect of a tyrannical government; the magnitude to which Reagan did not experience, but presciently attempted to avert.

Although Reagan succeeded in his fundamental goals of stalling the inexorable growth of government, cutting taxes, rolling back some regulations, and winning the Cold War, he realized at the end of his presidency that those victories were not sufficient to countermand the self-perpetuating growth of government dependency and tyranny.  He knew that due to factors which were mostly beyond his control he had failed to eliminate a significant number of agencies and programs that serve as the backbone for the statist society.

Reagan had learned that liberals had insidiously co-opted so many rent-seekers in government that it was impossible to win a war of attrition by fighting agency-to-agency and program-to-program warfare.  Fifty years of steady movement toward socialism had shown that any edict promulgated by the federal government, much like the ancient Persian government described in Esther, “may not be revoked.”  He realized that something drastic had to be done to prevent the immutable growth of government that he so ominously envisioned after his departure.