Combs Spouts Off

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Posts Tagged ‘spending’

It’s called the stupid party for a reason

Posted by Richard on March 31, 2011

The Republicans have been pushing for $61 billion in spending cuts for FY2011 (significantly less than the $100 billion they promised before the election), and the Democrats have been denouncing even that modest cut as "draconian" and "extreme."

You'd think this would be a challenge the GOP would be eager to take on. If you have even a modicum of communication skills and public relations savvy, how hard can it be to ridicule the absurd argument that cutting $61 billion — 1.6% — out of a budget of $3,700 billion is "draconian" and "extreme"? It barely puts a tiny dent in the $1,600 billion deficit. Do they really fear that the average American can't grasp that point?

Let's put the federal fiscal crisis into comparable (approximate) household numbers that people can relate to: Let's say your household income is about $42,000 ($3500/month). But you're spending about $74,000 ($6167/month). And you're putting the $32,000 difference on your credit cards (on which you already owe over $300,000). Would cutting your spending by less than $100 a month really be "draconian"? Does it even seriously address the terrible financial situation you're in?

To me, this seems like an argument that's a slam-dunk win, especially in the political climate that gave us the Tea Party movement and resulting electoral tsunami of last November. And yet, the Republican leadership seems terrified of taking a hard stand and drawing a line in the sand. According to the Washington Post, they're ready to cave — settling for $30 billion in cuts and giving up on defunding anything — and Dan Mitchell isn't pleased: 

Yesterday, I analyzed how the GOP should fight the budget battle, but I may have made a big mistake. I assumed the Republican leadership actually wanted to do the right thing. I thought they learned the right lessons from the disastrous Bush years, and that the GOP no longer would be handmaidens for big government. And I naively assumed that the Republican leadership would not betray the base and stab the Tea Party in the back.

I thought the GOP leadership would fight and get a decent deal rather than unilaterally surrender. If the Washington Post report is true and Republicans act like the French army, it will discourage the base and cause a rift with the Tea Party. So it’s dumb politics and dumb policy.

And that display of cowardice by House Republican leaders follows on the heels of the report that Senate Republicans are going to agree to support a debt limit increase if the Democrats merely allow a symbolic vote on a balanced budget amendment. No, Democrats don't have to support it — they just have to allow a vote, which the Republicans are guaranteed to lose. A repeat of a vote they've already had (and lost), a vote that they could force by parliamentary means in any case. In other words, they're giving up their biggest leverage in return for … nothing.

Stupid party seems like such a mild and inadequate term.

There are a few shiny gems amidst the steaming pile of cow-flop that is the GOP. Sen. Marco Rubio won't vote for a debt limit increase unless it comes with a whole bunch of serious conditions: 

"Raising America's debt limit is a sign of leadership failure." So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America's debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.

I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.

Bravo. Read the whole thing

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Send a message: Spend Less Now

Posted by Richard on March 8, 2011

AFP-Colorado is holding a rally at the State Capitol Wednesday to send a simple message to the Governor and Legislature:

Are you tired of watching those who rally the government for more and more on the evening news every night while you are at the kitchen table figuring out how your family is making ends meet?
It’s time that you stand up and let your voice be heard!
Some legislators in the Colorado Senate just proposed a $1.6 billion tax increase without offering any ideas to reduce government spending.
Colorado faces a budget shortfall of more than $1 billion. It is time we tell our Colorado leaders to Spend Less Now!!
Join us as we make our voices heard at the State Capitol.

Wednesday, March 9th
Colorado State Capitol – West Steps
Noon

If you're in the Denver area and can swing by there on your lunch hour, please add your voice. If, like me, you can't make it to the rally, go to www.spendlessnow.org to sign the Spend Less Now petition.

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Deficit reduction chicanery

Posted by Richard on November 11, 2010

The "bipartisan" deficit-reduction commission has released its preliminary plan, and as many suspected, it spares government profligacy and sticks it to the taxpayers. Rush Limbaugh noted that the 50-page report uses the word "tax" 62 times. Americans for Tax Reform said, "The plan ignores every suggestion submitted by ATR President Grover Norquist to the Commission that would have balanced the budget without raising taxes. In fact, the Commission Co-Chairs refuse to acknowledge the role overspending has played in the economic climate, setting spending at the exorbitant FY2010 levels."

Not so, said commission member and Sen. Judd Gregg (RINO-NH): 

Sen. Gregg said that overall, federal spending takes a bigger hit in the plan than taxpayers do. The plan's goal is to reduce federal spending and federal revenues to 21% of gross domestic product. Federal revenues currently are projected to be about 19% of GDP in 2015, and outlays about 23%.

It would seek to achieve the pullbacks through a mix of spending cuts and increasing tax revenues—about 75% in spending reductions and about 25% from the tax side.

So it's 75% spending cuts and 25% tax increases? Three times as much in spending cuts as in tax increases? Really? Mind you, I'm not a math whiz like my friend David, who can do calculations in his head that would take me an hour with a calculator and a textbook. But something seems way off with Sen. Gregg's math.

He says the plan will cut spending from 23% of GDP to 21% of GDP. OK, according to the Commerce Dept., GDP is about $14.7 trillion now, so let's just use that number and get out the calculator.

23% − 21% = 2%
2% × $14730.2 billion = $294.604 billion

So the plan cuts spending by about $295 billion (plus 2% of whatever GDP increase there is). Now lets crunch the revenue increase, where they want to go from 19% to 21% (BTW, in the 70+ years of OMB data, revenues have never been as high as 21% of GDP).

21% − 19% of GDP = 2%
2% × $14730.2 billion = $294.604 billion

Hmm, that number looks familiar… Why, it's the same number by which their plan cuts spending! So, taxes go up about $295 billion, and revenues go up about $295 billion (adjusted upward, in both cases, for GDP growth) — yet, somehow, according to Sen. Gregg, the plan is 75% spending cuts and 25% tax increases! How is that possible? Have they magically discovered vast new sources of revenue that don't involve taxing people?

Of course not. This is the statist scam of counting it as a "spending cut" when they reduce your mortgage interest deduction, charitable deductions, and other so-called "loopholes." Just like the 9th Circuit Court in Wynn v. Garriott, the statists on the commission believe that all your income belongs to the government. So a tax deduction or credit is an "expenditure," and reducing or eliminating a tax deduction or credit — that is, letting you keep less of your money — is a "spending cut."

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The Obama spending binge in perspective

Posted by Richard on September 14, 2010

Here's a factoid I almost missed, and maybe you did too: In the first 19 months of the Obama presidency, the US government's publicly-held debt increased by more than it did under all presidents from George Washington through Ronald Reagan (emphasis added):

The U.S. Treasury Department divides the federal debt into two categories. One is “debt held by the public,” which includes U.S. government securities owned by individuals, corporations, state or local governments, foreign governments and other entities outside the federal government itself. The other is “intragovernmental” debt, which includes I.O.U.s the federal government gives to itself when, for example, the Treasury borrows money out of the Social Security “trust fund” to pay for expenses other than Social Security.

At the end of fiscal year 1989, which ended eight months after President Reagan left office, the total federal debt held by the public was $2.1907 trillion, according to the Congressional Budget Office. That means all U.S. presidents from George Washington through Ronald Reagan had accumulated only that much publicly held debt on behalf of American taxpayers. That is $335.3 billion less than the $2.5260 trillion that was added to the federal debt held by the public just between Jan. 20, 2009, when President Obama was inaugurated, and Aug. 20, 2010, the 19-month anniversary of Obama's inauguration.

Lots of change. Not much hope.

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U.S., Europe on different paths

Posted by Richard on June 26, 2010

US Treasury Secretary Tim Geithner told the BBC that the United States can "no longer drive global growth," and that the world "cannot depend as much on the US as it did in the past." There's a good reason for that.

The administration of which Geithner is a part apparently has as its goal cutting the US down to size — hobbling our economy, reducing our standard of living, slashing the "disproportionate share of the world's resources" we consume, and driving us toward a stagnant society that's more egalitarian because the successful have been forcibly impoverished.

Geithner also said that Europe and the US are taking "different paths, at a different pace," and he's not kidding. As most other developed nations are moving away from socialism in an attempt to restore economic growth and fiscal responsibility, the Obama administration is moving the US as fast as it can in the opposite direction.

So now we have the ironic situation of European socialist countries defending their government spending cuts against attacks from Obama and arguing against Obama's calls for more government "stimulus" programs. For instance

Germany and the United States appear set for a heated showdown at this weekend's G20 summit in Canada after Chancellor Angela Merkel flatly rejected warnings from President Barack Obama that Europe's attempts to save its way out of the debt crisis could put fragile global economic growth in danger.

She added in a recent rebuttal of economic stimulus packages: "If we don't go for sustainable growth, but just create puffed-up growth, we will pay for that with another crisis." 

Merkel isn't alone. While the Obama administration embraces protectionism and fiscal profligacy, Britain's David Cameron calls for progress in the Doha free trade talks and embraces the fiscal conservatism that's becoming increasingly popular around the world:

"Delivering progress on Doha will not be easy. However, I’m also impatient for change and people in Britain, Canada, Asia, Africa and elsewhere can't wait for negotiators to come to agreement.

"World leaders have made previous commitments on Doha in good faith – but despite almost a decade of talks, there’s been no breakthrough."

The comments come as America noticeably distances itself from the economic agenda of most other world powers.

Once internationally isolated, Mr Cameron's fiscal conservatism now constitutes something akin to a consensus among world powers, and president Barack Obama is isolated in his desire for further spending – a plan he has been struggling to get through domestically.

Heck, even China has repeatedly chided the Obama administration about its fiscal irresponsibility. You know we're in trouble when the Chicoms are saying our government is getting too big.

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Concealing the grim budget news

Posted by Richard on May 26, 2010

Rick Manning of Americans for Limited Government:

House Democrats plan to leave the country without a budget according to House Majority Leader Steny Hoyer who stated, “It’s difficult to pass budgets in election years because they reflect what the [fiscal] status is.”

Now that’s courage, leadership and transparency.

Remember, the Democrats hold 59% of the seats in the House with a 255 to 176 advantage over the Republicans, yet it is too hard to put a budget together?

For perspective, consider election year 2002 when Speaker Dennis Hastert enjoyed a slender 222 to 211 advantage, yet our nation was not left without a budget.

The ranking Republican on the House Budget Committee, Paul Ryan, has called this decision, “an unprecedented failure to govern.”

I call it unprecedented cowardice and dereliction of duty.

I call it a calculated and cynical attempt to hide the ugly truth from the American people during the run-up to the November elections. Will it work? Maybe not this time. Michael Barone thinks there's something different about the current mood of the country: 

It has long been a maxim of political scientists that American voters are ideologically conservative and operationally liberal. That is another way of saying that they tend to oppose government spending in the abstract but tend to favor spending on particular programs.

In the past, rebellions against fiscal policy have concentrated on taxes rather than spending.

The rebellion against the fiscal policies of the Obama Democrats, in contrast, is concentrated on spending. The Tea Party movement began with Rick Santelli's rant in February 2009, long before the scheduled expiration of the Bush tax cuts in January 2011.

What we are seeing is a spontaneous rush of previously inactive citizens into political activity, a movement symbolized but not limited to the Tea Party movement, in response to the vast increases in federal spending that began with the TARP legislation in fall 2008 and accelerated with the Obama Democrats' stimulus package, budget and health care bills.

The Tea Party folk are focusing on something real. Federal spending is rising from about 21% to about 25% of gross domestic product — a huge increase in historic terms — and the national debt is on a trajectory to double as a percentage of gross domestic product within a decade. That is a bigger increase than anything since World War II.

I hope Barone is right — and that this long-overdue revolt against government spending is not too little or too late. 

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Restoring fiscal sanity in New Jersey

Posted by Richard on February 17, 2010

Newly elected New Jersey Governor Chris Christie addressed the legislature last week on the state's budget crisis, and I finally got around to reading the speech*. Wow. It's a humdinger — refreshingly honest, with no punches pulled and no shying away from the tough decisions. Christie quickly made clear just how dire the state's situation is:

New Jersey is in a state of financial crisis. … For the current fiscal year 2010, which has only four and one-half months left to go, the budget we have inherited has a two billion dollar gap. The budget passed less than eight months ago, in June of last year, contained all of the same worn out tricks of the trade that have become common place in Trenton, that have driven our citizens to anger and frustration and our wonderful state to the edge of bankruptcy.

What do I mean exactly? This year’s budget projected 5.1 % growth in sales tax revenue and flat growth in corporate business tax revenues. In June of 2009, was there anyone in New Jersey, other than in the department of treasury, who actually believed any revenues would grow in 2009-2010? With spiraling unemployment heading over 10%, with a financial system in crisis and with consumers petrified to spend, only Trenton treasury officials could certify that kind of growth. In fact, sales tax revenue is not up 5%, it is down 5.5 %; and corporate business tax revenue is not flat, it is down 8%. Any wonder why we are in such big trouble? Any question why the people don’t trust their government anymore and demanded change in November? Today, we must make a pact with each other to end this reckless conduct with the people’s government. Today, we come to terms with the fact that we cannot spend money on everything we want. Today, the days of Alice in Wonderland budgeting in Trenton end.

Our Constitution requires a balanced budget. Our commitment requires us to begin the next fiscal year with a prudent opening balance. Our conscience and common sense require us to fix the problem in a way that does not raise taxes on the most overtaxed citizens in America. Our love for our children requires that we do not shove today’s problems under the rug only to be discovered again tomorrow. Our sense of decency must require that we stop using tricks that will make next year’s budget problem even worse.

Christie cut spending in 375 state programs — practically everything he could legally cut by executive action — in order to close the $2 billion current-year shortfall. Then he took aim on the years to follow and made it clear that biggest problem is an absurdly generous pension and benefit program for the state's unionized workers: 

I am encouraged by the bi-partisan bills filed in the Senate this week to begin pension and benefit reform. … 

These bills must just mark the beginning, not the end, of our conversation and actions on pension and benefit reform. Because make no mistake about it, pensions and benefits are the major driver of our spending increases at all levels of government—state, county, municipal and school board. … 

Let’s tell our citizens the truth—today—right now—about what failing to do strong reforms costs them.

One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life and nearly $500,000 for health care benefits — a total of $3.8m on a $120,000 investment. Is that fair?

A retired teacher paid $62,000 towards her pension and nothing, yes nothing, for full family medical, dental and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it “fair” for all of us and our children to have to pay for this excess?

The total unfunded pension and medical benefit costs are $90 billion. We would have to pay $7 billion per year to make them current. We don’t have that money—you know it and I know it. What has been done to our citizens by offering a pension system we cannot afford and health benefits that are 41% more expensive than the average fortune 500 company’s costs is the truly unfair part of this equation.

New Jersey isn't the only state being sunk by public employee unions and the politicians who buy their votes and support with future taxpayers' money. As Doug Ross pointed out, California, New York, Illinois, and Massachusetts, to name just a few, are in the same leaking boat. And those union workers who think they've got it made now are going to end up all wet.

Herb Stein famously said, "If something can't go on forever, it won't." Retirees collecting more than they ever earned while working, 50-year-olds retiring at 90% of their highest salary (indexed for inflation), employee pension and health plan contributions in the single digits (and declining in some places) while unfunded pension liabilities have grown into the trillions — these things simply can't go on forever. Taxes can't be raised high enough to let this continue. Something's going to have to change, and soon. 

In addition to a more balanced mix of employer and employee contributions and an actuarially sound schedule of benefits, I suggest one simple rule change for all government workers (heck, for everyone with a defined-benefit pension plan): Retire after 30 years if you want, but pension payments don't begin until age 65. If you're only 50, go get another job for the next 15 years (that's what many of them do anyway, collecting both a paycheck and a pension, and eventually getting two pensions). 

* In Firefox 3.5, this website doesn't lay out properly, and some of the text is cut off. It's fine in IE 7. Or you can click Print this page, which opens a new window containing the whole speech. Just cancel the Print dialog and start reading (that trick also saves you a lot of clicking, since otherwise the speech spans 9 rather short pages). 

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More and more bureaucrats earning more and more

Posted by Richard on February 5, 2010

Last Sunday, on ABC's This Week, in an interview with Baba Wawa, Scott Brown called for a freeze on federal hiring and federal pay raises (something he'd advocated before on the campaign trail):

WALTERS: President Obama has asked for a spending freeze on almost everything except matters like the military, Social Security, and Medicare. He says he's going line by line through the budget. Now, you have said that's not enough for you; that you want to cut spending and not just freeze it.

Time out: What a bogus question. The "almost everything except" that's supposed to be frozen amounts to just 13% of the federal budget, according to the Cato Institute. So 87% of the nearly $4 trillion dollar budget is exempted from the Obama "freeze." And as Cato's Chris Edwards noted, "a very large part of the 2009 spending spike of $699 billion will be sloshing forward into 2010 and later years," so even that 13% isn't really "frozen" — it will grow by the hundreds of billions of yet-unspent "stimulus" funds already appropriated and still "sloshing" around.

So what are the first 3 items that you would cut?

BROWN: The problem with what the president said is he's not doing it until 2011. We need to do it immediately. We need to put a freeze on federal hires and federal raises because, as you know, federal employees are making twice as much as their private counterparts.

Sen. Brown's assertion about federal pay apparently came from a Cato study from last fall based on Bureau of Economic Analysis data. It showed that total compensation (including fringe benefits, which are much more generous for federal employees than those in the private sector) averaged $119,982 for federal civilian employees versus $59, 909 for those in the private sector.

Americans for Limited Government's Carter Clews thinks Sen. Brown's proposal is a good beginning, but doesn't go far enough. He thinks we should cut the federal government's workforce of 1.9 million civilian employees (which has grown steadily for many years, in good times and bad) instead of just freezing it:

Private sector vs. government employment

Scott Brown was right – as far as he went. And he should have gone much further. We don’t simply need to put a freeze on federal hires and raises. We need to fire federal employees. The American people, themselves, are clearly prepared to do their part come November. But, it would be a chipper idea to get a head start now by firing about ten percent of the drones and dregs now feeding from the federal trough.

Everywhere else in America, workers are reporting to work each morning not knowing whether they will have a job by the end of the day. More than ten percent of American workers – if you believe Barack Obama’s Labor Department – are now unemployed. And if you add those who are working part time because they can’t find full time jobs, as well as those who have simply given up looking, the figure is nearly double that.

But, there is one place where no one worries about losing his or her job, where the very idea of a pay cut is little more than laughable, and where the next pay raise is as certain as the sun rising in the east and Barack Obama spending money. No, it’s not the Enchanted Kingdom. It is, of course, the federal “work” place.

Charles Anderson thinks firing just 10% is totally inadequate: 

It is almost impossible to fire a federal employee, but the government would work much better if at least 20% of them were fired.  That is just the one's who are not even trying to do their jobs.  If you were to fire the ones who are trying somewhat, but doing their jobs badly, that would eliminate another 30% of federal workers.  Then there are those who are doing what they are assigned to do adequately well, but what they are doing is so wrongheaded that it is hurting the country.  Fire them and you will have eliminated another 25%.  The remaining 25% might largely be federal employees who are doing things that ought to be done and doing them well enough that it is reasonable to spare them the axe.

I'm with Charles on this. I like his math. Cutting the federal payroll by about 75% sounds pretty good to me. 

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Budget madness

Posted by Richard on February 2, 2010

In the New York Post, Brian Riedl tried to put the President's breath-taking 2011 budget into perspective (bold emphasis added):

Last year, Obama swept into office promising to make tough choices — and then released a budget proposing the largest debt-and-spending spree in American history. This year, he's at it again: Over 2010-2019, his new plan boosts spending another $1.7 trillion and the deficit by $2 trillion over what he proposed last year.

In fact, this year's budget shows yearly deficits as much as 49 percent larger than even last year's bloated proposal. This spending spree will drive up both taxes and deficits to levels unseen in US history.

Nor are the Obama deficits a temporary result of the recession. Despite a modest recovery, the 2010 budget deficit will be higher than the 2009 deficit. Nearly 42 cents of each dollar Washington spends will be borrowed.

Even by 2020 — which Obama's planners assume will be a time of peace and prosperity — annual deficits would still exceed $1 trillion. By that point, nearly a fifth of all taxes would go toward paying the interest on this record debt.

The president who said "I didn't come here to pass our problems on to the next president or the next generation — I'm here to solve them" would, over the next decade, dump $75,000 per household in added debt into the laps of our children and grandchildren. 

Those disturbing budget numbers include the three-year "freeze" (starting next year) that the President bragged about as proving he's a fiscally disciplined deficit hawk — a "freeze" that will theoretically prevent a pitiful $20 billion of additional spending in a budget of nearly $4 trillion (that's $4,000 billion for the math-challenged).

I can think of only three explanations for what the Obama administration is doing to this country:

  1. The President and his top advisors are cynical manipulators, saying what they're saying to fool us, and doing what they're doing to accumulate power and wealth for themselves and their friends, while betting that the day of reckoning will fall on someone else's watch.

    If that's the case, they're like many politicians who preceded them, but on a much larger and more reckless scale. And they're much more ignorant and lacking in judgment.

  2. The President and his top advisors genuinely believe that they can improve the economy and make us all better off by spending in excess of 25% of GDP and enacting massive tax increases, especially (but not exclusively) on "the rich" — i.e., the producers, the people and businesses that create jobs and wealth.

    If that's the case, they're out of their minds. Completely delusional.

  3. The President and his top advisors are rabid leftist ideologues intent on deliberately destroying capitalism and dragging down the successful and productive regardless of the effect on the economy. They're determined to create a more egalitarian (albeit much poorer) society, no matter what the consequences.

    If that's the case, there is no dissuading them, compromising with them, or appealing to their patriotism, values, or concern for average Americans.

I'd like to believe that #1 is the case (because then they could be reasoned with, cajoled, bullied, or bribed). But their utter failure to adjust after multiple electoral warnings (including an astonishing repudiation in Massachusetts), their unwillingness to "triangulate" a la Clinton and tack to the center even a bit, their dogged determination to "double down" regarding takeovers of health care, energy, etc., and their unrelenting focus on wealth redistribution — these things make it more and more likely that, sadly, either #2 or more likely #3 is the case.

As the late Herb Stein said, "If something cannot go on forever, it will stop." This fiscal insanity clearly can't go on forever — or even, I suspect, for a decade. It will stop either because people with a modicum of good sense and concern for the nation recognize the danger and make it stop or because the dollar and the economy completely collapse.

But it seems that the former are not in charge.

That must change, and the sooner the better. This November would be good.

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Stimulus spending necessarily costs jobs

Posted by Richard on January 25, 2010

Veronique de Rugy graphed employment and labor force changes against the government's "stimulus" spending, and the results aren't pretty:

Using data from the administration’s website Recovery.gov and from the Bureau of Labor Statistics, this accompanying chart shows the monthly increase in the number of unemployed workers and the shrinkage of the civilian labor force in tandem with the administration’s stimulus spending. In other words, it shows how not only that many workers have lost their jobs since the administration started spending stimulus funds, but also that many more workers have exited the labor market. The civilian labor force shrinks when individuals who were looking for work or were employed decide that their labor market prospects are not good enough to keep looking for a job or to stay employed. For instance, some people might decide to go to grad school instead of keeping a poorly paid job, while others might decide to not seek a job and instead stay home with their kids. One reason for the shrinkage could be that the current economic state is so bad that workers feel it is not worth their time and energy to keep looking for a job when there is no hope in sight.

Two things are sure. First, if it weren’t for workers’ mass exit from the labor force (600,000 workers exited in December alone), the unemployment numbers would look even worse that they already do. Second, government spending cannot create jobs.

(HT: Instapundit)

This shouldn't surprise anyone with a modicum of economics education. In fact, it's an utterly predictable result. A study released last March by researchers at Madrid's Juan Carlos University determined that each "green" job created by Spain's rush to embrace "alternative" energy (at a cost of $750,000 apiece in subsidies) cost the Spanish economy 2.2 jobs elsewhere in the economy.

The problem isn't specific to "green" energy, and it doesn't matter whether you're talking about direct government hiring, government contracts, government mandates on private activities, or government subsidies.

When government takes resources out of the economy (by increased taxing or borrowing) to fund any of these activities, it redirects resources from a more productive use to a less productive use. If that weren't the case, the heavy hand of government wouldn't have to forcibly redirect of those resources.

Ipso facto, these activities make us as a society poorer — although they certainly enrich the special interests who benefit from the redirection of those resources.

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Free money from Obama’s stash

Posted by Richard on October 9, 2009

Remember when they promised us the $780 billion in "stimulus" spending would produce jobs, funding shovel-ready projects that would get the economy moving? Not in Detroit. There, they just created a lottery for free money. Instead of creating jobs, they stimulated a chaotic mob scene, with fights and injuries and a near-riot. Welcome to Obama's redistributionist America.

[YouTube link]

Via The Virginian, here are a couple of transcripts of WJR's Ken Rogulski interviewing some free money lottery participants (emphasis added): 

ROGULSKI: Why are you here?
WOMAN #1: To get some money.
ROGULSKI: What kind of money?
WOMAN #1: Obama money.
ROGULSKI: Where's it coming from?
WOMAN #1: Obama.
ROGULSKI: And where did Obama get it?
WOMAN #1: I don't know, his stash. I don't know. (laughter) I don't know where he got it from, but he givin' it to us, to help us.
WOMAN #2: And we love him.
WOMAN #1: We love him. That's why we voted for him!
WOMEN: (chanting) Obama! Obama! Obama! (laughing)

And the other one:

ROGULSKI: Did you get an application to fill out yet?
WOMAN: I sure did. And I filled it out, and I am waiting to see what the results are going to be.
ROGULSKI: Will you know today how much money you're getting?
WOMAN: No, I won't, but I'm waiting for a phone call.
ROGULSKI: Where's the money coming from?
WOMAN: I believe it's coming from the City of Detroit or the state.
ROGULSKI: Where did they get it from?
WOMAN: Some funds that was forgiven (sic) by Obama.
ROGULSKI: And where did Obama get the funds?
WOMAN: Obama getting the funds from… Ummm, I have no idea, to tell you the truth. He's the president.
ROGULSKI: In downtown Detroit, Ken Rogulski, WJR News.

You can't imagine how much that depresses me.

Gregory of Yardale at Moonbattery thinks this is the model Obama citizen:

There you have the core of the Democrat base, someone lining up for money the government has taken away from someone else (future generations, in this case), who has done nothing to earn it, who doesn't give a damb where it came from, and is happy that Obama is looking out for her.

And Tim Geithner's bailout buddies at Goldman Sachs are no better.

I'd amend Gregory's assessment slightly. These aren't model citizens, they're model subjects.

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Happy Friedman Day!

Posted by Richard on June 7, 2009

You've no doubt heard of the Tax Foundation's "Tax Freedom Day," the day when Americans have finally earned enough money to pay all our taxes. This year, it was April 13. But because of borrowing, taxes don't pay the full costs of government. This year, it's not even close.

Today, we've finally reached what the American Institute for Economic Research calls Friedman Day, the day that we've worked enough to pay for all government spending. Friedman Day has been coming later and later in the past eight years, and this year it came seven weeks after Tax Freedom Day and nearly halfway through the year: 

The reason? The federal government deficit for the fiscal year ending Sept. 30 has mushroomed to $1.84 trillion.  This means that about 46 cents of every dollar of federal spending will be financed by borrowing through the sale of new U.S. Treasury securities. 

Nor is the current 2009 deficit simply a one-year spike. The most recent estimate for the 2010 deficit is $1.3 trillion, still about 8.5% of GDP.

And the debt will go up accordingly, by another $1.3 trillion.

The United States seems to have entered a new era of historically high deficits and a national debt that is therefore growing by leaps and bounds.  Emergency or not, temporary or not, this is new territory for the federal government and for the economy.

You and I aren't paying the difference between Tax Freedom Day and Friedman Day out of our pockets, but we're on the hook for it — or our kids and grandkids are. And no, we don't "owe it to ourselves." We owe more than two-thirds of it to foreign investors and governments. And they've been getting antsy about our government's profligacy. 

When the subprime mortgage crisis heated up last July, foreign governments began to worry about the value of the U.S. securities they were holding.  When Fannie Mae and Freddie Mac started to look insolvent, Treasury officials had to make phone calls around the world, reassuring foreign holders of Treasury and especially "agency" (Freddie and Fannie) securities. Then the government nationalized Freddie and Fannie, taking explicit responsibility for their liabilities.

This was America's "Argentina moment." Suddenly, the United States could be viewed as a debtor nation, obliged to persuade the owners of its debt that everything would be OK. 

Friedman Day, as it inches ever closer to Milton Friedman's July 31 birthday, should serve as a warning that government is consuming way beyond its means. In the years ahead — and for future generations — everything may not be OK.

So take a moment to celebrate Friedman Day today. But then spend some time in sober reflection about our future.

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Tea party photo update

Posted by Richard on April 17, 2009

David Aitken took some terrific photos of the Denver Tea Party. He just has links at his blog, Life's Better Ideas, and I can see why. The photos are 2048 x 1536 pixels. On my 22" monitor (1680 x 1250), using Firefox, I had to zoom out to see the whole image at once. But he got right in the thick of things, they're sharp as a tack, and they really give you a great sense of being in the middle of the crowd. They're well worth a look. Just be patient if you don't have a very high-speed connection.

Michelle Malkin has a large collection of photos from around the country that shows, as she put it, "the full breadth and scope of the protests — not just the size, but the reach, a true sense of which is missing from the MSM coverage." And Instapundit posted several collections of pix, links to video, and commentary — here and here and here and here and here

As you look at the photos, and especially Aitken's photos, notice that virtually every sign is handmade. The few printed ones look like people printed them on their inkjet — they probably downloaded the files from one of the think tanks or pro-freedom non-profits that jumped onto the tea party bandwagon. Contrary to what Nancy Pelosi and her PR firm, CNN, claimed, this wasn't an "astroturf" event — it was true grass roots, and it grew from the ground up. The national organizations and (relatively few) politicians who jumped aboard were following the people, not leading them. 

At the Denver event, the only signs that were obviously professionally printed were the ones a handful of ProgressColorado and union counter-demonstrators had (with slogans like "Shut up and pay your taxes" and "We're cleaning up Bush's mess"). The printing was probably paid for by ACORN, using federal tax dollars. Or George Soros, the king of astroturf politics. Or the cadre of Colorado millionaire leftists who've bought the state for the Democratic Party in the last few years.

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A terrific tea party

Posted by Richard on April 16, 2009

What a great day we had in Denver today. Sunny and in the 70s. A perfect day to gather at the State Capitol and voice opposition to tax increases, massive new spending, wealth redistribution, bailouts, pork, and the headlong rush toward socialism. And, boy, did people gather!

The police estimated 5000, and I think that's pretty conservative. I remember the gun rights rally that the police estimated at 3000, and this one was at least twice as big and probably quite a bit more. Quite a diverse crowd, too. Lots of families with children, and lots of strollers. More young adults than I expected, but lots of retirees, too. Men in suits, and men in biker jackets. Mostly middle-class working people.

I heard virtually nothing of the speakers, and I think most of the people there were in the same boat. The crowd spilled down the steps and grassy slope all the way to Lincoln St., and the sound system was really only adequate for the two to three thousand up on the drive around the Capitol and maybe a little beyond. But no one seemed to mind, and when those who were close cheered and chanted, everyone else joined in. 

On Lincoln St. and Colfax, where traffic was heavy, the honking and waving never let up. I noticed that quite a few of the vehicles expressing support were work vehicles (panel vans and trucks with business names on them, etc.). 

There were lots of Gadsden flags (I wore my Gadsden t-shirt) and lots of signs with references to Galt and Atlas Shrugged. Some of my favorite signs: 

I am not your ATM

Don't spread the wealth, spread my work ethic!

Atlas Shrugged has come to pass

I left a socialist country for this??

Don't spend my money, I haven't made it yet (carried by a 10-year-old)

We are John Galt

Don't tell Obama what comes after a trillion

I was running late and forgot my camera, so all I got was some crummy shots from my ancient cell phone. You can see them here. But the Peoples Press Collective has much better pictures here and here. Heck, just go to the home page and keep scrolling. Drop by Slapstick Politics, too, for lots of coverage — pix, video, and links. 

If you attended a tea party somewhere, how did it go?

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Tea Party time!

Posted by Richard on April 15, 2009

Tomorrow, April 15, is Tax Day, but this year it's something more — Tea Party Day! The Tea Party movement was inspired by CNBC's Rick Santelli, who back in February delivered a terrific rant against bailouts, stimulus packages, pork, and taxing responsible, hard-working people to subsidize bad behavior. Santelli said it was time for another Tea Party, and he inspired thousands.

There have been many tea party events since, but nothing like what's scheduled for April 15. Over 600 Tea Party rallies all across the country are confirmed for tomorrow. I'm going to the one at the State Capitol in Denver (11:00 – 1:30).

Other Colorado rallies are scheduled in Craig, Delta, Durango, Fort Collins, Grand Junction, Loveland, Montrose, Pueblo, Steamboat Springs, Walsenburg, and Woodland Park.

I hope you'll go to a rally near you (go here and click your state to find the closest one). Many are scheduled around noon, so take a long lunch and bring your sandwich. And maybe a sign or an American flag.

If you can't make it (or even if you can), sign the Stop Spending Our Future petition. And if you've got a few bucks to spare, join the Go Galt movement — buy some copies of Atlas Shrugged and send them to politicians. 

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