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Category Archives: spending

Another Person Who Agrees With Me–Reagan Would Be Persona Non Grata in Today’s GOP

On a couple of different occasions, I wrote about how former President Ronald Reagan probably could get elected by today’s GOP no matter how much they revere him (see here and here). It’s an opinion shared by a number of pundits across the blogosphere. Here is another example of exactly what I mean:

After trying (and failing) to disembowel Social Security, Reagan did an dramatic about-face and bailed out the program to the tune of $165 billion and made Social Security taxes more progressive, forcing upper-income Americans to shoulder more of the burden than their poor counterparts.
Reagan raised taxes 11 times! He passed the largest tax increase since World War II and introduced hefty new corporate taxes.

While conservatives like Sarah Palin tout Reagan’s record for standing up to the Soviet Union, they ignore that Reagan was attacked by far-right conservatives for being too conciliatory to the Communist bloc. When Reagan engaged in direct talks with Gorbachev and the Soviets, conservative leader Paul Wyerich wrote in The Washington Post, “Reagan is a weakened president, weakened in spirit as well as clout.”

Go here to read the rest. It’s definitely worth the read.

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A Few Things to Make You Say “Hmmmmmmm…”

Each of these could be a blog piece by itself (and probably will be eventually).  But for now, here are some things to make you say “hmmmmmm,” or scratch your head, or go buy a stiff drink…

THE GOVERNMENT IS NOT GOOD AT PICKING WINNERS (part 1):  The government has ordered the phasing out of the trusty incandescent light bulb, which means we all have to go out and get the curly-looking compact fluorescent light (CFL) bulbs.  Sure they are more energy efficient.  But they also have a small amount of mercury in them.  Broken one lately?  Have you seen the steps involved to clean up after one breaks? But that’s not the worst part. Because of the government mandated change, GE has closed all of their incandescent light bulb plants in the US. At a time when unemployment is already high, that’s more jobs lost.

THE GOVERNMENT IS NOT GOOD AT PICKING WINNERS (part 2): The search for alternative fuels is very worthwhile. Except when the government is subsidizing it. Let’s talk ethanol. First, the government subsidizes ethanol production with taxpayer dollars. Second, there is a tariff placed on the importation of Brazilian sugar cane ethanol, as a way of protecting US production (it would be cheaper otherwise). The result? Not only are food prices (especially corn) higher because farmers are spending more time growing corn for ethanol, but the end product has been found to damage small engines over time. Oh, and then the government tells us ethanol is cheaper per gallon. Right.

HE’S TALKING ABOUT THE TEA PARTY, RIGHT?: Here is a recent quote from Senator John Kerry:

“And I have to tell you, I say this to you politely. The media in America has a bigger responsibility than it’s exercising today. The media has got to begin to not give equal time or equal balance to an absolutely absurd notion just because somebody asserts it or simply because somebody says something which everybody knows is not factual.”

“It doesn’t deserve the same credit as a legitimate idea about what you do. And the problem is everything is put into this tit-for-tat equal battle and America is losing any sense of what’s real, of who’s accountable, of who is not accountable, of who’s real, who isn’t, who’s serious, who isn’t?”

Let me guess. The press should ignore the Tea Party, their supporters, and maybe even the GOP because they lie, right? Got it. By the way, Senator, would you apply that standard to your own party? Because I’m sure we’d see a lot less of some of your pals.

SPEAKING OF LYING…: This one came to my attention earlier today. Senator Harry Reid said earlier this month that there were 8 million jobs lost during the Bush years. Unfortunately, it is an easily provable lie:

As always, we looked at jobs numbers compiled by the Bureau of Labor Statistics, the government’s official source of employment data.

During Bush’s eight years in office — January 2001 to January 2009 — the nation actually gained a net 1.09 million jobs. (Because there were gains in government jobs, the private sector actually lost 653,000 jobs during that period.)

This isn’t remotely close to what Reid claimed. Reid’s office didn’t respond to our request for information, but we think we know what he was referring to.

From the economy’s peak to its low point, the nation lost 8.75 million jobs. Here’s the problem: The peak for jobs came in January 2008, while the low point for jobs came in February 2010.

This means the starting point for Reid’s measure came seven years into Bush’s eight-year tenure, and the low point occurred about a year into Barack Obama’s tenure.

‘Nuff said.

ON TAXING THE RICH:  According to the IRS, there are over 8,200 income earners that earn more than $10 million per year.  Their combined income is $240 billion/year.  If you taxed them at 100%, it would be enough money to pay for government spending for a whopping 22 days.

Finally, I leave you with this thought, which most definitely will take on a life of its on another day in another post…

PARTISAN VOTERS HAVE NO CLUE WHAT AN INDEPENDENT VOTER IS: We get accused of straddling the fence, or of taking no stance. Even worse, we get attacked by both sides if we actually accept a view held by one party over another. But it’s simple. We look at the views and candidates available and choose what we like, regardless of what side it represents, and it could vary from week to week, from party to party, or from election to election. I’ve learned that instead of constantly fighting accusations that I’m not independent, I will simply stop feeding the trolls and continue business as usual.

Party on, dudes!

Texas Gov. Rick Perry is Stupid. Oh, and He’s Racist. ALL Republicans are Stupid and Racist!

As expected, Texas Governor Rick Perry entered the crowded GOP presidential field over the weekend.  Him tossing his hat in the ring was a non-event, as people had been expecting him to enter for a while now.  No offense to Michelle Bachmann, but most bets right now are figuring this to be a two-horse race between Perry and former governor Mitt Romney.  (Sidenote:  is becoming president worth running multiple times and spending millions of your own money??)

Almost immediately, the attacks on Perry started coming.

It’s no secret that the Left loves attacking their political opponents via cracks at their intelligence.  Folks on the left will wax poetically on about how intelligent Obama is and how stupid George W. Bush is, or how stupid Michelle Bachmann is.  I can’t recall anyone on the Left referring to Al Gore being stupid even though his grades were actually worse than Bush’s.  And even when such an observation was made, it was done in a way to still make Gore–the Lefty–not look so bad:

His generally middling college grades at Harvard in fact bear a close resemblance to the corresponding Yale marks of his presidential opponent, George W. Bush, whose studiousness and brainpower have been more open to question during this campaign.

Gore arrived at Harvard with an impressive 1355 SAT score, 625 verbal and 730 math, compared with Bush’s 1206 total from 566 verbal and 640 math. In his sophomore year at Harvard, Gore’s grades were lower than any semester recorded on Bush’s transcript from Yale. That was the year Gore’s classmates remember him spending a notable amount of time in the Dunster House basement lounge shooting pool, watching television, eating hamburgers and occasionally smoking marijuana. His grades temporarily reflected his mildly experimental mood, and alarmed his parents. He received one D, one C-minus, two C’s, two C-pluses and one B-minus, an effort that placed him in the lower fifth of the class for the second year in a row.

But I digress.

Recently, The Huffington Post jumped into the fray by announcing they had obtained a copy of Rick Perry’s college transcript.  As is usually the case, the intended implication is that maybe Perry ain’t so bright:

One reason that might explain his hostility toward the system: He didn’t do very well in it. A source in Texas passed The Huffington Post Perry’s transcripts from his years at Texas A&M University. The future politician did not distinguish himself much in the classroom. While he later became a student leader, he had to get out of academic probation to do so. He rarely earned anything above a C in his courses — earning a C in U.S. History, a D in Shakespeare, and a D in the principles of economics. Perry got a C in gym.

Nevermind that the debate should center on what he has done since then, or maybe even focus on his term as governor, or even that release of a transcript without permission of the student may be illegal. No. Let’s go back to college so we can legitimately say (say it along with me now) “Rick Perry is stupid!!”

Now, the other preferred method of attack is to find a way of labeling the GOP as “racist.”  Nevermind that the word has been misused so much that most people don’t even know the real definition, or don’t realize that “bigot” or “prejudiced” would probably be better if the argument actually applied.

MSNBC talking head Ed Schultz decided to prove Perry is a racist.   Now, mind you, the Left is always on the case when it comes to calling out statements they don’t like, especially when they are made by Limbaugh, Hannity, and other Conservative talking heads.  Somehow, they never mind when people like Schultz pull absurd statements out of their sphincter void and toss them out like gospel.

Rick Perry gave a speech where he referred to America’s debt as a “black cloud hanging over us.”  So what did Schultz do?  He had his people do some selective editing:

Yep.  Let’s leave out a key phrase–“that debt”–and make a case out of it, going so far as to invite guests on who you know will agree with you.  Schultz did apologize.  “On this particular statement, we should not have included it in our coverage of his overheated rhetoric,” he said in a statement.   “That’s our mistake. The full context of all of these other statements show who he is and what he stands for.”

In other words, “sorry we faked THAT one, but he’s still a racist!”

Next, we’ll start hearing about how GOP candidates are ugly and dress funny.

Do Politicians Understand What “Stimulus” Means? I Think Not.

Is it so difficult that the idea behind a “stimulus” package, or “stimulus” spending, or “stimulus” funding would be to stimulate the economy via job creation?  Somehow, politicians aren’t getting this.  The suggestions made by them aren’t ones that include a job multiplying effect.  In other words, for stimulus to be effective, it has to go towards something that creates a job, which directly creates a need for additional jobs, and so on.

Earlier this week, during a press conference, White House press secretary Jay Carney was asked how extending unemployment benefits creates jobs.  His reply?

“There are few other ways that can directly put money into the economy than applying unemployment insurance,” Carney said.

Carney answers the question: “It is one of the most direct ways to infuse money directly into the economy because people who are unemployed and obviously aren’t running a paycheck are going to spend the money that they get. They’re not going to save it, they’re going to spend it. And with unemployment insurance, that way, the money goes directly back into the economy, dollar for dollar virtually.”

This is similar to a comment made by former Speaker of the House Rep. Nancy Pelosi:

Economists will tell you this money is spent quickly. It injects demand into the economy, and is job creating. It creates jobs faster than almost any other initiative you can name because, again, it is money that is needed for families to survive, and it is spent. So it has a double benefit. It helps those who have lost their jobs, but it also is a job creator.

Back when Pelosi made the comment, as you can see from the feedback on the Media Matters page, they were more than happy to show how economists backed up what she said, while right-leaning critics were going nuts and criticizing her.

Regardless of the economists that affirmed her statement (and even the CBO), we can now agree that the assertion was wrong.

Maybe I’m out in left field here, but I am willing to wager that the majority of people who are collecting unemployment benefits are spending the money on necessities–food, power, gas, phone, ect.  While the money is technically going into the economy, its not going in for things that will create more jobs.  Listening to Carney, Pelosi, and those who agree with them, it’s as if the unemployment benefits are disposable income.  Paying the bills is not a job multiplier.

Likewise, the expressed opinion of the Left is that the stimulus was a success.  Even a CBO report says that it had some success. From Factcheck.org:

As we have written before, the nonpartisan Congressional Budget Office released a report in August that said the stimulus bill has “[l]owered the unemployment rate by between 0.7 percentage points and 1.8 percentage points” and “[i]ncreased the number of people employed by between 1.4 million and 3.3 million.”

Simply put, more people would be unemployed if not for the stimulus bill. The exact number of jobs created and saved is difficult to estimate, but nonpartisan economists say there’s no doubt that the number is positive.

But the key words are “created and saved.” Many of the jobs that received stimulus money were to maintain exisiting positions, not create new ones. Much of the money went to states to help prevent them from firing government workers. Not to mention, as the President himself said not too long ago, some of the shovel-ready jobs were “not so shovel-ready.” (Sidenote: he chuckled after cracking this joke. Looking at the cost of the stimulus, and how those shovel-ready projects were talked about ad nauseum to get the bill passed, its not very funny.) Again, in the end, for the section of the stimulus intended to create jobs and stimulate the economy, based on the unemployment rate since then, there was no multiplier effect.

So, with calls coming for another stimulus, we should be afraid.  Be very afraid.

The President and the False Blame Game

This article was brought to my attention by a friend of mine (shoutout to Kovarik Glasco, fellow Georgia Tech grad and fellow fan of the “Song of Ice and Fire” series).

There is a narrative that President Obama and many on the left engage in when discussing the economy.  Even two-plus years into the new presidency, the “blame Bush” technique is still used.  In this narrative, the picture painted shows runaway spending and runaway deficits during the Bush years.  And the main point he uses is that the year he entered office he inherited a deficit of nearly $1 trillion.

But in an article found on the Huffington Post, Dean Baker, Co-Director of the Center for Economic and Policy Research, shows how this narrative just isn’t true:

This is simply not true. In its budget projections from January 2008, the last set before the impact of the collapse of the housing bubble was clear, the Congressional Budget Office (CBO) projected a deficit of just $198 billion for 2009. This is less than one-fifth of the “on track to top $1 trillion” figure that President Obama gave in his speech. This is a serious error. One trillion is a much bigger number than $198 billion.

This difference is central to the budget debate. People can argue that the $198 billion deficit projected for 2008 was too large. But it would be absurd to claim it was out of control or represented any remotely serious threat to the nation’s solvency. In fact, over the five years 2003-2007 the country’s debt to GDP ratio was virtually unchanged, meaning that the country could run deficits of the same size (relative to the economy) literally forever.

This changed with the recession caused by the collapse of the housing bubble. It was the recession, and the response to it, that pushed the deficit in 2009 from the $198 billion projected by CBO to the over $1 trillion noted by President Obama in his speech.

Further, Dick Morris explains where the President is getting his numbers from:

In 2008, George W. Bush ran a deficit of $485 billion. By the time the fiscal year started, on Oct. 1, 2008, it had gone up by another $100 billion due to increased recession-related spending and depressed revenues. So it was about $600 billion at the start of the fiscal crisis. That was the real Bush deficit.

But when the fiscal crisis hit, Bush had to pass the Troubled Asset Relief Program (TARP) in the final months of his presidency, which cost $700 billion. Under the federal budget rules, a loan and a grant are treated the same. So the $700 billion pushed the deficit — officially — up to $1.3 trillion. But not really. The $700 billion was a short-term loan. $500 billion of it has already been repaid.

So what was the real deficit Obama inherited? The $600 billion deficit Bush was running plus the $200 billion of TARP money that probably won’t be repaid (mainly AIG and Fannie Mae and Freddie Mac). That totals $800 billion. That was the real deficit Obama inherited.

Then … he added $300 billion in his stimulus package, bringing the deficit to $1.1 trillion. This $300 billion was, of course, totally qualitatively different from the TARP money in that it was spending, not lending. It would never be paid back. Once it was out the door, it was gone. Other spending and falling revenues due to the recession pushed the final numbers for Obama’s 2009 deficit up to $1.4 trillion.

One important note that both writers mentioned: the important thing being missed is JOBS. Job creation will create income earners, which will boost the economy and help revenues. This is what the debate in Washington should be all about.

A Nice Visual Explanation of How the Government Can “Cut” Spending…and Increase Spending at the Same Time

Been curious as to whether or not the government was really cutting spending in all these negotiations?  Wondered what “baseline spending” is?  Didn’t realize that all the crying about cutting programs for the poor is crap?  Check out this video.  You’ll never look at “spending cuts” the same again!