Tag Archives: Budget

Time for Some Economic Truth Telling

I have something to say to the politicians and the buffoons in the media. “Enough with the lies and the spin and the mis-information! The fraud you are perpetrating on the American people is (or should be) criminal.” For years now, we’ve been told that Reagan ran massive deficits unnecessarily; that Bill Clinton created a surplus; that the Bush tax cuts of 2003 caused the current debt crisis; and my least favorite, that all we need today is tax increases to get out of our current fiscal mess. Using the chart above, and in only 800 words, I will completely disprove each of these idiotic opinions. They are progressive myths perpetrated in an attempt to justify an ever larger U.S. government. So in order:

The deficits of the Reagan years aren’t pretty, but they pale in comparison to the sheer madness of today and more importantly, they had a purpose. When Mr. Reagan took office the Country was in a quagmire financially and militarily and the policies of his administration brought us out of both and to new heights never seen before in America. During his entire Presidency, Democrats held a death grip on Congress and its purse-strings. They could have stopped all that ‘horrible spending’ any time they wanted to – they didn’t. Trust me when I say, I hate deficits, but as deficits go, these had a usefulness at least. Things were accomplished. For the debt incurred, the country gained peace with its greatest-ever threat, the Soviet Union as well as new-found economic prosperity.

Bill Clinton is the luckiest President in U.S. history. He was a philanderer in the only moment in history when one might get away with it – that is after the country gave up its morals and before blogs, twitter, facebook etc. which might have led to a very different outcome (look at Anthony Weiner – his actions were nothing compared to Mr. Clinton’s and he was ridden out of town on a rail). On the financial front, he rode an economic boom driven by the internet to government financial nirvana and he and his progressive friends continue to take credit for something they had virtually nothing to do with. Look at the chart; it’s right there in red and blue. From 1984 to 2000 Federal revenue more than doubled. Tax cuts from the 80’s and the resulting economic crescendo capped by the tech-boom drove federal tax receipts through the roof. Did he pay down the debt? Nope. Instead, Washington spent more money than ever before in the nation’s history. Though they tried very hard, Mr. Clinton’s administration couldn’t spend it all and a small surplus was left over.

Along comes President Bush. He campaigns on returning the American people’s money (remember now, despite the progressives’ slight of hand tactics to make you forget this fact, it is our money)  to them via tax cuts. Coupled with the tech bubble bursting and 9/11, this leads to a drop in Federal revenue and a return to annual deficits. But, wait; look what happens next. Revenues explode upward starting in 2004 and reach the highest in our nation’s history in 2007. How can this be? I’ve been told repeatedly that the Bush tax cuts ruined this country. I’m sure it must be true; I mean, MSNBC says so. Sorry, liberals, wrong again. Mr. Bush is not blameless however. He presided over a federal spending bonanza that out-paced all the income gains created by the tax cuts. But, Progressives don’t argue against the ‘Bush spending’ however. That wouldn’t work with their agenda of always spending more; so they say the tax cuts are to blame. Think what they are actually saying – “We wanted to spend all the money we did spend, PLUS all the money Bush gave back in tax cuts”. Incredible!

Last lie, “Tax increases will get us out of this”. What?!?! The current tax code is virtually identical to that of 2007. That means we have a tax system in place today that produced the largest single year Federal revenue in American history. That isn’t enough for them? They need more? Look at the chart again. In the imaginary years to come, Mr. Obama is counting on Federal income reaching all new highs. And even if it does, he still expects to run $500 and $600 BILLION deficits EVERY YEAR!  He wants to increase taxes in the hopes of increasing revenue (despite all the evidence that it doesn’t work that way), not to get our budget balanced and pay down some debt. No, that would be far too sensible for Washington. These morons want to increase spending even more. They want to go to all-new record levels of spending. I guess they’ve never heard of the idea of cutting back when times are tough.

There you have it; four lies of the left debunked. Where does that leave us? I’ll leave that for another time, but there are some lessons here for those willing to see. How does 2007 revenues with 1999’s spending sound? The result is a $900 billion annual surplus. $450 billion per year of that could go to debt reduction and $450 billion to replacing the money Washington has robbed from Social Security. That sounds like a good place to start.

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What Do NBC News and Barack Obama Have in Common? Neither One Understands the Deficit

Last night I watched in utter disbelief as a news report on NBC Nightly News claimed the President was going to shave $4 trillion from the $14 trillion deficit over the next ten years. Why is this shocking? Because the $14 trillion isn’t a deficit (an annual shortfall in revenues compared to spending) but rather the nation’s debt (outstanding monies owed). Furthermore, the President’s campaign speech – I mean detail deficient “plan” – doesn’t cut one penny from the $14 trillion national debt. Instead it merely cuts $4 trillion from planned future spending over the next 12 years.

[Side note: this is the first time any Washington nitwit has gone out 12 years with a budget (it’s normally ten) and, of course, was done to pretty-up a very ugly picture.]

I can hear you now, “$4 trillion is nothing to sneeze at”. Well, look at it this way – that’s only $340 billion per year and when you’re going backwards $1.5 trillion per year as we are now, that’s not going to even make a dent in this crisis. Politician’s talk in these big numbers over many years because it obscures the truth and they know it. They do silly things like tell you they’ll fix this massive crisis by raising taxes on the rich as the President did yesterday.

Newsflash, Mr. Obama – According to the IRS, the entire income of all Americans earning over $100,000 in 2008 was about $1.58 trillion. Even if  we taxed them all at 100%, it wouldn’t fix the problem. And, of course, taxing them at 100%, even 50% isn’t feasible as it will kill investment, economic growth and job creation; so please, I know it makes good campaign fodder, but can we drop that charade already? I’m begging you!

So, whether you’re NBC and are going to claim to be a national news service, or you are Barack Obama and claim to be qualified to be President, it would perhaps be good if you had ANY idea what you were talking about when it comes to the fiscal matters of this country. Feel free to call me if you need some help!

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Representation Without Taxation Doesn’t Work Either

Today being tax day, it seems a good time to remind ourselves of some key figures. Most Americans give at least a cursory look at their household budget monthly as they pay their bills or perhaps weekly if they’re in the tough position of living paycheck-to-paycheck. But, few stop to review their country’s financial state even once a year. Perhaps that should become a tradition on tax day. After all, Americans would call their cell phone provider and dispute a $10 unexplained charge; so why do they continue to pay thousands each year without asking why or where it’s going?

So here it is, the federal budget for the next ten years, as laid out by President Obama. Be sure to note, it is displayed in billions of dollars.

Allow me to round some figures off in summation: This year, the federal government will take in $2.2 trillion while spending $3.7 trillion (a $1.5 trillion deficit on top of the existing $11 trillion federal debt). Notice they expect the best year in the next ten, 2014, to still be a net loss of $706 billion, even if some wild optimism on Washington’s part comes to fruition.

This is the equivalent of an American family that earns $100,000 per year spending $168,000 while carrying $600,000 in debt; writing IOUs for the $68,000, and planning to do the same thing each of the next ten years and beyond. None of us would do that, so I can’t believe there’s a person in this country dumb enough to think the government’s numbers work, but there is. In fact, there are millions of them. A few of these work in the Lame Stream Media and will go on TV tonight and deride their fellow citizens who are at rallies all over the country today protesting this very spending lunacy, even though it seems the protesters are the only ones paying attention.

But how can millions of people who think the government’s budgetary suicide is ok? Well, that’s easy – 47% of all Americans pay NO FEDERAL INCOME TAX! Put simply, these people have no skin in the game. They are too short-sighted to realize that at the very least, their kids might some day have to pay this bill; or much worse, that a financial default by this country will mean financial pain for all – especially those who currently live off the taxpayer’s largess. Still, come election day, they have the same voting power as those footing the bill, and therein lies the problem. As Ben Franklin so accurately said, “When the people find that they can vote themselves money, that will herald the end of the republic.”

Taxation without representation was cause for a Declaration and War of Independence. Turns out representation without taxation doesn’t work so well either.

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Why Trifle Over a Measly $2 Trillion

On February 26, 2009, the Obama Administration released it’s first budget projecting a net deficit over the next 10 years of $7.1 trillion. The Congressional Budget Office scored the budget and said, no, the deficit would be $9.1 trillion over that 10 year period. The administration didn’t like that number and insisted it was wrong. Forget that the CBO is a non-partisan organization whose entire reason for existing is to answer such questions, that number was just too high and the administration didn’t want to admit to saddling the country with that kind of debt. chart_budget3

I’m not sure why they were worried about that, their friends and non-journalists in the main stream media published this chart without so much as mentioning that not one single year was projected to be in the black. Nor did they mention that this preposterous level of spending didn’t even include the additional $1 trillion that Obama’s team projects universal health care will cost (again, the real economists say that number is more likely to be $2 trillion).

This week, in a shocking development that absolutely everyone saw coming, the administration admitted that yes, the real deficit number will be exactly what the CBO said it would be – $9.1 trillion! And this number still doesn’t include the costs of a universal health care program. Nobody seemed to care very much, certainly not Obama’s campaign publicists, aka the main stream media.

Some may ask why I would trifle over a measly $2 trillion. After all, what’s another couple trillion dollars at this point. We are drowning in these mind-boggling large numbers that are beyond comprehension for most Americans. And that’s exactly what the policy makers count on. And that is why it should matter to all Americans. It should matter that our government is spending like a group of drunken sailors on shore leave and expecting you and I to pick up the tab. Actually, that’s not true, were we able to give the politicians a truth serum, they would tell us they have absolutely no idea how to pay for this. Yet, they keep spending, and America keeps letting them.

$9.1 trillion over the next 10 years will mean a federal debt of more than TWENTY TRILLION DOLLARS by 2019 and that’s if the politicians are able to control themselves and stick to a budget – a laughably unlikely proposition if ever there were one. Maybe it is time to trifle.

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Eight Quarters, a Dime and Four Pennies

With much fanfare today, President Obama asked his Cabinet to dig deep into their individual budgets and come up with savings of $100,000,000 from the federal budget. Finally, Washington is going to stop the madness; finally there is some fiscal discipline coming from our leadership. Or is there?

You see, 100 Million Dollars, while a big number to almost any American, is just .00286% of the President’s budget for the coming year. Since a percentage that small is almost incomprehensible, let’s try to put it in perspective. For someone earning $75,000 a year, this is the equivalent of saving $2.14. No, you don’t need to check my math, it’s correct. This much hyped effort is roughly the same thing as you or I skipping tomorrow morning’s coffee. Now don’t misunderstand, restraint in Washington is always a positive and to be encouraged. But, it is wholly disingenuous to hold a press conference and announce your “ambitious plans” to save a cup of coffee.

This is so obvious that even Obama’s fan club (oops, that should read – the White House press corps) caught on as you can see in the first two minutes of this hilarious video. As these reporters correctly point out, the White House scoffed at Republicans just a few weeks ago when they suggested that billions in earmarks were frivolous in light of the country’s financial situation.  In Obamaland billions are small meaningless numbers we shouldn’t worry about, and millions are huge savings to call a press conference and pat yourself on the back about – NO WONDER WE’RE IN THIS MESS!!!!!!

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The Future Is Clear

As luck would have it, Americans do not have to guess what will happen if they follow President Obama into the economic abyss that is his socialist agenda and accompanying budget. No, this time we are blessed with a crystal ball to look into. With it, we can see exactly what we might expect. That crystal ball is Europe, and America would do well to pay attention to what it is showing us.

For the last several decades Europe has aggressively pursued the socialist agenda that our President would now like to foist on America.  And where has the pursuit of the that agenda taken Europe, what does the crystal ball tell us to expect if we continue down this path?

  • British Prime Minister has spent the country “out of money” :

For even more prognostication of our impending future, check out excerpts from this  article.

Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe has borrowed $1.7 trillion abroad, much on short-term maturities. It must repay – or roll over – $400 Billion this year, equal to a third of the region’s GDP. Good luck! The credit window has slammed shut.

Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36% of its foreign reserves since August defending the rouble. “This is the largest run on a currency in history,” said Mr Jen.

Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. Europeans account for an astonishing 74% of the entire $4.9 trillion portfolio of loans to emerging markets. They are five times more exposed to this latest bust than American or Japanese banks, and they are 50% more leveraged (IMF data).

Spain is up to its neck in Latin America, which has belatedly joined the slump (Mexico’s car output fell 51% in January, and Brazil lost 650,000 jobs in one month). Britain and Switzerland are up to their necks in Asia.

Whether it takes months, or just weeks, the world is going to discover that Europe’s financial system is sunk!

For what earthly reason would we pursue the agenda that has led Europe to the brink of financial ruin?  Why would our government look across the Atlantic, see economic turmoil, failing healthcare systems, crippling debt and the resulting civil unrest and come to the conclusion that pursuit of a similar course will somehow turn out differently for the United States?  The crystal ball is telling us what to expect, the future is clear – the only question is will we listen.

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