US Daily Review » Economy

Standard and Poors Downgrade and the Need to Further Reign in Spending…

Les Carpenter — Sun, 07 Aug 2011 10:54:39 +0000

by: Les Carpenter
Rational Nation USA
Birthplace of Independent Conservatism
Liberty -vs- Tyranny

The debt ceiling/deficit reduction debate/crises is concluded. The result? Our nation avoided defaulting on its obligations. A good thing. That and the Congress & President now have the green light to spend a couple trillion plus more over the next year and a half. Not a good thing.

Of course the special “super commission” is supposed to come up with an additional trillion and a half in spending cuts. Cuts both the Congress and the President will have to approve or the triggers dems fear will kick in and automatic spending cuts will occur.

That’s the plan at this point anyway. We’ll see.

The forthcoming debate over how to handle the details of “the deal” will be every bit as rancorous as the debt ceiling/deficit reduction debate just concluded. Such is American politics. We can all be relatively certain given recent history that the American people are likely to come out on the short end of the stick. Again.

After all the various gyrations, equivocations, posturing, hyperbole, and the ever present brinksmanship, we finally struck a deal. While we avoided default our nation’s AAA rating was downgraded to AA+ by Standard and Poors, with the warning our rating may be downgraded to AA in the next couple years if the Congress and the President fail to find further cuts or increased revenues.

The Hill – Standard & Poor’s laments the possibility cuts to entitlement programs won’t materialize and the decreasing likelihood of new tax revenues.

The decision by Standard & Poor’s to downgrade the U.S. credit rating to “AA+” at once laments the possibility that cuts to entitlement programs will not materialize and the decreasing likelihood of new tax revenues. But it appears to give more weight to the need for more spending cuts, as it warns that a further credit rating downgrade is in the cards if the U.S. does not trim spending.

In contrast, while the report indicates that new tax revenues would help mitigate the debt crisis, failing to find these revenues does not immediately put the U.S. at risk of another downgrade.

Specifically, the report warns directly that a further downgrade to “AA” status could occur within the next two years if there is “less reduction in spending” than what was agreed in the debt ceiling agreement. S&P said one factor that could lead to this second downgrade is if the minimum $1.2 trillion in spending cuts under the debt ceiling agreement does not occur.

But S&P sees the continuation of the Bush tax cuts in 2001 and 2003 as something that could still allow the U.S. to maintain its new “AA+” rating.

While this difference would seem to put a greater emphasis on spending cuts, the report more broadly seems to value both spending cuts and tax revenues as a way out of the debt crisis. S&P said it takes no position on the “mix of spending and revenue measures” needed to put the U.S. back on a path to its historic “AAA” rating, a sign that it believes both are needed in some measure.

It also laments Congress’s failure to find a way forward on either prescription as part of the debt ceiling agreement. {Continue Reading}

It is clear that Standard and Poors recognizes the most desirable path to fiscal sanity, and thus stability rests in further spending cuts. There is a reason for this.

This nation has been living beyond its means for a long while, going back to the seventies. Deficit spending has somehow crept into the American economic lexicon as an acceptable way of doing the government’s business. Perhaps this is because Americans, possibly due to the relative prosperity of the fifties and the sixties grew to feel they were “entitled” to prosperity as a given. Thus the increasing array of social welfare programs ushered in by LBJ, and continuing on in succeeding administrations.

Or maybe it is due to the flawed economic principles of John Maynard Keynes being readily accepted by politicians who were only to willing to pander to their constituents every social whim and a MIC that continued to grow ever larger and more costly.

The need for spending cuts are real, and the proper and rational way to proceed is to cut spending across an array of programs. From bureaucratic excess, to eliminating duplicity and overlap, to costly and unnecessary regulations that hurt American competitiveness, to reigning in the MIC, to reforming entitlement programs, to scraping ObamaCare and instituting market driven healthcare along the lines of the Swiss healthcare model, to reducing the number of tax brackets to three and eliminating loopholes just to name a few.

After all this is accomplished perhaps then, and only then should further increases in looting American’s income be considered. That folks is the point Standard and Poors is attempting to make in a politically viable and acceptable way.

Via: Memeorandum

The New Obama Deficit Plan… Investment in the Future

Les Carpenter — Sun, 13 Feb 2011 06:46:10 +0000

by: Les Carpenter
Rational Nation USA
Birthplace of Independent Conservatism

I just love the new phrase that Obama has sold to the faithful, and that includes the lame stream liberal media. Spending, and trillion dollar deficits have been assigned the new official term of investments.

Lets get one thing straight…. Obama coined the phrase “investments”, which is nothing more than a slick snake oil salesman’s attempt to confuse the American people and gain support for a huge domestic social spending agenda. That and to insure his pre-determined socialist plan to slip his destructive socialist agenda by the American people and force his spendthrift deficit spending through a willing Congress before anyone noticed. If spending becomes an investment in America’s “future” how can lots and lots of it be a bad thing? You may want to refer to Keynesian economic theory for a answer to that one. Then ou will undoubtedly want to check ut Hayek’s more rational economic theory.

Spending is necessary to operate the government. No country can remain a viable state without spending on infrastructure, defense, or the the nation’s legal system etc. But the idea that it is the federal governments responsibility to take care of the social issues, social concern, or social welfare of 50 sovereign states is ludicrous. Consider also that billions of American dollars are going out in foreign aid to nations that hate America, all in the name of compassion and under the umbrella of altruism.

This misguided altruistic belief, combined with the fervor to feed the Military Industrial Complex is bankrupting America. When one adds to the this fact that government and Corporate America are in fact willing partners in the demise of true capitalism in the pursuit of crony capitalism and corporatism it should be resoundingly clear the American people is the pooch and we are being collectively screwed.

For no other reasons than the above do I welcome the the TEA Parties influence in cutting the federal budget by 100 billion dollars. Waste is abundant in the feral government and we need rabid watchdogs to keep spending{not real investments}under strict control.

I have said my piece. Now check out the following excerpt from THE HILL.

“This evening, on behalf of House Republicans, Appropriations Chairman Hal Rogers introduced a Continuing Resolution that will reduce spending by at least $100 billion in the next 7 months – a historic effort to get our fiscal house in order and restore certainty to the economy,” Majority Leader Eric Cantor (R-Va.) said in a statement.

“At a time when unemployment is too high and economic growth is elusive in part because of the uncertainty created by our skyrocketing debt, this legislation will mark the largest spending cut in modern history and will help restore confidence so that people can get back to work. These are not easy cuts, but we are finally doing what every other American has to do in their households and their businesses, and that’s to begin a path of living within our means,” he said.

All this independent conservative can say is, RIGHT ON! It is indeed time Congress begin to act responsibly and with fiscal restraint. This statement applies to oth sies of the political aisle and political ideology.

What is missing in the 100 billion dollar cuts are cuts to military {defense} spending. Rather, the proposal is for increasing defense 2% over last years expenditures and make ABSOLUTLY n sense.

If we are to again to become a fiscally responsible nation all expenditures must be put on the chopping block. The pain must be felt all around the budget table. We either act responsibly across the board or we become another Greece or Portugal.

The choice still rests with the American people. Don’t squander it on the likes of the Obama vision. His vision is nothing more than that of a charlatan.

The full HILL article.

Cross posted to Rational Nation USA and the Left Coast Rebel
Via: Memeorandum

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Capitalism, A Forgotten Value

Les Carpenter — Tue, 08 Feb 2011 07:00:08 +0000

by: Les Carpenter
Rational Nation USA
Birthplace of Independent Conservatism

I have to chuckle when I listen to the business community and or the governemnt. specially when either talks about capitalism.

Capitalism is something our founders understood. For a brief, maybe one hundred years or so following them so did most Americans. They understood what it is as well as the value it gave to a free society.

However, after 1900 or thereabouts something changed. I think we all know what it was that began to slowing erode capitalism until today we have only a shell of real capitalism. And a perverted shell at that.

Yes, certainly I blame the anti capitalist governemnt mentality that took hold and ultimately grew in America, much to its great detriment. I also blame equally the businessmen and the manufactures that once were responsible for this nation’s prosperity and the creation of national wealth {those who produce}because they became willing partners in the efforts that served to eliminate true capitalism.

By asking for and accepting favors in the form government subsidies, business played into the hands of the progressive elements of society and a progressive socialistic government and in the process played their cards against the best interest of capitalism, the American people, and a free society.

Consider the following from Capitalism: The Unknown Ideal…. “I said that the “liberals” are coining and spreading the “anti concepts” in order to smuggle this country into statism by an imperceptible process – and that the primary target marked for obliteration is thew concept of “capitalism,” which if lost would carry away with it the knowledge that a free society can and did exist”

Consider as well this, again from Capitalism: The Unknown Ideal…. ” “No “anti concept” launched by the “liberals” goes so far so crudely as the tag “consumerism.” It implies loudly and clearly that the status of “consumer” is separate from and superior to the status of “producer”; it suggests a social system dedicated to the service of a new aristocracy which is distinguished by the ability to “consume” and vested with a special claim on the castes serfs marked by the ability to produce. If taken seriously, such a tag would lead to the ultimate absurdity of the communists proclaiming: “Who does not toil, shall not eat” – and the alleged representatives of capitalism replying: “Oh yes he shall!”

Anyone truly interested in understanding true capitalism and its force for good should read Ayn Rand’s book, Capitalism: The Unknown Ideal.

I vaguely recall a time when the banking industry was lauded as “Pillars of the Community.” Well, given the recent past and the financial meltdown I suppose we can all agree the neither banking industry nor the financial industry in general represent any such “pillars.”. Rather they, as well as the government represent corruption and control. Today neither represent anything even close to an understanding of what true capitalism is.

Consider the following from the third President of these United States, Thomas Jefferson…. “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” Thomas Jefferson, 1821

Indeed, if President Thomas Jefferson and Ayn Rand where with us today there is no doubt but they would be appalled at the Corporatism, Crony Capitalism, Anti Concepts, and lack of Intellectual Honesty that currently pervades our society.

Unfortunately neither modern liberals nor modern conservatives are talking honestly and rationally on the issues herein introduced. This is not all that surprising if one thinks about it. After all, as we have grown to observe {assuming we have observed reality at all}, regardless of party, ideology, or level of awareness it is likely that all roads eventually converge at the same point. The failure to reexamine the principles of capitalism. and allow a true capitalism to again take root and eventually flourish will, at a not to distant time, result in our society becoming {willingly}enslaved to the corporatist, crony capitalist, and the anti concept snake oil salesmen.

The choice we make must be that of people. The road we choose to take rests with us. Isn’t it time that all Americans that truly long for a better more prosperous future take action to insure we remain a free people. A people at liberty to choose the course of or life and succeed own our own merit and hard work.

This is The United States of America. We can accomplish great things if we renounce emotionalism and lead our lives and our nation by rational concepts. Concepts borne of physical reality and determined to be true based on cognitive reasoning and logic.

Cross posted to the Left Coast Rebel and Democracy Central and Rational Nation USA

Via: Memeorandum

What Causes Unemployment?

Kevin Price — Wed, 13 Oct 2010 15:10:56 +0000

Daily we see news headlines of an unemployment situation that is only worsening. It is not unusual to see nearly a half a million signing up for unemployment benefits on a single week. People keep asking, “Why doesn’t the government do something about it?” It is a fair question. However, a better question is “What causes unemployment?” The failure to understand this is why the American people continue to stand on the sidelines of government’s policy battles as victims of plans that have gone awry. There are many factors to both job creation and job loss. This article will focus on some of the more obvious ones.

We all know that if there was no cost to hiring people, there would be no unemployment. But there are costs, some natural and some of them government created. In a world without government, the only cost would be the price that an employer would be willing to spend and employee would be willing to receive in exchange. If there were no wage limits set by the government, no payroll tax for employers in hiring, and no negative government intervention in other areas of market exchange, it is safe to assume we would generally have near full unemployment. Therefore, every time there is a cost to hiring outside of the voluntary relationship between employers and employees, there is a barrier to job creation.

• Minimum wage is one of the more obvious job deterrents. Companies hire based on the value of the work to be done and not the person doing it. If it costs more to hire someone than the job is worth, the job will not exist. That is just reality. Interestingly, there has been a huge jump in unemployment every July for the last three years following an increase in the minimum wage. Ironically, those hit the hardest by minimum wage generated unemployment are the same ones who were suppose to benefit from such artificial increases – minorities and youth. Minimum wage is a serious job killer.
• Taxes on corporations and businesses. The most frustrating aspect of these taxes is that they are a mere fixed cost of doing business. If the costs become too high, businesses move their companies – and the jobs they create – to other parts of the world. Eliminate this barrier to job creation, tax individuals directly through their purchases, and enjoy a more fiscally sound and accountable government.
• Reform regulatory and licensure laws. These are both common barriers to job creation, particularly regulations. The Federal Register of Regulations is a source of nightmares for businesses of all sizes. Everyday business owners live in fear of violating the law, which puts pressures on them to have as few employees as humanly possible. The recent health care law of the Obama administration is a shining example of this. According to attorney Judith Sadler, a Price of Business Radio Show Contributor, among the perplex provisions in the legislation is a requirement that companies with fifty are more employees must have a designated room in their offices just for breastfeeding, regardless if there is a need for such. “Fifty employees” is often the threshold for many regulations. The vast majority of businesses (approximately 80 percent) have fewer than 50 employees; this is not only because of the virtues of small business, but the fear of being too successful in the eyes of the government.

These are just a few of the things that stand between Americans and jobs. Ronald Reagan once said that the best “social program is a job.” That type of “social program” provides revenue to the government in the form of taxation, rather than consumes money when people are on the dole. The government should get out of the way and let the job creating economic engine roar.

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Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

An independent conservative’s thoughts on limited government, an objective tax code, and regulatory overreach

Les Carpenter — Wed, 06 Oct 2010 09:43:56 +0000

by Les Carpenter
Rational Nation USA

As the nation quickly approaches the 2010 midterm elections and Tea Party fervor reaches a fever-pitch I ask that you take but a moment to reflect. What – if anything – might change should the Tea Party candidates claim victory and Republicans take back the Congress?

My fervent desire for years has been to cast aside politicians on both sides of the political aisle and elect candidates that actually stand on principle. Ideally, this translates to those that adhere unflinchingly to the principles of limited government and individualism. American Constitutional principles that allow for the greatest individual liberty possible while also requiring the individual to accept and embrace the concept of individual responsibility are the prescription to right our national ship.

What does the term limited government mean? More importantly – what do the Tea Party and Republican candidates believe the term means? Even more importantly, what will they do if the reins of Congressional power are turned over in 2010?

My answer is — nothing.

It is unfortunate, however likely that tea party candidates will simply continue the same big government overreach we have witnessed for decades. Recall Ronald Reagan’s call to trim government, make it more effective, and essentially ‘starve the beast’? While he succeeded in slowing the growth of government, the Leviathan continued to extend its tentacles into every corner of America with armies of enriched special interests, side by side.

The best the Gipper could do was to marginally slow the trajectory away from limited government.

What conservatives should want and support are candidates that not only talk the talk of limited government but also walk the walk. Ron Paul is perhaps one of the few individuals in American politics today to come close to doing so and he provides a stark example to follow.

To expand upon the subject of limited government, I will limit today’s commentary to taxes and regulations.

By way of definition:

Limited - characterized by enforceable limitations prescribed (as by a constitution) upon the scope or exercise of powers…

Government - the act or process of governing, specif.: authoritative direction or control…

From these definitions the concept of limited federal government is crystal-clear. The U.S. government to retain its right to govern must do so within limitations as set forth in the Constitution and the tenth amendment . The federal government has a clearly defined function that has been all-but-ignored.

In essence we have allowed our government to create a tax code that is as mind-boggling as it is convoluted, requires hundreds of thousands if not millions of pages, and keeps the tax accountants and lobbyists in business. It also creates uncertainty within the business sector and markets, and decreases our competitive standing in the world.

Achieving limited government in taxation would be quite rudimentary and uncomplicated, were it not for the pull peddlers. But the moment the United States government instituted the graduated income tax with its exemptions, deductions, and loopholes the stage was set for the Leviathan tax code that exists today. Slaying Leviathan will not be easy but it is necessary. Conservatives should love to hear somebody in the Tea Party or Republican Party shouting it from the rooftop.

I present, therefore, an “independent” conservative solution. Such that would give government increased tax revenues and simplify the tax code so Reagan’s idea of the post card return could be realized. It would also eliminate the need for tax lobbyists that are engaged in “protecting” the interests of business.

1.1 – Graduated tax would be retained for individuals gross earning up to 35K.

1.2 – All gross earnings above 35K would be taxed at a flat rate.

1.3 – There should be no exemptions, deductions or other considerations that would have the effect of lowering the taxable amount.

1.4 – Individual tax rate of 10% on all gross income above 35K. To change this should require a 60% affirmative vote of the 50 states making up the union of The United States of America.

2.1 – Businesses and Corporations should be taxed on the flat tax basis.

2.2 – Business and Corporations should cease to receive government subsidies and corporate welfare. Too big to fail would no longer be an operative word.

2.3 – Deductions for businesses and corporations should be limited to legitimate business expense as defined by current cost accounting principles.

2.4 – Business and Corporate tax rate should be 10% after legitimate business expenses are deducted.

Simple and straight forward, the above would create an environment in which everyone would know month to month and year to year what their tax liability would be. Planning for business investment and expansion would thus proceed on a stable, level, playing field that would exponentially increase the dynamism of American entrepreneurism.

A common stumbling block when discussing limited government is the nature of, and need for, regulation. Few would disagree with the premise that government has a role in protecting the public safety. Even the staunchest conservative advocates of limited government support the belief that government has some responsibility in protecting the public safety and the environment. As an example, note the pronouncements LA. Governor Bobby Jindal made during the BP oil spill.

Inversely, most can agree the level of myriad and often incoherent governmental regulation is both costly to business and serves no real public purpose. Beyond staggering costs, the very businesses that create jobs and spur economic growth are significantly and negatively impacted by frivolous and unnecessary regulatory restrictions. I refer you to John Stossel ’s spot on video covering the subject of over regulation as an illustrious example of this.

The cost borne by business and corporations as a result of our regulatory framework is significant and frankly often unnecessary. Freeing business and corporations of the unneeded and unnecessary burden of regulatory control would be a major leap towards improving our industrial competitiveness in the global marketplace.

To use an analogy – giving one dog preferential treatment over his fellow dog is both unethical and counterproductive. Government regulation should only serve to benefit the critical public interest, not the interest of the individual or the business interest with the most money to contribute to a candidate’s electoral aspirations.

Plainly put – get the lobbyist out of the picture by revising the tax code and we would most certainly have a more vibrant and productive economy.

If the Tea Party wants to truly distinguish itself from the “establishment” then let it pronounce and then act upon the tenets of limited government, maximum individual freedoms and ethical behavior in all public and personal pursuits. So far, with the exception of Senatorial candidates Marco Rubio in Florida and Rand Paul of Kentucky, I fail to see any distinction from business as usual. In other words we are merely witnessing Republicanism undergoing cosmetic surgery.

I hope that I am wrong.

“Job creation policies” should address causes and not symptoms

Kevin Price — Fri, 01 Oct 2010 13:10:11 +0000

Recently the Obama Administration navigated another “jobs creation” bill through Congress. Correction, it was a “jobs preservation” bill designed to bailout fiscally irresponsible states that are about to pursue massive layoffs to get their spending back in line. If the Federal government “should” help the states, shouldn’t it be for the important functions that would be lost if the governments were forced to do massive cuts? Instead, it is all couched in job protection and an opportunity to pursue efficiency in government is eliminated thanks to Uncle Sam and at the expense of the American Taxpayer. It is the continued demise of moral hazard that is further destroying our free market economy.

If Obama and Congressional leaders were serious about job creation, they would take a decidedly different approach. The following are just a few suggestions:

Eliminate the barriers between people and jobs. This isn’t done through temporary government jobs that will run out with the recent bailouts (like the bill passed this week), but through real jobs that create revenue for them to grow in number and in quality. Although I oppose a federal minimum wage, you are not going to make one go away. However, the federal government could mandate that each state have its own minimum wage law and allow them to set it based on the needs of the people and the cities. This would not cost the federal government a penny, but would spur economic activity immediately. Certain cities, such as Camden (New Jersey), East St. Louis (Illinois), and Detroit each suffer from an unemployment of around 20 percent. they need help like this immediately. In addition to creating jobs and solving employment problems where they are — locally — it would also help to restore the Federalism system that helped make this country great.
Since businesses do not pay taxes (they are only tax collectors through higher prices or lower quality products), we should eliminating taxes on them. Taxes are simply a fixed cost for doing business, nothing more. If taxes are too high, businesses have no choice, but move to other countries where the rate is less so they can lower prices and be more competitive. Businesses do not take these actions because they are not patriotic. In the words of The Godfather, “it isn’t personal, it’s just business.” Eliminating taxes on business would have a profound impact on high quality job creation. This policy would also encourage an increase in productivity and soften the blow of inflation. Finally and, maybe most importantly, it would help restore honest government when the voters face the brunt of the taxes directly.
Ending taxes on wealth (and job) creation and replace income tax with a sales tax. This would eliminate the economic genocide against job creators we are seeing today and would more fairly spread the financial burden of government on all economic groups. If every economic group shared the burden of funding the government, that would encourage all groups to make government fiscally accountable.

The “band aid” approach of bailouts and short term fixes are only making our situation worse. There is a root cause to our current economic situation. Employing the strategies above would put the United States on the fast track for recovery and would lead to a more accountable government.

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The Obama economy: a report card from America’s Heartland

Kevin Price — Mon, 27 Sep 2010 13:07:26 +0000

I have been seeing several “reports cards” recently by political pundits, policy institutes, journalists and others who are all over the map on how to grade the President’s performance when it comes to the economy. The vast majority are providing rather low scores. I think the highest I have seen was a “C+” by a very liberal think tank. What I wanted to do was get the opinion of real Americans who are living through this administration’s policies on a daily basis. With that, I got the views of friends and fans of my Price of Business radio show on CBS radio at Facebook. Their responses provide real insight on what is going on in this economy and the role Obama is playing.

“President Obama’s answer to everything is “spend more money.” He appears never to have looked at the ways lower taxes and a tightened budget could benefit the economy. His economic philosophy is “more,” not “less,” and the effect has been only failure at every turn. (Michele Samuelson, Austin, freelance political writer).

Christine Marks (Jenks, Oklahoma) wrote “I am 53 years old. I have no recollection of the economy being even close to what it is now and has been for the last 2 years. I am a nurse and thank God I chose this profession as I feel there isn’t any other professions that are safe from layoffs. I go to bed every night and pray for all the people, just that I know personally, that are unemployed. There are five nurses that I work with that have a spouse that has lost their jobs and they are the sole support of their families. Before I got my license reinstated after my divorce, I looked for 2 years for another job, ANY JOB, from pushing a lawn mower around to washing windows and was lucky if anyone could afford the extra money to hire me until I got back on my feet.”

Annette Marie Jones (Dallas, Texas). “I work as an Account Representative for a career and technical school. I am probably one of the few individuals who just recently graduated from college that did NOT vote for him and become “mesmerized” by his “Hope” and “…Change” campaign. I do not see this administration addressing the unemployment or the devastated economy. Instead, I see an administration that wants to spend our nation into a bankrupt oblivion by passing this new health care reform, is out of touch with reality and the American people, is simply just set on progressing past the constitution and everything our nation was founded on. Please do cite me…I could write a lot more on here…if you need me to go further I will. Oh, and I will give Obama an F for a grade.”

Ed Merkel (Lincoln, Nebraska). “I’m now convinced the President believes he can spend and tax the nation into equalized prosperity. I’ve been employed in the financial sector for three decades. And no, I’m not wealthy, not even close. I deal with businesses across the county, and have yet to hear a positive comment about the direction of the economy. And these are unsolicited comments. Beyond that, I’ll give him a “D”, because the country hasn’t collapsed yet. But let them pass Cap & Trade and it likely will plummet further.”

Nick Carbine (Houston, Texas) writes, “Kevin, the Obama administration’s handling of the economy exposes a fundamental conflict of interest in a government “handling” an economy. Unleashing the economic might of the United States calls for dramatic tax cuts, reducing onerous regulations, and confidence that one’s economic moves will not be arbitrarily undone. As fixing the economy calls for less of themselves, Congress and the administration are fighting against our economy rather than helping it. They would much rather siphon borrowed trillions to themselves and their pet projects. Better the whole country suffer than Washington insiders do without the lifestyle they have grown accustomed to. So for actual handling of the economy, a very predictable F.”

These are the comments of real people, trying to pursue economic prosperity in very trying times.

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Where has all the Stimulus gone?

Kevin Price — Tue, 21 Sep 2010 13:04:38 +0000

Sen. Tom Coburn concerned were all the stimulus funds went.

President Barack Obama has consistently defended the quality of the spending that has taken place in the stimulus package. He has repeatedly told voters how impressed he is that there has been so little waste in the spending. “If there has been any waste,” it was “miniscule,” according to the Administration.

Senators Tom Coburn (R-OK) and John McCain (R-AZ) beg to differ and do so in a recent report they released entitled “Summertime Blues,” in which they examine widespread waste in the various stimulus programs. This is the third in a series and in this most recent report they write: “Eighteen months since the passage of the stimulus bill, millions of jobs are still gone and the economy is as uncertain as ever. The only thing getting a boost is our national debt. The stimulus has helped push it 23 percent higher, to $13.2 trillion, a new record.” Coburn went on to talk about the specifics of the waste, saying that he “expected to get criticism for pointing out ‘stupid and inappropriate” expenditures from the 2009 stimulus bill, whose cost is now estimated at $862 billion.”

Here are a few examples of the incredible numbers:

• $554,763 for the Forest Service to replace windows in a closed visitor center at Mount St. Helens

• $762,372 to create “Dance Draw” interactive dance software

• $62 million for a tunnel to nowhere in Pittsburgh, PA that even Governor, Ed Rendell called “a tragic mistake”

• $1.9 million for international ant research

• $1.8 million for a road project that is threatening a pastor’s home

• $308 million for a joint clean energy venture with…BP

• $89,298 to replace a new sidewalk that leads to a ditch in Boynton, OK

• $3.8 million for a “streetscaping” project that has reduced traffic and caused a business to fire two employees

• $16 million to help Boeing to clean up an environmental mess it created in 2007

• $200,000 to help Siberian communities lobby Russian policy makers

• $39.7 million to upgrade the statehouse and political offices in Topeka, Kansas

• $760,000 to Georgia Tech to study improvised music

• $700,000 to study why monkeys respond negatively to inequity

• $193,956 to study voter perceptions of the economic stimulus

• $363,760 to help NIH promote the positive impacts of stimulus projects

• $456,663 to study the circulation of Neptune’s atmosphere

• $529,648 to study the effects of local populations on the environment…in the Himalayas

The waste is not so small that is is “difficult to measure,” as apologists for the President would claim, but so obvious that every politician that has supported such programs should fear for their political lives.

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Foreclosures at highest point since Obama took office

Kenneth Daines — Thu, 16 Sep 2010 12:27:32 +0000

From the AP:

LOS ANGELES — Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday.

In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can’t afford to simply dump the properties on the market.

Concerns are growing that the housing market recovery could…

Savings from Obamacare?

Kevin Price — Wed, 15 Sep 2010 13:10:24 +0000

The Obama administration has continually boasted about the huge savings that the American people would receive from it sweeping health care legislation. What kind of savings is it claiming? The National Center for Policy Analysis states that the Obama government is arguing that the “reform” will reduce “the federal budget deficit by $100 billion over 10 years and 10 times that amount in the second decade of implementation. They cite the Congressional Budget Office’s (CBO) cost estimate to back their claims.” These are dream numbers that do not line up with reality according to many policy experts.

Obama and Congressional Democrats only want to discuss the CBO numbers, but that agency is not the only one monitoring the fiscal and economic impact of Obamacare. The chief actuary of Medicare has an opinion on Obama’s health law too. His assessment is that the gap between the CBO’s numbers and reality is quite significant.

For example, Obama says that the law will slow drive down the increase in costs. However, the chief actuary of Medicare says it will not have such an effect. In fact, any person who has taken high school economics know that this cannot be the case. With tens of millions more added to the health care demand and as many as 33 percent of doctors saying they will get out as a results of the legislation, the pull on the costs will explode.

Obama argues that people will get to keep their work related plans if they want, while the actuary says that as many as 14 million people will lose their employer coverage. Many, if not most, of these people would prefer the company plan rather than going to one that resembles the Department of Motor Vehicles. I believe 14 million to be a very conservative number. Obama’s plan is modeled after the state of Massachusetts and they have seen an exponential increase in companies killing their private plans because they know they can get on a cheaper government plan. This shift from private to government is among the reasons Obamacare will not lower the deficit over time.

Finally, Obama says that his health care agenda will improve the budget outlook. I doubt it and so does the chief actuary. The Joint Tax Committee has chimed in with estimates of its own, noting that the tax provisions missing from the chief actuary’s study shows approximately $50 billion of deficit reduction alleged in the CBO report will not hold up in reality, notes James Capretta of the Heartland Institute.

Obama may not know much about economics, but he is very proficient when it comes to smoke and mirrors. Unfortunately, these do not hold up over time.

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