Thursday, December 6, 2012

Quick Hits - December 6, 2012

Bashir al-Assad, Syria's dictator, placed his toes on the edge of the Red Line last night as multiple sources confirmed the Syrian military had completed preparation for loading Sarin gas onto delivery systems.  For the next 60 days, the 'half-life' of the nerve gas, only an order from Assad prevents the Syrian military from using WMD on their own people.

If that line is crossed - what will the US or NATO do?  That is one of the questions that Assad has to be asking himself as he tries to decide whether to stay in Syria until the bitter end or bolt to a convenient exile location like Cuba, Venezuela, Bolivia, or Ecuador.

How will Barack Obama deal with this 3AM call?

We already know how President Obama is reacting to the 3AM call he's received from Egypt over the escalating violence around the Islamist Morsi granting himself dictatorial powers.

We also know how the President decided to address the 3AM call from Benghazi, Libya on September 11, 2012.  Pretty much the same way as he needed his beauty sleep before attending a morning campaign fund raiser in Las Vegas.

What makes the fiasco of Benghazi even worse is that the Islamist terrorists who launched the 8 hour long attack on two US diplomatic facilities in Benghazi were armed, according to a report in the New York Times this morning, by a secret weapons deal approved by the Obama Administration.

How nice that the NYT has decided to report this AFTER the Presidential Election.  It's stunning the amount of valuable info that becomes available after they shilled for Barack Obama's re-election.  Like the other disclosure where the New York Times admits that 'Reaganomics worked'.
The inadvertent revelation comes in a November 29th article by Binyamin Appelbaum chronicling the steadily falling tax burden Americans have experienced since the 1980s.

AEI columnist James Pethokoukis notes that the heart of The Times' article is that in 2010 Americans "paid far less in total taxes -- federal, state and local -- than they would have paid 30 years ago."

Pethokoukis points out that some tax hike advocates think this means that America's tax burden is too low and time has come for a hike. But Pethokoukis disagrees.

Maybe I’m crazy, but I think the reduction in the tax burden — staring with the Reagan tax cuts — has been a huge competitive advantage for the U.S. We should keep that edge. Check out these numbers. In 1981, France’s per capita GDP was 81% of U.S. per capita GDP, Germany’s 83%, Italy’s 81%, Britain’s 69%.

In 2010, France’s per capita GDP was 73% of U.S. per capita GDP (down 8 points), Germany’s 81% (down 2 points), Italy’s 68% (down 12 points), and Britain’s 76% (up 7 points).
Pethokoukis reminds readers that Europe was closing the gap with U.S. wealth by 1980, but after Reagan's tax cuts that trend stagnated and in other cases even began to reverse.
This is a good segue to the main focus for today's post - Economics, Fiscal Cliffs, and how we, the American people, are losing regardless of who 'win's' the current negotiations.

First, let's understand something very simple.  The fiscal cliff, 'Taxmageddon', the 'witching day' of January 1, 2013 when a host of bills expire and subject the American people to a number of significant tax increases, is not an accident.  It's not happening by chance.  It's happening by design and by policy.
Year after year, the Democratic-controlled Senate, ignoring the law, refuses to pass budgets.

Year after year, Washington makes big government cheap by charging Americans only $6 for every $10 of government services, borrowing the difference. And the biggest purchaser of U.S. government debt is not China but ... the U.S. government, largely through the Federal Reserve.

Yet what supposedly is horrifying is a sequester that would cut less than 3% of federal spending over the next decade? Or horrible Grover Norquist.
George Will, writing the above, just starts to touch on the issues.  Yes, issues - plural.  And it's all according to plan.

Barack Obama is a true disciple of Saul Alinsky.  He's acting on his deep rooted ideological roots intending to 'fundamentally change' what he sees is a broken country - one that is 'unfair', that 'oppresses the poor', and is based on the foundation of an economic system (capitalism) that is fundamentally flawed.  He sees his role as providing 'justice' for those 'wronged' by that fundamentally flawed economic system.  For ensuring the equality of results.  That government and the state is the only and best tool to manage the economy to ensure 'fairness', 'balance', and deliver 'social justice' to all the people.  The government has to right the wrongs of the past two hundred plus years in order to move beyond it's history.  Among these wrongs that he has to fight are 'racism', 'sexism', and the greed of wealthy who obtain their gains on the backs of the disadvantaged.

He, and his progressive liberal fascist supporters, highlight and call out 'racism', 'sexism', and use the meme of class warfare to target, personalize, and demonize those who wish to maintain that fundamentally flawed system.  To him, and his allies, the use of projection is second nature -and he (they) do not see anything wrong with it because to further their ideological agenda, to achieve the utopia they envision, they have to be all in.

To achieve what he believes in his core is the only 'fair' system - Barack Obama doesn't care if the country goes over the cliff.  This cliff is a creation of Barack Obama and his allies in Congress. They are the ones who planned to set the expiration dates of the 2001-2003 Tax Reductions, the Temporary Payroll Tax Reduction, and the hitting of the new Obamacare taxes for January 1, 2013.  Add to these, the plan by Obama and the Congressional Democrats to set the next confrontation around the debt ceiling around the same time.

Crises are opportunities in the Alinsky school.  They offer the ability to expand the agenda via 'fixing' the problem as well as a circumstance to affix blame, demonize, and personalize the opposition in order to sway the opinions of the masses.  If they do not occur naturally - create one in order to create the meme to 'justify' the solution.

Even failures are no longer issues or impediments.  Failures do not occur because the ideological agenda is flawed, failures occur because of the adverse action by opponents to the actions, or that the action was 'watered down' as the result of previous negotiations - and not implemented thoroughly enough.  In that case, then the 'solution' is the more ideologically 'pure' implementation.  Once the door is opened, and the foot is across the threshold, there is no going back in the Alinsky model.

For example, Obamacare, as it is currently designed is intended to fail.  The ultimate goal of the progressives was to obtain a single-payor government controlled healthcare system not unlike Britain's NHS.  They were unable to do this, so what was created was a manner to open the door and get the foot across the threshold - pass the law and then have it survive electoral and judicial review.  When Obamacare 'fail's, the solution will not be to 'roll back' Obamacare and return to the 'unfairness' of a free market system - but expand government control of healthcare.

[This was the same philosophy Jacques Delors, the principal architect of the Euro, followed as he pressed for the EU and single European currency.  What was actually implemented was flawed and known to be flawed - but a step towards a complete Union which was the ultimate goal. Now in the midst of the Euro-crisis, the leading 'solution' is moving more to a complete Union - not moving back.]

Assisting Barack Obama in achieving his goals are the incompetents of the GOP Congressional Leadership - particularly Speaker John Boehner, who lack the fortitude to stand on and defend conservative principles and traditional American values.   They appear far more concerned about keeping their power and popularity in the short term than taking a stand for the benefit of the country in the long term.  As they pontificate about their 'hard-line' positions, all they are offering are just a slightly smaller, slower incremental step towards the progressive agenda advocated by Barack Obama.  They are acting as if they fear the effect of the propaganda of the progressive mainstream media more than they fear the effects of their voters / base.

To make a historical analogy, if Winston Churchill acted like these 'leaders' during his years of political exile in the 1930's - he would never have sounded the alarm over Hitler and Nazi Germany.  He never would have pushed for the re-armament of Britain.  He never would have stood alone against Nazi Germany in June 1940 - and likely would have sought a negotiated peace with Nazi Germany during the summer of 1940.

So why am I, a conservative, castigating the Speaker of the House and other GOP Congressional leaders, in these negotiations?  Because they aren't negotiating based on conservative principles.  They aren't fighting.  They aren't making their case in the media or taking it to the American people.  All they are offering is just a watered down / slower approach to the progressive agenda of 'fundamental change'.

This is the problem.  Neither side is working towards FIXING THE FUNDAMENTAL PROBLEM we are facing which is the excessive spending and expansion of the Federal Government.

Barack Obama's 'offer' to the GOP to avert the 'fiscal cliff' is basically the President's rightfully maligned FY2013 budget plan.  Despite getting exactly ZERO votes in the House and the Senate when brought for a vote earlier this year - this is the President's plan and agenda.  It's all about 'fairness', 'balance', and 'social justice'.  It's also ALL ABOUT SPENDING.

According to the President's plan - between 2013 and 2023, he intends the Federal Government to spend $47 trillion dollars.  Let that set in for a second... Over the next DECADE, he wants to spend an average of $4.7 trillion dollars PER YEAR.  He's spending about $3.8 trillion dollars this year, which is about $1 trillion more than we spent in FY2007 - the last all GOP budget.   So, over the next decade, he's intending to increase spending nearly another $1 trillion per year.

The current spending, when compared to the size of our GDP, is about 24% of GDP.  This is matching the all-time - which last occurred during the Second World War.  From 1960 to 2008, federal government spending averaged 20.2% of GDP.

Our GDP, is struggling to grow at a 1.5%-2% rate per year - well below the 4-5% rate that the President expected and projects in his budget plan.  At the projected rate of spending increases, we will remain spending nearly 20% more than we did between 1960 and 2008.

In 2012, the receipts of the federal government were approximately $2.6 trillion - about $200-$250 billion below the all-time high receipts which occurred in 2007 (and when the budget deficit was only $161 billion). Obama's economic plan projects a nearly 20% increase in federal government revenues in 2013 and 2014 - an then about 8% annually for the remaining 8 years of the next decade.  All told, his plan says that over the next decade the federal government will bring in about $40.3 trillion of revenues.

The annual average of revenues the President projects?  $1.2 trillion higher than our ALL-TIME HIGH.

The end result of this spending and revenues - ADDING ANOTHER $6.7 trillion to the $16.35 trillion national debt that has been already accrued.

Let that sink in - if the President gets what he wants - and the economy / tax policy performs as they believe, we will expand our national debt from $16.35 trillion to $23.05 trillion.  Or - to look at it this way - about $13 trillion more than it was when it took office on January 2009.

But even this is an incredibly optimistic and unrealistic scenario.

Our economic growth is a third or less than what is being projected.  While spending is soaring, the President is claiming that new tax 'fairness' will generate revenues.  But returning the 'wealthy' to the Clinton-era tax rates only brings in about $80 billion in additional revenues -IF WE ASSUME THE HIGHER RATES DO NOT HAVE A NEGATIVE IMPACT ON THE ECONOMY.  That $80 billion, or $800 billion over the next decade is only about 20% of the total revenues the President projects will be raised over the next decade.

Where are the OTHER REVENUES GOING TO COME FROM?  Economic growth?  Not hardly.  They will come from even more taxes - not only on the wealthy, but also on the backs of not only the middle class, but everyone.  And it still will only be enough, if all works out, to limit the increase of the national debt to $6.7 trillion.  [Realistically, I expect it to be far closer to $10 trillion over the next decade.]

In his 'offer' to 'avert' the fiscal crisis - the President calls for $4 in new taxes for every $1 in spending cuts.  He seeks, over the next decade, to reduce the debt by about $1.2 trillion via this formula.

If we assume the speculations are accurate, this means that the President is willing to change his plan so that rather than increase the national debt over the next decade by $6.7 trillion (to a $23.05 trillion total), he will ONLY increase the national debt by $5.5 trillion ($21.85 trillion total).

The national debt will still increase - and by an amount in the next decade only a less than what Barack Obama added in his first 4 years [as he added as much as the combined totals of President's 1 through 42 plus the first half year of 43's term].

The debt crisis is not being averted.  It will get worse under the President's plan over the next decade.

The President is, as I've noted before, running the progressive agenda.  He seeks to increase taxes, expand government and government control to manage the economy, increase the size of government to instill 'fairness', 'balance', 'social justice' [pick winners and losers] so that the country 'is a better place'.  Wealth gets redistributed via the 'fairness' of the government.  Poverty and racism end.

The conservatives stand on different principles.  They believe in lower taxes - keeping wealth within the private sector, moving the government out of the way of the private sector to encourage growth, and generate the funds to pay for government with a lower, simplified tax code where economic growth is the fuel behind higher revenues.  They believe in equality of opportunity as opposed to the equality of results - and individual rights and accountability.

But these aren't the principles that Speaker John Boehner is standing on for his 'negotiations' with Barack Obama to move us away from the fiscal cliffs we are racing towards.

Speaker Boehner's 'solution' is to agree to $800 billion (over the next decade) of higher taxes, while calling for about $3 trillion of spending reductions over the next decade.  In sum, what John Boehner sees as a solution is to reduce what we are going to spend over the next decade by about $3.8 - $3.9 trillion.

So, rather than increasing the national debt over the next decade, $6.7 trillion, he wants to ONLY INCREASE the national debt by $2.8 to $2.9 trillion.

This isn't cutting the national debt - it's just a proposal to SLOW DOWN THE GROWTH of the national debt.  Furthermore, if we look at a more likely $8-$10 trillion increase the Obama agenda will deliver over the next decade, Boehner is only proposing to slow down the rate of spending by 30-35%.

How is that going to help us?  That's a fix?

All John Boehner is doing is offering to let the country bleed a little slower - we'll still bleed to death.

The crises we face require far more drastic measures than are being offered by the GOP Speaker of the House.  It also requires far more fortitude than the Speaker has.  The longer we wait to fix the fundamental problem we have around spending and debt - the harder the fix will be.  To 'win' - all Obama has to do is make it 'too hard' to reverse his agenda...once the tipping point has been reached it will not be reversible and the country will have become 'fundamentally changed'.

No comments:

Post a Comment