Quick Hits - December 5, 2012

Last year, during the Debt Ceiling / Budget negotiations between Barack Obama and the GOP Congressional leadership, a deal in principle had been reached between the President and Speaker John Boehner where $800 billion in new revenues would be raised in conjunction with about $3.2 trillion in spending cuts over the next decade.  But before the deal could be finalized, Barack Obama reneged on the deal, demanding that the Speaker accept $1.2 trillion in revenues.  Angered by the bait and switch conducted by the President, the Speaker torpedoed the deal.

Barack Obama took to the airways to complain about the action by the Speaker - noting that the entire $1.2 trillion of new revenues would not increase anyone's tax rates - but was achievable via eliminating deductions and loopholes in the tax code.

Secretary of the Treasury, Tim Geithner, in his negotiations with the GOP Congressional Leadership this week, staked out two absolute 'Red Lines' for the President.  The first is that any reform of Social Security is entirely and completely off of the table.  Even though Social Security is one of the three largest drivers of the fiscal spending challenges we face, the President and SecTreas contend that Social Security is not a 'driver of the deficit' - and that the negotiations will only address the 'drivers of the deficit'.

Drivers of the deficit?  Here's a simple graph that reflects what will happen if we really address the 'drivers of the deficit' that include Medicare, Medicaid, and Social Security - and that happens if we do not.

This country is the SS Titanic - and we're speeding at top speed, blindly, into the path of the 'entitlement iceberg'.

[Side observation - one of the groups that turned last month's election to Barack Obama was the youth vote - those under the age of 29.  They overwhelmingly voted for Obama and his 'gifts' and promises courtesy of the government.  Yet, these are the one's who will be screwed the most by the President's irresponsible and ideological driven policies.  They voted to let Obama spend their inheritance, the wealth they hope to earn and accumulate in their lifetimes, today.  They will be the one's that will be holding the bill if we don't take action today.]

The other 'Red Line' - that any deal has to have a tax increase on the income tax rate paid by the 'wealthy' - those Americans who earn over $250,000.

Between Obama’s fiscal cliff proposal and subsequent vacation, and Carney’s and Geithner’s comments, the Administration is finally making its intentions clear: tax the so-called “rich,” cut next-to-nothing from the budget, and claim that this will bring back the glory days of the Clinton era. Never mind that the entire argument ignores at least seven major Clinton-era fallacies, and that a return to the Clinton-era tax rates on the “wealthy” only raises 1.88% of the next decade’s expected spending.

Spending cuts, entitlement reform, and tax reform are the three major keys to economic recovery and preventing the transformation of America into today’s Greece. Unfortunately, Obama’s opening negotiations on the fiscal cliff are not hopeful signs that he takes any of them seriously.

This 'Red Line' was reinforced by an unnamed 'Senior White House Official' who set the President's position, 'If GOP doesn't agree to higher rates for the top 2 percent, we'll go over the cliff and the American people will hold them responsible."

It is the fear of being held 'accountable' that seems to be driving the actions of the current GOP Congressional leadership - and in particular Speaker John Boehner.  He seems more concerned about his own reputation and the possible smearing of himself and other GOP leaders by the feckless Obama sycophants in the mainstream media than with addressing the immediate needs and best interests of the country.

His counteroffer to the President's ludicrous initial offer for $1.6 trillion in new taxes and a vague promise of $400 billion in spending cuts was to effectively move directly to what the President and he originally agreed to last year - with the $800 billion in new revenues coming from not higher tax rates, but from closing loopholes and limiting deductions for the wealthiest Americans.

This is a major concession by the Speaker - and one that is very troubling even though he is appearing to hold the focus on revenues being derived from tax code reform.

First, he has positioned himself to accept a 'compromise' revenue increase of at least $1.2 trillion over the next decade by immediately going to the $800 billion of the 'last deal'.  The issue we face, as I've covered, is not a shortage of revenues - but too much spending.  Lower tax rates and other efforts to stimulate economic growth actually result in higher government revenues as we've learned from the Kennedy, Reagan, and Bush (43) tax reduction programs.

Second, in his fear of confrontation, he has made some incredibly bad decisions that call into question his suitability to serve as the Speaker of the House.  It's asinine to be concerned about the media.  He's a Republican and supposed to be a conservative - he'll never get a fair shake by the mainstream media.  Even if he agrees to give Barack Obama everything he wants - he'll not get fair treatment by the mainstream media.

Another is related to what seems to be a purge underway of Tea Party Conservatives from crucial House Committees - in order to remove them from having a position of influence to argue for a stronger conservative negotiation position or case.  This is what the Democratic caucus does to enforce groupthink and groupspeak.  This is what the Soviet Union and other tyrannies did to punish those who would not tow the 'official' line.  This is not what the GOP stands for.

Finally, the Speaker also issued his 'response' to the President's absurd offer without sharing it or discussing it with the GOP caucus in the House.  It was done entirely outside of the caucus - all in an effort to avoid debate.  Again, this is not how the GOP should operate...and reflects the insecurity and arrogance of the Speaker.

While many conservative bloggers and commentators have been focused on the near instant dimissal of Boehner's offer by the President - particularly around their continued use of the buzzwords 'balance' and 'fairness' - which is fair game, others are not taking a hard look at the actions of the Speaker and raising questions about them or the Speaker's proposal.

Here's some hard facts for the Speaker -

• The Obama Administration is not interested in a negotiation or a compromise.  They only want a surrender.
• The press will castigate the GOP and defend Obama regardless of the results - as long as Obama does not surrender.  And if he does surrender, they will stop castigating him within weeks.  Furthermore, if the economy turns around - Obama will get the credit for the turnaround.
• Obama is not interested in what is in the best interests of the country.  He's only interested in what is in the best interests of his hard left progressive agenda - and destroying the viability of the GOP.
• 'Fairness' is not about fairness.
• 'Balance' is not about balance.
• The Obama Administration does not see spending as an issue - and have no interests in reducing spending or reforming the major entitlement programs.  They see any resulting crisis as an opportunity to advance their agenda and increase the size / scope of government.

Just because the media will castigate you - and your policies, doesn't mean that you do not take to the bully pulpit and make your case.  You can't assume that the American people will learn from their 'pain'.  They've been feeling pain from the President's feckless economic policies for the last 4 years - and they've not learned anything.

Mr. Speaker, since the President does not want to return to the Clinton-era tax levels - across the board, or the Clinton-era spending levels - across the board - both of which he and his economic advisers said delivered the 1995-2000 economic boom that was so much better than the 2004-2008 economic boom, and since the President will also ignore the recommendations of his own blue ribbon commission [Simpson-Bowles] to solve the fiscal challenges we face all in favor of hiking taxes on those earning more than $250,000 which will cover about 7% or less of our annual deficit - and has no plan to find the other 93% other than from more taxes [capital gains, dividend, corporate, and inheritance] - then you can either surrender or hold to our core values.

We know that if the President seizes 100% of the assets of the top 1% (or even 2%) - he barely covers the scope of this year's annual budget deficit.  But with those [formerly] wealthy now without 1 cent of assets - how will he cover his massive spending plan for next year or the one after that?  He can't - without massive taxes on the middle class.  

Spending cuts and entitlement reforms are needed.  Social Security is 70 years old.  Medicare is nearly 50 years old.  These programs need to be reformed / modernized to reflect the new demographics and new realities. 

But you, Mr. Speaker and your fellow GOP leaders, have to also make the commonsense argument for the American people.... 

Victor Davis Hanson, in his latest column notes this about the position of the President and his supporters observes...

But what we cannot stomach is all the sermonizing about “fair share” and “play by the rules” and “the one percent” from those who seek to be exempt from their own rhetoric. Can’t Warren Buffett keep quiet and just leave his $50 billion to his heirs — and let the wonderful federal government do what it must with a $30 billion estate tax on his earnings? Can Bill Gates’ people really manage the Buffett $50 billion better than HUD or HHS? And if so, why a HUD or HHS? His estate will dodge more tax liabilities than what millions of his proverbial overtaxed secretaries pay. Why isn’t George Soros one of the despised money speculators of the sort that Occupy Wall Street was enraged about? Isn’t trying to break the Bank of England a bit too much money-grubbing? So weird what constitutes good and bad riches!

I guess the rub is not big or small money, or what you must do to get it and keep it. No, the lesson instead is what you say when you get it.

Look at California - which has been running the progressive agenda since Jerry Brown's first term as Governor in the mid-1970's....

Today, 144,000 HOUSEHOLDS in California, account for 50% of the State's income tax receipts.  With the passage of Proposition 30, the Governor's plan to 'fix' the state's fiscal challenges, the top 10% of wage earners in California will account for 80% of the total income tax receipts.  This is also the state where middle class wage earners, those earning $48,000 per year (state median income is $54,000), pay a 9.3% income tax rate - a rate higher than the TOP income tax rate in 47 other states.

There are about 12 million households today in California.  Even with these tax increases - or the excessive dependence of tax payments on a shrinking number of people - California's structural fiscal problems are not being solved - but exacerbated.

How many of these 144,000 households or top 10% will remain in California despite it's great weather and natural resources?  How many have to leave before this collapses?  And leave many will as the other policies of the state, the fecklessness around cap and trade, water management, illegal immigration, identity politics, and the power of the public sector unions all drive up costs and push businesses out of business.  At what point is the value of the great Californian weather offset by the pain of all of the other factors?  For thousands of businesses and hundreds of thousands of people - we're already at that point.  California's population is barely growing - as illegal immigrants, dependent on low wage jobs or government entitlements, flood in numbers that barely offset the exodus.

This is what the US will look like if the GOP does not hold to its core principles.  

The GOP has more to fear from its abandonment of its core principles and values than it has to fear from the castigation from the progressive mainstream media or the baseless attacks and campaigning conducted by the Obama Administration.  We're already in a 'Gimme' electorate - where the majority of people who cast their votes last month want something from the government and are willing to sacrifice their rights to get something 'for nothing'.  

That is the mindset we have to change.  That's not the mindset that made this country great.  That's the mindset, shared by over 50% of Democrats and 25% (!!) of Republicans, that embraces socialism and fascism over capitalism and freedom.  That's the mindset echoed by the failed progressive city leadership of Detroit - now bankrupt after four decades of implementing the progressive agenda - when they demand their 'quid pro quo' from the President - reminding him that since they overwhelmingly voted for him on Election Day, he OWES them billions to bail the city out. Not so the city can change its approach - but so the city can continue down the same path that bankrupted it.  

Yes, it is Einstein's definition of insanity in action.

My fear is if my hope that the GOP leadership will get smart is also an example of Einstein's definition of insanity?  Doing the same thing again and again while expecting a different result.

Quick Hits - December 4, 2012

The fecklessness of the Obama foreign policy, particularly regarding the Middle East, is seizing attention today.

In Syria, which the President's team is handling 180 degrees different than it handled the popular uprising against a rabid dictator in Libya, signs are starting to appear that could reflect the regime of Bashir al-Assad is on its last days - after killing over 40,000 Syrians in the last 20 months.  Fighting remains heavy in the suburbs of the Syrian capital of Damascus - and the Damascus International Airport has been intermittently shut down.

Opposition fighters are using newly supplied (from Libya?) portable anti-aircraft missiles to shoot down Syrian attack helicopters and jets flying close air support missions for the Syrian army.  Signs are being detected that the Syrian military is either starting to relocate elements of their large stocks of chemical weapons or more ominously preparing some of these weapons for use in a last ditch effort by Assad to remain in power.  Rumors are that Assad's people have been reaching out to Cuba and Venezuela to explore those countries as being hosts for his possible exile.

The US and NATO have both issued stern warnings to the Syrian regime that any use of chemical weapons in the current conflict would be crossing a 'red line' - and imply that such a step may precipitate a military response.

Meanwhile, from all information, it appears as if the primary elements of the Syrian opposition are forces linked with radical Islamic jihadists - including a resurging al-Qaeda in Iraq which has been rebuilding itself since Barack Obama yanked US forces out of Iraq.  Not only has the group been increasing their terror activities in Iraq, but it is also establishing operations in Syria - and threatening to do so in Jordan.  [So much for the President's inept claim that al-Qaeda is on the run - it's becoming one of the major regional forces since the US pulled out of Iraq.]

Conditions in Egypt are continuing to deteriorate in the wake of President Mohamed Morsi's unprecedented power grab - where he gave himself near dictatorial powers to push the agenda of the Muslim Brotherhood in Egypt.  Immediately after emasculating the Egyptian courts, the sole remaining 'check and balance' for his efforts, his Islamist allies rammed through a new Egyptian Constitution which supports the power grab and embraces Shari'a law as the basic legal process for Egypt.

On top of locking Shari'a into to the Egyptian Constitution, the new Islamist Constitution also eliminates the right of free speech in Egypt, the equality of rights for women, and restores the legality of slavery throughout the country.

Tens of thousands of Egyptians, who oppose the radical Islamists, have taken to the streets in Cairo - including massive demonstrations at Tahir Square.  During one march - the demonstrators approached and drove President Morsi out of the Presidential Palace.

Unlike during similar demonstrations protesting the regime of the former Egyptian strongman, Hosani Mubarak, the Obama Administration and WH has remained silent over not only supporting the 'will of the people', or freedom, but also in denouncing the power grab launched by Morsi.

Why the difference in actions between Morsi and Mubarak?  Between Libya and Syria?

How can the Obama Administration remain silent over a Constitution being rammed down the throats of Egyptians that eliminates free speech, women's rights, and RESTORES SLAVERY?

Feckless, naive, and incompetent describe the Obama Administration's approach to foreign policy.

But these traits aren't just the purvey of Barack Obama when it comes to foreign policy.  Large elements of the State Department also embrace these same traits.

In the Wall Street Journal, a former US Ambassador to one of the 'stans, noted that he had to fight several times with officials based in Washington DC who were insisting on reducing the security protection for his Embassy, his staff, and himself because of budgetary concerns being raised by Administration bean counters.  This is exactly the same moronic decision making that the late Ambassador Chris Stevens had to deal with - as the security for US diplomatic facilities in Libya were reduced because that country had become 'save' in the wake of 'democratic' elections and the rise of Islamic organizations - including a surrogate of al-Qaeda.

There are some 'professionals' in the State Department that make a career on being incompetent and testing new bounds of the Peter Principle - including one who is still rumored to be on the short list to replace SecState Hillary Clinton - Susan Rice.

Susan Rice's record of feckless incompetence dates back to the 1990's and her stint during the Clinton Administration as an Assistant SecState for Africa.  In her role, she actively supported the rise of some of central Africa's biggest and most violent thugs.  She campaigned during the Rwandan genocide to not only prevent any US humanitarian intervention to end the genocide, but actually pushed to encourage the Administration to not use the term 'genocide' in any description of the Rwandan violence as use of that term would politically damage the Clinton Administration.  Rice also performed in a similar manner as millions died in the Democratic Republic of Congo - advocating that the Administration do nothing.  Finally, Rice was also the strongest advocate in the Clinton Administration against US efforts to provide HIV / AIDS and Malaria medication throughout the continent - saying it would only enrich US pharmaceuticals.  How many died before President George W. Bush overruled this inept policy and spent billions to assist the region?

Yet, despite this record of incompetence - the progressive nimrods in the media continue to push for her to become the next SecState - and attack conservatives who continue to demand accountability by Rice not only for her past actions, but specifically her role to lie to the American people and provide political cover for the Obama Administration in the wake of the Benghazi terrorist attack which killed the US Ambassador to Libya, a State Department official, and 2 State Department / CIA security officers in an 8 hour attack on September 11, 2012.

Ruth Marcus, one of the WaPoo's more moronic columnists, took to the editorial pages of that paper to invoke the 'Fake, but accurate' meme in an effort to provide cover for Susan Rice.

This is just the latest effort to protect Rice by attacking and defaming those who call Rice out for her dismal record.  Protest Rice, and one is called a racist and misogynist.  Yet these same nimrods who toss these pejoratives were silent as liberal progressives smeared Secretary of State Condi Rice - calling her a 'house nigga' for President George W. Bush.  Racist?  Absolutely - but in the mindset of the looney left, it's legitimate because Condi Rice is a conservative and worked for a Republican.

If not for double standards, they would have no standards whatsoever.

Anti-Israel and anti-Christian hard left 'journalist', ABC's Christiane Amanpour, aka Mistress Death, is going to be hosting for ABC News a 2 part primetime special about the history of Israel and the Bible.  I'm sure that there will be no bias or hatred in this - right?  In reality, I expect this to be about as objective, unbiased, and accurate as Oliver Stone's History of America [Showtime] ....which is neither objective, unbiased, or factually accurate.

It's that time of season again - the annual 'War on Christmas' being waged by the liberal fascist progressives - in their efforts to demonize and marginalize Christianity and it's role in defining some of the traditional core values of the United States.

Bill O'Reilly, on The Factor, is, once again, jumping into the front lines to fight against this war...

Many liberal progressives deny that they are waging a 'War on Christmas' or ridicule efforts like those of BOR to call their efforts to marginalize Christianity and Christmas a 'War'.  But this is part and parcel of the liberal secular progressive attacks on Christianity and core US values for decades.

For example, in Santa Monica, CA - a Nativity scene has been displayed in Palisades Park for decades.  However, in the last few years, Atheists have attempted to block the display of the Nativity scene in the public park citing the provisions of 'separation of Church and State' - and claiming that the display reflects an endorsement of Christianity by the local government.  In an effort to come to a 'fair' resolution - the City permitted others to also place Holiday season displays - representing not only other faiths, but also the viewpoint of the Atheists.  Those viewpoints were basically open attacks on Christianity and Christian beliefs as opposed to advocating atheism.  Then the atheist groups attempted to crowd out the religious displays.

Finally, this year, as they commenced their latest attack on the Nativity Display, they admitted what was obvious to all - that their intent is not for 'fairness' or having all faiths / beliefs on display - but eliminating the display of the Christian faith.

That's right - tyranny of the minority.  They are offended by Christianity and insist that their right to not be offended trumps the rights of others to see a Nativity display.

BOR interviewed several days ago a leading US atheist on his program - and the arrogance and mindset of this tyranny of the minority comes through...

The 'War on Christmas' is just one front of the basic 'War on Traditional American Values' that has been waged since President Woodrow Wilson.

Quick Hits - December 1-3, 2012

Treasury Secretary Tim Geithner took to a number of the Sunday morning talk programs to continue the PR push for Barack Obama's plan to avert rushing over the fiscal cliff - Taxmageddon - that we face in less than 30 days.  The message of the SecTreas continued by focusing on the importance of increasing tax rates for the 'wealthy', those earning over $250,000, in order to reduce the deficit and achieve 'fairness' - points that the President made on Friday at a toy manufacturing plant outside Philadelphia, PA.

President Obama took to the road Friday to sell his plan to avoid a looming series of tax increases and spending cuts, using a campaign-style event to accuse Republicans of holding the middle class “hostage” during deadlocked negotiations.

“It’s unacceptable for a handful of Republicans in Congress to hold middle-class tax cuts hostage,” Obama said at a toy manufacturing plant in a suburb of Philadelphia. “Let’s give families all across American the sense of security they deserve this holiday season.”

Middle class tax cuts?  There weren't any middle class tax cuts offered in the 'solution' offered by the White House to the GOP Congressional leadership.  KEEPING THE TAX RATE THE SAME AS IT HAS BEEN FOR THE LAST DECADE IS NOT A TAX CUT.  Preventing the tax rate from rising 10% is NOT AN EFFIN' TAX CUT.

But this and similar lies and misrepresentations are now standard operating procedure from Barack Obama and his sycophantic shills within the Administration - and within the mainstream media.

The appearance by SecTreas Geithner on Fox News Sunday hosted by Chris Wallace offered another one of  the standard lies and misrepresentations offered by the President in their proposed 'solution' to our fiscal crisis - the bogus and ludicrous claim that 'war savings', savings from ending military operations in Iraq and Afghanistan, count as part of their spending reductions - efforts to reduce the massive spending of the Federal Government.

Finally, a journalist / host calls this for the scam that it is...

As noted on HotAir's commentary - why not add another $200 billion to the 'savings' category that will come from the $200 billion we aren't spending to invade..... [name any country here].

The tax dodging Secretary of the Treasury, while on Fox News, also drew a new line in the sand in front of Congressional Republicans, by insisting that no deal will be done unless tax rates increase for the 'wealthy'.

All of this posturing by the Obama Administration, in the name of 'fairness' and 'balance', is part of their claim that the fiscal challenges we face today are the result from inadequate revenues - tax rates that are too low to fund the government that 'we need', ensure 'social justice', and make certain that those who became wealthy in this country pay their 'fair share'.

What is being ignored, because of the ideological blinders the President and his supporters wear, is that the fiscal challenges are not related to the 'unfairness' of our progressive income tax system, the lack of 'social justice', and tax rates that are too low.

Our fiscal challenges today are the direct result of one simple problem - WE SPEND TOO MUCH.  In fact, we spend way beyond our means / revenues.  SPENDING IS THE ROOT PROBLEM we have to address. 

When Bill Clinton so famously "balanced the budget" with the Internet boom and all the taxes from those stock sales, the GOP and Newt Gingrich passed a budget (yes, Congress used to do that) of $1.7 trillion in expenditures. Adjusted for inflation, our federal government would be spending $2.3 trillion today and collecting $2.5 trillion in "revenues," resulting in a $200 billion surplus. But instead of increasing government spending in line with normal inflation, under Bush and Obama we are spending $3.8 trillion today. Democrats, who believe we have a "revenue" problem instead of a "spending" problem, must also think they have a bartender problem, not a drinking problem.

Let that sink in for a moment.    If we maintained the spending level of the Federal Government as it was under those 'boom' years of President Bill Clinton, adjusted only for inflation, we would have an annual budget of $2.3 trillion today.

In Fiscal Year 2007, the last year of the GOP control of Congress, Congress and President Bush approved a budget that called for $2.7 trillion in spending.

Yes, President George W. Bush was a spender.  That was one of his biggest challenges with conservatives - he started us down the path of spending too much.  But, he also undertook steps to increase the revenues for the Federal Government - via his tax cuts.  Under President Bush (43), we had record setting revenues for the Federal Government.  FY2007 had a budget deficit of $161 billion.  We've had MONTHS since 2009, where the monthly deficit exceeded $161 billion.  On Black Friday of this year, just the one day, the Federal Government borrowed nearly $25 billion - about 16% of the entire 2007 annual deficit.

But while President Bush (43) was a spender, President Barack Obama has taken that crown and dramatically increased our spending  by a THIRD (!) - resulting in four (soon to be five) consecutive years of an annual deficit of over $1 trillion.

This is where our debt and fiscal crisis comes from.  We anticipate this year's federal government receipts will be about the same as they were in 2004 - perhaps a little higher.  Receipts are down largely because of the continued stagnating economic conditions that we face.  But rather than running a FY2004 level budget deficit (about $400B), the massive overspending undertaken by President Obama will add about $1.1 to $1.2 trillion to the national debt.

Here's another way to look at this issue -

As the Investors Business Daily noted, using the Federal Government (Obama Administration's) own data, the claim by Barack Obama that President George W. Bush's tax cuts in 2001 / 2003 were the cause of the massive deficits we've experienced over the past 4 years is nothing but a base canard.  The economic stimulative effect of the Bush tax cuts, 10% across the board for every single taxpayer regardless of income level, reduced the budget gap that was forming from the increased spending of the Bush Administration and Congress.

Kicking off fiscal cliff negotiations last month, Obama said: “What I’m not going to do is extend Bush tax cuts for the wealthiest 2% that we can’t afford and, according to economists, will have the least positive impact on our economy.” During the White House press conference, he added, “If we’re going to be serious about deficit reduction, we’ve got to do it in a balanced way.”

Obama argued voters made it clear in the election that they don’t want to go back to Republican policies that “cost” the Treasury revenues and “blew up the deficit,” as he told them repeatedly during the campaign.

The Washington media by and large share these assumptions. And they’re driving the debate over what to do about the federal budget crisis before Jan. 1, when the tax cuts and spending programs are set to expire.

But the assumptions are faulty, based largely on political demagoguery rather than hard numbers — including ones certified by Obama’s own fiscal policy advisers and bean counters in the White House. . . . Based on Bush fiscal policies, the nonpartisan Congressional Budget Office projected budget deficits of 0.7% to 1.5% of GDP for the years 2008 through 2011. The CBO even predicted surpluses for the subsequent years through 2018. . . . Obama’s economic report shows that the average deficit-to-GDP ratio during the entire Bush administration — 2001 to 2009 — was 2%, which is well below the 50-year average of 3%. During the Obama years, in contrast, the same deficit ratio has averaged 9.1%.

The Bush tax cuts did not "cost" the Treasury revenues. Nor did they increase income inequality.

When fully implemented, they increased the portion of the income tax burden that fell on the wealthiest Americans.

The top 1% of taxpayers went from paying 38.4% of overall taxes to 39.1%, while the bottom 50% saw their share drop from 3.4% to 3.1%.

And as a percentage of the economy, deficits shrank to historically low levels. Record red ink flowed much later as the housing market toppled and government spending shot up.

New spending on welfare programs and Obama's $1.9 trillion national health care entitlement threaten only to compound the budget crisis.

I suspect that these facts are the primary reason why the President does not want any of the fiscal cliff / debt reduction talks with GOP Congressional leaders to be made public as the GOP leaders are insisting.  If they were public, and outside the spin control of the WH / Mainstream media shills for the President's progressive agenda, the American people would be able to see which side is lying about their agenda and which side is actively trying to address the challenges the country is facing.

As Mark Steyn noted in his column on Friday, if the American people want a Euro-style government based around 'social justice', 'fairness', and massive entitlements, then the American middle class will have to pay Euro-style taxes...

Obama now wishes "the rich" to pay their "fair share" - presumably 80 or 90 percent. After all, as Warren Buffett pointed out in the New York Times this week, the Forbes 400 richest Americans have a combined wealth of $1.7 trillion. That sounds a lot, and once upon a time it was. But today, if you confiscated every penny the Forbes 400 have, it would be enough to cover just over one year's federal deficit. And after that you're back to square one. It's not that "the rich" aren't paying their "fair share," it's that America isn't. A majority of the electorate has voted itself a size of government it's not willing to pay for.

A couple of years back, Andrew Biggs of the American Enterprise Institute calculated that, if Washington were to increase every single tax by 30 percent, it would be enough to balance the books - in 25 years. If you were to raise taxes by 50 percent, it would be enough to fund our entitlement liabilities - just our current ones, not our future liabilities, which would require further increases. This is the scale of course correction needed.

Throughout the Presidential campaign, Barack Obama and his key spokespeople repeatedly hammered the fiscal / taxation plans of Mitt Romney and Paul Ryan saying that the only way that those plans could work is if taxes were massively increased for the middle class.

This was nothing but another case of projection by the President and his allies - as well as smear campaigning.  The Romney / Ryan plan would have avoided massive tax increases on the middle class - because the plan focused on reforms and reducing the massive overspending of the federal government.  The plan that does need massive tax increases on the middle class is the Obama plan that we are currently enacting.  Only via massive tax increases on the middle class can the US avoid becoming Greece.

What should the position of the GOP Congressional leadership team be regarding their response to the President's ludicrous 'offer' to avoid the fiscal cliff?

Should we go over the cliff with the hopes of being able to pin the ownership of the resulting economy on the President and his allies?

We couldn't pin the President's stagnant economy on him for the past election - so what makes us think that we will be able to do this in 2013 / 2014?

I'm beginning to think / agree with a number of other conservative commentators that the best response might be to take some action in the GOP led House before the Christmas break and pass / send some bills to the Senate - demanding the Senate / President act on those bills.

Since the GOP has already laid out their key factors around a deal (House FY2013 budget - the Ryan plan) - and they have been utterly rejected by the Administration and their allies, let's try a slightly different approach that represents a real 'compromise' in the GOP position.   Pass the full recommendations of the Simpson-Bowles Commission  regarding taxation and spending and send that onto the Senate / President saying that they are adopting the plan of the President's own blue ribbon commission as the best compromise program to put the country back on a path towards fiscal responsibility.

While Simpson-Bowles isn't perfect in terms of tax and spending, in particular around the tax increases advocated and the lack of real reform to the major entitlement spending programs (Medicare, Medicaid, and Social Security), it is a compromise - and should be the 'best and final' offer from the GOP leadership.

At the same time, the GOP Congressional leadership should announce that they will be sending forth by the end of January 2013 bills for the reform of those three massive entitlement programs in order to ensure their continued viability.

Within that announcement, let's also remind the American people of the President's past positions regarding debt / spending solutions - where he's gone from demanding $2.50 of spending cuts for every $1 in new taxes (September 2012 during the Presidential campaign) to pushing now for $4 in new taxes for every $1 in spending cuts - and asking how that is 'fair' or 'balanced'?

Just how focused is the President and his Congressional allies in trying to prevent us from going over not only this first cliff, but the debt and entitlement cliffs that follow?

Think about this.... Barack Obama, via Tim Geithner, is pushing for the extension of the 2% temporary payroll tax reduction that has been the cornerstone of his 'tax cuts for 95%' campaign line.  But in order to achieve the appearance of supporting a 'tax cut', the President is also taking Social Security into immediate insolvency - unable to fund its current liabilities with the payroll taxes collected and forcing the need for even more borrowing.  The purpose of this temporary step was to 'stimulate' the economy by putting $480 more into each worker's pockets.  Yet, the economy remains stagnant because this is an unproductive tax cut and offers a very little stimulative effect when income taxes and other taxes (Obamacare) are increasing.

Another aspect about the President's plans where the math doesn't work (to use one of the President's favorite pejoratives towards GOP fiscal plans), is on the investments that the President wants to make / expand on the 'War on Poverty'.

We've been fighting a war on poverty for nearly 50 years - since President Lyndon Johnson's 'Great Society' launched us down this path.  Hundreds of billions of dollars, if not multiple trillions, have been spent on programs and people to end poverty in this country.

In the private sector, one of the key measurements of success on a program is to calculate the ROI - return on investment - for that program.  Did we or will we get a viable and acceptable return on the investment we've made or are being asked to make?  If yes, then it was a good program - or we should proceed.  If not, then it was not a wise investment or is an investment that should not be made - or the program should be looked at to try to modify it so we can get an acceptable positive return on the investment.

In 1975, the poverty rate in the US was 26%.  That means 26% of the US population was at or below the 'poverty' rate.  Today, 37 years and hundreds of billions later, we are still at a poverty rate of 26%.  Was all those billions worth the investment?  Did we end poverty?

How about education spending - another favorite topic / target of the progressives.  We're told that we need to funnel more billions, tens of billions, perhaps hundreds of billions towards education in order to 'fix' our educational system.  What has our ROI been on our past massive investments into Education?

Our spending has shot up dramatically, but our children aren't getting the benefit of these investments.  Their test scores aren't improving.  But the teacher's unions are getting more powerful and wealthier.

Continuing the tax and spend mentality - HHS is now proposing a new tax to be imposed as part of the Obamacare healthcare reform.  This new tax is being called a 'user fee' of 3.5% which is being put on the premiums collected by health insurers who offer their policies in the new federal exchanges coming in 2014 as part of Obamacare.  This 'fee' or tax, is going to result in higher health insurance premiums, already soaring,  as insurers who participate in the exchanges pass their higher costs on to the consumer.

But since the economic rule around taxes is - the more tax something, the less you get of that something - is the intent for this new fee going beyond just taxing the insurers- and creating an environment where the private insurers choose to avoid participating in the exchanges - creating a planned failure of the exchanges?

We've seen this in Europe as well as in the US - deliberately creating a failure so as to build a case for an even greater power / regulatory grab than would be available if the program worked or wasn't even in place?  Never letting a crisis go to waste - even if they have to create the crisis in the first place?

Wrapping up today, 2 more quick items about the economy.

In NYC, the famed Stage Deli in Manhattan is closing its doors after 75 years in business.  It is unable to remain open and compete with the higher costs that it is facing - with a major rent increase being the final straw that broke the eatery's back.

Providing a harsh contrast to the economic message coming out of DC just prior to the Election - and in its immediate aftermath that the economy is recovering, the manufacturing sector has dropped to its lowest level of productivity since July 2009 - actually reflecting a contraction in what is a common precursor for a recession on the immediate horizon.  The contraction in manufacturing will also increase downward pressure on GDP - and making the 3rd Quarter estimate of 2.7% growth a real outlier - boosted entirely by massive federal spending pre-Election Day.

We could be looking at another recession in early 2013 even if we do not go over the cliff- thanks to the economic policies of the President.

Hows that Hopey Changey thingy working out 2.0?

Quick Hits - November 30, 2012

The likelihood of a deal to prevent 'Taxmageddon' on January 2nd in the wake of the President's laughable plan presented to GOP Congressional leaders yesterday appears extremely remote as the President doubles down on his rhetoric while making a campaign stop today in Pennsylvania.  Appearing at a toy factory in Philadelphia, the President continued to press his case for $1.6 trillion in tax increases, tens of billions in new stimulus spending, a demand that Congress cedes its responsibility for managing / controlling the national debt limit to the President, and vague references for a possible $400 billion in spending reductions in a manner that even staunch media allies, the New York Times and Los Angeles Times, called 'disingenuous'.

Even the liberal press is exposing Obama’s disingenuousness. The New York Times noted on Wednesday that Obama “has barely discussed how he would pare back federal spending, focusing instead on the aspect of his plan that plays to his liberal base.”

The Los Angeles Times on Thursday observed Obama “hasn’t said anything publicly about his targets for entitlement savings or cuts in discretionary spending. Instead, he’s tacitly stuck with the proposals in his fiscal 2013 budget, which Congress has already rejected.”

Obama touts what he calls a “balanced approach” in which Republicans raise tax rates, and he promised during the campaign this year to “cut 2-1/2 dollars” in spending “for every dollar in increased revenue.”

But now, with signs that Republicans will agree to increase taxes, the L.A. Times reports that “Democrats seem to have become more entrenched in their resistance to the other half of Obama’s formula.”

As we've noted before, the President's 2013 budget approach was not just 'rejected' by Congress - but utterly and completely rejected as the proposal failed to receive a single vote of support in either the House or the Senate, falling 0-415 and 0-97 earlier this year.

In an effort to embrace the mantra of his former chief of staff, Rahm Emanuel, Barack Obama seems hellbent on taking the country over the fiscal cliff in order to create another 'crisis' that he believes he can capitalize on to further his hard left tax and spend 'fundamental change' agenda.  As I noted yesterday, in his non-stop campaign, he is continuing to redefine simple and basic words in order to promote the propaganda that his proposals will not plunge the country into a far deeper economic crisis than we are seeing throughout the Eurozone.  In addition to redefining 'Balanced' and 'Fairness', Barack Obama and his allies today focused on two new words to redefine - 'Cuts' and 'Compromise'.

Since 2009, Barack Obama and his allies have insisted that 'Compromise' is what happens when the GOP / Conservatives surrender their values and positions and fully adopt the values and positions of the President and liberal fascists.  This flies in the face of the real definition of 'Compromise' which is where both parties in negotiations achieve an agreement based on either a common middle ground - or one where each side surrenders a little in order to achieve an agreement.  Today, in the wake of a narrow Election Day victory that highlighted how close the divide in this country is between right and left, the President launched new rhetoric that demanded the GOP to surrender their values entirely or pay the price.

House Minority Leader, the insufferable Nancy Pelosi, took her pleas to the sycophantic mainstream media today to press the case for Obama's proposal - calling the offer the President's press for 'Middle Class Tax Cuts'.

A Tax Cut?  For the Middle Class?

In the tortured (or is it 'enhanced') logic of the dim former Speaker, the President is making the entire $1.6 trillion in new taxes entirely  on the backs of the 'wealthy' - those who earn more than $250,000 - even though increasing their taxes 10% will only raise around $400 billion (not the 'nearly $1 trillion that the media is trying to shovel us) to $600 billion over the next decade.  In the new normal of $1 trillion annual deficits, this is little more than a few drops into the bucket.  We're to expect that adjusting deductions for these same wealthy will make up the balance of the more than $1 trillion in new taxes the left is pushing for?  That defies belief.  The only way that the President will achieve $1.6 trillion in new revenues over the next decade (which still will do nothing to reduce the deficit / debt level) will be to increase taxes on the middle class.

Then we have the asinine re-definition of the word 'Cut' pressed today by both Pelosi and Obama.  To them,  keeping the middle class personal income tax level at the same level that it has been for the last dozen years, is a cut.  That's right.  A cut is now defined as preventing an increase in the tax rate.  Just as a cut in spending is now defined as a minor slowing down of the relentless increase in spending levels.

Adding to these insults to the intelligence of normal Americans, the President then tries to apply his 'charm' to the festive season by reminding us all that if his intransigence takes the country off the cliff -- it will be the GOP that has 'Scrooged' us all.

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In today's Captain Renault moment, even the Washington Post is shocked, shocked I say, to discover that Obama's 'balanced approach' to achieve meaningful deficit reductions is neither balanced or will achieve any deficit reduction. This is 'package check time' people - and in particular for the GOP 'negotiators'.  The President is not interested in a compromise.  He is also unconcerned about the impact to the country if he drives the country off this first fiscal cliff.  For him, his goal is the political destruction of the GOP and conservativism - what's best for him not what's best for the country.

So at this point, either the GOP holds the line here and now - making Obama and his liberal fascist allies own the economy and the effects of his actions - or you will offer what amounts to an unconditional surrender of your core values. Yes, holding firm will be unpopular with many because of the ramifications of the fiscal cliff.  Yes, the President's sycophantic allies in the mainstream media will browbeat, castigate, and demonize you.

 But guess what.

 No matter what happens or what you do, you WILL be browbeaten, castigated, and demonized by the sycophants in the press.  Accept that.  That is the reality of the situation.

 No matter what you do - you will lose in the eyes of the press.

Stand firm - they will browbeat, castigate, and demonize you. Surrender - they will browbeat, castigate, and demonize you for cravenly surrendering after tossing a few fluff pieces your way on day one....and then demand even more surrenders. But it is imperative that a counter-offer to the President's laughable offer is made and touted.  And that counter-offer needs mirror, to a large extent, our core positions.

1. Not only does a deal need to require a major revision in the national tax code - but for the first step of that revision we need to permanently freeze personal income tax, capital gains, and dividend tax rates at the current level while cutting corporate tax rates to 25%.  Then we need to reform and simplify our tax code so its no longer a full employment act for tax attorney's or accountants.  That means maintaining only a minimal number of tax deductions - and scaling these deductions to income.  Higher income levels are limited as to how what percentage of these deductions they can claim.  As we close the loopholes and deductions, we change the tax rates.  The final goal, a 10% or 25% personal income tax rate, capital gains and dividends taxed at 15%, and in the corporate environment, continue to allow companies to deduct their investments into research and development.  The estate tax gets eliminated.
2. The Alternative Minimum Tax that exists today has to be scrapped / reformed.  All taxpayers will pay at least 5% of their gross income to the Fed as a minimum tax to ensure that everyone has 'skin in the game'.  If deductions bring their tax liability below 5% - they still pay 5%.  That's a hard floor.
3. Real and significant spending reductions and program elimination has to take place.  Ethanol subsidies, rural electricity, 'Obama' phones, farm subsidies, taxpayer funded abortions / contraceptives, contributions and grants to the arts, public broadcasting, and similar items are gone.  Earmarks end.
4. In step 2 of real spending deductions - all other programs and spending are permanently capped at the  FY2007 levels plus adjustments for inflation and population growth.  From this point, every department, agency, and taskforce is then examined and re-justified with the goal to eliminate redundancies and increase efficiency and accountability.
5. Obamacare is delayed until the Debt to GDP ratio is below 75% and the U-6 unemployment rate is below 9.5%.  While it is delayed - it should be reformed to address fundamental structural changes that are needed - tort reform, sales of health insurance across state lines, vouchers, and open market principles as opposed to government control and built-in inefficiencies.

More is needed, in particular reform to Medicare, Medicaid, and Social Security, but these are the first steps that are needed to bring our fiscal house into some semblance of order.

If we needed yet another example of how dysfunctional government is today in this country, we don't have to look much further than California, Illinois, New York, New Jersey, or.... Louisiana.

Unlike the massive attacks on President Bush (43) and the Federal Government in the wake of the massive destruction on New Orleans caused by Hurricane Katrina in 2005, the mainstream press has been silent in the wake of the truly incompetent and dysfunctional response to the destruction caused by Hurricane Sandy in New York and New Jersey.  Pretty much, other than photo ops, little has been done by the Federal Government to assist the victims - or the local / state authorities.

Even the state authorities have been severely challenged in responding to the disaster -lacking funds, people, and most importantly, effective disaster relief / mitigation plans to help those in need or commence the rebuilding process.  This seems to match the general lack of effectiveness in government around being able to act decisively or effectively like private sector organizations are forced to do by market conditions.

But in Louisiana, we're seeing the latest example of how feckless and dysfunctional government is - and why it is sheer folly to depend too heavily on government being effective and efficient.

The US Corps of Engineers, in the wake of Katrina, built the 'Rolls Royce' of flood protection and flood control for the city of New Orleans - all designed to prevent a repeat of the flooding that occurred when the levees failed when hit by Katrina.  Now complete, the Corps is turning over the management of the system to municipal officials. However these municipal officials have neither the inclination or the funding to do anything to manage or maintain this system.  It's not theirs, and the city lacks the revenues to absorb the millions needed each year to manage and maintain the system.  So, the system will atrophy and ultimately fail - quite probably when it is most needed.

Where was the planning around this?  Or the coordination to ensure that the municipal leadership allocated funding for the management and maintenance of this system?  

These are basic functions that exist within the private sector.  If they aren't considered or acted upon, competitive forces will drive those managers / businesses out of business.  But in government?  

Are we really wise in putting more and more dependency on the decision making and effectiveness of government?

California was named this week the worst run state in the United States - and given it's fiscal challenges and decades of enacting the progressive liberal fascist agenda - it's no wonder.  Half a century ago, California was the Golden State - near the top in the country for education, agricultural production, industrial production, and infrastructure.  Millions moved to California for jobs and opportunity.  Today, millions are moving out of California [primarily the middle class and business owners / job creators] and are being replaced by illegal immigrants and the poor.

In more loyalty towards the progressive liberal fascist agenda, the mainstream media is continuing to hype the propaganda about California - now promoting that California's fiscal challenges have ended with the passage of Proposition 30 - massive tax hikes 'on the wealthy' intended to raise $6 billion in additional tax revenues.  The New York Times and other progressive mouthpieces are touting that just the mere passage of the bill - well before one new penny has been added to the state coffers - has not only solved the states fiscal crisis, but sparked an economic recovery that has turned the state around in three short weeks.

This is just laughable - and defies all common sense.  It's about as economically accurate as the fallacy that the higher tax rates of the Clinton-era' ignited the 1995-2000 internet fueled economic boom, or that Barack Obama's fiscal solutions are 'balanced', 'fair', and reflect a willingness to 'compromise' and 'cut' in order to return us to a path of fiscal responsibility.

What do higher taxes on the 'wealthy' actually do?  Well, let's look to France which is implementing a new tax rate of 75% on those who earn more than one million Euros per year -  - the vast majority of those in this category are relocating to Belgium, Switzerland, and the UK - and selling their lavish chateaus.  (Looking for a multi-million vacation home in France?  The prices of these are cratering as inventories increase from more and more seeking to sell and relocate.) In Britain, where the top tax rate for the 'wealthy' increased to 50% two years ago, the UK's Daily Telegraph is reporting that two thirds of British millionaires fled the country.

In this country, we have the same experience.  When New York and Maryland passed new 'millionaire' taxes several years ago - they saw not only a large scale exodus of their millionaires to other states, but a net drop in their tax revenues.  

Maybe California is different now that it's economy is 'booming' in a 'recovery' fueled by higher taxes ripping funds out of the private sector?  What was that about Einstein?

On a final note - tomorrow, December 1st, the USS Enterprise, CVN-65, the world's first nuclear powered aircraft carrier, and the 2nd oldest commissioned warship in the US Navy (behind the USS Constitution, commissioned in 1798), is being struck from the active list of the US Navy and retired after 52 years of service.

Quick Hits - November 23 - 29, 2012

If nothing changes, we will drive off the fiscal cliff in about 33 days...

While this cliff is not nearly as high as the other cliffs that we are rapidly approaching, the debt cliff and the entitlement cliff, the effects of driving off of this cliff without taking real steps to address our spending, debt, and entitlement liabilities will be very painful in an economy that is continuing to stagnate except for massive government spending.

Every single taxpayer will get a 10% across the board tax increase as we go off the cliff.  On top of this, the 2% temporary payroll tax reduction pushed by Barack Obama (and touted as his 'tax cut' for 95%) will end.  The estate tax will resume - at a punitive level.  The tax rate for Dividend income will soar from 15% to 43%, while the tax rate for Capital Gains will jump from 15% to 23%.  Hundreds of thousands of the middle class will find themselves trapped by the Alternative Minimum Tax - paying substantially higher income taxes as the AMT once again is not adjusted for inflation.  On top of these tax increases will come nearly a dozen new taxes designed to fund Obamacare.

Between now and the end of the year - we're also going to hit hard up against the debt ceiling which will prevent new government borrowing to fund the greater than $1 trillion annual budget deficit that has become the new normal.

And that brings us to the other major effect of our fiscal irresponsibility - the massive spending, the massive expansion of the size and scope of the federal government, and the unprecedented expansion of government entitlement programs.

Like the Dependency Agenda...

...which has transformed the US into a different country...

Which brings us here...

One would think with the near immediate effect of the January 1, 2013 'Fiscal Cliff', or the $16.4 trillion in national debt (and growing by more than $1 trillion per year), or the $86 trillion in unfunded liabilities related to the three largest elements of government spending - Medicare, Medicaid, and Social Security - the President would be focused on ensuring that we do not just rush headlong off these cliffs at full speed.

One would also think that with the economy killing effects of new tax increases, the burden of Trillion dollar plus annual deficits, the massive expansion of government entitlements (in both costs and numbers of people dependent on the government), the rapidly approaching insolvency of the three largest entitlement programs, and the one-third growth in spending - the President and his supporters, if they really feared taking the nation over these cliffs, would be looking at reducing spending, reforming the tax code, and getting people off of government dependency as their primary solution to the problems we face.

Unfortunately, we now live in a universe where normal logic has been replaced by political expediency - and the definition of many words have been quietly re-defined to fit the combination of political expediency and ideological agenda.

Despite Election Day being a little over three weeks ago, the newly re-elected President has declined to lead and instead continues to campaign and plot the demise of his political enemies, the GOP.  This agenda is being supported and enacted by the same media allies who helped facilitate his election win.  These allies, despite the President's reelection win, continues to focus on attacking the GOP as sexist, racist, and fiscally evil putting partisan ideology before what is best for the country.

They combine to hammer the GOP position that one of the key fiscal challenges we face are not our revenues, which are nearly pre-recession 2008 highs, but the irresponsible and excessive spending of the federal government.  They continue to focus on the importance of new revenues for the federal government irregardless of the damage done to the economy by touting the need for 'fairness' and 'balance'.

We're told that we need to have 'balance' - addressing the fiscal challenges by a combination of tax increases (new revenues) and spending reductions.  We're also told that we need to balance out these tax increases in the name of 'fairness' - by putting the burden of new taxes on the wealthy who can afford to pay more in order to reduce the national debt.

But rarely are we told how specious these terms really are - or that for the President and his progressive allies, going over these cliffs are necessary steps to facilitate their "fundamental change" of America.

Various pinheads spew forth the fallacy that the reason we had a large economic expansion from 1995 to 2000 was because of the 'Clinton-era tax rates' which were 10% higher than the rates we've paid for the last 10-12 years.  But where is the balanced approach to match these 'Clinton-era tax rates' with Clinton-era spending levels - and the acknowledgement that the reason why 1999-2000 ended up in budget surpluses were because of strong private sector economic growth and reduced levels of federal spending?

Or where is the balanced approach towards addressing spending by including the three largest elements of federal spending, Medicare, Medicaid, and Social Security with Defense spending and all of the other elements of federal spending?  Do we really need to spend over $300 billion in farm subsidies, rural electricity subsidies, ethanol subsidies, and other entitlements funded by either borrowing or yanking more funds away from the private sector where they fuel growth?

How about the fallacy around 'fairness' - were the President wants to focus on the 'wealthy' to pay their 'fair' share in order to reduce the debt?

Where's the fairness when half pay no taxes whatsoever - or that the top 5% of tax filers, who account for 32% of the nation's total income, already pay 59% of all the taxes?

In the President's 'solution' to our problem - we're told that the 'wealthy' have to pay more taxes, 10% higher, in order to reduce the deficit.  But one has to wonder just how far $40 billion in additional revenues from taxing the wealthy their 'fair share' will go into an annual federal government deficit of $1.2 to $1.4 trillion?  And that $40 billion of 'new revenues' is assuming that 'taxing' the 'wealthy' will not damage the private sector...which would be the case despite the misrepresentations of the President to the contrary...

All of this debate, however, pales in comparison to the actual offer that the President made towards the GOP Congressional leadership earlier today [Nov 29th] as their solution to prevent the nation from plummeting off this first cliff.

The offer, made by SecTreas. Tim Geithner to senior GOP members of Congress, including Speaker John Boehner and Senate Minority Leader Mitch McConnell, clearly demonstrated that the President could care less not only about taking the nation over the cliff, but in achieving a compromise with the GOP.  He seems firmly convinced that if the country goes off the cliff, the blame would rest [courtesy of media propaganda] entirely on the GOP - and the more dire the conditions become, the more likely he will be able to get what he wants along with more 'fundamental change'.

The offer focused on several key demands.  First was the demand for $1.6 trillion in new taxes.  Second was the demand for a new round of stimulus spending - to the tune of several hundred billion dollars per year.  Third was for Congress to completely surrender their oversight of the national debt ceiling - effectively ending the ceiling.  Finally to 'balance' these, the President agreed to some vague spending reductions - in amounts far less than the amounts of the new spending levels demanded - which would need to be negotiated over the next year and be non-guaranteed.  In other words, if an agreement couldn't be reached on which programs to cut - no programs would be cut.

In fact, the President has no real plans for any significant spending cuts...

The offer was so one-sided and absurd that Senator McConnell's initial response was to laugh out loud at it.

I seem to recall in 1986, Democrats approached the President and made a solemn promise - if President Reagan would agree to several tax increases in order to boost revenues, the Democrats would guarantee to respond by supporting spending cuts so that the compromise would result in deficit reductions.

Ronald Reagan is still waiting for those promised spending cuts...as are the rest of us.  I don't think they're coming.

I think we need to factor this into whether or not we believe the current promise for spending cuts tomorrow if we give them tax increases today.

Perhaps the Mayans were right after all....

The saddest part is that this is not the limit of the absurdity around the fecklessness of the Obama Administration or the Progressive agenda or the anti-Western Agenda.  Over the next several days we'll look in more detail at:

• Susan Rice 
• Reports of California's Economic Turnaround 
• Time Magazine's Person of the Year
• Egypt
• Syria
• UN General Assembly granting the so-called Palestinian state official status as a non-observer member
• Eurozone Crisis - Our Future?
• Media Bias

Hold on - as the ride will not be getting any smoother....