by | ARTICLES, ECONOMY, OBAMA, POLITICS, TAXES
Time for another milestone. I noted it when it was 1,000 days past, but today we are now 1331 days without a budget. Nevermind all the doomsday talk for tomorrow — our fiscal situation is dire now.
April 29, 2009 is the last time Congress passed a budget. Obama’s two budgets proposals failed 0-97 in the Senate, and 0-414 in the House. No Democrats would vote for, or even sponsor, his proposals.
Right now we are about: $16,370,000,000,000 in debt. But that is not the whole picture. It doesn’t include entitlement debt, which makes the situation more egregious.
And what about the fiscal cliff? Harry Reid has decided to send Congress home for Christmas and reconvene on December 27th, and rules out a vote on Boehner’s “Plan B”. On the contrary, Eric Cantor has said the House has the votes for “Plan B”. “Plan B” raises taxes for taxpayers above $1 million, while the Senate version is a much lower, $250,000 threshold. More discussions, but no answers. We continue on in a state of uncertainty.
Yesterday, I wrote out a primer which showed all government debt, spending, and fiscal cliff solutions scaled down to manageable numbers. If you were to reduce equally everything by $10 million, you can understand the figures in amounts we are use to.
For instance:
Total Current Financial Picture for a Family of Three, on a $25,000 income
Annual Revenue: $25,000
Annual Spending: $38,000
Annual Expenses/Deficit per year: $13,000
Current Government “Shadow” Debt: $156,000 (ie. think – like your mortgage & credit cards)
Promised Future Entitlement Debt (SS and Medicare): $603,000
Total Family Debt on a $25,000 Income = $759,000 + $13,000 in annual added deficits
Debt “Fiscal Cliff” Solutions:
Obama’s Plan: cuts a mere $812 a year for 10 years and adds $1242 in revenue
Boehner’s Plan: cuts a mere $955 a year for 10 years and adds $955 in revenue.
You can read more here to see the breakdown and all calculations.
With 11 days out before the fiscal cliff deadline and no solution in sight, you can be sure the “no-budget clock” will also continue ticking. 1331 days…and counting.
by | ECONOMY, FREEDOM
President Obama, please stop lying. There are no “tax cuts for the wealthy” on the table. The Bush tax rates are what the taxpayers pay and have been paying for 10 years. Keeping the rates the same does not equate to a tax cut. And changing the rates to the Clinton-era rates is, in fact, a tax increase.
These current tax margins have been built into the economic market for a decade. Our economy – for better or for worse – has operated on that particular set of data. Increasing of the rates would have the effect on the marketplace and in the business world of immediately reducing the value (by reducing the after-tax cash flow) of all existing investments, and, by reducing the expected return of prospective investments, will eliminate many of them (and the jobs that would have gone with them).
To talk about “restoring the old Clinton-era rates” is ludicrous for several reasons: 1) the Clinton-era economy was stronger than our current one; 2) the Clinton rates did not have the burdens of taxation introduced by legislation since then; 3) state and local tax rates are significantly higher (and states have much higher debt levels which portend even greater increases); 4) the enormously increased burden of Obama (and some Bush) era regulations exists, which have the same effect of still further tax increases, and 5) we now have to contend with Obamacare and all the staggering taxes associated with it.
Additionally, spending during the Clinton-era was much lower than now. Currently, Obama is spending 24% of the GDP, compared to 18% with Clinton. It was Clinton who specifically declared “the era of big government is over”; he aimed to reduce the spending in order to substantially reduce the size of government. Not so with Obama. Really, how in the world does Obama have the chutzpah to compare himself to Clinton when talking taxes?
Referring to a continuation of the same law is not a “tax cut”. Just because the liberals have not accepted it doesn’t mean it’s not the law. Increasing tax rates on any segment of taxpayers, especially the segment responsible for nearly all job creation, is irresponsible.
by | ARTICLES, FREEDOM, SOCIAL SECURITY
It is a national tragedy that people may be willing to put aside the issue of Social Security reform because Congressional Leaders on the Democrat side – such as Dick Durbin and Harry Reid – have been standing behind the position that Social Security is not a problem. While discussing the impending “fiscal cliff” negotiations last week, Harry Reid proclaimed (yet again), that
“Social Security is not part of the problem, That’s one of the myths the Republicans have tried to create,” he said. “Social Security is sound for the next many years.
Reid justifies this outrageous and distorted view by asserting that Social Security is not adding to the current deficit since the the cash in and out is roughly the same. While that may technically true, it is technically true only in the sense that it is analogous to an individual who is running up millions in credit every day — and then that person says that since he doesn’t have to pay it back right away till next year or the year after, it doesn’t affect his immediate budget.
The fallacy of this logic is that although the Social Security cash in may be equal to the cash out, the cash in includes everything we are getting, while the cash out doesn’t include the responsibilities due to come. The cash out formula they are referring to excludes the trillions that are being promised to existing workers in the future while their Social Security tax is being collected today. As the years go by we are continuing to incur the deep cost of future payment obligations that the Democrats are conveniently not accounting for – and it’s going to get impossible to pay those bills when they come due. Yet, those obligations are every bit as real as charges on a credit card.
Equally disturbing is the fact that the media is complicit in promoting this fable. Each year that that passes without fixing the system creates trillions of additional deficit to be paid by our children and grandchildren. Our media is feeding the Democrats’ incompetence by promoting their sham and failing to report the truth about the insolvency of Social Security.
(crossposted at redstate.com/alanjoelny)
by | ECONOMY, FREEDOM, GOVERNMENT, HYPOCRISY, OBAMA, POLITICS, TAXES
President Obama has all but admitted that raising the tax margin on the top 2%/”millionaires and billionaires”/the wealthy might, just might, affect the economy negatively. Anticipating increased economic decline when he pushes up the rate from 35% to 39.6%, Obama has proposed another successful round of stimulus.
What might this new stimulus look like?
Extending the 2 percentage point Social Security payroll tax cut, boosting a tax incentive to businesses, establishing a $50 billion bank for long-term infrastructure projects, and extending unemployment benefits.
And the cost to taxpayers?
An estimated $255 billion total — which the GOP would surely need to demand that it be matched dollar-for-dollar in extra spending cuts.
So, let’s recount the logic of the Left:
Raise taxes –> Economy falters due to less consumption spending —> Need to spend $255 billion in government money to prop up the economy.
How about some other logic?
Keep tax rates the same as they’ve been for 10 years —> Economy gets a chance to recover without government interference and economic uncertainty —> No need to spend another $255 billion of taxpayer money
Some have suggested these are merely bargaining chips for the budget discussions. However, if Obama was so sure about his economic policies, and if these policies were really so good, he wouldn’t need to “spend” more or bargain any.
by | ARTICLES, FREEDOM, TAXES
Senator Orrin Hatch nails it today when he discussed Obama’s ideas regarding budget negotiations:
“What [Obama] proposed this week was a classic bait and switch on the American people—a tax increase double the size of what he campaigned on, billions of dollars in new stimulus spending and an unlimited, unchecked authority to borrow from the Chinese,” Sen. Orrin Hatch (R-Utah) said in Saturday’s weekly GOP address.
“Maybe I missed it but I don’t recall him asking for any of that during the presidential campaign. These ideas are so radical that they have already been rejected on a bipartisan basis by Congress.”
Obama’s proposed deal includes: $1.6 trillion in tax hikes, $400 billion in spending cuts, and at least $50 billion in economic stimulus spending! (some estimates are more than $250 billion of stimulus
On the Republican side, they have sought additional and larger spending cuts that will also include entitlement reform as a baseline for considering increases to the tax margin.
So far the discussions are at a stalemate. This means Congress has 30 days to act before the tax tsunami comes.
