Over at Red State, Dan Spencer calls attention to the fact that today is a notable day:
“Deficit Day” is the date by which federal tax revenues run dry and the federal government begins adding even more debt on top of our exploding $16 Trillion national debt. This year Deficit Day falls on September 10th.
If lawmakers produced a balanced budget, Deficit Day would occur on December 31st, when the government spent the last dollar of its annual tax receipts at the stroke of midnight on New Year’s Eve. But we haven’t seen a balanced budget since the Eisenhower administration.
Conventional wisdom holds that the Clinton administration ran surpluses. But this is a twisting of the facts. It is true that the debt held by the public-which excludes money the government borrows from the Social Security trust fund-declined by $433 billion from 1997 to 2001. But, over those same years, the government borrowed $827 billion from the Social Security trust fund. In other words, the only way to claim that the Clinton administration ran surpluses is to admit that the government has no intention of paying back that $827 billion it borrowed from Social Security.
The latest that Deficit Day has fallen in the past 40-some years has been mid-December, at the end of the Clinton administration. The earliest was the beginning of July, during the Great Recession in 2009.
The gimmick accounting that our federal government employs would get you thrown in jail in the private sector. The gimmick borrowing-plus-money-printing that our government employs would make you ineligible to be credit-worthy for anything.
During recent campaigning, Obama has continuously exhorted the value of the auto industry. He went so far as to use their success as an example for bailing out other industries. During his famous “You Didn’t Build That” Speech, Obama said something that has been somewhat overlooked by his other immortalized phrase:
“I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
But a couple of weeks ago, the Treasury Department issued an updated report on the auto industry bailout.
The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.
The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.
Shares that day were at $20.49
Under Obamanomics, a $25 Billion loss of taxpayer money is considered “a success” and “roaring back”. The spin is that the losses are less than the estimated $44 Billion, so hey, it’s okay! We saved the taxpayers $19 Billion!
Then, at the end of August, it was announced that the production of the highly touted Chevy Volt was to be suspended for a month. From Automotive News report:
“GM will close its Detroit-Hamtramck plant from Sept. 17 until Oct. 15, one of the sources said. Union representatives last week told the plant’s roughly 1,500 workers about the scheduled downtime, the source said.
It’s the second time this year that GM has throttled back on Volt production. The Detroit-Hamtramck plant was idled from March 19 until April 16 amid swollen Volt inventories.
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
Our taxpayer money. Sucked down the drain. Propping up an industry that couldn’t make it anymore on its own merits and produces a product that no one wants.
Why do the Democrats keep lying about it?
Remember what he said:
“ I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
If he wins a second term, what will Obama do with other fledgling sectors?
More bailouts? Nationalizing other industries? This is legal plunder. This is government welfare. This is wrong.
During the State of the Union, we heard President Obama talk repeatedly about fairness and taxes as he painted a picture of income inequality. The problem is that income inequality really is a myth, yet it is being perpetuated: the gap between rich and poor has never been higher.
The data used most frequently to substantiate this claim is a Congressional Budget Office (CBO) report from October 2011. However, the glaring problem with this report is that it only covers the period from 1979 to 2007 — ending right before the Great Recession. Convenient?
So in November, Ron Schmidt of the University of Rochester School of Business Administration, did an analysis of the CBO data and compared it to IRS data during the same time period — but through the year 2009, the latest year for which IRS data was available. He found something very, very different. In a reported summary,
According to IRS data, which extend through 2009, the average nominal Adjusted Gross Income (AGI) for filers with AGI of at least $500,000 declined by 17.8 percent from 2007 to 2009, and their average after-tax income declined by 19.9 percent. For those with AGI of less than $500,000, AGI declined by only 2.6 percent, and after-tax income declined by only 1.5 percent. These numbers certainly do not indicate an increase in income inequality.
In fact, there has been a marked decline in income inequality over the last decade. From 2000 to 2009, average AGI declined by 15.0 percent and average after-tax income declined by 11.0 percent for returns with AGI of at least $500,000. (Filers with an AGI of at least $500,000 represent 0.5 percent of all returns in both years, so this comparison is similar in spirit to the CBO report, which looks at the top 1 percent of households.) For all other returns, there were increases of 14.6 percent for average AGI and 17.3 percent for average after-tax income.
It revealed that income inequality is not only not at an all-time high, but also, due to the nature of economic and business cycles, it is relatively the same as it was twenty-five years ago.
The repeated calls for fairness last night reminds one of Margaret Thatcher’s famous speech in front of the House of Commons where she lambasted her opposition for suggesting that the gap between rich and poor had widened. The Prime Minister People responded that “people on all levels of income are better off than they were in 1979. The honorable gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy”.
Liberal policy indeed is alive and well in America today. Thankfully, income inequality is not.
Though Obama may be pretending to draw a line in the sand between himself and the Republicans, he is really drawing a line for voters: Them vs The Rich Guy (millionaires and billionaires, anyone?) Setting up the narrative in the State of the Union for the year has allowed Obama to pander to the electorate during this campaign season and relentlessly go after those who have proven to be successful as a source of increased tax revenue to cover his spending problem.
In a recent interview with Entertainment Tonight, President Obama made the following remark: (h/t to RCP).
“We’re going around the country, talking about, ‘How do we put people back to work? How do we improve our schools? How do we make sure that we’re producing American energy? How do we lower our debt in a responsible way?’ And I don’t think you or anybody who’s been watching the campaign would say that in any way we have tried to divide the country. We’ve always tried to bring the country together,”
Last week, I noted that Obama announced he wants to bailout all the industries. To quoth:
“I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
Now, the Treasury Department issued an updated report today on the auto industry bailout.
The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.
The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.
Shares today were at $20.49
I guess Obamanomics is the only place where a $25 Billion loss of taxpayer money is considered “a success” and “roaring back”. The spin is that the losses are less than the estimated $44 Billion, so hey, it’s okay! We saved the taxpayers $19 Billion!
1) President Obama has spent more campaign cash more quickly than any incumbent in recent history
2) The price tag: about $400 million from the beginning of last year to June 30 this year, according to a New York Times analysis of Federal Election Commission records, including $86 million on advertising.
3) With less than a month to go before the national party conventions begin, the president’s once commanding cash advantage has evaporated, leaving Mitt Romney and the Republican National Committee with about $25 million more cash on hand than the Democrats as of the beginning of July
Let’s couple these points with a recent report from the Hill:
The president spent $58.1 million in June despite bringing in just $45.9 million, meaning his reelection effort ran a deficit of more than $12 million dollars for the month. And the president spent an whopping $32.2 million in television ads, along with $4.5 million in online ads, over the 30-day period. The Romney campaign, by contrast, spent $10.4 million over that period on advertisements.
The total national debt is $15.8 trillion, increasing nearly 50% from the $10.6 trillion in debt when Obama took office. Additionally, the debt held by the public is up to $11 trillion from $6.3 trillion when Obama began his presidency, which is a 75% increase. Though it is commonly cited that Obama accumulated more public debt than all the other prior presidents combined, he falls $1.7 trillion short right now — though that is not too far off.
Another interesting statistic is that calculating the federal spending debt as a percentage of the GDP yields that Obama is higher than the last five presidents. The Office of Management and Budget statistics show that the debt percentage increases were: Reagan, up 14.9%; Bush 41, up 7.1%; Clinton, down 13.4%; George W. Bush 43, up 5.6%; and Obama, up 21.9%. Thus, Obama’s spending debt increases exceeded that of the last five presidents.
So right now, Obama’s campaign spending is the highest in recent history, and his campaign posted deficit spending last month. We know that his campaign is sending out multiple donation pleas daily to his supporters, just as Obama is talking about raising the tax margins in order to generate more government revenue. The most ironic part is that Obama is more than happy to attend and accept $35,000+ a-plate fundraising dinners, but then at the same time excoriates “millionaires and billionaires” and the “top 2%” for the sake of election class warfare rhetoric.
I guess these expensive campaign fundraisers is Obama’s interpretation of making sure the wealthy “pay their fair share” (to him).
After being caught by surprise on Tuesday at a press conference, Jay Carney admitted he did not know that Ohio military base — to which President Obama would be flying and landing — on August 1, would be closed due to defense cuts.
“What is holding us up right now is the Republican refusal to have the top two percent [of earners] pay their fair share,” Zients said in response to a question from Rep. Randy Forbes (R., Va.).”
At least one lawmaker rightfully called out Jeffrey Zients, director of OMB who made the remark. Rep. Mike Turner of Ohio responded in kind,
“We’re not usually in the habit of hearing such partisan comments in what is really a bipartisan committee,” Turner said. “We don’t usually hear people throw around ‘Republican’ and ‘Democrat,’ but you have, very, very well. I want to commend you on your broken record of partisanship.”
“Zients’ comments are pretty brazen in light of the $800 billion in wasted taxpayer dollars that was supposed to (but didn’t) stimulate the economy and which were, in effect, paid for by $800 billion in defense cuts,” said Gary Schmitt, resident scholar at the American Enterprise Institute. “And is he really suggesting the country’s national security be put at risk because the administration want to raise taxes (on more than the top 2 percent) in order to save PBS, Amtrak, and the Education Department?”
The possible military cuts (sequestration) would cut troops at several levels, affect medical benefits, military housing, and more. This would happen if $1.2 trillion in budget cuts are not found. As part of the “automatic trigger” put in place from the failed Super Committee last year, President Obama endorsed and signed the sequester plan.
But instead of offering alternative solutions to avoid this from happening on January 2nd, unlike the Republicans and the Ryan Plan, Obama and the Democrats have not offered another option. Resorting to the same old tired class warfare rhetoric doesn’t solve any real problems; it only makes the White House look more desperate as the campaign season limps along.
Class warfare is a key component of Obama’s policies and re-election rhetoric. The components of such a tactic are easily recognized: 1) the political opponent will hurt those among us who are most vulnerable (elderly, poor, etc); 2) the political opponent does not care about the “middle class”; 3) the political opponent wants to benefit those most advantaged (the rich/elite). The third point of this strategy is the one that is most popular with Obama, as he continuously and intentionally rails against “millionaires and billionaires” in order to separate that particular population from mainstream America.
Besides the obvious baseness of such an argument coming from the President of the United States, it is critically important to note that he doesn’t actually ever define a millionaire or billionaire. The amount of true millionaires and billionaires are so few in number, that taxing them more – as Obama plans to do – will not help with any significant deficit reduction. His assertion is pure dishonest political speech because you cannot possibly create enough revenue from the millionaire/billionaire population even if you were to tax them at 100%. Our fiscal situation is so dire in this country that an increased tax on this group in any large or small amount solves nothing.
Unfortunately, none of this matters to Obama. He intentionally throws the labels around so that they conveniently fit whatever emotive language will coerce voters and supporters to rally behind his outrageous fiscal policies. It is classical class-warfare: antagonizing lower socio-economic groups against the “rich”.
Obama has stated his intent to raise the marginal rates on the top income earners, (aka the “rich”, “wealthy”, or “top 2%”). Yet according to the IRS, the threshold for this bracket is actually 200K for individual taxpayers or 250K for married couples. These incomes are certainly no where near millionaire or billionaire amounts.
Since there is a clear federal definition for a group of taxpayers whom Obama is targeting for tax increases, Obama really has no right to say millionaires and billionaires as a collective for the highest income earners. But he uses the generic terms anyway. By making it sound like one kind of people, it pits the average/middle-class against “the other guy”. And if he actually tried to define that other guy instead of resorting to generic terms, it would include a lot of people who would be upset to be included.
History shows us that higher tax rates results in less – not more – tax collections. Democrats like to wax poetic about the high rates of 70% and even 91%. What they fail to comprehend or deliberately don’t explain is that at those times, there were an enormous amount of tax shelters such as real estate, so that people could legally lower that taxable income and would not have to actually pay the outrageous tax rates.
With the IRC reforms of 1986, Reagan reduced the tax rates to 28% in exchange for getting rid of the tax shelters. As a result, the amount of federal income collected was more at 28% and a clean tax code than at 91% and tax shelters, because at 28%, it really wasn’t worth the time, cost, and effort to hide money. If the tax rates are going to rise again – in addition to state and local tax hikes – the tax burden in this country will be staggering. People will do one of two things: 1) start finding ways not to pay it like they did when the rates were outrageous or 2) stop working and investing so much because it’s just going to get taken away from them. When that happens, it’s not good for the economy.
Blindly going after “millionaires and billionaires” (who earn $200,000 or more) is simply a tactic Obama uses to pit classes against one another for political gain. Imposing higher taxes on that segment of the population most able to invest in and aid our recovery is true economic ignorance. Why take additional money from those taxpayers who have been able to create wealth and employment successfully and give it to the government and politicians who have proven their ability to mismanage and squander income?
Shortly after the oral arguments in front of the Supreme Court this past spring– which didn’t seem to go very well at the time — Obama warned against a version of constitutional “activism”:
“And I’d just remind conservative commentators that, for years, what we have heard is, the biggest problem on the bench was judicial activism, or a lack of judicial restraint, that an unelected group of people would somehow overturn a duly constituted and passed law.”
At the time, the thought of our President attacking the third branch of government seemed a little absurd, a little whiny. Now, looking back over the past three years of his presidency, the hypocrisy is alarming. Obama has continuously engaged in “ executive activism” from the Executive Branch.
Back in March 2008, President Obama made the following claim:
“The biggest problems that we’re facing right now have to do with George Bush trying to bring more and more power into the executive branch and not go through Congress at all. And that’s what I intend to reverse when I’m president of the United States”.
In hindsight of course, we now know that Obama doesn’t mean what he says. His executive activism has increased since he lost the House in 2010, but was evident from his liberal use of Czars and quasi-autonomous agencies since the beginning of his term.
Turning the tables on his aforementioned Supreme Court remarks, which specifically questioned the power of an “unelected group of people”, it is unfathomable for Obama to have raised such concerns in light of Obama’s cadre of unelecteds.
For instance, many of Obama’s czars are neither confirmed by Congress nor accountable to the president. The “Pay Czar”, Ken Feinburg, made unilateral decisions about the compensation of private businesses — something that is certainly not within the realm of the government’s constitutional authority. Or what about the “WMD Czar”, officially titled as Special Assistant to the President and White House Coordinator for Arms Control and Weapons of Mass Destruction, Proliferation, and Terrorism? Gary Samore is unconfirmed; his job description is that of a “coordinator,” a title with vague and broad responsibilities.
Additionally, Obama has frequently made use of government agencies to impose that which failed to become law. For instance, the Environmental Protection Agency (EPA) passed limitations on emissions and implemented almost in its entirety the cap-and-trade bill that failed in Congress. Likewise, the National Relations Labor Board (NLRB) passed rules that are virtually as onerous as the card check, which failed to get through Congress.
Abroad, the term QUANGO is widely used to describe such government agencies, standing for “QUasi-Autonomous Non-Governmental Organizations”. They execute actions meant to be carried out by the legislature. Among the most offending here are the Federal Reserve, the NRLB, the EPA, and the the Federal Trade Commission. Indeed, Obama has established an “order of succession” for several agencies via Executive Order, thereby raising the level of their importance.
Obama even created a new program specifically devoted to his “activism”, which was announced last October. Obama revealed new programs to aid college students to repay their federal loans, veterans to find employment, and homeowners make their mortgage obligations. All three initiatives were without legislation. He remarked, “We can’t wait for Congress to do its job. So where they won’t act, I will. We’re going to look every single day to figure out what we can do without Congress.” Calling the offical program, “We Can’t Wait”, Obama claimed that inaction by Congress requires action from him, a clear overreach of power and presumption.
Legal criticism also mounted from Obama’s recess appointments last January. Circumventing Congressional confirmations, Obama approved the appointments on his own, whining that the “pro forma” sessions during the break – held specifically to block the ability of a recess appointment — were not legitimate. Of course, Obama was quick to forget that Senator Harry Reid was the creator of the “pro forma”, a strategy implemented by the Democrats themselves during the latter years of the Bush administration.
Earlier this summer, Obama implemented a version of the Dream Act and just announced it at a press conference. His policy is very similar to Mark Rubio’s undrafted legislation that was expected to enter Congressional debate very soon. Contrast Obama with Bush, who tried to get his somewhat unpopular ideas passed through Congress, including Social Security reform and immigration reform. The difference is that Bush didn’t skip the Constitution – and he wouldn’t have even considered such an idea. Obama, on the other hand, did precisely that.
Obama’s use of the Executive Order (EO) has also been alarming. His total count so far has been 130, and while this is in no way an extraordinary number compared to some other presidents, it’s the content of many of the EOs which gives pause. The most recent EO on July 6, 2012, allows for control over communications during a crisis, while earlier ones include subjects related to confiscation of private property and labor, national defense resources preparedness, control over food production, and more.
What happened to the Obama who (we were told) was supposed to bring everyone together? The Obama who criticized executive activism? What we have today is a President purposely making unilateral decisions to advance his own agenda. The various tactics that Obama have grossly expanded the power of the Executive Branch. The result is a sort of reckless imperialism, which will only continue to undermine the nation if he is once again elected to the Presidency.
Anyone who wants to study the tricks of propaganda rhetoric has a rich source of examples in the statements of President Barack Obama. On Monday, July 9th, for example, he said that Republicans “believe that prosperity comes from the top down, so that if we spend trillions more on tax cuts for the wealthiest Americans, that that will somehow unleash jobs and economic growth.”
and this gem:
People over 65 years of age have far more wealth than people in their thirties and forties — but lower incomes. If Obama wants to talk about raising income taxes, let him talk about it, but claiming that he wants to tax “the wealthiest Americans” is a lie and an emotional distraction for propaganda purposes.
Sowell really dissects Obama’s distortion of wealth vs income, and how it plays right into class warfare tactics. He also points out the fallacy of the notion that raising taxes will result in higher government revenue. He is absolutely correct, and the most recent example of such a failed policy is England. Last week, I wrote about the reports which showed that upping the taxes rates this past spring in England yielded lower-than-expected revenue, which boggled the minds of such politicians who don’t understand the Laffer Curve.
And Sowell reminds us, JFK staunchly believed that higher tax rates drives money into tax shelters. This point was proven in the time leading up to the Internal Revenue Code (IRC) overhaul of 1986 — when some tax rates were more than 70%. When the IRC lowered rates to 28%, the money flowed, because it was too much work to hide the money, so to speak. I have written about this before when I picked apart Obama’s “millionaires and billionaires” rhetoric.
Obama’s only tactic is to continue to use class warfare speak in order to win. As much of the electorate is simply uninformed about the nuances of economics and with a media content to perpetuate his distortions, we must steadfastly refute his claims, as Sowell has done so well.
