Archive for the ‘Bush Tax Cuts’ Category

THE AMAZING OBAMA BUDGET

Wednesday, February 15th, 2012
The Wall Street Journal

  • FEBRUARY 15, 2012

He’s proposing higher spending and deficits this year.

Federal budgets are by definition political documents, but even by that standard yesterday’s White House proposal for fiscal year 2013 is a brilliant bit of misdirection. With the abracadabra of a tax increase on the wealthy and defense spending cuts that will never materialize, the White House asserts that in President Obama’s second term revenues will soar, outlays will fall, and $1.3 trillion annual deficits will be cut in half like the lady in the box on stage.

All voters need to do is suspend disbelief for another nine months. And ignore the first four years.

The real news in Mr. Obama’s budget proposal is the story of those four years, and what a tale they tell.

• Four years of spending of more than 24% of GDP, the four highest spending years since 1946. In the current fiscal year of 2012, despite talk of austerity, Mr. Obama predicts spending will increase by $193 billion to $3.8 trillion, or 24.3% of GDP. The top chart shows the unprecedented four-year blowout.

• Another deficit of $1.327 trillion in 2012, also an increase from 2011, and making four years in a row above $1.29 trillion. The last time that happened? Never.

• Revenues at historic lows because of the mediocre recovery and temporary tax cuts that are deadweight revenue losses because they do so little for economic growth. The White House budget office estimates that for the fourth year in a row revenues won’t reach 16% of GDP. The last time they were below 16% for any year was 1950.

• All of this has added as astonishing $5 trillion in debt in a single Presidential term. National debt held by the public—the kind you have to pay back—will hit 74.2% this year and keep rising to 77.4% next year. The bottom chart shows the trend.

Economists believe that when debt to GDP reaches 90% or so, the economic damage begins to rise. And this doesn’t include the debt that future taxpayers owe current and future retirees through the IOUs in the Social Security “trust fund.”

But, lo, says the White House, all of this will change in 2013 if Mr. Obama is re-elected. Next year, revenues will suddenly leap to 17.8% of GDP thanks to tax increases on the wealthy, which we are supposed to believe will have little impact on growth. (more…)

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OBAMA’S DISMAL FISCAL RECORD

Thursday, February 2nd, 2012
The Wall Street Journal

  • FEBRUARY 2, 2012

$5 Trillion and Change

Obama’s four years have seen the four highest deficits since 1946.

The political strategy behind Obamanomics was always simple: Call for “stimulus” to rescue the economy, run up the debt with the biggest spending blitz in 60 years, and then when the deficit explodes call for higher taxes. The Congressional Budget Office annual review released yesterday shows this is all on track.

CBO reports that annual spending over the Obama era has climbed to a projected $3.6 trillion this fiscal year from $2.98 trillion in fiscal 2008, or more than 20%. The government spending burden has averaged 24% of GDP, up from an average of about 20%. This doesn’t include the $2 trillion tab for ObamaCare.

All of this has increased the federal debt by about $5 trillion in a mere four years. Thanks to higher revenues, the federal deficit will decline to $1.08 trillion in 2012, or 7% of GDP. But that is still the highest deficit since 1946—except for the previous three years. In other words, the four years of the Obama’s Presidency will mark the four highest years in spending and deficits as a share of the economy since Harry Truman sat in the Oval Office.

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EPA

And don’t forget the national debt held by the public—the kind we have to pay back. On President Obama’s watch, CBO says public debt will climb this year to 72.5% of the economy from 40.3% in 2008. This isn’t as high as Italy or Greece, but it’s rising fast toward the 90% level that begins to debilitate an economy. (more…)

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KRAUTHAMMER – ‘FAIRNESS’ FALLS FLAT FOR OBAMA

Saturday, January 28th, 2012
Printed from the News & Observer – www.NewsObserver.com
Published Fri, Jan 27, 2012
‘Fairness’ falls flat for Obama

Washington Post Writers Group – Charles Krauthammer

Under penalty of what? Jail? The self-proclaimed transformer of America is now playing truant officer?

It sounded like the Clinton years with their presidentially proclaimed initiatives on midnight basketball and school uniforms. These are the marks of a shrunken presidency, thoroughly flummoxed by high unemployment, economic stagnation, crushing debt – and a glaring absence of ideas.

Of course, this being Obama, there was a reach for grandeur. Hope and change are long gone. It’s now equality and fairness. (more…)

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VIDEO – ERSKINE BOWLES AND ALAN SIMPSON DISCUSSING THE U.S. DEBT CRISIS

Friday, January 20th, 2012

DUKE UNIVERSITY – JANUARY 18, 2012

NOTE: TO BYPASS THE INTRODUCTIONS, CLICK AND SLIDE THE CIRCLE AT THE BOTTOM OF THE SCREEN OF THE VIDEO UNTIL YOU REACH THE PRESENTATION.

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KRAUTHAMMER – OBAMA AND CLASS CONFLICT

Tuesday, December 13th, 2011

WASHINGTON POST

Obama’s campaign for class resentment

By , Published: December 8

In the first month of his presidency, Barack Obama averred that if in three years he hadn’t alleviated the nation’s economic pain, he’d be a “one-term proposition.”

When three-quarters of Americans think the country is on the “wrong track” and even Bill Clinton calls the economy “lousy,” how then to run for a second term? Traveling Tuesday to Osawatomie, Kan., site of a famous 1910 Teddy Roosevelt speech, Obama laid out the case.

It seems that he and his policies have nothing to do with the current state of things. Sure, presidents are ordinarily held accountable for economic growth, unemployment, national indebtedness (see Obama, above). But not this time. Responsibility, you see, lies with the rich. (more…)

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THE 2013 TAX CLIFF

Thursday, September 15th, 2011
The Wall Street Journal

  • SEPTEMBER 14, 2011

Business had better enjoy the next 16 months.

  • President Obama unveiled part two of his American Jobs Act on Monday, and it turns out to be another permanent increase in taxes to pay for more spending and another temporary tax cut. No surprise there. What might surprise Americans, however, is how the President is setting up the U.S. economy for one of the biggest tax increases in history in 2013.
Mr. Obama said last week that he wants $240 billion in new tax incentives for workers and small business, but the catch is that all of these tax breaks would expire at the end of next year. To pay for all this, White House budget director Jack Lew also proposed $467 billion in new taxes that would begin a mere 16 months from now. The tax list includes limiting deductions for those earning more than $200,000 ($250,000 for couples), limiting tax breaks for oil and gas companies, and a tax increase on carried interest earned by private equity firms. These tax increases would not be temporary.

What this means is that millions of small-business owners had better enjoy the next 16 months, because come January 2013 they are going to get hit with a giant tax bill. Let’s call the expensive roll: (more…)

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WARREN BUFFETT’S FATHER SPOKE OUT ABOUT DANGEROUS INCREASE IN GOVERNMENT POWER IN 1956

Thursday, August 18th, 2011
The Wall Street Journal

  • AUGUST 17, 2011,

Howard Buffett, a Nebraska congressman and father of Warren Buffett, on how taxes curtail economic independence, December 1956.

  • From a speech by Howard Buffett, a congressman from Nebraska (and father of Warren Buffett), reprinted in the Freeman, December 1956:

The last 40 years have seen a gigantic expansion of political power over economic affairs by the federal government. This change is linked by many scholars to the passage of the income tax law in 1913. This law revolutionized the taxing system in two ways:

1. It gave the government new powers over the economic status of the individual. This change has curtailed the ability of the individual to achieve economic independence.

2. The part of his production taken from the producer cumulatively increases the power of the federal government proportionately with the increase in its income. This power is not created; it is simply taken away from the people. . . .

George Sokolsky, noted columnist, says it this way: “When human beings become dependent upon the political power of the state for their livelihood, the independence of person must disappear. It is the identification of economic power with police power that destroys the right of the individual to liberty.”

The transfer of economic power into political hands takes many forms. In 1932 about 2.5 million people received a check from the government every month. Today about 20 million receive a government check every month. What is the effect on the freedom of this great segment of our people being more or less dependent on the political authorities for their daily bread? . . .

Any discussion of the status of the economic foundation of freedom is incomplete without some attention to a historic human urge—the desire for security. This intense human desire is reflected in the so-called social legislation politicians have placed on our statute books.

Will this legislation fulfill its promises? If you think so, consider this rarely mentioned fine print clause. If the government is to guarantee you what the consequences of your actions will be in this case, security, then the government must take control of your activities. For with responsibility—even self-arrogated responsibility—must go authority.

This means that if politicians are to supply your security, they must control your work, your spending, and your saving. Witness crop controls. In that event you have traded the reality of liberty for the promise of security.

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NOW THE HARD WORK MUST BEGIN

Sunday, August 7th, 2011
Printed from the News & Observer – www.NewsObserver.com
Published Thu, Aug 04, 2011
Bowles and Simpson: Now the hard work must begin
BY ERSKINE BOWLES AND ALAN SIMPSON – The New York Times

Last month, President Barack Obama and congressional leaders came close to an agreement that could have set our nation on a sound fiscal path, only to see deal after deal, compromise after compromise, collapse.

The debt deal that Congress finally approved on Tuesday, however, is a start. It calls for at least $2.1 trillion in deficit reduction, including, starting in the fall, caps on discretionary spending worth around $900 billion in savings over 10 years, which is not chump change in anyone’s book. It represents an important first step toward fiscal sanity, and by taking it we have avoided default and thus a potential financial crisis. We hope to avoid a costly downgrade to our debt as well.

The problem with the plan is that it’s just a step forward; it isn’t a solution. It leaves more than half of its work – finding at least $1.2 trillion in savings to avert an automatic set of cuts – to a new bipartisan congressional committee. Even if that committee is successful, more tough work will be necessary to avoid, a few years down the road, another crisis over the deficit.

This country needs a plan to reduce our deficits by no less than $4 trillion in the next decade. It needs a plan to cut more wasteful spending in the defense and nondefense budgets than this deal does. In addition, we must address the unsustainable growth of our entitlement programs and reform the tax code to make it more competitive and more efficient. (more…)

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OBAMA AND THE NARCISSISM OF BIG DIFFERENCES

Sunday, August 7th, 2011
The Wall Street Journal

  • AUGUST 6, 2011

‘He becomes visibly agitated. . . . He does not like to be challenged on policy grounds,’ says the House majority leader of the president.

New York

Whatever the rhetoric that preceded this week’s deal, the debt-ceiling debate was never really about the debt at all. It was about the terms on which the debate would continue. The “two different worldviews” that divide Washington, explains Eric Cantor, are too far apart for anything more than an armistice. Still, listening to the House majority leader—who says the deal is “not perfect” but “there were some achievements”—it’s remarkable that the two parties were able to agree even to its modest terms.

The “philosophical starting point” of today’s Democrats, as Mr. Cantor sees it, is that they “believe in a welfare state before they believe in capitalism. They promote economic programs of redistribution to close the gap of the disparity between the classes. That’s what they’re about: redistributive politics.” The Virginian’s contempt is obvious in his Tidewater drawl. “The assumption . . . is that there is some kind of perpetual engine of economic prosperity in America that is going to just continue. And therefore they are able to take from those who create and give to those who don’t. We just have a fundamentally different view.” (more…)

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THE OBAMA DOWNGRADE

Monday, July 18th, 2011
The Wall Street Journal

  • JULY 15, 2011

The real reason the U.S. could lose its AAA rating.

  • So the credit-rating agencies that helped to create the financial crisis that led to a deep recession are now warning that the U.S. could lose the AAA rating it has had since 1917. As painfully ironic as this is, there’s no benefit in shooting the messengers. The real culprit is the U.S. political class, especially the President who has presided over this historic collapse of fiscal credibility.

Moody’s and the boys are citing the risk of a default on August 2 as the proximate reason for their warning. But Americans should understand that the debt ceiling is merely the trigger. The gun is the spending boom of the last three years and the prospect that Washington lacks the political will to reduce it in the years to come.

1downgradeOn spending, it is important to recall how extraordinary the blowout of the last three years has been. We’ve seen nothing like it since World War II. Nothing close. The nearby chart tracks federal outlays as a share of GDP since 1960. The early peaks coincide with the rise of the Great Society, the recession of 1974-75, and then a high of 23.5% with the recession of 1982 and the Reagan defense buildup.

From there, spending declines, most rapidly during the 1990s as defense outlays fell to 3% of GDP in 2000 from its Reagan peak of 6.2% in 1986. The early George W. Bush years saw spending bounce up to a plateau of roughly 20% of GDP, but no more than 20.7% as recently as 2008.

Then came the Obama blowout, in league with Nancy Pelosi’s Congress. With the recession as a rationale, Democrats consciously blew up the national balance sheet, lifting federal outlays to 25% in 2009, the highest level since 1945. (Even in 1946, with millions still in the military, spending was only 24.8% of GDP. In 1947 it fell to 14.8%.) Though the recession ended in June 2009, spending in 2010 stayed high at nearly 24%, and this year it is heading back toward 25%.

(more…)

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