WASHINGTON – In a 2008 debate, Charlie Gibson asked Barack Obama about his support for raising capital gains taxes, given the historical record of government losing net revenue as a result. Obama persevered: “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.”
A most revealing window into our president’s political core: To impose a tax that actually impoverishes our communal bank account (the U.S. Treasury) is ridiculous. It is nothing but punitive. It benefits no one – not the rich, not the poor, not the government. For Obama, however, it brings fairness, which is priceless.
Now that he’s president, Obama has actually gone and done it. He’s just proposed a $1.5 trillion tsunami of tax hikes featuring a “Buffett rule” that, although as yet deliberately still fuzzy, clearly includes raising capital gains taxes. (more…)
BY CHARLES KRAUTHAMMER – Washington Post Writers Group
WASHINGTON The Great Social Security Debate, Proposition 1: Of course it’s a Ponzi scheme.
In a Ponzi scheme, the people who invest early get their money out with dividends. But these dividends don’t come from any profitable or productive activity – they consist entirely of money paid in by later participants.
This cannot go on forever because at some point there just aren’t enough new investors to support the earlier entrants. Word gets around that there are no profits, just money transferred from new to old. The merry-go-round stops, the scheme collapses and the investors lose everything.
Now, Social Security is a pay-as-you-go program. A current beneficiary isn’t receiving the money she paid in years ago. That money is gone. It went to her parents’ Social Security check. The money in her check is coming from her son’s FICA tax today – i.e., her “investment” was paid out years ago to earlier entrants in the system and her current benefits are coming from the “investment” of the new entrants into the system. Pay-as-you-go is the definition of a Ponzi scheme. (more…)
The 9/11 ‘Overreaction’? Nonsense
America’s current demoralization is not a result of the War on Terror.
EXCERPT FROM THIS ARTICLE:
The total costs of “the two wars” is $1.3 trillion. That’s less than one eleventh of the national debt, less than one year of Obama deficit spending. During the golden Eisenhower 1950s of robust economic growth averaging 5 percent annually, defense spending was 11 percent of GDP and 60 percent of the federal budget. Today, defense spending is 5 percent of GDP and 20 percent of the budget. So much for imperial overstretch
The new conventional wisdom on 9/11: We have created a decade of fear. We overreacted to 9/11 — al-Qaeda turned out to be a paper tiger; there never was a second attack — thereby bankrupting the country, destroying our morale, and sending us into national decline.
The secretary of defense says that al-Qaeda is on the verge of strategic defeat. True. But why? Al-Qaeda did not spontaneously combust. Yet, in a decade, Osama bin Laden went from the emir of radical Islam — jihadi hero after whom babies were named all over the Muslim world — to pathetic old recluse, almost incommunicado, watching shades of himself on a cheap TV in a bare room.
What turned the strong horse into the weak horse? Precisely the massive and unrelenting American War on Terror, a systematic worldwide campaign carried out with increasing sophistication, efficiency, and lethality — now so cheaply denigrated as an “overreaction.”
First came the Afghan campaign, once so universally supported that Democrats for years complained that President Bush was not investing enough blood and treasure there. Now, it is reduced to a talking point as one of the “two wars” that bankrupted us. Yet Afghanistan was utterly indispensable in defeating the jihadis then and now. We think of Pakistan as the terrorist sanctuary. We fail to see that Afghanistan is our sanctuary, the base from which we have freedom of action to strike Jihad Central in Pakistan and the border regions. (more…)
“We had reversed the recession, avoided a depression, got the economy moving again. … But over the last six months, we’ve had a run of bad luck.”
— President Obama, Decorah, Iowa, Aug. 15
WASHINGTON — A troubled nation wonders: How did we get mired in 9.1 percent unemployment, 0.9 percent growth and an economic outlook so bad that the Federal Reserve pledges to keep interest rates at zero through mid-2013 — an admission that it sees little hope on the horizon?
Bad luck, explains our president. Out of nowhere came Japan and its supply-chain disruptions, Europe and its debt problems, the Arab Spring and those oil spikes. Kicked off, presumably, by various acts of God (should He not be held accountable too?): earthquake and tsunami. (Tomorrow: pestilence and famine. Maybe frogs.)
Well yes, but what leader is not subject to external events? Were the minor disruptions of the current Arab Spring remotely as damaging as the Arab oil embargo of 1973-74? Were the supply disruptions of Japan 2011 anything like the Asian financial collapse of 1997-98? Events happen. Leaders are elected to lead (from the front, incidentally). That means dealing with events, not plaintively claiming to be their victim.
Moreover, luck is the residue of design, as Branch Rickey immortally observed. And Obama’s design for the economy was a near-$1 trillion stimulus that left not a trace, the heavy hand of Obamacare and a flurry of regulatory zeal that seeks to stifle everything from domestic energy production to Boeing’s manufacturing expansion into South Carolina.
By Charles Krauthammer – Washington Post Writers Group
Published in: Other Views
August 6, 2011
WASHINGTON Conventional wisdom holds that the congressional super-committee established by the debt-ceiling deal to propose further deficit reduction will go nowhere. I’m not so sure. There is a grand compromise to be had. It does, however, require precise sequencing. To succeed it must proceed in three stages:
1 Tax Reform. True tax reform that removes loopholes while lowering tax rates is the Holy Grail of social policy. It appeals equally to left and right because, almost uniquely, it promotes both economic efficiency and fairness. Economic efficiency – because it removes tax dodges that distort capital flows (and thereby diminish productivity) while cutting marginal tax rates (thereby spurring growth). Fairness – because a corrupted tax code with myriad breaks grants deeply unfair advantage to the rich who buy the lobbyists who create the loopholes and buy the lawyers who exploit them.
Which is why the 1986 Reagan-Bradley tax reform was such a historic success. It satisfied left and right, promoted efficiency and fairness, and helped launch two decades of almost uninterrupted economic expansion.
But didn’t that agreement take years to hammer out? Yes. Today, however, the elements are already laid out by the Simpson-Bowles commission. The super-committee doesn’t have to reinvent the wheel. It simply has to make choices.
BY CHARLES KRAUTHAMMER – Washington Post Writers Group
Published in: Other Views
WASHINGTON We’re in the midst of a great four-year national debate on the size and reach of government, the future of the welfare state, indeed, the nature of the social contract between citizen and state. The distinctive visions of the two parties – social-democratic versus limited-government – have underlain every debate on every issue since Barack Obama’s inauguration: the stimulus, the auto bailouts, health care reform, financial regulation, deficit spending. Everything. The debt ceiling is but the latest focus of this fundamental divide.
The sausage-making may be unsightly, but the problem is not that Washington is broken, that ridiculous ubiquitous cliché. The problem is that these two visions are in competition, and the definitive popular verdict has not yet been rendered.
We’re only at the midpoint. Obama won a great victory in 2008 that he took as a mandate to transform America toward European-style social democracy. The subsequent counterrevolution delivered to that project a staggering rebuke in November 2010. Under our incremental system, however, a rebuke delivered is not a mandate conferred. That awaits definitive resolution, the rubber match of November 2012.
I have every sympathy with the conservative counterrevolutionaries. Their containment of the Obama experiment has been remarkable. But reversal is simply not achievable until conservatives receive a mandate to govern from the White House. (more…)
By Charles Krauthammer – Washington Post Writers Group
WASHINGTON Here we go again. An approaching crisis. A looming deadline. Nervous markets. And then, from the miasma of gridlock, rises our president, calling upon those unruly congressional children to quit squabbling, stop kicking the can down the road and get serious about debt.
This from the man who:
Ignored the debt problem for two years by kicking the can to a commission.
Promptly ignored the commission’s December 2010 report.
Delivered a State of the Union address in January that didn’t even mention the word “debt” until 35 minutes in.
Delivered in February a budget so embarrassing – it actually increased the deficit – that the Democratic-controlled Senate rejected it 97-0.
Took a budget mulligan with his April 13 debt-plan speech. Asked in Congress how this new “budget framework” would affect the actual federal budget, Congressional Budget Office Director Doug Elmendorf replied with a devastating “We don’t estimate speeches.” You can’t assign numbers to air. (more…)
