Scott Spiegel

Image by tj.blackwell via Flickr

On Saturday President Obama magnanimously announced that he was willing to support cutting $33 billion from 2010 federal spending levels for 2011—which, for the mathematically challenged, is about 1% of infinity.

Congressional Democrats screamed that these cuts were way too large.  Republicans countered that the cuts didn’t go far enough and should be extended to $61 billion, which amounts to about 2% of infinity.

With current spending set to run out this week, the federal government faces a shutdown on Friday night unless Congress can agree on which of these piddly sums to cut from the budget.

Tea party supporters have been rightly insulted by these farcical negotiating positions, arguing that hundreds of billions could be saved just by, for example, eliminating redundant programs.

As Rasmussen reports, a majority of Americans haven’t been snookered into thinking these microscopic doses of fiscal austerity will do a thing to address our long-term budget crisis.

Meanwhile, the only Congressman clear-eyed enough to appreciate the extent of the crisis, knowledgeable enough to propose a plan to resolve it, and brave enough to stand up for his proposal in the face of Republican wishy-washiness—namely, House Budget Chairman Paul Ryan—and also not crazily isolationist on foreign policy (Ron and Rand Paul) has offered a blueprint called “A Path to Prosperity,” modeled after his 2008 “Roadmap for America’s Future.”

Ryan’s plan proposes phasing out Medicare by replacing it with vouchers and turning it over to the states, making major changes to Medicaid, and taking similar action with Social Security after these two behemoths have been wrestled to the ground.

The central irony of Ryan’s stance is that, as he claims, his is the only proposal that will help “save” these programs, whereas current entitlement obligations will, if continued at their present levels, lead to eventual insolvency.

While Medicare/Medicaid and Social Security are unsustainable, unconstitutional Ponzi schemes, and while our country somehow managed to survive 189 and 159 years respectively without them, I suppose we need to start somewhere.  I guess a Budget Chairman who wants to drastically reform these albatrosses in order to save them is as good a start as we’re going to get nowadays from a political standpoint.

Ryan’s plan proposes cutting $5 trillion from the national debt over the next decade, and eventually eliminating the national debt, all without raising taxes.

On Tuesday, Obama rejected a third stopgap offer from House Majority Leader John Boehner to keep the government open another week while budget negotiations continue.

Obama’s right—we shouldn’t settle for on-the-fly, seat-of-our-pants, week-by-week spending plans.  Republicans should hold their ground and not be afraid to shut the government down on Friday.

Some who claim to favor entitlement reform have counseled House Republicans to compromise with Democrats on this week’s negotiations, so that Democrats will work with them later on more substantial cuts like Ryan’s.  The Chicago Tribune counsels, “Better to declare victory at $33 billion, or whatever more Republicans can wrest from Democrats, and move on to the bigger picture.  Because sanity in federal spending isn’t going to be restored by dealing in billions.  It’s going to be restored by dealing in trillions…  A deal today on discretionary spending could lay the foundation for bipartisan agreement on the far more impactful issue of entitlements.”

So giving in to Democrats will create goodwill and set the stage for larger-scale cuts, whereas shutting down the government will cause Democrats to dig in further and resist compromise later on.

One question: Since when did Democrats respond to Republican compromise with magnanimous, reciprocal behavior?

Sensing that they’re about to win on the shutdown, dyed-in-the-wool leftists like E. J. Dionne are already crying, “The Ryan budget’s central purpose will not be deficit reduction but the gradual dismantling of key parts of government…  Americans are about to learn… how radical the new conservatives in Washington are, and the extent to which some politicians would transfer even more resources from the have-nots and have-a-littles to the have-a-lots.”  Ezra Klein whines that Ryan’s plan will mean “leaving the old and the poor without health care.”  These are the people who are going to be placated by giving in on minute cuts now into accepting huge cuts several months from now?

Republicans’ negotiation strategy, from Bush I to Bush II to Boehner, has always been: The other side asks for an inch; Republicans give a mile.  Democrats’ strategy is: The other side asks for an inch; Democrats take a mile.  See how fair and evenhanded things are!

To take just one recent example, Congressional Republicans begged Democrats to consider including medical malpractice tort reform, legalizing health insurance sales across state lines, and offering greater tax deductions for health care costs in their ObamaCare bill.  Democrats responded by ignoring all these ideas and muscling through their bill inappropriately using the budget reconciliation procedure after the enraged residents of Massachusetts denied them their 60th Senate vote.

Battling Democrats legislatively is like fighting terrorists militarily—you don’t show them how weak and spineless you are; you show them how ruthless and merciless you can be.  They don’t respond to anything else.



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In the spirit of the decade-long procession of Eastern European and Middle Eastern upheavals in which oppressed peoples have gathered en masse to protest the brutality of their tyrannical leaders, I hereby suggest we christen the current Wisconsin uprising the Government Cheese Revolution.

We gave poetic names to recent revolts based on the colors of their countries’ flags or their native specialties, such as the Rose Revolution, the Cedar Revolution, the Tulip Revolution, the Green Revolution, the Jasmine Revolution, and the Lotus Revolution.  Wisconsin markets its cheddar as being orange, and protestors have filled the state capitol wearing ugly orange Working Families T-shirts, but unfortunately the Ukraine has already snagged the title “Orange Revolution.”

Newly elected Governor Scott Walker and the freshly majority Republican Wisconsin state legislature recently proposed a bill that would eliminate the ability of most public sector union members to collectively bargain.  It would prevent unions from forcing members to pay dues, require annual secret ballots on whether to remain unionized, and ask members to contribute a pittance toward their lavish pensions and health care plans.  The bill would help obviate Wisconsin’s projected $3.6 billion 2013 budget deficit.

Wisconsin public employees have demonstrated their rock-solid work ethic and indispensable contribution to the community by calling in sick to gather at the capitol and dub the governor Hosni Mubarak and Adolf Hitler.  Due to thousands of teachers’ absence from work, the largest Wisconsin public school districts have been closed for almost a week.

Last Thursday, the day of the scheduled union bill vote, all 14 Democratic Senators rode a shuttle bus out of state to hide in a secret location in Illinois.

The legislators included Julie Lassa—mother of two small children, six months pregnant with a third—who thought it was a better idea to be on the lam during her third trimester and leave her toddlers at home than to show up at work.

Meanwhile, classy public employee demonstrators have been putting those trashy Tea Partiers to shame by savagely beating drums, sitting Indian-style throughout the capitol corridors, and deliberately blocking people from passing.  Pro-union rabble rousers have left the capitol grounds littered with flyers and trash and have massed outside Republican Senators’ homes to scream threats at them.

Some of the more civil and respectful signs at the capitol rally have read: “Walker Terrorizes Families,” “Wisconsin Dictator Must Go,” “Scott Walker = Adolf Hitler,” “Midwest Mussolini,” “Why Do Republicans Hate People,” “Raping Public Employees Is Not The Way To Balance The Budget,” and “Don’t Retreat: Reload,” the latter including the same crosshair symbol over Walker’s face that had liberals up in arms when it was found on Sarah Palin’s website after last month’s Tucson shooting.

Other signs included the delightful encomiums “Al-Qaeda Scott,” “Walker Blows Koch,” “Scott Walker: The Reason We Need Planned Parenthood,” and “Heil Walker!”

Regarding the ubiquitous Hitler references, one protestor explained to a reporter, “First you take away the unions, and then you take away the Jews…  That’s where it starts.”

If some African Americans object when gays talk about their struggle as a civil rights movement, I wonder: how do Wisconsin’s Jews feel about protestors comparing minor pension plan adjustments to the Holocaust?

State Republican legislators have bravely refused to water down the bill and have demanded that Democrats return to the state for an up-or-down vote.

Naturally, liberals from coast to coast are reflexively defending the Wisconsin protestors.  Apologists for the Cheddar Deadbeats include New York Times columnist Paul Krugman, who extols the glories of unions and the protestors’ cause without bothering to mention that Wisconsin public employees are treated to extravagant pensions and health care plans few private sector workers would dream of.

President Obama and the Democratic National Committee have been sending their 2008 campaign supporters and union cronies to Madison to help with the AstroTurf uprising.

Obama’s support may make this the first revolution in history in which a nation’s Commander-in-Chief has provided material reinforcements to the protestors to help quash the opposition party.

The Government Cheese Revolution is also probably the first revolt in which medical doctors have glided through the crowds offering fraudulent sick notes to protestors, encouraging them to claim “mental anguish and distress” over the bill and the need to congregate with similarly situated victims to alleviate their symptoms.  One doctor dispensed with any pretense of medical jargon and simply told a reporter, “Everybody is sick—of Scott Walker!”

Since Wisconsin public employees’ actions are indistinguishable from a strike, which government unions are legally barred from carrying out, I have a solution for putting a peaceful end to the Government Cheese Revolution.

Namely, fire every Wisconsin public sector employee discovered to have obtained a false sick note to skip work and attend the protests.  That ought to rid the state payroll of the worst of the riffraff.

Then make them find employment in the private sector, where they can learn just how the rest of the country lives.

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Call Monday’s 2012 budget release the St. Valentine’s Day Non-massacre.

President Obama’s budget director Jacob Lew announced on Monday that he was presenting Congress with a budget that would compel the nation to “live within our means, but also invest in the future.”

Can we leave out “but also invest in the future”?

Why does Obama always append damaging clauses to seemingly responsible proposals?  Is it so that when he fails to do what he should—have us live within our means—and merely does what he wants—spend, spend, spend—he can say he at least kept half his promise?

In a press conference defending his proposal, Obama scolded Republicans about the need to have an “adult conversation” with him on the budget and stop being “impatient” about his failure to deal with entitlement reform.

Obama is enormously proud of the fact that he has pledged to freeze domestic spending for the next five years.  Since that means freezing spending at 2010 levels, which were 22% higher than bloated 2008 levels, Obama has done the equivalent of freezing the national diet at Michael Moore’s instead of Alec Baldwin’s.

Even Obama’s spending freeze applies only to non-defense discretionary spending, which makes up just 15% of the federal budget.  His proposal does nothing to address reform of Medicare, Medicaid, or Social Security.

Everyone knew that the bipartisan deficit reduction commission Obama sanctioned last year to “study” the federal debt and make recommendations was window dressing.  Obama never had any intention of following suggestions that were unpalatable for his base, such as raising the retirement age for Social Security or means-testing Medicare.

But the $3.73 trillion 2012 budget, and projected $1.65 trillion 2011 deficit, Obama unveiled on Monday set staggering, all-time records that shocked even his supporters.

Obama’s 2012 budget will cause our federal debt to jump from $14.2 trillion to $15.5 trillion, which will render the federal debt greater than the size of the entire U.S. economy for the first time in history.

By 2013, the federal debt will equal 106% of the U.S. economy.  That rosy scenario, by the way, will happen only if the next two years see the U.S. economy roaring back to life and demonstrating much higher growth than in recent years—which the Obama administration, with complete, non-self-serving objectivity, is absolutely certain will happen.

By 2016 the federal debt will swell to $21 trillion.

Obama claims his administration’s proposed 10-year budget outline makes “tough choices and sacrifices.”  What, specifically, does his budget sacrifice?  The expectation that he will ever get serious about our national debt?

Perhaps one sacrifice is Obama’s pledge to reduce funding to lower-income people to pay their heating bills.  How many of you realized there was a federal program in place to help poor people pay their heating bills?  I propose that if the average American didn’t even realize he was subsidizing a federal program, then trimming it doesn’t count as a sacrifice.

In defending their budget, Obama and Lew have displayed the air of surly teenagers who want to show their parents just how much they’ve suffered under the repressive rules of the house, rather than responsible adults who want to solve a problem.  Lew whined on Monday, “It’s important to note that we’re beyond the easy, low-hanging fruit.  We’re reducing programs that are important programs that we care about.”  (“But Mom, I made my bed—why do I have to clean my whole room?”)

Obama’s budget is so elephantine—no pun intended—even liberals are embarrassed by its sheer cowardice and unresponsiveness to financial conditions.  Obama’s deficit commission chairman, Democrat Erskine Bowles, complained that the budget is “nowhere near where they will have to go to resolve our fiscal nightmare.”

To the extent Democrats care at all about cutting spending, of course they want to slash defense appropriations.  Fine—but defense spending makes up only 20% of the federal budget, even with two ongoing wars.  Medicare, Medicaid, Social Security, and other “mandatory” programs make up more than 50%, and “discretionary” programs like the Department of Education and the Environmental Protection Agency make up another 20%.  If we agree to cut defense spending 10%, could we get Democrats on record favoring a piddly 5% cut in entitlement spending?

During the third 2008 presidential debate, when moderator Bob Schieffer asked the candidates what they would cut from the federal budget, Senator John McCain declared that he would use a “hatchet,” then get out a “scalpel” to finish the job—a response Senator Barack Obama ridiculed as too radical.

How about a hatchet, then a machete to catch everything we missed with the hatchet, then a 60-ton M1 Abrams tank over anything left standing?  Will Democrats finally get the message about the crisis we face after that?

As Indiana Governor Mitch Daniels put it in his speech at CPAC last weekend, “Our morbidly obese federal government needs, not just behavior modification, but bariatric surgery.”

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In a recent article on the upcoming 112^th Congress, the Associated Press warned that gridlock between the Republican House and Democratic Senate might result in a failure to act that “could threaten the nation’s economic health.”

Are they kidding?  What do they think has been going on for the past two years, when Democrats controlled both chambers and the White House and put us further in debt than the first 100 Congresses combined?  Gridlock in Congress is the best prescription for helping our economy recover.

Mainstream news outlets have noted that Republicans hold two main objectives after their swearing in on Wednesday: repealing or defunding ObamaCare and finding a politically palatable solution to the imminent overrun of the federal debt ceiling President Obama signed into law last year.

If Republicans don’t vote to raise the ceiling above its existing limit of $14.3 trillion by March 4, when the current stopgap measure runs out, we are told that they will be responsible for a government shutdown like the one in January 1996.

Obama’s Chairman of the Council of Economic Advisers Austan Goolsbee declared that failure to raise the debt ceiling would have a “catastrophic” effect, in that the federal government would essentially be in default.

In contrast, if we pass a resolution increasing the debt ceiling and continue to spend into the stratosphere, the world will be fooled into thinking that we are on financially sounder footing.

Huh?

An arbitrary limit chosen by Congress that will be increased repeatedly in coming months and years will have that much of an impact on our global creditworthiness, but our actual spending behavior won’t?

If I understand correctly, the purpose of a debt ceiling is to prevent politicians from spending so much that the federal government goes into debt at a level higher than that specified by the ceiling.  In other words, the ceiling is set so that spend-happy legislators trolling for votes can’t overrun a predetermined limit in the future.  The fact that the ceiling is voted into law means the debt level is inviolable and cannot be increased.

Something seems to have gone wrong here.

If we don’t stop increasing the debt ceiling to ever-higher levels, what’s the point of having one?  What meaning does it hold?

Is it at least possible that the world might interpret our declining to raise the debt ceiling as a sign that we intend to scale back our meteoric rise in federal spending and return to earlier levels?

Hasn’t the party that failed to pass a budget for the last two years, and passed but failed to live by its own sanctimonious PAYGO “pay-as-you-go” rule, damaged our international standing more than the GOP’s failing to declare a meaningless debt ceiling could?

Goolsbee scolded Republicans for “playing chicken” with raising the debt ceiling.  This is exactly the same thing Congressional Democrats did when they accused Republicans of being ‘the party of ‘no’” on health care reform, financial regulation, and extending the Bush tax cuts for only the middle class.  Goolsbee threatens that not raising the deficit ceiling will result in a greater financial crisis than the one in 2008, just as Democrats claimed that not enacting all of their other policies would result in catastrophic consequences for the nation’s economic well-being.

Everyone knows there are two ways to reduce the federal debt, one of which is to cut spending.  (The other involves taxes, though liberals and conservatives disagree on the direction: liberals believe raising them increases revenue, whereas conservatives believe lowering them does.)

In that light, I highly recommend for educational purposes the New York Times’ Budget Puzzle: You Fix the Budget from November of last year.

I, for one, was able to eliminate the projected $418 billion 2015 shortfall, and the projected $1,345 billion 2030 shortfall, without raising a single dollar in taxes, obtaining 100% of my savings from spending cuts.

I achieved this primarily by: (1) capping Medicare growth starting in 2013, (2) raising the Social Security retirement age to 70, (3) reducing the tax break for employer-provided health insurance, and (4) increasing the Medicare eligibility age to 70.  That’s it.  Each of these four measures resulted in $100 billion or more in projected savings to the deficit by 2030; combined with other, more minor cuts, the job was done.

True, I had to reduce the number of troops in Iraq and Afghanistan to 60,000 by 2015, and trim some other military spending, in order to cross the finish line.  But I didn’t have to resurrect the estate tax, reinstate taxes on capital gains and dividends, allow any of the Bush tax cuts to expire, impose a millionaire’s tax, or institute a national sales tax, a carbon tax, or a bank tax.  (I didn’t even have to cut Vice President Joe Biden’s salary to its market value of $13,500!)

And all of this was done without relying on the assumption that cutting taxes will increase total government revenue, as it has every time taxes were cut, by Presidents both Republican (Reagan and Bush II) and Democratic (Clinton).  Such increased revenue would mitigate the need for spending cuts or yield budget surpluses.

The budget can be “solved,” without raising taxes or the debt ceiling, solely by cutting spending, in a framework so clear and intuitive even a child could do it using an interactive online “puzzle.”

If certain stubborn teenagers in Congress can’t figure that out, then the government ought to be shut down so they can have a nice, long timeout.



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During President Obama’s recent 10-day Asia Fantasia expedition, the leaders of the G-20 seemed to demonstrate a modified version of the Golden Rule: Don’t do unto Obama what he never had the courtesy to do unto you.

Namely, don’t adopt his crackpot ideas on economic policy—pumping billions more in currency into your economies—in the same way he didn’t stop the Federal Reserve from enacting similar measures when the world warned him not to the first year-and-a-half of his presidency.

Also, don’t jump on the Obama bandwagon of loudly scolding China for its currency manipulation, when the U.S. is doing the same or worse via cockamamie quantitative easing and currency devaluation schemes.

You know your president’s “progressive” ideas are behind the times when the Communist Chinese Foreign Minister rebukes him for relying on “outmoded central planning.”

On his mega-expensive trip to India, Indonesia, South Korea, and Japan last week (which didn’t cost $200 million a day, no way!), Obama failed to achieve a free trade agreement with South Korea, which was supposed to be one of the highlights of his trip.

Kind of reminds you of how Obama’s excursions to Copenhagen were supposed to hand Chicago the 2016 Olympics and the U.S. an international climate change summit, and his jaunts to New Jersey, Virginia, and Massachusetts were supposed to produce electoral wins for John Corzine, Creigh Deeds, and Martha Coakley.

But at least Obama got to dance awkwardly on camera with Indian toddlers!  Also, he had time to thank Indonesia for the sacrifices of their “great nation” on Veteran’s Day.

The San Francisco Examiner’s headline says it all: “Diplomatic success and economic failure on Asian trip show limits for Obama on global stage”—or, “Once again, Obama flashes his pearly whites, charms the pants off people who don’t know better, and fails miserably to get what he wants.”

Cranky Fed officials shot back at international criticism of Reserve policies, arguing that QE2 and inflation-promoting measures are necessary to get the economy going.  How many times have we heard that one before?

These days the Fed isn’t even pretending their latest round of mad experimentation won’t be their last.  Charles Evans, head of the Federal Reserve Bank of Chicago, mused that the Fed’s recent decision to buy $600 billion of government debt was a “good place to start” but “I would continue to want to apply accommodative monetary policy until I had some confidence that that situation was changing.”  Eric Rosengren, head of the Federal Reserve Bank in Boston, hints, “[I]f the economy were to weaken and we were to get further disinflation and a higher unemployment rate, then we would have to reflect on whether we should take additional action.”

This week, Obama will be attending economic summits held by members of NATO and the European Union, where he will be lucky not to have his policy ideas served back to him via a swift palm to the cheek.

Obama’s fiscal and monetary policies aren’t popular in Asia, but they’re certainly even more detested in Europe, where the economies of Greece, Spain, Ireland, and Iceland have already tanked and others are on the brink of ruin.

To summarize our president’s recent forays onto the global stage: Obama is off to Europe for another shot at redeeming his image after failing to redeem his image in Asia, which he attempted after failing to redeem his image as a popular leader in the midterm elections.  Where’s he going to go after he fails in Europe—where is there a place where residents don’t already hate him and haven’t been materially harmed by his policies?  Mars?

As Reuters put it, “If President Barack Obama is not yet convinced that his international star power has faded, his next round of transatlantic summitry should clear up any lingering doubts.”  As I put it, “If Reuters thinks that Obama’s next round of transatlantic summitry will have a humbling effect on the president, they haven’t met Obama.”

British Prime Minister David Cameron, French President Nicolas Sarkozy, and German Chancellor Angela Merkel have already sent out advance notice to Obama that Western Europe is not about to go the way of the American Recovery and Reinvestment Act.  So all-in-all I think it’s going to be a big success.

The world supposedly once hated President George W. Bush for his “cowboy diplomacy.”  What’s the appropriate metaphor for Obama—a sleazy, destructive friend who encourages you to blow all your money in Vegas?



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President Barack Obama wants the Bush tax cuts of 2001 and 2003 extended at the end of this year for only those making under $250,000, and not for small business owners and two-income families—sorry, “the filthy, stinking rich.”

Republicans, including House Minority Leader John Boehner, want all of the tax cuts renewed.

Last June, Obama’s former economic advisor Christina Rohmer published an empirical paper demonstrating that tax cuts stimulate economic growth.

In July, Obama’s Federal Reserve Chairman Ben Bernanke observed that continuing all of the Bush tax cuts past 2010 would be a wise idea.

Recently, moderate Democrats and Independents in Congress including Senators Kent Conrad, Evan Bayh, Ben Nelson, Jim Webb, and Joe Lieberman, and a dozen Representatives, have stated that they are open to extending all of the Bush tax cuts.

Last week, Peter Orszag, Obama’s former Director of the Office of Management and Budget, wrote an editorial in the New York Times supporting both sets of tax cuts as preferable to neither.

On Monday, Rasmussen reported that a majority of Americans favor letting the Bush tax cuts continue for upper income brackets.

Naturally, in this environment of receptiveness to renewing the Bush tax cuts and reinterpreting economic history, Boehner has capitalized on the wave of bipartisan goodwill and public support by announcing that he is fine with… discontinuing the tax cuts for high earners.

The setup for Boehner’s boner was foreseeable, since it has happened to spineless Republicans too many times before.  During his speech last Wednesday in Cleveland, Obama did a nice little hit job on Boehner and his policies, claiming that Boehner had no new ideas and simply wanted to return to the Bush era.

Last week, The New York Times did its own hit job on Boehner.

On Sunday, Boehner did something to actually deserve a hit job.

On CBS’s “Face the Nation,” host Bob Schieffer tried, successfully, to trap Boehner into saying that he would support only the middle class tax cuts, if Democrats opposed the tax cuts on high earners.

I may be reading too much into the tea leaves, but it seems that Schieffer may possibly have tipped his hand to Boehner when he rhetorically asked his audience, in the immediate lead-up to the interview, “Will he try to block middle-class tax cuts, if he can’t get the same cuts for the wealthy?  We’ll ask.”

When asked, Boehner sheepishly agreed that this would be a dandy idea.

Schieffer rubbed Boehner’s nose in his blunder by restating, no fewer than three times, what Boehner’s new position on taxes apparently was.  Boehner never once regained his footing.

As Mark Levin put it, Boehner responded to Schieffer by “embracing the template of the left, rather than deconstructing it.”

In the midst of a national anti-spending, anti-taxing, anti-class warfare tempest, in which Republicans have their largest lead by far in the history of the generic poll, and are poised to make overwhelming gains in Congress, Boehner decided, on the most important issue of the day, to punt.

Evidently Boehner fears that if he stands his ground against extending only some of the tax cuts, Democrats will try to portray the Republican leader as opposing all tax cuts.  This is like portraying a fish as opposing water.  Even liberal voters don’t believe Republicans are opposed to tax cuts.

Boehner should have responded, “I object to the premise of the question, which inappropriately puts our side on the defensive.  Why aren’t you asking House Democrats, who are actually the ones in power and can set the agenda for what we vote on, whether they would veto tax cuts for the middle class if the legislation didn’t exclude tax cuts for people in the upper brackets?  Is their irrational desire to punish the rich so strong that they would hurt lower income earners just to spite Republicans?  Are they not even going to allow an up-or-down vote on our proposal?”

When the Republicans sweep Congress in November, they will need a leader who can bravely implement conservative views and oppose Democratic monstrosities.

House Minority Whip Eric Cantor, Senate Minority Leader Mitch McConnell, and Senate Minority Whip John Kyl all disavowed Boehner’s comments on Monday, affirming that they would insist on a vote on renewing the entire set of tax cuts.  McConnell and Kyl reported that all 41 Republican Senators are opposed to extending the tax cuts to only the middle class.  But no—Boehner had to make nice to a liberal talk show host and demonstrate to Democrats that he was too weak-kneed to stand up to their disastrous agenda.

I don’t care if Boehner is “triangulating,” or trying to win points with the administration because he thinks Obama’s bill can’t pass the Senate anyway.  He needs to defend the principle that tax cuts for high earners increase incentives to invest and take risks, and yield greater government revenue, and he needs to say it using those terms.  Boehner may think he’s being clever, but what if his strategy backfires during the upcoming lame duck session of Congress—a distinct possibility, given the ruthless kamikaze machinations we saw from Democrats on the health care bill?  What if his words lead some moderate Republicans to feel pressured into giving in on tax cuts?

This is not an ideological purity test—it is a test of basic competence.  If Boehner isn’t clever enough to come up with an uncompromising response to a predictable query from a leftist septuagenarian in the dinosaur media, then he’s not adept or coherent enough to be an effective House Majority Leader for the reenergized, newly ascendant, Tea Party-infused conservative movement.



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The stimulus bill Congress passed in February 2009 was supposed to be spent predominantly on infrastructure rebuilding projects.

At an address to AFL-CIO members at Laborfest in Milwaukee on Monday, President Barack Obama pushed an additional $50 billion-plus stimulus bill designed to fulfill the novel task of… rebuilding the country’s infrastructure.

Obama warmed up his working class audience by wearing an open-collar shirt with rolled up sleeves, referring to his listeners as “folks,” and reminding them of the miserably unprosperous Reagan years, when unemployment plummeted from a Carter-induced 10% in 1982 to 5% by the end of Reagan’s second term.

The President’s proposed infrastructure spending aimed to rebuild roads, railways, and runways, not to mention public union coffers and Democratic Congressional reelection campaigns.

The bill would be paid for by eliminating tax breaks for oil and gas companies, also known as “raising taxes.”

In addition, the President proposed a new federal Infrastructure Bank of unspecified cost and scope that would use tax dollars to borrow private funds to fuel future projects.  You know—sort of a cross between Amtrak and Fannie Mae, with all the efficiency of the former and all the transparency of the latter.

Chastising Republicans for their platform of “No, We Can’t” and their propensity to oppose everything he suggests, Obama declared, “If I said the sky was blue, they’d say no.  If I said fish live in the sea, they’d say no.”  Actually, if he said never-ending Keynesian spending orgies stimulate long-term economic growth, we’d say no.  But close!

Obama announced that he would “keep fighting, every single day, every single hour, every single minute to turn this economy around.”  (He did not say “every single second”—a guy does need time to get in some golf swings and order shrimp baskets in between bouts of pondering the economy.)

Behold a president whose economic ideas are so muddled that he could pronounce, in his speech, “[A]nyone who thinks we can move this economy forward with a few doing well at the top, hoping it’ll trickle down to working folks… just [hasn’t] studied our history”; and then, a few paragraphs later, brag, “[W]e’ve given tax cuts to small business owners…  [W]e’re cutting taxes for companies that put our people to work here at home.”  Gee—I wonder how giving tax breaks to companies helps the middle class?  Perhaps, when taxes are lowered, wealthy company owners have more money to hire workers?  You might almost say that tax cuts cause jobs to “trickle down” to the working class.

When the stimulus bill failed to reduce unemployment last year, liberal commentators snickered at how dumb conservatives were for expecting the bill to have an effect right away.  In late spring 2009, when unemployment was at 8.5%, they said, Just wait a few more months.  At the end of the summer, when unemployment was at 9.5%, they said, Just wait till the end of the year.  At the end of the year, when unemployment was over 10%, they said, The stimulus could actually take years to lay bare its brilliant results.

Eighteen months after the stimulus bill was passed, the House Ways and Means Committee reported that more than 2.5 million jobs had been lost.

In order to minimize the egg on their faces a year from now, the Obama administration simply refuses to estimate how many jobs its new not-a-stimulus stimulus bill would create.

Obama’s announcement represents a perverse stubbornness to acknowledge that his party’s economic ideas simply aren’t working.  The one thing that might save his presidency would be for him to turn into President Bill Clinton and start governing from the center, but then he would have to admit that he was wrong, which he refuses to do.

The clincher that liberals know they should be following conservatives’ advice always comes when they trot out the old canard that “Republican leadership hasn’t brought any helpful ideas to the table.”  That’s what they said when conservatives rejected their nationalized health care scheme last year.  The claim was belied by dozens of innovative health care reform bills Republicans had introduced in the House that never even left the referral stage.

The Tea Party’s Contract from America, for starters, lists 10 fantastic ideas for strengthening the economy and creating an environment favorable to growth and development, such as simplifying the tax system, imposing caps on annual federal spending increases, and permanently extending the Bush tax cuts.  In other words, “no helpful ideas.”

Obama’s latest tin-eared proposal is final proof, in 12-foot tall, blood-red, block letters, for those who still need it, that he doesn’t get it: Americans are furious and terrified about the mountains of debt he has piled on top of us, and don’t believe any of his spending programs have done a thing to help the economy.



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Liberals have generously treated us to a motley assortment of apologia for President Obama’s economy-wrecking fiscal policies over the past 19 months:

(1) The economy is doing fine (Ezra Klein)!  We should have expected the recovery to be agonizingly slow, and it is—hence, Obama’s policies worked.

(2) The economy isn’t doing well, but it would have been doing even worse without the stimulus bill (e.g., Mark Zandi, chief economist of Moody’s and bona fide boob).  Without a Keynesian spending orgy—or as Obama puts it, “moving the economy forward”—unemployment wouldn’t have stopped at 10% and might have risen to 12 or 13 or 15%.

(3) The economy is doing poorly, and it’s because the Democrats didn’t do enough (the ever-certifiable Paul Krugman).  The stimulus should have been much bigger, and financial regulations should have been much harsher.  To compensate we need “a second big stimulus, plus much more aggressive Fed policy.”

In contrast, conservatives have suggested the following interpretations of events:

(1) The economy is going to improve soon (Larry Kudlow).  We won’t experience a double-dip recession and growth is resuming, so we should be more optimistic.  Obama’s policies aren’t helping, but American ingenuity and entrepreneurial spirit are strong enough that we can recover anyway.

(2) The economy isn’t doing well, and Obama’s policies have made it worse (every other conservative on the planet).  Wasteful spending caused our debt to skyrocket and increased the chances of inflation; government takeover of private industries and burdensome financial regulations created an uncertain climate for investing and hiring that has prolonged the recession.

(3) The economy is doing poorly, and now is the time to discuss not only repealing Obama’s policies and ensuring that the likes of them never pass again, but undoing the policies liberals have inflicted on the nation since FDR under the pretense that once they were in place future generations would be too sheepish to touch them (Paul Ryan).  The impetus from the Tea Party movement should be used to revive talks about privatizing Social Security, Medicare, and Medicaid.

So liberals and conservatives are at a bit of a standoff over the fundamental economic principles behind their political strategies.  Who’s right?

Let’s see: economists have demonstrated, time and again, using common-sense reasoning, econometric modeling, and historical data, that increasing government spending yields less economic output than if government had left that money in the private sector to be spent, invested, or saved as those who generated it saw fit.

Economists have shown that increasing marginal tax rates counterintuitively decreases the gross domestic product, especially in the years immediately following tax increases.  Obama’s chief economic advisor, Christina Romer—who just retired over a conflict between her views and the administration’s—documented the effect of this negative tax “multiplier” using empirical data in a recently published economics article.

It doesn’t matter whether we accept Klein’s view that the economy is peachy, Zandi’s view that it’s doing badly but could be worse, or Krugman’s view that it’s doing badly and needs more Obamanomics.  All are based on the false premise that more government spending, taxation, and regulation are better for the economy than less.  (Hey—don’t Keynesians believe that spending lots of money on wars is a good way to revive the economy?  I guess Krugman will be admitting he was wrong about the Iraq and Afghanistan conflicts after all!)

People like Klein bemoan the fact that corporate profits are back up to 2006 levels while hiring remains slow.  Liberals present the question of our tepid recovery as an intractable metaphysical mystery incapable of being penetrated by mere humans; as Klein puts it: “That is the catch-22 of the recovery: Businesses will start hiring when the economy recovers. And the economy will start to recover when businesses start hiring.”  Answer: And both will improve when the government gets out of the way!

As for the varying conservative perspectives, which are the only ones remotely connected to reality and thus worth considering, Kudlow is right that the American economy is resilient.  Perhaps he’s slyly making the point that more optimism on the public’s part not only better reflects the state of our economy but may improve it via increased investment and hiring.  Kudlow’s perspective is largely predictive, rather than focusing on how lawmakers should bring about a faster and more permanent recovery (though he often discusses those issues as well).

Every other conservative in the world who believes that we shouldn’t stand for the “new normal” of high unemployment and unexceptional growth is correct that Democrats’ policies are making the recession worse.  Repealing ObamaCare, preventing cap-and-trade legislation, and stopping or reversing the scores of other nasty things Obama and Pelosi have planned for our economy are mandatory undertakings over the next six years.

But Paul Ryan hits the bullseye when he notes that it is desirable, necessary, and possible to go further.  Train wreck legislation like ObamaCare is worth repealing, but if Medicare and Medicaid are quickly running out of money, and Social Security is already in the red, why shouldn’t we go after every entitlement shibboleth?

What principle, applied consistently, would nudge us to nullify ObamaCare but leave Social Security, Medicare, and Medicaid shiny and intact?  Did our country survive and prosper before these programs were enacted?  Would we survive and prosper if we phased them out?  Might we prosper even more in their absence?

Ryan’s proposal is far from perfect—his main argument for the Roadmap to recovery is that it will keep our entitlement system solvent, and he doesn’t discuss eradicating entitlements once and for all.  Perhaps Ryan believes that talking about eliminating entitlements is too politically risky now, when even his Roadmap is audacious by today’s standards.  But Ryan deserves credit for having gone further than anyone else in Congress in working out the details of a plan that will help the country avoid a fatal insolvency.



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Conservatives have been pounding their fists and screaming for decades that tax cuts stimulate the economy.  With lower taxes, investors and business owners can provide more capital for new ventures and engage in more hiring, because they know less of their profits will be confiscated to pay for things like solar panels at the White House.

Tax cuts don’t revive the economy the second they’re passed—no one, not even Rick Santelli, ever said they did.  They don’t do so a few weeks later; they don’t always do so in time for the next election.  But eventually they do.

Tax cuts trim government revenue temporarily, but soon increased growth from lower tax rates results in net revenue increases.

In contrast, tax increases—which is what the impending reversal of the 2001 and 2003 Bush tax cuts would amount to—shrink the economy by decreasing hiring and investment.  Regarding the Bush tax cuts, that’d be a combined tax increase to the tune of half a trillion dollars over the next decade.  (Pop quiz: If Rhode Island and Massachusetts’ tax structures were switched, would John Kerry still take the trouble to dock his yacht in another state, even though it would cost him half a million dollars a year in taxes?)

It’s really not that complicated.

Imagine that you run a lemonade stand and make $100 profit a day, and the Obama administration taxes you at 50%, for a government revenue total of $50.

Now imagine that the incoming Christie administration slashes that rate to 20%.  Instead of worrying about paying your bills and staying afloat, and resenting the government’s punishing your entrepreneurship, you hire more workers and eventually expand to five franchises.  At $20 in taxes per stand, you are now sending twice as much revenue to the government as before.

Leftists refuse to see the economy as dynamic and capable of expansion; they view it as a fixed pot that must be redistributed from oppressors to oppressed.

The 1990s were prosperous, not because Bill Clinton was a laissez-faire capitalist extraordinaire—though he was forced into the role of pseudo-free-marketer by Republican Congressional majorities after 1994—but because of the cumulative effect of Reagan’s policies throughout the 1980s.  Reagan campaigned on the idea of permanent tax cuts across the board and enacted them while in office; they remain largely in effect to this day.  The degree of certainty, stability, and flexibility that this consistent posture afforded investors and business owners over the next two decades should not be underestimated.

Reagan steadfastly resisted the call of Congressional Democrats and some Republicans to ramp up government spending during the early 80s recession.  Under his administration, deficit as a percentage of GDP never rose above 6.0%.  By 1987 it was down to 3.2%.

In contrast, the Office of Management and Budget expects the deficit-GDP ratio to be 10.0% in 2010 under Obama, and to barely decline in 2011.

During his presidential campaign, Obama was not shy about promising to let Bush’s tax cuts expire in 2011 if elected.  When Charles Gibson asked Obama why he would support an increase in capital gains taxes, even though raising them in the 1980s decreased revenue and lowering them in the 1990s and 2000s increased revenue, Obama insisted he would do it “for purposes of fairness.”  In other words, Obama feels obligated to make rich people suffer for the sin of being productive, even if that means poor people will suffer more in the long run.

In the spring of 2009, Obama and Congressional Democrats passed their poorly designed, massively irresponsible stimulus spending bill.  Before passage, Obama warned that without the $787 (now $862) billion bill, the unemployment rate might rise to 8.0%.

When unemployment hit 10.0% in 2010, Obama’s new tagline became, “Yes, but it’s not 12 or 13, or 15.”

Democrats’ halting efforts to offer targeted tax cuts to special interest groups as part of the stimulus bill were not convincing.  Giving a tax break to a “green” company that wouldn’t survive on its own does not create the wealth that a tax break for an independent, self-sufficient, productive company would.

Now that it’s become obvious to everyone except Paul Krugman that runaway government spending does not mysteriously create wealth, Federal Reserve Chairman Ben Bernanke has been caught admitting to the House Financial Services Committee last Thursday, 18 months after the stimulus bill has had a chance to work but failed, that extending the Bush tax cuts will strengthen the economy.

Bernanke was quick to walk back his statement and claim that extending the tax cuts is just one way to stimulate the economy.  (One way that works, he did not say in so many words, but give him credit for letting the genie out of the bottle.)

Since the end of last Thursday, the Dow Jones has rallied some 200 points to 10,500, after have troughed earlier in the week at just above 10,000.

Last month Obama economic advisor Christina Romer and her husband published a paper in The American Economic Review demonstrating that tax hikes hurt economic growth.  Their article included the following takeaway: “Our estimates suggest that a tax increase of 1 percent of GDP reduces output over the next three years by nearly 3 percent.  The effect is highly significant.”

Over the weekend, Republican senators revived the idea of extending the Bush tax cuts.  Now even some Democratic senators are talking up the idea, including Evan Bayh, Kent Conrad, and Ben Nelson.

So I guess tax cuts stimulate the economy after all, according to our liberal president’s Federal Reserve chairman, his economic advisor, and multiple Democratic senators.  It used to be newsworthy when we discovered that Obama’s associates and cabinet nominees were terrorists, communists, and Maoists.  Lately the scoop seems to be that a few of his cronies, if allowed to speak freely, occasionally have some sane ideas about how to run the country.



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If deficit spending is the way out of an economic downturn, as leftist economists like Paul Krugman keep telling us, then one way to characterize President Obama’s approach to reviving the ailing economy is “killing it with kindness.”

Another is “tough love”—not the kind where you force hard choices and self-discipline, but the kind where you shoot the poor beast to put it out of its misery.

James Clyburn, House Majority Whip, recently crystallized the Democrats’ position on fiscal responsibility when he announced, “We’re not going to save our way out of this recession.  We’ve got to spend our way out of this recession, and I think most economists know that.”

Here are some fun facts about Obama’s proposed federal budgets over the next decade:

•    The projected deficit for Obama’s 2010 budget is $1.6 trillion, which is 10% larger than the 2009 deficit, which in turn was three times as big as the record 2008 deficit under President Bush.

•    The projected 2010 deficit is 10 times as large as the deficit for Bush’s 2007 budget, the latter of which included funding for the troop surge that won the war in Iraq.  Hoping to match our accomplishment in Iraq, the White House Travel Office has approved a trip for Obama to go to Cambridge, Massachusetts in November to get a Democratic dogcatcher elected in Harvard Square.

•    The projected 2010 deficit will render our national debt 13% bigger on the last day of this year than it is today.  Projected 2010-11 deficits will cause the debt to swell 23% bigger than it is now.  By 2020, the debt will be twice as big as it is today.

•    By 2013 the deficit will recede to $700 billion, a “mere” half of the 2009 deficit, then ratchet up again to $1 trillion by 2020.  Even this will happen only if Congress agrees to drastic spending cuts before 2013, which it has already expressed strong resistance to doing.

•    All of these numbers are conditional on what many private sector economists call overly optimistic expectations held by the current administration regarding growth of the economy.

These sobering statistics raise a number of tough questions about the measures Obama has proposed to bring down the deficit—which, naturally, he will never satisfactorily answer.

For example: in his budget address on Monday, Obama stated, “Because small businesses are critical creators of new jobs and economic growth, the budget eliminates capital gains taxes for investments in small firms and includes measures to increase these firms’ access to the loans they need to meet payroll, expand their operations, and hire new workers.”

Why only small businesses?  Why not medium and large businesses?  Who adds more jobs to the economy—Sal’s Pizzeria, a local franchise of Linens ‘n Things, or Microsoft Corporation?

Obama proposes letting the Bush tax cuts expire for families making over $250,000 a year.  He wants to impose a new tax—sorry, “financial crisis responsibility fee”—on banks and corporations who received TARP money, some of whom were forced by the administration to take it.  Obama wants to strip away tax breaks from oil and gas corporations.

Why would Obama want to choke the engines of growth and job creation by saddling them with tax increases?  If the absence of a $5,000 tax credit would hinder a small business from new hiring, what does he think the addition of hundreds of thousands of dollars in taxes to a corporation would do to their hiring?  Do big corporations hire workers out of the goodness of their hearts, with no concern for the bottom line?

Also, given that many of those families who make over $250,000 are headed by small business owners, how does Obama justify giving them tax credits while simultaneously increasing their taxes?  Is his administration even feigning consistency here?

History shows that cutting individual and corporate tax rates increases long-term tax revenue.  Obama was specifically asked about this proven fact by George Stephanopoulos during a primary debate with Hillary Clinton.  Obama stated outright that even if this pattern were true, he would still favor higher taxes on the wealthy to promote “fair” taxation.

Obama is free to endorse Marxist policies if he desires, but how can he turn around and claim that his proposal to increase taxes for the wealthy is an effective way to reduce long-term deficits?

When you’re handed a hot potato such as the sickly economy—a fate Obama has reminded us of precisely eight million times since he was elected office—the responsible solution is to let it cool down.

Instead, Obama proposes to cremate it.

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