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Posts Tagged ‘debt’
March 24th, 2012 at 11:06 am
Mark Steyn: America About to Go Broke

Mark Steyn puts the federal government’s spending spree in a global perspective:

When you’re spending on the scale Washington does, what matters is the hard dollar numbers. Greece’s total debt is a few rinky-dink billions, a rounding error in the average Obama budget. Only America is spending trillions. The 2011 budget deficit, for example, is about the size of the entire Russian economy. By 2010, the Obama administration was issuing about a hundred billion dollars of Treasury bonds every month – or, to put it another way, Washington is dependent on the bond markets being willing to absorb an increase of U.S. debt equivalent to the GDP of Canada or India – every year. And those numbers don’t take into account the huge levels of personal debt run up by Americans. College debt alone is over a trillion dollars, or the equivalent of the entire South Korean economy – tied up just in one small boutique niche market of debt which barely exists in most other developed nations.

March 8th, 2012 at 4:57 pm
February 2012: Largest Monthly Deficit in History
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Last month, we recalled Barack Obama’s false promise in February 2009 “to cut the deficit we inherited by half by the end of my first term in office.”  Instead, the nation’s deficit went from $455 billion in 2008 to $1.4 trillion in 2009, $1.3 trillion in 2010, $1.3 trillion in 2011, and now another projected $1.3 trillion for 2012.   Today, the Congressional Budget Office (CBO) just announced that the February 2012 deficit of $229 billion is the single largest monthly budget deficit in American history.

A $229 billion deficit would probably be close enough to make good on Obama’s promise to cut the $455 billion 2008 deficit in half as he approaches the end of his “first” term.  Except that it turned out to be for one month, not one year.

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February 13th, 2012 at 8:55 am
Ramirez Cartoon – Senate Dems: Budget? We Don’t Need No Stinkin’ Budget
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Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

January 23rd, 2012 at 4:35 pm
1,000 Days Without a Budget
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Believe it or not, that’s the remarkable reality we’ll be facing when Barack Obama takes to the podium to deliver his State of the Union address tomorrow night: nearly three years wherein the federal government — the largest distributor of funds on the planet — has operated without a budget. That’s a failure that deserves widespread public attention. Happily, the GOP — which usually can be counted on to bobble these kinds of communications opportunities — is doing a serviceable job of highlighting this ignominious milestone:

January 9th, 2012 at 7:17 pm
Chevy Volt: Catches Fire, Burns Taxpayers

Environmentalists’ dreams of highways filled with electric cars continue to crash and burn.  Literally.

Fresh off news that the Chevy Volt will undergo an internal redesign to make the car less susceptible to catching fire up to three weeks after it is impacted in an accident, William La Jeunesse of Fox News reports how taxpayers are getting burned even if they never purchase the car.

“Politicans love to get in front of something they think is the future, the problem is they do it poorly, they waste money and they just don’t have an impact on the overall economy,” says economist James Hohman of the Mackinac Center for Public Policy.

When all the federal and state subsidies to General Motors and its Volt suppliers are totaled, Hohman estimates each Volt sold costs taxpayers as much as $250,000.

Here’s the most outrageous numbers:

According to the CEO of General Motors, the average annual income of buyers of the Chevy Volt is $170,000. Those who buy the luxury electric Fisker Karma or Tesla roadster earn more than $250,000 a year. Yet every wealthy buyer receives a hefty handout from Uncle Sam, adding more than $8,500 to the federal debt for every car sold.

Once upon a time limousine liberals could be counted on to at least foot the charge for their gas bill.  Now, the rest of us are stuck paying for their environmental guilt trips.

August 30th, 2011 at 5:10 pm
Obama Returns to the “Blame Bush” Game
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Even for Barack Obama’s supporters, this has to be getting old.

Today, responding to a question about an American economy still struggling after almost three years of deficit-driven Obama “stimulation,” he went back to the “Bush Card” with radio host Tom Joyner:

George Bush left us with a $1 trillion deficit, so it’s a lot harder to climb out of this hole when we don’t have a lot of money in the federal coffers.”

There are several problems with President Alibi’s rationalization.  Among other things, (1) the recession officially ended all the way back in June 2009, (2) the money in those “federal coffers” to which he refers actually reached an all-time high under Bush in 2007 (several years after the Bush tax cuts and well into the Iraq and Afghan wars that Obama now scapegoats) and (3) nothing seems to have stopped him so far from spending trillions of dollars that we don’t have.

But forget about those realities for a moment.  On a more basic moral level, what does it say about Obama as a man that this is what he continues to offer the nation to justify his performance and his request for a job extension?

August 4th, 2011 at 1:00 pm
California Democrats Trying to Weaken Initiative System

Dan Walters, the dean of California political journalists, is sounding the alarm over a series of moves by the state’s Democratic machine to restrict conservative access to statewide ballot initiatives.

As California Democrats see it, conservatives are poised to unleash a torrent of ballot measures to rein in government spending and regulations, as the state continues to suffer double-digit unemployment and annual budget deficits.  With Democrats controlling all levers of government, there’s only one area where their tax-and-spend liberalism could be challenged: at the ballot box.

To eliminate that threat, Democrats in and outside government are pushing to criminalize paying signature gatherers per name collected, and issuing radio ads linking petition-signing with identity theft.  Last week, Democratic Governor Jerry Brown vetoed the criminalization measure, but others are waiting the wings.

The motivation behind the Democrats’ ploy is protecting the public employee union members who live off legislative largesse, be it sweetheart pension deals, deferred compensation, or over-generous overtime pay.

With Californians waking up to the fact that economic growth isn’t possible without serious reforms, it’s becoming clearer by the day that the liberal Democrats running the state are not governing in the taxpayer’s best interest.  So to the statist’s mind, it’s far better to cut off debate than face reality.

August 4th, 2011 at 12:20 pm
Clinton Advisor Backs Mack Penny Plan

Lanny Davis, former special counsel to President Bill Clinton, writes in TheHill that the “Penny Plan” by Rep. Connie Mack (R-FL) is a “simple and creative” way to balance the budget.

…since the “balanced” solution of both increased revenues and spending cuts is supported in virtually every poll by substantial majorities of all voters, including large numbers of Republicans, Democrats need to find a spending cut formula that they can live with. The Mack Penny Plan seems a good place to start — it is simple, it makes common sense, and with some adjustments protecting the poor and the unemployed, it could be seen as fair even to many of the most liberal Democrats.

Ignoring Davis’ call to undermine the elegance of Mack’s Penny Plan by creating vague exceptions for the poor and unemployed – as I wrote recently, the attraction of Mack’s plan is its uniform treatment of all budget items – it’s welcome news that a high-ranking Clintonista can sense good policy when he sees it.

Earlier in his column Davis warned his fellow liberals that it would be “a moral stain on our generation if we leave this red-ink legacy for generations to come to deal with.”

Davis is right.  Let’s hope he urges his fellow Democrats to back Mack’s Penny Plan so we can get on the road to fiscal solvency as soon as possible.

August 3rd, 2011 at 7:50 pm
Ryan, Republicans Debating an Empty Oval Office

There are few things more annoying than trying to compete against someone who won’t play the game.

In today’s Wall Street Journal, House Budget Chairman Paul Ryan (R-WI) expresses the frustration of many conservatives who want a real debate about the purposes of government and our ability as a nation to fund them.  Ryan rightly chides President Obama for failing to engage in specifics about how to focus policymakers’ attention on the debt, not just its ceiling.

It is mystifying to me that the president continues to shut out Ryan’s “Path to Prosperity” proposal as a middle ground between bankrupting Medicare and Medicaid and eliminating them altogether.

One would think The One could see a Clintonian moment when presented.  But rather than see Ryan’s willingness to preserve the social safety net for what it is – a path to a long-term bipartisan solution – the president can’t see past his own partisan nose.

Yet instead of laying out his own vision, President Obama continues to offer speeches instead of specifics.  Lots of us want a debate about the ends of government, and how we structure our economy to pay for it.  If the leader of the Democratic Party won’t engage in a serious debate about it, maybe the Democrats should get someone who will.

August 1st, 2011 at 9:33 pm
Biden Downgrades the Vice Presidency
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Oh, for the halcyon days when the vice presidency was a sinecure, in the (paraphrased) words of John Nance Garner, “not worth a bucket of warm (spit).” The current presidency and the two preceding it, however, have seen our nation’s deputy-executive take on growing prominence and prestige. Which was all well and good until Joe Biden arrived on the scene. Here’s how Politico reports Biden’s take on the conservative negotiating stance during the debt ceiling debate:

Vice President Joe Biden joined House Democrats in lashing tea party Republicans Monday, accusing them of having “acted like terrorists” in the fight over raising the nation’s debt limit, according to several sources in the room.

There are two lessons here. The first is that “terrorist” is the new “nazi”; an epithet that the boorish and unimaginative throw around with no regard to the gravity of genuine evil and suffering. The second is that Biden is an extraordinarily imprudent man. While comments like his don’t deserve an airing anywhere, an experienced politician like the VP should know that they’re especially dangerous in a room full of potential leakers — especially when the consequence of a leak could be to dismantle the legislative coalition needed to pass an essential piece of legislation.

With news that the House has passed the compromise debt agreement, Biden has dodged the bullet of having his words derail a grand bargain. But he’s far from being out the woods. Now that he’s alienated the lion’s share of the Republican Caucus, don’t expect to see the VP chairing any more bipartisan task forces on Capitol Hill in the future. The vice presidency may now return to its historical role — attending state funerals and welcoming Girl Scout troops to the Rose Garden. Who said nothing good would come out of the debt ceiling debate?

August 1st, 2011 at 1:16 pm
The Debt Battle Isn’t the Only One Conservatives Are Winning
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Michael Barone and our own Quin Hillyer, among others, remind us that conservatives are winning the broader debt limit debate.   But that’s not the only battle in which we conservatives are winning.

A Gallup survey released today shows that we also continue to win the battle for the hearts and minds of the American people.  According to the poll, more Americans again identify themselves as “conservative” (41%) than “moderate” (36%), and almost twice as many call themselves conservative than “liberal” (21%).  For two decades now, conservatives and moderates have battled for the plurality, but each could consistently claim twice as many adherents as liberalism.  For the third consecutive year, however, conservatives can claim greater numbers than moderates.

That certainly isn’t the sort of change that Barack Obama might have predicted on January 20, 2009.

July 25th, 2011 at 11:08 pm
Knowing When To Say Yes

Some hard-liners in the House are refusing to support John Boehner’s latest plan. They seem to believe it’s doesn’t achieve enough savings.

Not to be too blunt about it, but they need to get a clue.

James Capretta, who trashed the Gang of Six plan, says Boehner’s plan is okay. So does Grover Norquist.

Here’s what they understand: $1.2 trillion of savings from domestic discretionary programs, with real, enforceable budget caps, over ten years, is a huge accomplishment. And it still leaves on the table some of the low-hanging entitlement fruit (a “chained” Consumer Price Index adjustment) and some of the mid-hanging entitlement fruit (hiking the Medicare eligibility age merely to coincide with that of Social Security). So that means that part of the other $1.6 trillion in savings, to come from the later commission, is actually likely to be fairly easy to achieve as well.

The history is this: Never before has Congress used the debt ceiling hike to force serious budget savings. Any successful use of this debate toward that end should be counted as a significant accomplishment. Sure, some on the hard right — and I have ALWAYS been hard-right on cutting spending — may complain that Boehner’s plan isn’t as good as the original “Cut, Cap, and Balance.” So the bleep what. Anybody who ever expected CC&B to become law in its original form wasn’t living in the real world. James Madison and Roger Sherman didn’t design our system to allow one House to steamroll both the other congressional chamber and the president (although they did indeed give more power to the House of Reps. vis-a-vis the president, on domestic issues, than it has historically made use of).  The U.S. government is designed to force compromise.

Frankly, the Boehner plan isn’t a 50-50 compromise; it’s a win for conservatives, for fiscal responsibility, and for the nation. It effectively changes the trajectory of spending for the first time since Washington started bingeing again (after three good years) in the fall of 1998. It’s a remarkable achievement when working against the most leftist president in history. Conservatives should not torpedo it.

July 25th, 2011 at 11:35 am
Congressional Democrats Tacitly Admitting Obama is Inept
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For the past two and a half years, it’s been the exclusive provenance of the right to point out that President Obama often seems overmatched by his job. But after this weekend’s latest round of debt ceiling negotiations — where a newly irascible President Obama was nowhere to be seen amidst the congressional horse-trading — it’s becoming clear that Democrats on the hill are starting to think the same thing. The ugly details are fleshed out by Craig Crawford, writing in the Huffington Post:

While the GOP obviously would savor a solution to the debt-ceiling crisis that gives Obama no credit, why are Democratic leaders so willing to cut him out?

The answer might be found in growing concerns among veteran Capitol Hill Democrats that their president is a lousy negotiator.

Although they see him as a talented public communicator, his short time as a senator and painfully slow learning curve as president leads congressional Democrats to think it best to take over and provide cover for him once the deal is done.

“A talented public communicator” who can’t negotiate? The Democrats are essentially saying that the president is really good at talking about his job, just weak when it comes to actually doing it. This, my friends, is what the wag who coined the phrase “damning with faint praise” had in mind.

July 20th, 2011 at 5:19 pm
Surest Path to Getting Rid of a Federal Employee? Death
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At this time of “shared sacrifice”, the political class is fond of telling us that there are “no easy choices” to combat the nation’s crisis of overspending. Yet as private companies have cut back on their payrolls to cope with the Great Recession, Washington hasn’t even been firing on the merits, according to USA Today:

Death — rather than poor performance, misconduct or layoffs — is the primary threat to job security at the Environmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations.

The federal government fired 0.55% of its workers in the budget year that ended Sept. 30 — 11,668 employees in its 2.1 million workforce. Research shows that the private sector fires about 3% of workers annually for poor performance, says John Palguta, former research chief at the federal Merit Systems Protection Board, which handles federal firing disputes.

The 1,800-employee Federal Communications Commission and the 1,200-employee Federal Trade Commission didn’t lay off or fire a single employee last year. The SBA had no layoffs, six firings and 17 deaths in its 4,000-employee workforce.
I’ll think about sharing in the sacrifice once these folks do.
h/t: Mollie Hemingway at Ricochet
July 11th, 2011 at 9:47 pm
Gelinas: 3 Choices on Leftover Toxic Debt

City Journal’s Nicole Gelinas describes the Bush-era “TARP” bailout as a massive case of moral hazard.  With the financial sector able to fob off its bad debts to the American taxpayer while suffering almost no consequences, it’s no wonder the jobless rate is not recovering.

The politicians we elect have three choices—the same choices they had four years ago. They can admit that this debt isn’t worth much and allow the financial sector to bear the consequences. They can hope that the Fed tries to use inflation to raise the price of everything else, making the debt seem a lighter burden in comparison. Or they can maintain their silence, letting the financial sector take another half-decade or more to make enough money on new ventures so that it can finally admit what it should have admitted back in the fall of 2007: bad debt is never good. At least the Fed acknowledges this strategy: it says that it’s using “time” to manage toxic securities and “minimize disruption to the financial markets.” But prolonging government control of financial markets just prolongs investors’ uncertainty.

If Congress and President Obama, as well as the candidates who would like to succeed the president in 2013, maintain their silence, people should at least understand that the lousy jobs numbers are no mystery. They are the result of a policy that Washington has willfully chosen. As the Fed notes, the cost of this policy isn’t measured in dollars but in something more precious: time. Washington’s refusal to confront the debt problem is costing millions the most productive years of their lives.

June 23rd, 2011 at 11:06 am
Initial Unemployment Claims Rise, Fed Says “We’ve Done All We Can”
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So much for attempt number two on the “Recovery Summer” that the Obama Administration promised one year ago.

Today, the Labor Department announced that weekly initial unemployment claims jumped to 429,000, an increase of 9,000 from last week’s 420,000.  Even more ominously, Federal Reserve Chairman Ben Bernanke explained yesterday that the Fed has already done all it is prepared to do to increase growth, and expressed the same sort of cluelessness as Obama on why their “stimulus” has failed:

We don’t have a precise read on why this slower pace of growth is persisting.”

The Fed also issued “fairly significant” reductions in its 2011 growth forecast to 2.9% next year (down from a 3.3% growth expectation in April, and from 3.9% in January).  Another “Recovery Summer” like this, and Obama will be borrowing Jimmy Carter’s sweater for his own “Malaise Speech.”

June 8th, 2011 at 12:13 am
Pawlenty Gets His Game Face On
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I’m going to have to make some concessions to Tim, which means I may start drinking before I’m finished writing this post (just kidding, Tim is consistently on point … and I started drinking long before I started drafting).

The source of this doff of the cap is the performance of one Tim Pawlenty, who Mr. Lee took to this blog to defend when I lamented the state of the Republican presidential field upon Mitch Daniels’ non-entry.

As the invisible primary picks up steam, Pawlenty is showing some real grit (he opposed ethanol mandates despite the importance of Iowa to his electoral strategy, for instance) and consistently sharpening his message. Giving a major economic address in Chicago today, the former Minnesota governor brilliantly characterized his formula for reducing government:

“We can start by applying what I call ‘The Google Test,’ Pawlenty said Tuesday. “If you can find a good or service on the Internet, then the federal government probably doesn’t need to be doing it.”

Pundits on the left are already hitting Pawlenty for being reductionist. There may be some ever-so-slight truth to that. You can find health care services online, but that doesn’t mean it’s unreasonable for the government to provide funding for the poorest among us. Still, having the government provide it? I’d have to say the Pawlenty formula is right about 98 percent of the time.

May 6th, 2011 at 1:39 pm
Too Few Taxpayers

Tim again hits a crucially important issue  in his column that ran yesterday. When fewer than half of the population pays income taxes, the balance tips in favor of freeloading. The Washington Times editorial Wednesday laments that half of the equation: Welfare, of various sorts, is out of control.

It’s no wonder that the latest Agriculture Department figures shows one out of every five households received food stamps in February. The assistance provided to 20.8 million homes – up 20 percent in the past year-and-a-half – came at an annual cost of $68 billion. Free lunches were handed out to another 18.4 million, leaving taxpayers with a bill for $12.8 billion…. Instead of punishing enterprise and subsidizing poverty, the country needs to restore the conditions that promote prosperity. America’s corporate tax rate – currently the second highest in the world – needs to be cut. We need to restrain federal spending by scaling back the freebies doled out to far too many people. That’s the best way to restart our economic engine.

Only policies that promote growth will put more people above the income line at which they pay income taxes. Taxes are not a good thing, but making enough money to pay taxes is. Unless people are paying at least a nominal rate of taxes, they will feel no compunction to support the sorts of policies that reduce the need for taxes in the first place. From what they can see in the immediate horizon, at least, they are not at all invested in the health of the private economy, but instead are invested in the idea of bigger government — because bigger government now costs them nothing, and probably subsidizes them directly.

Tim’s quote from Orrin Hatch was good:

“An increasingly smaller group of Americans is shouldering the burden for an increasingly larger group of Americans.”

This is a recipe for ultimate economic collapse.

Veronique de Rugy adds more at NRO. She notes massive empirical research that shows high levels of publicly held debt have the effedct of consistently lowering economic growth. She ends with a quote that itself contains a link to this paper. In that paper comes a line that restates my point: “What is fleeting in economics is politically popular, while what is enduring in economics is politically unpopular.” The author descrivbes this phenomenon as the “shortsightedness bias” inherent in politics. When a majority of the public freeloads, their short-sightedness bias will be in favor of more freeloading, more debt — and, against their long-term interest, less growth. That’s why tax rates should not be raised, but why the tax base must be widened.  Counterintuitively, the way to widen the base is to keep the rates low enough to promote the economic growth that lifts more people into income levels at which they pay taxes. And as more people pay taxes, deficits and debt start to decline. A government that encourages economic growth can therefore be a more stable government than one that tries to soak the rich. A broad tax base thus supports ordered liberty. High tax rates undermine it.

April 29th, 2011 at 4:25 pm
Gallup: 73%-22% Majority Blames Deficit on Too Much Spending, Not Insufficient Taxes
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Here’s more encouraging news:  Americans are “getting it” on the issue of federal deficits and debt.  According to a new Gallup survey, an overwhelming 73% to 22% majority blames excess spending for the deficit, not insufficient taxation.  Barack Obama and his liberal apologists seek to blame “tax cuts for the rich” and insufficient revenues as the problem.  But as illustrated by the Heritage Foundation’s newly-released 2011 Budget Chart Book, our budget would still be approximately balanced if spending merely returned to early 2000s levels.  Does any serious person contend that government was too small in the first half of the 2000s, that government didn’t spend enough, that the poor and hungry were somehow cast out on the cold streets, that bureaucrats went unpaid?  Of course not.  The problem is explosive spending growth.  Obama oversaw an 84% increase in domestic discretionary spending, including his failed “stimulus,” in just his first two years.

Fortunately, Americans see through his attempt to demand even more taxpayer dollars to feed the insatiable leviathan he hopes to enlarge.

April 29th, 2011 at 1:03 pm
Fiscal Victory: DOD Announces Termination of Duplicative F-35 Engine
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Although the campaign for America’s fiscal survival continues, it is important to recognize battle victories along the way.

CFIF has participated in the effort to stop the duplicative, unnecessary and wasteful second engine for the new F-35 Joint Strike Fighter that refused to die.  Pratt & Whitney was awarded production of the F-35 engine, but forces in Congress perpetuated the wasteful General Electric/Rolls-Royce second engine.  The Pentagon doesn’t want it.  The Senate has voted it down.  The House has voted it down.  The Bush White House sought to stop it.  The Obama White House has sought to stop it.

Unfortunately, the second engine project rambled on at a cost to taxpayers of $1 million per day, because of Beltway pork-barrel political forces and the previous Congress’s failure to even pass a 2011 budget.

But at long last, the Defense Department this week instructed G.E. and Rolls Royce that the second engine contract has been terminated.  This is progress.