Freedom Line Blog

Recall the flimsy, grand promises that candidate Barack Obama used to get himself elected in 2008:

We’ve been living beyond our means, and we’re going to have to make some adjustments.  Now, what I’ve done throughout this campaign is to propose a net spending cut.”

Obama made that promise during the third presidential debate in October 2008, well after the onset of the financial crisis that he now uses as an all-purpose alibi.  Accordingly, Obama’s apologists cannot claim that current realities were unforeseen when he made that statement.  Indeed, Obama himself pronounced during that same debate, “I think everybody understands at this point that we are experiencing the worst financial crisis since the Great Depression.”  One wonders whether Obama thought for even a moment about what would happen if he ultimately won and was forced to make good on his “hope and change” promises.

Regardless, the collision between Obama’s frivolous promises and reality continued this week.  The Treasury Department has announced that March 2010 marked a record 18th consecutive month in which the federal government posted a budget deficit.  This despite the fact that federal “bailout” spending has declined, meaning not even that can be scapegoated by the Obama Administration.  March’s $65 billion deficit also exceeded the Congressional Budget Office’s projected $62 billion deficit, and the first half 2010 fiscal year deficit now stands at $717 billion, only slightly below last year’s $781 billion first half deficit.

We’re witnessing “change,” but certainly not of the “hopeful” variety.

Perhaps nothing symbolizes our nation’s sad state of political affairs than the fact that government-town Washington, D.C. thrives relative to other major American cities.

As noted by a recent Wall Street Journal report, home prices in the D.C. area rose 2% in 2009, compared to a 3% decline in 20 areas covered by the S&P/Case-Shiller Index.  The capital’s unemployment rate stands at 6.9% compared to 9.7% nationally, and restaurants have added workers in D.C. while other metropolitan areas bleed such jobs.  The reason?  Federal government employment in the area increased by over 20,000, whereas approximately 100,000 private-sector jobs were lost there.  Not only has our bloated federal government increased its employment rolls even as the rest of our society cuts back, but $78.5 billion in federal contract work and the flurry of bureaucratic activity brings domestic and foreign visitors to town.

Americans everywhere have had to trim their budgets and expectations during the downturn, but not the expanding federal government.  What sad, albeit fitting, symbolism.

Today, congressional Republicans put up their six members to sit on President Barack Obama’s National Commission on Fiscal Responsibility and Reform.  They are Representatives Paul Ryan of Wisconsin, Jeb Hensarling of Texas, and Dave Camp of Michigan, along with Senators Tom Coburn of Oklahoma, Judd Gregg of New Hampshire, and Mike Crapo of Idaho.  Hopefully, their combined focus on cutting spending will off-set fellow panelist and SEIU chief Andy Stern’s insatiable appetite for more tax dollars funneled to public employee unions.  Bring on C-SPAN!

How much longer will Obama’s escalating deficits still be blamed on Bush?

This week, the Treasury Department reported a $221 billion monthly deficit for February 2010, the largest ever.  This compares to a $194 billion deficit for February 2009, and the year-to-date 2010 deficit has now reached $652 billion, also an all-time high.  Consequently, the projected 2010 annual deficit now appears likely to exceed last year’s $1.4 trillion dollar record.

Obama continues to blame his budgetary irresponsibility on Bush, but at least when Bush was President we counted the deficit in billions, not trillions.  Further, the Treasury Department data points to the true culprit:  spending for February 2010 increased some 17% over February 2009 spending, to $328 billion.  That’s certainly not Bush’s spending.

To paraphrase the increasingly-popular bumper sticker, please don’t tell Obama what comes after “trillion.”

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the facade that is the administration’s debt-reduction commission and, specifically, how appointing a panel of has-been politicians to give Washington cover for tax hikes is not exactly a profile in courage.

Earlier today, by Executive Order, President Obama instituted a commission to make recommendations for deficit reduction.  Whatever the recommendations are, whenever they come, they will have no binding authority. 

This comes after Congress, which along with the administration is busily increasing the deficit, refused to set up a commission for deficit reduction.

The commission will have eighteen members.  Including co-chairmen Erskine Bowles and Alan Simpson, Obama will appoint 6 members, Democrat leaders will appoint 6 and Republican leaders will appoint 6.  Take out Simpson, a Republican, and we make that eleven to seven, meaning that President Obama, if nothing else, can really do that political math.  But, we are assured, all recommendations will require 14 votes for adoption, so they will be, wonder of political math wonders, “bipartisan.”  Those would, of course, be the recommendations of no binding authority.

Remember all those jobs Americans wouldn’t do?  Well now we know the jobs the President and Congress won’t do – precisely the ones they were sent to Washington to do.  And they wonder why so many Americans are disgusted with government…and their stewardship of it.

Oregon, whose 11% unemployment rate exceeds the national rate by a full percentage point, sits just to the north of California, whose suicidal economic policies have provided a close-up lesson that reducing economic freedom reduces prosperity. As a result, Oregonians have seen first-hand the mass exodus of jobs and residents stemming from those policies.

So as Oregonians head to the polls tomorrow to consider two tax-raising ballot measures, we’ll see whether they’ve internalized California’s straightforward lessons.

Proposition 66 would increase Oregon’s personal income tax on “the rich” by fully 2%, and Proposition 67 would foolishly increase the corporate income tax. You know…  those corporations that actually create jobs and add to the economy.

Just as California’s reckless tax-and-spend policies have driven residents and jobs to surrounding states, Oregon may astonishingly slit its own wrists in the same manner by passing these measures.  Residents and community leaders in Washington, Idaho, Utah, Montana, Nevada and Arizona may welcome the resulting influx, but it will mean doom for Oregon. Nike, Inc. founder and chairman Phil Knight, hardly a starched-collar conservative, has labeled Propositions 66 and 67 “Oregon’s Assisted Suicide Law II,” and some economists predict 70,000 lost jobs if the measures pass.

So which way, Oregon?  Freedom and prosperity, or suicidal tax increases?  Massachusetts, Virginia and New Jersey voters have learned the lessons of Obamanomics, and now we’ll see if the news has traveled out to the West Coast…

For a man of such supposed intellectual prowess, Barack Obama certainly seems oblivious to any sense of irony.

Attempting to stanch his hemhorraging public aproval numbers, Obama yesterday retreated to phony populism by proposing $90 billion in new taxes upon American banks. It must be noted that many of these banks have already repaid the questionable bailout funds that they received, and are now staring at a form of double jeopardy.

Obama’s misguided proposal contradicts his own stated goal of encouraging bank lending in this choppy economy, because the new tax will undercut banks’ ability to create new loans.  Further, the tax will merely be passed on to strapped American consumers, as all corporate taxes ultimately are.  It’s such a terrible idea that even Democrat Senator Kristen Gillibrand voiced opposition, saying it “could disproportionately affect New York City’s economic recovery, which relies on a growing financial services industry.”

Disregarding this reality, Obama was undeterred, sanctimoniously thundering, “we want our money back, and we’re going to get it.”

We feel the same way, Mr. President.  In just the first year of your administration, we have seen you squander our hard-earned dollars on failed “stimulus” behemoths and bureaucratic boondoggles on behalf of labor unions and other favored special interests.  We have seen you triple the budget deficit after telling us duirng your campaign that you were going to reduce it by scouring the budget “line by line.”

Yes, Mr. President, we also want our money back.

The Congressional Budget Office (CBO) has released its monthly budget review, and once again, the results are not pretty for taxpayers.

For the first quarter of Fiscal Year 2010 alone, CBO estimates a $390 billion budget deficit, or $56 billion more than the record shortfall last year.  This year is scheduled to be the largest budget deficit in history, but you wouldn’t know it the way Congress is spending.

The November and December results were actually worse than CBO had originally predicted.  The U.S. ended November with a $120 billion shortfall, or $5 billion more than original projections.  In December, CBO estimates a $92 billion deficit but that figure is likely to grow larger when the actual numbers are released next month.

The response from Congress and the White House?  Crickets.  It appears that accelerating our national debt and printing more money is still the raison d’être in our nation’s capital.

Lost during the health care fight in the Senate over the holidays were the votes in the House over yet another round of central planning stimulus provisions.

On its last roll call vote, the House narrowly, 217-212, passed an $180 billion “jobs for main street” bill that will exacerbate the federal deficit by another $64 billion, according to the Congressional Budget Office (CBO).

Not surprisingly, not a single Republican offered to support a third/fourth stimulus bill filled with pork-barrel spending and empty wealth transfers.  Democrats defected as well, with 38 voting “No.”

Now, the CBO has officially panned the legislation.  The final price tag over the next decade will be more than $180 billion, meaning Congress authorized $967 billion in 2009 alone for “stimulus” spending.

With all this, the unemployment rate remains at 10% and poll numbers indicate that no amount of wealth redistribution will increase Democratic majorities come Election Day.

The Obma White House has long followed the idea that there’s no problem that the federal government shouldn’t fix.

Now, it’s telling us that there’s no improvement that the federal government shouldn’t fix, either.

That appeared to be the message from White House Council of Economic Advisors Chairman Christina Romer and National Economic Council Chairman Lawrence Summers, both of whom made the rounds on yesterday’s Sunday talk shows.  In his comments to George Stephanopoulos on ABC’s This Week, Mr. Summers said that, “most professional forecasters are now looking for a return to job growth by spring.”  And appearing on NBC’s Meet the Press, Ms. Romer predicted “positive job growth sometime in the first quarter.”

But as noted by The Wall Street Journal today, we must ignore federal deficits in favor of more “stimulus” spending.  According to both Summers and Romer, shifting focus to the deficit instead of spending even more during a period of record deficits would be “suicide.”

So let’s get this straight:  Obama’s first “stimulus” was supposed to cap unemployment at 8%.  It’s now at 10%.  But despite the fact that the White House expects job growth to return in the next quarter, it wants to spend even more to “stimulate?”

One is left to wonder whether the Obama Era more closely resembles a work of Orwell or merely an issue of The Onion.

The White House has made the decision that debt, all $12 trillion worth of it, no longer matters in America.  Instead of attempting to lower the $1.4 trillion annual budget deficit, the White House is looking for another round of stimulus pork.

According to White House Economic Advisor Christina Romer, it would be “suicide” to focus on deficit reduction to the exclusion of “job creation.”  Her solution, of course, is to repeat the past two/three failed stimulus bills and spend another $50 billion on infrastructure.   In Washington, D.C. that means $5 billion on infrastructure and $45 billion on pork and other preferred government handouts.

Romer’s solution is odd considering this paper she authored with her husband in April (after she began working at the White House) that concluded each dollar of tax cuts historically raised Gross Domestic Product (GDP) by $3, greater than many similar estimates of government stimulus spending.

Romer also concluded that tax increases can easily lower GDP.  As she wrote, “Our results indicate that tax changes have very large effects on output.  Our baseline specification implies than an exogenous tax increase of 1% of GDP lowers real GDP by almost 3%.”  There appears to be a big difference between Doctor of Economics Romer and White House employee Romer.

With all this knowledge about the virtues of tax cuts and the harm of tax increases, Dr. Romer should pay a visit to the West Wing occasionally and remind President Obama that his policies will continue to shrink GDP and impede job creation.

Barack Obama has done little, if anything, right during his year in office, but he’s obviously perfecting the art of shameless hypocrisy.

Appearing on CBS’s 60 Minutes yesterday, Barack Obama said with a straight face that “the people on Wall Street still don’t get it.  They don’t get it.” For good measure, he also broadly labeled bankers “fat cats” who have behaved in an “irresponsible” manner and not shown “a lot of shame.”

Let’s see.  This is the same Barack Obama who promised to address the $0.4 trillion deficit, only to add a trillion to make it $1.4 trillion in just his first year.  In other words, he is addressing the deficit by…  tripling it.  Lest one reflexively attribute that to his inheritance, this year’s deficit is on an even worse trajectory.  He is also the man who proposes adding an endless array of new entitlements and highly-paid new federal employees to an already-unsustainable budget trajectory.  He is also the man who seeks to reward the same federal bureaucracies that failed to recognize the financial bubble, and even abetted it, by granting them nearly plenary powers over the entire struggling economy.  He is also the man who aims to compound the nation’s economic woes by imposing catastrophic healthcare costs and carbon taxes upon it.  He is also the man who seeks to increase taxes on broad swaths of struggling individuals and small businesses by allowing rates to increase next year. He is also the man who promised to usher in a new era of international diplomacy and peace, only to see rogue regimes such as Iran increase their menace since his inauguration.

Yet he says that others “don’t get it?”

Laughably, he mocked bankers for being “puzzled” why the public is “mad” at them.  Perhaps he was merely projecting his own puzzlement at his record-low poll numbers, which similarly reveal a public “mad” at him?

No surprises here … the U.S. spends more money than it collects.  The Congressional Budget Office (CBO) just released its monthly budget review and it’s not pretty.

Through the first two months of FY 2010, the federal deficit is already $292 billion.  For perspective (based on my shoddy math skills), if you placed that money ($1 bills) end-to-end, it would stretch from the Earth to the Moon 115 times (placed end-to-end the deficit is over 27 million miles and the distance from the Earth to the Moon is only 238,857 miles).

That’s a long sad debt train.  In addition, that debt train could also carry you to Venus, which is only 23.7 million miles from Earth (at its closest).

This would be a big deficit for a single year, but unfortunately the government has ten more months of taxing and spending left.  Year-to-date, this deficit figure is $11 billion more than the shortfall from last year.  Not good.

The deficit from the month of October alone was $176 billion.  The CBO projects another $115 billion deficit for December.

As the report noted, “Excluding outlays for the TARP and net cash infusions for Fannie Mae and Freddie Mac, however, spending in 2010 rose by $51 billion (or 10 percent).”

Sooner or later, 269 people (218 in the House and 51 in the Senate) will be elected to Congress who actually care about reducing spending and cutting the deficit.

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses Congress’ ever-growing trend of reckless government spending and what the nation’s growing debt means for America’s families and furture generations.

Watch the video below.

Remember when the Obama Administration promised that, if we only passed his potent “stimulus” plan, unemployment would top out at 8%?  In contrast, according to Obama, if the American people foolishly refused his master plan, unemployment might rise as high as 10%?

Well, this morning, the U.S. Department of Labor provided yet another wakeup call and simple math lesson to Mr. Obama.  Unfortunately, the unemployment rate has now risen to 10.2%.  Worse, Obama’s ineffective “stimulus” has only exacerbated the problem by adding to our unsustainable federal debt and creating a forward-looking business climate that is inhospitable to creation of new employment and enterprises.  Something to keep in mind as Obama issues new promise after promise regarding his healthcare, carbon cap-and-tax and other agenda items.

After taking intense criticism for not being open and transparent, the House of Representatives just posted a new version of health care “reform” online.

If you have a slow Internet connection, then you better take a coffee break while downloading.  The bill is 1,990 pages or more than six football fields long when placed end-to-end.

Pelosi’s pledge on the legislation, “It will not add one dime to the deficit.”  How does she get there you ask? Of course by raising taxes in an effort to make the bill “deficit neutral.”

More analysis to come…

Here’s a contradiction to chew on for a while:  Google’s chief executive Eric Schmidt tells The Washington Post that he’s wary about destructive overregulation of the Internet…  Yet he simultaneously favors so-called Net “Neutrality?”

According to Mr. Schmidt, “it is possible for the government to screw up the Internet, bigtime.”  The article reports that he went so far as to say that “it would be a terrible idea for the government to involve itself as a regulator of the broader Internet.”

We couldn’t have said it better ourselves.

But how can Mr. Schmidt square his accurate concern about destructive Internet regulation with his advocacy of Net “Neutrality,” which would needlessly introduce federal rules into Internet service for the first time?  Stated simply, he can’t.  Nevertheless, he and Google foolishly advocate Net “Neutrality” because they believe it serves their short-term corporate interest.  Of course, the insurance and pharmaceutical industries initially believed the same thing about ObamaCare, before belatedly recognizing the toxic longer-term reality…

How’s this for unadulterated, sanctimonious chutzpah:  “Top Obama Aides Upbraid Wall Street.”

So announces a Washington Post headline, discussing the harsh criticisms leveled by Obama Administration officials against Wall Street firms.  But consider this:  if Wall Street executives ran their firms and kept their books the same way that the federal government does, they would be in jail until their dying days.  Or consider how Obama and his apologists promised that if his “stimulus” plan was passed, unemployment would top out at 8%.  Well, it’s now at 9.8% and rising.  If a Wall Street CEO made similarly fatuous promises to unwary consumers, the resulting onslaught of class action lawsuits would descend faster than a Swiss avalanche.

Yet there was David Axelrod on ABC’s This Week, labeling Wall Street behavior “offensive” and admonishing them that “they ought to think through what they are doing.”  Perhaps, but nobody should take that advice more than officials of an administration that is taking an already-dangerous fiscal situation and making it positively deadly.  Too bad there are no righteous trial lawyers who can do anything about them.

Thank goodness that Senator Judd Gregg (R – NH) called the Obama Administration out on its habit of scapegoating its fiscal irresponsibility on former President Bush.

Whenever confronted with questions about their alarming fiscal trajectory, which will quickly double and then triple America’s cumulative national debt, Obama Administration officials invariably seem to rationalize it as an inheritance from the Bush Administration.   Never mind, of course, that then-Senator Obama voted for such things as last fall’s questionable bailout proposal.  And granted, the Bush Administration was far from perfect in its frequent fiscal misbehavior.  But the simple fact is that Obama’s budgetary agenda is like “Bush on steroids,” as one observer noted.

And appearing on CNN’s State of the Union yesterday, Senator Gregg refreshingly pointed out that Obama’s fiscal insanity is in a category of its own.  Addressing Obama’s deficit projections, Sen. Gregg said, “you can’t blame that on George Bush,” because each of the next ten years will witness deficits exceeding $1 trillion.  He also noted that the nation’s debt as a percentage of gross domestic product (GDP) will skyrocket from 40% to “banana republic” levels of 80%.

Who knows how much longer the mainstream media will allow Obama’s apologists to repeat this canard, but we owe Senator Gregg our gratitude for eviscerating it in vivid terms.