Freedom Line Blog

At some point, Americans’ outrage over the nonsense spewed upon us by desperate Washington, D.C. liberals becomes twisted amusement.  Today, Representative Maxine Waters (D – California) managed to pull the “race card” and “blame Bush” card in one preposterous swoop.

Representative Waters now finds herself the defendant against Congressional ethics charges that she improperly offered special assistance to OneUnited, a bank on whose board her husband had served.  At the time, her husband owned $350,000 in OneUnited stock, which was threatened by the financial downturn and would stand to benefit from federal dollars.  Speaking to reporters to rationalize her behavior, Waters claimed that she was compelled to do what she did because the Bush Treasury Department wasn’t responding to her satisfaction:

The question at this point should not be why I called Secretary [Henry] Paulson, but why I had to.  The question at this point should be why a trade association representing over one hundred minority banks could not get a meeting at the height of the crisis.”

Waters apparently hasn’t received the memo that “the race card is maxed out.”

On this date in 1981, President Ronald Reagan signed the Economic Recovery Tax Act of 1981 at his Rancho del Cielo property in Santa Barbara, California.  Sponsored by Congressman Jack Kemp (R – New York) and Senator William Roth (R – Delaware), the bill amended the Internal Revenue Code in order “to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings.”

Did it ever.

By reducing tax rates and unleashing American dynamism, the U.S. witnessed two consecutive years of remarkable growth.  For the eight quarters spanning 1982 and 1983, we saw gross domestic product (GDP) growth of 5.1%, 9.3%, 8.1%, 8.5%, 8.0%, 7.1%, 3.9% and 3.3%.  Compare that to our current cyclical recovery, in which the Obama-Pelosi-Reid agenda of higher spending, regulation and taxation has subdued our rebound to 1.6%, 5.0%, 3.7% and 2.4% (soon to be revised downward to an estimated 1%).  Obama, Pelosi and Reid like to claim credit for our inevitable cyclical recovery from the last downturn, but the truth is that they’ve only managed to stifle it while adding trillions to our debt.

They should instead take a trip down memory lane and correct course according to the crystal clear Regan example.

As November’s elections loom increasingly dire for Democrats, their mainstream media waterboys desperately recast the American electorate as “anti-incumbent” rather than the more accurate “anti-liberal” or “anti-Democrat.”  Today’s latest example:  The Washington Post, perhaps liberals’ chief media waterboy, reacted to last night’s primary elections with their daily political newsletter headline “Senator’s Win Tests Anti-Incumbency Theory.”

The Post’s Dan Balz bizarrely claims that a Democratic incumbent beating a Democrat challenger endorsed by Bill Clinton somehow alters our assessment of America’s mood:

Senator Michael Bennet (D) of Colorado turned back a sharp challenge from former state House Speaker Andrew Romanoff on Tuesday night on a busy day of primaries that offered fresh clues about the anti-establishment mood of voters…  Bennet’s challenge was seen as the latest test of anti-incumbent sentiment in a year in which two Senators and four House members have been defeated.  His victory proved that the benefits and resources of incumbency can offset the liabilities that many officeholders are carrying this year.”

Earth to The Washington Post, MSNBC and other liberal media sirens:  American voters aren’t simply “anti-incumbent,” they’re anti-liberal.  They’re not simply looking to replace incumbent liberals with other liberals, so one Democrat beating an alternative Democrat doesn’t rebut that fact.  After all, you don’t tend to see trusted conservative incumbents like Senators Jim DeMint (R – South Carolina) or Tom Coburn (R – Oklahoma) needing national political figures to parachute in to rescue them as Senator Benet did.  Americans’ revulsion toward the Obama-Reid-Pelosi agenda is threatening liberal incumbents, not incumbents generically.  You’re not fooling anyone other than yourselves.

That’s the question raised in four states after recent events suggest that state and local Democrat officials are backing several alleged Tea Party candidates.  According to a report by Politico, incidents in Pennsylvania, New Jersey, Florida and Michigan are prompting calls for more scrutiny of third party challengers in tight races.

The accusations range from helping tea party activists circulate candidate petition sheets to underwriting the creation of official tea parties, which then put forth slates of candidates that local conservatives accuse of being rife with Democratic plants.

In all of the affected races, the outcome is expected to be close enough that a third-party candidate who wins just a few percentage points could end up swinging the outcome to the Democratic congressman or candidate.

So far, there is no direct evidence of an official Democrat-directed conspiracy to recruit and fund Tea Party candidates.  However, a third party spoiler strategy makes much more sense than the Democratic National Committee’s recent pledge to convince Americans that the Tea Party and GOP are one in the same.

Could this be another example of “government” working better at the local level?

Already navigating a turbulent economic sea, Americans are bracing for the single largest tax increase in history this January 1.

Democrats fighting for their political lives believe they have a winner soaking “the rich,” but we’ve noted the destructive effect that raising taxes on the top bracket will have on the struggling economy.  Not only will they hit small businesses (which create most new jobs in America) particularly hard, but individuals in that bracket carry a disproportionate burden of consumer spending, which makes up 70% of our overall economy.   In this video clip from CNBC, even often left-leaning Don Peebles considers tax increases for the highest income bracket a destructive idea:

If we spend more money paying taxes, then we will have less money to invest, less money to employ workers…  We can’t take a bad situation and make it worse by taxing people more at a difficult time.”

Liberals cannot win this debate on the substance, so they instead hope to win on the rhetoric by framing the issue as “the Bush tax cuts.”  But Bush will have been gone from the White House for two full years by the time the tax increases hit.  We’re not debating new tax cuts, and Bush is long gone.  Rather, what we’re talking about are looming tax increases.  Namely, Obama’s tax increases.

Is there any periphery bounding the absurdity of the desperate political left?

The Obama Administration’s 2009 “stimulus” continues to prove itself a failure.  It promised that unemployment would peak in October 2009 at 8%, and would be down to 7.3% by now.  Instead, we remain mired near 10%.  Further, second quarter gross domestic product (GDP) was revised downward just last week to 2.4%, a slowdown from 3.7% in the first quarter and 5.0% from the fourth quarter of 2009.  Meanwhile, we’re $1 trillion deeper in debt, and the administration admitted last month that its second year deficit will reach an astounding $1.5 trillion, exceeding even its first deficit of $1.4 trillion.

Yet according to former Secretary of Labor Robert Reich, “the administration’s original sin was not spending enough.”  Commenting in today’s Wall Street Journal, Reich bizarrely adds that the Democrats’ 2009 filibuster-proof Senate supermajority somehow constituted “a fragile 60 votes” constraining Obama’s ambitions, and says that the problem with ObamaCare was that it was “not nearly large or bold enough.”  Not large enough?  Take a look at this ObamaCare flow chart, which looks more intricate than a nuclear reactor.

So how much would have been enough to satisfy Reich, anyway?  Two trillion?  Three trillion?  Ten?  It all recalls the popular bumper sticker – “Don’t Tell Obama What Comes After ‘Trillion.'”

Seems like someone at the Associated Press read our commentary “Raising Taxes on ‘The Rich’ Will Harm the Economy” from last week’s Liberty Update.  Either way, we couldn’t help but note an AP headline “Economy Weakens as Wealthy Spend Less” released today.

The AP story begins, “Wealthy Americans aren’t spending so freely anymore.  And the rest of us are feeling the sqeeze.”  The story goes on to lament that the economy appears to be slowing as “the rich” spend less:

Think of the wealthy as the main engine of the economy:  When they buy more, the economy hums.  When they cut back, it sputters.  The rest of us mainly go along for the ride.”

Noting that the Obama Administration seeks to increase tax rates on that critical income segment, the AP report states ominously that, “the wealthy may be keeping some money on the sidelines due to uncertainty over whether or not they will soon face higher taxes.”

The good news is that there’s still time for the Obama Administration to wake up and smell the same coffee the AP is smelling.

Remember when Barack Obama preposterously claimed that ObamaCare would reduce the deficit, rather than exacerbate it?  Last week, in admitting that this year’s total budget deficit will exceed last year’s, the Obama Administration included a noteworthy admission.  Namely, that ObamaCare is already adding to his unsustainable deficits.  As reported by The Wall Street Journal:

The White House said the health-care law, heralded as a powerful deficit-tamer in the long term, is expected to add $51 billion of debt between now and fiscal 2012. Those increases more than offset modest savings through 2020.”

Reasonable people knew it was just a matter of time until even Obama admitted that ObamaCare compounds the nation’s deficit.  But who knew that would only take four months?

The Obama Administration now acknowledges that this year’s budget deficit will exceed last year’s.  Their 2010 $1.5 trillion deficit constitutes 10% of gross domestic product (GDP), up from 9.9% last year.   The administration also raised its 2011 deficit forecast to $1.4 trillion, up from its previous $1.267 trillion projection.

Barack Obama repeatedly – and falsely – seeks to escape blame by scapegoating his predecessor for last year’s $1.4 trillion deficit.  He promised as a candidate to address the deficit, but instead more than tripled it in his first year with such things as his failed $1 trillion “stimulus.”  So what will be his alibi for this year’s deficit?  And for 2011’s?

Is there no expiration date on “Blame Bush?”

Another falsehood that Obama advances is that he and Congressional Democrats were simply handed this deficit on January 20, 2009.  The truth, however, is that Nancy Pelosi, Harry Reid and Democrats recaptured Congress (which controls spending under the Constitution) in November 2006, when the deficit was merely $248 billion.  In just four years, they’ve managed to multiply that number by six.

According to some economists, deflation is the biggest financial risk to the American economy.  In a nutshell, deflation means prices are decreasing, which is usually caused by merchants trying to stimulate declining demand by selling goods cheaper.  If the lower prices don’t sell, people get laid off, factories shut down and there is no joy in Mudville.

It turns out that many Republican Senate candidates are threatening their own version of deflation; part economic, part emotional.  Former presidential speechwriter Marc Thiessen shows that many of the favored GOP Senate challengers are, in fact, big spenders.   Mark Kirk (IL), Mike Castle (DE), Roy Blunt (MO) and John Hoeven (ND) – even one-time Tea Party darling Scott Brown (MA) – are all “vetted” politicians whose records predict senators who will be voting “Yes” when it comes to spending in the national interest.

In an election cycle where Tea Party-backed a candidate like Sharron Angle (R-NV) is being called “wacky” for daring to suggest Social Security should be privatized, it’s easy to overlook the fact that Republican control of the Senate may not have much effect on the chamber’s legislative output.

Nothing would deflate Tea Party aspirations more than a Republican Senate that could get more members to caucus with the likes of pro-stimulus, pro-financial reform Olympia Snowe (R-ME) rather than fiscal conservative stalwart Jim DeMint (R-SC).  If that happens, get ready for a third party bid that severely cripples the Republican brand.

Even proponents of ObamaCare are now admitting that Obama “has not been honest with the American people about the nature of this bill.”  Those are the words of Yale University professor Jack Balkin, who actually supports the bill.

Throughout his candidacy and now into his presidency, Barack Obama solemnly promised American voters that he wouldn’t raise taxes on anyone earning under $250,000 per year.  Not just income taxes – he said “any form” of taxes.  When he, Nancy Pelosi and Harry Reid subsequently dumped their ObamaCare monstrosity upon the resistant nation, however, the bill contained an individual mandate under which Americans who failed to purchase insurance for whatever reason would be assessed a punitive tax.  When career liberal George Stephanopoulos pointed out  to Obama during an ABC News interview that this mandate constitutes a tax, even reading a straightforward definition of “tax” from a dictionary, Obama petulantly objected.

That pesky interview from September now safely behind him, however, get a load of the Obama Administration’s new position on the matter.  In its legal brief defending ObamaCare against the lawsuit to overturn it brought by fifteen different states, Obama contends that the Constitution empowers the federal government “power to lay and collect taxes.”

Thus, it appears that Obama intentionally offered two falsehoods to the American people:  (1) that he would not increase “any form” of taxes upon anyone earning less than $250,000, and (2) that he didn’t consider ObamaCare’s individual mandate a “tax.”  How much deeper can this man bury his campaign false promise of “hope” and “change?”

Take a look at Table 2.1, “Receipts by Source: 1934-2015” here on the White House Office of Management and Budget website.  For the year 2009, the federal government took in $915 billion in income tax receipts.  Then take a look at this Congressional Budget Office report that the Obama “stimulus,” which was originally estimated to cost $787 billion, in fact cost $862 billion.

And to what effect?  The Obama White House promised that his “stimulus” would keep unemployment below 8%, but we’ve instead suffered months of approximately 10% unemployment.  Gross domestic product reports are tepid and often revised downward, and the Labor Department reported this week that unemployment claims increased just as Obama and Biden embarked on their “Recovery Summer” tour.

Obama’s “stimulus” has only succeeded in adding almost $1 trillion to our nation’s unsustainable debt, while failing in its stated goals.  For the same cost, we could have completely eliminated the income tax for an entire year.  That’s right – no income tax at all for 2009.  Imagine the real-world stimulative effect that would have had.  Unfortunately, Obama and liberals prefer more government spending and control of taxpayer dollars to the true stimulative effect that the income tax elimination would have instead provided.  They know that once Americans suddenly saw those dollars in their pockets, it would be nearly impossible to corral them back into Washington’s usual tax-and-borrow-and-spend ranch.

Two weeks ago, in a commentary entitled Obama’s Big Fat Greek Bailout, we noted the alarming parallels between Greece’s meltdown and America’s trajectory.  Following years of unsustainable welfare-state spending, Greece’s deficit stands at 13% of gross domestic product (GDP), and its cumulative debt stands at 110% of GDP.  Unfortunately, America isn’t far off, with a deficit approaching 11% of GDP and cumulative debt under Obama heading toward 90% of GDP.

Well, other observers are beginning to draw the same parallel we did.  Robert Samuelson notes his commentary The Welfare State’s Death Spiral that “virtually every advanced nation, including the United States, faces the same prospect.”  Pat Buchanan echoes our observation in his commentary The End of La Dolce Vita:

For the nations of Europe have made commitments beyond their capacity to keep, given their growing debts and aging populations.  And America is not all that far behind.  While the federal deficit is not 14% of GDP, it was 10% in 2009 and may reach 11% in 2010.  Trillion-dollar deficits are projected through the decade, bringing the public debt – held by citizens, companies, foreign governments and sovereign wealth funds – close to 100% of GDP.  And the unfunded liabilities of Social Security, Medicare and federal pensions rival those of Western Europe.  States like California and New York, larger than Greece, look a lot like Greece.”

And today, we wake up to the news that Fannie Mae seeks yet another $8.4 billion federal lifeline.  Fannie was originally rescued by the federal government in September 2008, but at least that bailout was capped at $400 billion.  Last year, however, the Obama Administration agreed to remove even that limit, pledging unlimited loss coverage. Fannie’s total now stands at $83.6 billion, with Fannie Mae’s and Freddie Mac’s cumulative bailout costing American taxpayers $145 billion.

But just like Greece, whose original bailout estimate of $45 billion has now risen to $1 trillion, there is no end in sight for Fannie, Freddie or the United States.  Who knows how many more bailouts will be sought by Fannie and Freddie, not to mention other dysfunctional states like California and industries dominated by unions whose bosses are on Obama’s speed dial?

Can you hear the Greek wedding music growing louder?

If you’re looking for a pick-me-up amidst the travails of the Gulf oil disaster, Greek riots, and technologically crazed financial markets, check out Ted Nugent’s recent commentary praising the Tea Party movement.

This glorious experiment in self-government is not supposed to be a spectator sport as it has been reduced to for so long. As the boss of government, we the people were supposed to stay in touch with politics and politicians, making sure our will was the force behind policies and law making.

Remember that? The Tea Party Americans do, and we are demanding its return immediately. The New Deal was a raw deal and the Great Society was for losers. A hand out creates the curse of dependency. A hand up is nationalism at its finest.

This tribute to liberty is required reading for anyone in search of some good, rock-ribbed conservative truths told as only a Great American like Ted Nugent can.

H/T: Human Events

Even after recent declines, the level of unemployment claims is higher than one would expect it to be if private nonfarm payrolls were really poised to begin sustained gains.”

That is the observation of Joshua Shapiro, an economist at MFR Inc., speaking about the employment and economic climate more than one year after Barack Obama’s trillion-dollar borrow-and-tax-and-spend “stimulus.”

Mr. Shapiro’s assessment echoes a a survey of economists released by the National Association of Business Economics (NABE) this week.  Almost 75% of surveyed economists reported that Obama’s “stimulus” had no effect on the nation’s natural economic healing cycle or employment:

About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act, which the White House’s Council of Economic Advisers says is on track to create or save 3.5 million jobs by the end of the year.  That sentiment is shared for the recently passed $17.7 billion jobs bill that calls for tax breaks for businesses that hire and additional infrastructure spending.  More than two-thirds of those polled believe the measure won’t affect payrolls, while 30% expect it to boost hiring ‘moderately.'”

In other words, Obama pointlessly heaped almost $1 trillion more upon our nation’s unsustainable debt to be repaid via some toxic combination of future borrowing and higher taxes.  In pushing that “stimulus,” he promised that it would keep unemployment under 8%, but unemployment continues to fester at 10% and economists say that the “stimulus” had no effect on employment or the natural cyclical recovery.

In this week’s Freedom Minute video, CFIF’s Renee Giachino dispels the myths perpetrated by the left and the mainstream media about the Tea Party movement. 

Watch the video below:

Remember the iconic 1978 movie Animal House?  In it, Kevin Bacon plays a tormented fraternity pledge stripped to his tightie-whitie underwear and forced to respond to each swat of the paddle by screaming, “Thank you, sir!  May I have another?”

In Obama’s new America, life apparently imitates Animal House.  Speaking at a partisan fundraiser, Obama once again descended into his petty trash-talking persona, saying that instead of protesting oversized government and tax burdens on April 15, Tea Party protesters should have been saying “thank you” to him.  That’s not a misprint – we should be thanking Obama for our current federal tax system. Here is the video:

obama-mocks-tea-partiers-you-would-think-theyd-be-saying-thank-you

No, Mr. President.  American taxpayers have already been stripped to their proverbial underwear, just like Kevin Bacon’s pledge.  We’re not going to respond with “thank you, sir, may I have another?”  No, we’re going to swat back come November.

In honor of Tax Day, several friends in the Tea Party movement offer this ten point plan for the next U.S. Congress to enact.  A sampling:

(1)    Protect the Constitution

(2)    Reject Cap & Trade

(3)    Demand a Balanced Budget

(4)    Enact Fundamental Tax Reform

(5)    Restore Fiscal Responsibility & Constitutionally Limited Government in Washington

(6)    End Runaway Government Spending

(7)    Defund, Repeal, & Replace Government-Run Health Care

(8)    Pass an “All-of-the-Above” Energy Policy

(9)    Stop the Pork

(10)  Stop the Tax Hikes

Each point comes with a nice one-sentence elaboration.  It is definitely worth the read.  Candidates, are you listening?

Reading Joe Conason’s column today makes one wonder if the author takes seriously the words of the Constitution, or just its “spirit” – whatever that means.  In a piece that identifies the growing constitutionalist movement as fringe, Conason equates adherence to the words in the text as preferring a primitive, pre-enlightened society.

What exactly do they mean by “constitutional”? On the increasingly powerful fringes of the Republican right, a category that includes some Tea Party activists, the Constitution is interpreted as prohibiting every social and political advance since before the Civil War. They would outlaw the Federal Reserve System, the progressive income tax, Social Security, Medicare, environmental protection, consumer regulation and every other important federal initiative of the past century.

What Conason misses is that arguing for a textually-based, limited federal government of enumerated powers says next to nothing about the ability of state governments to weigh in on the institutions he wants so much to preserve.  Experience shows that states like California and New York will bankrupt their treasuries to provide the kind of all-providing government Conason likes.  Seemingly, the fact that other states wouldn’t if the feds weren’t allowed is what really bothers him.

Too bad.  The genius of federalism is that it affords the greatest amount of people the greatest amount of choices in the scope and scale of their government.  Once again, liberals like Conason show that when it comes to public policy choices, there’s really only one they care to defend.

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.