Denial

“Government is not reason; it is not eloquence. It is force. And force, like fire, is a dangerous servant and a fearful master.” George Washington

Robert Samuelson mad this comment in a recent article discussing the politics of dealing with the debt:

We won’t make much progress until (a) Democrats concede that spending control requires genuine cuts in Social Security and Medicare, which now total $1.3 trillion annually and represent 35 percent of federal outlays; and (b) Republicans acknowledge that, even after significant spending cuts, tax increases will be needed to balance the budget. Last week, there was little sign of either. President Obama rebuffed Social Security and Medicare cuts. Most Republicans held fast on taxes.

Well, he’s right, sort of. The issue is clearly about getting spending under control, but it is indeed critical that revenue gets addressed. These are not mutually exclusive issues and it really shouldn’t be so hard to get the concept of living within our means. Alas, it is, and it is for a very simple reason: Political Corruption. To most politicians living in Washington- and most government workers at all levels- there is no connection with the People’s money. It is funny money; an arbitrary figure tossed around on spreadsheets and used by mid level managers all the up to Cabinet Secretaries to measure the size of their… ah… fiefdom. If you were to ask any one of them what the difference was between a million dollars and a billion dollars, you’d get two answers: 1) one has an M and the other has a B, and 2) the size of my new office space. It is sad and it exists in ALL government institutions.

What is worse is the fact that most government employees do not appreciate government dollars for that they are- the People’s money. This simple concept is vastly out of reach for so many. To them, it belongs to their institution and they can spend it as they wish, apparently with no limits. The simple connection to the premise that the money does not belong to them or their institution is missed. The concept that the money is a financial grant based on the trust of the People towards those who have been elected to represent the interests of the People never materializes. And government does nothing to correct this misnomer. There are no awards for government shops that succeed in fulfilling their mission AND returning unused funds back to the general fund. No, no. From July through August of every year, the government goes into a spending binge, dumping billions of dollars into last minute expenses. Why? Because the prevailing premise is that if I do not use all of my funds, then next year I will get less money because the perception will be I didn’t need it.

Stupid. Absolutely stupid.

But that is not the worst of it. There has always been a cadre of souls in this world who thrive by preying on the ignorance of the masses. A stupid electorate a is a great electorate because they’ll buy whatever snake oil the political carpetbagger is selling that day, never thinking that these promises of Hope and Change may be nothing more than sweet smelling castor oil. These carpetbaggers don’t contain general government employees. No, no, these snake oil salesmen are made up exclusively by elected officials and political appointees. The worst of the worst thrive in an environment where they promise a step up, yet create conditions that repeatedly keep the People down.

This does not happen by accident. The Left in general, and Democrats in particular, have spent the last 50 plus years focused on an intense strategy of public dependency. And frankly, they are succeeding. The fact that there are now more people receiving government payments than there are people paying taxes should scare the Devil out of every able bodied person in this country, especially the young. The entitlement mind-set promulgated by the Left has expanded the size of the dreaded culture of dependency. There is only one reason to do this- power. When you control every function of life from cradle to grave, you control people, and that has always been the end state for the Left.

Which brings us back to the debt. To think that there has ever been a serious effort on the part of the White House to address it, well, psychiatric care may be needed. The National Debt has gone from nine trillion dollars in 2007 to 14.3 trillion dollars today. That is all Democrat, all the time. The Dems took control of the House in 2006 and had control of the Senate, so they controlled the purse strings of the country. And Obama is going to be the first president in U.S. history to have trillion dollar deficits EVERY YEAR of his term. The Dems failure to pass a 2011 budget was a horribly executed scheme to hide the volume of spending from the electorate in the face of what was predicted, and eventually turned out to be, a landslide victory for the GOP.

And this recent kerfluffle over the House GOP’s passed budget for 2012 drafted by House Budget Committee Chair Paul Ryan is quite telling. Ryan’s plan cuts spending by 4 trillion dollars in 10 years. He also does what Obama has never done- provide details. Obama’s speech (which is as close to a plan as you get) last week where he essentially spent an hour heavily engaged in demagoguery, distortion and outright lying failed to present a single detail on how his plan would reduce 4 trillion dollars in 12 years. But we are use to that by now. Obama does not do details.

S&P’s downgrading of the ratings outlook for the U.S. to negative should be a huge wake up call. Remember when Obama called our long term debt situation “unsustainable”? Well that was before we saw three consecutive Obama budgets of one trillion dollars or more of deficit spending. It is hard to imagine anyone can trust a single word uttered from his lips at this point. Remember when Obama promised to cut the deficit in half in four years? It is starting to sound like, ‘you can keep your doctor.’ What’s more, Obama even attempted to pressure the S&P to not lower the rating, but S&P decided that the arguments from the Obama Administration that the debt was manageable and that the Administration had a plan to address the debt was lacking.

We cannot even begin to hope to address the National Debt or the annual deficit if we are not serious about cutting spending. Period. The fat must be cut. The load must be lightened. The economy, and more importantly the People, can no longer support the bribes of political carpetbaggers selling a culture of dependency with the People’s money. Which brings us back to Samuelson. Yes, he’s obviously correct in our need to cut spending, but he’s wrong on the tax issue in the sense that we need to raise taxes. No. We desperately need to simplify the tax code, which is years behind, and we need to cut the taxes that inhibit business. Every single time taxes have been cut, the government has seen an increase in revenue. Every single time. When Obama was running for office, this was pointed out to him, but his reply was that he would raise taxes anyway in order to be “fair”.

What’s more is that the argument about raising taxes on the rich is specious at best. The rich don’t have rooms full of cash just lying around in their 40,000 square foot mansions. They have assets, and those assets don’t get taxed for being, only when they move. So when the government raises the Capital Gains on investments the rich simply sit on those investments instead of selling, and when the taxes go down, then they sell at the lower rate. The point is that the rich have options in places to put their money that is outside of the tax structure. However, the Middle Class do not have those same options. The Wall Street Journal had an excellent article explaining this, and the fallacy of Obama’s tax-the-rich strategy. The bottom line is that any tax increases will not just affect the super rich, but will invariably touch the Middle Class.

In the noble words of Thomas Jefferson:

A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicity.” – Thomas Jefferson, First Inaugural Address.

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12 thoughts on “Denial

  1. Excellent Gorilla. I’m still awaiting my request to Congress for an outside audit performed by a private company without any ties to Uncle Sam. Tom Coburn (R-OK) has specified $350Billion dollars in duplicated of effort and waste.

    That would begin to make a nice dent.

  2. One of the common memes is that cutting taxes spurs job growth. History does not support this supposition.

    Despite your stated “facts” I strongly suspect some numerical manipulation. The only way for revenue to increase with a tax cut is for more people to being paying taxes. The only way for more people to be paying taxes is for employment to increase. Tax cuts do not spur job growth. I don’t know where the flaw in your numbers are, but someone smarter than I in economics could get to the bottom of it.

    Bottom line, Samuelson, at least as far as that quote goes, is right.

    1. Oh, so your rebuttal is: “It’s wrong, I don’t know how, or why, but it’s wrong.”

      Got it. Clear as any liberal day. Thanks for playing.

      It’s pretty simple, the more money people have, the more they spend. The more they spend, the more business is generated. They busier business is, the more support they need to attend to their customers, thus hiring. I challenge you to show me how jobs have not been created with tax cuts, since economic growth has followed ALL tax cuts.

    2. Did you really read that article? Didn’t some pretty obvious, and glaring, misconceptions jump out at you? Let’s look at a few:

      #1. Two of the three years during the last four decades with the highest level of economic growth occurred during the ’50s when the top tax rate was 91%. [FE]

      The faulty logic in this is that the growth rate was this high because of the tax rate, which is clearly and obviously faulty. It was this high because it was a result of the post-WWII era in which GI’s were starting businesses, and general infrastructure development throughout the nation was at an all-time high. It was inspite of the tax rate, not because of the tax rate.

      #2. Growth increased drastically after the 1982 tax cut, reaching as high as 7.3% in 1984. However, as the Reagan-Bush, Sr. administrations went on and taxes for the rich were slashed even further, growth fell to negative levels during 1991. [FE]

      In 1991, we had a recession, which was not the result of Reagan’s Tax cut. It was the Dot.com bubble bursting. Missing this indicates either incredible ignorance, or incredible deceit.

      #3. Overall, there seems to be no close relationship between the top tax rate and the GDP growth rate, and statistical analysis backs this up: the correlation coefficient between the two variables is 0.03, meaning that there is essentially no connection. (If tax cuts were strongly related to GDP growth, we would see a coefficient close to -1.) [FE]

      Top tax rate? This is faulty logic, again, because it is intentionally using only part of the information. When taken as a whole, GDP growth and the tax rate correspond pretty closely.

      #4. Between March 2001 and December 2007, the period of the implementation of the Bush Tax Cuts, witnessed the slowest job growth to date. The overall monthly job growth was the weakest since February 1945 and household income growth was negative for the first time since we began keeping track of that statistic. [CAP]

      Unemployment averaged ~ 3-4%, which is well under the economist standard of full employment at 5%. It’s hard to have job growth when essentially everyone has a job.

      I suppose I could go through and point out the faulty logical and intentional misrepresentations of historical context, but why bother? If that is what you’re going to refute with, well, it says a lot more about you than me.

      1. I absolutely hate that f@#$ing 90% thing. I have never been able to find any proof that any citizen ever paid at that atrocious rate. I think we need a history version of MythBusters.

      2. It was actually that high, but there were loop holes a mile wide. Most of the wealthy money was in property and many of their luxuries were “business” assets, so it didn’t fall under personal property taxes, etc. I guess that’s kind of the point, when you jack the rate up, they will look for a way to protect the money. It is ironic that Obama complains about high paid accountants, but is looking to jack up taxes on everyone, of which only the rich will be able to afford high paid accountants.

        He should stick to golfing…

      3. What’s funny is the illegal money that just suddenly showed up. Like the Kennedy’s, who made their fortune running booze during prohibition.

  3. “Tax cuts do not spur job growth. I don’t know where the flaw in your numbers are, but someone smarter than I in economics could get to the bottom of it.”

    I think you’re charged with backing-up that assertion Rutherford. And what “taxes” are you talking about. Corporate, personal income, capital gains — or is there no difference in your opinion (as I suspect).

    I mean, God forbid we promote capital investment, right?

    “What is worse is the fact that most government employees do not appreciate government dollars for that they are- the People’s money. This simple concept is vastly out of reach for so many.”

    Sorry, but that applies to all dems, not just government employees, which is how the lunacy of “tax cut = expenditure” rhetoric employed by Obama raises no questions from the left.

    1. I agree whole heartedly. This is why I kept- and will continue to do so- challenging Dog to explain how tax cuts are paid for. You don’t pay for a loss in revenue, you adjust expenditures to match revenue. It is a simple concept, but when the baseline belief structure is ‘everyone’s money belong to the government’, it is not hard to see why they have this faulty premise.

    2. I just marvel at the lengths the left will go to try and convince us that tax increases boost the economy and employment. Yeah, nothing could be better for capitalism than socialism. Pfffft.

      “[I]f that is what you’re going to refute with, well, it says a lot more about you than me”

      Indeed!

      Reply

  4. Oh yeah. I forgot about another gem. Spending on welfare actually makes money. Didn’t Pelosi say we get a return of $2 dollars on every dollar given out? In fact, isn’t that the logic of Rutherford’s link? Or is that the term spending on “infrastructure” will go unnoticed.

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