A Boundless Faith in Government

Someone recently said to me that "government just screws up everything they touch." So I asked him why he was so in favor of Obamacare. He said because healthcare costs too much.

I've given up trying to change his mind.

Karl Rove said it well in an Op-Ed piece in today's Wall Street Journal:

This liberal lack of faith in the people is combined with a nearly boundless confidence in government

I'm taking his quote out of context, but I'm not misrepresenting his point. Today's liberals do not see the inherent contradiction in their policy positions. It's seemingly willful. And I don't see how their minds can be changed by rational, logic-based arguments.

Karl Rove: Obama and the Politics of Condescension (link requires subscription)

The 21% Limit

I was recently engaged in an intense conversation with a dear friend. She, an ardent Obama supporter, insisted that the Bush tax cuts are to blame for our exploding national debt. Our conversation was interrupted by more important things, but it got me thinking about how best to illustrate the basic problem with her argument.

The Office of Management and Budget (OMB) - a part of the President's team - publishes the percentage of GDP that the federal government takes in each fiscal year. It's helpful to understand what actually happened, rather than an estimate of might happen in the future, or a prediction of how this policy or that policy will affect things. The chart below is based on the OMB's publicly published numbers showing tax receipts since 1945.

What does history tell us? It tells us that, regardless of tax rates, the federal government takes never takes in more than 21% of GDP. This is nearly 70 years of consistent behavior. It is a modern era that includes years of war and of peace. It includes recessions, recoveries, housing booms, oil crises and even the collapse of the gold standard. It is a period of dramatic technological and economic change. In these years, marginal tax rates were as high as 90%. In some of these years, taxes on high incomes and successful investments were exceptionally high; in others they were exceptionally low.

Through it all, tax receipts never went above 21% of GDP. That tells me that our federal government must not spend more than 21% of GDP. We must prioritize that spending so that we fund that which is most important. And we will likely disagree amongst ourselves on those priorities. But the fundamental fact is that we will never tax ourselves back to a balanced budget. The only way is to recognize that federal spending has an indisputable limit.

Source of tax receipt data: The Office of Management and Budget

Solyndra - Worse than it appears

Andrew McCarthy, writing at The National Review -

... If the Solyndra case came walking into a competent prosecutor’s office, the theory of the investigation would be fraud. We have the loss of over half a billion dollars in public money (in the form of government credits), which was pledged to back a company that had a hopelessly flawed business model and that was gushing losses with no realistic prospect of a turn-around. We have grossly misleading rosy-scenario pronouncements by key players (including President Obama and Vice President Biden) at a time when Solyndra backers were gearing up an initial public offering of stock — and when Solyndra’s independent auditors had issued a dire warning that it was doubtful the company could continue as a going concern. In addition, we have executive-branch officials renegotiating the loan arrangement so that corporate insiders, including Obama administration cronies, would be given priority over taxpayers in the liquidation of assets when the company inevitably went belly-up — a novation that appears to be as illegal as it is inexplicable.

On the surface, it appeared to be just a well-connected investor making good use of his network to secure a nice contract. But in fact, we have a well-connected investor making good use of his network to secure a federally subsidized loan that the firm could not have qualified for on its merits.

I don't understand how even conscientious liberals can accept this state of affairs. If they truly despise "crony capitalism," then surely they despise this! Don't they?

Mr. McCarthy's commentary is worth reading. You'll find it here: The Solyndra Non-Investigation

Growing corruption

The stink surrounding the so-called Fast and Furious gun-running scandal is growing by the week. On Friday, FoxNews.com reported that a "third gun linked to 'Operation Fast and Furious' was found at the murder scene of Border Patrol Agent Brian Terry." This contradicts earlier reports that only ... ONLY! ... two guns linked to the program were found at the site. The report goes further to say that "Unlike the two AK-style assault weapons found at the scene, the third weapon could more easily be linked to the informant. To prevent that from happening, sources say, the third gun 'disappeared.'"

So not only did a major, legally suspect and morally indefensible operation result in the death of a law-enforcement officer. But now we learn that there is even more of a coverup going on than first suspected.

Why isn't the mainstream media covering this?

Why isn't the New York Times calling for the resignation of Eric Holder, and for a special investigator?

Why indeed!

Credit where credit is due: Read more more at FoxNews.com

Temporary tax policies never work

I'd like to focus on one small part of the President's big address from Thursday... this notion of a Payroll Tax Holiday. On Friday, Sen. Paul Ryan had this to say on CNBC :

"The payroll tax cut that, to me, is not a bad idea. It's always good to let people keep more of their own money," Ryan said. "But it's no substitute for fundamental tax reform--for certainty. It's temporary stuff.

"See, what we've learned already from the Keynesian playbook is demand side spending stimulus, temporary tax rebates, which were tried in the Bush administration and didn't work, and this administration--all this stimulus hasn't worked."

This has nothing to do with which party has the majority in Congress, or whether it's a conservative or a liberal in the White House. The bottom line is that temporary fiscal measures never work. The Bush administration tried them. And the Obama administration has tried them. They don't work. Stop doing it!

They might have worked when information moved slowly. But not any more. Decision makers in business look at all of the available information before making a choice. And if that choice involves hiring another employee, their planning horizon is at least three years. An ethical business owner ... and most are highly ethical ... will not make the implied promise of a livelihood to a new employee unless he is confident that he will still be part of the company three years from now. Otherwise, it's better to simply hire a contractor.

There is no hiding from a record

Obama was elected on the promise of changing the direction of government. He would reverse the rightward leanings of the executive branch that have been in place since 1980 with an aggressive, leftward, progressive agenda. No longer would federal bureaucracies react to the economy ... the federal bureaucracies would drive the economy. And how has he kept that promise?

Steven Hayward writes in PowerLine:

Obama has collapsed on the Bush tax cuts, the debt ceiling, expanded the war in Afghanistan, said “never mind” to his promise to close Gitmo, went to war against Libya without congressional authorization or UN resolution, and retracted several key environmental regulations while signaling that he will approve the Keystone pipeline. Progressives are starting to notice.

This is a short list of his failures. But what about his accomplishments?

ObamaCare was passed along a strictly party line vote. The voters' response? A Rasmussen Poll of likely voters indicates that 57% of likely voters favor repeal of this unprecedented expansion of the federal government's impact on our very personal lives.

The financial reform has created more uncertainty in the banking sector, keeping investment cash on the sidelines. It's too complicated for the evening newscast, but the stifling effect that this has had on our economy is stunning in its breadth and depth. It's often said that generals fight the last war ... the Dodd-Frank bill is no exception: It blatantly ignores the huge role that the federal government played in causing the ongoing housing crisis.

And then there is, of course, nearly $1 Trillion in so-called "stimulus" ... again passed along party lines. All that has gotten us is zero net job growth for the first time in over 55 years; an explosion in sovereign debt; and some really snazzy signs to litter our roadways.

Obama's record of failure has exposed leftist policies for the sham that they are. The policy initiatives that he has endorsed have resulted in consistently poor results for the country. The conservative policies that he has grudgingly accepted are the only ones that he can claim have enjoyed any kind of success. The progressives will vote for him because they have no one else. But he cannot run on his record, even with the media pulling for him.

Accurate Deception

Here is a fascinating graphic. It is technically accurate, but it is highly misleading. It describes the public debt as a static sum. Its sole purpose is to assign blame for the rapid growth in the national debt to George W. Bush.

How is this misleading?

The nominal amount of debt racked up by Bush 43 is $6.1 Trillion.
The nominal amount of debt racked up by Obama is $2.4 Trillion ... or just shy of 40% of the total Bush 43 presidency.

But remember, Obama is only 30 months into his presidency, meaning that his policies are increasing the debt at a rate $80,000,000,000 per month!. If this were to continue for two terms (perish the thought), the total additional debt created in the same period as Bush 43's presidency would equal nearly $8 trillion, or about 33% more. And this does not even account for Obamacare, which hasn't even begun adding to our debt.

Yes, Bush 43 added $6.1 trillion to the public debt. Yes, this was not a success. Obama's supporters have no explanation for why doing more of a bad idea is somehow a good thing.