Tuesday, August 31, 2010

Obama the Reneger

Here is another great little video clip pointing out the obvious.

Monday, August 30, 2010

Why Companies are putting the freeze on hiring

Here is a nice summary from the WSJ of why companies aren’t hiring.

Michael P. Fleischer: Why I'm Not Hiring - WSJ.com

We also fit into this category. Even though we could use another employee, we have elected to hold off because of the uncertainty with Obamanomics and the Healthcare fiasco he and the democratic radicals have implemented.

When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits.


With unemployment just under 10% and companies sitting on their cash, you would think that sooner or later job growth would take off. I think it's going to be later—much later. Here's why.

Meet Sally (not her real name; details changed to preserve privacy). Sally is a terrific employee, and she happens to be the median person in terms of base pay among the 83 people at my little company in New Jersey, where we provide audio systems for use in educational, commercial and industrial settings. She's been with us for over 15 years. She's a high school graduate with some specialized training. She makes $59,000 a year—on paper. In reality, she makes only $44,000 a year because $15,000 is taken from her thanks to various deductions and taxes, all of which form the steep, sad slope between gross and net pay.

Before that money hits her bank, it is reduced by the $2,376 she pays as her share of the medical and dental insurance that my company provides. And then the government takes its due. She pays $126 for state unemployment insurance, $149 for disability insurance and $856 for Medicare. That's the small stuff. New Jersey takes $1,893 in income taxes. The federal government gets $3,661 for Social Security and another $6,250 for income tax withholding. The roughly $13,000 taken from her by various government entities means that some 22% of her gross pay goes to Washington or Trenton. She's lucky she doesn't live in New York City, where the toll would be even higher.

Some Firms Struggle to Hire Despite High Unemployment Faces—and Fates—of the Jobless Employing Sally costs plenty too. My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay. Health insurance is a big, added cost: While Sally pays nearly $2,400 for coverage, my company pays the rest—$9,561 for employee/spouse medical and dental. We also provide company-paid life and other insurance premiums amounting to $153. Altogether, company-paid benefits add $9,714 to the cost of employing Sally.

Then the federal and state governments want a little something extra. They take $56 for federal unemployment coverage, $149 for disability insurance, $300 for workers' comp and $505 for state unemployment insurance. Finally, the feds make me pay $856 for Sally's Medicare and $3,661 for her Social Security.

When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally's job each year.

Because my company has been conscripted by the government and forced to serve as a tax collector, we have lost control of a big chunk of our cost structure. Tax increases, whether cloaked as changes in unemployment or disability insurance, Medicare increases or in any other form can dramatically alter our financial situation. With government spending and deficits growing as fast as they have been, you know that more tax increases are coming—for my company, and even for Sally too.

Companies have also been pressed into serving as providers of health insurance. In a saner world, health insurance would be something that individuals buy for themselves and their families, just as they do with auto insurance. Now, adding to the insanity, there is ObamaCare.

Every year, we negotiate a renewal to our health coverage. This year, our provider demanded a 28% increase in premiums—for a lesser plan. This is in part a tax increase that the federal government has co-opted insurance providers to collect. We had never faced an increase anywhere near this large; in each of the last two years, the increase was under 10%.

To offset tax increases and steepening rises in health-insurance premiums, my company needs sustainably higher profits and sales—something unlikely in this "summer of recovery." We can't pass the additional costs onto our customers, because the market is too tight and we'd lose sales. Only governments can raise prices repeatedly and pretend there will be no consequences.

And even if the economic outlook were more encouraging, increasing revenues is always uncertain and expensive. As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company's vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment.

A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price.

Mr. Fleischer is president of Bogen Communications Inc. in Ramsey, N.J.

Friday, August 27, 2010

A Seuss Perspective

I do not like this Uncle Sam,

I do not like his health care scam.

I do not like these dirty crooks,

or how they lie and cook the books.

I do not like when Congress steals,

I do not like their secret deals.

I do not like this speaker Nan ,

I do not like this 'YES, WE CAN'.

I do not like this spending spree---

I'm smart, I know that nothing's free.

I do not like your smug replies,

when I complain about your lies.

I do not like this kind of hope.

I do not like it. Nope, nope, nope!

Thursday, August 26, 2010

Obama Deficit

The Washington Post babbled again recently about Obama inheriting a huge deficit from Bush.

Amazingly enough,...... a lot of people swallow this nonsense.

So once more, a short civics lesson.

While the White House (the President) proposes budgets, funding for Budgets does not come from the White House!

It comes from Congress, and the party that controlled Congress since January 2007 is the Democratic Party.

They controlled the budget process for FY 2008 and FY 2009, as well as FY 2010 and FY 2011.

In that first year, they had to contend with George Bush, which caused them to compromise on spending, when Bush belatedly got tough on spending increases. (and conservatives were not happy with his fiscal irresponsibility either)

For FY 2009 though, Nancy Pelosi and Harry Reid bypassed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office.

At that time, they passed a massive omnibus spending bill to complete the FY 2009 budgets.

And where was Barack Obama during this time?

He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete FY 2009.

Let's remember what the deficits looked like during that period and what is projected into the future to 2019:

If the Democrats inherited any deficit, it was the FY 2007 deficit, the last of the Republican budgets.

That deficit was the lowest in five years, and the fourth straight decline in deficit spending.

After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets.

If Obama inherited anything, he inherited it from himself.

In a nutshell, what Obama is saying is “I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th”.

Wednesday, August 25, 2010

Hauser's Law

Here is a recent posting from the National Center for Policy Analysis. Obamanomics won’t work. It’s time for a change!

The Limit Of Tax Revenues

"Hauser's Law" (named after W. Kurt Hauser of the Hoover Institution) states that there has been a close proportionality between revenue and gross domestic product (GDP) since World War II, despite big changes in marginal tax rates in both directions. The law states that there is a kind of capacity ceiling for federal tax receipts of about 19 percent of GDP.

In short, Hauser's Law provides a simple basis for testing the validity of any government's revenue projections, says David Ranson, president and director of research of H.C. Wainwright & Co. Economics:

· Today, since the U.S. economy already suffers from a large output gap that is expected to take many years to close, 18.3 percent must be a realistic upper limit on the ratio of budget revenues to GDP for years to come.

· Any major tax increase will reduce GDP and therefore revenues too.
How long does it take to fire up the economy once capital is more readily available? The answer is: Longer than it takes to close it down.

According to Congressional Budget Office (CBO) projections based on the current budget:

· The revenue-to-GDP ratio could reach 18.3 percent as early as 2013 and rise to 19.6 percent in 2020.

· Such numbers implicitly assume that the U.S. labor market will get back to sustainable "full employment" by 2013 and that GDP will exceed its potential thereafter.
However, when the projections are tempered by the constraints of Hauser's Law, it is clear that deficit spending will grow faster than the official estimates show, says Ranson.

For budget planning, it is wiser and safer to assume that tax receipts will remain at a historically realistic ratio to GDP no matter how tax rates are manipulated. That leads to the conclusion that current projections of federal revenue are, once again, unrealistically high, says Ranson.


Tuesday, August 24, 2010

Obamacare will cost you what you have

Remember Obama repeatedly stating “If you like your current insurance plan, you can keep it”?

We all knew this was a lie when he stated it.

When you cut $500 billion dollars from Medicare and take over the healthcare system, plans absolutely will be irrevocably changed and you will not be able to keep what you have.

This WSJ article shows how the elderly will be affected by the cuts. Health Law Augurs Transfer of Funds From Old to Young - WSJ.com

Monday, August 23, 2010

The Professor

Let's listen to the professor and remember this in November

Friday, August 20, 2010

Remembering Better Times

Remember when Ronald Reagan was president?

At that time, we also had Bob Hope and Johnny Cash.

Now, we have Obama and no hope and no cash!!

Thursday, August 19, 2010

Prager on the Socialist Appointee

As always, Dennis Prager adds such clarity to discussions. In this audio clip, he discusses Obama's recent appointee.


Wednesday, August 18, 2010

Obama Math

Here is a nice editorial piece written for Bloomberg exposing the creative but misleading and deceiving math of the stiumulus and jobs.

Obama Omits Jobs Killed or Thwarted from Tally: Caroline Baum
By Caroline Baum - Jul 18, 2010

Bloomberg Opinion

Can you believe they’re still touting that silly metric?

When I heard last week that the White House would be announcing the number of “jobs created or saved” as a result of the 2009 American Reinvestment and Recovery Act, my first reaction was embarrassment.

Imagine how Christina Romer must feel. The chairman of the President’s Council of Economic Advisors was dressed in a cheery, salmon-colored jacket, a complement to the upbeat news she had to deliver on July 14. The $787 billion stimulus enacted in February 2009, which subsequently grew to $862 billion, increased gross domestic product by 2.7 percent to 3.4 percent relative to where it would have been, and added anywhere from 2.5 million to 3.6 million jobs compared with an ex-stimulus baseline.

“By this estimate, the Recovery Act has met the president’s goal of saving or creating 3.5 million jobs -- two quarters earlier than anticipated,” Romer said with a straight face. (More than 2.5 million non-farm jobs have been lost since ARRA was enacted in February 2009, all of them in the private sector, according to the Bureau of Labor Statistics.)

How does the CEA arrive at these numbers? It uses two methods, Romer said. The first is a standard macroeconomic forecasting model that estimates the multiplier effect of fiscal policy. (The government’s spending is someone else’s income.) The second method is statistical, using previous relationships between GDP and employment to project future behavior.

Model Imperfection

These numbers might just as well have been pulled out of a hat. Recall that it was the same model and method the administration used in January 2009 to predict an unemployment rate of 7 percent in the fourth quarter of 2010 with the enactment of the fiscal stimulus and 8.8 percent without. The unemployment rate now stands at 9.5 percent.

This same model convinced policy makers that the subprime crisis was contained, encouraged the rating companies to slap AAA ratings on collateralized garbage, and led banks to believe they had adequately managed their risks and reserved for potential losses.

Econometric models rely on the assumption that $1 of government spending generates more than $1 of GDP, the so-called multiplier effect. There is no allowance for the negative multiplier on the other side.

Sure the government can spend money and generate GDP growth in the short run: Government spending is a component of GDP!

What it giveth it taketh away from the private sector via taxation or borrowing. Every dollar the government spends is a dollar the private sector doesn’t spend, an investment it doesn’t make, a job it doesn’t create. This is what is unseen, as Frederic Bastiat explained in an 1850essay.
Hiring Disincentives

“If the administration wants to take credit for ‘jobs created or saved,’ it should also accept responsibility for ’jobs destroyed or prevented,’” saidBill Dunkelberg, chief economist at the National Federation of Independent Business.

Ignoring the flaws in the stimulus for the moment, Congress raised the hurdle for hiring entry-level workers when it refused to delay the third step in a three-stage minimum wage increase last year. And the Department of Labor cracked down on unpaid internships, outlining six criteria that businesses had to satisfy in order to hire someone willing and able to work for nothing to get the experience.

For example, the employer must derive “no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded.”

You can’t make this stuff up.

Recession’s Advantage

At the White House briefing last week, Romer touted the leveraging of public investment with private funds, with $1 of Recovery Act funds partnering with $3 of outside spending. Romer said this public spending “saved or created 800,000 jobs” in the second quarter alone.

Once again, what would have happened in the absence of the government’s targeted intervention?

According to a June 2009 study by the Kauffman Foundation in Kansas City, Missouri, well over half of the companies on the Fortune 500 list, and almost half of the fastest growing companies in America, were started during a recession or bear market. Dunkelberg calls this phenomenon “negative push starts.” People might not be willing to quit their jobs, but if they get laid off during a recession and were thinking about starting a business, they might seize the day, he said.
“When people ask me when the best time to start a company is, I tell them the day before the recession ends,” Dunkelberg said. “They can do it on the cheap, and the next day you get cash flow.”

Model That!

What’s more, firms less than five years old are responsible for all of the net new jobs created in the U.S., the Kauffman study found. Job creation by start-ups is more stable, less sensitive to the business cycle.

So, if the goal is to create more jobs, and start-ups are the ones that create them, why is the Obama administration partnering up with existing firms?

“Job-creation policies aimed at luring larger, established employers will inevitably fail,” said Tim Kane, Kauffman Foundation senior fellow in research and policy and author of a follow-up study released this month.

Not to worry. The White House has a model that turns failure into success.

Tuesday, August 17, 2010

Obama Credibility

Here is another op-ed Obama's Economic Fish Stories from the WSJ that shows why Obama’s credibility continues to wane.

On unemployment, the president claims that the stimulus bill was several times more potent than his chief economic adviser estimates. Such statements hurt his credibility.


A president's most valuable asset—with voters, Congress, allies and enemies—is credibility. So it is unfortunate when extreme exaggeration emanates from the White House.

All presidents wind up saying some things that make even their own economists cringe (often the brainchild of political advisers unconstrained by economic principles, facts or arithmetic). Usually, economic advisers manage to correct these problematic statements before delivery. Sometimes they get channeled into relatively harmless nonsense, such as President Gerald Ford's "Whip Inflation Now" buttons. Other times they produce damaging policies, such as President Richard Nixon's wage and price controls. The most illiterate statement was President Jimmy Carter's late-1970s plea to the Federal Reserve to lower interest rates to combat high inflation, the exact opposite of what it should do. Not surprisingly, the value of the dollar collapsed.

President Obama says "every economist who's looked at it says that the Recovery Act has done its job"—i.e., the stimulus bill has turned the economy around. That's nonsense. Opinions differ widely and many leading economists believe that its impact has been small. Why? The expectation of future spending and future tax hikes to pay for the stimulus and Mr. Obama's vast expansion of government are offsetting the direct short-run expansionary effect. That is standard in all macroeconomic theories.

So, as I and others warned in 2008, the permanent government expansion and higher tax rate agenda is a classic example of what not to do during bad economic times. Worse yet, all the subsidies, bailouts, regulations and mandates are forcing noncommercial decisions on the economy, which now awaits literally thousands of new diktats as a result of things like ObamaCare and the financial reform bill. The uncertainty is impeding investment and hiring.
The president does not say that economists agree that the high future taxes to finance the stimulus will hurt the economy. (The University of Chicago's Harald Uhlig estimates $3.40 of lost output for every dollar of government spending.) Either the president is not being told of serious alternative viewpoints, or serious viewpoints are defined as only those that support his position. In either case, he is being ill-served by his staff.

Mr. Obama's economic statements are increasingly divorced not only from competing viewpoints but from those of his own economic advisers. It is surprising how many numerically challenged pronouncements come from this most scripted and political of White Houses. One slip is eventually forgiven, but when a pattern emerges, no one believes it is an accident.

For example, on the anniversary of the stimulus bill, Mr. Obama declared, "It is largely thanks to the Recovery Act that a second Depression is no longer a possibility." Yet his Council of Economic Advisers just estimated the stimulus bill's effect on GDP at its trough was 1%-2%.
The most common definition of a depression is a long period in which GDP or consumption declines at least 10%. The decline in GDP in the recent recession was 3.8%, in consumption 2%. No one disputes the recession was severe, but to reach a 10% GDP decline requires tripling the administration's estimate (three times their 2% effect) added to the actual 3.8% decline. On the alternative consumption standard, the math is even more absurd. The depression statement isn't credible. The stimulus bill has assumed certain mystic powers in administration discourse, but revoking the laws of arithmetic shouldn't be one of them.

The recession would have been worse if not for the Fed's monetary policy and quantitative easing. Also important were the unmentioned automatic stabilizers—taxes falling more than income, cushioning declines in after-tax incomes and consumption—which were far larger than the spending and tax rebates in the stimulus bill. Arguing that all these policies (including injecting capital into banks, which was necessary but done poorly) may have prevented a depression is perhaps still an exaggeration but at least is within hailing distance of plausibility. On that scale, the effect of the stimulus was puny.

On his recent "Recovery Tour," Mr. Obama boasted, "The stimulus bill prevented the unemployment rate from "getting up to . . . 15%." But the president's own chief economic adviser, Christina Romer, has estimated that the stimulus bill reduced peak unemployment by one percentage point—i.e., since the unemployment rate peaked at 10.1%, it prevented the unemployment rate from rising to just over 11%. So Mr. Obama claims that the stimulus bill was several times more potent than his chief economic adviser estimates.

Perhaps the most serious disconnect concerns the impending expiration of the 2001 and 2003 tax cuts, which will raise the top two income tax rates and the rates on dividends and capital gains. If these growth inhibiting tax increases occur—about $75 billion in tax increases next year, $1.4 trillion over 10 years—there will be serious economic damage.

In the most recent issue of the American Economic Review, Ms. Romer (and her husband David H. Romer) conclude that "tax increases are highly contractionary . . . tax cuts have very large and persistent positive output effects." Their estimates imply the tax increases would depress GDP by roughly half the growth rate in this so-far-anemic recovery.

If Mr. Obama is really serious about a second stimulus, by far the best thing he can do is have Congress quickly extend the expiring Bush tax cuts, combined with real spending cuts set to take effect as the economy improves.

The president badly needs to make more realistic pronouncements. No one expects him to say his policies have failed (although most have delivered far less than claimed at large cost). A little candor about the results of experimentation in uncharted waters would go a long way. But at the very least, his staff needs to avoid putting these exaggerations on the teleprompter. It undermines confidence and raises concerns about competence. It's doing nobody any good—not the economy and certainly not Mr. Obama.

Monday, August 16, 2010

Border Concerns

Here are some pictures on new innovative ways to smuggle drugs across the Mexican border.

These are passing through our southern states including Arizona.

This is more evidence of why States like Arizona need to do whatever it takes to protect the borders.

This could have been illegal aliens, weapons, dirty bombs or any host of other contraband that passes through the borders.

Sunday, August 15, 2010

Obesity Tracking by "Big Brother"

The “Big Brother” is watching and going to invade privacy even further with the new Obamacare rules. In the following article CNSNews.com - Obesity Rating for Every American Must Be Included in Stimulus-Mandated Electronic Health Records, Says HHS it describes the new mandates placed on physicians and EMR’s to record and submit BMI (Body Mass Index) readings on patients.

What do you think the government will do with the data? We already know the United States is generally overweight, eats poorly and has an obesity problem. Why does the government need to track BMI’s on every individual?

It is hypocritical to think the government allows an individual the choice to terminate a human life because they believe women should have control of their reproductive desires, but now they are going to track your weight and begin regulating how heavy you should be. Is it really any of their business?

Once they takeover healthcare; it is their business and they will regulate individuals and the choices they make!!

Saturday, August 14, 2010

Now It's a Tax

Since the democrats have realized there really are constitutional grounds to defeat the individual mandate in Obamacare using the interstate commerce clause, the democrats now are going to try to use the tax clause to defend this unconstitutional mandate.

The problem now becomes that if they now refer to healthcare as a new tax, (which in essence it is) than Obama will be held accountable for the lie. He defended Obamacare and repeatedly stated that it is not a new tax. But, even his Yale friend states otherwise in this article. Changing Tune, Administration Defends Insurance Mandate as a Tax - NYTimes.com

Jack M. Balkin, a professor at Yale Law School who supports the new law, said, “The tax argument is the strongest argument for upholding” the individual-coverage requirement.

Mr. Obama “has not been honest with the American people about the nature of this bill,” Mr. Balkin said last month at a meeting of the American Constitution Society, a progressive legal organization. “This bill is a tax. Because it’s a tax, it’s completely constitutional.”

The democrats have dug themselves into quite a quandary. It will be interesting to see how they weasel their way out.

Friday, August 13, 2010

The Kagan Question

In this op-ed piece, Elena Kagan’s Active Promotion of Shariah Law, we see Elena Kagan’s double standards when it comes to how she has utilized her authority to promote or withhold support for the ideas and philosophies that form her worldview.

I think the last sentence really sums up the article.

It is a mute point at this time since she has been confirmed, but the question will always remain; Is this who Americans want on our Supreme Court?

Husband Down

A husband and wife are shopping in their local Wal-Mart.

The husband picks up a case of Budweiser and puts it in their cart.

'What do you think you're doing?' asks the wife.

'They're on sale, only $10 for 24 cans he replies.

'Put them back, we can't afford them demands the wife, and so they carry on shopping.

A few aisles further on along the woman picks up a $20 jar of face cream and puts it in the basket.

What do you think you're doing?' asks the husband.

'It’s my face cream. It makes me look beautiful,' replies the wife.

Her husband retorts: 'So does 24 cans of Budweiser and it's half the price.'

On the PA system: 'Cleanup on aisle 25, we have a husband down.'

Monday, August 9, 2010

Prager Simplicity

I am going to leave this video up all week and hopefully people will play it over and over and distribute it widely.

Dennis Prager's clarity is so simple and directly to the point of what our greatest threat truly is.

Friday, August 6, 2010

2 important questions

Life really boils down to 2 questions...

1.. Should I get a dog....?


2. Should I have children?

No matter what situations life throws at you... No matter how long and treacherous your journey may seem.. Remember there is a light at the end of the tunnel.

You're laughing aren't you?

Cats are so dramatic!!

Thursday, August 5, 2010

Europe learning; Obama not

As we move towards a more bureaucratic laden healthcare system (Obamacare), the United Kingdom's new coalition government has figured out that they need to get government less involved. The new coalition government announced an overhaul of the state-funded health system that it said would put more power in the hands of doctors and save as much as $30.12 billion by 2014.

They will begin cutting huge swaths of bureaucracy and reinvesting the savings in urgent health care services.

The government didn't say how many management jobs will be cut, but said the plan would reduce management costs by more than 45 percent over the next four years all while we are increasing government jobs and waste in healthcare.

In a 60-page document outlining the overhaul, the government said the changes "will cause significant disruption and loss of jobs ... but it has rapidly become clear to us that the NHS simply cannot continue to afford to support the costs of the existing bureaucracy; and the government has a moral obligation to release as much money as possible into supporting front line care."
I wonder where there morals come from??

This is reportedly the biggest shake-up in the 62-year history of the NHS that is the largest employer in Europe, with more than 1.3 million employees.

Wednesday, August 4, 2010

Using the Scapegoat

Let’s look at the rhetoric of the left and really see how it compares to reality. This reinforces what we know to be true. The Obama team continues to use its fuzzy math to try and justify their liberal program all while trying to convince people that the huge deficit is not their fault.

Brian Riedl: The Bush Tax Cuts and the Deficit Myth - WSJ.com

President Obama and congressional Democrats are blaming their trillion-dollar budget deficits on the Bush tax cuts of 2001 and 2003. Letting these tax cuts expire is their answer. Yet the data flatly contradict this "tax cuts caused the deficits" narrative. Consider the three most persistent myths:

• The Bush tax cuts wiped out last decade's budget surpluses. Sen. John Kerry (D., Mass.), for example, has long blamed the tax cuts for having "taken a $5.6 trillion surplus and turned it into deficits as far as the eye can see." That $5.6 trillion surplus never existed. It was a projection by the Congressional Budget Office (CBO) in January 2001 to cover the next decade. It assumed that late-1990s economic growth and the stock-market bubble (which had already peaked) would continue forever and generate record-high tax revenues. It assumed no recessions, no terrorist attacks, no wars, no natural disasters, and that all discretionary spending would fall to 1930s levels.

The projected $5.6 trillion surplus between 2002 and 2011 will more likely be a $6.1 trillion deficit through September 2011. So what was the cause of this dizzying, $11.7 trillion swing? I've analyzed CBO's 28 subsequent budget baseline updates since January 2001. These updates reveal that the much-maligned Bush tax cuts, at $1.7 trillion, caused just 14% of the swing from projected surpluses to actual deficits (and that is according to a "static" analysis, excluding any revenues recovered from faster economic growth induced by the cuts).

The bulk of the swing resulted from economic and technical revisions (33%), other new spending (32%), net interest on the debt (12%), the 2009 stimulus (6%) and other tax cuts (3%). Specifically, the tax cuts for those earning more than $250,000 are responsible for just 4% of the swing. If there were no Bush tax cuts, runaway spending and economic factors would have guaranteed more than $4 trillion in deficits over the decade and kept the budget in deficit every year except 2007.

• The next decade's deficits are the result of the previous administration's profligacy. Mr. Obama asserted in his January State of the Union Address that by the time he took office, "we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program."

In short, it's all President Bush's fault. But Mr. Obama's assertion fails on three grounds.
First, the wars, tax cuts and the prescription drug program were implemented in the early 2000s, yet by 2007 the deficit stood at only $161 billion. How could these stable policies have suddenly caused trillion-dollar deficits beginning in 2009? (Obviously what happened was collapsing revenues from the recession along with stimulus spending.)

Second, the president's $8 trillion figure minimizes the problem. Recent CBO data indicate a 10-year baseline deficit closer to $13 trillion if Washington maintains today's tax-and-spend policies—whereby discretionary spending grows with the economy, war spending winds down, ObamaCare is implemented, and Congress extends all the Bush tax cuts, the Alternative Minimum Tax (AMT) patch, and the Medicare "doc fix" (i.e., no reimbursement cuts).
Under this realistic baseline, the 10-year cost of extending the Bush tax cuts ($3.2 trillion), the Medicare drug entitlement ($1 trillion), and Iraq and Afghanistan spending ($515 billion) add up to $4.7 trillion. That's approximately one-third of the $13 trillion in baseline deficits—far from the majority the president claims.

Third and most importantly, the White House methodology is arbitrary. With Washington set to tax $33 trillion and spend $46 trillion over the next decade, how does one determine which policies "caused" the $13 trillion deficit? Mr. Obama could have just as easily singled out Social Security ($9.2 trillion over 10 years), antipoverty programs ($7 trillion), other Medicare spending ($5.4 trillion), net interest on the debt ($6.1 trillion), or nondefense discretionary spending ($7.5 trillion).

There's no legitimate reason to single out the $4.7 trillion in tax cuts, war funding and the Medicare drug entitlement. A better methodology would focus on which programs are expanding and pushing the next decade's deficit up.

• Declining revenues are driving future deficits. The fact is that rapidly increasing spending will cause 100% of rising long-term deficits. Over the past 50 years, tax revenues have deviated little from their 18% of gross domestic product (GDP) average. Despite a temporary recession-induced dip, CBO projects that even if all Bush tax cuts are extended and the AMT is patched, tax revenues will rebound to 18.2% of GDP by 2020—slightly above the historical average. They will continue growing afterwards.

Spending—which has averaged 20.3% of GDP over the past 50 years—won't remain as stable. Using the budget baseline deficit of $13 trillion for the next decade as described above, CBO figures show spending surging to a peacetime record 26.5% of GDP by 2020 and also rising steeply thereafter.

Putting this together, the budget deficit, historically 2.3% of GDP, is projected to leap to 8.3% of GDP by 2020 under current policies. This will result from Washington taxing at 0.2% of GDP above the historical average but spending 6.2% above its historical average.

Entitlements and other obligations are driving the deficits. Specifically, Social Security, Medicare, Medicaid and net interest costs are projected to rise by 5.4% of GDP between 2008 and 2020.

The Bush tax cuts are a convenient scapegoat for past and future budget woes. But it is the dramatic upward arc of federal spending that is the root of the problem.

Tuesday, August 3, 2010

Even the Dead are Against Reid

Here is one lady who finally “saw the light”.

She has spoken through her death in order to right a wrong she helped create.

Let’s hope enough people request her wishes and acknowledge her insight.

Charlotte zings Reid from beyond the grave - John L. Smith - ReviewJournal.com

Monday, August 2, 2010

The Cuban Direction

Where are we headed with Obamacare and his new appointee?

Let’s look at a recent op-ed in the WSJ. Bret Stephens: Dr. Berwick and That Fabulous Cuban Health Care - WSJ.com

Heaven forbid that anyone accuse Donald Berwick—lately of Harvard, newly of the Centers for Medicare and Medicaid Services, with $800 billion under management—of being an admirer of Cuba's health-care system. In the matter of CastroCare, progressives of Dr. Berwick's stripe are rarely at a loss for superlatives. But suggest that ObamaCare is a step in the Cuban direction, and these same people will accuse you of rank scare-mongering.

We don't scare-monger in this paper. And for the record, nothing in Dr. Berwick's published record indicates he has ever praised the Cuban system.

But note that when the health-care bill became law in March, Fidel Castro emerged from semiretirement to praise it as a "miracle." Note also that Dr. Berwick has made himself notorious by warning of "the darkness of private enterprise," admitting his "love" for Britain's socialized National Health Service, and insisting that "excellent health care is by definition redistributional."

Without imputing a mutuality of views, then, it's worth noting a certain mutuality of respect. So it's a good time to check in on the state of the Cuban health-care system. That's just what Laurie Garrett, a senior fellow at the Council on Foreign Relations, does in the current issue of Foreign Affairs magazine.

Lest anyone mistake Ms. Garrett as a raving opponent of the Cuban system, she praises Cuba for offering "an inspiring, standard-setting vision of government responsibility for the health of its people." Cuba's (reported) success in reducing the incidence of child mortality and tropical diseases, she adds, is "laudable."

Just one problem: The system is in an advanced state of collapse. It is bankrupting the state and driving doctors out of the medical field and the country. Its ostensibly egalitarian nature disguises a radically inegalitarian reality, with a tiny number of well-appointed clinics catering to paying medical tourists and senior Party apparatchiks while most Cubans take their chances in filthy, under-resourced hospitals.

Consider the facts as laid out by Ms. Garrett. There are 73,000 physicians licensed to practice in Cuba. This allows Cuba to boast of having the best doctor-patient ratio in the world, with one doctor for every 170 people, as opposed to one for every 390 in the United States.

Yet reality belies the statistics. Slightly more than half of all Cuban physicians work overseas; taxed by the Cuban state at a 66% rate, many of them wind up defecting. Doctors who remain in the country earn about $25 a month. As a result, Ms. Garrett writes, they often take "jobs as taxi drivers or in hotels," where they can make better money. As for the quality of the doctors, she notes that very few of those who manage to reach the U.S. can gain accreditation here, partly because of the language barrier, partly because of the "stark differences" in medical training. Typically, they wind up working as nurses.

As for the quality of medical treatment in Cuba, Ms. Garrett reports that hospital patients must arrive with their own syringes, towels and bed sheets. Women avoid gynecological exams "because they fear infection from unhygienic equipment and practices." Rates of cervical cancer have doubled in the past 25 years as the use of Pap tests has fallen by 30%.

And while Cuba's admirers love to advertise the country's low infant mortality rate (at least according to the Castro regime's dubious self-reporting) the flip-side has been a high rate of maternal mortality. "Most deaths," Ms. Garrett writes, "occur during delivery or within the next 48 hours and are caused by uterine hemorrhage or postpartum sepsis."

Sound inviting? The number of ostensibly serious people—Michael Moore not being one of them—who think so is nothing short of astonishing. On a visit to Cuba last October, Margaret Chan, the director general of the World Health Organization, said that Cuba "has the right vision and the right direction. Health is a state policy and health is seen as a right of the people." In 2005, one prominent New York Times editorialist headlined a column "Health Care? Ask Cuba." Health care was probably also what former Secretary of State Colin Powell had in mind when he noted that "Castro has done some good things for his people."

Now, to repeat, Dr. Berwick is nowhere on record endorsing Cuban-style health care. And ObamaCare, with its million flaws, is not CastroCare.

But it remains the case that for all those for whom "free" health care has been, as Teddy Kennedy once put it, the cause of their lives, the Cuban system has been a touchstone—proof, supposedly, that socialized medicine is, as Dr. Berwick has said, the only "just, equitable, civilized and humane" answer when it comes to addressing the dilemmas inherent in health-care delivery.

The truth is that socialism and related forms of command-and-control technocracy work as well in the health-care market as they do in every other. Which is to say, not at all. When better-heeled Americans start flying to offshore medical centers for their facelifts and bypasses (performed by expat American doctors) while poorer folk make do in ObamaCare's second tier, then perhaps the real lessons of the Cuban system will begin to sink in. Even, perhaps, among Dr. Berwick's progressive friends.