Tuesday, July 28, 2015
America’s tendency toward over-spending leading to catastrophe
Many years ago Beatle John Lennon compared America to Rome. Some interpreted his statement as being complimentary, that America was like the Roman Empire in its glory days: the place to be. Others took it to mean that like Rome’s eventual fate, America was declining and headed for the dustbin of history.
As it turns out, both interpretations were correct, depending upon the time frame of the analysis. From its early days America was a bright spot in the world, becoming a leader in many areas and doing things never done before. The rise of the hippie movement of the 60s and 70s spawned the flower children that viewed the U.S. as tarnished and wicked. And since then, particularly in recent years, America has been transitioning to resemble Rome’s decline. Perhaps a more accurate comparison for 2015 is Greece, where out-of-control spending is about to kill the nation.
There is a steady record of troubling statistics that U.S. presidents and Congresses have negligently ignored. For example, in 1971 the federal debt was $348 billion, about 34 percent of GDP, but today it is about $18 trillion, and is more than 100 percent of GDP. This trend caused Standard and Poor’s to downgrade America’s credit rating in 2011.
Federal assistance program payments have risen from about 21 percent of GDP in the 1970s to about 70 percent today. The Supplemental Nutrition Assistance Program in 2008 cost $37.6 billion, but by 2012 totaled $78.4 billion.
The 2014 Index of Culture and Opportunity, published by the Heritage Foundation, reports how food-stamp participation has soared from 2003 to 2013, growing by more than 26 million people. In 1970, the number receiving food stamps was well below 10 million, growing to more than 20 million by 2003, and nearing 50 million by 2013. The index also shows that total welfare spending has climbed by $246 billion between 2003 and 2013. In 2014 the federal government operated more than 80 means-tested welfare programs that provide cash, food, housing and medical care to poor and low-income Americans.
Heritage’s Robert Rector notes that government spent $916 billion on these programs in 2012, and roughly 100 million Americans – nearly one in three – received aid from at least one of them, averaging $9,000 per recipient.
Many will see the increase in these numbers as necessary support from the government for Americans in trouble. Some do truly need help, but many are simply availing themselves of easy money.
Government policies and actions have kept the economy stagnant since the recession of 2007, preventing job creation that would allow millions to provide for themselves, or at least to contribute to their own wellbeing. More than 93 million Americans desiring work – nearly one in three – are not in the labor force. These policies and actions are championed by politicians, many of whom subscribe to the same socialist ideals that are killing Greece, and who benefit from having large numbers of individuals and organizations depending upon them for their survival.
And, the common theme of government wreaking havoc by interfering with business economics rises to the fore, yet again.
One example of a foolish policy is when Obamacare reduced the number of hours of the full-time workweek from 40 to 30 in an attempt to force employers to cover some part-time workers. This resulted in thousands of full-time workers becoming part-time workers, who lost 11 hours of pay a week, as businesses suddenly faced massive new expense and were forced to counteract that by reducing the number of full-time employees by cutting their hours.
Had the leftists that threw together Obamacare in the dark, smoke-filled rooms of the Capital actually thought about what they were doing, they could have avoided some of the punishment they caused these workers. No doubt that thousands of those workers now qualify for government support as a result.
Ignoring the wisdom of not raising the minimum wage, Seattle, Washington raised its minimum wage to $11 an hour in April. And guess what? Some of the workers who benefitted from the increase are now complaining that since they are making more money they will lose their housing subsidy, and are asking to have their hours reduced so that they can keep the free money flowing. Seattle’s minimum wage is scheduled to rise to $15 an hour by 2017.
The American tradition of self-reliance, of working to improve one’s plight, has been replaced by the opportunity to benefit from “free money” from government.
“If we keep on this way, we’ll reach a tipping point where there are too many people receiving government benefits and not enough people to pay for those benefits,” Rep. Paul Ryan (R-Wis.) wrote in The Wall Street Journal. Currently, about half of Americans pay no income taxes. “That’s an untenable problem. The receivers cannot receive more than the givers can give.”
The politics of government largesse and the sensible policy of holding individuals and institutions responsible for their actions, the tradition of self-reliance upon which America became the wondrous nation it used to be, are inalterably opposed. The question is, how much more of this dependency can the country survive before it becomes a Greek tragedy?
Cross-posted from Observations
Tuesday, February 26, 2013
Breaking News: A new Washington blockbuster is set to debut Friday
Tuesday, January 01, 2013
Happy New Year! Attention Washington: fix our spending problem
As last week came to a close the nation was peering over the edge of “Fiscal Cliff” with only a few days left to fix the problem, and it seemed likely that nothing more would be done before 2013 arrived.
Nearly everyone likes to celebrate holidays, but when there is a crisis afoot, the people whose duty it is to address that problem are expected to make the appropriate sacrifices and do their job. Finding that your house is on fire, you expect the fire department to respond to your call. You don’t expect to be told, “sorry, but all firefighters are taking the holiday off.”
Where the fiscal cliff is concerned, the public servants we pay to responsibly run our government have put that priority behind others they consider more important. They went home for the holiday, or to Hawaii.
President Obama tells us over and over how the policies of conservatives and Republicans are responsible for "getting us in this mess." But that is wrong: what got us in this mess is decades of irresponsible and improper spending and taxation. It has not always been like it is today, and we are the victims of wrong-headed policies from those public servants.
Senator Kent Conrad (D-N.D), retiring Chairman of the Senate Budget Committee, told the National Press Club recently that raising both spending and taxes really should not be a problem, when viewed as a percent of gross domestic product (GDP). He noted that since 1969 the budget has been balanced five times and tax revenue was around 20 percent of GDP each of those times, and that the budget has never been balanced at the historical level of 18 or 18.5 percent of GDP, the level many Republicans favor.
Spending for Fiscal Year 2012 exceeds 22.9 percent of GDP, according to the 2012 edition of “Federal Spending by the Numbers.” In the past 20 years, federal outlays have grown 71 percent faster than inflation, and the average American household’s share of this spending is $29,691, or roughly two-thirds of median household income. Federal spending is projected to continue increasing at this rate, pushing total government outlays to $5.5 trillion a decade from now, and to about 36 percent of GDP in the next 25 years. To quote Mr. Obama: “That’s irresponsible. That’s unpatriotic."
Dean Kalahar, economics teacher and author of Practical Economics, explains that from 1787 to 1849, federal spending averaged 1.7 percent of GDP. For the next 51 years, from 1850 to 1900 (including fighting the Civil War) spending averaged only 3.1 percent. And from 1901 till 1930 (including fighting WWI) it never reached 8 percent, and averaged approximately 3.2 percent.
During the height of the progressive movement, including FDR's New Deal, federal spending never exceeded the 1934 level of 10.7 percent. And even though as WWII raged and spending shot to 43.6 percent of GDP, four years later it had fallen to 11.6 percent. For 130 years of our existence, federal spending averaged around 2.5 percent of GDP, says Mr. Kalahar.
That level of spending was close to what the Founders had in mind for their limited government. But it has grown incrementally, as politicians abandoned constitutional limits and today this statist, socialistic philosophy has moved us toward fiscal collapse.
Mr. Kalahar understands what public servants and many, perhaps most, Americans do not: Government spending is taken directly out of the pockets of the people, or out of the economy. “Every dollar consumed by our profligate government is one less that could fund productive advancement in the private economy,” he wrote. “Every dime needlessly spent by government comes at the cost of efficiency in moving scarce resources to their most valuable use.”
What that means in simple terms is that if left alone, the private economy will most often cruise along comfortably, repair itself when necessary, and the genius of Americans will produce an expanding economy that benefits us all.
“The just and proper fiscal balance is to give the state what it needs to protect you and your property while at the same time protecting you and your property from the state,” he wrote. “Looking at the low historical trends that allowed this great nation to lead the world into prosperity would be a good place to start an honest debate in determining federal spending. A good rule of thumb would be to give half of what the politicians ask for.”
And, as economist Walter Williams reminds us about federal spending, "If 10 percent is good enough for the church, it ought to be good enough for Congress."
As we have incrementally increased spending as a percent of GDP, now we must begin to incrementally return to the spending level before 1930.
Cross-posted from Observations
Tuesday, December 18, 2012
Going Rogue, Part IX: Expanding Power and Control over the People
By James Shott
It’s been nearly six months since the antics of the Environmental Protection Agency (EPA) have received attention, but in the last several days two instances have sneaked past the mainstream media filter and become public knowledge, even though only a limited number of people will have seen the reports.
In the first example, a couple seeking to have a retirement home in New Mexico purchased 20 acres of land near Sante Fe. Over the years, the unused land had accumulated quite a lot of trash which the couple intended to clean up to make their property a suitable place for them to spend their remaining years. But no, cleaning up their own property for their own use will not be possible because the dedicated public servants at the EPA have cited the Clean Water Act and prohibited the clean-up saying it might harm the Rio Grande River.
Now, who among us would not want to prevent activities that pollute the nation’s waterways? However, it is difficult to understand how cleaning up tin cans, broken glass and other such trash could actually harm a river, unless the trash ended up being dumped in the river or on its banks, which the couple did not intend to do.
The EPA’s decree at first glance seems intrusive and absurd. Actually, it is much worse than it appears: the Rio Grande about which the EPA folks were so concerned is 25 miles away from the couple’s property.
This outrageous interference has driven property owners Peter and Francoise Smith to court to seek justice against this mindless government over-reach. The case is being brought by the Pacific Legal Foundation on the Smith’s behalf, and the organization alleges that the land does not contain any relatively permanent, standing or continuous body of water that can be regulated by the Clean Water Act.
We’ll have to wait to see how this plays out in court.
In order to further expand its cancerous growth of power and control over the American people, the EPA stretches definitions to the breaking point, asserting that mud puddles that form after rain are “wetlands,” as illustrated in the second example.
The EPA now seeks to gain control over land alongside ditches, gullies and other spots where water may temporarily accumulate from rains or melting snow, claiming they are part of navigable waterways. Seriously.
They are not waterways or wetlands, of course, and they are certainly not navigable, but these temporary “waters” often interfere with how private property owners want to use their own property, to perhaps construct an out building, grow crops, raise livestock and conduct other activities in which private landowners may choose to indulge. But the EPA proposes to tell these landowners just how they may use their property.
“Never in the history of the Clean Water Act has federal regulation defined ditches and other upland features as ‘waters of the United States,’” said Rep. John Mica (R-Fla.), chairman of the House Transportation and Infrastructure Committee, Rep. Nick Rahall (D-W.Va.), the ranking committee member, and Rep. Bob Gibbs (R-Ohio), chairman of the Subcommittee on Water Resources and Environment.
In a related event, the EPA notified Virginia last December that it would have to take steps to reduce the amount of highway runoff from rain that eventually ends up in a particular stream in Fairfax County. The EPA considers this a no-no because the runoff contains sediment that collects in streams. The rub comes in how the agency has twisted reality to assume control over runoff: it treats rain as a pollutant.
Virginia’s Republican Attorney General Ken Cuccinelli and the Democrat Fairfax County Board of Supervisors claim that the EPA’s position is illegal and say further that if the Commonwealth is forced to comply it would cost the Virginia Department of Transportation (VDOT) and Fairfax County hundreds of millions of dollars to comply with storm water regulations just for the one creek the EPA cited. To control the rain “pollution” VDOT would have to seize private land, evict persons living on it, tear down homes, businesses and other structures on the land, and plant grass that would absorb the runoff.
Reasonable people consider such radical steps as an idiotic solution for a problem with such a tiny effect on the whole of the Commonwealth.
The EPA is likely the most out-of-control federal agency, although it is not without challengers for that dubious distinction. It believes it has authority to do virtually anything it imagines will promote better environmental conditions, no matter how insignificant the perceived problem may be in reality.
It makes no difference to these public servants how many people are affected, how many jobs are lost or how much money is spent; no legal, moral or practical concern is sufficient enough to deter them from regulating themselves into power-induced ecstasy.
The fact that Democrat Congressman Nick Rahall joined with Republican chairmen of two House committees, and that the Democrat Fairfax County Board of Supervisors joined with Republican Attorney General Ken Cuccinelli in protest, illustrates the degree to which officials now believe the EPA is out of control.
Let’s hope changes are on the way.
Cross-posted from Observations
Saturday, December 08, 2012
Robert Welch on America's Destruction
- Greatly expanded government spending...getting rid of ever larger sums of American money as wastefully as possible
- Higher and then much higher taxes
- An increasingly unbalanced budget, despite the higher taxes
- Wild inflation of our currency
- Government control of prices, wages and materials, supposedly to combat inflation
- Greatly increased socialistic controls over every operation of our economy and every activity of our daily lives; this is to be accompanied...by a correspondingly huge increase in the size of our bureaucracy and in both the cost and reach of our domestic government
- Far more centralization of power in Washington and the practical elimination of our State lines
- The steady advance of Federal aid to and control over our educational system
- A constant hammering into the American consciousness of the horror of modern warfare...and the absolute necessity of peace, peace always on communist terms
- The consequent willingness of the American people to allow the steps of appeasement by our government which amount to a piecemeal surrender of the rest of the free world and the United States itself
--Against All Enemies
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Disclaimer: These opinions are solely my own, and do not reflect the opinions or official positions of any United States Government agency, organization or department.
Tuesday, December 04, 2012
Tax-and-spend policies have not and cannot solve America’s problems
By James Shott
British millionaires are looking for greener pastures. As reported in The Telegraph of London, “In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs,” but that “number fell to just 6,000 after Gordon Brown introduced the new 50 [percent] top rate of income tax shortly before the last general election.” The story goes on to say that it “is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.” Consequently, the increase in tax revenues Prime Minister Brown had anticipated turned into a nearly £7 billion loss.
This should serve as a cautionary tale for America’s tax-and-spenders in the White House and Congress, who want to raise taxes on “the wealthy,” but it likely will float past them un-heeded. When you consider the details of the first post-election offer from the White House, it is clear that the administration does not comprehend such economic realities. The proposal: $1.6 trillion in higher taxes over 10 years, $180 billion in new spending and vague promises to cut only the growth of entitlement spending at an indeterminate future date, all while giving the president the power to unilaterally raise the debt ceiling.
The proposal calls for double the pre-election tax amount, additional spending and no specific amount of spending cuts or dates certain for them to take effect. And, there’s that last item, which gets immediately crossed-off: it’s unconstitutional.
As idiotic as that proposal is, understand that President Barack Obama appears serious about it.
Big government liberals live on entitlement spending, and many would die without it. The president’s proposal includes allowing the Bush tax cuts to expire for those making $250,000 a year or more, raising the top rate to nearly 40 percent, which he supposes will raise $80 billion annually. That’s enough to run the federal government for only 8.5 days. If America’s high earners follow the lead of the Brits and reduce taxable income or shift it into 2012, it will be even less than that relatively small amount.
But what is worse, when you understand that half of those affected by this rate increase are small businesses, it makes no sense to raise taxes on them with unemployment still more than 50 percent above normal levels nearly 42 months after the recession ended.
The tax-and-spenders need to get past their resentment of high earners and their appetite for their earnings, and get serious about fiscal reform. Out-of-control spending for entitlements, a bloated and inefficient government, a tax code that plays favorites, and other factors combine to produce huge annual deficits and 16 trillion in crushing debt, and it’s time to fix that.
Americans for Tax Reform has focused for years on getting newly elected U.S. Representatives and Senators to take a pledge against raising taxes, understanding that our problem is that we spend far too much, not that anyone needs higher tax rates. Grover Norquist, its president, is now a target of the tax-and-spenders for his organization’s efforts at controlling taxation. However, those Senators and Representatives didn’t make the pledge to Mr. Norquist, they pledged to their constituents they would vote against tax increases.
The problem we have today is not a new one. A Cary Orr political cartoon from 1934, in the midst of The Great Depression, shows a wagon filled with drunken people drinking from a “Power” bottle and shoveling bags of money out onto the road. On the back of the wagon is a sign reading, “Depleting the resources of the soundest government in the world.” And there’s a man on the side of the road painting a sign which says:
Plan of Action for U.S.
Spend! Spend! Spend!
Under the guise of recovery
Bust the government
Blame the capitalists for the failure
Junk the Constitution and declare a dictatorship
Other comments jotted around the scene say, “How red the sunrise is getting” near an ominous looking man labeled “Stalin,” and, “It worked in Russia.”
That is how Cary Orr saw what the government was doing then. And what is unsettling about this cartoon is the striking similarity to what is happening now.
He believed government’s actions were communistic. What our government is doing today may not be socialistic or communistic under the strict definition of those terms But an interesting coincidence is that the Communist Party USA is now organizing teleconferences and rallies supporting the plans to raise taxes and encouraging continued over-spending on entitlement programs.
We should recognize that no nation on Earth has ever achieved success that even approaches the level of success the United States of America achieved before it began changing from the capitalistic model that built it to a model that has produced mediocrity and fiscal peril worldwide.
We should heed the lessons of wrong-headed government policies that extended the Great Depression for years longer than it should have lasted, and try something different, like the economic principles of capitalism that built America.
Cross-posted from Observations
Tuesday, November 27, 2012
Movie: Grinding America Down
"Grinding America Down" is a movie by Curtis Bowers that accurately describes the design of the Communist Agenda in America, how it is has been executed, how successful it has been, and what those of us who love liberty need to do to counter it. It is apparent that Curtis believes the Communists are closer than they ever have been to fundamentally transforming our nation, but they can still be stopped. We just have to do something.
Some of the many topics he talks about are Fabian Socialism, Saul Alinsky, Herbet Marcuse, the Communist Party USA, the Frankfurt School, and Bill Ayers. Curtis has done his research and is on-target with his analysis. Encourage your friends and family to watch this film.
I am not able to embed this video, so you will have to go to the following link to view it. From what I understand, it will only be available for free for a limited time.
AGENDA: Grinding America Down (Full Movie) FREE for a limited time
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Disclaimer: These opinions are solely my own, and do not reflect the opinions or official positions of any United States Government agency, organization or department.
Tuesday, October 30, 2012
One week out: The case against President Barack Obama’s re-election
Commentary by James H. Shott
Four years ago the left was filled with optimism and poised to win the presidential election. The Democrats had nominated the first African-American candidate for President of the United States, and millions were spellbound, and buoyed by his message of hope and change.
During his acceptance speech at the Democrat Convention, Barack Obama said, “we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment when we ended a war and secured our nation and restored our image as the last, best hope on Earth.” The crowd went wild.
And it was about time we did those things. We had never cared for the sick before or provided jobs to the jobless. Or ended wars or been the last, best hope on Earth before.
In a campaign amazingly light on detail and substance, a dreadfully inexperienced Barack Obama won the election.
When he assumed office the country was in the midst of a recession, one President Obama frequently refers to as “The Great Recession.” As time passed and things didn’t improve as promised, this title has become a tool to make the downturn seem worse than it was to excuse his dismal performance on the nation’s crushing economic problems. Data show that other recessions were worse in one or more aspects than this recession, and while significant, the 2008 recession does not rate the honorific the president bestowed on it.
What does deserve our attention is the non-existent Obama recovery, which still has not taken hold 56 months after the recession began.
President Obama claims 5 million new jobs have been created during his term, but for the 37 weeks of 2012 through Sept. 15 the weekly new unemployment insurance claims average roughly 374,000, a total that dwarfs 5 million new jobs in just 37 weeks.
The U-6 unemployment rate stands at 14.6 percent as of September 30, and includes the unemployed, under-employed and those who have given up looking for work, a total of 22.6 million people.
Mr. Obama increased the national debt from $10.6 trillion on Jan. 20, 2009 by 51 percent, or $5.4 trillion, through a failed stimulus and a government spending spree. Despite spending all that borrowed money, since Q3 2009 GDP has averaged only 2.17 percent, substantially lower than the 3.25 percent average GDP through expansions and contractions since 1947.
Median household income has declined by 7.3 percent, and last year the Census Bureau reported more Americans in poverty than ever before in the more than 50 years that it has tracked poverty. Ironically, the group that has suffered the most during the Obama presidency has been black Americans, whose real incomes have fallen by more than 11 percent.
Had Mr. Obama set out immediately to address joblessness, and championed policies to spur the economy we would be far better off than we are. Instead, he wasted two years getting a bill passed to revamp the nation’s healthcare system, against the will of 60 percent of the people he serves.
Yet, the president does not regret wasting two years on Obamacare instead of focusing on the economy. In an interview with the Des Moines Register Mr. Obama said he had no regrets that he didn’t focus on the nation’s most pressing issue. “Absolutely not,” he said.
The dismal economic performance affects us all; however, the most remarkable failure is the scandalous behavior of the Obama administration before and after the terrorist attack on the U.S. consulate in Benghazi, Libya, where during a seven-hour attack four Americans were murdered. There was a reduced level of security before the attack, despite numerous requests to maintain the higher levels and even increase those levels because of recent attacks on U.S. facilities and mounting levels of violence.
Requests for help during the attack, including requests from personnel stationed nearby who wanted to help were denied. And worst of all, adequate answers to the many legitimate questions about what actually happened still have not been provided fully seven weeks after the attack. It is difficult to avoid assigning political motives to this behavior, which appears at this point as a clumsy cover-up to get through the election.
Add to this the Fast and Furious gun-running debacle, the ridiculous job-killing ban on drilling for our own oil on federal lands, and the war on coal killing thousands of coal jobs and thousands more in related industries like power plants, railroads and support businesses, and there simply is no reason to give this man more time to wreck the economy.
Barack Obama is not the god-like figure his fawning fans believe him to be, but a very average man who allowed the nation to continue to suffer while he pursued his ill-advised ideological goals.
On the campaign trail he now says, “I want your vote for what I’m going to do.” But we’ve heard that one before, and we can’t afford to fall for it again.
Cross-posted from Observations
Thursday, August 23, 2012
The Great Divide
Today in America we are faced with a choice about who is sovereign--God or Man? Most other nations in the world have already made this choice and decided that Man is sovereign. Our Founding Fathers strove to leave such nations. When our nation was formed, they chose God. Now we are faced with this choice once again, and we must have the courage to pick one or the other.
We are witnessing these two competing beliefs throughout our society, and it impacts where we as a nation believe Truth resides. If Truth resides with a sovereign God, then Truth is an unchanging foundation upon which we can base our laws and society. If it is with a sovereign Man, then Truth is an ever-shifting foundation that moves based on the desires of the human being (or beings) in power.
Frankly, it appears that we are moving full speed toward a rejection of God's sovereignty and an acceptance of Man's. Moving toward a sovereign Man exhibits many tendencies:
- The rejection of humans as created in God's image and the acceptance of humans as mere animals, just a little bit more "evolved" than the rest (this myth is perpetuated to create a competing explanation for the existence of humans that undermines God's Truth and replaces it with Man's)
- Because we are animals, our behaviors result from our "nature" and "environment," removing personal responsibility for our actions
- Because we are animals, we should not be restricted by "morality," but should instead give in to our "natural" desires and do as we wish
- Because of the reduction in morality, there is an increase in the need for the Sovereign to control the populace, for they now cause more problems
- As the populace becomes increasingly irresponsible, liberties will be taken away since the people can no longer responsibly govern themselves
- Because we are animals, our population needs to be controlled to protect the health of our species and prevent overpopulation (eugenics and abortion)
- To govern such a population of irresponsible human "animals," a centralized, collective government must be instituted, ruled by the "elite" and "enlightened." The sovereign will have to instruct the populace on how to live their lives in order to protect them from themselves and to protect those around them. In essence, the sovereign will determine the rights of the people. The ultimate end of this sort of thinking is global control of the human population.
- Finally, because Truth resides in the human sovereign, then anyone who either goes against the sovereign or does not believe that Truth resides with him is an enemy of the State and will be persecuted in order to maintain the authority of the human sovereign. (tyranny)
- Status Quo. We continue on the current path, watching God's Truth be steadily pushed out of the fabric of our nation. Basically, accept "fate," do nothing, and allow Man's Truth to take over the nation.
- National Choice. Convene something akin to a Constitutional Convention and lay out the issue before the American people to make a choice of our national sovereign.
- State Choices. Allow each State to choose its sovereign, effectively dissolving the Union, but allowing certain segments of society to go the way they wish. This will most likely see massive migrations of populations.
- Civil War. This is similar to scenario #1, but instead of accepting "fate," the issue comes to a head and each side takes up arms against the other. This could result in the dissolution of the Union, one side or the other being victorious and maintaining the Union, or foreign occupation.
- Election. Elect a President and Congress who execute a "reset" on the government and restore it to its Constitutional foundations.
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Disclaimer: These opinions are solely my own, and do not reflect the opinions or official positions of any United States Government agency, organization or department.
Tuesday, August 07, 2012
President Obama’s policies failing to revive the American economy
Commentary By James H. Shott
More important than the lofty generalities candidate Barack Obama fed his fans about healing the planet, slowing the rise of the oceans, ending political divisions in America, and ushering in an era of hope and change, as President he and his administration gave Americans strong assurances of better things to come.
He promised to create five million new jobs just in the energy sector, and in promoting the $767 billion stimulus plan his economic advisors Christina Romer and Jared Bernstein predicted unemployment would not rise above 8 percent. In the first year of his presidency, Mr. Obama pledged to “cut the deficit we inherited in half by the end of my first term in office,” to “lift two million Americans from poverty,” and “jolt our economy back to life.”
The President told NBC’s Matt Lauer January of 2009, “If I don't have this done in three years, then there's gonna be a one-term proposition.”
Last week’s July jobs numbers show continued misery across the nation, again calling attention to Mr. Obama’s failure to deliver on his economic pledges. Since he didn’t “have this done in three years,” why is he running for re-election?
The unemployment rate ticked up to 8.3 percent, far above the 5.6 percent rate that his economic team predicted for July 2012 if Congress passed the $767 billion stimulus plan.
The Bureau of Labor Statistics (BLS) report for July showed that 195,000 fewer people were working in the U.S. than in June. Further, the BLS figures showed that 150,000 more people became discouraged and dropped out of the labor force.
Nevertheless, Mr. Obama struggled to put a positive spin on these dismal numbers, boasting, “we tried our plan — and it worked.”
Really? Let’s review the results: Forty-two straight months of unemployment above 8 percent; 8.2 million people working part-time who want full-time work; a record 88 million Americans who are not in the labor force; 1.9 percent GDP growth in the past quarter; $5 trillion in new debt; the downgrading of the U.S. credit rating; 38 percent of Americans living paycheck to paycheck; 45 million Americans on food stamps; food prices continuing to increase dramatically; and the poverty level likely to rise to the highest level in nearly fifty years.
If this is what a successful Obama economic policy looks like, let’s go back to the Bush years, where those “top-down” economic policies Mr. Obama so loves to hate created 52 straight months of job creation, and an unemployment rate that never exceeded 6.3 percent following the September 11, 2001 terrorist attacks, despite the attending chaos they caused. Oh, for the good old days.
The continued poor economy and dismal jobs pictures since he won the office he so aggressively sought are precisely what would we should expect from Mr. Obama’s big spending economic philosophy.
On the campaign trail, he said, “You grow an economy from the middle out, and from the bottom up. …When middle-class families have money in their pockets, they go out and buy that new car or that new appliance or the new computer for their kids or they go out to a restaurant – heaven forbid they take a vacation once in a while – and that money goes back into the economy and businesses do well because they’ve got more customers.” That same example applies to wealthy Americans.
The example supports leaving more money in the private economy, which is a point in favor of low income taxes for all. However, it omits a critical element: Before mom and dad can buy a new car or even a toaster, at least one of them has to have a job.
However, if they work in the coal industry or the space industry, or in a related business, thanks to the Obama administration there’s a good chance they either don’t have a job, or soon will lose it.
At a time of dangerously high unemployment, Mr. Obama’s jobs program focuses not on creating jobs, but on killing jobs. The coal industry is dying – or rather is being executed – as extreme air quality goals imposed by the Environmental Protection Agency force coal-fired generators to shut down, meaning consumers could see their electricity bills jump an estimated 40 to 60 percent in the next few years. The decreased demand for American coal shuts down mining and related companies, putting more people on the unemployment line.
His policies have produced high unemployment in Brevard County, Florida, the home of the Kennedy Space Center, which peaked in double digits, but now is about nine percent. That is somewhat lower than it otherwise would be because space industry workers had to leave the County to try to find work after the President scrapped the second manned moon mission in 2010.
In the grand scheme of things the jobs lost in the space and coal industries and in supporting businesses may be only a fraction of the total. But Mr. Obama should be held to account for policies that deliberately kill jobs in a time of already high unemployment.
This callous disregard for American jobs is not among the characteristics that voters should expect to find in their president.
Cross-posted from Observations