I would like to recommend that you watch this fascinating and poignant interview with Ken Langone, co-founder of Home Depot. Mr. Langone discusses the debt ceiling debate, President Obama’s damaging class welfare rhetoric, and America’s poor job market. Mr. Langone’s words and advice should be heeded in Washington. Enjoy
Posts Tagged ‘Debt ceiling’
1. ‘Obama’s Approach Is Not How to ‘Live Within Our Means’ – Jeffrey Anderson, The Weekly Standard
This piece is a friendly reminder that President Obama’s recent talk of cutting spending and decreasing our nation’s debt is large departure from his policies and very recent past priorities. President Obamas’s budget for 2011 (rejected in the Senate 97-0 and the last time he actually put his plan down on paper for judgement) showed his true colors; Ever increasing government spending and deficits that grow and grow:
But even if our levels of taxation had stayed at that postwar high of 20.6 percent, that wouldn’t have come anywhere near covering Obama’s unprecedented appetite for spending. Obama’s budget calls for spending an average of 24 percent of GDP across ten years. Pre-Obama, the last time the federal government spent 24 percent of GDP was during World War II (see table 1.3).
Obama disingenuously suggests that if he had been faced with a surplus in 2000, he would have used it to help pay off the debt. Yet three straight $1 trillion-plus deficits haven’t lessoned his appetite for “investments” (particularly in Obamacare, fast trains, and “green energy”), nor his desire to borrow another $2.4 trillion for the next year and a half.
In addition, Obama once again falsely implied that he somehow has a plan to reduce deficit spending by $4 trillion. That’s a phantom $4 trillion from a phantom plan. The only real plan Obama has put forward is his budget, and deficit spending under his budget would be $1 billion a day higher than under the Paul Ryan-authored House budget. In all, Obama’s 10-year budget calls for raising our national debt to a staggering $27.6 trillion — from $14.5 trillion today and $9.986 trillion shortly after he was elected.
2. ‘China’s Military Flexes Its Muscle‘ – Tom Vanden Brook and Calum MacLeod, USA Today
A medium-length article detailing some of the latest developments of the Chinese military and how the US military is reacting to them:
The United States has far more ships and warplanes worldwide, but in just two decades China has created the largest force of submarines and amphibious warfare ships in Asia. Its air force has added hundreds of fighter jets comparable to U.S. F-15s and F-16s. This year China’s military announced it had successfully tested a military fighter jet — the J-20 — that based on video appears to have radar-evading stealth characteristics.
China also announced it is about to launch its first aircraft carrier and is developing an anti-ship missile that can strike from 900 miles away, according to the Pentagon report.
3. ‘If a Law Doesn’t Work, Waive It Away?‘ – John E. Sununu, The Boston Globe
Former Senator John Sununu lucidly explains how the Obamacare waiver campaign showcases the Health Care Reform law’s haphazard and reckless nature. It may not seem like much to ask, but I would like our democratically elected leaders to know what is in a law before they pass it and force us citizens to live under its yoke:
HHS began shutting down the waiver program – an action it announced on a Friday afternoon, the customary way to bury bad news in Washington. Companies now face a September deadline to apply for protection. After that, they’re out of luck. According to the administration, without the special treatment, health care premiums for 3 million workers would have gone up by 10 percent or more. A note to social engineers of all parties: If you have to protect 3 million people from a brand-new law, it probably wasn’t very well written in the first place.
That this was an unintended consequence is clear from the fact that the law never contemplated a need for waivers in the first place. In a stroke of bureaucratic magic, HHS simply granted itself the power, and started dispensing the passes. Only when independent groups started pressing for transparency did things begin to shut down.
The broader lesson here is that the constant need for special waivers is symptomatic of poorly written public policy. It’s a signal that the cost of compliance is unreasonably high; the benefits are hard to measure; and either legislators or regulators have failed to do their homework.
4. ‘The Independent Payment Advisory Board Could Be Obama’s Achilles’ Heel‘ – Doug Scheon, Huffington Post
Speaking of Obamacare failures and unintended consequences, even the Huffington Post has come out against the Independent Payment Advisory Board (IPAB), which empowers unelected bureaucrats to determine medicare coverage:
For conservatives, Independents and a growing number of Democrats, the Independent Payment Advisory Board (IPAB) that was created with the passage of last year’s health care law represents the worst of health care reform. IPAB would allow an unelected board to singularly enact spending cuts in the Medicare program through binding recommendations to reduce Medicare spending.
Last weekend, Reps. Tim Bishop of New York and Eddie Bernice Johnson of Texas were the latest Democrats to join the increasing bipartisan effort that opposes IPAB as they signed on as co-sponsors of Rep. Phil Roe’s bill to repeal it. Quite simply, IPAB has so many opponents because it embodies centralized planning from Washington, D.C., and enables unelected bureaucrats to make decisions about people’s health care. The contrast couldn’t be more clear: a new government body (IPAB) charged with taking resources away from the beloved Medicare program.
5. ‘Why Is the Left So Frustrated with Obama?‘ – Jay Cost, The Weekly Standard
For many conservatives, it is difficult to understand that many liberals are unhappy with President Obama. Leave it to the always enlightening Jay Cost to explain why many liberals have good reasons to be upset with the man they held such hope for:
Between 1968 and 2004 liberals did not win a single presidential election. Republicans won seven of the ten elections held during this period, and Southern, moderate Democrats won the other three. Worse for liberals, both Jimmy Carter and Bill Clinton regularly governed without much regard for the liberal flank of their own party – as can be seen in Carter’s opposition to a universal health care bill sponsored by Ted Kennedy, and Bill Clinton agreeing to NAFTA, a balanced budget, and welfare reform…
Then along comes Barack Obama, an extremely appealing candidate for liberals. For starters, his background as a state senator in Hyde Park indicated pretty clearly that he was on the left-hand side of his party. Yet at the same time Obama proved himself extremely adept at avoiding the kind of entanglements that undermined candidates like Dukakis and Kerry. There was no Willie Horton furlough flap. No Kerry moment – “I voted for it before I voted against it.” And, unlike Al Gore, Obama could articulate traditional Democratic themes without sounding like an over-rehearsed imitation of William Jennings Bryan.
Thoughts? Questions? Recommendations?
1. ‘Give Greece What It Deserves: Communism‘, Bill Frezza, Forbes
No real need to provide an introduction to this bitingly fun take down of modern Greece. Just read it!:
What the world needs, lest we forget, is a contemporary example of Communism in action. What better candidate than Greece? They’ve been pining for it for years, exhibiting a level of anti-capitalist vitriol unmatched in any developed country. They are temperamentally attuned to it, having driven all hard working Greeks abroad in search of opportunity. They pose no military threat to their neighbors, unless you quake at the sight of soldiers marching around in white skirts. And they have all the trappings of a modern Western nation, making them an uncompromised test bed for Marxist theories. Just toss them out of the European Union, cut off the flow of free Euros, and hand them back the printing plates for their old drachmas. Then stand back for a generation and watch.
2. ‘Some Federal Workers More Likely to Die Than Lose Jobs‘, Dennis Cauchon, USA Today
A major indictment of the efficiency of our Federal government bureaucracy is found in this study done by USA Today. In the study, it was found that only .55% of federal employees were fired in the 2010 calendar year. So we tax payers are supposed to swallow that our federal bureaucracies are having a 99.45% success rate in finding effective and worthy employees? It seems that if a department wants to replace someone, they just have to wait for them to die, that’s all:
Death — rather than poor performance, misconduct or layoffs — is the primary threat to job security at the Environmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations.
The federal government fired 0.55% of its workers in the budget year that ended Sept. 30 — 11,668 employees in its 2.1 million workforce. Research shows that the private sector fires about 3% of workers annually for poor performance, says John Palguta, former research chief at the federal Merit Systems Protection Board, which handles federal firing disputes.
3. ‘Home Depot Co-Founder: Obama Is Choking Recovery‘, John Merline, Investor’s Business Daily
An informative interview with a man who built a small business into a giant, hiring thousands of Americans along the way:
IBD: What’s the single biggest impediment to job growth today?
Marcus: The U.S. government. Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we’d tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business. And I mean every day. It’s become stifling.
If you’re a small businessman, the only way to deal with it is to work harder, put in more hours, and let people go. When you consider that something like 70% of the American people work for small businesses, you are talking about a big economic impact.
IBD: President Obama has promised to streamline and eliminate regulations. What’s your take?
Marcus: His speeches are wonderful. His output is absolutely, incredibly bad. As he speaks about cutting out regulations, they are now producing thousands of pages of new ones. With just ObamaCare by itself, you have a 2,000 page bill that’s probably going to end up being 150,000 pages of regulations.
4. ‘Obamacare’s Raid On the Medicine Cabinet‘, John Graham, Washington Times
HHS Secretary Kathleen Sebelius testified before the House Energy and Commerce Committee last week. The subject was the impact the new Independent Payment Advisory Board (IPAB) will have on doctor’s reimbursement rates and whether that would lead to denied care for seniors on Medicare. She denied that there would much impact because savings would be found elsewhere in Medicare Parts C (Medicare Advantage) and D (prescription drug plans).
John Graham provides hard figures showing even if you took all the “savings” from these other programs, the Board would still be far short of reaching it’s cost-cutting mandate. All this to mean that the Board WILL have to cut physician reimbursement rates significantly because it simply has no where else to look:
Although IPAB can theoretically cut Medicare Advantage, the private program used by one-quarter of Medicare beneficiaries, Obamacare has already subjected Medicare Advantage to $145 billion in cuts this decade. This analysis suggests that IPAB will have to carry a lot more weight than expected. In 2019 alone, Medicare spending will likely be about $75 billion higher than officially estimated – or 7.5 times greater than what IPAB is called upon to save in the official estimate. For the entire decade, Medicare spending will be more than $400 billion greater than Obamacare estimates.
5. ‘The Half-Trillion Plan‘, Charles Krauthammer, Washington Post
With the debt ceiling THE issue in national politics right now and several plans floating around, Charles Krauthammer has an interesting (and in my view, most persuasive) take on the options facing Congress and the President. He calls it the Half Trillion Plan:
The debt ceiling looms. Confusion reigns. Schemes abound. We are deep in a hole with only three ways out: the McConnell Plan, the G6 Plan and the Half-Trillion Plan.
— The McConnell essentially punts the issue till after Election Day 2012. A good last resort if nothing else works.
— The Half-Trillion raises the debt ceiling by that amount in return for an equal amount of spending cuts. At the current obscene rate of deficit spending — about $100 billion a month — it yields about five months’ respite before the debt ceiling is reached again.
If you have other articles you want to recommend or have an opinion on our choices, let your voice be heard in the Comments.
The Washington Post chart above (H/T Cato) clearly lays out three key truths: 1. The United States government has a structural problem controlling it’s level of debt and spending 2. The growing size of the federal government and its debt has been a bipartisan affair 3. President Obama’s tenure has greatly exasperated America’s short and long term financial situation.
In 30 years the United States’ debt has increased from $1 trillion dollars to $14 trillion and if the chart continued into the projected future, well, you would have had to scroll even further down to read this. I may not be an economist or an expert on Congressional budgets, but I don’t have to be to know we are on the wrong track. The past few weeks we have constantly heard the President and numerous other political leaders strongly defend the status quo. Sure there is much talk about ‘cutting spending’, but where are the details?
We need much more than gimmicks and baseline budgeting tricks to solve our real problems. We need leaders to tackle the transparent challenge shown in the aforementioned chart and we just aren’t getting it from this White House and Senate. For gosh sakes, the US Senate has put a constitutionally mandated budget in over two years! Why haven’t they? It’s pretty simple: If you never take a stand, you never have to take responsibility. I’ll finish with the first and last entries on Congressman Paul Ryan’s (a man who put out a budget all by himself, are you listening US Senate?) timeline of the Obama administration’s financial stewardship:
January 20, 2009
President Obama sworn into office
- President tells the American people in his Inaugural Address: “Those of us who manage the public’s dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.”
- Debt Held By Public = $6.31 trillion
July 15, 2011
President Holds Press Conference: “We’re Running Out of Time” to Deal with Debt
- President Obama tells reporters: “I’ve got reams of paper and printouts and spreadsheets on my desk, and so we know how we can create a package that solves the deficits and debt for a significant period of time. But in order to do that, we got to get started now.”
- The American people have still not seen any “paper” or “printouts” of what specific spending cuts the President supports. The American people have still not seen any “spreadsheets” from the White House to corroborate their claims of having offered a deficit reduction plan.
- While it’s long past time for Washington “to get started now” on tackling our debt problems, President Obama has still not proposed a credible budget, and Senate Democrats have still not proposed any budget.
- Debt Held by Public = $9.75 trillion
Saturday’s lead editorial in the Wall Street Journal poignantly identifies the problem with the President and the liberal elite’s mindset in today’s politics: let’s focus on new programs and bury any discussion of how we’re going to pay for them or the current ones we already can’t afford. The WSJ says it best:
“Maybe the most unknowing moment from President Obama’s debt-limit press conference the other day was when he said that, ‘I’d rather be talking about stuff that everybody welcomes, like new programs.’ Define everybody—and, please, let us know when the new programs are going to stop.”
Yes, Mr. President, please tell us when we can finally start addressing the record debt and deficits. Or the impending bankruptcy of Medicare. Or the several trillion dollar shortfall in the Social Security Trust Fund. Or the rising interest that we have to pay to service our massive debt to foreigners (41 cents of every dollar we spend is borrowed!). Or a handful of other disastrous budgetary issues we have ignored over the past several years (like pensions, for starters).
In light of this deep hole we are in as a country – and the very real display in Greece of what our future might look like if we stay on this current path – it is absolutely stunning to think we are still pondering new government programs. Just a cursory look at the several thousand federal programs and agencies that we have now should put to rest the thought that we need any more government or that the government we currently have is somehow cost-effective.
Yet this is the guiding light of modern day liberalism. As Thomas Sowell recently put it when discussing President Obama’s advocacy for a new high-speed rail program, “One of the most successful political ploys is to promise people things without having the money to pay for them. Then, when others want to cut back on the things that have been promised, blame them for lacking the compassion of those who wrote the checks without enough money in the bank to cover them.”
Nevertheless, with an ever increasing percent of the American population paying no federal income taxes, receiving government-run health care and cashing in on welfare programs (e.g., unemployment benefits, food stamps), the argument for a fiscally sane federal government is becoming a more difficult sell.
Sadly, it might take a default on the national debt before Americans realize we are on an unsustainable path. In the meantime, it appears the conductor (President Obama) will be sitting in the caboose figuring out how to add more cars to the train.
Senator Barack Obama, March, 2006:
“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” he said. “It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”
Senator Obama was right. Too bad, he’s now the President and appears to have not meant a word of that statement above. Too bad for all of us. President Obama has tried to portray himself as the adult in this debt ceiling debate, but when it comes to taking care of our nation’s fiscal well being his administration has made a drunk teenager in love look responsible and mature. Just months ago he released a budget so unserious that his own party and the entire Senate disowned it 97-0. He came into office to lead a country facing massive debt and managed to make the situation even worse as our debt has sky rocketed in the past 3 years. He not only has failed to do anything to rectify our coming entitlement crisis, he has actually made them even worse by passing a new health care entitlement and vilifying anyone who is willing to address Medicare, Social Security, and Medicaid, all of which are facing major funding shortages. Barack Obama is many things, a good leader, he is not.