The Man of Change?

Well here we are just six days away from the much publicized summit on healthcare reform the President announced during the State of the Union Address. Some foolishly believed that his invitation to ranking Republican’s signaled his understanding of the message voters had sent in the New Jersey and Virginia gubernatorial elections and finally, the Massachusetts special election to fill Ted Kennedy’s Senate seat. Apparently that assumption was premature and the election of Republicans to all three of these vital races is being dismissed as easily as the town hall meetings and Tea Parties have been.

It is bizarre that the Democrats can be this blatant as to their intentions. Behind the scenes work to reconcile the Healthcare Bill is still progressing even as the President continues to at least say, that he wants the best ideas from both Parties. Harry Reid and Nancy Pelosi have both signaled their intention to “go nuclear” and rely on a reconciliation tactic to pass the bill with a simple majority, causing reasonable people to ask what kind of summit can this be if these negotiation are till taking place in secret and these kind of plans are being made before Congressional Republicans are even given the opportunity to present their ideas and compromises?

Scott Brown was not simply a message for the Democrats. His campaign was centered on the promise that he would be the 41st vote that would stop the race to pass a healthcare reform bill that the majority of American’s do not want. As support for the President wanes, the trust the American people have in the Democrat’s healthcare plan evaporates at an astounding rate. In recent polls, most Americans would prefer that the plan be scrapped and that the government turn its attention to the economy and the faltering job market.

Regardless of the loud and clear voice of the people, Congressional Democrats are standing firm because their President said they must move forward and also because the Progressive movement has been holding the Democratic Party hostage for decades. That is why Indiana Democrat Evan Bayh decided to throw in the towel and refuse to run for another term. He was bitter in his statements about the ineffectiveness of Congress and said that he could accomplish more as a private citizen than he ever could as a member of the Senate. Alabama Congressman Parker Griffith recently switched Parties for much the same reason. He joined the Republican Party because the Democrats under the Progressive assault had lost their way. They were no longer the Party of the people but some weird group of far left elitists that no longer cared to hear the people. That is why the President’s agenda is being propelled forward as the economy continues to crumble; they have been in effect, deafened by their own rhetoric.

To continue their push for healthcare reform and cap and trade they must convince you that the economy is already in recovery. As the President and the DNC struggle to convince people that the Recovery Act (Stimulus Bill) is working fine and has “saved or created” two million jobs, the U.S. Department of Labor’s own website says the job loss average for the past month has been 467,500 jobs lost in each of the last four weeks. Of course “saved jobs” is the new catch phrase since it is as impossible to disprove as it is to quantify. You know, that we might have even begun to believe some of that if Joe Biden hadn’t spilled the beans in an interview on Wednesday. As he spouted the administration line of “saved jobs” he added that the Recovery Act is a two phase program with the money for actual job creation loaded in the second half of the program. He explained that most of the funds spent in phase one had been targeted to offset the cost of State unemployment benefits and to provide tax relief.

Ok, I admit I’m a little confused here. The job creation funds have not been disbursed yet but the Recovery Act has already saved or created two million jobs? “Most of the funds spent in phase one were to offset the cost of State unemployment benefits and to provide tax relief” but the Recovery Act has already saved or created two million jobs? Is Vice President Biden saying that the act of collecting unemployment insurance is now considered a job? If so, is it a created job or a saved job? Maybe it’s both. If you had already been collecting benefits and are now drawing on an emergency extension then it is clearly a saved job but if you are one of the unfortunate 467,500 that are still losing their jobs every week; well, then that must be a created job.

All of this nonsense of saved jobs and created jobs flies in the face of the statements made by White House Economic Advisor Christina Romer in a Congressional hearing in October of 2009. Romer testified “Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009 and by mid-2010 fiscal stimulus will likely be contributing little to further growth.” Of course when the economy did not respond as hoped, Romer was obviously asked by the White House to revise her assessment. While recently appearing on the February 17th edition of Good Morning America, Romer said in response to questions about the economy that the greatest effects of the Stimulus Bill have yet to be realized.

The inconsistencies aren’t something shocking. In fact, this administration is amazingly consistent in its inconsistency. If you speak with five different people in this administration you will get five different numbers of the jobs the stimulus bill has “saved or created”. What doesn’t change is the mindless defense of the actions they have already taken or are hell bent on passing into law. Regardless of every possible economic index you can look at, the stimulus bill is not only a failure but has resulted in a “job deficit” as the economy fails to respond. What they absolutely refuse to see is that they can have another five stimulus bills of equal amount and still not create lasting private sector employment. Business is not responding because as this administration continues to apply its short term fiscal Band-Aid, the threat of future tax hikes and new regulations are still part of the overall plan.

The Healthcare Bill is just one of those black holes that are making businesses apprehensive. We still don’t know what is being crafted in the dark up on Capitol Hill. What will the tax liability be? At what income level does it begin? How many employees can I have before the mandate to provide coverage hits me? Will the plan I already provide have an additional tax levied against it? How can responsible business owners make a decision to hire additional employees until they know if they can even remain profitable after the Bush tax cuts expire and the capital gains tax go up in 2011?

Cap and trade, if passed, will increase energy costs by 65% in the first few years and more that 100% by 2015. The only thing that has allowed American businesses to remain even marginally competitive against nations that pay their employees five dollars a day is affordable and abundant energy. Proponents of cap and trade claim the difference is pennies a day but California has already installed Smart Meters, a major component of Smart Grid, the key to cap and trade. California energy costs to PS&G customers have skyrocketed and they are ready to revolt at the increases they are experiencing. Bear in mind that the cost of purchasing carbon credits to produce their electricity aren’t even part of that increase yet. That is where the real kick in the pants will come from. There are estimates that claim cap and trade will cost America five million jobs or two jobs for every so-called “green job” it creates. Looking at Spain, I think that estimate is conservative if not overly optimistic. Spain was suckered into the whole plan of creating a green economy that Obama is trying to sell us and unemployment in Spain has already passed 19%.

So where is the change? The actions of this administration are bordering on criminal; there is no transparency other than a few carefully orchestrated photo ops and the President has broken every promise he made during his campaign. The legislative process itself has been hijacked by Progressive radicals and special interests and even Obama’s friends in the Community Organizing business have been writing key parts of costly legislation that Congress won’t bother to read before passing. If Progressive Democrats continue to ignore the impact their plans are having on the economy and force healthcare through while unemployment is still close to 10%, the backlash will cost them both the House and the Senate in 2010. The damage they are doing now has already insured a long and hard road to recovery and the measures that will have to be taken to right the wrongs will be painful and unpopular. I can only hope that the American people will wean themselves from the public teat so we can actually address the spending problems in Congress before the world economy forces even more drastic change against our will.

Paul

New Budget - Same Old Story

One would have thought that after the recent Democratic losses in three States, two of which were staunch Democratic areas, that the President would have heard the message from the voters loud and clear. Well, apparently they still can’t hear you. Glenn Beck warned on one of his shows after the Massachusetts victory for Republican Scott Brown that one of two Presidents would emerge from the ashes. Either we would see a politician that would move to the center as Bill Clinton did after his 1994 midterm thrashing or we would see Obama the ideologue stomping on the gas to force his agenda through. For those that didn’t see a glimpse of the ideologue during the State of the Union address we have additional proof today in the President’s budget proposals for 2011.

The budget for FY 2011 announced today will top $3.8 trillion dollars and add another $1.56 trillion dollars to the national debt….if we are lucky. White House Budget Director Peter “Loverboy” Orszag claims that the President’s plans will trim over $1 trillion dollars from the Federal Budget within the next ten years but that is one of the oldest tricks in the books. All the President has to do to achieve that is to announce that they didn’t spend money they were planning to and Viola! $1 trillion dollars has been trimmed from the Federal Budget. It is a phantom trillion, a savings that is as hard to prove as all of the “jobs saved” under the last stimulus bill. Before the President could be able to claim such a savings with authority, he would have to be believable and that is equally as laughable.

President Obama's budget plans project $5.08 trillion in deficit spending over the next five years -- a 35 percent increase over what the administration projected a year ago. Even the current budget deficit is suspect as the revenue figures include income from Cap and Trade; a bill that has not yet passed Congress and if economic conditions do not vastly improve, will never pass. Just in case you have lost track of Cap and Trade, the administration is now trying to sell this massive energy tax under the heading of a “comprehensive energy bill”. Similar to the renaming of global warming to climate change now that the planet appears to be cooling….it still stinks no matter what it is calls.

To spite the President’s call for development of American domestic energy resources during the State of the Union Address, including oil, coal and nuclear power, this budget cuts subsidies for fossil fuels netting a reduction of $31.5 trillion dollars over ten years. That will raise costs for American energy consumers, only adding to the additional costs for energy promised if the President’s energy bill is passed. Pass out the candles folks…the lights are going out if Obama get’s his way. The fact is that either we develop domestic resources as politician Obama promised during his speech or we tax the hell out of them as ideologue Obama promises in his budget. If I had to guess which one to bet on, all I have to do is look at his track record. His speeches have so far, meant nothing while the black and white, tax and spend ink on the pages of his budgets have seized the day. Perhaps I should have said red and white, tax and spend ink?

So where is the attention to the plight of unemployed Americans? Certainly, you won’t find it in this budget proposal. Ever since the inception of the personal income tax under Woodrow Wilson, the historical evidence proves over and over that increases in taxes reduce overall revenue to the treasury because of the negative effect they have on business. Even Obama said that small business provides more than half the jobs in the United States. Whether or not he actually believes that is up for debate but he did say it. They why does every major initiative the President is trying to get passed into law contain oppressive new regulations and massive new taxes that will strangle the number one job creator in the United States?

While the White House happily announces that the mediocre growth of the economy in the last quarter is proof that the recession is easing, much of that growth was brought on by government spending on pet projects that provided little or no relief to the unemployed. The hopeless ideologue and his “progressive friends” in Congress (his words, not mine) still fail to see that government does not create jobs. Only the private sector can create real and lasting employment and only during those odd years when government stops meddling in their affairs. Government can create jobs within their own bloated bureaucracies but those “support” jobs still rely on collecting taxes from income generated by real companies that pay real wages to real employees.

In a quick summary taken from business 101, companies basically have two kinds of employees beyond the owners; sales people that generate revenue for the company and support people that use a portion of that revenue to provide support for the sales people. When times are lean and cuts must be made, the first positions any company will eliminate are support staff because it makes no fiscal sense to eliminate the people that actually earn money for the company. What ideologues and Congressional Progressives still fail to understand is that the Federal government, in its entirety, is the support staff for the American people. We are the revenue generators and there isn’t a nickel they spend that does not come directly from our earnings. Contrary to every known law of fiscal responsibility, the Federal government under the Progressive banner is expanding the support staff of the nation at the expense of the people that actually earn the money. It cannot work.

Every time that the Federal government has cut taxes it has led directly to an expansion of the economy and to the growth of revenues to the treasury. The increases in debt have always come from a spendthrift Congress and their history is to spend every penny they can get their hands on, and more. The best possible ratio of taxes to GDP is 20%. That is when you can afford a reasonable level of government and still maintain decent measure of economic growth. Of course that has to be the real GDP; not one that has been inflated by the influence of government stimulus spending. The other segue is that the taxes collected cannot exclusively be taken from those that are the investors and creators of the businesses that actually create jobs. Only the demented views of the radical left see wealth as an evil worthy of punishment; the rest of us see it as a statement of opportunity and the rewards of hard work. The truth is that I don’t believe they really think wealth is evil. Most of them are wealthy in their own right. They do use the evil rich argument as a tool to gain the support of the average American when they pass tax plans that confiscate unconscionable amounts of that wealth.

There appears to be no recognition in Washington that we are in serious economic trouble and no one but the government has ever proposed that they can spend themselves out of debt. Just a few short years ago, China was purchasing 50% of the notes that fund our annual deficit. Now that the dollar has shrunk thanks to the runaway printing of money at the Federal Reserve, China has lost billions as the interest we paid them to service the debt has diminished over 17% this year alone. The net result is that China only purchased 4% of our deficit spending in 2009 and that is just a portend of things to come.

The balance of our deficit had to be financed elsewhere, with the American people picking up a large part of it. Don’t kid yourself; that is not an indication that the American people have faith in the solvency of the Federal government. That really speaks about the lack of faith in the nation’s banking system. Wary investors are asking the Fed to hold their money, even at zero interest as the last safe haven before they begin dumping dollars and buying gold. When that begins to happen it will signal that events are about to enter a new and dangerous territory….a territory last visited by the Weimar Republic after World War One.

Paul