October 20, 2012

Romney’s “Unique Qualifications” for the Economy

The Romney campaign likes to refer to Mitt as “uniquely qualified” for the office of the presidency. While I enthusiastically agree, I’d like to extend the phrase to a particular subset of the role: economic policy.

A couple days ago, I argued that a political windfall would potentially lay at Romney’s disposal should he win November 6th. To recap, that windfall would depend on a couple significant developments: job growth would have to pick up, the deficit would have to decrease, and Mitt would have to persuade the American public that his leadership directly contributed.

This time around, I’d like to go through a few ways Mitt’s background and policy positions can make progress on the most pressing component of the equation, the economy, in descending order of bipartisan support needed and, thus, ease of implementation.

First and foremost, day one of a Romney administration (and perhaps even the day after his election) would present a crystal-clear signal – a green light, of sorts – to the business community. We’ve seen countless stories about how the investor class and business leaders have increasingly kept cash on the sidelines, because of the painful uncertainty regarding tax and regulatory policy and the distinctly hostile attitude Washington and the culture at large has taken toward wealth, business, and success in general since the financial crisis of 2008.

Having Romney in the White House would essentially tell the business community, “There’s a new sheriff in town, and this one appreciates you. This one values what you do, so please, do it. We won’t demonize you, we’ll celebrate your achievements and contributions.” While policies obviously matter, rhetoric does, too. Having a president who understands the business community and uses the bully pulpit to lead a change in attitude toward capitalism, free enterprise, and success in general will make a huge impact from day one.

Now, onto the issues that would require legislation, starting with the one that would have the most bipartisan support: corporate tax reform. Our left-of-center friends and even President Obama himself often note, correctly, that the President supports reform of the corporate tax code. However, this is a matter of priorities, and Obama clearly doesn’t place corporate tax reform high on his list. A President Romney, however, would. And this issue truly does have a great deal of bipartisan support, so much so that Romney could easily get legislation on his desk in the early days of his administration. Numerous authorities have studied the stimulative effects of cutting the marginal rate to 25% or less – essentially the OECD average, reducing or eliminating deductions, and instituting a territorial tax system. This is an easy one, and Mitt would get it done, quickly.

The next issue would necessitate more bipartisan support, but still less than those I’ll discuss later, since Republicans could go the reconciliation route: healthcare reform. Mitt has made it no secret that he would embark on an endeavor to repeal Obamacare as soon as he took office. Removing the tax increases and crushing regulatory burden Obamacare would impose would certainly help job growth, but to promote the maximum positive impact on upward mobility, Romney would need to follow up Obamacare repeal with reform of his own.

Simply enabling states to “craft their own solutions” represents a marked improvement over the status quo, but he could take it one step further by moving toward a system that detaches healthcare from employer-based coverage. Empowering individuals to take their insurance plans from one job to another and especially to self-employment would make MASSIVE progress on one of the most important issues of the day: income growth. After all, studies have shown that people usually obtain the greatest raises when they accept promotions at different companies, but many hesitate to take the leap due to benefit-based concerns. Healthcare reform like that described above, along with the aforementioned corporate tax reform and improved attitude toward the business community would represent some of the most powerful measures Washington has taken to promote income growth and upward mobility in years. We must not underestimate the magnitude of this proposition, not merely from a political standpoint, but also from a personal perspective, as it would make a real, noticeable impact on millions of everyday lives.

After tackling these issues, President Romney could then move onto those that would involve the greatest across-the-aisle cooperation and, thus, the most challenging paths forward: personal income tax reform and entitlement reform. As Gov. Romney so compellingly argued in his first debate with Pres. Obama, reforming the personal income tax code would have a stimulative effect on the greatest job creators in our economy: small businesses.

And entitlement reform, while having less of an immediate effect on the employment picture, would still help, as it would supply another positive signal to the financial community – that taxes will not skyrocket in the future to chase runaway entitlement spending, and that America’s political leaders can break the gridlock on key issues. However, this would obviously involve extraordinary negotiation, effort, and political capital. As a result, a Pres. Romney should focus on it after addressing the other topics cited above, since those reforms and the subsequent boosts to the economy would create a proverbial political wind at his back and maximize his ability to secure public support of his positions.

Of course, while Mitt’s background of executive experience and cooperation with Democratic legislatures act as key components of his “unique qualifications”, we mustn’t discount the helping hand his running mate would play, as well. The influence and contacts Paul Ryan has built over his 13 years in the House would prove instrumental in stewarding Pres. Romney’s agenda through Congress.

In the end, Mitt Romney’s experience and positions on the issues do, indeed, render him uniquely qualified to provide the leadership and reform necessary to confront the matters most salient to the American public: economic revitalization, income growth, and upward mobility.

by @ 1:44 pm. Filed under 2012 Misc., Campaign Issues, Deficit, Economy, Mitt Romney, R4'12 Essential Reads, Spending

October 18, 2012

Great Challenges Bring Great Opportunity

Many within and outside the Republican Party have commented on the intimidating situation Mitt Romney would inherit (yes, I went ahead and used one of President Obama’s favorite words) if he won this election. The remarks usually fall along the following lines: “Romney will have to make so many tough and unpopular decisions to fix the economy and deficit that he won’t win a second term.”

While I certainly agree with the assessment of the situation facing the tenant of the Oval Office come January 20th, I’ll add a bit of a caveat to the forecasting of the 2016 election: because a President Romney would encounter such difficult circumstances, and because American voters understand this, a political windfall that would bear fruit for the Republican Party for years would potentially lie at his disposal.

After enduring almost four years of a near-collapse and painfully weak “recovery”, Americans have for the most part fully internalized the economic circumstances facing our elected officials. Therefore, they wouldn’t expect immediate results from a President Romney. In fact, many probably doubt he could even make a significant difference. The frequent references to a “new normal” by countless talking heads only compounds these beliefs. In effect, low expectations have become baked into the cake.

But, as we saw after the first general election debate, low expectations can become a tremendous advantage. If the economy started to produce strong job growth by the second or third year of a Romney administration, if the deficit finally began to shrink, and if Romney could persuasively argue that his actions contributed to these improvements, he’d enjoy a massive swell in public opinion, possibly to the extent that he’d cruise to a landslide re-election.

If this became reality, it could reverberate throughout the American political landscape for years. Bill Clinton showed just how effectively a president can re-brand his party with the right policies, messaging, and results, when he changed the public’s perception of Democrats from heirs to the Vietnam-protesting counterculture to champions of the middle class, siphoning off millions of votes from suburbanites and college students in the process. Under the right circumstances, Romney could re-brand the GOP as the “competence” party that gets things done on the big issues of the day (especially if he can spearhead and sign entitlement reform) and Democrats as ideologues out of touch with mathematical reality.

Obviously, A LOT would have to fall into place for all of this to happen, but the possibilities are very real.

August 3, 2012

Paul Ryan: Still the Best Option

These ideas began as a comment on my colleague Matthew Miller’s helpful reminder of Paul Ryan’s sheer brilliance when it comes to philosophical framing of the choice we face this November. I decided to turn it into a full-fledged post, to open up some debate on one of my favorite political topics, the Veepstakes, just ahead of Gov. Romney’s final decision.

Back in April, I advocated Congressman Ryan as Gov. Romney’s best choice for VP. Despite the scuttlebutt that Tim Pawlenty has pulled into a commanding lead on Mitt’s Veep depth chart, I maintain my preference of Ryan (and this comes from someone totally in the tank for T-Paw back during the primary campaign). I also take the view that Ryan would actually help more than Pawlenty among younger voters and moderates, by improving the ticket’s – and the Republican Party’s – brand.

First and foremost, Rep. Ryan would bring enormous intellectual heft to the ticket, as evidenced once again by the videos in the aforementioned Matthew Miller post. I don’t mean this to denigrate T-Paw as an intellectual lightweight, but few, if any, can better articulate the merits of capitalism, free enterprise, and limited government than our dear Budget Committee Chairman. This would go a long way toward changing the perception of the GOP (among young voters, moderates, suburbanites, and other growing demographics) from a rural-dominated group deficient in critical thinking to a liberty-focused, philosophically sophisticated bunch – closer to the positioning the party established during the Reagan years.

Many in Romney’s corner have voiced concern that tapping Ryan would shift the conversation away from the economy and onto his budget proposals. I may stand alone here, but I would welcome this shift if it changed the target of the Democrats’ attacks from Romney’s wealth – their current topic du jour – to entitlement reform. Class warfare is very powerful politically. It plays into voters’ insecurities and jealousies. People can do scary things when their emotions take over. And like it or not, Mitt already struggles with the “empathy” test. That, along with the electoral efficacy of class warfare, largely accounts for why Democrats have trained their fire on Mitt’s wealth so often in the campaign, and they show no signs of discontinuing. If he figures to get attacked for his success, anyway, why not at least strive to extract some benefit from it, by going all-in on long-term, structural budget reform with Rep. Ryan?

And that brings me to my next point: adding a counter-punch to the Romney campaign. Mitt has drawn criticism for relying too heavily on negativity, instead of following up his critiques of the President with proposals of his own. What better way to do that than to add arguably the biggest policy wonk among Republican elected officials in Washington, not to mention one of the most persuasive salesmen of conservative reform? Instead of simply arguing, in effect, “Obama’s policies stink,” Team Romney can go on the offensive with, “Obama’s policies stink, and we can do better. Here’s how.” We must not underestimate the significance of this; voters don’t always just want to vote against someone or something, they prefer to vote for something else, if given the chance. This especially holds true if the person they would have to vote against retains strong popularity on a personal level.

Last but not least, Ryan has spent 13 years in Washington. While that in itself carries some risk, it also means he has forged valuable relationships and connections on the Hill. Recent administrations have demonstrated the advantages of a vice president well-versed in the legislative process. As such, a Vice President Ryan could prove invaluable with spearheading a President Romney’s agenda through Congress. All the executive experience in the world doesn’t matter very much if the president can’t get any legislation passed. Ryan’s ability to help in this realm adds the figurative cherry on top for his case.

In the end, Paul Ryan may not have the greatest chances of getting the eventual nod from Gov. Romney, but when we take a step back and analyze the long-term implications of this campaign, he remains the best option.

July 9, 2012

The President’s Nifty New Tax Proposal Just Stinks – Politically and Mathematically

Today, according to Fox News, the President will make a speech that includes a proposal to raise taxes on those making more than $250,000 per year. Fox says Obama will make the pitch on the grounds of “tax fairness.”

While the effect of this tax warfare strategy for the President during the rest of his re-election campaign is unknown, it does put him in a bit of a tight spot with Congress. As the Wall Street Journal noted this morning, a number of Senate Democrats have gone on the record either opposing the President’s position or being very hesitant to fully back such a proposal. Without their support, such a proposal will not pass the Senate. In fact, I would go so far as to say their opposition could very well embolden Republicans in Congress to call the President’s bluff and offer their own formal counterproposal.

Additionally, the math is not on the side of the President. Using numbers from the liberal Center for Budget and Policy Priorities, which says extending policies for those making over $250,000 would cost the government $829 billion over ten years, the President’s proposal would negate about 1.88% of spending over the next decade. And that assumes we spend what the Congressional Budget Office’s (CBO) baseline estimate says we will – $44 trillion. If we don’t enact the significant spending cuts CBO includes in its baseline budgeting, I suspect spending would be much higher, somewhere in the $47 trillion to $50 trillion range. Which makes the President’s proposal related to fairness when it comes to deficit reduction even more laughable.

Finally, to quote a John Hawkins tweet,

The people who aren’t paying any income tax at all right now are using gov’t services. Is 0 in income tax their “fair share” of the taxes?

While almost all Americans do pay some sort of federal taxes – from taxes on cigarettes to payroll taxes – John’s point is an excellent one: the 50% or so of taxpayers who don’t pay non-payroll income taxes benefit from federally-funded roads, education services, immigration control, the military and other federal services. Who, then, pays for these services? According to the Tax Foundation in an October 2011 report, “The top 5 percent earned 31.7 percent of the nation’s adjusted gross income, but paid approximately 58.7 percent of federal individual income taxes.” In short, most taxes for non-retirement social spending – the same social spending liberals are so keen on expanding – are being paid by those people liberals also say don’t pay enough in taxes – the top five percent, whose income was a relatively modest $154,643,000 in 2009, according to the Tax Foundation.

This fight over the Bush tax cuts has been taking place for over a decade, and will continue as we head towards the “fiscal cliff” on January 1, 2013. Unfortunately, this debate ignores what the country really needs in the tax code: a complete revamp that includes elimination of most loopholes, lower rates for all, and a transition to either a low, single-rate income tax system or a national sales tax with no income taxes. While the Journal seems optimistic that extension of the Bush tax policies would leave room for major tax reform, I think the President’s nifty new proposal basically undercuts the entire debate, substituting economically fair and growth-encouraging tax reform for class warfare that encourages no growth and barely makes a dimple in the debt the country is about to accumulate.

[Originally posted in the Hot Air Green Room.]

by @ 8:19 am. Filed under Deficit

June 28, 2012

The Worst Political Outcome For The Democrats

As I wrote yesterday on this space BEFORE the Supreme Court decision on Obamacare:

“A complete upholding of the law will do little to improve its popularity. In fact, public opinion, if it is upheld, will most likely intensify its opposition, and bring out in November those who are against it, particularly among independent voters, all seeking to vote for those who would repeal it.”

The Court decision, somewhat unexpected by many who either support Obamacare or oppose Obamacare, now re-emerges as a central issue of the 2012 national elections, as it clearly was the central issue of the 2010 elections. Those elections resulted in a landslide against the Democrats who then controlled both houses of Congress, as well as the presidency. The national electorate was clearly in favor of repeal of this legislation, as has been reinforced by virtually every poll since. With control of only the U.S. house, but not the U.S. senate and the White House, Republicans were powerless to repeal the Obamacare law. If, as some thought, only the health insurance mandate would be ruled unconstitutional, it now appears the Court would have found the whole law invalid. This would have then removed Obamacare as a central issue of the 2012 campaign, and enabled President Obama and his congressional allies to refashion the legislation to their political advantage.

As matters now stand, however, all of the profound fiscal problems with Obamacare, particularly its impact on federal debt, remain. PLUS, the Court decision now unarguably makes the mandate a TAX. In fact, it is a huge tax increase. If Obamacare were unpopular before this, it is now likely to be even more so because it is indelibly a tax increase. Candidates for the U.S. house and senate can now be simply asked the question: Do you support the repeal of the Obamacare tax increase? If Republicans are skillful in demonstrating over the next several months just how damaging to the economy and to the individual voter’s pocketbook Obamacare truly is and will be, the political cost of the Supreme Court decision to the Democrats will be immense.

The ball is now in Mitt Romney’s court. The GOP leaders of the Congress have been given a political gift of historic dimensions.

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-Copyright (c) 2012 by Barry Casselman. All rights reserved. Please visit Mr. Casselman’s personal site.

by @ 10:59 am. Filed under 2012 Misc., Campaign Issues, Deficit, Mitt Romney

June 27, 2012

A Curious Aspect About The Obamacare Decision

The U.S. Supreme Court decision regarding the constitutionality of Obamacare will have major implications and aftershocks in the law, but curiously, no matter what the Court decides, the political consequences may be not be much different whether or not the Obamacare legislation is completely upheld, partially upheld or entirely struck down.

That is because this healthcare legislation is so unpopular in the nation, and so fraught with economic problems, that the Obama administration is destined to pay the same price for its enactment in any scenario.

A complete upholding of the law will do little to improve its popularity. In fact public opinion, if the law is upheld, will most likely intensify in opposition, and bring out in November those who are against it, particularly among independent voters, all seeking to vote for those who would repeal it

A partial upholding of the law, presumably striking down the mandate provision, would alter the fundamental structure of the legislation, and depending on the details and language of the Court decision, make the legislation mostly unworkable. The incentive to abolish much of the remaining law would then be politically strong, thus also bringing out voters in November to assure its total demise (and a new approach to healthcare reform).

If Obamacare legislation is completely struck down, it would be a political disaster for those Democrats who supported it, including the president and former house speaker Nancy Pelosi and current senate majority leader Harry Reid. Controlling the White House and both houses of Congress in 2009 when this legislation was passed, it would mean their only truly major public policy achievement had been an inherent failure. Given public opinion, and the unfolding fiscal consequences of Obamacare (much higher debt and public costs), there would be little persuasive argument to return them to office in 2013, presumably to repeat their performance from 2009-2012.

There is considerable suspense about the Supreme Court decision. It will be judicially very important, and much commentary will be made about it. But there will probably be little suspense about its political consequences, When major and historic legislation is passed by a political party and signed into law by a president, the proudly stated (and absurd) notion that there was no need even to read its 2000 pages of details until AFTER it went into effect, doomed it with the most important “supreme” court of all, the voters.

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Copyright (c) 2012 by Barry Casselman.  All rights reserved.

by @ 4:38 pm. Filed under 2012 Misc., Campaign Issues, Deficit

May 31, 2012

The Coalition to Reduce Spending

The 2012 election is about far more than just the single office of the presidency.  The fate of our nation will be shaped more so by the hundreds of congressmen, the thousands of state legislators and other local office holders, as well as all the bills and ballot issues that will be voted up or down in November.  At the forefront of the effort to win the battle against the unsustainable national debt is a new organization called The Coalition to Reduce Spending.  There is a bit of political nepotism in my post here, as the group is founded and run by my friend and colleague Jonathan Bydlak (finance director for Ron Paul 2008 and Gary Johnson 2012), but the Coalition to Reduce Spending has the resources and the ground game to make a major difference.  You can become a part of the effort to get this country serious about tackling the national debt, by signing up at their website, and following their progress on Facebook and Twitter.

by @ 7:00 pm. Filed under 2012 Misc., Conservatism, Deficit, Spending

May 5, 2012

The Cofferdam Approach To The Economy

My home town has been an historic and major inland shipbuildng port for two centuries. Oliver Hazard Perry’s fleet, which won a decisive victory on Lake Erie in the War of 1812 (“We Have Met The Enemy And They Are Ours”), was built in Erie, PA, and later the first iron-hulled warship, the Wolverine,, was built in Erie several decades later. Over the next hundred years, ships of all sizes were built by various boat builders at the port of Erie which also had the first lighthouse on the Great Lakes, and still has a major U.S. Coast Guard station. A few years ago, this industry was revived locally, and currently huge freighters, tugboats and smaller ships and boats are built and repaired in the city. My own interest in ships has kept me (now living far away) abreast of this industry, and in the course of my reading about it, I came across a term I did not previously know— a cofferdam.

A cofferdam (sometimes just called a coffer) is a temporary structure built over water which enables ship repair (among other purposes) to take place in a body of water on dry land. Usually using a steel enclosure, the water is removed and the space filled with dirt. It’s an expensive process, but it is done when putting a ship in drydock is unfeasible or, as is often the case, even more expensive than a cofferdam. If you live in a port city, especially on a Great Lake or near a major river, you have probably seen a cofferdam. The cofferdam. being temporary, is removed after use.

It has occurred to me that the way politicians are dealing with the current economic crises, is very much like using a cofferdam. Unfortunately, while the cofferdam is a practical and necessary device in ship repair, I think the fiscal cofferdams appearing in the US. and Europe these days function in an opposite manner. The U.S. economy, including Social Security, Medicare and Medicaid, the private pension fund system, mortgage banking system, healthcare financing system and other major economic structuress are in need of historic and very major repair. The great ship which is our economy really should be taken into drydock for serious and critical work. Putting an economic ship into drydock , however, involves delays, dislocations and other “inconvenient” problems, but if you don’t want a ship eventually to sink, it must be done.

Our politicians don’t want to face the hue and cry that would come from the citizenry (and voters) if they put the U.S. in the absolutely necessary (in my opinion) drydock to get the job  of repairing our economy done right.

So the politicians avoid this drydock and construct economic cofferdams that only provide short-term and superficial repair. An even more egregious example of this is the behavior of politicians in the European Union today. Their debt problems are perhaps even more immediate and serious than ours, but instead of facing up to imminent dangers of delay, European leaders are constructing cofferedams everywhere on the continent..

Much has been made in recent weeks and months at the centenary marking of the sinking of the Titanic in 1912, a disaster which a hundred years later still grips worldwide fascination.  Our cruise ships today are much larger, and much safer, but recently one of them sailing in the Mediterranean struck a rock, and sank, turning on its side,  killing more than 30 persons.

An economy is a vastly large ship. When in need of major and critical repair, too much is at stake to simply construct a temporary cofferdam and just patch up the problem.

Commodore Perry, who commanded that key naval battle of Lake Erie in 1813, and who had personally supervised the construction of the U.S. fleet in Erie, PA two hundred years ago, had the most famous naval battle flag in American history. Its words still ring out today: “Don’t Give Up The Ship!”

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Copyright (c) 2012 by Barry Casselman.  All rights reserved.

by @ 1:40 pm. Filed under Deficit, International

April 27, 2012

The Unserious Nature of Washington, Exhibit A: The Student Loan Debate

Over the last week, President Obama made a series of speeches at colleges around the country in which he decried the coming rise of student loan interest rates on July 1. Obama, joined by Mitt RomneySenate Minority Leader Mitch McConnell (R-KY)  and House Republicans, has said he refuses to let rates rise from 3.4% to 6.8%. Following his lead, as Morgen Richmond noted yesterday, Democrats immediately jumped on the chance to raise taxes on upper earners. Republicans, meanwhile, pushed a bill through the House today that takes $5.9 billion from what Speaker Boehner called an “ObamaCare slush fund” to pay for the extension.

Unwittingly, this student loan debate highlights the debacle that is politics in Washington. To wit:

1. House Minority Leader Nancy Pelosi (D-CA) said the House legislation was part of the “war on women” because it took from a women’s health program. I must say, she’s good at staying on message. Good at solving the nation’s problems, or leading her caucus to do so? Not so much.

2. Pelosi also denounced “robbing from Paula to pay Peter.” This from the same women who wants to tax the wealthy because they are wealthy. And while I actually agree with her that we should get rid of oil subsidies, tax credits, etc., a) I support eliminating all such subsidies and credits, not just for companies I personally or professionally dislike, and b) Pelosi is being intellectually dishonest in pretending many of the oil industry’s “subsidies” are specifically targeted to them. Jazz Shaw nicely pointed this out last year.

3. Much like they did with the payroll tax holiday extension, Republicans let themselves get suckered into a media game. The fact is that federal subsidies to higher education institutions and/or students increase the tuition students pay, and helps increase the size of the college bubble that is likely to come crashing down soon. Republicans would better serve the public in highlighting this fact instead of playing to the voters’ lack of economic knowledge.

4. The Republican National Committee has stepped up to challenge Obama’s travels to various states under the auspices of “official events,” despite the obvious campaign style and intention of the tour. (For the record, I am aware that President Bush did the same thing. That was just as wrong.) However, the fact that it took ABC News’ Jake Tapper to really bring this issue to the public’s attention says a lot about the willingness of Congress to do its duty and challenge the President on this and other issues of the public trust and corruption, since the RNC’s challenge has no actual legislative power or authority.

5. How many more “temporary” patches to subsidies, tax breaks, pay cuts and like can the federal government afford? The Alternative Minimum Tax, the Bush tax policies, the Doc Fix, the payroll tax holiday, etc. have all been temporarily patched to prevent angering this constituency or that demographic. Once again, elections take priority over effective policy on taxes, spending and other critical issues.

As the two parties head into formal election mode – Romney is about to be the GOP nominee for President, and President Obama just announced his first “official” campaign rally will be May 5 – the voters should note the unserious nature of Washington and give a bipartisan reminder in November that we want real solutions. After all, there are 1.2 million abortions annually in this country. We have the federal government violating the First Amendment with various mandates. Debt is skyrocketing, the economy stinks, Social Security and Medicare are going bankrupt fast, we refuse to solve our immigration problems, major tax hikes are on the horizon and we’re still sacrificing troops for Karzai despite no discernible national interest…and the primary focus of Washington is on student loans.

Of course, the people may not want real solutions. In that case, I’d say it’s time to start packing; America’s decline may soon be steepening.

[Originally posted at Hot Air's Green Room]

 

Dustin Siggins is an associate producer with The Laura Ingraham Show and co-author with William Beach of The Heritage Foundation on a forthcoming book about the national debt. The opinions expressed are his own.

by @ 3:23 pm. Filed under 2012 Misc., Deficit, Democrats, Spending

April 1, 2012

The Path to Prosperity Beats the Alternatives

The Bipartisan Policy Center has produced a nifty graph comparing Paul Ryan’s Path to Prosperity to the plans prepared by Alice Rivlin and former Sen. Pete Domenici, Simpson-Bowles, House Democrats, President Obama, and the BPC itself (to provide a baseline). The results are striking:

And to top it off, these numbers use the CBO’s pessimistic growth assumptions.

Of course, some have attacked the Path to Prosperity from the right, arguing that it doesn’t go far enough or balance the budget quickly enough. However, we must remember that Chairman Ryan incorporated a keen understanding of political reality when he compiled the plan. When we consider this, the merits of the Path look all the more impressive.

by @ 1:57 pm. Filed under 2012 Misc., Deficit, R4'12 Essential Reads, Spending

March 19, 2012

Paul Ryan: What Could Have Been, Part 2

Piggybacking on the work of my esteemed colleague, Matthew Miller, I give you the latest spot the House Budget Committee has released to promote the new Path to Prosperity:
[youtube]http://www.youtube.com/watch?v=j-MswXzp2p4&feature=youtu.be[/youtube]

Wouldn’t it be nice to have an election that pits two competing broad visions of America’s future – of a private sector-driven market economy vs. state-managed corporatism – against each other for the voters to evaluate? With the economy improving to a slightly less demoralizing stagnation, I would argue that the issues of the debt and deficit have only grown in their applicability to a general election platform that can attack head-on the GOP’s poor fortunes among leading demographics.

Hey, a guy can dream, can’t he?

by @ 9:23 pm. Filed under 2012 Misc., Barack Obama, Deficit

February 7, 2012

Should We Focus on Demand to Spur the Economy?

In case I haven’t made it blatantly obvious, I like to turn to AEI’s James Pethokoukis when it comes to economic commentary and analysis. He does another number today on the Keynesians’ obsessive focus on the demand side of the economy. He begins with two charts, courtesy of the BLS and adds the following:

These charts are based on the U.S. Job Openings and Labor Turnover report. The first chart shows that with 13.1 million people unemployed, there were an estimated 3.9 unemployed people for every opening. That’s the lowest level since December 2008. Good news.

Yet, as can be seen in the second chart, job openings have been rising faster than hiring. As Barclays concludes: “This suggests that factors such as mismatched skills continue to be frictions in the labor market.”

Or, in other words, people who lost their jobs in the Great Recession will not be able to return to their old jobs or even new jobs in the same industry.

He then points to a recent article in the WSJ, written by Arnold Kling:

Many jobs in home construction, durable-goods manufacturing and distribution, and mortgage finance were dependent on housing markets with ever-rising prices. In the U.S. and the U.K. in particular, the finance industry expanded well beyond its true economic value. Once the property bubbles burst, these jobs were exposed as not viable. Meanwhile, ongoing creative destruction brought about by the Internet and globalization have continued to allow substitution of capital and emerging-market labor for industrialized countries’ labor in many sectors. Together, these phenomena have caused widespread dislocation. … The necessary adjustments can only be made by the decentralized efforts of entrepreneurs. …

The Keynesian story would lead one to expect a recovery to consist of workers returning to the jobs that they held prior to the recession. That is not what happened after the Great Depression. It is not what has happened in recent recessions in the U.S., particularly the one that ended in 2009. Regaining full employment requires significant restructuring of the economy, rather than simply returning to the pre-slump status quo.

We’ve heard the standard arguments from the Keynesnians over and over again: Effective tax rates on individuals and businesses stand at or near historical lows, the Fed has interest rates at rock-bottom levels, and yet the rich and their companies still sit on trillions in cash, so what else can we do except stimulate demand via government spending until the private sector can once again shoulder the burden of driving growth?

Setting aside the Keynesians’ convenient avoidance of the simple truth that without the profit and price mechanisms depended on by the private sector, the government can never know exactly how much to pump into the economy and when to do it, the data and arguments voiced by Pethokoukis and Kling highlight only a fraction of the evidence against central planner orthodoxy and Obamanomics. Now, if only we could get the mainstream media to report this…

by @ 8:30 pm. Filed under Barack Obama, Deficit, Democrats, R4'12 Essential Reads

January 12, 2012

Leading by Example

Today, Politico reported that Sen. Rand Paul took the initiative to demonstrate his personal commitment to cutting government spending:

Freshman Sen. Rand Paul is making good on his promise to cut federal spending. The Kentucky Republican and tea-party favorite said Thursday he’s returning $500,000 to the U.S. Treasury — money from his operating budget that his office never spent.

The half million dollars represents about 16 percent of Paul’s annual budget, and he contends no senator has returned as much to taxpayers.

Obviously, $500,000 amounts to a drop in the bucket. Still, with all the broken promises and reneged commitments we see from our elected officials, it feels refreshing to see one quite literally put his money where his mouth is.

by @ 4:42 pm. Filed under Deficit, Misc., Spending

November 25, 2011

Why America needs a libertarian President

The first bubble I ever darkened on an American electoral ballot was that of George W. Bush and Richard B. Cheney for President and Vice President in 2004.  Being an 18-year-old young conservative, the choice was clear: smaller, more honest government with Bush, versus what would inevitably be scandalous, big government with John Kerry.

Over the next four years, I would watch as the man for whom I had cast my first vote expanded the federal government to its largest size in history, ramped up government spending to its greatest volume in history, engaged in some of the most radical and opaque redistributions of wealth ever undertaken by an American president, and began effectively nationalizing vast swaths of the private economy.

The effects of these actions were a housing bust that never corrected, a recession that turned into a lumbering depression, a dimming and slowing American economy, a new culture of corporatism and dependency, and a social order that has begun unraveling into civil unrest.

Needless to say, I and many others who had initially supported George W. Bush have been seriously disillusioned.  No longer do I (and the majority of grassroots conservatives) merely take it for granted that the individual with the (R) adjacent to their name will necessarily be preferable to the individual with the (D) adjacent to their name.  And it wasn’t just George W. Bush being one bad apple—the entire executive branch, Senate, and Congress, were awash with Republicans and self-proclaimed conservatives.  We got government that was larger and more unsavory than anything Democrats had ever delivered us—unprecedented federal regulations on the education system, a huge expansion of Medicare entitlements, and a Great Society program for the entire Middle East under the guise of “protecting us from terrorism”.

I needn’t relate the terrifying numbers to you, which constitute the national debt, the tens of trillions more in unfunded liabilities, and the unfolding population shift that spells crisis for all the entitlement systems.  We have heard these numbers endlessly, and we are all well aware of them.

We are in a serious crisis, and the root of this crisis is a federal government that has stifled the ability of our once robust and well-oiled free market economy to provide for its participants.  The federal government has disoriented and impoverished the individuals comprising the free market slowly, bit by bit, over the course of many decades.  Each additional, little program has contributed a little bit more to the economic and fiscal disaster now upon us.  What the economy needs is not someone who will tinker with, and try to “fix,” all these thousands of poorly-functioning trinkets that, combined, are crushing us beneath their weight.  What the economy needs is someone who will simply throw all of this junk off of our backs entirely.

The charge typically thrown at those who advocate such a massive paring down of federal responsibilities is that we would be “throwing out” these things entirely.  Without federal student loans, we just won’t have college education anymore.  Without subsidies to the arts, we just won’t have any museums.  Without massive entitlement systems, we just won’t have health care in this country.  If the federal government doesn’t do it itself, it just won’t happen.

As conservatives, our immediate response should be, “Bull hockey.”  We know better than that.  We had all these things before the feds got involved in them, and their rate of improvement has either slowed or reversed since the feds got involved.

The biggest portion of federal weight on the private economy is of course not student loans and subsidies to the arts, but rather military spending and entitlement spending.  Once again, the charge of big government-supporters is that if the Pentagon isn’t expropriating and using the wealth we create, then we will be unsafe.  If Medicare and Social Security are not humming with a steady intake of taxpayers’ money, then retirees will waste away in the streets.  On so many other issues, we conservatives readily see and admit that government spending more money on a good or service does not equal a better good or service.  Shoveling more money into the Department of Education does not equal a better educational system, just as shoveling more money into the Department of Defense does not equal a better national defense.  We can and should see huge portions of the defense and entitlement budgets returned to private control.  For every dollar that we take away from a bureaucrat’s pocketbook and return to the individual who earned it, we see an increase in the prudence and ingenuity with which it is put to use.

We need a very, very big change—not only in the size of government, but in the entire attitude and culture that defines the citizenry’s relationship to government.  A President can only accomplish so much, which is why every President accomplishes far less than they promise.  This is why I feel it is so important to risk erring more on the side of small government and individual liberty.  A President who promises to eliminate three federal Cabinet departments will probably only eliminate one—and it will probably be eliminated by joining its staff and budget to other departments in such a way that no net decrease in spending occurs.  A President who promises to cut federal spending by 10% will probably only slow the increase in federal spending by about 10%.  If we really want to see even minor changes in the way the government operates, we need to elect someone who promises to cut federal spending by a full 40%, or someone who will submit a balanced budget to Congress in his or her first or second year in office.  There will be push-back from the legislative branch and other elements of the government, but we will be much farther on the road to a balanced federal budget and an economic recovery with a President who pushes the envelope a great deal and only makes half the progress they intend to, rather than a President who promises to push only a little bit past the status quo and ends up only maintaining the status quo (or worse).

Now is not the time for status quo moderation.  We cannot afford a “safe” (which is not truly safe anyway) presidential candidate that will merely get an “(R)” into the Oval Office without actually making a serious difference in federal spending and monetary policy.  It’s time to move past the red flag / blue flag game we so enjoy playing and actually get serious about changing this government from a huge, limitless one, to a limited, constitutionally constrained one.  Only a libertarian Republican can accomplish this.

If you want an America defined by personal responsibility, free market capitalism, and strong communities, then vote for Ron Paul or Gary Johnson in your state’s primary or caucus.  If you want an America that continues its slow, gravely slide into economic stagnation, uncontrolled government power, and civil strife, then vote for any of the other seven candidates with a great haircut, a perfectly-fitting suit, smooth oratory skills, and a milquetoast commitment to individual freedom and free markets.

November 6, 2011

House GOP to Advance Balanced Budget Amendment

Politico reports that House Republicans have made it a priority to advance a balanced budget amendment, with a couple variations possible:

There are two options, which the House Republican Conference is mulling Friday morning in a closed meeting. One balanced budget amendment would cap federal spending at 20 percent of gross domestic product, while requiring a two-thirds supermajority for raising taxes. The other is a so-called “clean” balance budget measure, without any super majority limitations for tax increases.

“We’ve been involved in good faith negotiations and discussions with Democrat colleagues and I’m just convinced this is the right policy moving forward,” [Mike] Pence told POLITICO.

Of course, the subtext is that House Democrats have signaled that they wouldn’t help Republicans get to 290 — the number of votes needed to meet the threshold to amend the Constitution.

Pushing this legislation would certainly lend credence to the tough rhetoric Republicans have taken on the deficit since President Obama took office. After all, Democrats frequently allege that while Republicans like to talk tough on the deficit, when they get in power they don’t really do much. A BBA would help counter these claims.

Of course, they’ll face a steeply uphill battle with attracting support. Democrats will not want to place any more pressure to cut spending on themselves, and on the other side of the coin, many Republicans will recognize that a BBA may compel them to vote for tax increases. Still, if the party genuinely believes in balanced budgets, this is a battle worth having.

by @ 2:46 pm. Filed under 2012 Misc., Deficit, R4'12 Essential Reads, Republican Party

September 27, 2011

Illinois: A Case Study in How NOT to Manage Budgets

A new report from the non-partisan Civic Foundation illustrates yet another example of how not to govern courtesy of my home state of Illinois:

Despite a major income tax increase, the state of Illinois is expected to end the budget year more than $8 billion in the red, according to a report set to be released Monday by a nonpartisan tax watchdog group.

The Civic Federation analysis found that while lawmakers cut spending for state agencies this year, the reductions were offset by higher pension costs and the growing cost of paying back years of increased borrowing to keep Illinois afloat.

…”What we’re seeing is that even after a considerable tax increase and a commitment by the Illinois General Assembly to set expenditures based on revenues, because of the manipulations to under fund Medicaid and the growing debt service and pension contribution costs, the state remains in an unstable and unsustainable fiscal situation,” said Laurence Msall, Civic Federation president.

…Despite the bleak picture, Msall said there was a silver lining this year — lawmakers made the annual pension payment without borrowing money. But Msall said that payment, roughly $4 billion, ate up most of the extra money the January tax increase brought into the state, and the pension systems remain severely underfunded.

So, let’s recap: Illinois elected officials, led by Gov. Pat Quinn, argue in favor of a tax increase as a means to address the state’s mountains of unfunded pension liabilities. The hikes pass, and, lo and behold, while they do generate some additional revenue (aside from making the state even less competitive for businesses), the structural deficit has hardly changed!

If this should sound familiar, that’s because it is. The Illinois government and budget offer plenty of lessons we can apply on a national scale. Indeed, you can substitute “entitlement” for “pension”, “country” for “state”, and “trillion[s] for billion[s]” and have almost the same overall scenario. This provides us with a key insight: that we should look to spending restraint (read: entitlement reform), not tax increases, as the primary means to address our fiscal woes.

As the Land of Lincoln has showed us, you cannot erase red ink without focusing on the true driver of budget gaps. Public pensions act as that for Illinois; for the federal government, entitlements do.

by @ 7:19 pm. Filed under Deficit, R4'12 Essential Reads, Spending

September 15, 2011

Bipartisan Group of Senators Urges Super Committee to Go Big

Here’s an interesting item in the blogosphere this afternoon concerning the Congressional Debt Panel and its deliberations:

A bipartisan group of 36 senators urged the joint committee on deficit reduction Thursday to exceed its legal mandate and cut the deficit by as much as $4 trillion by embracing tax reform and entitlement cuts.

The group was led by Republican Sens. Saxby Chambliss (Ga.) and Mark Warner (Va.), members of the Gang of Six, a group of senators who worked for months on deficit reduction ideas and unveiled a similar proposal in the days just before Congress accepted the debt deal with much more modest goals early in August.

The group’s message to the panel, dubbed the “supercommittee,” said Sen. Kent Conrad (D-N.D): “Be brave, be bold, go big.”

Let’s hope this leads to something.  Read the full story here.

 

by @ 2:29 pm. Filed under Deficit, Misc., Spending

September 8, 2011

The Debt-Paying Generation Has the Most to Lose If America Doesn’t Start Creating Jobs

Yesterday, Conserative Home published an op-ed by former Race42012 contributor Dustin Siggins and me.  I initially posted this yesterday but then figured it made much more sense to wait until today, so we had time to discuss and process last night’s debate.  Without further ado:

With President Obama making a major speech about jobs this week, and the House GOP, Mitt Romney and Jon Huntsman putting forth their own plans in response, it appears employment will finally be on the forefront of the public debate. This year’s often vitriol-filled discussions of the United States’ bleak fiscal future, despite their intensive media coverage, have overlooked a stark reality: millions of Americans still sit out of work. Paul Krugman gets a rare cheer for a recent column in which he hammered Washington for replacing leadership with gamesmanship.

Let’s be clear: the national debt is the greatest issue facing America. However, to achieve long-lasting success, any plan to balance the budget must encourage job growth. A growing economy will do a great deal to shrink the deficit as it increases tax revenues, and it will enable more Americans to provide for themselves, control their own financial destinies and avoid government dependency. This especially matters to the 115 million Americans aged 5-30, who will become the Debt-Paying Generation (DPG) if our national debt continues to skyrocket.

With some ideas already on the table, and others still being hammered into actual plans, here are some proposals our leadership and potential leaders should embrace:

  • Eliminate all tax loopholes and simplify the tax structure. Americans spent 6.1 billion hours and over $160 billion (equivalent to about 40 hours and over $1,000 per working American) complying with just the personal and corporate income tax code in 2010. Certainly, under a flat tax or the FairTax, taxpayers could redeploy these resources in productive activities that would expand the economic pie and thus increase tax revenues. Furthermore, such reforms would eliminate or at least shrink the IRS, taking up to a $13 billion dollar bite out of the deficit.
  • Eliminate all subsidies from the government to private companies. The energy industries, for example, received direct subsidies of $37.2 billion in 2010, all at the expense of the American taxpayer— and some at the expense of the poor in this and other countries. Total corporate welfare totaled $92 billion in 2009. These and other subsidies only distort markets, essentially taking productive dollars out of the private sector and redistributing them at the whims of politicians and government bureaucrats.
  • Utilize all of America’s energy resources without prejudice. Essentially, get the government out of the way and let each form of energy- from nuclear to oil to hydro to ethanol- stand on its own merits. This will create hundreds of thousands of new high-skill, well-paying, long-lasting jobs in the nuclear and oil industries alone. Additionally, allowing equal competition would create a smaller regulatory bureaucracy in Washington, and eliminate many of the above-mentioned subsidies. This would save the taxpayers money and increase tax revenues, creating a two-fold deficit reduction effect.
  • Cut regulations with an axe. The size of the Federal Register, the official record of federal regulations, swelled to nearly 80,000 pages during the Bush administration. To name but a few egregious current examples:
  1. The infamous light bulb law, which effectively bans standard incandescent bulbs, has already begun to drive jobs and capital overseas. It also restricts the choices free, law-abiding Americans can make regarding their energy options.
  2. According to a 30-year veteran of business ownership interviewed for this piece, the minimum wage is a significant job-killer. Instead of helping low-skill workers, it actually crowds them out of the job market by making their cost to an employer more expensive than the benefit to an employer.
  3. “Richard Gale,” a general contractor and member of the Debt-Paying Generation, told us a series of 2010 EPA lead regulations impose significant costs on his business. Formal estimates of the impact on businesses vary, but according to “Richard,” the “cost of training, licensing, lead testing and extensive precautionary measures make the cost of contracting services prohibitive to the customer,” and thus deprive “Richard” of approximately $20,000 in lost annual revenue.
  4. Myriad rules and restrictions on energy projects caused a natural gas pipeline, which stretches from Opal, Wyoming to Malin, Oregon, to finish four months late and 23% over budget.

Ours is the longest-lasting recession in several generations, and it is likely to continue for some time— despite the influx of government debt over the last 4 years. At the current pace of job creation vs. debt creation, the Debt-Paying Generation is in serious trouble: according to August 2010 Bureau of Labor Studies statistics, 16-24 year olds have an unemployment rate of over 20%. An entire subsection of young people is losing the opportunities necessary to garner job skills, grow their retirement savings and purchase their first home. And while the spending cuts we recommend won’t balance the budget, they represent a serious down payment that will grant politicians a little more time to tackle the “big four” expenses of our federal government: Social Security, Medicare, Medicaid and national defense.

It heartens us to see influential public figures finally returning their collective focus to unemployment. Now, we challenge them to take matters one step further and offer credible proposals on how to get America back on the path to recovery.

Thoughts? Questions? Concerns? Let us know what you think!

by @ 10:00 am. Filed under Deficit, Misc., R4'12 Essential Reads, Spending

August 24, 2011

Obama Is Irresponsible and Unpatriotic

When Obama took office, the national debt stood at $10.6 trillion.

Since then, it has risen to $14.6 trillion.

That is irresponsible and unpatriotic of the President. But don’t just take my word for it…
[youtube]http://www.youtube.com/watch?v=1kuTG19Cu_Q[/youtube]

And to top it off, Obama complained about Bush adding $4 trillion in debt over eight years. Our current commander-in-chief has achieved that feat in less than half the time!

We all know how much Obama loves calling the actions of his administration “unprecedented”. Well, he can add this to the list.

by @ 9:48 pm. Filed under Barack Obama, Deficit, R4'12 Essential Reads, Spending

August 5, 2011

My Take on the S&P Downgrading

In case you haven’t heard, Standard & Poor’s just announced that they will downgrade the U.S.’s credit rating:

S&P dropped the ranking one level to AA+, after warning on July 14 that it would reduce the rating in the absence of a “credible” plan to lower deficits even if the nation’s $14.3 trillion debt limit was lifted. The U.S. was awarded the top credit ranking by New York-based S&P in 1941. It kept the outlook at “negative” amid the failure to end Bush-era tax cuts.

“The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P said in a statement today.

…S&P said it may lower the long-term rating to AA within the next two years if spending reductions are lower than agreed to, interest rates rise or “new fiscal pressures” during the period result in higher general government debt.

Well, we can’t act surprised. Ratings agencies have warned us for years that our elected officials needed to enact structural entitlement reform to maintain top-quality credit. One can’t help but assume that the Obama administration convinced S&P to wait on making the decision official until the markets closed today.

In a shameless abdication of reality, the media has already begun attempts to lay the blame on the Republican Party or the ratings agencies themselves. Just look at some of these headlines: “Is the U.S. Credit Rating a Victim of GOP Sabotage?” (written by none other than Yahoo! Finance’s economics editor) and “S&P Downgrades the U.S. – But Why?”

How will President Obama try to wriggle out from under this one? Sure, he can lean on his tried-and-true tactic of blaming the opposition party, but the fact remains that he has bowed to political considerations and avoided entitlement reform (other than adding an additional entitlement, of course…) as much as possible, in an attempt to force the GOP to “make the first move” and thus create more fodder for the negative attacks he vowed to cast aside but has instead embraced.

Simply put, the President had his chance; with the stratospheric amount of goodwill he carried when he entered office, he could have harnessed the opportunity to advocate true entitlement and tax reform. However, he passed. Instead, he opted to pour his political capital into an ill-begotten “stimulus” plan that did more to safeguard public union jobs than it did to fund the infrastructure projects Democrats so love, in addition to a frighteningly complex and opaque health care bill.

Try as he might, I can’t see how anybody other than hardcore Democratic partisans and the lowest of the low-information voters can let Obama slide on this. The problem didn’t start with Obama, nor with George W. Bush (although both did their part to contribute), but he sure didn’t do anything to help.

by @ 10:21 pm. Filed under 2012 Misc., Barack Obama, Deficit, Democrats, R4'12 Essential Reads, Spending

August 3, 2011

Why Huntsman Supported the Satan Sandwich and Romney Didn’t

Today, the Washington Post’s Aaron Blake wrote an enlightening analysis of the respective decisions by Mitt Romney and John Huntsman to oppose and support Washington’s recent debt ceiling agreement:

Basically all of Romney’s opponents are getting some traction by criticizing his inaction on the issue. And one of The Fix’s favorite reporters – Politico’s Ben Smith – coined a term this week that could haunt Team Romney in the weeks and months ahead: The Mittness Protection Program. It refers to the idea that Romney has basically been hiding from the big ideas and issues of the day.

This could all help Romney’s opponents paint a picture that ends up being very similar to the image that emerged of Romney’s 2008 campaign. In that race, Romney got pegged as an expedient politician with no real convictions.

At the same time, by not supporting or opposing all of the other proposals that were brought forward before the final deal, Romney avoided pinning himself down on all manner of things that could be used against him in the future.

Any time you’re supporting or opposing a broad package of spending cuts and reforms, its pretty easy to cherry pick one or two items than make for a powerful campaign ad. If you were one of Romney’s opponents, you could easily pick one of the more controversial aspects of the plan and hang it around Romney’s neck. Or, if he didn’t support the larger proposal, you could accuse him of opposing this or that spending cut.

Romney also has an eye on the general election, where he still wants to be able to attract independent voters. Embracing some of the more conservative proposals could have hurt him if he gets to that point.

…Huntsman, meanwhile, was quick to jump on board with the last two proposals. This is part of his strategy of trying to look like the adult in the room – the moderate pragmatist who wants to get things done and isn’t a craven politician.

“Everyone else played politics,” Huntsman spokesman Tim Miller said. “Voters want a president who is going to be honest with them.”

Inasmuch as Huntsman has a path to victory right now, this is it. While all the other Republicans will be fighting over ground on the right, Huntsman is content to appeal to the leftovers in the middle.

Mr. Blake also notes that any negative proposals coming from the debt super-committee could easily get pegged to Huntsman by his opponents.

As we’ve seen, the polling data that has emerged since the agreement has suggested that candidates like Romney, Pawlenty, and Bachmann, who opposed the deal, may not see much political damage, as most of the public disapproved of the proceedings.

For those who, like me, came away perplexed from Mitt’s posture (or lack thereof) during the debt ceiling debate, Blake’s article certainly sheds some light on the strategy behind it.

by @ 9:35 pm. Filed under 2012 Misc., Deficit, Jon Huntsman, Mitt Romney, R4'12 Essential Reads

August 2, 2011

Poll Watch: CNN/ORC Debt Ceiling Survey

CNN/ORC Debt Ceiling Survey

Do you approve or disapprove of the way Barack Obama is handling his job as president?

  • Approve 45% (45%) [48%] {54%}
  • Disapprove 52% (54%) [48%] {45%}
  • No opinion 2% (2%) [5%] {2%}

Note: Results in parenthesis taken July 18-20. Results in brackets taken June 3-7. Results in curly brackets taken May 24-26.

Do you approve or disapprove of the way Congress is handling its job?

  • Approve 14%
  • Disapprove 84%

As you may know, an agreement between Barack Obama and the Republicans and Democrats in Congress would raise the federal government’s debt ceiling through the year 2013 and make major cuts in
government spending over the next few years.

Based on what you have read or heard, do you approve or disapprove of that agreement?

  • Approve 44%
  • Disapprove 52%
  • No opinion

As you may know, the agreement would raise the debt ceiling through the year 2013. Regardless of
how you feel about the overall agreement, do you approve or disapprove of raising the debt ceiling
at this time?

  • Approve 48%
  • Disapprove 51%
  • No opinion

As you may know, the agreement would cut about one trillion dollars in government spending over
the next ten years with provisions to make additional spending cuts in the future. Regardless of how you feel about the overall agreement, do you approve or disapprove of the cuts in government
spending included in the debt ceiling agreement?

  • Approve 65%
  • Disapprove 30%
  • No opinion 4%

And as you may know, the agreement does not include any tax increases for business or higher-income Americans. Regardless of how you feel about the overall agreement, do you approve or disapprove of the fact that the debt ceiling agreement does not include tax increases for those
groups?

  • Approve 40%
  • Disapprove 60%

Do you think that a failure to raise the debt ceiling by Tuesday would create a crisis for the United
States, major problems, minor problems, or no problems at all?

  • Crisis 14%
  • Major problems 38%
  • Minor problems 31%
  • No problems at all 15%

Who do you think is more responsible for the debt ceiling agreement? Do you think Barack Obama
and the Democrats in Congress are more responsible for that agreement, or do you think the Republicans in Congress are more responsible for that agreement?

  • Obama/Democrats in Congress 34%
  • Republicans in Congress 42%
  • Both equally 18%
  • Neither/no opinion 6%

Next, please tell me whether you approve or disapprove of the way each of the following has handled the negotiations over the debt ceiling in Washington over the past few days.

    Barack Obama 46% approve/53% disapprove (-7%)
    The Republican leaders in Congress 30% approve/68% disapprove (-38%)
    The Democratic leaders in Congress 35% approve/63% disapprove (-28%)

Interviews with 860 adult Americans conducted by telephone on August 1, 2011. The margin of error is +/- 3.5%

A few follow-up points:

1. Ouch. These numbers certainly don’t look good for Republicans. Apparently, the majority of the public views our Republican leaders’ performance as childish, unreasonable, and selfish (maximizing political gain at the expense of “reasonable compromise”). Prepare to see the Democrats paint their Republican counterparts with this brush well into the future.

2. After seeing this, the decision of all the Republican presidential candidates except Jon Huntsman to oppose the deal make more sense (at least from a political standpoint).

3. This poll gives the Dems even more ammo to wax poetic about the need for a “balanced approach”, filled with “shared sacrifice” and “millionaire and billionaire corporate jet owners paying their fair share” in future deals. In fact, we’ll probably hear the words “balanced approach” so often from Democratic leaders, they might as well tattoo them on their foreheads.

By: TwitterButtons.com
By TwitterButtons.com

August 1, 2011

House Passes Debt-Ceiling Deal

As was expected, the House of Representatives passed the debt-ceiling deal tonight by a margin of 269-161. Democrats split their vote exactly evenly 95-95 while Republicans voted 174-66 in favor of the bill. As Politico points out, all this talk of uber-radical freshmen turns out to be more than a little spin. You can see how your Representative voted here.

However, the most dramatic moment of the night was when Congresswoman Gabrielle Giffords, still recovering from an attempted assassination, made her way to the floor and cast her first vote since January. As you might guess, the returning Congresswoman was met by an emotional, emphatic and overwhelming response. I defy anyone to not feel a small lump in your throat or a tear in your eye at this one.

by @ 9:40 pm. Filed under Deficit, Misc., Spending

Just a Reminder…

Sorry to spoil the President’s victory lap and throw some cold water on his fire, but the issue of the day – the economy – still looms large:

Manufacturers had their weakest growth in two years in July, a sign that the economy could weaken this summer.

The Institute for Supply Management, a trade group of purchasing executives, said Monday that its index of manufacturing activity fell to 50.9 percent in July from 55.3 percent in June. The reading was the lowest since July 2009 — one month after the recession officially ended.

…The disappointing report on manufacturing is the first major reading on how the economy performed in July. It suggests the dismal economic growth in the first half of the year could extend into the July-September quarter.

…The economy expanded at a dismal 1.3 percent annual rate in the April-June period after an even worse 0.4 percent increase in the first three months of the year, the government said Friday.

…The index fell in May to 53.5 from April’s reading of 60.4. That was the sharpest one-month drop since 1984.

Employers have responded by pulling back on hiring. The economy added just 18,000 net jobs in June, the fewest in nine months, and the unemployment rate rose to 9.2 percent. Hiring by manufacturers was nearly flat in the April-June period.

Of course, when the economy continues to sputter into 2012, Obama will most likely suggest that the spending cuts contained in the debt ceiling/deficit agreement contributed to the malaise.

Typical of Keynesians, the President wants to have his cake and eat it, too; he stumps for increased government spending to end the recession, calls for even more when these measures fail to have their desired effects, and then rails against the massive federal deficit largely caused, of course, by spending.

When it comes down to it and people challenge Kenynesians on why their policy prescriptions rarely, if ever, achieve their expected growth effects, they often take the easy way out and argue that they simply didn’t go far enough.

By: TwitterButtons.com
By TwitterButtons.com

by @ 8:31 pm. Filed under 2012 Misc., Barack Obama, Deficit, Democrats, R4'12 Essential Reads, Spending

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