Daily Archives: July 17, 2009
QandO founder Jon Henke posted at The Next Right yesterday with a suggestion for Republicans that I didn’t think would be very controversial: that they should propose swapping out the payroll tax in favor of a carbon tax. I’ve established that I’m all for that idea. Though I would go farther, it’s a good idea on its own, especially when unemployment is high and hours worked are very low.
Go over there and read his reasoning (please don’t comment unless you’ve read it). It makes a lot of sense, whether you believe in anthropogenic climate change or not. Well, unless you do believe in it, and think it’s such a good thing that it overwhelms the benefits of switching from a relatively destructive tax to a better one.
And props to the Prez for doing so. However, and you knew there’d be one or I wouldn’t be writing about it, it is interesting to note what the NAACP, to whom he addressed the speech, heard:
The organization’s president, Benjamin T. Jealous, said afterward that the address “was the most forthright speech on the racial disparities still plaguing our nation” Mr. Obama has given since moving into the White House.
A little confirmation bias maybe. This is what they wanted to hear (that’s what keeps them in business) and so that’s what they heard.
So lets see what he said and how they might have gotten that impression.
President Obama delivered a fiery sermon to black America on Thursday night, warning black parents that they must accept their own responsibilities by “putting away the Xbox and putting our kids to bed at a reasonable hour,” and telling black children that growing up poor is no reason to get bad grades.
“No one has written your destiny for you,” he said, directing his remarks to “all the other Barack Obamas out there” who might one day grow up to be president. “Your destiny is in your hands, and don’t you forget that. That’s what we have to teach all of our children! No excuses! No excuses!”
Sounds like the Bill Cosby speech to me – “no excuses!” means “no excuses!”, right?
Well sorta. Apparently after throwing that out there, he remembered to whom he was speaking and provided them the their portion of red meat:
Even as he urged blacks to take responsibility for themselves, he spoke of the societal ills — high unemployment, the housing and energy crisis — that have created the conditions for black joblessness. And he said the legacy of the Jim Crow era is still felt, albeit in different ways today.
“Make no mistake, no mistake: the pain of discrimination is still felt in America,” Mr. Obama said, by African-American women who are paid less for the same work as white men, by Latinos “made to feel unwelcome,” by Muslim Americans “viewed with suspicion” and by “our gay brothers and sisters, still taunted, still attacked, still denied their rights.”
I’m sure the press will fact check all of this (who, btw is viewing “Muslim Americans” with suspicion and taunting and attacking “our gay brothers and sisters”? Is it those “white men” who’re being paid more than African-American women?), but there it is, the very part that Benjamin Jealous (I love that last name) decided to remember.
The put-away-the-X-Box-go-to-bed-and-study stuff – well, as I said, Bill Cosby has been giving that speech for years. Given the fact that Obama feels compelled to give it now should tell you why the NAACP chooses to ignore the “no excuses” portion in favor of the “racial disparities” portion.
Addendum: And, of course, I’ll be the racist for pointing this out – just hide and watch.
It goes to Steve Chapman in his discussion of the government’s health care reform proposals and what they promise:
But efficiency is to government programs what barbecue sauce is to an ice-cream sundae: not a typical component.
Chapman also discusses the illusion of “competition” the reformers are pushing while outlining what real competition in the insurance field might actually look like (and, unsurprisingly it requires less, not more, government).
Make sure you RTWT.
I‘m not sure how often everyone has to be told, but here’s the warning again, just as Democrats attempt to pile another trillion plus dollars in federal health care spending (and debt). From the CBO Director’s blog:
Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.
I’m not sure how it can be said any more clearly and more succinctly.
The choices, as laid out in the paragraph above are fairly simple – cut federal spending dramatically or raise taxes (revenues) dramatically to meet the spending or your going to do “substantial harm to the economy”. Of course we also know that raising taxes dramatically would have the same effect. That leaves one option and, as is clear with the health care reform proposals, that’s nowhere near the table, is it?
Yet that’s the formula:
Keeping deficits and debt from reaching these levels would require increasing revenues significantly as a share of GDP, decreasing projected spending sharply, or some combination of the two.
CBO offers the following graph to illustrate the point of letting the status quo remain in place. Note that the second line coming off the actual/projected line – that’s the “extended baseline scenario” where absolutely nothing is changed and the budget, as projected, is executed. Disregard the first line for the moment.
What is important is to understand this:
The current recession and policy responses have little effect on long-term projections of noninterest spending and revenues. But CBO estimates that in fiscal years 2009 and 2010, the federal government will record its largest budget deficits as a share of GDP since shortly after World War II. As a result of those deficits, federal debt held by the public will soar from 41 percent of GDP at the end of fiscal year 2008 to 60 percent at the end of fiscal year 2010. This higher debt results in permanently higher spending to pay interest on that debt. Federal interest payments already amount to more than 1 percent of GDP; unless current law changes, that share would rise to 2.5 percent by 2020.
Now you’ve heard that, in various forms for years. But what does that mean to you personally – how does one put that in terms that mean anything to a taxpayer?
Well Jim Glass at scrivner.net has done that for us:
The national debt incurs interest that is paid with taxes. The interest rate on US debt is projected be about 6% annually in the long run, according to the Social Security Administration’s actuaries and other such governmental budget projectors. Six percent of one trillion dollars is $60 billion.
There are 80 million payers of income tax in the US. (If that seems low for a population of 300 million remember that 47% of all “tax units”, 70 million potential taxpayers, pay no income tax or receive refundable tax credits from the government.)
Now $60 billion divided by 80 million taxpayers equals $750 per taxpayer — so each trillion dollars of the national debt costs the average taxpayer $750 per year, every year that the debt is carried, forever.
So for every trillion in debt the federal government puts us, we owe $750 per tax payer in interest alone.
Jim extends his example to what the chart above depicts:
As of the end of last year the government’s outstanding explicit and implicit debt was $64 trillion. Add another year’s interest on that, plus this year’s $1.8 trillion deficit, and we will be well over $66 trillion at the end of this year. Which creates an explicit and implict annual interest liability to just carry the debt of more than $49,000 per taxpayer.
Yet we have Joe Biden claiming we have to spend money to avoid bankruptcy – and there are people out there who believe him. As Jim points out:
As of today most of that is implicit (for unfunded Medicare liabilities, etc.) but every year from now on (as more seniors retire and start collecting Medicare, etc) more of the debt will shift from being implicit to explicit, requiring cash tax collections to pay for it.
And the same entity which has put the country in this shape running a health care system, now wants the rest of it with the stated goal of cutting costs.
If you’re gullible enough, given the facts above, to fall for that, I have to question your critical thinking abilities. In fact, you might want to consider the chart above again and pay attention to the top line coming off the actual/projected line – that’s likely what our debt will look like if you hand over health care to the federal government.
It is very close to fish or cut bait time for the people of the US – we have got to realize, very quickly, that in fact, we are on the verge of bankruptcy and what that buffoon Biden says is just abject, unthinking nonsense.
Either cut government spending – drastically – or go under. Those are your choices.