Obama’s Deficit: The Devil Made Me Do It

Obama’s Deficit: The Devil Made Me Do It

By Jon N. Hall

Ever since his inauguration, President Obama has said that he “inherited” the federal budget deficit from his predecessor. But immediately upon taking office, Obama signed two new bills, the $787B stimulus and the $410B omnibus, that together about equal the $1.2T deficit he “inherited.”


Now that the fiscal year has ended, we see that the feds ran a $1.58T deficit for FY 2009, the all-time record and the first deficit over a trillion bucks. This deficit is 3.4 times the $459B deficit of 2008, and 10 times the $160B deficit of 2007, which began when Republicans were still in control of Congress.


In his speech to the Joint Session of Congress on September 9, Obama said:


Now, part of the reason I faced a trillion-dollar deficit when I walked in the door of the White House is because too many initiatives over the last decade were not paid for — from the Iraq war to tax breaks for the wealthy.  (Applause.)


The fact that things “were not paid for” would seem to be a pretty good reason for a deficit. But the part about “tax breaks for the wealthy” is pure nonsense.


The “tax breaks for the wealthy” were tax rate cuts that totaled 4.6 percent. For the sake of illustration, let’s round that up to 5 percent and apply it to an annual federal revenue total of $3T (which is more than the federal government has ever taken in). That works out to $150B, a long ways from the 2009 deficit.


The “tax breaks for the wealthy” weren’t for all federal revenue, just revenue from the Individual Income Tax. The largest portion of total federal revenue taken up by the personal income tax in recent years was 50 percent in FY 2000 (at the height of the dot-com bubble). So, if applied against revenue from personal income taxes only, the Bush rate cuts would have meant $75B in lost revenue. But wait, Obama promised that only the top 5 percent of personal income taxpayers would see a rate hike. The most that the top 5 percent has paid recently is about 60 percent of the personal income tax. So the Bush tax rate cuts would mean at most a $45B loss of revenue, or … less than 3 percent of the 2009 deficit.


The point of the above exercise is to show, with just a few well-known figures, that the president is mistaken. And I’ve used inflated figures throughout the example. Using more precise figures would yield an even smaller loss of revenue due to tax rate cuts. Clearly, the Obama administration doesn’t think we are very smart.


The problem with this exercise is that it uses “static scoring;” it doesn’t take into account the effect of the tax rate cuts on economic behavior, and therefore tax revenue. Indeed, the economy did pick up under the Bush tax rate cuts, and America enjoyed her 5 highest years of total revenues ever, one of which was more than 25 percent higher than the previous record set in FY 2000. If my analysis were to use “dynamic scoring,” there might not have been any loss of revenue due to the evil Bush tax rate cuts.


And another thing: Why are only these “initiatives” running up the deficit? Why is the Iraq war running up the deficit but not the National Endowment for the Arts? All such line items are part of the “discretionary” spending that Congress votes on each year, and the money for them all comes out of the same pot: the Treasury’s general fund.


The subtext of Obama’s message is: Except for “initiatives,” nothing can be done about federal spending; the rest of the budget can’t be touched; no spending cuts will be forthcoming; budgets can be balanced only by increasing revenue (higher taxes).


The reason Obama is so keen on laying blame for the deficit on Bush is that he’s caught in the Democrats’ old lie: The president is responsible for the budget. The Democrats are aided and abetted in this lie by the establishment media.


It is Congress that is responsible for budgets and budget deficits. Appropriations and budgets are set by the legislature not the president. And Congress has been controlled by Democrats for nearly 3 years now, during which time they’ve set the two highest deficits in history, this year’s record being almost four times the Republican record of 2004.


A survey the OMB’s Historical Tables (page 21) going back to the inception of the income tax in 1913, shows that no matter how we look at it, a Republican Congress does better at balancing the budget than does a Democrat Congress. Republican Congresses have produced the most recent surpluses, the largest surpluses, the most back-to-back surpluses, the most surpluses under a president of either party, etc. This is why the Democrats and their media lapdogs lay the responsibility for budgets and deficits on the president.


According to the OMB’s Mid-Session Review (page 26) from August 25, total revenue for FY 2009 was down by $450 billion from FY 2008, yet the deficit was up by more than $1.1 trillion. So the problem is spending, not revenue. And in the middle of this massive shortfall, Congress is trying to saddle America with even more debt, with “initiatives” like healthcare reform, cap-and-trade, and “green” ventures. The latest OMB projections predict huge deficits for the next decade. These projections do not take into account Congress’ spending spree in legislation that is still under consideration.


Now, one could point out that the economy was doing just fine until Democrats took over Congress. But that would be so simplistic. It’s undeniable, however, that Barack Hussein Obama voted for the $700B TARP bill last October when he was the junior senator from Illinois in the U.S. Congress. He didn’t vote “present;” he took responsibility.


So President Obama “inherited” the deficit from himself … and the rest of Congress.


Jon N. Hall is a programmer/analyst from Kansas City.

Page Printed from: http://www.americanthinker.com/2009/10/obamas_deficit_the_devil_made.html at October 02, 2009 – 09:44:28 AM EDT

Palin’s Revenge: Who’s Laughing Now?

Palin’s Revenge: Who’s Laughing Now?

By C. Edmund Wright

Now correct me if I am wrong, but didn’t I hear the Jurassic media bury the career of Sarah Palin just last July?  And weren’t they joined in this mockery by the so-called conservative elites like David Brooks and Karl Rove and Joe Scarborough and so on?

Wasn’t Mo Dowd just delirious in fact that the wicked witch (of her world) was dead?


You betcha. 


Well, just who is looking out of touch and foolish now? Hint: It isn’t the Killa from Wasilla.  And yes, I think that is her Brinks Truck in fact. One of them anyway.


The temptation here is to rub the seven million dollar book advance in the face of all her naysayers — then add that the book is coming out early and in fact breaking all kinds of sales records though not even edited yet.  But we won’t do that for Mo’s sake.


Another temptation is to chide the Jurassics and the elites who were snickering at the thought she could command the six figures fees the big boys get for speaking engagements — with the reports that she is currently sifting through some eleven hundred offers.  Cha-ching.  We won’t make a big deal over that either.  It might make Colin Powell blush.


What is the real story here is that given a set of singularly difficult circumstances, Governor Palin made a counter-intuitive and gutsy decision that has already proven right for all parties involved.  We call that brilliance. We call that effective leadership.


Perhaps inside the beltway, those measures of wisdom and intelligence and instinctive leadership are out of date.  All too often in that world, decisions are made by what is the safe play and by what will play well with the pundits.  Damn the consequences to others, just pull that focus group report and make sure we look good to the media.


That was not how Palin measured her decision.  She was willing to look outside the box for a possibility, and when she found an idea that worked for everyone she grabbed it.  Quickly.  And she never looked back.  Why Dan Rather might call that “…courage…”


Palin did not seem to worry a bit about how her decision would look to the pundit class as she strode to the microphones and confidently gave a shocking announcement that she knew would bring down a hell storm of self-important derision.  She did not flinch. She made her decision, announced it, and went about making it work for all involved.


And it has. It has worked for the state of Alaska, where their small government is no longer burdened by over the top media scrutiny and an endless string of nuisance legal actions.  Alaska can get back to being Alaska, and the state is governed by a man who shares Palin’s vision for the state without having one of the biggest media targets in the history of the country painted on his back.


What?  You don’t know his name?  Good. Alaskans probably like it that way.


And the resignation has certainly worked for Palin’s family and the former governor herself no doubt.  They no longer have the targets painted on their backs either.  They no longer are burdened by a mountain of legal debt and the mountain of legal debt is no longer growing like it was. Win. Win. Win.


Heck, it looks like the family will be able to travel the entire country at the request of many other people happy to pay their expenses and a nice honorarium as well. That’s not a bad educational experience, and I even doubt the former governor will burden us with stories about how much she has sacrificed while doing all of this jet setting.


Along the way, she will be exposed to millions and millions of American voters who will see her in person or see local coverage of her appearances.  She will curry favor with many Republicans and other conservative candidates across the country.  Her rolodex will be engorged with valuable contacts.  Her work in this area is likely to have a major impact on the mid-term elections of 2010 in fact.  If it goes well for the GOP, she will get much of the credit in all likelihood.


There will be sound bytes from her on any number of weighty issues. That started last week in Asia in fact.  Even Charles Krauthammer will be impressed. By the time 2012 rolls around – just in case she has that year circled in her day planner – any notion of her lack of depth or experience will have been clearly dispelled.


Tina Fey shooting the moose will be a distant memory. Charlie Gibson will be the one thrown to the curb in his chosen profession.  And I doubt Katie Couric will age as gracefully as Sarah Palin will.


To summarize, every single ramification of Palin’s resignation has come up aces.  For her, her family, her state and even for any future political ambitions, it was the right call.


Even in the one arena the Jurassic media and conservative elites thought they were really expert — politics — Palin has trumped them in that too.  It is almost 100% certain that she will come in to the year 2012 with a lot more money, a lot more exposure, a lot more commentary on the big issues, a lot more potential campaign workers across the 57 states and a lot more favors owed than she ever could have by hanging around Juneau for two more years. Yes, even in purely political terms, Palin’s business and personal decision has proven to be superior to what the pundits thought she should have done.


Now of course this is sending the pundit class in the D.C.-Manhattan corridor into the vapors, not to mention shock.  They never have been able to make one correct assessment about Palin and her relationship with the American people and their reaction to their own ineptness is to hate Palin herself.


Millions of Americans are not surprised however.  Why do you think so many are buying her book already.  You can call those “votes” and also “future campaign contributors.”


They are not caught off guard by the brilliance of her decision.  They knew it all along.


And I add proudly, so did American Thinker.  Our contributing authors penned no less than 9 articles in the two weeks following Palin’s resignation, and every single one of them supported her decision as wise and several pieces were scarily prescient in how they predicted just this type of success for her in light of the decision.


It is obvious that Palin knew what she was doing all along.  Who knows what she will do in 2012.  It doesn’t matter at the moment.  What matters is that her decision to resign as Governor of Alaska will put her in a far superior position for whatever she does or does not pursue. 


I think that’s hilariously ironic.  Betcha she does too.  So who’s laughing now?

Page Printed from: http://www.americanthinker.com/2009/10/palins_revenge_whos_laughing_n.html at October 02, 2009 – 09:41:50 AM EDT

Unemployment Hits 17%: White House Claim That Stimulus Would Halt Joblessness At 8% Shattered

Unemployment Hits 17%: White House Claim That Stimulus Would Halt Joblessness At 8% Shattered

October 2nd, 2009 Posted By Pat Dollard.


Over a quarter of a million jobs lost last month alone…longest recession in 80 years…$1 trillion dollar health care expenditure now looks criminal…stimulus dollars going to Leftist causes, not job creation…expect absurd proposals for job-killing higher taxes…

WASHINGTON (AP) — The U.S. unemployment rate rose to 9.8 percent in September as employers cut far more jobs than expected, evidence that the longest recession since the 1930s is still inflicting widespread pain.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.

The Labor Department said Friday that the economy lost a net total of 263,000 jobs last month, up from a downwardly revised 201,000 in August. That’s above Wall Street economists’ expectations of 180,000 job losses, according to a survey by Thomson Reuters.

The unemployment rate rose from 9.7 percent in August, matching expectations.

More than a half-million unemployed Americans gave up looking for work last month. Had they continued searching, the official jobless rate would have been higher.

All told, 15.1 million Americans are now out of work, the department said. And more than 7.1 million jobs have been eliminated since the recession began in December 2007.

Many analysts expect the economy grew at a healthy clip in the July-September quarter, technically ending the recession, but few think the recovery will be strong enough to lower the jobless rate. Most economists expect the rate to top 10 percent and keep climbing.

The economy has received a boost from the Cash for Clunkers auto rebate program and other government stimulus efforts, but many economists believe that growth will slow in the current quarter and early next year as the impact of those programs fade.

Federal Reserve Chairman Ben Bernanke said Thursday that even if the economy were to grow at a 3 percent pace in the coming quarters, it would not be enough to quickly drive down the unemployment rate. Bernanke said the rate is likely to remain above 9 percent through the end of 2010.

Persistently high unemployment could weaken the recovery as consumers, concerned about their jobs and incomes, restrain spending. Consumer spending accounts for about 70 percent of the U.S. economy.

Hourly earnings rose by a penny last month, while weekly wages fell $1.54 to $616.11.

The average hourly work week fell back to a record low of 33 in September, the department said. That figure is important because economists are looking for companies to add more hours for current workers before they hire new ones.