Morning Bell: The Reagan Recovery vs The Obama Recovery

Morning Bell: The Reagan Recovery vs The Obama Recovery

Posted By Conn Carroll On February 4, 2011 @ 9:25 am In Ongoing Priorities | 15 Comments

This Sunday is President Ronald Reagan’s 100th birthday. It’s hard to comprehend the debt of gratitude our nation owes the 40th President of these United States. As Heritage Foundation Distinguished Fellow in Conservative Thought Lee Edwards details, Reagan embodied many of the classical virtues [1] that the best political leaders possess: courage, prudence, justice, and wisdom. And he used each of these virtues to create an environment where the U.S. economy could strongly recover from our last great recession. The current occupant of the White House ought to take some better notes.

According to the National Bureau of Economic Research [2], our most recent recession began in December 2007, lasted 18 months, and ended in June 2009. The last recession that lasted this long began in July 1981, lasted 16 months, and ended in November 1982. In his 1983 State of the Union Address [3], President Reagan described an economic situation that mirrored our own today: “The problems we inherited were far worse than most inside and out of government had expected; the recession was deeper than most inside and out of government had predicted. Curing those problems has taken more time and a higher toll than any of us wanted. Unemployment is far too high.” But where President Obama responded to an economic recession with a bigger than $2 trillion expansion of government (more than $1 trillion on health care and almost $1 trillion in economic stimulus), President Reagan passed the Economic Recovery Tax Act of 1981, which cut marginal income tax rates across the board permanently. And the differences don’t end there. Read the rest of this entry »

Our Only Answer is Bankruptcy

Our Only Answer is Bankruptcy

January 18th, 2011

Thomas Sowell, Investors Business Daily


(Thomas Sowell discusses abolishing the Fed on
Judge Napolitano’s show.
)
Government budget crises can be painful, but the political rhetoric
accompanying these crises can also be fascinating and revealing.
Perhaps the most famous American budget crisis was New York City’s, back
during the 1970s. When President Gerald Ford was unwilling to bail them out, the
famous headline in the New York Daily News read, “Ford to City: Drop Dead.”
President Ford caved and bailed them out, after all. The rhetoric worked.
That is why so many other cities and states — not to mention the federal
government — have continued on with irresponsible spending, and are now facing
new budget crises, with no end in sight.
What would have happened if Ford had stuck to his guns and not set the
dangerous precedent of bailing out local irresponsibility with the taxpayers’
money? New York would have gone bankrupt. But millions of individuals and
organizations go bankrupt without dropping dead.
Bankruptcy conveys the plain facts that political rhetoric tries to conceal.
It tells people who depended on the bankrupt government that they can no longer
depend on that bankrupt government. It tells the voters who elected that
bankrupt government, with its big spending promises, that they made a bad
mistake that they would be wise to avoid making again in the future.
Legally, bankruptcy wipes out commitments made to public sector unions, whose
extravagant pay and pension contracts are bleeding municipal and state
governments dry. Is putting an end to political irresponsibility and legalized
union racketeering dropping dead?
Politics being what it is, we are sure to hear all sorts of doomsday rhetoric
at the thought of cutbacks in government spending. The poor will be starving in
the streets, to hear the politicians and the media tell it.
Party On
But the amount of money it would take to keep the poor from starving in the
streets is chump change compared to how much it would take to keep on feeding
unions, subsidized businesses and other special interests who are robbing the
taxpayers blind.
Letting armies of government employees retire in their 50s, to live for
decades on pensions larger than they were making when they were working, costs a
lot more than keeping the poor from starving in the streets.
Pouring the taxpayers’ money down a thousand bottomless pits of public and
private boondoggles costs a lot more than keeping the poor from starving in the
streets.
Bankruptcy says: “We just don’t have the money.” End of discussion.
Read
more
.

The “One” Returns

The “One” Returns

   View Alan Caruba’s blog

By Alan Caruba

OZYMANDIAS
by Percy Bysshe Shelley

I met a traveler from an antique land
Who said: Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk, a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal these words appear:
“My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!”
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away.

Occasionally, when I am watching or listening to Barack Hussein Obama, I am reminded of the poem, “Ozymandias” by Percy Bysshe Shelley.

Shelley was an English romantic poet who hung out with Lord Byron and John Keats, all authentic literary giants. Shelley died at age 30 from drowning. Bryon contracted a fever, dying in Greece at the age of 36. Poor Keats died at age 26. All were dead by 1824. Rediscovered by later generations, they gained immortality.

“Ozymandias” is a poem about a life of over-weaning pride that ends poorly and forgotten. Obama has the first part down. After all, he wrote two memoirs about his life and deep thoughts before he was elected to be the junior U.S. Senator from Illinois in 2004.

By 2007 Obama hit the presidential campaign trail and ended Hillary (and Bill) Clinton’s dreams of returning to the White House. He gave her a consolation prize. He then defeated yet another lame Republican candidate simply by showing up, being younger, and being able to read a TelePrompter better.

What Obama’s campaign is now remembered for is Rev. Jeremiah Wright, telling Joe the Plumber he wanted to redistribute everyone’s wealth, and for throwing his grandma under the bus.

From a very young age, Obama believed he would become President. It might better be called a fixation or obsession.

Obama only met his birth father once in 1971 at age ten, but here again this idea of fixation plays a role. In reality his father was a bigamist (he had a wife or two back in Kenya when he married Obama’s momma), a drunk (he died behind the wheel while soused), and fancied a political career in Kenya that never materialized. One of Obama’s two memoirs was titled “Dreams From My Father.” Yeah, sure.

After Obama Senior, his mother married an Indonesian who adopted their son. His formative years were spent there until his mother divorced again and shipped Barack to Hawaii to be raised by his white grandparents. Progressives, they were friends with Frank Marshall Davis, a communist, one of Obama’s many very left wing influences and associates over the years.

I think that, early on, Obama decided to become the communist messiah to America, but like all communists, he kept that part of his political philosophy a secret from the voters, while dropping hints of it in his memoirs.

When Obama returns from his vacation in Hawaii, he is going to face the toughest two years of his life. Not since 1946 have the voters turned so deliberately on a Democrat president. In 2010 they voted in a Republican majority to the House and narrowed the Democrat margin in the Senate.

Obama called it “a shellacking” but it is better described as a rejection.

Other presidents in the modern era lost their party’s majorities in Congress. Clinton comes to mind and, of course, George W. Bush. Obama’s loss was more than just political, it was personal.

Beyond Congress Obama will have to deal with a vibrant, energized movement, the Tea Party that intends to ensure the Republicans trim government spending and turn back the policy gains Obama put in place with Obamacare at the top of the list.

As far as the rest of the world’s movers and shakers are concerned, Obama is little more than a charming cocktail party guest with little to offer than small talk and leftist bromides.

Only one thing is certain. Obama will be running for re-election the minute he returns to Washington, but he is going to need more than his former vacuous “hope and change” motto and there is small chance of that. In a very real way, the nation has already moved beyond him.

When I see Obama these days, I think of Jimmy Carter, a pathetic former president soundly rejected by the voters, the “author” of endless, largely unread books, and grateful that anyone takes notice of him.

When you see Jimmy Carter today, you’re looking at Barack Obama in fifteen or twenty years.

© Alan Caruba, 2010

New study shows zero impact of $800 billion stimulus

New study shows zero impact of $800 billion stimulus

Rick Moran

 

There have been other studies hinting at the same thing,
but this one by John
Cogan and John Taylor
of the Hoover Institution appears to be pretty
solid.

In September 2009, we reported on this page empirical research
showing that the temporary tax rebates and transfer payments in the Bush and
Obama administration’s stimulus programs were ineffective. Here we consider new
data on the impact of increases in government purchases, which were heralded as
a major stimulating factor in the Obama package.
The key tenet of Keynesian economics is that government purchases of goods
and services stimulate additional economic activity beyond the amount of the
purchase itself. The impact on GDP of the stimulus depends both on the dollar
volume of additional government purchases and on the size of the government
purchases multiplier, i.e., the effect of a change in government purchases on
real GDP.
Although the policy debate has mainly focused on the multiplier’s size, data
covering the first year and three quarters of the 2009 American Recovery and
Reinvestment Act (ARRA) show that, despite the large size of the program, the
dollar volume of additional government purchases that it has generated has been
negligible.

“Negligible” as in perhaps a 3% difference. One thing that the stim bill
accomplished was bringing down state indebtedness – about $130 billion less was
borrowed. That’s not to say that the states didn’t spend that money. They just
didn’t need to borrow against tomorrow to do it.
This won’t stop liberal economists like Paul Krugman from ranting about more
and more stimulus. But it least it gives the opposition a little ammunition to
stop the madness before we are forced into
insolvency.

Page Printed from:
http://www.americanthinker.com/blog/2010/12/new_study_shows_zero_impact_of.html

at December 10, 2010 – 11:09:24 AM CST

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Christmas is About Jesus, Not More Debt

Christmas is About Jesus, Not More Debt

November 29th, 2010

Floyd and Mary Beth Brown, FloydReports.com

During  this  Christmas season of cheer and good tidings, a  universal message  is going  forth.  They are all united — from Barack  Obama, to Martha  Stewart, to Wall  Street banks, to the Federal Reserve  — and even your  local mall agrees:  please borrow to spend more this  Christmas.

Americans  since 2008  have been tightening their belts, and they have  paid down  more than $150 billion in consumer debt.  This is a  remarkable feat and  a  testimony to the diligence, hard work, and  frugality of the  American  citizen. In contrast to the people, we are  embarrassed that  our  government is encouraging irresponsible and  spendthrift behavior.

Little   wonder the finances of the U.S. government and the Federal  Reserve  are in  a shambles. When times are tight, overspending and  excessive  debt is  never the answer. Americans intuitively understand  this and  they are  making tough choices to avoid bankruptcy.  Barack  Obama would  be smart  to follow their example.

But governments never really  tighten  the budget. We all learned  years ago the idiocy of government  accounting  when they proclaimed they  were making “budget cuts” when  spending and  borrowing was going up  every year.  This would be akin to  us saying, “We  want a Porsche, so we  will cut the budget and get a  Corvette,” when our  salary could only  cover payments on a Toyota  Corolla.

This upside-down idea was in the news again this week with the bailout of Ireland….

Read more.

INSANE! Reid: ‘But for Me, We’d be in World-Wide Depression.’

Senator Harry Reid boldly states that he is the savior of the world economy.   He is clearly frustrated that voters are not more appreciative of what’s he’s done for them.

Where would the world be without Harry Reid?
That’s The Question the World Needs To Ask, That’s right folks, according to Harry Reid, he alone saved us all from a world wide depression.
What Cave As He Been Living In? Is H. Reid totally Senile?
Please watch the interview and you decide.

 

http://www.breitbart.tv/reid-but-for-me-wed-be-in-world-wide-depression/

CEOs Threatened by Obama’s “Arrogant Ignorance”

CEOs Threatened by Obama’s “Arrogant Ignorance”

September 27th, 2010

Investors Business Daily

He doesn’t look or sound radical. President Obama, in fact, is so calm, almost regal, he makes government takeovers and redistribution schemes seem almost reasonable. But the facade is wearing thin.

Fortune 500 leaders who believed Obama’s moderate rhetoric, and even raised cash and voted for him, have soured on him. They now believe he’s bad for business and hostile to the American free enterprise system.

Even die-hard Obama fan Tom Wilson, head of Allstate, says the president could have used some executive experience on his all-academic economics team. Not a single former corporate executive is in Obama’s Cabinet or among his top economic advisers. “I think it was a hiring mistake for the administration,” Wilson told CNN last week.

Wilson also suggests Obama convene a summit with business leaders to clear the air. “I’d spend less time on the G-20 and more time on the U.S. 100,” he advised.

Problem is, CEOs have walked away from prior White House luncheons shocked at (1) Obama’s dismissive reaction as they try to explain the harm of his anti-business policies and (2) his shallow understanding of business and economic matters.

They’re not just put off by the president’s harsh depiction of “fat cat bankers” and other anti-business bashings. They’re more disturbed by his arrogant ignorance. “The truth is that not even the Franklin Roosevelt administration was as hostile to and ignorant about free enterprise as this administration is,” said publisher Steve Forbes.

Few before the election dared call Obama the “s” word. Independent voters, who ensured Obama’s victory, generally considered him to be a centrist or slightly left of center. Now they view him as extremely liberal. And by Democrats’ own polling, a solid majority — 55% — of all likely voters now think “socialist” is a more accurate way to describe Obama.

Hate to say we told you so. But we did.

Read more.

“Historic” Rise in Taxation in 6 Mos.

“Historic” Rise in Taxation in 6 Mos.

Posted by Veronica (Profile)

Friday, July 2nd at 12:20PM EDT

53 Comments

We’ve been here before.

Americans For Tax Reform culled a few things from the List of Expiring Federal Tax Provisions 2009-2020 off the government’s website:

In just six months, the largest tax hikes in the history of America will take effect.  They will hit families and small businesses in three great waves on January 1, 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families.  These will all expire on January 1, 2011:

Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).  The lowest rate will rise from 10 to 15 percent.  All the rates in between will also rise.  Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.  The full list of marginal rate hikes is below:

– The 10% bracket rises to an expanded 15%
– The 25% bracket rises to 28%
– The 28% bracket rises to 31%
– The 33% bracket rises to 36%
– The 35% bracket rises to 39.6%

Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income.  The child tax credit will be cut in half from $1000 to $500 per child.  The standard deduction will no longer be doubled for married couples relative to the single level.  The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax.  For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million.  A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011.  The dividends tax will rise from 15 percent this year to 39.6 percent in 2011.  These rates will rise another 3.8 percent in 2013.

Second Wave: Obamacare

There are over twenty new or higher taxes in Obamacare.  Several will first go into effect on January 1, 2011.  They include:

The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit).  There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.  There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.  Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year.  Under tax rules, FSA dollars can be used to pay for this type of special needs education.

The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired.  The major items include:

The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million.  These families will have to calculate their tax burdens twice, and pay taxes at the higher level.  The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000.  This will be cut all the way down to $25,000.  Larger businesses can expense half of their purchases of equipment.  In January of 2011, all of it will have to be “depreciated.”

Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place.  The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others.  Combining high marginal tax rates with the loss of this tax relief will cost jobs.

Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available.  Tax credits for education will be limited.  Teachers will no longer be able to deduct classroom expenses.  Coverdell Education Savings Accounts will be cut.  Employer-provided educational assistance is curtailed.  The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.  This contribution also counts toward an annual “required minimum distribution.”  This ability will no longer be there

Breaking: US Unemployment Claims Rise Unexpectedly As Employers Are Forced To Fire More Workers

Breaking: US Unemployment Claims Rise Unexpectedly As Employers Are Forced To Fire More Workers

July 1st, 2010 Posted By Pat Dollard.

obama-laughing-258x300

WASHINGTON (AP) — Initial claims for unemployment benefits rose last week for the second time in three weeks, a sign that layoffs are rising.

The Labor Department says new claims for jobless benefits jumped by 13,000 to a seasonally adjusted 472,000. Analysts expected a small drop, according to a survey by Thomson Reuters.

Greater layoffs by construction firms contributed to the increase, a Labor Department analyst said. Home sales slumped last month after the expiration of a popular homebuyer tax credit. Summer layoffs in many school districts also added to the total.

The number of people continuing to claim benefits rose by 43,000 to 4.6 million, the department said. But the number of people collecting extended benefits fell by 376,000, as lawmakers have refused to continue the extra aid.

Why Obamanomics Has Failed

Why Obamanomics Has Failed

June 30th, 2010

By ALLAN H. MELTZER, The Wall Street Journal

The administration’s stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible.

But they want new stimulus measures—which is convincing evidence that they too recognize that the earlier measures failed. And so the U.S. was odd-man out at the G-20 meeting over the weekend, continuing to call for more government spending in the face of European resistance.

The contrast with President Reagan’s antirecession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9% and it continued to expand above trend rates.

Two overarching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future. High uncertainty is the enemy of investment and growth.

Most of the earlier spending was a very short-term response to long-term problems. One piece financed temporary tax cuts. This was a mistake, and ignores the role of expectations in the economy. Economic theory predicts that temporary tax cuts have little effect on spending. Unless tax cuts are expected to last, consumers save the proceeds and pay down debt. Experience with past temporary tax reductions, as in the Carter and first Bush presidencies, confirms this outcome.

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