They are still using the same tired rhetoric, about inheriting the worst economic calamity since the Great Depression. The truth is that the worst economic calamity since the Great Depression is the Obama administration. Barack Obama stands with Herbert Hoover as the only presidents with negative job growth during their administrations. As if stuck in the 1930s, Obama dusted off FDR’s playbook, since he had no personal executive experience to draw on, and that playbook didn’t work then and it’s not working now.

So along comes an opportunity for a major “shovel ready” project, backed by unions, that can create thousands of jobs, move us closer to energy independence, help us depend less on getting oil from Middle East despots, and what does Obama do? He kills it. What he wanted to do, was defer a decision on this until after the election, eleven months away. He wanted to do what he does best, vote “present”.

Congress, particularly the Republicans who seem to be the only adults working on Capital Hill, included a provision in the payroll tax holiday extension, to make a decision within sixty days. People are hurting, gas prices are creeping up, unemployment benefits have been extended to extraordinary lengths, and this incompetent president says that sixty days was not enough time to review the proposal so he had to, sadly, reject it. Perhaps if he hadn’t played all those rounds of golf, perhaps if he had studied it a little closer instead of spending all that time in Hawaii, perhaps if he put this job creating proposal on the top of the EPA’s to-do list instead of their focusing on the job killing regulations to limit power plant emissions, he would have gotten his job done. But no, sorry, I don’t have my homework, teacher, I dunno, I forgot, my dog…. Enough!

Let China make an oil deal with Canada. We can always buy the oil back from them at a premium. Why not, they probably don’t have enough of our dollars as it is now. Why not give them more? This president is making decisions that will cobble together a coalition of supporters to get him reelected. This is about appeasing the environmental movement so that they won’t abandon him.

At an event in Ottumwa, Iowa, on Dec. 31, Rick Santorum mocked the idea that the pipeline posed the threat of environmental damage, noting that there were already many other pipelines in the area it would go through. “This is just, again, pandering to radical environmentalists who don’t want energy production, who don’t want us to burn more carbon,” Mr. Santorum said.

The State Department, which has authority over this since it goes between us and Canada, “said there was not enough time to draw a new route for the pipeline and assess the environmental harm.” Bullfeathers. It’s a 1700 mile pipeline. The area in question is a fraction of that length. Agree to the pipeline, get started hiring people and building it in areas not in dispute, and work to resolve the section in question. But unless it is killed, Obama risks losing the green vote and what is more important, America or Obama’s reelection?

I’d like to ask my Congressman, Tim Bishop, to weigh in. What do you have to say about this, Tim? Or are you too busy manufacturing your own campaign issue around outsourced phone center jobs. If jobs are really important to you, you would stand up and challenge Obama for killing an opportunity for good, high paying, union jobs in America. On the other hand you can stay silent, not challenge President Obama’s error and risk his ire and possibly lose campaign funds and support. So what do you stand for, Tim? Putting America first or putting your interests right up there with President Obama’s and above America’s.

That’s my opinion; I’d like to know yours. Please comment below.

Jon Corzine, one of those very smart Wall Street guys, the former head of Goldman Sachs, testified before Congress today to answer questions as to what happened to his firm MF Global, which is now one of the largest bankruptcies in US history. There is over $1 billion unaccounted for. He simply doesn’t know where it went. This is the guy that Obama and Biden praised when they took office as the first guy they would turn to in the midst of the economic crisis. It explains a lot about where we are today.

http://www.youtube.com/watch?v=xm3VMrKqJSA

It seemed that as long as Corzine sat in the cat bird seat of crony capitalism, where if your big bets pay off you rake in the dough and if they go south, you hand the bill to the taxpayers in the form of bailouts because you are too big to fail. Take him out of that role and he acts the same way, but without the safety net you see the results.

What Corzine did, after driving New Jersey into a ditch that Chris Christie is digging out of, he bet heavily on the debt of foreign countries. Oops! It seems like he believed that governments never run out of money, but sadly they do. And we will face the same fate, but who is steering our economic ship? The two guys who think Jon Corzine is brilliant. Jon Corzine is the first guy that Joe Biden and Barack Obama called upon taking office. Is there any wonder that their plan has been a disaster? Is there any wonder that no one on Wall Street has been pursued by the Justice Department? Is there any wonder that they are trying to kill the free market economy by regulating out of existence the things that people actually want to buy and heavily subsidize things that they don’t? Every day we hear a new report of more billions going into green programs that we will never see a return on.

It’s time to drop the curtain and get the hook. These clowns are not the least bit funny.

That’s my opinion; I’d like to know yours. Please comment below.

President Obama Speaking at Solyndra

Congressman Tim Bishop has not been able to keep from spending, no matter what. The Postal Service has an $8.5 billion deficit, and Tim Bishop is out there fighting to keep an unneeded post office open. We are trillions of dollars in debt and he comes out blasting the Tea Party, because they want Congress to not waste anymore money on green boondoggles like Solyndra.

At issue is a Continuing Resolution, that is, a bill to provide temporary funding to the government. At the heart of the issue is that the Federal Emergency Management Administration (FEMA) has run out of money, so there is an issue of whether to give them $3 billion more or $6 billion more. In addition the Republicans want to cut funding for such green projects like Solyndra, which just declared bankruptcy after getting a $500 million taxpayer-funded loan guarantee. How heartless can those Tea Party people be to not want to send good money after bad for progressive boondoggles? But of course we should listen to Tim Bishop. After all he has been such a trusted steward of our money so far, right?

The above chart shows how much debt limit has been increased by Congress to keep the government functioning, since 1940, when it was almost zero. Tim Bishop was sworn into Congress in January of 2003, from a point where it had leveled off, the line almost goes vertical. That is eight trillion dollars in additional borrowing in just ten years in office, and he has the utter gall to say the Tea Party’s calls for restraint are unwarranted? Somebody has to do it. If Tim Bishop and Nancy Pelosi had not spent trillions of dollars that the government didn’t have, maybe we wouldn’t be quibbling over $3 billion.

Waste and Fraud

It remains to be seen if Solyndra was a massive fraud or the Democrats thinking they are really investment bankers and venture capitalists rather than elected officials, but we could have used that $500 million rather than waste it. But Bishop objects:

“Even worse, the Republican bill calls for much of that sum to be funded by cutting federal loan programs that have encouraged new job creation by U.S. automakers and clean energy manufacturers.” — e-mail message from Tim Bishop to his constituents.

$39 billion in stimulus dollars have been earmarked for green energy jobs. So far, $19 billion has been spent and 3,500 jobs have been created. That’s $5.4 million per job, people, do you think we can do better than that in the private sector? But what is a “green job?” According to Labor Secretary Hilda Solis, if you drive a hybrid bus, it’s a green job, if you drive a gas-powered bus it is not a green job.

http://www.youtube.com/watch?v=1scrqqWpFlM

As one pundit put it, Washington is the only place where the circus never leaves town. This is what Congressman Bishop decries that Republicans are trying to cut. Do you think your hard-earned money is being well spent?

There is a report out today that the federal government paid about $600 million to federal workers who are DEAD! The Justice Department buys muffins for a meeting that cost $16 each! Medicare and Medicaid routinely have $60-$100 billion per stolen, and Tim Bishop has no suggestions how to cut, and even takes the time to write his constituents that, “I am sick and tired of this divisive posturing we have come to expect from the Republican Tea Party Caucus.”

I have a piece of news for you, Congressman, in case you have not been paying attention. The last Democrat who thought it would be a great idea to attack his opponent as beholden to the Tea Party was a guy named David Weprin in the 9th Congressional District of New York special election. In a district that was 3:1 Democrat registered voters, he lost big. Many Tea Party members from the heart of your district traveled on their own time and at their own expense into Brooklyn and Queens to get out the vote for Bob Turner. If you think it is a winning strategy to attack the Tea Party, I have three words for you. Bring it on.

That’s my opinion; I’d like to know yours. Please comment below.

As I check the current price of GM stock this morning, $31 per share, and I contemplate how in the world it is going to reach the $53 per share price Americans need to fully recover their “investment” in the automaker, a recent news story lays it on the line. It’s not going to happen. The Obama administration has announced that it is demanding that auto companies double the mileage that their fleets get, to 56.2 miles per gallon, by 2025.

Once again we have the statists thinking that they are the smarter version of soviet planners who can demand that the wind blows, the sun shines, and the seas fall, and can just order that private industry do something and it will be done. As I point out in my book Liberty’s Lifeline, U.S. auto companies have about a $2,000 per car disadvantage relative to their foreign competitors due to health care benefits. So unless people think environmental green is superior to the green in their wallets, they are not going to pay a premium for high mileage cars. After all, the point of a high mileage car is to save on  the rising cost of gasoline, but if you never get the savings because the of the high price of the car, why do it. The clear example of this is the Chevy Volt.

The Chevy Volt is a $40,000 electric car, that is General Motors pride and joy. To encourage people to pay the ridiculous sticker price, the government offers a $7,500 subsidy, that is, you pay for the privilege of your neighbor driving his green car. The good news is that March sales were more than January and February combined. The bad news is that March sales were a total of 608 cars. For the first quarter the number of Volts sold totaled 1,210, compared to 50,000 for the Chevy Cruze.

GM makes money when it sells a Cadillac. Ford makes money selling F-150 pickup trucks. But the government has to get involved and tell these companies that they must sell cars in a sufficient mix that their Corporate Average Fuel Economy (CAFE) meets the government mandate, which will rise to the aforementioned 56.2 miles per gallon.

The market consists of demand for a variety of vehicles. Some companies can produce small, light, high mileage vehicles. Others can produce stronger, heavier trucks and luxury cars. Who is Washington to say what each can build? Let the market decide. If gasoline prices continue to rise, the car company that can continue to build high mileage cars will do well. GM and Chrylser are caught between the unions and a hard place. Their higher labor costs put them at a serious disadvantage in the low end, high mileage market and then Washington says that they have to sell more cars in that space to hit the CAFE averages. It is a recipe for disaster. But don’t worry, you have their back. You wallet is just a stroke of the pen away from this administration doling out more money to their friends and sticking you with the bill.

That’s my opinion; I’d like to know yours. Please comment below.

The UN’s World Health Organisation and the International Atomic Energy Agency claim that only 56 people have died as a direct result of the radiation released at Chernobyl and that about 4,000 will die from it eventually.

On August 31, the EPA quietly released interim results of its ongoing review of possible drinking water contamination at several sites near Pavillion, Wyoming. Kevin Book, an energy expert with ClearView Energy Partners, an energy market research firm, reports, “Although EPA’s latest data did not conclusively link
contamination to fracking, EPA’s guidance that residents should avoid drinking the water may give Congressional fracking opponents a valuable sound bite to use when calling for mandatory disclosure rules [identifying chemicals used]“.

When did the distortions start? Was it with Officer Crowley and the Cambridge Police Deparment “acting stupidly”? Was it with the distortions over ObamaCare? How about dressing down the Supreme Court while the camera catches Samuel Alito saying “not true”. His assault on Paul Ryan’s budget blueprint after inviting Congressman Ryan to come hear his speech, brings to mind Joe Wilson’s outburst, “You Lie!” during another Obama address in Congress. It is becoming all to common to hear the lies and distortions from this president, but they keep coming. The good news is that Congressman Ryan is not afraid to counterpunch.

Congressman Ryan takes apart the president’s speech on his budget proposal and injects some truth into the debate. Let us not forget it was President Obama who proposed a budget and without so much as a debate, pulled it back and submitted another. It is still too much spending for too long. The economy is crawling back when, by now, it should be roaring back. But regardless, at least let’s have an honest debate.

httpv://www.youtube.com/watch?v=yR7dBVM5NvQ&feature=player_embedded#at=140

Now it is time to address the debt limit and some serious scaling back of spending. Congressman Ryan’s budget would be a good start coupled with a Balanced Budget Amendment, because one Congress cannot bind another Congress to its actions. Only a Balanced Budget Amendment would put the discipline in place that we must have.

That’s my opinion; I’d like to know yours. Please comment below.

The Tea Parties sprang to life after seeing cyincal politicians advance their own agenda that most Americans knew wouldn’t work, but damn the people, the politicians plowed ahead. It was about the time of the great stimulus program that we were told (and didn’t believe) the program would cap unemployment at 8% for the mere cost of nearly $1 trillion. If we didn’t act, the politicians somberly pronounced, we would face the dire situation of 9% unmployment.

New York Congressman Tim Bishop has introduced “The Big Oil Welfare Repeal Act,” which could be said is cynicism on steroids. Let’s start with the title. Does Mr. Bishop really believe that oil companies are receiving welfare? Welfare as most honest people know is where the government gives people money who are not working. It takes little questioning to figure out that is not happening in the case of the oil companies but, hey, lying works. Tim Bishop just ran his entire reelection campaign on personal attacks on his opponent rather than running on his record, so lies and distortion are his specialty. Let’s break it down.

What he wants to do is eliminate a tax break, not a subsidy, that the oil companies receive which equates to 6% of the income they get from domestic oil production. I am all for simplifying the tax code and eliminating all loopholes and at the same time reducing tax rates so on balance it is revenue neutral. But why stop with the five biggest oil companies? What about eliminating subsidies for ethanol? Wind? Solar? Crops? Electric cars? Mortgages? Uh, those wouldn’t be cool with the people Bishop needs to reelect him, but Big Oil, yeah everybody can hate Big Oil!

Bishop goes on to say that the extra revenue from the oil companies by eliminating the tax break will reduce the deficit by $13 billion over ten years or doing the math about $1.3 billion for one year which is 0.08% of the current one year deficit of $1.6 trillion. So, Mr. Bishop is cyinically trying to show he is concerned about the debt, and yet he voted against the Ryan budget proposal that would save $6 trillion; deficit reduction to Tim Bishop has to be symbolic not serious or real.

Lies, Lies and more Lies

Mr. Bishop, on his own website, says the following:

• I’m outraged that at $4 a gallon, Americans are still paying twice for gas: once at the pump and once on tax day,” said Congressman Bishop.  “Borrowing money to pay Exxon-Mobil to drill for oil they have every incentive to drill for already is Exhibit A for wasteful government spending.”
• Repealing the oil industry’s tax subsidies will not impact gas prices for American consumers.
• Bishop unveiled the bill at the Patchogue Village Department of Public Works facility on Waverly Avenue, which houses the gas pumps used by village, school, and fire district vehicles.  He was joined by Village Mayor Paul Pontieri, who described the effect high gas prices have on the Village’s budget.

These three bullets were from the same post on his website! He begins by saying he is outraged by the price of gasoline at $4 a gallon. He then says that his proposal will not affect gas prices. Then he uses the poor Patchogue Village mayor as a prop, to unveil his plan that Bishop  says won’t do a damn thing to solve the mayor’s problems. Do you wonder why Americans hate politicians?

Bishop is right about the gas prices. Exxon makes a profit of about $0.07 per gallon of gasoline. Bishop’s proposal will affect 6% of the profits they make on domestic production. It doesn’t take a mathematician to figure out at 6% of $0.07 is about half a cent per gallon. So why all the hoopla other than to create a false impression that this congressman is actually earning his $176,000 salary. That’s why Americans hate politicians.

Let’s move onto the next lie, paying the oil companies on tax day. With Memorial Day approaching we will be seeing a lot of sales from merchants. If you go to Lowe’s to buy that new grill and they advertise 10% off for Memorial Day, does the cashier reach into the drawer, take out some cash and give it to you? No. Ten percent off means you pay ten percent less. You do not come home with a grill and more money in your pocket than when you left the house. The same applies to taxes. Any tax break means you pay less in taxes, the government doesn’t pay you. The government doesn’t have any money except what it gets from you. That’s how it works. So tax cuts are where you get to keep more of your own property. It is not a payment from the government, it is not a cost to the government, IT’S NOT THE GOVERNMENT’S MONEY, it’s your money.

Okay, gas is expensive, so what do we do about that? Many on the right have said we should increase domestic production. So what does Tim Bishop do? His proposal is to remove a tax incentive on domestic production. That seems counterproductive. He also said he just voted against expediting domestic drilling permits. It would almost seem that Bishop wants to increase our dependency on foreign oil. He then goes on to say in a C-SPAN interview that domestic production is at an all time high, and that the oil companies have plenty of leases and they should just drill on the leases that they have.

The problem is that it takes about sixty leases to get one with a productive discovery of oil. What Mr. Bishop only mentions in passing is the value of the dollar as a contributing factor in the price of gasoline. I suggest that it is a more serious relationship than that and who has been destroying the value of the dollar by printing money and spending it like crazy? It was Tim Bishop who voted for the stimulus that accomplished nothing. Nancy Pelosi ran up the debt $5 trillion during her tenure as Speaker and Tim Bishop voted with her 97% of the time. Now he proposes meaningless legislation just to get some campaign sound bites, because attacking Big Oil is good politics. That’s why Americans hate politicians. They want their elected representatives to do things that work, not things that get the politicians another two years on the government’s payroll.

Here Mr. Bishop let’s his fig leaf slip and reveals his socialist leanings:

He noted that while continuing to enjoy the subsidy, the largest five oil producers have directed the lion’s share of their profits into dividends and stock buy-backs.

Think about the local green grocer. If he has a good year and he makes a profit, maybe he decides to put that profit into the bank. Would Tim Bishop object to that? Okay, who owns the oil companies? The stockholders. Mr. Bishop is basically saying that the people, maybe even a certain green grocer, who invested their hard earned money are not entitled to any of the profits from the oil companies they own in the form of dividends. They are not allowed to sell some of their stock back to the company in the form of a stock buyback so they can invest their money elsewhere. Perhaps some of those oil company owners are retirees who bought the oil company stocks for the dividends and because they believed the oil companies will be around for some time to come. Perhaps they don’t believe that Social Security is such a swell deal; few ponzi schemes are. Mr. Bishop takes exception to them getting a dividend increase now and then. In his twisted understanding of economics or lack thereof, the oil companies should be taxed more, its owners receive no profits, plow all profits back into exploration and development, and sell their product for less money, while he and his cohorts spend every last dollar that this country produces, to keep themselves in office, and have a claim on everything you own, except that which Mr. Bishop decides you can keep. But whatever you do, don’t call them socialists.

And that’s why Americans hate politicians.

That’s my opinion; I’d like to know yours. Please comment below.

With gas prices on the rise, Bill O’Reilly, is once again targeting his favorite whipping boy, The Speculators. Like a 1940′s whodunit, we are told of those evil greedy speculators and how we need more government intervention to reign them in. The question that is never asked nor answered is, where do the speculators go when gas prices fall? If their evil intent is to drive up prices so they can make obscene profits, why would they ever stop?

It was only about three years ago when gas prices were similarly on the rise. The O’Reilly Factor was all over the speculators and how they were greedy, selfish, and had to be stopped. But from June 2008 to December 2008 the price of a gallon of regular gasoline dropped from $3.99 to $1.66 and no mention was made about the speculators. Why? Did they disappear? No.

The speculators were still there, but this time they were driving prices down. Huh? Speculators don’t care if the price goes up or the price goes down. All they care about is that the price moves in the direction they predict it will. If speculators predict prices will rise because of supply and demand, which could be affected by growth in China or political upheaval in the Middle East, they will help push prices up. If they predict prices will fall because of a severe economic contraction, they will help push prices down. They are performing a legitimate market function by providing liquidity, they are not out to get “the folks,” as Bill likes to say. Economist Walter Williams explains it here using other commodities to take some of the emotion out of the discussion where oil is concerned:

Here’s a non-rocket science question: If you expect a reduced harvest of wheat, corn, rice or any other commodity some time in the future, what would be the wise thing to do about your consumption today? I bet that the average person would answer: Consume less now so that more will be available in the future.

But how in the world can people be encouraged to consume less now? Enter the futures market, which consists of a worldwide group of millions upon millions of traders, often called speculators. Speculators, betting on a future shortage, buy up wheat, corn and rice today in the hopes of making money selling it for a higher price when the bad harvest hits. As speculators buy more and more wheat, corn and rice, they drive up today’s prices. As today’s price gets higher, people consume less, but more importantly, people do the intelligent thing without bureaucratic edicts. The vital role of the futures trader, or speculator, is to allocate goods over different time periods. And, it’s not just wheat, corn and rice that must be allocated over time but all commodities including oil.

Okay, that may explain the speculators but some have also said there is ample supply of oil, so why are prices rising?  If it is not the speculators, who is at fault? To that I say turn your eyes toward Washington. Oil is an international commodity that is priced in U.S. dollars, because U.S. dollars are the world’s reserve currency. But what has our government been doing to the dollar? With the reckless spending and unprecedented borrowing and indebtedness, we are printing money like crazy which is driving down the value of the dollar. As the value of the dollar falls, you need more of them to buy the same amount of oil.

Gold vs Gasoline prices

As you can see from this chart, the trend in gasoline prices closely matches the trend in gold prices. At one time our dollar used to be backed by gold, so you can look at gold as value based money rather than fiat money. Fiat money is where a government issues paper and says it has a worth that the government determines. There isn’t any real commodity or thing of value behind it, it has value because the government says so. Let’s look at it a different way. Let’s say you could buy your gasoline by using gold instead of paper dollars. In 1990 it would have taking 0.003 ounces of gold to buy a gallon of gasoline. In April 2011 it would take 0.0025 ounces of gold to buy the same gallon of gasoline. So while we are starting to worry about gasoline costing nearly $4 a gallon nationwide, it is really relatively cheap on an historical basis, so watch out.

Price of a gallon of Regular gasoling in ounces of gold

Historically you can see a slight upward trend in the price of gasoline when using gold as the standard of value. It has been climbing, but not ridiculously so.

So lay off beating up on the speculators and start turning your firepower on Washington. If we don’t get our fiscal house in order and soon, we will be in very deep trouble indeed. This has to be fixed and it has to be fixed now; not in ten years, not in twenty years, NOW.

That’s my opinion; I’d like to know yours. Please comment below.

I received an e-mail from my congressman introducing his new “Big Oil Welfare Repeal Act”. It was one of those proposals that was either a political ploy or demonstrative of the potential damage that can be done by politicians who spent their lives closeted from the real world in either the ivory towers of academia or as life long members of the ruling class. I wrote a reply:

April 29, 2011

Congressman Tim Bishop

306 Cannon H.O.B.

Washington, D.C. 20515

Dear Congressman Bishop,

I received your e-mail today regarding tax subsidies for oil companies. Your e-mail began:

“’With oil at more than $50 a barrel, by the way, energy companies do not need taxpayer-funded incentives to explore for oil and gas.’  So said President George W. Bush in, 2005.”

If I am not mistaken, Congressman, you were in Congress in 2005 and your party was in the majority from 2006-2010. What did you do to fix this for the past six years? If President Bush was in favor of ending the subsidies, and you were in favor of ending the subsidies and the Democrats held both houses of Congress why did you fail to act? Bringing this up now, sounds not like leadership but cheap political posturing.

I am no fan of subsidies for any companies, but let’s not kid ourselves. Corporations build their tax liability into their prices. They don’t pay taxes; they collect them from their customers. So if you somehow believe that by taking away the subsidy and making oil companies pay more in taxes that the price of petroleum products like gasoline will not increase, you are deluding yourself.

Your next statement says that your effort “is not about punishing oil companies; it is about making smart choices with limited resources.” I am mystified by your statement that “Right now, Americans are paying oil companies at the pump and on tax day. I hope you agree that gas is far too expensive to pay for it twice.” We don’t pay the oil companies on tax day. A tax break means they pay less, not that we pay them. You seem to embrace the statist concept that all wealth belongs to the government and the government takes what it wants and give us the rest, rather than we give money to the government. Second, Exxon makes about seven cents profit on a gallon of gasoline, so if you raise their taxes, what do you suppose they are going to do? That’s right, raise the price of a gallon of gas.

If you really want to bring down the cost of gasoline, rather than scoring political points here are some suggestions:

1. Abolish the federal gasoline tax which is $0.184 per gallon. Abolish the Department of Transportation while you are at it and let each state raise the revenue they need for their infrastructure and roads. It may mean they reinstate part of that tax at the state level, but it will also put pressure on them to perform better.
2. Reduce the number of different blends of gasoline required by the EPA. We haven’t built a new refinery in this country in over 25 years and we have to keep changing over the formula to meet the EPA requirements which curtails output.
3. Eliminate subsidies for ethanol. If we’re cutting energy subsidies let’s do it for wind and solar as well. If they are not economically viable, why should the taxpayer pay for someone’s hobby?
4. Increase the drilling for our own oil and natural gas. The less we depend on foreign oil the less they can play with the spigot to make exploration projects here unprofitable at a whim.

You and your party had four years in power. Now all we seem to hear from your side is demagoguery of every idea the Republicans put forth. If you don’t like them, fine, come up with your own ideas and then debate them. But the demonizing of every idea they put forth has to stop.

Sincerely yours,

William R. O’Connell

That’s my opinion; I’d like to know your. Please comment below.

Maybe it was because he was trained as a medical doctor that Rand Paul knows that if you are going to lift something heavy you have to bend your knees and keep your back straight. Contrast that to the other members of Congress who stand on tiptoes, with their legs straight, bent at the waist leaning far over and picking through the $1.6 trillion deficit using only their thumb and forefinger, to find some morsel that they can extract from the budget, crying all the while “It’s too heavy, it’s too heavy.”

While Chuck Schumer on one side and John Boehner on the other side squabble over $61 billion to cut versus $4, or $6 or $10 billion to cut, Senator Rand Paul has put on the table $500 billion in cuts and to balance the budget in five years. The progressives are apoplectic. But even with a $500 billion cut there will still be a deficit of $1 trillion. Senator Paul explains:

http://www.youtube.com/watch?v=Q6Y_Dvzng-4

The progressives had no problem spending nearly $ 1 trillion in one year for the failed stimulus program. They had no problem spending nearly $1 trillion for TARP. Nancy Pelosi had no problem adding $5 trillion to the national debt since 2006 where it took over 230 years to accumulate a mere $8 trillion in debt. So why is it impossible to cut $500 billion?

In looking over Senator Paul’s plan (click here to view it), what struck me is the number of areas of the government that are completely ineffective that Senator Paul rightfully says should be eliminated. Some examples:

• Eliminate the Government Printing Office: “In 2010 alone, GPO spent nearly $30 million in taxpayer dollars to provide Congressional offices with the rarely read Congressional Record, and in September they released their first-ever comic book, ‘Squeaks Discovers Type,’ meant to teach children ‘why printing is important.’”
• Eliminate the Agriculture Research Service: “Most American industries fund their own research and development programs. The agriculture industry is a notable exception. USDA spends about $3 billion annually on agricultural research, statistical information services, and economic studies.”
• Eliminate the Department of Housing and Urban Development: This department has no constitutional basis for existing. “Rather than providing a one-time stop for families on their way out of poverty, public housing has largely been a failure. Public housing projects have become havens of crime and dysfunction, driving away the very business investment and homeowners that would revitalize a city block.”
• Eliminate the Bureau of Reclamation: “Owning a majority block of energy and water resources is not the business of the federal government. Water rights should be controlled by the states and agreements can be made between the states to ensure water supply to all.”
• Eliminate the Bureau of Indian Affairs: “For far too long, the Bureau of Indian Affairs has swindled and mismanaged billions of dollars in Indian trust funds. Former Special Trustee Thomas Slonaker in 2004 testified that the Department of the Interior and the BIA were incapable of reform and were unwilling to hold people accountable for their actions. In addition, Paul Homan also has testified before Congress saying that a “vast majority of upper and middle management at the BIA were incompetent. Instead of wasting taxpayer funds throwing money into a bureau of corruption and incompetency, eliminate them and allow the tribes to manage their own trust funds independently without government intervention.”
• Eliminate the Office of Justice Programs: “The Office of Justice Programs does not directly carry out law enforcement or justice activities, rather OJP performs studies on the pressing crime-related challenges that confront the justice system and provides grants to try and help cities and counties reduce their crime rates. In effect, OJP has evolved into a multi-billion dollar subsidy to the budgets of local governments.” “Each state, county, and city communities and police departments are forced to address many different forms of crime. The federal government can set guidelines on how to address criminal issues, but only the states and local communities can determine what the best way to counter and deter violence and crime.”
• Eliminate Amtrak Subsidies: “Created by an act of Congress in 1970 to provide passenger rail service, Amtrak has yet to turn a yearly profit. During its first 35 years, federal assistance amounted to approximately $30 billion. Yet from FY2007 to FY2010 that number has increased by $7 billion. Of the 44 routes and 21,000 miles of track the trains travel over, only 625 miles are actually owned by Amtrak. Congress has forced freight rail companies to allow Amtrak to use the lines the freight rail companies own and maintain. We need to allow the states to have a greater say in trail service between their cities. To provide better service, Amtrak must learn to make the difficult decisions on routes and coverage to develop a sound business model, which will push them toward becoming profitable.”
• Repeal Davis-Bacon Act (and watch the unions attack): “In 2008, for metropolitan areas, Davis-Bacon prevailing wages rates for all projects were 62.4 percent higher than the average hourly wages reported by the Occupational Employment Statistics (OES). Davis-Bacon forces government contractors to pay wages that are higher than they normally would. These wages increase the cost of the federal construction project, without increasing the labor productivity, quality, or timeliness in completing the project.”
• Affordable Housing Program – Eliminated
• Commission on Fine Arts – Eliminated
• Consumer Product Safety Commission – Eliminated
• Corporation for Public Broadcasting – Eliminated
• National Endowment of Arts – Eliminated
• National Endowment for Humanities – Eliminated
• Privative the Smithsonian Institution – Privatized
• State Justice Institute – Eliminated
• End TARP (how many of you knew it was still going?): “The September 2010 Outlay of TARP funds report put out by Treasury comparing committed amounts and actual disbursements, shows a $87.39 billion savings if no more money was disbursed.”
• Sell Unused Federal Assets: “Of that property the Office of Management and Budget (OMB) claims more than 21,800 federal properties are abandoned assets, which could be sold for approximately $19 billion.

A Top To Bottom House Cleaning

One of the management methods employed in the private sector is called zero based budgeting. What that means is that every year, you don’t take last year’s budget and tack on a growth factor but you take a look at why you continue to do a particular function at all. If you can no longer justify it, you eliminate it. What Senator Paul’s report has uncovered is that we need a complete top to bottom house cleaning of the federal government and leave no corner of the government unexamined with a bright light. It appears there has been too much of “the way we have always done it.” This gets reinforced with the standard progressive argument that the reason any government program doesn’t work is that it wasn’t big enough. If we only expand it to hit that tipping point, all things will be wonderful.

How about this instead: Take out a copy of the Constitution and turn to Article I, Section 8. It starts with, “The Congress shall have the power to…” Take every function of the federal government and match it up against that list. If there is no match, eliminate it. But fear not, all you statist hand wringers, you can have the states or local government step in and choose to continue any program eliminated if they desire. When the people get the bill for those services they can take out their newly sharpened pencils.

In five years, after the Paul plan has balanced the budget and the economy is growing crisply again, federal taxes can be cut to return money to the citizens who have been robbed to sustain these useless and ineffective programs.

That’s my opinion; I’d like to know yours.  Please comment below.