President Barack Obama has a new budget. So it’s time to suspend reality and listen and nod your head and pine for four more years.

President Obama promised in 2009 to halve the deficit by the end of his first term. The last fiscal year budget deficit under Bush was $482 billion. In the four years of Obama’s first term it has yet to be less than $1 trillion. As former New York City Mayor Ed Koch used to asks his constituents, “How’m I doing?”

So while Obama’s new budget promises another trillion plus deficit, but don’t worry he will cut $4 trillion in spending over the next ten years. Never mind that even if he is reelected 60% of that timeline is beyond his control. It should also be pointed out that $4 trillion over ten years is only $400 billion a year, which leaves another $600 billion to be added to the national debt each year.

If that is not smoke and mirrors enough, that $4 trillion includes $1.5 trillion in tax increases. Why does this president and his backers insist that we have to take more money from the production of America’s citizens to cover his spending, rather than cutting his spending to fit within the available revenues?

For his first two years in office he worked with a Democrat controlled Congress. He got everything he asked for and everything is worse. We have staggering debt despite his promises to cut the deficit in half, unemployment worse than when he took office despite his promises to that his stimulus would cap unemployment at 8%, we have ObamaCare striking right at the heart of the First Amendment and he basically says, “get over it.”

Enough is enough. The experiment failed. It is time to cut this man loose and start working to repair the enormous damage he has done.

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

As the brinksmanship over the debt limit heats up, we can still hear the progressives saying that we are in this fix because we cut taxes without “paying” them. Let’s drive a stake through the heart of that one.

First of all, nobody “pays” for tax cuts.  A tax cut means that the taxpayer gets to keep more of his money. Period. It doesn’t have to be budgeted or paid for. Let me make it simple enough that a nine year old child could understand it. When you were a child and your father cut your allowance, how did you pay for it? Huh? Exactly. You don’t pay for something you never received.

Okay, now that we have that squared away, let’s look at the total amount of revenue taken in by the federal government.

Federal Government Revenue over Time

You will notice a sharp drop off beginning around 2000, that is the dot-com bubble and recession. The Bush tax cuts took place in 2003, just about in the valley on the graph, and as you can see revenues not only recoverd but hit an all time high. That means we are not in the fix we are in because of the Bush tax cuts. We are in this jam because of spending and the anemic Obama recovery, which is buried under the stimulus debt, bailouts, ObamaCare, mult-thousand page bills and tens of thousands of pages of regulations. It’s the spending. We don’t need any recovery killing tax increases.

By the way, when the Bush tax cuts passed, and as you can clearly see increased revenues, only seven Democrats in the House and two in the Senate voted for them. These are the same people today who are telling us they must be repealed.

Stop the spending. Any questions?

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

Michelle Bachmann let off the three day CPAC conference with a keynote address that laid out the case against the current administration and the rule of Nancy Pelosi. Most of the focus of her talk was on raising the alarm on our current financial situation and its urgency.

When the Nancy Pelosi took the Speaker’s gavel in January of 2007, the national debt stood a eight trillion dollars, not a meager sum by any means. To illustrate she pointed out that if a dollar was a second of time, a trillion seconds equates to thirty-two thousand years. It took two hundred and thirty years for the America to accumulate that much debt. In the four years that the Democrats controlled Congress and the two years that President Barack Obama occupied the White House, the debt increased by 75% to fourteen trillion dollars. That is truly astounding.

Much of that debt is being funded by foreign countries including China. She mentioned President Hu Jintao of China being perfectly happy with our borrowing binge, prompting her to ask, “Hu’s your daddy?” She asked who in the crowd was of college age and then addressed her next point to them. If we do not get our financial situation under control, she told them, you will be paying about one-third of your income to cover Social Security. If you add to that your federal income tax you may be rates up to 75% of your income in your peak earning years.

She then called on the assembled to complete the task they started with the major electoral victory this past November with a repeat performance in 2012, to take control of the Senate and the White House.

We have had several bubbles before, but if the Obama administration has their way, “you ain’t seen nothin’ yet.”  Currently the budget for the federal government is $4 trillion dollars.  That’s right, your federal government will spend approximately (which means probably more) $4 trillion in one year.  Of that amount $202 billion is interest on the national debt.  In an article in the New York Times today by 2019, a mere ten years from now, the portion of the budget directed to interest payments will be over $700 billion, or three and a half times what it is today.  Many people have trouble grasping how much a trillion dollars are, and within ten years we will be paying three-quarters of a trillion dollars just to cover the interest without paying off any of the principle.

Family Budget Analogy

We all understand the dramatic effects of too much debt, as the point has been driven home every day throughout this financial crisis.  Bankruptcy filings, home foreclosures, bailouts, all resulting from more debt than we can pay the interest on, let alone pay back the principle.  You see commercials on television every day for companies that will help you renegotiate your credit card debt, your mortgage, intervene on your behalf with the IRS.  None of those programs are available to the federal government as a debtor. 

Obama’s Out of Control Spending

The Obama administration seems oblivious to the problem.  As bad as it is they just keep on spending or want to spend more:

• Stimulus package — $787 billion.  Despite evidence that it is not working and widespread opposition from the American people, the Obama administration is simply declaring that it is working and we need to do it again with a second stimulus
• Cap and Trade — this is a program that will drive energy costs through the roof for no real benefit.  After all if, as is becoming more and more apparent, global warming is not man made then it cannot be stopped by man either.  Higher costs will lead to businesses closing down, laying off people, and generating less tax revenue from both the businesses and the individuals it laid off.  Result — an increase in the deficit.
• Health Care — another $1 trillion of IOUs piled on our children’s back and if Medicare’s history is any guide, these numbers are well below what will really happen.

The Truth About Government

The truth is that government doesn’t create anything.  They don’t generate income.  Everything that government has to spend comes from you and me.  The government takes it from us (or throws us in jail for tax evasion) and then spends it.  If they can’t get enough from us, they borrow the difference.  But somewhere down the line, that money has to get paid back.  A news report today said we have the opportunity to just write a check to the Treasury if we are concerned about the deficit and want to help pay it down!  Let’s see how many of Obama’s wealthy supporters sign up for that program.

Runaway Train

Our federal government is a runaway train and if we don’t stop it very soon and pare it back to the functions enumerated in the Constitution, we will get hit with a bubble so big, that there is no Hollywood screenwriter that could even begin to conceive of how to portray it.  $700 billion folks, that’s $2,059 in INTEREST for every man, woman and child in America.  Ask yourself this, if you are a family of four are you prepared to write a check for $8,235 to the federal government for interest alone?  You don’t get anything for your money, it just keeps your government from defaulting on what they already borrowed. This will be on top of your regular tax bill. And the next year you will have to pay it again and probably more.  It’s time to stop the madness.  It’s time to stop the spending.  It’s time to stop the expansion of government and start shutting down departments.  It’s what you would do at home in a financial crisis, it’s what a small business would do in a crisis.  This is a crisis that we can still get under control, but if the debt continues to grow to the point where we can no longer afford to pay even the interest, America will be a footnote in history.

Do I have your attention now?