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.

Martin Luther King, Jr. gave a great oration with his “I Have a Dream” speech that moved millions of Americans to action. Howard Dean gave a puzzling oration with his “I Have a Scream” speech that moved millions of Americans to laughter and derision. Tim Bishop flops at oration with an “I Have a Scheme” remarks that will leave hundreds (he’d be hard pressed to reach millions), scratching their heads.

“After losing a district won by John McCain in 2008 and Carl Paladino in 2010, some thought House Republicans would take a step back. But, like a bad riverboat gambler waiting for his luck to change, they have doubled-down,” Bishop wrote to his supporters.

What the hell does that mean? I know that riverboat gamblers are a questionable group, but where does that put Tim Bishop?

• Tim Bishop voted for the massive stimulus bill that left a steaming pile of $3 billion in debt on his constituents doorstep (based on what percentage his district pays of total income taxes x the total stimulus bill), and in return we got what? As of today 28 May 2011, his district received $693 million in stimulus funds which resulted in 428 jobs (Recovery.gov website). According to my calculator that works out to $1,627,113 per job. Who got the bulk of the funding? The school districts, to protect teachers’ union jobs so they can come out and thank Congressman Bishop by voting him back into office.
• Tim Bishop ran for reelection almost exclusively on tarring his opponent for being an entrepreneur who started a company with offices around the world that did back office work for U.S. businesses. Bishop said outsourcing was bad, very bad. Bishop then voted to bail out GM and Chrysler and then Chrysler takes our tax dollars and builds a $570 million engine factory in Mexico. Can you say hypocrite? Personally, I believe we live in a global economy and work should flow to where it can be done most efficiently. The Wall Street Journal reports on a study by Dartmouth that shows that for every one job outsourced overseas, two jobs are created here in the U.S. So not only is he a hypocrite for running for reelection on an anti-outsourcing platform and then uses taxpayer dollars to outsource high paying union manufucturing jobs, he is ignorant of economics to boot. Lose, lose, lose. So, who’s the riverboat gambler doubling down?

Mr. Bishop continues:

“The Republicans insist the problem with their budget isn’t the substance, it’s the messaging. And just today, they put forward a ‘jobs plan’ which is nothing more than a warmed-over massive tax cut for millionaires which will blow an enormous hole in the deficit that their economic policies created.”

Let’s see, Mr. Bishop has been in office since 2002. In 2006, Nancy Pelosi took the Speaker’s gavel and at that time our national debt was $8 trillion going all the way back to George Washington. By the time she turned the gavel over to Mr. Boehner, the national debt stood at $13 trillion. Can Mr. Bishop, who voted with Nancy Pelosi 97% of the time by the way, please explain how anything the Republicans could propose could “blow an enormous hole in the deficit that their economic policies created”? Where was Mr. Bishop when all this alleged chicanery was going on? Scrubbing down the paddle wheels?

Not leaving well enough alone he wraps up with:

He added: “I have no doubt that in 2012, my opponent will look to make the same tired arguments against me. With your help, I will continue to fight for policies that are going to create jobs and boost our economy.”

The same tired arguments? Create jobs? What jobs? Any idiot could create a job with $1.6 million. Boost our economy? It’s two years since the recession officially ended and still the economy is lousy. Bishop spends too much, the unemployment rate in his district remains at 8%; and he and his fellow Democrats have no plan. The Ryan plan was passed by the House but lost in the Senate 57-40. That vote was followed by one on the Obama Budget II with went down in flames 97-0. Not a single Democrat senator wanted to attach their name to the president’s budget. At the same time, the Senate democrats have not put forth a budget of their own with Harry Reid even saying:

“There’s no need to have a Democratic budget, in my opinion,” Reid told the Los Angeles Times last week. “It would be foolish for us to do a budget at this stage.”

Foolish? The country’s fiscal house is engulfed in flames and Harry says it would be foolish to look for a fire hose.

Tim Bishop’s scheme is to keep a low profile and hope nobody notices what an awful job he is doing, try to make colorful references to characters out of dime store novels, and call actually having a plan a tired argument. Mr. Bishop, I’ll tell you what we are tired of, and it is not about plans to get us out of this mess.

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

President Barack Obama released his budget blueprint on the same day the White House says it expects the budget deficit for the current fiscal year ending in October to hit $1.65 trillion. His budget calls for spending cuts of $1 trillion spread out over ten years. 

To put it another way, the cuts that the president is proposing will be less than the deficit in the first year alone, projected at $1.1 trillion. So the debt leviathan will continue to grow and with it, the interest payments required to satisfy it. While the nation is staggering under this massive and growing debt, this president still wants to spend $53 billion building high speed railroads. Such a program may create jobs to build such railroads and create jobs to man the trains, stations, and track, but they are make-work jobs that will be a burden on future budgets and future generations because anyone with a room temperature IQ knows that these trains will operate at a deficit, just like Amtrak does.

While showing extraordinary focus and determination in ramming his healthcare and other socialist programs down the throat of Americans that do not want them, his knees buckle when it comes to showing leadership on cutting the vast and growing entitlement programs.

 ”It is a patronizing plan that says to the American people that their concerns are not his concerns,” Senate Minority Leader Mitch McConnell (R., Ky.) said.

Also, noticeably absent from the president’s budget was most of the recommendations of the bipartisan budget panel he created via an executive order. There’s nothing like spending tax dollars on a show panel to buff up your fiscal “cred” before an election and then ignoring the results afterwards to build on your reputation for cynicism.

 Erskine Bowles, the Democratic chairman of the fiscal commission, said the White House budget request goes “nowhere near where they will have to go to resolve our fiscal nightmare.” – Washington Post

So there you have it folks, even Democrats are saying the president’s budget doesn’t go far enough. It will be up to the newly elected Republicans and the Tea Party who will hold those Republican’s feet to the fire, to get that job done.

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?

President Barack Obama held his first press conference last night and did a masterful job of controlling the communication while dodging any hint that he let this stimulus package spin out of control, at the hands of Nancy Pelosi.

Elkhart, Indiana

I found it curious that President Obama chose Elkhart, Indiana, the RV capital of the world, as the backdrop for the current economic situation.  After all, in the campaign he said that driving SUVs and RVs was irresponsible.  What kind of gas mileage does an RV get?  He campaigned on Cap and Trade.  What would Cap and Trade do to the good people of Elkhart, Indiana if implemented?  How many people are going to out and buy an RV, which can cost up to $600,000, with the $10 per week tax cut President Obama is proposing.  Remember, he is dead set against across the board tax cuts, which could actually prompt an evil “rich person” to buy an RV.  It reminds me of the 10% tax on luxury yachts sales that killed the boat building industry and put many blue collar people out of work.

Disaster by Design

Of all the schemes tried over the years, from the Great Depression forward, to stimulate the economy, why does this President insist on going with the ones proven not to work?

No less an authority than FDR’s Treasury secretary and close friend, Henry Morganthau, conceded this fact to Congressional Democrats in May 1939: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”

Spending in the Great Depression didn’t work and that is according to the guy doing the spending.  Last night President Obama mentioned the lost decade in Japan.  However, all of the massive public works spending in Japan during that decade didn’t work.

What did Japan get from sustained and massive public works spending by the LDP after a real estate bubble burst in the late 1980s?  According to a recent article in the IHT, one thing is clear:  taxpayers ended up being saddled with the largest public debt in the developed world, totaling 180 percent of its $5.5 trillion economy.

While there are disputes over how to view the results, the Japanese appear to have learned a lesson, while US officials like Treasury Secretary Timothy Geithner, who spent time as a financial attaché in Japan after the collapse, appear to determined to repeat it on a larger scale

President Obama alluded to the “failed policies of the last eight years,” as if tax cuts created this mess. But today, Treasury Secretary Geithner opened his remarks on the bank bailout by basically saying that government action or inaction coupled with Wall Street excesses caused the financial debacle not tax cuts.  They were:

• Interest rates too low for too long – driving up home prices
• Complicated financial intruments that no one understood bundling mortgages
• Failure of government oversight
• People being encouraged to borrow beyond their means (by government)

But we are supposed to believe that only government can get us out of this.  So, government created the mess, they are ignoring what has worked in the past (tax cuts: Kennedy, Reagan, Bush), choosing those things that were proven failures (spending: Great Depression, Japan) and we’re supposed to be angry at Republicans for putting up a goal line stand to protect us from this impending disaster.

If this passes, be afraid, be very afraid

Early this morning I was listening to a news broadcast where they said that this fiscal year’s federal budget deficit (October 2008-September 2009) will top $1 trillion which is more that triple the largest budget deficit in history.  That sounded pretty bad even considering the financial bailout that the government was undertaking to keep the money flowing.

Reading later in the day in the Wall Street Journal, Obama is quoted as saying, “We’re already looking at a $1 trillion budget deficit or close to a $1 trillion budget deficit, and potentially we’ve got $1 trillion deficits for years to come,” {emphasis added}.  Years to Come?  This is hope? This is change? I’ll give you a moment to try to wrap your mind around that statement before I continue.

If we see trillion dollar deficits for years to come, That’s All Folks!, our economy is gone, G-O-N-E.

Now I understand he may have just been saying that for the shock effect because he follows that statement with the another about the necessity of budget reform.  Budget reform? People, budget reform is not going to close a trillion dollar shortfall, and the very fact that the president-elect even utters the words is like shouting FIRE in a crowded theater.  Does he think that is leadership?  Here is where Obama’s lack of executive experience is on full display, and the man is yet to take office.

In an excellent piece on Cafe Hayek, Russ Roberts explains that if you cut taxes but you do not cut spending by an equal or larger amount, you are not really cutting taxes.  All you are doing is moving them around.  To put it another way, if you cut taxes today and spend the same or more, you are just deferring the taxes to later.  The debt will eventually have to be paid and it is paid through taxes.  So with trillion dollar budget deficits on the horizon, there will be a tax bill coming due that will crush the economy for us or for our children.

Someone needs to take Obama aside and tell him never to make such a public statement again, lest someone throw a net over him and carry him off to an asylum.  Second, he needs to get with his advisors and start hacking away at the size of the government and I recommend starting with the Department of Education.  Although it took 28 years for that department to spend a trillion dollars, it’s a start.  But this is not going to be fixed by tinkering or eliminating earmarks.  Our government has gotten too big and is meddling in too many things, causing many of the problems it is now trying to fix.  Government needs to be cut down to size.