It’s This Simple

Obama and the Democrats want to raise taxes on “millionaires and billionaires” — but then define them as those making more than $250,000 per year.  I think the key to negotiating with these nitwits is to give them what they want.  By how much would we need to “raise taxes” on these selfish bastards to balance the budget?  Well, for those making $250,o00 per year they’d need to cough up an extra $500,000 annually.

Read more here: LINK

Now that we’ve put that to rest, what is their next great idea?

Thanks to Mark Steyn for the tip.

Published in: on October 24, 2011 at 12:29 pm  Comments (1)  
Tags: ,

The Debt Ceiling Charade

The so-called debate over the debt ceiling is going nowhere because the elected officials involved have zero experience in problem solving at any level. The only reason this debt ceiling increase hasn’t been rubber stamped like the last 100 times is that the Republican House is attempting to use it as a bargaining chip. With the Democrats in control of the Senate and Obama in the White House they have very little leverage and seemingly no clue as to how to use what they have.

Part of the problem is that Washington politicians know virtually nothing about negotiating. The result of almost every impasse is a “Washington Compromise”, just one more oxymoron from our capital. As every married man knows, a real compromise requires a tradeoff, some sort of sacrifice. You want to play golf this Saturday? Fine, but you’ll be spending Sunday working on that “honey do” list. You gotta give a little to get a little.

In the Washington alternative universe both sides get everything they want. But the laws of mathematics are not so easily suspended. Who does the giving? The tax payer of course. It is because of this habitual way of doing things that the debt keeps mounting.

It is all made worse due to the static scoring that assumes higher tax rates produce higher revenue. History shows us otherwise. The lowering of tax rates under Coolidge, Kennedy, Reagan and Bush II all were followed by increased revenue. Revenues fall during recessions-so let’s stop having them.

The GOP is trying to appear tough right now because they know this is why they won so big in the 2010 mid-terms. They have a mandate to cut spending without raising tax rates. Obama and the Democrats received the same message. Their solution? Stop passing budgets and try to stall until after the 2012 elections.

What should the Republican Party do?

First, get its act together. They are rudderless. There should be a clear plan with a chosen leader to promote it. Plan it before you publicize it. Instead, on the night we pass the “Cut, Cap and Balance” the “Gang of Six” announces a conflicting plan. I am a fan of Tom Coburn. He is one of the few decent people in politics-but he should have his head examined. Why would anyone join a “gang” that included Dick Durbin?

They need to make this a 2012 issue. It goes like this:

We have presented a plan for moving forward. In acknowledgement that the economy is still showing signs of weakness, particularly in the employment sector, we refuse to consider a tax hike. Since government spending requires diverting money from the private sector and prevents growth we are proposing serious spending cuts-not just lower levels of increase. By necessity this includes serious entitlement reform.

If the Democrats in the Senate refuse to work with us-or if the President vetoes this common sense plan-we will have no choice but to pass a series of small bumps in the debt ceiling to prevent a shutdown of government. The American people have made it clear that the growth of government must stop. We agree and we’re willing to take that fight to the polls in 2012.

Pat Duggan

Debate the Bigger Issue

Instead of playing a game of political chicken with Obama, the Republican leadership should grab the high ground and focus everyone’s attention on the big picture. Everyone knows the debt ceiling must be raised. The question is not whether it will peak at 15 or 16 trillion dollars-the cold reality is that it will be a much higher number. The GOP should not get trapped into negotiating around such a puny issue. They need to move the focus on the bigger, more important concerns. The health of the economy and the debt rating hinge on Washington’s ability to change the trajectory of government spending and the debt it generates. Under Obama, spending as a share of GDP has jumped 25% while revenues have dropped, as they always do, due to the deep recession. Current debt is virtually irrelevant when compared to the unfunded entitlement liabilities that exceed $100 TRILLION.

The only way to solve this problem, which was decades in the making, is with a long-term plan that will transcend the 2 year election cycle. The GOP needs to reject the static scoring that puts a price tag on lower tax rates. The Laffer curve demonstrates that the presumed correlations do not exist. Alan Reynolds recently authored a piece in the Wall Street Journal accompanied by a chart showing income tax revenue as a share of GDP as the top marginal rate was lowered from 91% to 28%. Revenues rose as a raw number and a percentage. (More on that here: LINK)

The silver lining in the current economic cloud is that the Democrats with their super majorities were able to give their economic theories a thorough test. The failure is also thorough and evident. The so-called “stimulus” was neither targeted nor temporary. The Democrats are trying to use it as a new baseline for budgeting. The crown for the party of big spending is properly placed once again. The GOP needs to claim victory and move on. The 2010 mid-term elections are their mandate.

This is our moment. We must seize it. Promises have been made for decades that can never be kept. The age of unfunded liabilities is over. True entitlement reform must include a transition to private accounts so that congress can never again spend what should have been in the mythical trust fund. Our health care is our responsibility. It is not a right-it is a basic necessity, just like food and housing-other areas where government meddling wreaks havoc. Insurance is a risk management tool that adds a layer of bureaucracy and the associated costs. It should be used sparingly, and will be, once it is untangled from the insane tax code.

A vibrant, growing economy can eventually dwarf the debt figures and then we can pay it off entirely. A rational energy policy focused on domestic drilling and proven technologies must replace the “green” fantasy. Real jobs will produce real revenue and help slay the inflation dragon that has already brought us $4 gas. Gains in national security are achieved as well. This message, this vision, can clarify the ongoing debate and serve as a national platform for the 2012 elections.

Pat Duggan

Reality Check For The Left

If we don’t force our elected representatives to cut spending they will be forced to tax YOU, regardless of your income, at a painfully high rate. The liberals have been lying about taxes ever since they first passed the initial income tax on “only the very wealthy” and only at small levels. They said they would never tax YOU-but they are now, aren’t they? They feed the beast of government and then when we try to cut some programs they scream bloody murder. Never forget that in the recent budget “negotiations” their proposal was to cut zero from our bloated federal budget. Nothing was on the table.

At some point tax revenue and spending levels must match. Borrowing only delays the inevitable but that is the preferred method for our gutless politicians. As anyone who has ever financed anything knows, it just costs more in the long run. Imagine a world in which everything that Congress authorized had to be paid for immediately. Imagine what it would be necessary if they were not allowed to create an unfunded liability. What if there really was a Social Security trust fund? A “lock box”? Washington pols would be faced with some serious decisions. They would have to raise taxes on everyone to levels that would end their political careers, or they would immediately have to trim the fat from the budget. Suddenly there would be no funds available for the Rock and Roll Museum or the “Bridge to Nowhere”. We wouldn’t have hundreds of federal agencies doing virtually the same thing. The Department of Redundancy Department would finally be shut down.

Today’s Wall Street Journal has the hard numbers here. It is eye opening.

LINK

Pat Duggan

Published in: on April 18, 2011 at 8:31 am  Leave a Comment  
Tags: , ,

The Left’s New Math

In their attempts to demonize Republican efforts to restore fiscal sanity the left will try anything, from basic smears to grand hyperbole and outright lies. The Tea Party is “extreme”. Budget cuts will starve seniors and even “kill women” according to Rep. Louise Slaughter, D-N.Y. Now the class warriors are trying a new tactic, one that requires inventing a totally new concept: reverse wealth redistribution.

The theme is appearing more frequently. I hear it in conversations with liberal friends and echoed in the media. E.J. Dionne floated it in a recent column, where left-wing fantasies run free. More evidence that this is an orchestrated left-wing talking point came from Donna Brazile on ABC’s Sunday morning show.

What is their claim? Ms. Brazile claims that Republican policy, as evidenced in Paul Ryan’s “Path to Prosperity”, is “taking money from the poor and giving it to the rich…in a redistribution of wealth.” Huh?

E.J. Dionne wrote that we “are about to learn how radical the new conservatives in Washington are, and the extent to which some politicians would transfer even more resources from the have-nots and have-a-littles to the have-a-lots.” I see.

So this is what goes for logic on the left.

All this is based on the left-wing fallacy that the government has any money that isn’t first seized from the private-sector economy. Under this straw man presumption, money is then doled out, with the rich getting more than they need at the expense of the poor. Only using this deeply-flawed starting point can the wealthy, really just this year’s hard-working top earners, actually be “taking” anything from a group that has nothing to begin with-or they wouldn’t be poor now would they?

They’ll say anything that fits their view, regardless of fact. From this foundation they build their “argument”. According to the left, so-called “income distribution” has been severely skewed in recent decades, going back to the Reagan era of course. This is ground zero for tax zealots. But facts are stubborn things. While top tax rates were cut from 91% to 28%, before moving back up to the 35/39% area, revenues continued to increase and the top income brackets saw their share of total tax revenue increase as well. Rather than concede the obvious-that they have lost the debate-they opt to change the subject. It’s not about revenue anymore; it is about “fairness”. Obama said just that in his famous chat with Charlie Gibson when it was pointed out that lower capital gains rates had produced higher revenues.

Bill Gates became a billionaire, and thousands of employees became millionaires, while developing the software that propelled us into the age of personal computers. Billions upon billions in taxes were paid, both by the corporation and the employees through corporate, income and FICA taxes. Microsoft stock has generated billions more in capital gains. Thousands of companies were launched in related industries, creating yet more jobs. Thousand of separate industries became more efficient and our cost of living was lowered while our standard of living increased. We have thousands of years of information at our fingertips and up-to-the-minute news. Yet all this must be wrong because Bill Gates makes X-times more money than the average Joe.

This is the tantrum of the left. When confronted with evidence that destroys their theories they cover their eyes and ears. They won’t look and they won’t listen. Why not embrace the basic truths of the “Laffer Curve” and enjoy the optimized revenue stream? Because that would begin to unravel their carefully constructed world view. If they’re wrong about economics-and they are-what is next? Could it be that their welfare programs actually hurt the poor? Is global warming a hoax? Could the U.S. drill for enough oil here to be truly energy independent?

In the left’s imagination, America is a pie that magically appears and they think the government should slice it up more “fairly”. In reality, those who bake the pie, after paying for all the ingredients, should have a bigger say in how many slices the government seizes. Under current projections, in a few years they will take it all. The bakers will be on strike before that happens.

Pat Duggan

Published in: on April 11, 2011 at 1:29 pm  Comments (1)  
Tags: , , ,

Cheese Head Temper Tantrum

Egypt has been replaced on the front page by the angry mob that gathered in Madison, Wisconsin yesterday to protest the new Governor’s budget plan. The source of outrage? The radical notion that public-sector workers should contribute a portion of their own health insurance and pension expenses.

Once again we see that liberal policy is barely distinguishable from a child’s tantrum. It’s the equivalent of asking for a raise in your allowance right after your dad announces he’s been laid off.  The government of Wisconsin is faced with a simple math problem shared by a frightening number of states: they don’t have the money to make good on the promises to public sector unions, forged in deals brokered by mostly Democrat-party politicians over decades. The union members traded their votes for these doomed plans. The politicians they voted for are nearing retirement and many are rushing for the exits early. It is not going to be much fun to be a politician in coming years. Instead of trading favors, paid for by tax payers, they will be forced to be the bearers of bad news.

Some, like New Jersey Governor Chris Christie have embraced the challenge. Peggy Noonan recounts in her WSJ column that in September he faced a crowd of 7,500 firefighters at a convention days after announcing a proposal to raise their retirement age, eliminate the cost-of-living adjustment, increase employee pension contributions and roll back a pay raise.

As Noonan reports: He crumpled up his prepared remarks and threw them on the floor. He told them, “Here’s the deal: I understand you’re angry, and I understand you’re frustrated, and I understand you feel deceived and betrayed.” And, he said, they were right: “For 20 years, governors have come into this room and lied to you, promised you benefits that they had no way of paying for, making promises they knew they couldn’t keep, and just hoping that they wouldn’t be the man or women left holding the bag. I understand why you feel angry and betrayed and deceived by those people. Here’s what I don’t understand. Why are you booing the first guy who came in here and told you the truth?”

There are some simple truths that these public-sector union employees are going to have to come to terms with:

1.    You are not going to get far demanding money that doesn’t exist.

2.    We can do the math. Salary + Bonus + HealthCare + Retirement = Total Compensation. Add it all up and your compensation packages are out of whack with the private sector-otherwise know as the real world.

3.    Politicians have proved that they cannot be trusted with retirement funds at any level of government. Privatized, defined contribution plans and 401K’s are going to be the only viable option going forward. This is the future for Social Security as well. Unfunded liabilities are the #1 fiscal problem at every level of government and the only solution is to eliminate them.

A friend emailed this set of suggestions recently. You want to retire at 50? Fine. But you can’t start collecting that pension until you are 65-and you only get one. No more double-or triple-dipping. Your pension will be a fraction of your average lifetime pay-excluding overtime, unused vacation days and other pension-padding scams. Your benefits package, including health care, will be counted in your total compensation score and that score will be tied to the average of the private sector tax payers who fund it all. You can choose from a selection of health care plans but you must ante up the difference if you choose the gold-plated plan. Incentives will be put in place to assure that all are watching every penny.

These austerity measure are coming to Illinois soon-whether the Democrats running the show pull their heads out of the sand or not.

Pat Duggan

Published in: on February 18, 2011 at 9:50 am  Leave a Comment  
Tags: ,

Rand Paul’s $500 Billion Budget Cut

This is exactly what the Tea Party brings to the table. Rand Paul is a doctor. He did not spend a career accumulating favors owed to special interests. This gets us 1/3rd of the way to a balanced budget. This makes it a good starting point. Many will say it is too much. Obama would be one of them. It is not possible to take these people seriously. They would sink this country and all the way down insist that spending more money was still the only solution.

See Dr. Senator Paul’s specific plan here:

LINK

Pat Duggan

%d bloggers like this: