Posts Tagged ‘revenue’

Tax Cuts INCREASE Revenues; They Have ALWAYS Increased Revenues

September 8, 2010

We keep seeing the same liberal argument being played over and over again.  As the mainstream media seek to make their case to the American people that the Bush tax cuts should expire, one of the primary strategies being employed is to claim that Republicans are refusing to “pay for” their extension of the tax cuts.  And that therefore the Republicans will hike the deficit.  The problem is that it’s a false premise, based on a static conception of human behavior that refuses to take into account the fact that people’s behavior changes depending upon how much of their money they are allowed to keep, and how much of their money is seized from them in taxation.

As bizarre as it might seem, it is seen as perverse these days to suggest that allowing someone to keep more of the money he or she invests would stimulate people to take more risks by investing in businesses and products, and that such increased investment in business and products would in turn stimulate more economic growth.  Common sense has become akin to rocket science these days.

Then again, liberals aren’t doing much for rocket science, either.

Let’s take a look at the current facts, and then examine the history of our greatest tax-cutting presidents.

The Falsehood That Democrats Are ‘Cutting’ Taxes

Democrats say they are cutting taxes on “95% of Americans, but argue that giving the same tax cut benefits to the remaining 5% would hike the deficit and be fiscally irresponsible.

Well, for one thing, the Democrats are flat-out lying when they say they are cutting taxes for 95% of Americans.  That can’t possibly be true, because as a matter of simple fact a whopping 47% of American households pay no federal income taxes whatsoever.

WASHINGTON (AP) — Tax Day is a dreaded deadline for millions, but for nearly half of U.S. households it’s simply somebody else’s problem.

About 47 percent will pay no federal income taxes at all for 2009. Either their incomes were too low, or they qualified for enough credits, deductions and exemptions to eliminate their liability. That’s according to projections by the Tax Policy Center, a Washington research organization. […]

The result is a tax system that exempts almost half the country from paying for programs that benefit everyone, including national defense, public safety, infrastructure and education. It is a system in which the top 10 percent of earners — households making an average of $366,400 in 2006 — paid about 73 percent of the income taxes collected by the federal government.

What Democrats are doing – deceitful liars that they are – is giving Americans “tax credits” and calling them “tax cuts.”

tax cut is a reduction in the percentage or amount of taxes that is being imposed on a citizen.  The government is cutting the amount it had been collecting from taxpayers.  A government cannot “cut” a citizen’s taxes unless that citizen had been paying taxes in the first place.

A tax credit is when you give someone money that has been collected from another taxpayer.  It is redistribution of wealth.  It is what Karl Marx described as “from each according to his ability, to each according to his need.”  Do you notice that “to” in the middle?  It means, “transferring the wealth from one government-penalized group of people TO another government-privileged group of people.”  It is what Obama described as “spreading the wealth around.”

What Obama and the Democrats in Congress propose is NOT a “tax cut.”  And it is nothing but a lie to call it that.  And every single journalist who has suggested that it is a tax cut is as much of a liar as the Democrats are.

That’s the first point.  Democrats are advancing a central tenet of Marxism and deceitfully and even demagogically relabeling it as “capitalism.”  And the media helps them get away with it.

The Falsehood That Cutting Taxes For the Rich – But NOT The Other Classes – Contributes To the Deficit

Next comes the idea Democrats argue that tax cuts for the rich contribute to the deficit.

Let’s say for the sake of argument (just for the moment; I’ll prove it’s wrong below) that tax cuts for the rich raise the deficit.  Let me ask you one question: how then do tax cuts for the rest of us not ALSO raise the deficit???

Why wouldn’t raising taxes on the middle class and the poor not correspondingly lower the deficit?  So why aren’t Democrats going after them?

Are Democrats too stupid to realize that there just aren’t enough rich people to pay off our deficit, especially when this president and this Congress have raised said deficit tenfold over the last Republican-passed budget deficit?  The last budget produced by congressional Republicans was in 2007.  That year, the deficit was approximately $160 billion; now under Obama, Nancy Pelosi and Harry Reid it is $1.6 TRILLION a year as far as the eye can see.

Wouldn’t ANY tax cuts raise the deficit?  And shouldn’t we therefore tax the bejeezus out of EVERYBODY to lower the deficit?  Wouldn’t every single dollar collected reduce the deficit correspondingly?

Let me put it concretely: say I took a $100 bill out of the wallet of a millionaire.  And then say I took a $100 bill out of the wallet of a poor person.  If I took both bills to a Democrat, would he or she be able to tell the difference?  Would he say, “Ah, THIS bill will lower the deficit because it comes from a rich person; but THIS one clearly won’t because it clearly came from a poor person.”

Update, Sep. 10: A study by the Joint Tax Committee, using the same static methodology that I refer to in my opening paragraph, calculate that the government will lose $700 billion in revenue if the tax cuts for the top income brackets are extended.  And that sounds bad.  But they also conclude that the Bush tax cuts on the middle class will cost the Treasury $3 TRILLION over the same period.  If we can’t afford $700 billion, then how on earth can we afford $3 trillion?  And then you’ve got to ask how much the Treasury is losing by not taxing the poor first into the poorhouse, and then into the street?  And how much more revenue could we collect if we then imposed a “street” tax? [end update].

Hopefully you get the point: if tax cuts for the rich are bad because they increase the deficit, then they are equally bad for everyone else for the same exact reason.  And so we should either tax the hell out of everyone, or cut taxes for everyone.  And a consistent Democrat opposed to “deficit-hiking tax cuts for the rich” should be for raising YOUR taxes as much as possible.

Republicans don’t fall into this fundamental contradiction (see below), because they don’t believe that tax cuts create deficits.  Democrats do.  Which means they are perfectly content with shockingly supermassive deficits – as long as its 95% of Americans who are creating those deficits, rather than 100%.

Joe Biden said it was a patriotic duty to pay higher taxes.  And yet Democrats are trying to make 95% of Americans unpatriotic traitors who don’t care about their country?

Now, Democrats will at this point repudiate logic and punt to the issue of “fairness.”  But “fairness” is a very subjective thing, when one group of people decide it’s “fair” for another group of people to hand over their money while the first group pays nothing.  Even George Bernard Shaw – a socialist, mind you – understood this.  He pointed out the fact that “A government that robs Peter to pay Paul can always depend on the support of Paul.”

Which is to say it’s NOT fair at all.  Paul may think it’s fair, but poor Peter gets screwed year after year.

And it is a fundamental act of hypocrisy – not to mention advancing yet ANOTHER central tenet of Marxist class warfare – to claim to oppose tax cuts for the rich in the name of the deficit, but not to oppose tax cuts for everyone else.

And for the record, I despise both hypocrisy AND central tenets of Marxism.  Which is why I despise the Democrat Party, which is both hypocritical and basically Marxist.

[Update, September 20] Brit Hume demolished the Obama-Democrat argument regarding the Bush tax cuts being a “cost” to the government, saying:

But the very language used in discussing these issues tells you something as well. In Washington, letting people keep more of their own money is considered a cost. As if all the money really belongs to the government in the first place in which what you get to keep is an expenditure.”

And, again, that mindset about government control and in fact government ownership over people’s wealth represents a profoundly Marxist view of the world. [End update].

For what it’s worth, Democrats will only maintain the massive contradiction of “tax cuts for the rich raising the deficit” for so long.  Obama already admitted he was willing to go back on his promise to raise taxes on the middle class.  And his people are already looking to tee off on middle class tax hikes.  In addition, if you have any private retirement funds, they may well be coming after you soon.

The Falsehood That Tax Cuts Increase The Deficit

Now let’s take a look at the utterly fallacious view that tax cuts in general create higher deficits.

Let’s take a trip back in time, starting with the 1920s.  From Burton Folsom’s book, New Deal or Raw Deal?:

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history.  Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment.  High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.”  And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent.  These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies.  Investors took more risks when they were allowed to keep more of their gains.  President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue.  In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million.  In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark.  Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy” (page 129-130).

Now, that is incredible upon its face, but it becomes even more incredible when contrasted with FDR’s antibusiness and confiscatory tax policies, which both dramatically shrunk in terms of actual income tax revenues (from $1.096 billion in 1929 to $527 million in 1935), and dramatically shifted the tax burden to the backs of the poor by imposing huge new excise taxes (from $540 million in 1929 to $1.364 billion in 1935).  See Table 1 on page 125 of New Deal or Raw Deal for that information.

FDR both collected far less taxes from the rich, while imposing a far more onerous tax burden upon the poor.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.

Let’s move on to John F. Kennedy, one of the most popular Democrat presidents ever.  Few realize that he was also a supply-side tax cutter.

Kennedy said:

“It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

– John F. Kennedy, Nov. 20, 1962, president’s news conference


“Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”

– John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

“In today’s economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarges the federal deficit – why reducing taxes is the best way open to us to increase revenues.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“It is no contradiction – the most important single thing we can do to stimulate investment in today’s economy is to raise consumption by major reduction of individual income tax rates.”

– John F. Kennedy, Jan. 21, 1963, annual message to the Congress: “The Economic Report Of The President”


“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort – thereby aborting our recoveries and stifling our national growth rate.”

– John F. Kennedy, Jan. 24, 1963, message to Congress on tax reduction and reform, House Doc. 43, 88th Congress, 1st Session.


“A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.”

– John F. Kennedy, Sept. 18, 1963, radio and television address to the nation on tax-reduction bill

Which is to say that modern Democrats are essentially calling one of their greatest presidents a liar when they demonize tax cuts as a means of increasing government revenues.

So let’s move on to Ronald Reagan.  Reagan had two major tax cutting policies implemented: the Economic Recovery Tax Act (ERTA) of 1981, which was retroactive to 1981, and the Tax Reform Act of 1986.

Did Reagan’s tax cuts decrease federal revenues?  Hardly:

We find that 8 of the following 10 years there was a surplus of revenue from 1980, prior to the Reagan tax cuts.  And, following the Tax Reform Act of 1986, there was a MASSIVE INCREASE of revenue.

So Reagan’s tax cuts increased revenue.  But who paid the increased tax revenue?  The poor?  Opponents of the Reagan tax cuts argued that his policy was a giveaway to the rich (ever heard that one before?) because their tax payments would fall.  But that was exactly wrong.  In reality:

“The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.  Pretty good achievement considering that his predecessor was forced to describe his own economy as a “malaise,” suffering due to a “crisis of confidence.” Pretty good considering that President Jimmy Carter responded to a reporter’s question as to what he would do about the problem of inflation by answering, “It would be misleading for me to tell any of you that there is a solution to it.”

Reagan whipped inflation.  Just as he whipped that malaise and that crisis of confidence.

This might explain why a Gallup poll showed that Ronald Reagan is regarded as our greatest president, while fellow tax-cutting great John F. Kennedy is tied for second with Abraham Lincoln.  Because, in proving Democrat policies are completely wrongheaded, he helped people.  Including poorer people who benefited from the strong economy he built with his tax policies.

Let’s move on to George Bush and the infamous (to Democrats) Bush tax cuts.  And let me quote none other than the New York Times:

Sharp Rise in Tax Revenue to Pare U.S. Deficit
By EDMUND L. ANDREWS
Published: July 13, 2005

WASHINGTON, July 12 – For the first time since President Bush took office, an unexpected leap in tax revenue is about to shrink the federal budget deficit this year, by nearly $100 billion.

A Jump in Corporate Payments On Wednesday, White House officials plan to announce that the deficit for the 2005 fiscal year, which ends in September, will be far smaller than the $427 billion they estimated in February.

Mr. Bush plans to hail the improvement at a cabinet meeting and to cite it as validation of his argument that tax cuts would stimulate the economy and ultimately help pay for themselves.

Based on revenue and spending data through June, the budget deficit for the first nine months of the fiscal year was $251 billion, $76 billion lower than the $327 billion gap recorded at the corresponding point a year earlier.

The Congressional Budget Office estimated last week that the deficit for the full fiscal year, which reached $412 billion in 2004, could be “significantly less than $350 billion, perhaps below $325 billion.”

The big surprise has been in tax revenue, which is running nearly 15 percent higher than in 2004. Corporate tax revenue has soared about 40 percent, after languishing for four years, and individual tax revenue is up as well
.

[Update, September 20: The above NY Times link was scrubbed; the same article, edited differently, appears here.]

Note the newspaper’s use of liberals favorite adjective: “unexpected.” They never expect Republican and conservative polices to work, but they always do if they’re given the chance.  They never expect Democrat and liberal policies to fail, but they always seem to fail every single time they’re tried.

For the record, President George Bush’s 2003 tax cuts:

raised federal tax receipts by $785 billion, the largest four-year revenue increase in U.S. history. In fiscal 2007, which ended last month, the government took in 6.7% more tax revenues than in 2006.

These increases in tax revenue have substantially reduced the federal budget deficits. In 2004 the deficit was $413 billion, or 3.5% of gross domestic product. It narrowed to $318 billion in 2005, $248 billion in 2006 and $163 billion in 2007. That last figure is just 1.2% of GDP, which is half of the average of the past 50 years.

Lower tax rates have be so successful in spurring growth that the percentage of federal income taxes paid by the very wealthy has increased. According to the Treasury Department, the top 1% of income tax filers paid just 19% of income taxes in 1980 (when the top tax rate was 70%), and 36% in 2003, the year the Bush tax cuts took effect (when the top rate became 35%). The top 5% of income taxpayers went from 37% of taxes paid to 56%, and the top 10% from 49% to 68% of taxes paid. And the amount of taxes paid by those earning more than $1 million a year rose to $236 billion in 2005 from $132 billion in 2003, a 78% increase.

Budget deficits are not merely a matter of tax policy; it is a matter of tax policy AND spending policy.  Imagine you have a minimum wage job, but live within your means.  Then you get a job that pays a million dollars a year.  And you go a little nuts, buy a mansion, a yacht, a fancy car, and other assorted big ticket items such that you go into debt.  Are you really so asinine as to argue that you made more money when you earned minimum wage?  But that’s literally the Democrats’ argument when they criticize Reagan (who defeated the Soviet Union and won the Cold War in the aftermath of a recession he inherited from President Carter) and George Bush (who won the Iraq War after suffering the greatest attack on US soil in the midst of a recession he inherited from President Clinton).

As a result of the Clinton-era Dot-com bubble bursting, the Nasdaq lost a whopping 78% of its value, and $6 trillion dollars of wealth was simply vaporized.  We don’t tend to remember how bad that economic disaster was, because the 9/11 attack was such a huge experience, and because instead of endlessly blaming his predecessor, George Bush simply took responsibility for the economy, cut taxes, and fixed the problem.  The result, besides the above tax revenue gains, was an incredible and unprecedented 52 consecutive months of job growth.

Update September 12: Did somebody say something about “jobs”?  Another fact to recognize is the horrendous damage that will be done to small businesses and the jobs they create if the tax cuts for the “rich” aren’t continued.  As found in the Wall Street Journal, “According to IRS data, fully 48% of the net income of sole proprietorships, partnerships, and S corporations reported on tax returns went to households with incomes above $200,000 in 2007.” Further, the Tax Policy Center found that basically a third of taxpayers who are expected to be in the top tax bracket in 2011 generate more than half their income from a business ownership.  And while Democrats love to point out that their tax hikes on the so-called rich only impact 3% of small businesses, the National Federation of Independent Business reports that that three percent employs about 25 percent of the nation’s total workforce.  “Small businesses that employ 20 to 250 workers are the most likely to be hit by an increase in the top two tax rates, according to NFIB research. Businesses of this size employ more than 25 percent of the U.S. workforce.”  So if you want jobs and an economic recovery, you simply don’t pile more punishing taxes on those “rich” people.  Especially during a recession [End update].

We’re not arguing theories here; we’re talking about the actual, empirical numbers, literally dollars and cents, which confirms Andrew Mellon’s thesis, and Warren Harding’s and Calvin Coolidge’s, John F. Kennedy’s, Ronald Reagan’s, and George W. Bush’s, economic policies.

Harding and Coolidge, Reagan and Bush, with Democrat JFK right smack in the middle: great tax cutters all.

The notion that small- and limited-government conservatives who want ALL Americans to pay less to a freedom-encroaching government are somehow “beholden to the rich” for doing so is just a lie.  And a Marxist-based lie at that.

[Update, 12/15/10]: Check out these numbers as to how the Reagan tax cuts INCREASED the taxes paid by the wealthy, and REDUCED the taxes paid by the middle class and the bottom 50% of tax payers:

Income tax burdens (from the Joint Economic Committee for the US Congress report, 1996):
1981: top 1% of earners paid 17.6% of all personal income taxes
1988: top 1% of earners paid 27.5% of all personal income taxes (+ 10%).

1981: top 10% of earners paid 48% of all personal income taxes
1988: top 10% of earners paid 57.2% of all personal income taxes (+ 9%).

So rich clearly paid MORE of the tax burden when their tax rates were LOWERED.

For the middle class:
1981: middle class paid 57.5% of all personal income taxes
1988: middle class paid 48.7% of all personal income taxes (- 9%).

The middle class’ tax burden went DOWN by 9%.  They paid almost 10% LESS than what they had been paying before the Reagan cuts.

For the bottom 50%:
1981: bottom 50% paid 7.5% of all personal income taxes
1988: bottom 50% paid 5.7% of all personal income taxes (- 2%).

So the Joint Economic Economic Committee concludes that if you lower the tax rates on the rich, the rich wind up paying MORE of the tax burden and the poor end up paying LESS.  When you enact confiscatory taxation policies, the people who can afford it invariably end up protecting their money.  They do everything they can to NOT pay taxes because they are getting screwed.  When the rates drop to reasonable rates, they don’t shelter their money; rather, they take advantage of their ability to earn more – and improve the economy by doing so – by investing.  If you take away their profit, you take away their incentive to improve the economy and create jobs.

Some articles to read:

The Reagan Tax Cuts: Lessons for Tax Reform

The Historical Lessons of Lower Tax Rates

Income Tax Cuts Increase Revenues and Help Low Income Families

[End Update, 12/15/10]

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Under Obama Federal Spending Way, WAY Up, And Federal Revenues Way WAY Down

March 3, 2010

Let’s see, if you lost your job, and then you decided to massively increase your spending – you know, buy a mansion, buy a yacht, buy a Ferrari – what do you think would happen?

If you don’t know, you’re about to find out on a national level.

We keep hearing from the mainstream media that Messiah Obama has led us out of the recession.  But it’s a great big shining lie.

The fact of the matter is that even as Obama is spending more in 20 months than George Bush did throughout his entire high-spending 8 years combined –

Mr. Obama cannot dismiss critics by pointing to President George W. Bush’s decision to run $2.9 trillion in deficits while fighting two wars and dealing with 9/11 and Katrina. Mr. Obama will surpass Mr. Bush’s eight-year total in his first 20 months and 11 days in office, adding $3.2 trillion to the national debt. If America “cannot and will not sustain” deficits like Mr. Bush’s, as Mr. Obama said during the campaign, how can Mr. Obama sustain the geometrically larger ones he’s flogging? (Source: Wall Street Journal)

– the federal government is simultaneously taking in record low income tax withholdings from businesses and individuals.

From Zerohedge:

February was not an auspicious start to Obama’s record budget deficit-busting plans. The Daily Treasury Statement for the full month of February was just released, and it disclosed that while corporate tax withholdings, net of refunds, actually climbed marginally to $3.4 billion from $(3.4) billion in February 2009, individual tax withholdings plunged to a multi-year low of $30.7 billion. Combined, the two items also posted a multi low of $34 billion, less than the previous recent low from February 2009 when the first leg of the Greater Depression was allegedly at its zenith (see chart below). We can’t wait to hear how the “recession is over” brigade will paint this particular data point.

On a rolling twelve month basis, the government has to plug an LTM hole of about $250 billion in annual tax withholdings. The LTM individual tax withholdings have dropped to an unprecedented low of $1.275 trillion, compared to the $1.43 trillion as of September 2008 when the recession was about to start. If the government is unable to resurrect tax withholdings to historical levels before the interest rate on the $7.9 tillion in marketable debt starts climbing (even as the $7.9 is set to become about $10 trillion in just over a year), call it a ballgame.

Zerohedge’s Tyler Durden asks, “We can’t wait to hear how the “recession is over” brigade will paint this particular data point.”  Knowing the mainstream media, they won’t “paint” it at all.  They simply won’t cover it.  They are “gatekeepers,” after all, which means they protect you from information that they have concluded you don’t need to know.  If it doesn’t fit their narrative, it doesn’t exist.  You know, like in the novel 1984.

Oh, we’ve had the odd report.  For example, there was this one back in August from CBS (the only one I could find):

Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression.

That sounds really bad.  And you’d think the media would be all over it, keeping track of it and regularly reporting on an issue that is clearly very important.  But no.  It makes Obama look bad.

If tax witholdings under Bush were at a record low, you KNOW the media would be crawling all over it.  But it doesn’t fit their leftwing narrative to let you know.  So they don’t report it.

For the record, the “Bush tax cuts boosted federal revenue,” we find out in the Washington Times.  But the media weren’t too keen on letting you know that factoid, either.

Those two arrows in the bottom graph representing business and individual tax withholdings could well end up stabbing the heart and killing the U.S. economy.

You’d think this was something important that the media would report.  But nope.  Sorry.

Obama has done nothing to fix the real problems with our economy that are SCREAMING out for solutions.  He’s been far too busy trying to impose his ObamaCare boondoggle to be bothered with economic reality.  Meanwhile, we’re heading for a double-dip recession and very bad news.

And the smiley-faced media propagandist aren’t going to change that fact by glossing over or spinning the bad news and hyping anything remotely positive in order to make their messiah look as good as possible.  Personally, I’m sick and tired of the media reporting that everything is “unexpected” when it doesn’t fit their agenda.

Mainstream Media Touts $848 Billion Senate Health Bill, Ignores Actual Cost Of At LEAST $2.5 Trillion

November 20, 2009

Democrats have done a good job – along with the loyal participation of a leftwing propaganda machine – of projecting their takeover of the health care system as “only” costing a “mere” $848 billion.

They think the American people are dumb enough to buy their fraud, and maybe they are.

But the actual cost of this program over ten years of its actual implementation will be at least $2.5 trillion.  And that is $107.5 trillion more than we’ve got.

Updated November 19, 2009
Senate Health Bill Price Tag, Rosy Deficit Estimate Assailed as ‘Fantasy’

by FOXNews.com

Senate Majority Leader Harry Reid claims that his health care bill costs about $848 billion in the first 10 years, well under President Obama’s $900 billion target. That’s for 10 years of revenue-gathering, but only six years of service.

Senate Majority Leader Harry Reid claims that his health care bill costs about $848 billion in the first 10 years, well under President Obama’s $900 billion target.

That’s for 10 years of revenue-gathering, but only six years of service, according to the analysis by the Congressional Budget Office.

Adding in expenses beyond the 10-year mark drastically skews the overall cost, making the $848 billion a mere fraction of the long-term price tag of overhauling America’s health care system — and that’s if no changes are made to the legislation during that time.

The additional claim touted by Senate Democrats — that the bill will reduce the deficit by $130 billion over the first 10 years — is also coming under fire as “fantasy.”

Republicans have countered the CBO estimate with a figure of their own: $2.5 trillion, an estimate that comes out of the Senate Budget Committee minority’s analysis of Reid’s plan.

“This is a lousy bill that’s going to cost American taxpayers like mad for the rest of our lives,” Sen. Orrin Hatch, R-Utah, a fierce critic of the health care legislation, told Fox News on Thursday.

Part of the problem with the CBO estimate is that it covers a 10-year period from 2010-2019 — however, the health care reform plan is not fully implemented until 2014. That means the federal government is raking in billions in taxes and savings for the first four years without spending on the new program. The $2.5 trillion estimate is for the 10-year window starting in 2014, after implementation of the program begins.

Under the timetable in the CBO estimate, the government spends $9 billion in the first four years, but $838 billion in the last six when the overhaul goes into full force.

The revenue significantly ramps up in the latter half of the decade to keep pace with spending, but the nearly $100 billion in deficit savings in the first four years is not necessarily in the piggy bank either.

Democrats are holding up estimates that show the second decade of health care reform yields even more deficit reduction.

President Obama said in a statement Wednesday night that the unveiling of the is a “critical milestone” and cited one estimate showing the second 10 years would yield up to $650 billion in deficit reduction.

Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, cited the same estimate, telling Fox News that Reid’s bill is “going in the right direction” and yields significant savings.

“That to me is the most encouraging part of this,” he said.

Budget analysts say that the early revenue cannot be fenced off, much like Social Security money is spent despite a trust fund for that purpose. The funding gets absorbed into the general federal budget, presumably to go toward reducing the deficit on a yearly basis.

However, this creates the possibility that Congress could spend that money twice, by using the up-front savings as fun money for new projects and then having to pay the bill for health care reform down the road. Holtz-Eakin called this a worst-case scenario.

“The government’s incapable of segregating funds. You can’t put the money in a cigar box and bury it behind the Treasury Department,” said Michael Tanner, senior fellow with the libertarian Cato Institute.

Tanner pointed to two other “gimmicks” that make the price seem smaller than it is.

One deals with the so-called “doctor fix,” which would be an act of Congress to ensure Medicare doctors don’t face steeps cuts in federal reimbursements. This would cost at least $210 billion over 10 years, and it’s a “fix” that Democrats are trying to separate from the health care reform bill
.

That alone erases the $130 billion in deficit savings claimed by the CBO’s latest health care estimate.

Tanner also pointed to the CLASS Act, a long-term care program in the bill that takes in billions in revenue early on but does not pay out in any significant way until the next decade.

“If you use honest accounting … then this bill’s not paid for,” Tanner said. “It’s smoke-and-mirrors accounting.”

The Budget Committee document estimating the actual cost to be $2.5 trillion over years five through 14 of the program also showed $126 billion in deficit reduction in that period. It estimated even more down the road.

But Holtz-Eakin called that “fiction,” since it relies on more than $1 trillion in cuts to Medicare and Medicaid.

He said there’s no way the government can sustain and increase those cuts and expect the program to work.

The biggest problem of all is that the CBO – regardless of how well-intentioned or “objective” it is – have routinely underestimated the costs of government programs – especially health-related government programs – by a factor of ten.

The Senate Democrat health bill includes the public option.  It guarantees a government takeover of healthcare.

We are talking about clear matters of life and death.  We are talking about 1/6th of the U.S. economy.  And Democrats are playing games of smoke and mirrors.  What they are doing is beyond unconscionable.

$1 trillion in cuts to Medicare?  Bye-bye, old people.  In the words of Obama adviser Robert Reich, “We’re going to let you die.”

Liberal Newsweek has it’s “Case for Killing Granny.”  Newsbusters points out:

For good measure the magazine also promises readers to explain “Why We Should Insure Illegals” and how “Health Reform Could Combat Crime” in related articles linked on the front page. More illegal immigration, fewer criminals and old people. What a deal!

Please don’t be so naive and so stupid as to believe that these people aren’t serious.  And I mean deadly serious.

Make no mistake: Democrats are voting for the national economic suicide of the United States, and for the deaths by medical-resource rationing of millions of Americans who otherwise would have lived.

Obama’s Plan To Destroy America’s Farms Moving Full Steam Ahead

June 13, 2009

The bill is House Resolution 2454, imposing a domestic carbon emissions cap-and-trade program on the American economy.

The goal seems to be nothing short of eradicating American farms and self-sustainability.

Even DEMOCRATS are opposing the Obama Energy Bill. Climate change legislation will be utterly devastating for American farmers. Rep. Leonard Boswell (D-IA) of the House Agriculture Committee says that not only will he not vote for it, but no one else on his committee will support it either. The bill would increase the cost of everything that farmers depend on, such as diesel fuel, gasoline, fertilizers, pesticides, and a host of other things. It would raise taxes on energy by $846 billion over the next ten years. Due to the fact that farming is so energy intensive, one major study shows that it would reduce farm income by $8 billion or 28% over the next four years, by $25 billion (or by 60%) through 2024, and by $50 billion (or by 94%) by 2035 [source: Heritage Foundation study]. Many are shaking their heads in amazement over the proposed impact.

Cap and trade legislation would utterly devastate the agricultural community with stratospheric operating costs, and would just as utterly destroy rural America.

To make matters even worse, the 1,000 page bill pushed through by Henry Waxman and Ed Markey has barely been examined in spite of its sweeping consequences as Democrats play cutthroat politics with America’s future.

House Agriculture Committee Chairman Collin Peterson (D-MN) is complaining that the Agriculture Department has little if any role in the climate change bill, and that the EPA is driving it. Peterson said, “A lot of us on the Committee do not want the EPA near our farms.”

Agriculture Department Secy Tom Vilsack repeatedly said, “There is obviously work yet to be done on this bill.”

Nevertheless, Nancy Pelosi is trying to rush the bill through the House, demanding that it be finished by the end of next week – leaving almost no change lawmakers could change it. And Barack Obama is pushing hard to impose his agenda before Americans have a chance to know more about it and oppose it.

The economic aspects are terrible enough:

WASHINGTON, DC, June 9 — A US House bill that would introduce a domestic carbon emissions cap-and-trade program would cost $846 billion in new taxes, the Congressional Budget Office said on June 5. [….]

American Petroleum Institute President Jack N. Gerard said on June 8 that the analysis confirmed the bill would be “massively costly.”

“The $846 billion price tag on emission allowances, borne disproportionately by oil consumers, will drive up costs of producing and refining gasoline, diesel, and other fuel products while doing nothing to protect fuel consumers, including American families, trucking, the airlines, the construction industry, and many other businesses that rely on oil to make or transport products,” Gerard said.

API: ‘A job-killer’
API said that based on allowance costs in CBO’s study, impacts could be as much as 77¢/gal for gasoline, 83¢/gal for jet fuel, and 88¢/gal for diesel fuel.

“This is what happens when market-based regulation is abandoned in favor of picking winners and losers,” Gerard said. “Putting most of the burden on one sector also helps explain why this legislation promises to be a job-killer.”

The bill was cosponsored by Reps. Henry A. Waxman (D-Calif.), chairman of the Energy and Commerce Committee, and Edward J. Markey (D-Mass.), chairman of the committee’s Energy and Environment Subcommittee.

But the impact on industries such as farming will be utterly devastating:

For Farmers, Cap and Trade is a Permanent Drought Season

Economists at The Heritage Foundation’s Center for Data Analysis are digging deeper into the effects of the Waxman-Markey climate change legislation that includes a cap and trade plan to reduce carbon dioxide by 17 percent below 2005 levels in 2020 and by 83 percent below 2005 levels in 2050. Today’s victim: Farmers. Our CDA analysts found that Waxman-Markey would adversely affect farmers in a number of ways:

• Farm income (or the amount left over after paying all expenses) is expected to drop $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. These are decreases of 28%, 60% and 94%, respectively.
• The average net income lost over the 2010-2035 timeline is $23 billion – a 57% decrease from the baseline.
• Construction costs of farm buildings will go up by 5.5 percent in 2025 and 10 percent by 2034 (from the baseline).
• By 2035, gasoline and diesel costs are expected to be 58 percent higher and electric rates 90 percent higher.

And for the rest of us, including those of us on fixed incomes and already struggling in these tough economic times:

• The cost of producing everything from wheat to beef will increase. Indeed, the price deflator for private farm inventories goes up over 20 points by 2035. This increase gets quickly translated into much higher food prices for consumers at the grocery stores.
farm-inventory-costs

Most of our readers know cap and trade is an energy tax in disguise. The goal of cap and trade is to drive up energy costs so much that Americans use less. But there’s a fundamental problem with this. Just about everything we do and everything we consume uses energy, so even after consumers turn up their thermostats in the summer and down in the winter, consumers are still using a lot of energy. But under a cap and trade, they’ll be paying an exorbitantly high price for it.

Farming is no exception; in fact, farming is very energy-intensive, with fuel, chemical, electricity and fertilizer costs. They have to purchase a lot of equipment and have to construct a lot of buildings. The Heritage Foundation’s CDA estimates that the price of constructing farm buildings will go up by 4.5 percent in 2024 and by over 10 percent in 2034 (from the baseline) solely because of the upward pressure cap and trade puts on energy prices.
farm-construction

The price of tractors– and every other piece of farm equipment you can think of– will increase as well.
farm-transportation

Worst of all is what happens to farmers’ net income. Farmers live off their gross income; what they earn in addition to that is their net income or marginal income. Waxman-Markey significantly shrinks farmers’ net income pie. Farm income is expected to drop $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. These are decreases of 28%, 60% and 94% from the baseline, respectively.
farm-income-lost

Waxman-Markey increases the costs of farm inventories, which in turn raises the cost of food sold to the consumer. At first glance, this may appear to be a good thing for farmers. Higher prices equals higher profit. But this would only be true if all other things were equal. That’s certainly not the case here. Higher energy prices hurt the overall economy, which means less demand for all goods, less production, higher unemployment, and reduced income. This overall economic slowdown reduces demand for agricultural goods, too. And, as we’ve seen above from the charts, a lot changes for farmers; particularly, their overall cost of operations rise and their net incomes fall.

Waxman-Markey’s effect on farmers should raise a red flag for those in the farm belt and will put U.S. agriculture at a tremendous competitive disadvantage if enacted. Consumers will feel the pain as well, not only from the increase in their own energy prices, but increased food prices. And for what? A change in the temperature too small to notice.

For more, check out The Heritage Foundation’s Rapid Response Page

This won’t just undermine the American farmer; it will force him out of farming altogether.

How is it NOT a truly terrible idea to annihilate America’s ability to feed its own people?

This goes beyond undermining the US economy; it may well literally create starvation conditions for millions of Americans.

Last May, while on the campaign trail, Barack Obama said:

“We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times … and then just expect that other countries are going to say OK,” Obama said.

“That’s not leadership. That’s not going to happen,” he added.

And now we see what Obama’s “leadership” looks like: it looks like a bigger version of North Korea.  Nationalizing the auto industry and imposing tiny little clown cars on the country; an energy policy that will tax us into freezing in the dark at night (or conversely sweltering in the summer heat); and of course the whole famine thing.

You can’t say he didn’t warn us, I suppose.

Revelation 6:5-6 “When he opened the third seal, I heard the second living creature say, “Come!” And I looked, and behold, a black horse! And its rider had a pair of scales in his hand. And I heard what seemed to be a voice in the midst of the four living creatures, saying, “A quart of wheat for a day’s wage, and three quarts of barley for a day’s wage, and do not harm the oil and wine.”

The beast is coming. That approaching reality is becoming clearer every single day.