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Zach.Howell
Posted: Sunday, February 19, 2012 - 15:16
In its attempt to implement it’s healthcare reform bill, better known as Obamacare, the Obama Administration has tied itself in political and rhetorical knots.
When Democrats were attempting to sell the bill to the public they insisted that the individual mandate (the requirement that everyone must either obtain health insurance or pay a penalty) was not a tax. In a 2009 interview with George Stephanopoulos, Obama attempted to refute the argument that this portion of the bill violated his promise not to raise taxes on anyone making less than $250,000.
“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” Obama said in the interview. “You just can’t make up that language and call it a tax increase. . . I absolutely reject that notion.”
But after it passed the Obama Administration began to change its tune. Realizing that it was going to face a constitutional challenge the Obama team felt they would be on safer legal ground if they admitted it was a tax increase rather tan attempt to defend it based on the power to regulate interstate commerce.
Constitutionally speaking, this is a smart strategy. The Commerce Clause provides sweeping authority, allowing the government to regulate interstate commerce, a term of art that has come to mean it can regulate any economic activity. But this line of reasoning runs into problems because in the case of Obamacare there is no activity. It’s attempting to punish inactivity by punishing those who choose not to buy health care.
Democrats have sought to get around this problem by arguing that the collective decision not to purchase insurance has impacts that ripple into the economy. Numerous courts have pointed out that by this justification the government could regulate anything. “The government’s struggle to articulate cognizable, judicially administrable limiting principles only reiterates the conclusion we reach today: there are none,” the 11th Circuit Court of Appeals wrote in its decision on the case
The potential for failure has led the Obama legal team to take the much safer approach – argue that Obamacare is a tax, which Congress can exercise to provide for the “general welfare” – even broader language than the Commerce Clause.
The Justice Department has latched on to this argument, pointing out to the court that the individual mandate penalty would raise substantial revenue ($4 billion). It is also collected under the Internal Revenue Code and must be reported on tax returns “as an addition to income tax liability.” Therefore, despite the language of the bill calling it a “penalty” (a word chosen precisely because the Administration didn’t want it labeled a tax), if it walks like a tax and talks like a tax, it’s a tax.
(Of course, this too faces problems. As HotAir’s Allahpundit writes, “If Congress can use its taxing power to steer your money directly to private insurers, then in theory it could force you to fork your money over to any number of congressionally-favored private-sector businesses for not-so-public purposes.”)
But as the Obama Administration is keenly aware, enacting a new tax on the middle class in an election year is not sound political strategy, regardless of the legal merits. That’s why in public they continue to argue that Obamacare’s individual mandate should not be construed of as a tax.
The most recent example came in a hearing on Friday when Office of Management and Budget Director Jeffrey Zients said Obamacare is not a task.
When asked by Rep. Scott Garrett whether or not the individual mandate penalty is a tax that undermines the Obama Administration’s claim that it is not raising taxes for any families under $250,000, Zients seems confused, before eventually saying that the penalty is not a tax.
Zients confusion is understandable. With the Obama Administration completing changing its argument depending on the day and who is listening, it’s tough to keep your story straight. Of course this rhetorical knot could all be saved if Obama would just start being honest with the American people.
Zach.Howell
Posted: Sunday, February 5, 2012 - 15:52
At its core the State of the Union preceding a contested presidential election is as much a campaign speech as a statement of policy. It was of little surprise then that President Obama kicked it off with one of the few achievements that just about every voter, regardless of political philosophy, can agree was a success – the death of Osama bin Laden.
It’s also little surprise that Obama did his best to hide his weaknesses, namely Obamacare.
Yes, what was once supposed to be the bill that carried him to new heights of political power now threatens to drag his chances of reelection down. For that reason President Obama did his best to pretend that neither Obamacare, nor Medicare, nor really anything to do with health care at all was mentioned in his speech.
As Aaron E. Carroll writes,
If you weren’t paying close attention to the State of the Union speech, you might have missed the parts about health care. In almost 7000 words of text, a total of 44 words were spent on the topic, a mere 0.6% for a subject accounting for more than one-sixth of the US economy. Medicare and Medicaid received 1 mention each, in the same sentence.
Then again, what was he going to say? As we’ve written about before, since Obamacare was passed, health insurance premiums have risen substantially faster than in the years before it was passed. Indeed, premiums rose a 7.5 percent for individual coverage and 9.5 percent for family coverage in 2011 – compared to increases of 4.7 percent and 3.0 percent in 2010. That translates into a $2,393 increase for the typical family.
President Obama has recently tried to pull a switcheroo and claim that decreasing the number of uninsured, not premium costs, was the ultimate goal of Obamacare. But brand new data from Gallup reveals that Obamacare has failed by that measure as well.
“More American adults lacked health insurance coverage last year than in any year since Gallup and Healthways started tracking it in 2008,” writes Elizabeth Mendes. “The uninsured rate has been increasing since 2008, climbing to 17.1 percent in 2011.”
Still wondering why Obama didn’t mention his “signature piece of legislation” in the State of the Union? Yea, us neither.
But that doesn’t mean everyone is running away from the issue. The Hill reports:
“House Republicans will be ready with a plan to replace President Obama’s healthcare law once the Supreme Court determines the law’s fate this summer, Rep. Joe Pitts (R-PA) told reporters Wednesday.
. . . Pitss said the GOP will instead propose state-based pools in which the government would take over the cost of the sickest, most expensive patients, rather than requiring private insurers to cover them.
The rest of the plan Pitts outlined draws from long-standing GOP priorities. It will include limits on medical malpractice suits and allow the sale of insurance across state lines, Pitts said, while also expanding the use of health savings accounts.”
The goal according to Rep. Pitts is actually to have several plans that would be custom-tailored to the Supreme Courts’ ruling – whether it strikes down the individual mandate, strikes the whole law, or keeps the bill largely in place.
President Obama and Congressional Democrats can’t avoid the issue forever. Eventually they’ll have to account for the fact that the numbers of uninsured have risen and premiums have soared after the passage of their bill. No doubt they’ll do their best to defend the status quo by completely eschewing numbers and instead focusing on heart-warming individual stories. But what they won’t do, can’t do, is offer up a replacement that will truly solve the serious health care issues facing this country.
And that’s where Republicans step in.
Zach.Howell
Posted: Wednesday, February 1, 2012 - 11:04
Today the Congressional Budget Office released its annual “baseline” budget projections. The good news is that the deficit is projected to fall to the lowest it has been since the beginning of the so-called “Great Recession.” The bad news is that number is still $1.1 trillion – making it higher than any deficit between 1947 and 2008.
The estimate pretty much put the final nail in the coffin for President Obama’s “pledge to cut the deficit in half by the end of my first term in office.” Yea, he said that. We can’t fully explain it, but the two best theories that the office could come up with were (1) his speechwriter was playing a Anchorman-esque practical joke on him, (2) his teleprompter malfunctioned, he got nervous, and gave a black out speech reminiscent of Will Ferrell in Old School. Admittedly, neither are great theories. And apparently we watch too many Will Ferrell movies.
But the point is, not only did he fail to live up to the pledge, he completely ignored it. When Obama came into office the prior year’s deficit was $458 billion. The next four years were $1.4 trillion, $1.3 trillion, $1.6 trillion, and now, a projected $1.1 trillion. Obama didn’t halve the deficit, he occasionally tripled it, and always at least doubled it.
Fortunately, the report isn’t all terrible news. The numbers show that the Republican-held House of Representatives has begun to turn the ship around…slowly. Using levers like the debt ceiling debate and the omnibus appropriations bill Republicans have been able to achieve a remarkable amount of fiscal discipline despite controlling only the House while Democrats have the Senate and the White House.
The CBO’s projections show that federal government spending will actually remain flat over the next two years.
“In fiscal year 2011, total discretionary spending authority – authority provided in appropriations acts to incur financial obligations that will result in immediate or future outlays – dropped by $42 billion; that authority has declined by another $24 billion in 2012,” writes the CBO. “As a result, outlays decreased by 0.1 percent layer year – the first time since 1996 that discretionary outlays had fallen.”
Not exactly reason to throw a party. Especially when you still have Democrats in the House like Rep. Rahall who say stuff like this, “In two years, who knows, we may find a pot of gold at the end of the rainbow.” Gosh, why didn’t we think of that sooner! We could have totally solved our deficit if only we hadn’t wasted so much time tracking bin Laden and focused on finding the Lucky Charms guy!
Despite the utter lack of help that Republicans should expect from Democrats who believe magical creatures are the answers to our deficit problems, there is still much to be done.
Namely, we have to look beyond the discretionary budget to other “mandatory” spending such as Social Security, Medicare, and Medicaid. Yes, we know talking about entitlements is about as popular as former Obama Chief of Staff Bill Daley was with Harry Reid. Hahaha! Too insider? Ok, how about…as popular as Anthony Weiner at a Clinton family barbecue. That’s funny because Weiner’s wife Huma Abedin is good friends with…Hilary…oh never mind.
The fact is we have to reform these programs if we want to achieve fiscal sustainability. The CBO finds that mandatory spending will rise from $2.1 trillion to $3.5 trillion annually in the next decade. Although some of that will be covered by higher revenues as a result in economic growth, we still need to find a way to cut cost or else face a crippling debt crisis.
Fortunately, this isn’t as impossible as it sounds. As Dan Mitchell of the Cato Institute has been yelling about for years now – Washington can let spending rise by 2 percent each year (roughly the amount of inflation) and we would have a balanced budget in about 10 years. That’s hard, but not impossible.
What would make it even easier, as American for Tax Reform’s Ryan Ellis points out, is if Washington would implement policies focused on economic growth. “If real GDP growth was 1 percentage point higher over this window,” Ellis writes, “tax revenues generated would be equal to an additional $2.8 trillion.
So take the good news and bad news in today’s CBO report. But most importantly, keep in mind that we must continue to press for more fiscal responsibility out of Washington if we truly want to avert disaster.
Zach.Howell
Posted: Tuesday, January 17, 2012 - 19:18
Something strange is going on. Late last week President Obama made an official request for Congress to raise the debt ceiling by $1.2 trillion. But didn’t we just do that? It just seems like yesterday that Washington was abuzz over the debate about whether to increase the debt ceiling. And unless my memory fails me a $900 billion increase to the debt limit was granted.
Surely, Washington hasn’t blown through nearly $1 trillion already. And we’re still two weeks away from Groundhog Day, so unless there’s a Bill Murray sequel about the Martin Luther King, Jr. holiday that I missed, I’ll count out being stuck in a time loop.
Oh that’s right, this is Obama and the Democrats we’re talking about. Give them a few days and a blank check and they’ll have not only attempted to buy Antarctica, but will have unionized the penguins and given free health care to the seals. Yes, this is the party that makes Nicolas Cage look like a financial whiz (and this is a guy who bought not one, but two castles, not to mention a dinosaur skull for no apparent reason).
So here’s President Obama, back after having spent $900 billion in just five short months, and asking for more. Granted, the request is little more than a formality, a foregone conclusion that was folded in to the larger debt limit deal in August.
Under the package, President Obama was able to get a $900 billion immediate increase to the debt limit. The second tranche, worth as much as $1.5 billion that was intended to carry him through the election, could only happen if the Deficit Supercommittee agreed to the equivalent amount of cuts. Yea, we all know how that went over. About as well as a hygiene tutorial at an OWS camp.
According to the deal, the failure of the Supercommittee triggered automatic spending cuts – about half of which would come from the military and about half from Medicare providers. But it also meant that Obama can “only” get $1.2 trillion. Aw, poor guy.
Which brings us to where we are now, namely, screwed. OK not screwed (at least not yet), but not in the best of financial shape. After all, our debt, has surpassed $15.2 trillion – larger than our entire economy. And you know things are bad when not even the Liberal Ledger, er, I mean, New York Times, can sweep Obama’s spending habits under the rug.
“The government’s need for more borrowing results from the fact that it spends far more than it raises in revenue; it makes up the difference by borrowing 36 cents of every dollar it spends. In the fiscal year that ended Sept. 30, the government spend $3.6 trillion and collected $2.3 trillion.”
. . . Since President Obama took office, the debt has shot up 42 percent, to the current level of $15.1 trillion. Of that amount, $10.4 trillion is borrowed from the public, and $4.7 trillion consists of special-issue Treasury securities held by Social Security and other govenrment trust funds. Debt held by the public, considered by many economists to be the more significant indicator, is 65 percent higher now than in January 2009.”
When it comes to Obama and his penchant for spending there just isn’t many nice things you can say. This is a president who has the three largest deficits in U.S. history (FY 2009: $1.43 trillion, FY 2011: $1.29 trillion, FY 2010: $1.298 trillion). So if deficits were an olympic sport, Obama would take home the gold, silver, and bronze all by himself.
And those deficits are adding up fast. To provide a sense of just how large $15 trillion is consider this – in 2010 the Bureau of Engraving and Printing produced $974 million worth of currency. At that rate it would take 15,400 years to print $15 trillion – roughly around the same time we can expect Klingon to overtake English as our national language and Congress is desperately trying to rewrite the 2nd Amendment to include phasers. That is to say, never.
So yes, if it feels like we just raised the debt ceiling, it’s because we did. And unless Congress takes steps to slow the rate of spending, we’ll be right back in this same predicament in just a few months. So let’s try something that will feel really strange – let’s stop making debt limit increases seem mundane and let’s actually try and spend less.
Zach.Howell
Posted: Sunday, January 8, 2012 - 14:50
“It’s morning again in America.” That was the signature line from President Ronald Reagan’s famous campaign ad during his 1984 reelection bid. The message was perfect in its simplicity – that Reagan’s conservative policies had brought American out of the darkest depths of a recession and into the light of a new day.
The fact is, the strength of the economy is generally the first thing a president will cite in his reelection bid. Which brings us to a curious situation. Friday’s job numbers seemed to be the strongest evidence yet that the economy is gaining steam. And yet, President Obama largely withheld his excitement.
“We have made real progress,” Obama said Friday after the employment numbers were released. “Now is not the time to stop.”
Doesn’t exactly sound like the triumphant president, who is ready to point to his economic accomplishments come next November does it? It’s not even the calm reassurance of Reagan’s ‘morning in America.’
And with good reason. Wading below the positive jobs report, which showed 200,000 jobs were created in December, is a current of data that could wash away any positivity. The biggest problem is that people continue to drop out of the labor force, making the unemployment rate look much better than it truly is.
Economics blog Zero Hedge explains:
“One does not need to be a rocket scientist to grasp the fudging the BLS [Bureau of Labor Statistics] has been doing every month of years now in order to bring the unemployment rate lower: the BLS constantly lowers the labor force participation rate as more and more people “drop out” of the labor force for one reason or another.
. . . In order to back out of this fudge we are redoing an analysis we did first back in August 2010, which shows what the real unemployment rate would be using a realistic labor force participation rate. . . It won’t surprise anyone that as of December, the real implied unemployment rate was 11.4 percent – basically where it has been ever since 2009 – and at 2.9 percent delta to reported, represents the widest divergence to reported data since the early 1980s.”
In other words, the unemployment rate hasn’t changed, what’s changed is the historic amount of “fudging” that the BLS is doing to make things look rosy. And although it’s unlikely that there is anything nefarious going on, Zero Hedge finds an interesting point: “Extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5 percent, which should be just before the presidential election.”
Sadly, even the more accurate 11.4 percent figure doesn’t truly encapsulate the problem. To truly gauge our continued economic problems we must look at the U-6 rate, which takes into account part-time workers that would rather be working full time but have been forced to settle. Using this figure, unemployment stands at a whopping 15.2 percent.
Oh, and one other thing, courtesy of AEI’s Jim Pethokoukis:
“Then there is that 200,000 number. As Goldman Sachs points out:
Part of the strong gain reflected a 42k increase in employment for “couriers and messengers”, which likely reflects temporary employment for holiday gift delivery persons. As similar spike occurred last December and was reversed the following month. . .”
Obama was right to be reserved. The numbers are undoubtedly better, but they are also undoubtedly a flawed representation of the true unemployment picture. No doubt the Obama campaign team knew that standing behind them would be a risky strategy.
If Obama truly wants a “Morning in America” moment, with America positioned for long-term growth and prosperity, he’ll have to do more. Namely, he’ll have to get Washington out of the way.
Zach.Howell
Posted: Sunday, January 1, 2012 - 17:54
The ball has dropped, the last verses of Auld Lang Syne have been sung, the last hint of smoke from the fireworks has drifted to nothing, and party favors litter the floor. Another year is in the books. And frankly it was one many of us would as soon forget.
A year when Congressional Democrats likened spending money to saving the world; the national debt topping the $16 trillion dollar mark; the US credit rating downgraded after the debt limit debate yielded no substantial reforms; and President Obama abandoning any notion of governing, opting instead to focus on his reelection.
Yes, it was a dispiriting year, filled largely with worries of a double dip recession, and only spotty speculation about a recovery. It was another in an ever-growing timeline of high unemployment, sluggish growth, and lingering housing problems.
Worse still, it displayed once again Democrats’ utter aversion to solving the looming fiscal crisis that hovers ominously over America’s collective heads. Rather than agree to sensible reforms, or even engage in the conversation, they have taken to attack ads – setting back the reform process and potentially damning the solvency of the programs they claim to love.
That is not to say that no rays of light found their way through the dark clouds. Although no large cuts were made, newly elected Republican majorities in the House of Representatives were able to stem the tide of red ink that threatens to drown future generations. In doing so they were able to shift the national conversation away from “how much can we spend” to “where can we sensibly cut.” That is a question that should bear more fruit in the new year.
A conversation has also been started over how best to reform our broken tax code. According to the latest studies, the code takes 7.64 billion man-hours to comply with at a cost of $227.1 billion and does little to make us competitive in the world. All told, America continues to have the second highest corporate tax rate in the world, bucking the global trend of lowering rates. But there are signs that could change. Every Republican candidate for president has made it a key plank of their platform and even President Obama has indicated his willingness to pursue the issue.
Although Congressional Democrats remain staunchly opposed, the President has also hinted at a willingness to tinker with entitlements. Most recently, Rep. Paul Ryan, a Republicans, and Sen. Ron Wyden, a Democrat, have put forward a bipartisan plan to reform Medicare. As the debt looms larger and the fate of Greece becomes all the more real, there is reason to believe that the spark of reform could finally catch in 2012.
But perhaps the biggest reason for optimism is the election that will take place in a little more than 10 months.
Our nation has stagnated under Obama, crushed beneath the weight of an ever-growing federal government that spends our money with impunity. The national debt, the uncertainty of rising taxes, and burdensome federal regulations have served to yoke our once vibrant economy.
But that could soon change. 2012 will bring the chance to elect a new President, one who understands what it takes to succeed in a global economy, rather than one who has merely read about it within the ivy walls of academia. It brings an opportunity for a smaller, more responsive, more effective Washington that spends every dollar with the same care as a struggling family would. And finally, it offers hope of a new administration committed to helping the private sector thrive without the Solyndra-like scandals that have made many question the prevalence of crony-capitalism.
Sadly, 2011 brought far too little for far too many. Too little jobs, too little money, and too much Washington. But with hard work, a successful election, and a dash of hope, that could all change in 2012. Here’s to a Happy New Year…
Zach.Howell
Posted: Tuesday, December 27, 2011 - 14:27
We can all breathe a sigh of relief. Our representatives in Washington are home for the holidays until late January, giving Americans a brief respite from the comedy of horrors perpetuated by the government’s incessant tinkering and spending.
Fortunately or unfortunately, they’ll be back in town. The question is, what should they do when they get back?
I can hear you screaming through your screen: “NOTHING.” And I agree. With Democrats in the Senate and the White House, “doing” usually means “spending,” and even then, all that money rarely does much lasting good for the economy.
Nevertheless, the people do demand action. A new Rasmussen poll reveals that 50 percent of Americans worry that the government will not do enough to fix the nation’s economic problems. The sentiment is quite different than the one felt by Americans immediately following the housing crisis and subsequent financial meltdown. As Rasmussen analyzes:
“At that time, 63 percent of voters worried more that the government would do too much. In recent months, a plurality has expressed a fear that the government will do too little in response to the economic troubles gripping the nation. Earlier this month, for the first time ever, the number worried that the government would do too little reached 50 percent.”
Big government liberals everywhere are cheering the news. Finally, they say, the public is catching on to the fact that we need more government spending.
Not so fast. Let’s take a deeper look into just what sorts of actions voters want the government to take. As it turns out, the fears that Washington won’t do enough, have nothing to do with spending and everything to do with cutting.
Rasmussen finds that 77 percent want the government to cut deficits, 71 percent think the government should cut spending, and 59 percent want the government to cut taxes. The idea that the government should reduce rather than increase spending is one that stretches across almost every demographic. Even a significant plurality of Democrats (47/33) agree!
When it comes to cutting there is no shortage of work.
In the latest testament to a government gone out of control, the Government Accountability Office (GAO) issued a press release stating their inability to issue a financial report on the U.S. government. In their words:
“The U.S. Government Accountability Office (GAO) cannot render an opinion on the 2011 consolidated financial statements of the federal government, because of widespread material internal control weaknesses, significant uncertainties, and other limitations.
As was the case in 2010, the main obstacles to a GAO opinion on the accrual- based consolidated financial statements were: (1) serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable, (2) the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government’s ineffective process for preparing the consolidated financial statements.”
You know things have gotten bad when the agency responsible for keeping the government accountable just throws up its hands and says “forget it.” The government’s books are such a mess that they don’t even know where to start.
The inevitable creep towards insolvency poses troubling questions. For too long Washington has been able to promise more benefits without any concordant increases in taxes. Now the dynamic has shifted, likely permanently, forcing Congress to cut spending or raise taxes. Fortunately, the latest Rasmussen poll reveals the people’s presence. Will Washington listen when they get back to town?
Zach.Howell
Posted: Tuesday, December 13, 2011 - 14:34
“Here, finally, is the Barack Obama many of us thought we had elected in 2008.” – Robert Reich, Secretary of Labor under Bill Clinton
To many liberals that might have been true. They finally found their champion to ensure the equality of outcomes (not, as Obama would have you believe, the equality of opportunity) that comes from central economic planning.
“Of course, those productive investments cost money,” Obama said. “They’re not free. And so we’ve also paid for these investments by asking everybody to pay their fair share.”
But is that the President Obama that the rest of us elected? Too often we forget that one of Barack Obama’s most quoted pledges during the 2008 elections was to enact a “net spending cut” on the federal level.
Take this quote from a CNN debate as an example:
“We have had over the last 8 years the biggest increases in deficit spending and national debt in our history. . . Here’s what I would do. I would spend some money on the key issues we’ve got to work on. But we’ve also got to make spending cuts. And what I’ve proposed . . . is cutting more than I’m spending so it’s a net spending cut.”
In another debate Obama is asked to name some specifics about where he would cut. Here’s his answer:
“But there is no doubt that we’ve been living beyond our means and we’re going to have to make some adjustments. So what I’ve done throughout this campaign is to propose a net spending cut. . . Every dollar I have proposed I have proposed a different cuts. . . We need to eliminate a whole host of programs that don’t work, and I want to go through the federal budget line by line. Programs that don’t work we should cut. Programs we need we should make better.”
So as the Left cheers that their champion has finally arrived, ready to beat back the small-government numbskulls attempting to stop progress in its tracks, aren’t we right to wonder what happened to the candidate that promised us a net spending cut?
He’s still missing in action. In his place we’ve got the biggest deficit, the most debt, and the worst fiscal outlook we’ve ever had as a nation. Indeed,the president that Obama has morphed into would have appalled Obama as a candidate.
For instance, this past Obama achieved the milestone of adding just over $4 trillion to our national debt. And what’s more he accomplished it in three years. Now, here’s candidate Obama in a campaign event in Fargo, ND, laying the hammer down on President Bush for adding $4 trillion to the debt:
“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents – #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back – $30,000 for every man, woman and child. That’s irresponsible. It’s unpatriotic.”
What President Bush took eight years to accomplish, Obama managed in less than three. In fact, as of Halloween the total U.S. debt was $15.01 trillion – an all-time high – which also happens to be the size of our entire Gross Domestic Product. For the first time since World War II, when we were burning up resources for full-scale war mobilization, our national debt is equal to the size of our entire economy.
This isn’t the president we elected in 2008. But here’s an even scarier thought – if liberals are right, and last week’s speech at Osawatomie truly was the emergence of the real, liberal Obama, then just how quickly will our national debt shoot up in the next five years?
There’s only one sure-fire way not to find out. Don’t vote for him.
Zach.Howell
Posted: Wednesday, December 7, 2011 - 19:54
President Obama is known for being generous (with other people’s money). It’s little wonder then that he went all out on a gift for Europe. No doubt, it was a struggle to pick something out. After all, what do you get for a continent that needs everything? A bottle of wine? No, they’re pretty good at making that on their own. A Starbucks gift card? Meh, too generic. Oh I know, how about a $100 billion bailout!
Although very little was heard about it at the time, Rep. Barney Frank slipped a provision into a war supplemental bill that gave the International Monetary Fund a $100 billion line of credit that they could use at any time. And the way the law is written, the funds are fully authorized, meaning that the Obama Administration can send the IMF a bailout without Congressional approval.
That’s not the end of America’s deep financial involvement with the IMF. Although very few Americans are aware of it, the IMF receives most of it’s funding through a member-quota system, in which member states contribute to the fund based on their size relative to the world economy.
Despite President Obama’s best efforts to the contrary, the U.S. remains the world’s largest economy, meaning we carry the biggest burden within the IMF. In fact, our member quota is 17.7 percent of the entire fund, while Japan, the next largest contributor pays 6.5 percent of total contributions. As if all of that wasn’t enough of a burden on US taxpayers, the IMF’s Board of Governors approved a package last year doubling member dues.
And guess who’s now being asked to act as the “lender of last resort” as Europe spirals deeper into trouble? That’s right…the IMF. As the Washington Post reports,
“So far, European leaders have set up the European Financial Stability Fund for that purpose [to act as a lender of last resort], especially since Germany doesn’t want Europe’s central bank to start printing euros and doling them out left and right. But . . . the EFSF has only raised about €440 billion — and nearly half of that is already committed to Ireland, Portugal, Greece, and (possibly) some troubled banks. . . Now, enter the IMF.”
So the IMF, which the Pelosi-led Congress authorized $100 billion in funds on top of our status as the largest dues-payer, may now be stepping in to fill the void in Europe.
Even with all of our financial help, the $390 billion IMF fund still isn’t big enough to keep huge economies like Italy, Spain, and (gasp) France afloat. So who’s going to fill the gap. But what they do have is 187 members (including the US) that they can milk for more money.
And sadly, President Obama seeks to be fine with being Europe’s cash cow. Although White House spokesman Tim Carney has said, “We do not in any way believe that additional resources are required from the United States and from taxpayers,” Obama seemed to contradict these words. Following a meeting with European Council President Herman Van Rompuy, Obama said “The United States stands ready to do our part to help them resolve this issue,” adding, “We’ve got a stake in their success.”
Republicans are doing their best to protect taxpayers from being on the hook for bailing out the fiscal mistakes of other nations. After all, it makes little sense to give profligate European countries hundreds of billions of dollars when many in the United States are suffering and we have a little bit of a debt problem ourselves.
Rep. Cathy McMorris Rodgers (R-WA) and Sen. Jim DeMint (R-SC) have introduced a bill that would prevent taxpayer money from being used in a possible IMF bailout of the eurozone. Senator Coburn, one of the Senate’s leaders in rooting out waste, has also backed the measure. “We’re throwing good money after bad down a hole that I think is not a solvable problem,” Coburn said. “Europe is going to default eventually, so why would you socialize their profligate spending?”’
It’s a good question. One we can’t figure out the answer to. Unless that is, Obama just wanted to give Europe a huge taxpayer-funded Christmas present.
Zach.Howell
Posted: Sunday, December 4, 2011 - 16:29
Looking for a job? Here are some want ads I stumbled across this week:
- Greeting Card Merchandiser: “Needed part-time to service 1 store in Tooele, UT. Duties include replenishing, straightening, and tracking inventory of every-day and seasonal greeting cards and may include additional items such as gift-wrap and party supplies.
- Temporary Gift Boxing Associate: “Are you looking to make some extra $$$ for the holiday season?? Then please read on for an immediate opportunity: As a Gift Boxing associate you will: Work in a warehouse setting unwrapping boxes, Work efficiently to then wrap small boxes with holiday wrap, Prepare packages for shipment, Creativity a plus!”
- Lapland Elf: “A comprehensive and constant commitment to the Santa story is essential. There are four main elf activities: (1) Assist Santa Clause during family visits, (2) Meeting and greeting guests at the airport. Elves will frolic and play in the arrivals hall to welcome guests to Lapland. (3) Elf Sightings: time and rotas permitting, elves will participate in sightings. (4) Elves are responsible for ensuring that Santa’s presents are all wrapped and delivered to the Activity Centers.”
What? So you’re telling me you didn’t graduate from a four-year school to sort greeting cards? And could there a more resume-friendly euphemistic expression of a gift wrapper than a “temporary gift boxing associate?” Still, I guess it’s less degrading than dressing up in an elf costume and “frolicking” in an airport terminal.
Sadly, these are the sorts of jobs that President Obama is touting as evidence that his stimulus policies are finally working.
Obama’s spin machine got cranking because of a new Bureau of Labor Statistics report showing that the unemployment rate fell from 9.0 percent to 8.6 percent in November.
Undoubtedly, Obama was thrilled. The latest Gallup poll showed that Obama’s approval rating in November was 43 percent – the lowest of any modern president with the exception of Jimmy Carter (which is not exactly an accomplishment). In other words, the Obama campaign team was looking for some good news. And they seized on the BLS numbers as conclusive proof that all those hundreds of billions of dollars in stimulus money had finally kicked in (just, ya know, a couple of years later than expected).
But once you dig past the spin, the reality is a lot less appealing. The BLS data reveals two big problems. One, much of the jobs gains appeared to be seasonal – meaning that unless you never grew out of your dreams of being an elf when you grew up, you’re not going to be finding an enduring career in this market.
While unemployment fell, so too did average hourly earnings, meaning people were filling lower wage jobs. Moreover, the data reveals that much of the gain (50,000 jobs) was in the retail sector, whose jobs are notoriously seasonal.
Second, this is just another example of the “Antarctic Labor Market Miracle,” meaning that the drop in unemployment is due in large part to people giving up and leaving the labor force. As the Washington Post’s Ezra Klein explains,
“[The unemployment rate] is calculated by dividing the number of unemployed people by the size of the workforce, where an “unemployed person” is defined as an individual actively seeking work but not finding it. It excludes anyone who isn’t actively seeking work – a population captured by the labor force participation rate. And when it comes to that indicator, things don’t look as good. Over the past month, the labor force participation rate dropped from 64.2 to 64 percent, indicating that fewer Americans are looking for work and simply giving up on their searches.”
While 0.2 percent may not seem like much – that means that 315,000 people (roughly the equivalent of the whole city of Pittsburgh) stopped looking for work in the last month and are no longer included in the unemployment percentage. James Pethokoukis ran the numbers and found that if the participation rate was the same as October, the unemployment rate would be 8.9%, if the participation rate was the same as when Obama took office, the unemployment rate would be a devastating 11 percent.
As unabashed liberal Matthew Yglesias tweeted, “Decreasing unemployment by shrinking the labor force is not exactly winning the future.” We couldn’t have said it better ourselves.
