Politics and the US Economy

[RightField]

National Review Online

The World of Tomorrow
May 18, 2011 1:14 P.M.
By Yuval Levin

Monday’s New York Times had another classic entry in the annals of Obamacare. It seems that nursing homes are asking HHS for waivers from Obamacare’s requirement that employers provide health coverage to their workers. Nursing homes, even though they are in the health-care business, often don’t provide insurance to their employees. They can’t afford to. And why is that?

Mark Parkinson, president of the American Health Care Association, the largest trade group for nursing homes, says the problem is that reimbursement rates for Medicaid and Medicare, set by government agencies, do not pay them enough to offer their employees medical coverage. “We do not have much ability to increase prices because we are so dependent on Medicaid and Medicare” for revenue, he said.

Yes, that’s right. They can’t afford to give their own workers health insurance because they are dependent on government-provided health insurance programs for their own revenue, and the arbitrary price controls in those programs don’t allow them to make much of a profit. So what’s the solution? The Times doesn’t miss a beat:


Supporters of the law say several provisions will help low-wage workers who are uninsured or have bare-bones coverage. The law will expand Medicaid to cover people under 65 with income less than 133 percent of the federal poverty level, and it will offer subsidies to make insurance more affordable to those with incomes from 133 percent to 400 percent of the poverty level ($24,645 to $74,120 a year for a family of three). “This assistance could significantly increase coverage among direct-care workers because 80 percent of them have income less than 400 percent of the poverty level,” said Dorie K. Seavey, director of policy research at the Paraprofessional Healthcare Institute.

Of course! The solution is to put even more people on Medicaid and create another new entitlement. Maybe we can also tighten Medicare’s price controls even more, but without reforming either program to make it more efficient by making it more answerable to actual price signals and consumer preferences in the market. Of course. The solution to the failures of central planning is more central planning. Maybe when all of our employers are put out of business, we can all go on Medicaid, and then the health-care problem will finally be solved.

 

[mercury14]

Character assasination, the last refuge of a scoundrel. Don't you have anything better than that? Pretty weak on your part I'd say.

Yeah either that or you just got spanked for your lazy, irresponsible behavior.

 

[RightField]

A Shovel-Empty Waste Of $787 Billion
Posted 05/18/2011 06:50 PM ET

Infrastructure: On top of the other failures of President Obama's $787 billion stimulus plan you can now add this: It didn't even fulfill the simple promise of creating more highway jobs and improving roadways.

Shortly after getting the gargantuan program through Congress, Obama heralded the stimulus' $28 billion in new highway money, calling it "the largest new investment in America's infrastructure since President Eisenhower built the Interstate Highway System" and promising that it would "help states create a 21st-century infrastructure."

Obama also said that the extra highway money would "create or save" 150,000 jobs by the end of 2010.

Well, the results are in.

A new study by economists Timothy Conley of the University of Western Ontario and Bill Dupor of Ohio State found that despite the influx of all that federal money, highway construction jobs actually plunged by nearly 70,000 between 2008 and 2010.

As the authors explain, many states simply took the free federal money and shifted their own highway funds to meet other needs. In fact, in some states, highway spending dropped, even with the added federal money.

Examples cited in the study:

• Texas got $700 million in highway stimulus funds last year, but spent $560 million less on its roads in 2010 than it did in 2009.

• New York's highway spending was basically unchanged between 2009 and 2010, despite getting $522 million more in federal highway bucks.

• Michigan boosted its highway spending just $17.4 million, far below the $189 million extra the feds handed the state for highway improvements.

The Department of Transportation, meanwhile, found that 21 states weren't abiding by rules meant to prevent just this sort of shell game.

No wonder Ernst & Young's Urban Land Institute concluded in a report out this week that the stimulus "did not meet the public's inflated expectations for game-changing economic improvements" and that the nation's highway system is still in serious trouble.

Now, if this were the worst of the problems with the bloated stimulus bill, it would be bad enough. But there's growing evidence that the stimulus did little to improve the jobs picture overall.

Conley and Dupor found that, overall, the $500 billion in stimulus spending did "create or save" 443,000 state and local government jobs, but it "destroyed or forestalled" 1 million private-sector jobs. In part, they say, that's because the growth in state jobs crowded out private-sector job growth.

Research by John Cogan and John Taylor of Stanford's Hoover Institution found zero effect one way or another from all that stimulus money, since states mainly used the funds to cut back on borrowing, and the temporary tax cuts didn't stimulate extra consumer spending.

These results fly in the face of the White House's continued claim that without the stimulus things would have been far worse, pointing to studies showing that it "created or saved" millions of jobs. But these studies rely on economic models that assume extra federal spending will lead to job growth, so it's hardly surprising that they found it.

In the end, though, it doesn't take a statistician to settle this matter. The simple fact is that Obama's spendthrift ways produced the worst economic recovery since the Great Depression, with GDP growth far below, and unemployment far above, the trend set in previous recoveries.

Indeed, if Obama's recovery had kept pace with Reagan's after the equally deep and painful 1981-82 recession, we'd have 2.5 million more people with jobs right now.

So, when you add it all up, the stimulus plan left us with fewer people employed, a much bigger debt and still facing a big infrastructure problem. Even for government work, that's pretty lousy.

 

[RightField]

This generation of college students, the ones graduating now, got very excited about the prospects of Obama getting elected. Many volunteered and canvased for Obama and the democrats. I personally asked the ones coming to my door if they were aware that the program that they were voting for would likely practically eliminate new jobs growth by the time they'd be graduating and so, in fact, they were "voting themselves out of a job." Here it is a couple years later and the labor statistics bear this out.

Maybe the next generation won't buy the deceit of the next smooth-tongued democrat to come along and vote themselves out of jobs like this generation of new college graduates did.

Many With New College Degree Find the Job Market Humbling
By CATHERINE RAMPELL

The individual stories are familiar. The chemistry major tending bar. The classics major answering phones. The Italian studies major sweeping aisles at Wal-Mart.

Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates — the people who were most protected from the slings and arrows of recession — the outlook is rather bleak.

Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work. What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is “worth it” after all.

“I have friends with the same degree as me, from a worse school, but because of who they knew or when they happened to graduate, they’re in much better jobs,” said Kyle Bishop, 23, a 2009 graduate of the University of Pittsburgh who has spent the last two years waiting tables, delivering beer, working at a bookstore and entering data. “It’s more about luck than anything else.”

The median starting salary for students graduating from four-year colleges in 2009 and 2010 was $27,000, down from $30,000 for those who entered the work force in 2006 to 2008, according to a study released on Wednesday by the John J. Heldrich Center for Workforce Development at Rutgers University. That is a decline of 10 percent, even before taking inflation into account.

Of course, these are the lucky ones — the graduates who found a job. Among the members of the class of 2010, just 56 percent had held at least one job by this spring, when the survey was conducted. That compares with 90 percent of graduates from the classes of 2006 and 2007. (Some have gone for further education or opted out of the labor force, while many are still pounding the pavement.)

Even these figures understate the damage done to these workers’ careers. Many have taken jobs that do not make use of their skills; about only half of recent college graduates said that their first job required a college degree.

The choice of major is quite important. Certain majors had better luck finding a job that required a college degree, according to an analysis by Andrew M. Sum, an economist at Northeastern University, of 2009 Labor Department data for college graduates under 25.

Young graduates who majored in education and teaching or engineering were most likely to find a job requiring a college degree, while area studies majors — those who majored in Latin American studies, for example — and humanities majors were least likely to do so. Among all recent education graduates, 71.1 percent were in jobs that required a college degree; of all area studies majors, the share was 44.7 percent.

An analysis by The New York Times of Labor Department data about college graduates aged 25 to 34 found that the number of these workers employed in food service, restaurants and bars had risen 17 percent in 2009 from 2008, though the sample size was small. There were similar or bigger employment increases at gas stations and fuel dealers, food and alcohol stores, and taxi and limousine services.

This may be a waste of a college degree, but it also displaces the less-educated workers who would normally take these jobs.

“The less schooling you had, the more likely you were to get thrown out of the labor market altogether,” said Mr. Sum, noting that unemployment rates for high school graduates and dropouts are always much higher than those for college graduates. “There is complete displacement all the way down.”

Meanwhile, college graduates are having trouble paying off student loan debt, which is at a median of $20,000 for graduates of classes 2006 to 2010.

Mr. Bishop, the Pittsburgh graduate, said he is “terrified” of the effects his starter jobs might have on his ultimate career, which he hopes to be in publishing or writing. “It looks bad to have all these short-term jobs on your résumé, but you do have to pay the bills,” he said, adding that right now his student loan debt was over $70,000.

Many graduates will probably take on more student debt. More than 60 percent of those who graduated in the last five years say they will need more formal education to be successful.

“I knew there weren’t going to be many job prospects for me until I got my Ph.D.,” said Travis Patterson, 23, a 2010 graduate of California State University, Fullerton. He is working as an administrative assistant for a property management company and studying psychology in graduate school. While it may not have anything to do with his degree, “it helps pay my rent and tuition, and that’s what matters.”

Going back to school does offer the possibility of joining the labor force when the economy is better. Unemployment rates are also generally lower for people with advanced schooling.

Those who do not go back to school may be on a lower-paying trajectory for years. They start at a lower salary, and they may begin their careers with employers that pay less on average or have less room for growth.

“Their salary history follows them wherever they go,” said Carl Van Horn, a labor economist at Rutgers. “It’s like a parrot on your shoulder, traveling with you everywhere, constantly telling you ‘No, you can’t make that much money.’ ”

And while young people who have weathered a tough job market may shy from risks during their careers, the best way to nullify an unlucky graduation date is to change jobs when you can, says Till von Wachter, an economist at Columbia.

“If you don’t move within five years of graduating, for some reason you get stuck where you are. That’s just an empirical finding,” Mr. von Wachter said. “By your late 20s, you’re often married, and have a family and have a house. You stop the active pattern of moving jobs.”

 

[RightField]

Is this insane? Are the feds still sticking with their case? There's no way they can make something like this stick. Is the liberal power being demonstrated....they do it because they think they can get away with it? Is this what you liberals really want....favortism down to your shoelaces (unions donate heavily to democrats).


Battling over Boeing
Jobs in Texas threatened by effort to block company's plant relocationBy TOM LEPPERT
HOUSTON CHRONICLE

May 21, 2011, 3:54PM

The Obama administration has launched a battle in South Carolina that is both a strike at Texas and an attack upon America's free enterprise system.

Airplane manufacturer Boeing would like to expand its operations and create jobs with a new facility in North Charleston, but the National Labor Relations Board (NLRB) has taken legal action against the company because South Carolina, like Texas, is a right-to-work state. The NLRB says Boeing can't expand into South Carolina. It must instead keep all its workers in Washington, where it already has facilities and faces a toxic business climate. Washington is a state with forced unionization, and Boeing has regularly confronted work stoppages by the unions.

If the Obama administration succeeds in this attempt to tell businesses where they're allowed to set up shop and decide where workers can be employed, then it is not just South Carolina jobs that are in danger. Texas jobs are at stake as well, and the NLRB could soon be issuing rulings that companies cannot create jobs here in Texas. And, even further, this will have the unintended consequence of encouraging companies to locate facilities overseas just to be competitive in today's global economy.

Right to work empowers workers and it has fueled Texas' and the nation's economic growth. Rather than forcing anyone to join a union to obtain a job, it gives people the liberty to decide if that's the choice for them. Texas and 21 other states guarantee this right, and studies show these states have all seen stronger job growth, income growth and population growth than states that force workers to join unions as a prerequisite for employment. One economist found that 4.8 million people left their forced unionization states in favor of right-to-work states between 2000 and 2008. Right-to-work states also have better-educated workforces, and even as health care coverage in other states dropped by 5.7 percent between 1999-2009, coverage in right-to-work states increased.

With all the advantages right to work has over forced unionization, it's not surprising that Big Labor and its surrogates on the NLRB are doing whatever they can to stop Boeing from creating jobs in South Carolina.

Since becoming president, Barack Obama has stacked the NLRB with pro-union political appointees. The Senate rejected the appointment of Craig Becker to the NLRB, but Obama made a recess appointment, circumventing the Senate's constitutional authority to approve nominations. And while NLRB Acting General Counsel Lafe Solomon has yet to even face a vote in the Senate, he is the chief proponent of this dubious legal action against Boeing.

These unelected Obama appointees to the NLRB are telling a private company it's not allowed to relocate and create new jobs. This affront goes to the very heart of what we believe in America. If we're going to turn this country around and revive the American Dream, we must remember where our strength lies. Our free enterprise system is what built this country and led us to prosperity. We are in decline because our own government has taken a turn against the values that made us the greatest nation the world has ever known.

I spent my career in the private sector, growing businesses and creating thousands of jobs in the process. Witnessing this overreach by the NLRB, as well as other attacks on business like Obamacare and Washington's vast regulatory expansion, I can tell you businesses are confronted with a difficult decision over whether to maintain their operations here in the United States. If we don't roll back these government encroachments, American jobs will soon be shipped to China and India at an even faster pace.

Action must be taken to save jobs in Texas and around the country. Barack Obama should withdraw his nominations to the NLRB. If he refuses, the Senate can reject confirmation. This, however, is only a temporary fix. It is Congress' fault that the NLRB has gone unchecked. The board should face broad congressional oversight and funding should be stripped before it puts American jobs at even greater peril.


Read more: http://www.chron.com/disp/story.mpl/editorial/outlook/7575329.html#ixzz1N8IqfGRr

 

[Ishmael]

Boeing is proceeding according to schedule. Basically they've taken the stand that Obama and his cronies are just blowing smoke up everyone's ass. Their position is simple, they are taking no jobs out of Redmond. (In reality they are actually going to be adding some jobs.)

The long term strategy is fairly simple on their part. They are almost two years behind on rolling this airframe out. The orders are stacking up but any serious delays could cost them orders, orders that would go to Airbus. The union contract in Redmond has a year or two to run and based on the orders a strike at the end of contract would put the company in the position of being held hostage to the unions. The Unions and Boeing are both well aware of that fact. By opening the plant in SC they can insure that product will continue to roll off the line regardless of whether the Redmond plant strikes or not. That fact will significantly weaken the unions bargaining position come next contract negotiation. In other words this action by the NLRB is based on a future two years from now, not today.

Further, this action by the NLRB is NOT in the best interests of the nation or it's workers. There are thousands of suppliers that would suffer should the union put a strangle hold on Boeing. On top of that, Boeing is one of the brightest spots we have in the balance of trade equation, hampering Boeing tilts the scales in entirely the wrong direction.

When any unelected body can impose it's will on a company, or individual, without having the force of law behind it, it's time for everyone to take a step back and consider what's going on.

Ishmael

 

[RightField]

Overstepping their bounds.....again.

What role does "good" and "right" play when democrats are in search of campaign donations?

 

[Ishmael]

Overstepping their bounds.....again.

What role does "good" and "right" play when democrats are in search of campaign donations?

"There's just no end to doin' good."

Or to rephrase, "The ends justify the means."

Ishmael

 

[RightField]

Is this the future of America under these ruinous democrat policies? Maybe they'll have learned not to vote for slick talking democrat lawyer-presidential candidates with promises that defy the "laws" of economics with false and deceitful visions of a glorious future through government intervention and higher taxes on "others".


Why New York's future is fleeing
Nowhere near enough jobs for the younger generation

By FRED SIEGEL
Posted: 10:42 PM, May 23, 2011

For more than 15 years, New York state has led the country in domestic outmigration: For every American who comes here, roughly two depart for other states. This outmigration slowed briefly following the onset of the Great Recession. But a recent Marist poll suggests that the rate is likely to increase: 36 percent of New Yorkers under 30 plan to leave over the next five years. Why are all these people fleeing?

For one thing, according to a recent survey in Chief Executive, our state has the second-worst business climate in the country. (Only California ranks lower.) People go where the jobs are, so when a state repels businesses, it repels residents, too.

Moving out: More than a third of New Yorkers under 30 plan to move away in the next five years.

Indeed, the poll also found that 62 percent of New Yorkers planning to leave cited economic factors -- including cost of living (30 percent), taxes (19 percent) and the job environment (10 percent) -- as the main reason.

Upstate, a big part of the problem is extraordinarily high property taxes. New York has the country's 15 highest-taxed counties, including Nassau and Westchester, which rank Nos. 1 and 2.

Most of the property tax goes toward paying the state's Medicaid bill -- which is unlikely to diminish, since the state's most powerful lobby, the alliance of the hospital workers' union and hospital management, has gone unchallenged by our new governor, Andrew Cuomo.

New York City doesn't suffer from outmigration to the extent that the state does; in fact, the city grew slightly in the last decade, thanks to immigration from other countries.

There's also more work in Gotham than in the state as a whole. The problem is that the kind of work available shows that the city accommodates new immigrants much better than it supports middle-class aspirations. A recent report from the Drum Major Institute has the data: "The two fastest-growing industries in New York are also the lowest-paid. More than half of the city's employment growth over the past year has been in retail, hospitality and food services, all of which pay their workers less than half of the city's average wage."

Worse, more than 80 percent of the new jobs are in the city's five lowest-paying sectors.

Parts of the country are seeing a revival of manufacturing -- traditionally a source of upward mobility for immigrants -- but not New York City, where manufacturing continues to decline. The culprits here include the city's zoning policies, business taxes and decaying physical infrastructure.

Then there's the cost of living in New York City. A 2009 report by the Center for an Urban Future found that "a New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston. In Manhattan, a $60,000 salary is equivalent to someone making $26,092 in Atlanta." Even Queens, the report found, is the fifth most expensive urban area in the country.

The implications of Gotham's "hourglass economy" -- with all the action on the top and the bottom and not much in the middle -- are daunting.

The Drum Major report, which noted that 31 percent of the adults employed in New York work at low-wage labor, came with a political agenda. The institute wants the city to subsidize new categories of work by expanding the scope of "living-wage" laws, which require higher pay than minimum-wage laws do, to all businesses that receive city funds or contracts. But that would mean higher taxes on the middle class and a further narrowing of the hourglass' midsection.

Gov. Cuomo is calling for a property-tax cap but has postponed the question of "mandate relief" for localities -- for example, relaxing state laws that force localities to pay out exorbitant pension benefits. Mayor Bloomberg has pledged not to increase local taxes -- but even at their current level, city taxes and regulations will keep serving as an exit sign for aspiring 20-something workers.

In short, we can expect New York to lead the country in outmigration for the near future.

Fred Siegel is a contributing editor of City Journal, from whose Web site this is adapted, and a scholar in residence at St. Francis College in Brooklyn.

Read more: http://www.nypost.com/p/news/opinio..._fleeing_v4535f5BZTMQJSc4maz1qL#ixzz1NJr96Mzy

 

[RightField]

The economic miasma during the Carter years is well documented. It included "stagflation", prohibitively high interest rates, economic instability and very high unemployment. One of the significant factors of that period was very high taxes and a lack of investment in the future. Carter was cancelling military programs, most notably the B1, and Russians and others of similary ilk were celebrating. The democrats called it "fair."

Does it seem as if this administration is holding the policies and ecomomic program of the Carter years as a paragon to be emulated? Obama want's to punish the rich...increase their taxes significantly "because it's fair". What he's really doing is creating an economic climate that is insupportive of growth. Who really gets hurt when that happens? The rich guy or the poor guy?

When there's high marginal tax rates (proposed to rise to 62% by the dems) the Rich guy says to himself ....I could invest my money and put my time and effort into growth related activities (new business, business expansion, new Disneyworld, new real estate development) and have most of my returns on investment taxed away, or I can just sit on my money and not invest it and not have it subjected to large taxes (income is taxed for the most part...wealth is not). It is less effort, less risky and often more enjoyable to sit on the money and enjoy life than it is to work and toil and try to turn it into something "new" which often includes more wealth. (it is people buying the "new" good or service" - voting with their pocketbooks - which creates the new wealth).

What does that mean for the "working guy"? It means that the job at the construction site is never created, that the new entertainment venue is not created, that property taxes necessarily have to increase and get shifted to existing homes and businesses because the "new" businesses are being created at a much slower pace...it means unemployment, more competition for fewer rescources and declining standards of living.

Vote the democrats out, they can't lead.

A 62% Top Tax Rate?
Democrats have said they only intend to restore the tax rates that existed during the Clinton years. In reality they're proposing rates like those under President Carter...
By STEPHEN MOORE
Wall Street Journal - Today

Media reports in recent weeks say that Senate Democrats are considering a 3% surtax on income over $1 million to raise federal revenues. This would come on top of the higher income tax rates that President Obama has already proposed through the cancellation of the Bush era tax-rate reductions.

If the Democrats' millionaire surtax were to happen—and were added to other tax increases already enacted last year and other leading tax hike ideas on the table this year—this could leave the U.S. with a combined federal and state top tax rate on earnings of 62%. That's more than double the highest federal marginal rate of 28% when President Reagan left office in 1989. Welcome back to the 1970s.

Here's the math behind that depressing calculation. Today's top federal income tax rate is 35%. Almost all Democrats in Washington want to repeal the Bush tax cuts on those who make more than $250,000 and phase out certain deductions, so the effective income tax rate would rise to about 41.5%. The 3% millionaire surtax raises that rate to 44.5%.

But payroll taxes, which are income taxes on wages and salaries, must also be included in the equation. So we have to add about 2.5 percentage points for the payroll tax for Medicare (employee and employer share after business deductions), which was applied to all income without a ceiling in 1993 as part of the Clinton tax hike. I am including in this analysis the employer share of all payroll taxes because it is a direct tax on a worker's salary and most economists agree that though employers are responsible for collecting this tax, it is ultimately borne by the employee. That brings the tax rate to 47%.

Then last year, as part of the down payment for ObamaCare, Congress snuck in an extra 0.9% Medicare surtax on "high-income earners," meaning any individual earning more than $200,000 or couples earning more than $250,000. This brings the total tax rate to 47.9%.

But that's not all. Several weeks ago, Mr. Obama raised the possibility of eliminating the income ceiling on the Social Security tax, now capped at $106,800 of earnings a year. (Never mind that the program was designed to operate as an insurance system, with each individual's payment tied to the benefits paid out at retirement.) Subjecting all wage and salary income to Social Security taxes would add roughly 10.1 percentage points to the top tax rate. This takes the grand total tax rate on each additional dollar earned in America to about 58%.

Then we have to factor in state income taxes, which on average add after the deductions from the federal income tax roughly another four percentage points to the tax burden. So now on average we are at a tax rate of close to 62%.

Democrats have repeatedly stated they only intend to restore the tax rates that existed during the Clinton years. But after all these taxes on the "rich," we're headed back to the taxes that prevailed under Jimmy Carter, when the highest tax rate was 70%.

Taxes on investment income are also headed way up. Suspending the Bush tax cuts, which is favored by nearly every congressional Democrat, plus a 3.8% investment tax in the ObamaCare bill (which starts in 2014) brings the capital gains tax rate to 23.8% from 15%. The dividend tax would potentially climb to 45% from the current rate of 15%.

Now let's consider how our tax system today compares with the system that was in place in the late 1980s—when the deficit was only about one-quarter as large as a share of GDP as it is now. After the landmark Tax Reform Act of 1986, which closed special-interest loopholes in exchange for top marginal rates of 28%, the highest combined federal-state marginal tax rate was about 33%. Now we may be headed to 62%. You don't have to be Jack Kemp or Arthur Laffer to understand that a 29 percentage point rise in top marginal rates would make America a highly uncompetitive place.

What is particularly worrisome about this trend is the deterioration of the U.S. tax position relative to the rest of our economic rivals. In 1990, the highest individual income tax rate of our major economic trading partners was 51%, while the U.S. was much lower at 33%. It's no wonder that during the 1980s and '90s the U.S. created more than twice as many new jobs as Japan and Western Europe combined.

It's true that the economy was able to absorb the Bush 41 and Clinton tax hikes and still grow at a very rapid pace. But what the soak-the-rich lobby ignores is how different the world is today versus the early 1990s. According to the Organization for Economic Cooperation and Development, over the past two decades the average highest tax rate among the 20 major industrial nations has fallen to about 45%. Yet the highest U.S. tax rate would rise to more than 48% under the Obama/Democratic tax hikes. To make matters worse, if we include the average personal income tax rates of developing countries like India and China, the average tax rate around the world is closer to 30%, according to a new study by KPMG.

What all this means is that in the late 1980s, the U.S. was nearly the lowest taxed nation in the world, and a quarter century later we're nearly the highest.

Despite all of this, the refrain from Treasury Secretary Tim Geithner and most of the Democrats in Congress is our fiscal mess is a result of "tax cuts for the rich." When? Where? Who? The Tax Foundation recently noted that in 2009 the U.S. collected a higher share of income and payroll taxes (45%) from the richest 10% of tax filers than any other nation, including such socialist welfare states as Sweden (27%), France (28%) and Germany (31%). And this was before the rate hikes that Democrats are now endorsing.

Perhaps there can still be a happy ending to this sad tale of U.S. decline. If there were ever a right time to trade in the junk heap of our federal tax code for a pro-growth Steve Forbes-style flat tax, now's the time.

 

[Sean Renaud]

So your point is we should tax wealth not income. While I'm not certain how we would go about doing so I don't disagree.

 

[RightField]

So your point is we should tax wealth not income. While I'm not certain how we would go about doing so I don't disagree.

I think we ought to put a rider on every tax increase that says "In order to ensure that they feel the pain, every senator or congressman who votes for tax increases will have to pay a special tax levied on only active senators and congressman of a similar percentage of their total wealth." In other words, if they vote for a tax increase of 2% on everyone over $250,000 of income, they'd also have to pay 2% of their total wealth in a special tax. lol...watch John Kerry's eyes pop out if someone proposes to tax away the fortune he married into.

 

[RightField]

When there's high marginal tax rates (proposed to rise to 62% by the dems) the Rich guy says to himself ....I could invest my money and put my time and effort into growth related activities (new business, business expansion, new Disneyworld, new real estate development) and have most of my returns on investment taxed away, or I can just sit on my money and not invest it and not have it subjected to large taxes (income is taxed for the most part...wealth is not). It is less effort, less risky and often more enjoyable to sit on the money and enjoy life than it is to work and toil and try to turn it into something "new" which often includes more wealth. (it is people buying the "new" good or service" - voting with their pocketbooks - which creates the new wealth).

By the way, this is one of several reasons why total tax revenues often go down when tax rates are raised. People have a choice whether or not to "invest" in the future and if there's too much risk, too much taxes or other factors that make the expected rate of return or investment (ROI) too low, they decide not to put in the effort to add to ecoomic activity.

With such a large increase in taxes, economic investment in our country by our citizens and other citizens is going to slow to a trickle and with that, so will the rate of new jobs....no one is going to hire you to sit around and wait until economic conditions improve.

With the democrat leading the way, we're being led into a dark cave and it will take us many years to escape. The general advice is to bunker down and wait this idiocy out. Vote the dems out, they are destroying us.

 

[RightField]

Recovery Summer! Part Deux
By David Harsanyi
Denver Post - Today

Buy American! A conventional, well-intentioned, patriotically affirming sentiment. We've heard it all our lives. But unless you crave less competition, fewer choices and higher prices, it's also a completely irrational one.

Naturally, then, as we kick off "Recovery Summer! Part Deux," the chairwoman of the Democratic National Committee says that buying homemade cars is a matter of national importance. "If it were up to the candidates for president on the Republican side, we would be driving foreign cars," Rep. Debbie Wasserman Schultz explained while defending the protectionist auto/union bailout. "They would have let the auto industry in America go down the tubes." (And by "we," Wasserman Schultz, proud American, is talking about herself and her sweet Japanese-made Infiniti FX35.)

As if that weren't enough, those who oppose this brand of corporate welfare, according to Wasserman Schultz, also reject the very idea of "American exceptionalism." Now, one might argue that those who claim we must bankroll a few politically favored companies because an entire manufacturing sector could collapse are the ones skeptical of American ingenuity, perseverance and exceptionalism.

But God, evidently, loves the Volt and the Volt only. And Americans - people who can do almost anything, including, but not limited to, electing politicians who keep rotten companies buoyant for political gain - have a patriotic duty to buy poorly conceived automobiles. You have an obligation to insulate Washington's favorite companies from responsibility. For God and for country, taxpayers must purchase cars from corporations that have not come close - despite the contention of the administration - to paying back what they already owe you.

But hey, the car was assembled in Michigan. If that's not a sign of American exceptionalism, I don't know what is.

Even if Wasserman Schultz's "Buy American" rhetoric were genuine, it would be severely misguided.

Every time we overpay for an American-made product (whatever it is), don't we also spend less on an array of other services and products that create jobs at home? Real jobs. Self-sustaining jobs. If we all mechanically bought American, wouldn't we allow manufacturers to avoid competition and rely on their locations rather than the excellence of their products? Sounds like the opposite of exceptionalism.

Companies on the dole also have incentive to please their benefactors in Washington - a place that has the power to offer more handouts or to stifle competition. Like much of modern liberalism these days, a socially responsible outcome is far more important than a profitable one. Business is for social good, not for profit-mongering. We have no clue what's good for us, anyway. These companies, though, have less incentive to keep prices low or to innovate or to meet consumer demand.

Nobel Prize-winning economist and New York Times columnist Paul Krugman once explained in his book "Pop Internationalism" that if he could stress one thing to students, it would be that "international trade is not about competition, it is about mutually beneficial exchange." Wasserman Schultz is bright, so she must know all about the counterproductive history of protectionism. Then again, when she says "Buy American," maybe she just means "Buy Union" - buy union because taxpayers subsidize GM and it pays workers and they subsidize unions that subsidize the right candidates. A mutually beneficial exchange.

Or maybe - like most Americans, however inclined they are to embrace populist rhetoric regarding trade during tough times - Wasserman Schultz acts rationally when spending her own money. Now if only that rationality could seep into her political life, we'd be a lot better off.

 

[Frisco_Slug_Esq]

That's what they mean, buy union, we profit from it with their contributions.

The egalitarian has no use for market efficiency, Obama even said that!

Q: You favor an increase in the capital gains tax, saying, “I certainly would not go above what existed under Bill Clinton, which was 28%.” It’s now 15%. That’s almost a doubling if you went to 28%. Bill Clinton dropped the capital gains tax to 20%, then George Bush has taken it down to 15%. And in each instance, when the rate dropped, revenues from the tax increased. And in the 1980s, when the tax was increased to 28%, the revenues went down.
A: What I’ve said is that I would look at raising the capital gains tax for purposes of fairness. The top 50 hedge fund managers made $29 billion last year--$29 billion for 50 individuals. Those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.
Q: But history shows that when you drop the capital gains tax, the revenues go up.
A: Well, that might happen or it might not. It depends on what’s happening on Wall Street and how business is going.
Source: 2008 Philadelphia primary debate, on eve of PA primary Apr 16, 2008
__________________
Barry Says: You have that one nailed A_J!
http://pajamasmedia.com/tatler/files/2011/04/obama-wide-grin80.jpg

 

[unregistered]

 

[Frisco_Slug_Esq]

You know that. The last time it happened one of them impeached themselves with their own source and then started mumbling about the differences in the rate of growth...

 

[RightField]

Editorial: Jobs Slump — It's The Policy, Stupid
Investors Business Daily - Today.

Posted 06/03/2011 07:00 PM ET

Recession: Two years into a "recovery," the unemployment rate leaps to 9.1% and just 54,000 new jobs are created. Is this just "bumps on the road to recovery," as the White House insists, or something more dangerous?

This has been the most miserable recovery in modern history. Not only are there not enough jobs being created, but also the economy itself looks to be stalling.

Gross domestic product grew a paltry 1.8% during the first quarter, and most economists expect something similar for the second quarter. Double dip? It's possible.

As we noted earlier last week before the new jobs data came out, the U.S. is already in a growth recession — defined as an economy that's growing too slowly to keep unemployment from rising.

Yet the Obama administration is crowing about its accomplishments as if slowing growth and rising joblessness have nothing to do with its bad policies.

"The initiatives put in place by this administration — such as the payroll tax cut and business incentives for investment — have contributed to solid employment growth overall this year, but this report is a reminder of the challenges that remain," said Austan Goolsbee, Obama's top economic adviser.

"Solid employment growth"? Since the end of last year, job growth has averaged 130,500 a month — about the number of people who enter the workforce each month. That's not "solid" enough.

By the way, the unemployment rate has been below 9% for just five months since Obama took office — and three of those months were in the first 12 weeks of his presidency, before his policies took effect.

Even so, President Obama on Friday visited Chrysler workers, lauding the government's bailout for the re-emergence of the auto industry, which has added 113,000 jobs over the last two years.

What he didn't say was that GM, the bailout's poster boy, lost taxpayers $14 billion, and the total cost of his stimulus and bailout plan has now risen to $830 billion.

Obama was unflappable. "This economy took a big hit — it's taking a while to mend," he told Chrysler workers, reciting high gas prices, Japan's earthquake and the Mideast as the "head winds" facing the economy.

How about the head wind of bad government policies that, based on Congressional Budget Office data, have cost the economy over $760 billion in lost economic output in the past two years — and millions of jobs?

This lost output is the Obamanomics growth tax. Too much tinkering, too much debt, too much spending.

"By failing to alleviate the uncertainty businesses are feeling, Washington continues to stifle hiring," said Chamber of Commerce economist Martin Regalia.

This "uncertainty," by the way, is why businesses, with their $2 trillion in cash, stay on the sidelines. At this point in a recovery, they should be adding hundreds of thousands of workers each month.

That they aren't is a damning indictment of Obama's big-spending, high-debt, Keynesian strategy that has emerged as one of the great failures of economic policy-making in modern times.

 

[JenAltArmy]

So your point is we should tax wealth not income. While I'm not certain how we would go about doing so I don't disagree.

screw that, America is going down hill with obama in office. more your wealth over seas to a country that the IRS (aka obama thug army) can't invade

 

[Frisco_Slug_Esq]

Oh, bullshit. It's George Bush...

 

[Sean Renaud]

screw that, America is going down hill with obama in office. more your wealth over seas to a country that the IRS (aka obama thug army) can't invade

America is not going down hill so STFU. We tripped with Bush but that's it and Obama isn't doing nearly enough to get us back upright because for whatever reason he thinks your opinion matters.

 

[Frisco_Slug_Esq]

America is not going down hill so STFU. We tripped with Bush but that's it and Obama isn't doing nearly enough to get us back upright because for whatever reason he thinks your opinion matters.

We tripped with FDR and let the Middle Way (von Mises) become the norm for the Federal Government.

 

[RightField]

WALL STREET JOURNAL OPINION
JUNE 8, 2011.
The Economy Is Worse Than You Think
Expect more bad news until someone enacts a plan to bring deficits under control without raising taxes..

By MARTIN FELDSTEIN

The policies of the Obama administration have led to the weak condition of the American economy. Growth during the coming year will be subpar at best, leaving high or rising levels of unemployment and underemployment.

The drop in GDP growth to just 1.8% in the first quarter of 2011, from 3.1% in the final quarter of last year, understates the extent of the decline. Two-thirds of that 1.8% went into business inventories rather than sales to consumers or other final buyers. This means that final sales growth was at an annual rate of just 0.6% and the actual quarterly increase was just 0.15%—dangerously close to no rise at all. A sustained expansion cannot be built on inventory investment. It takes final sales to induce businesses to hire and to invest.

The picture is even gloomier if we look in more detail. Estimates of monthly GDP indicate that the only growth in the first quarter of 2011 was from February to March. After a temporary rise in March, the economy began sliding again in April, with declines in real wages, in durable-goods orders and manufacturing production, in existing home sales, and in real per-capita disposable incomes. It is not surprising that the index of leading indicators fell in April, only the second decline since it began to rise in the spring of 2009.
.
The data for May are beginning to arrive and are even worse than April's. They are marked by a collapse in payroll-employment gains; a higher unemployment rate; manufacturers' reports of slower orders and production; weak chain-store sales; and a sharp drop in consumer confidence.

How has the Obama administration contributed to this failure to achieve a robust and sustainable recovery?

The administration's most obvious failure was its misguided fiscal policies: the cash-for-clunkers subsidy for car buyers, the tax credit for first-time home buyers, and the $830 billion "stimulus" package. Cash-for-clunkers gave a temporary boost to motor-vehicle production but had no lasting impact on the economy. The home-buyer credit stimulated the demand for homes only temporarily.

As for the "stimulus" package, both its size and structure were inadequate to offset the enormous decline in aggregate demand. The fall in household wealth by the end of 2008 reduced the annual level of consumer spending by more than $500 billion. The drop in home building subtracted another $200 billion from GDP. The total GDP shortfall was therefore more than $700 billion. The Obama stimulus package that started at less than $300 billion in 2009 and reached a maximum of $400 billion in 2010 wouldn't have been big enough to fill the $700 billion annual GDP gap even if every dollar of the stimulus raised GDP by a dollar.

In fact, each dollar of extra deficit added much less than a dollar to GDP. Experience shows that the most cost-effective form of temporary fiscal stimulus is direct government spending. The most obvious way to achieve that in 2009 was to repair and replace the military equipment used in Iraq and Afghanistan that would otherwise have to be done in the future. But the Obama stimulus had nothing for the Defense Department. Instead, President Obama allowed the Democratic leadership in Congress to design a hodgepodge package of transfers to state and local governments, increased transfers to individuals, temporary tax cuts for lower-income taxpayers, etc. So we got a bigger deficit without economic growth.

A second cause of the continued economic weakness is the president's emphasis on increasing tax rates. Although Mr. Obama grudgingly agreed to continue the Bush tax cuts for 2011 and 2012, his budget this year repeated his call for higher tax rates on upper-income individuals and multinational corporations. With that higher-tax cloud hanging over them, it is not surprising that individuals and businesses do not make the entrepreneurial investments and business expansions that would cause a solid recovery.

A third problem stems from the administration's lack of an explicit plan to deal with future budget deficits and with the exploding national debt. This creates uncertainty about future tax increases and interest rates that impedes spending by households and investment by businesses. The national debt has jumped to 69% of GDP this year, from 40% in 2008. It is projected by the Congressional Budget Office to reach more than 85% by the end of the decade, and to keep rising after that. The reality is even worse since ObamaCare alone will cost more than $1 trillion in its first 10 years. The president's boast that his health legislation would not "add a dime" to the national debt was possible only by combining that increased spending with proposed new taxes and with projected cuts in Medicare spending that will never occur.

Finally, there is the administration's incoherent position on the international value of the dollar. The Treasury repeats the slogan that "a strong dollar is good for America" while watching the real value of the dollar fall by 7% over the past year, and while urging the Chinese to allow the dollar to fall more quickly relative to the yuan. The lack of a consistent dollar policy adds to the uncertainty that limits business investment and hiring.

The economy will continue to suffer until there is a coherent and favorable economic policy. That means bringing long-term deficits under control without raising marginal tax rates—by cutting government outlays and by limiting the tax expenditures that substitute for direct government spending. It means lower tax rates on businesses and individuals to spur entrepreneurship and investment. And it means reforming Social Security and Medicare to protect the living standards of future retirees while limiting the cost to future taxpayers.

All of these things are doable. But the Obama administration has not done them and shows no inclination to do them in the future.

Mr. Feldstein, chairman of the Council of Economic Advisers under President Ronald Reagan, is a professor at Harvard and a member of The Wall Street Journal's board of contributors.

 

[Frisco_Slug_Esq]

It wouldn't be "fair."

:nods:
__________________
Q: You favor an increase in the capital gains tax, saying, “I certainly would not go above what existed under Bill Clinton, which was 28%.” It’s now 15%. That’s almost a doubling if you went to 28%. Bill Clinton dropped the capital gains tax to 20%, then George Bush has taken it down to 15%. And in each instance, when the rate dropped, revenues from the tax increased. And in the 1980s, when the tax was increased to 28%, the revenues went down.
A: What I’ve said is that I would look at raising the capital gains tax for purposes of fairness. The top 50 hedge fund managers made $29 billion last year--$29 billion for 50 individuals. Those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.
Q: But history shows that when you drop the capital gains tax, the revenues go up.
A: Well, that might happen or it might not. It depends on what’s happening on Wall Street and how business is going.
Source: 2008 Philadelphia primary debate, on eve of PA primary Apr 16, 2008

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
Senator Barack Hussein Obama, 2006

 

[RightField]

Are we having another "Recovery Summer" this summer? Will they buy ballons and ice cream for everyone who promises to come out in support of the new party slogan?