Stimulus or Sedative? March 14, 2010
Posted by seeineye in : Politics , add a commentby Thomas Sowell
Abraham Lincoln once asked an audience how many legs a dog has, if you called the tail a leg? When the audience said “five,” Lincoln corrected them, saying that the answer was four. “The fact that you call a tail a leg does not make it a leg.”
That same principle applies today. The fact that politicians call something a “stimulus” does not make it a stimulus. The fact that they call something a “jobs bill” does not mean there will be more jobs.
What have been the actual consequences of all the hundreds of billions of dollars that the government has spent? The idea behind the spending is that it will cause investors to invest, lenders to lend and employers to employ.
That was called “pump priming.” To get a pump going, people put a little water into it, so that the pump will start pumping out a lot of water. In other words, government money alone was never supposed to restore the economy by itself. It was supposed to get the private sector spending, lending, investing and employing.
The question is: Is that what has actually happened?
The stimulus spending started back in 2008, during the Bush administration, and has continued under the Obama administration, so it has had plenty of time to show what it can do.
After the Bush administration’s stimulus spending in 2008, business spending on equipment and software fell– not rose– by 28 percent. Spending on durable goods fell 22 percent.
What about the banks? Four months after the Trouble Asset Relief Program (TARP) poured billions of dollars into the banks, the biggest recipients of that money made 23 percent fewer loans than before. A year later, the credit extended by American banks as a whole was down– not up– by more than $20 billion.
Spending in general was down. The velocity of circulation of money fell faster than it had in half a century.
Just two weeks ago, the Wall Street Journal reported, “U.S. banks posted last year their sharpest decline in lending since 1942.” You can call it a stimulus, if you want to, just as you can call a tail a leg. But the actual effect of what is called a “stimulus” has been more like that of a sedative. Continued…
House GOP Adopts Unilateral Ban on All Earmarks March 13, 2010
Posted by seeineye in : Politics , add a commentby Rep. John Boehner (R-OH)
This morning, the House GOP Caucus adopted a unilateral ban on all earmarks.
For millions of Americans, the earmark process in Congress has become a symbol of a broken Washington. Today House Republicans took an important step toward showing the American people we’re serious about reform by adopting an immediate, unilateral ban on all earmarks. But the more difficult battle lies ahead, and that’s stopping the spending spree in Washington that is saddling our children and grandchildren with trillions of dollars in debt. Only then will we have succeeded in bringing fundamental change to the way Congress spends taxpayers’ money.
DeMint demands a block to Obama land-grab attempt March 12, 2010
Posted by seeineye in : Politics , add a commentby Ed Morrissey
Jim DeMint took to the Senate floor and the pages of the Washington Times earlier this week to expose a plan by the White House to seize over 10 million acres of land in nine Western states. Using an obscure clause in the Antiquities Act of 1906, the Department of the Interior under Ken Salazar would designate the land as “monuments” in order to block the use of the resources in those states. DeMint correctly asserts that this is not only a perversion of the intent of the Antiquities Act, but also a huge power grab by the federal government at the expense of the states:
Americans should be wary of any plans a president has to seize land from the states without their consent. Any new plans to take away states’ freedom to use land as they see fit must be stopped.
That’s why I sponsored an amendment to block Mr. Obama from declaring any of the 14 lands listed in the memo as “monuments.” Unfortunately, the Senate, led by Democrats, rejected it on Thursday evening by a vote of 58-38.
It was particularly disappointing that the Senate Majority Leader Harry Reid, of Nevada, voted against the amendment. The government owns more than 80 percent of the land in Nevada and the unemployment rate there is 12.8 percent. Surely it would help job prospects if more land were open for business.
This is a nationwide problem. The government currently owns 650 million acres, or 29 percent of the nation’s total land.
Federal bureaucrats shouldn’t be wasting time thinking up ways to acquire more, especially in the middle of a recession. Taking the nation’s resources offline will stifle job creation and dry up tax revenues.
If anything, the government should be selling land off, not locking more up. By voting against my amendment, the Democrats tacitly endorsed Mr. Obama’s secret plan to close off millions more acres to commerce.
It’s not the first time an administration has used this act to seize land from states. Jimmy Carter grabbed 50 million acres from Alaska over their loud objections, and Bill Clinton almost 6 million in 22 separate actions. These executive actions bypassed Congress altogether and made a mockery of state sovereignty. After all, if a state can’t keep the federal government from unilaterally declaring that their land no longer belongs to them, then states have no real power at all — and neither do the people, represented by Congress.
DeMint’s amendment got defeated on a party-line 58-38 vote.
Artificial Stupidity: How the Democrats Decieved the CBO to Get Their “Reduces the Deficit” Claim March 12, 2010
Posted by seeineye in : Politics , add a commentby Nickie Goomba
he CBO has very strict rules about how they “score” a bill. Most importantly, they have to score a bill — or “conceptual language” in a non-bill, as we have here — according to what is written therein, even if it’s jackass.
In other words, if a bill claims that certain things are going to happen that the CBO knows with 95% confidence will never happen — like Medicare payments being cut — the CBO still has to pretend those cuts will happen, even though they know, as we all know, they almost certainly won’t.
Their scoring methodology resembles a computer’s “thinking” — a computer doesn’t think. It follows the rules it’s been programmed to follow, no matter how stupid those rules might be. It has no common sense or judgment. The analysts at the CBO might have common sense and judgment, but they’re stripped of that — prevented from using that — by the “code” of the program they follow, hard-wired into the system by law.
That means that it’s not very hard to trick the CBO’s “programming,” just as it’s no difficult feat to crash a computer. Garbage in, garbage out. And the Baucus bill is specifically designed to produce garbage, to get a “salable number” for the deficit.
And that number, while salable, is 100% false, by design.
Among the tricks used to generate that false number:
1. Increased revenues through increased taxes begin in 2010, but new payments and outflows begin in 2013. Meaning the ten-year window the CBO is required to score contains ten years of higher taxes and higher revenues, but only seven years of higher expenses. This is obviously an apples-to-oranges comparison — and if the CBO looked at 2013 through 2023, with ten years of higher revenue matched against ten years of higher expenses, they’d find a growing deficit, not a faked-up “deficit reduction” of $81 billion.
But the Baucus bill deliberately takes advantage of the artificial stupidity of the CBO’s code to compare seven years of spending to ten years of taxes to get a “deficit reduction.”
Sure it’s jackass to do that. But that’s the way the CBO is supposed to do it — even if it makes no sense — and the Baucus bill “conceptual language” deliberately exploits that in order to deceive the public.
2. A large amount of the expense for federal health care spending is simply pushed off to the states, taking it off the fed’s books — supposedly. But the states are all operating at deficits now — they only reason they’re not bankrupt is that the federal government periodically votes them huge grants (supposedly as “stimulus”) to help close the gap between revenue and spending.
If this health care bill passes, the states will be in even worse shape fiscally. They will avoid bankruptcy through two means: They will raise taxes — many of these hitting those who make under $200,000 per year (sales taxes, cigarette taxes, other sin taxes) and thus breaking Obama’s pledge of no new taxes for such people. He’s just mandating that the states do his dirty work for him.
And they will seek, and receive, more aid from the federal government, this aid granted to pay down the huge new unfunded mandates the government has imposed on them.
The CBO’s rules are deliberately subverted here — because technically, the states are supposed to come up with this revenue themselves. In reality — which the CBO isn’t allowed to consider — the federal government will simply grant them more aid.
The trick is that this aid-to-the-states, inevitable as death, isn’t counted as a cost of the Baucus plan. After all, it’s not specifically labeled “Federal Subsidies to the States to Fund Federal Health Care Mandates.” It’s not labeled at all, and so the CBO can’t count it as a cost of the federal health care plan. (Actually, since this inevitable aid isn’t written into law — yet — they have to pretend it’s not going to happen at all, and not count what they know will ultimately be passed.)
In reality, it should be so counted. If the federal government has to start granting the states $40 billion a year to pay for the new mandates, that is a federal expense deriving from the Baucus bill. But it won’t be labeled as such, and the CBO therefore won’t score it as such.
Schwarzenegger, quoted widely by the Leftwing Media in “support” of ObamaCare, specifically objected to this shell-game, stating that if a program is too expensive for the federal government, it’s damnsure too expensive for the rickety finances of the states. (Oddly enough, the Leftwing Media wasn’t particularly interested in this part of his remarks.)
3. Part of the revenue is supposed to come from increased taxes on high-end insurance plans. Trouble is, health care costs rise every year, and in some states, the health care costs are high enough that it won’t take too many years before many plans are deemed “Cadillac plans” and get higher taxes imposed on them – according to the bill as it is written.
Because the CBO isn’t supposed to take into account that Congress will escalate the level at which those increased taxes start kicking in. Garbage in, garbage out.
Congress will almost certainly adjust the numbers in the future to keep too many middle class families from paying big new taxes on their health care policies. And so the deficit will be increased, because a big chunk of the Baucus bill’s “conceptual language’s” revenues assume that all those voters will be ponying up more in taxes in the future. Again, the “conceptual language” is written in such a way to induce the CBO to pretend that the sky is pink and therefore give them their absurd “deficit reduction” claim.
4. A lot of “savings” come from cutting Medicare and Medicaid… supposedly. But year after year Congress blocks any proposed cuts; this is the third rail in American politics. But the CBO is obligated to pretend they don’t know this, simply because the Baucus “conceptual language” claims it will happen.
In all the above examples, the Baucus bill “conceptual language” is written not as a bona fide plan of legislation, but as a “hack” designed for no other purpose than to exploit the strict rules the CBO works under and produce a false number for public consumption. A more straightforward and honest bit of “conceptual language” was scored by the CBO as producing a big new deficit. That conceptual language has not been changed in any meaningful way — it’s simply been reworded to abuse the CBO’s methodology and produce a false result.
“Hello,” they lied.
And wait ’til they get past their introductions.
Oh, and 5.
5. It’s nearly an absolute rule that a politician can’t vote to cut Medicare or Medicaid — not without putting his career at risk. Health care coverage is income like any other — if your employer gives you a $5000 insurance policy, that’s $5000 in income. Same if the federal government gives you that policy — that is income to you, courtesy of the government other taxpayers.
Medicare and Medicaid are key factors blowing up the US budget in ten years or less. But no one can do anything to bring those costs under control, because — well, there are millions of seniors who vote. And when they vote, they are being asked, basically, if they’d like to cut their salaries.
Or if they’d like to keep their salaries.
Or if they’d like to increase their salaries.
Guess which is the most attractive option, which is the next most attractive option, and which is the least attractive option of all?
The Baucus/Obama plan will put millions of Americans in the exact same position as the nation’s seniors — where the most important factor (or one of the top three, at least) is whether a politician promises to increase their salary, keep it at the same rate, or… make less income.
Yay, less income!
But the CBO is not supposed to take into consideration what happens when millions of Americans are newly socialized and their primary choice every election cycle is whether to give themselves a raise.
I don’t believe they’re going to forgo raises very often, and I know for a fact they’re never going to vote to cut their salaries.
How smart is your right foot? March 11, 2010
Posted by seeineye in : Politics , add a commentIt’s already pre-programmed in you brain!
You have to try this. It is absolutely true. I guess there are some things that the brain cannot handle.
It takes two seconds.
This will confuse your mind and you will keep trying over and over again to see if you can outsmart your foot, but, you can’t. It is pre-programmed in your brain!
While sitting at your desk in front of your computer, lift your right foot off the floor and make clockwise circles.
Now, while doing this, draw the number “6″ in the air with your right hand. Your foot will change direction.
I told you so! And there’s nothing you can do about it! You and I both know how funny it is, but before the day is done you are going to try it again and again, if you’ve not already done so.
