Saturday, July 30, 2011

The Tea Party Forces a Real Discussion.

In the November,2010 elections the Republicans took control of the House of Representatives. Prior to that, the Democrats held large majorities in the House and Senate, and, of course, held the Presidency. Yet, somehow, they could not get a budget passed. They could and did spend money like there was no tomorrow (and no limit to taxpayer money): a nearly 1 trillion dollar stimulus, cash for clunkers, bail-outs of the banking and auto industry, and, of course, Obamacare. As all of these measures were passing, any time Republicans objected the mainstream media called them the "party of no." After the Republicans took the house I posted a blog in November, 2010. I asked if the now Republican controlled House passed measures that the Democrats balked at, would the media call the Democrats the "party of no?" Of course not. I predicted that they would still find a way to blame the Republicans.

And that is exactly what the mainstream media is doing now with the budget and debt ceiling "crisis." The House passed two measures to deal with these issues and Harry Reid refused to let the Senate vote on them. Incredibly, at a press conference yesterday, he chastised the Republicans who he said were filibustering to prevent his proposal from getting a straight "up or down" vote. You know, a vote like he refused to give Boehner's proposals. And then the media piles on and and says those awful Republicans are bringing us to the brink and will be responsible for the federal debt getting a downgrading from the credit agencies and for the U.S. defaulting on its' debt. Wow! Welcome to Alice in Wonderland!

In an Op-Ed in the July 28, 2011 LA Times, the liberal commentator Doyle McManus had this to say: "Raising the debt ceiling was once a routine piece of fiscal management, but now, for many in the GOP, it's become a matter of principle..." Well, thank G-d for the Tea Party. When was the last time we the people had representatives in Congress actually watching out for our money. Obama proposed a plan earlier in the year with NO spending cuts. It failed in the Senate 97 to 0.

The Democrats do not/will not/can not comprehend that we have a vast and rapidly growing entitlement society with an ever shrinking number of workers (proportionally) to pay for all of this. According to the Wall Street Journal, we now have 50.5 million Americans on Medicaid, 46.5 million on Medicare, 52 million on Social Security, 7.5 million on unemployment, and 44.6 million on food stamps or other nutrition programs.

LBJ established Medicare and Medicaid in 1965. Back then, the above entitlement payments constituted 28% of the federal budget. In 2010 - 66%! That's 2/3 of the federal budget. And here come the baby boomers, the largest cohort ever to hit the entitlement bonanza. Think it will last? Think it will crash? Or do you think that your taxes will have to be raised significantly to pay for all of this?

But the debt is no problem for Obama. It is a non-issue. If he still had both houses of Congress we would have continued unlimited spending and lots of new and higher taxes. And just what has Obama done for the economy? Did we get the under 8% unemployment he promised with his stimulus? No, still over 9% (and, of course, higher in California and LA). Did we get an economy booming from the "stimulus?" No, less than a 2% growth rate. Abysmal. Yet, after Reagan took over a horrendous economy from Jimmy Carter, the country was experiencing a 7% growth rate by this point. Under Obama, businesses are sitting on their money. Under Obama they do not know what new taxes and burdens they may face, in addition to the enormous unknown of Obamacare. They see the NLRB telling Boeing where they may open a new plant. They see an EPA ready to impose costly new regulations. So they are taking a "wait and see" approach instead of expanding and hiring new workers.

In addition, the business community hears a strong anti-business message from Obama. He never worked in the private sector, and has neither respect for, nor understanding of it. Just how many times has Obama complained about the "millionaires and billionaires?" I do not have a count, but I would be willing to bet he complains about those people more than any past President. Is it now illegal to be a millionaire or billionaire? Why this class warfare as if we were in Europe? Because Obama believes in a European style socialist society. After all, "it's a good idea to spread the wealth around." Except we already do that. According to the Heritage Foundation, the top 1% of wage earners pays 38% of all federal income taxes. The top 5% pays 59% of federal income taxes. And the top 10% pays a whopping 70% of all federal income taxes! We already have the most "progressive" income tax schedule in the world.

But why would the amount of the federal debt be an issue for Obama? It is estimated that on our current path we will have a debt load of 22 to 24 trillion dollars by
2021. Increasing debt means greater dependence on foreign lenders (like China) and a weakening of the U.S. economy. Why should America have so much of the world's wealth anyway? Besides, when we are weakened economically we are also weakened militarily, another plus for Obama. And for those who think the real budgetary problem is the defense budget and those 2 wars known by the media as "Bush's wars" - wrong again. First, as noted above, the entitlements are already 2/3 of the budget. Second, defense spending is only 4.8% of GDP, compared to 7.4% in 1965.

Think you will recognize this country if Obama gets another four years? If he does you should start reading up on European societies because they will be us: with permanent higher unemployment, an ever increasing number of people dependent on the government, and, of course, permanent higher taxes to pay for it all. Even worse, however, if we lose the American spirit of entrepreneurship, of rugged individualism, of starting life from the most humble beginnings and becoming the next Bill Gates. Of course, by then they may outlaw being a billionaire.