Political Angst In America

Location: Pantego, Texas, United States

Saturday, July 23, 2011

I saw a Fox News article about a Congressman from Oregon named Wu, who was accused of sexual misconduct. His political association was not given in the article. That means he is a Democrat because if he was a Republican he would have been identified as Republican Congressman Wu.

Monday, July 18, 2011

The Democrats and Republicans are not doing a good job of explaining what is actually at issue in the current debate over increasing the national debt limit. The real issue is the spending level of the United States government and the size of government itself. Since the end of World War II the United States government has spent about 18 to 20% of the GDP each year. Obama and the Democrats want to increase that to 25%, and possibly even more. This is about the spending level of EU countries, and it hasn't worked out well for them. It produces structural unemployment in the range of 9 to 10%, and slow economic growth. There is indication that it reduces income "inequality," but that may be an illusion since there is more "class" structure in society in the US, with people more likely to remain in the "class" in which they were born. Democrats claim that debt levels of 90% of GDP are not a problem for a country like the United States (though it is for a small country like Greece or Ireland). They discount the possibility that interest rates may rise above the current low levels, a rosy outlook that assumes that other countries will be happy to lend to us endlessly. Democrats talk like revenue can be dramatically increased by taxes only on the "rich." This is simply not true. Consider the "Bush tax cuts," reviled by the Democrats. They claim that these tax cuts reduced government revenue by about $340 billion per year (though revenue actually went up after the cuts were enacted). They want to solve our revenue shortfall by rescinding the Bush "tax cuts" on the rich. The problem is that the revenue shortfall is $1.6 trillion per year, but the revenue from rescinding the tax cuts on "the rich" is only about $40 billion per year. Thus the nasty little secret is that Democrats will eventually have to raise taxes on everyone to raise the revenue they need to pay for their spending desires. Actually they already have tax increases in place, but they do not go into effect until 2013 after the next. As is his usual practice, Obama does not want the bad news to be realized by the public until after the next election. The Republicans are not doing a good job of explaining the situation to the people; that Obama is turning the United States into an EU type entitlement state. It appears that they think that the majority of people actually favor what the Democrats are doing, that socialism is what the majority of people actually want. The Republicans are at a disadvantage because the media are in the tank for Obama, and continually tell people the lie that failure of Republicans to give Obama what he wants will result in social security payments not being made, etc. But, the Republicans are losing the PR war to Obama, and this has serious negative implication for the future of the country.

Friday, July 15, 2011

Today President Obama said that you can't get to $2.7 trillion in spending reduction without increasing revenue. He mentioned two potential revenue enhancements; closing the tax loopholes on corporate jets and oil companies. (It is curious that the corporate jet loophole was part of the vaunted Obama stimulus package and the oil company loophole is depreciation and investment credits that all companies get; his problem with the oil companies seems to be that they make a lot of profit.) Closing the corporate jet accelerated depreciation loophole will generate about $300 million per year, and the oil company change would generate at most $4 billion per year. (Both of these estimates assume that the companies will nor change their behavior, something that Obama assumes, but is by no means certain.) At any rate, the most revenue generated by these changes would be $43 billion over 10 years, a rather paltry amount compared to the desired reduction of $2.7 trillion, or about 1.6%. The discussion has been that there should be a 3:1 split between budget cuts and revenue enhancements indicating that the revenue enhancement should be 25% of the spending reduction. Obama obviously has some other revenue enhancements in mind. Why doesn't he spell those out rather than talking about minor things that he assumes appeal to the masses because they are aimed at those he demonizes.

Monday, July 11, 2011

I think the Obama Administration will take care of the illegal immigration problem without having to address it directly. I have been reading that illegal immigration is down and that some Mexicans are going back because of the current bad economic conditions in the US. Obama has the goal of turning the US into a third world nation, so the lure of America to Mexicans will diminish as Obama's economic and "green energy" policies succeed.

Saturday, July 02, 2011

President Obama overuses two rhetorical devices: the "setting up a strawman," and the "false choice." In his recent press conference, in his fake "folksy" style he used the "false choice" when he berated private jet owners. He presented the choice as between tax breaks for private jet owners and education and healthcare for children. The problem with this is that the budget deficit is over a trillion dollars per year, while education has annual expenditures of hundreds of billion. The false choice is that eliminating the private jet tax break will generate about 3 billion dollars over ten years. This is a mere drop in the bucket compared to the budget deficit and the social spending that he says will be curtailed without the added revenue. Obama is also a hypocrite in that the tax break for private jet owners (a reduction in the depreciation time from 7 years to 5 years) was implemented as part of Obama's economic stimulus law from 2009, and is one of the tax cuts that he brags about providing to promote economic activity and employment.