Yet Another Big Lie

Greetings from the Left Coast.

There are several Big Lies that I'm getting really tired of hearing, but very near the top of the list is the one that says we could address our budget problems if only the "rich" would pay their fair share. If they were only willing to pay a little more, we could solve this thing - but those evil Republicans keep "coddling" them, to use Warren Buffett's words. The trouble is, the math just doesn't work.

Let's set aside, for the moment, the point that if Warren Buffett really thinks his taxes are too low, he could send a check to the U.S. Treasury at any time, and look at the facts and figures provided by the Internal Revenue Service.

According to the IRS, in 2009, 235,413 people filed tax returns reporting a million dollars or more in income. In aggregate, those people earned $726.9 billion. The federal deficit in 2009 was roughly $1.4 trillion. That means if you had taken all of the reported income away from those 235,413 people who made a million dollars or more, it would only have covered about half of the federal deficit for that year.

I'm not sure exactly how much more in taxes Mr. Buffett thinks he should be paying, but I seriously doubt that he is willing to contribute 100% of his income. So the fact of the matter is that making the rich (or better yet, the "super-rich") pay just a little bit more would be a proverbial drop in the proverbial bucket compared to our current level of deficit spending.

Here's another tidbit to think about. If you make $160,000 or more, you're in the top 5% of earners in America. You and your fellow five-percenters already pay almost 60% of all income taxes collected. (And the other 95% of taxpayers would like to thank you for your disproportionate contribution, especially the bottom 50% who paid almost nothing.) In aggregate, you and your fellow five-percenters earned slightly under $3 trillion. Therefore, if the government had taken all of your money, it wouldn't have been enough to cover Obama's budget.

So let's be honest about this. If you want to punish the rich people for being so successful by taking more of their money away, if that would somehow make you feel better, just say so. If you believe in income redistribution - that money should be taken from people who have earned it and given to people who have not earned it - just say so. But stop pretending that this is will somehow magically solve our massive deficit problem. It's class warfare, plain and simple. As many others have observed, we don't have a deficit problem because taxes are too low - we have a deficit problem because spending is too high. And "taxing the rich" won't solve the problem, because all of the rich people put together don't earn enough money to eliminate the deficit even if we took all of it! Don't buy into the Big Lie.

Thanks for listening.

Connecting the Dots...

"President Obama's economic advisers estimated Thursday that the economic stimulus package has saved or created about 1 million jobs...Republicans called the White House estimate unreliable, pointing to Bureau of Labor Statistics figures showing...a net loss of 2.4 million jobs since Obama signed the stimulus law in February." - USA Today, 9/13/2009

"With unemployment hovering near 10 percent nearly two years after President Obama signed his economic stimulus package, Mr. Obama is acknowledging that, despite his campaign promises, 'there's no such thing as shovel-ready projects.'" - CBS News, October 13, 2010.

"The White House doesn't create jobs." - White House Press Secretary Jay Carney, August 3, 2011

Um...we've noticed that, Jay. Too bad it's taken you almost three years to figure it out.

Here's Another Prediction I Hope Is Wrong

Greetings from the Left Coast!

Last week, I heard Arthur Laffer interviewed on a national radio program. Laffer is a pretty bright guy who, by the way, supported President Bill Clinton in 1992 and 1996 because of Clinton's conservative fiscal policies. He's the guy who reportedly drew the "Laffer Curve" on the back of a cocktail napkin during a 1974 meeting with Dick Cheney and Donald Rumsfeld. The Laffer Curve basically states that at a 0% tax rate, and at a 100% tax rate, tax revenues would be zero. Therefore, somewhere between those two extremes is a point where tax revenues are maximized. Therefore, raising tax rates beyond that point will actually reduce revenues, and if rates are beyond that point, lowering them will actually increase revenues.

This absolutely worked during the Reagan administration, despite what you may have been told. Every time in modern history that federal taxes have been reduced, federal tax revenue has actually increased. The problem is that Congress is congenitally unable to stop itself from spending more money than it has - so even though tax revenue went up, spending went up even more, and debt increased. But I digress.

Back in June, Laffer wrote a column in the Wall Street Journal predicting what would happen if the "Bush Tax Cuts" were allowed to expire. This is now almost certain to happen, for reasons I'll explain later. Here are the salient points of Laffer's column:

• If people believe that taxes are going to be higher next year, they will attempt to shift production and income into this year if possible. This was demonstrated in the early 1990s when "high income taxpayers" shifted income into 1992 to avoid the expected increase in the top tax rate in 1993, then again at the end of 1993 to avoid the increase in Medicare taxes that went into effect in 1994.
• It is entirely likely that at least part of the reason that the economy is looking as good as it is in 2010 is because that's already happening.
• "When we pass the tax boundary of Jan. 1, 2011, my best guess is that the train goes off the tracks and we get our worst nightmare of a severe 'double dip' recession."

Laffer's estimate is that if the Bush tax cuts expire, Americans will see an average 3% tax increase. If you take away an additional 3% of people's disposable income through added taxation, it's logical to conclude that spending will drop by at least that 3%. Since the economy is currently growing at less than a 3% annual rate, if spending drops by 3% next year, we're back in recession - and that doesn't even take into account the effect the higher tax rates will have on investment and job growth.

The Democrats already chose to kick the ball down the road, and recess for their last-ditch campaign efforts without passing a tax cut extension. It probably won't get any better when they reconvene after the election, either, and here's why.

Even if the Republicans do see a sweeping victory on election day, they won't take office until next year. So the "lame duck" Congress that reconvenes after the election will be the same Congress that we have today. And here's what the math looks like. Nancy Pelosi already has in her hands a letter from 31 Democrats saying that the tax cuts should be extended for all Americans. So, although Pelosi is committed to extending the tax cuts only for the middle class, and allowing the "tax cuts for the rich" to expire, she may not have the votes to pass such a bill. So here is Laffer's prediction of what she'll do:

House rules allow her to bring a bill to the floor under "suspension" of debate, meaning that an immediate up or down vote must be held on the bill, without any debate taking place. However, such a bill requires a 2/3 majority for passage, which the Speaker does not have. So she will bring to the floor, under "suspension," a bill that extends the tax cuts only for the middle class, knowing she doesn't have the votes to pass it. Then, when it fails to pass, she will immediately blame the Republicans for voting against tax relief for the middle class. And if the economy does go off the rails next year, as Laffer predicts, she will blame the Republicans for that, too.

You see, for the Democrat leadership, it's all about their power. They were perfectly willing to see America lose the war in Iraq and come home in disgrace, as long as they could blame the Republicans for it. (Remember Harry Reid's "This war is lost?" And Obama's comment after he took office and saw that the surge was clearly working that, even knowing what he knew now, he would still have opposed it?) And they're perfectly willing to see the economy go off the rails, no matter how many Americans are hurt, as long as they can blame Republicans for it.

Thanks for listening.

Liberal Myth Number...Oh, Heck, I Lost Count...

Greetings from the Left Coast!

One of the many liberal talking points that just won't die is how our economic problems and ballooning deficit are due to all the spending on those "illegal" wars in Iraq and Afghanistan. I recently had the following comment exchange with one of my Liberal Facebook Friends ("LFF"):

ME: (...Facebook status update grumping about references to the "cost" of tax cuts, as though our tax money was something the government is entitled to, and it's some kind of sacrifice for them to take less of it...)

LFF: "I think they want the top 2% to start paying their part so we can get out of debt or something like that."

ME: "I think if you run the numbers, you'll find that you could tax the top 2% at a 100% tax rate and we still couldn't get out of debt at the current level of spending. But that's another issue - I was objecting to the use of the word 'cost' in the context of a tax cut."

LFF: "Good point.... Sadly. I hate to think how long it will take to pay off these wars and all the bailouts. None of which have done any good for the [people] of America."

ME: "According to the Congressional Research Service, the cumulative cost of the War On Terror, from 9/11 through the FY2010 defense appropriation, is approximately $1 Trillion. That includes all of the costs of the Iraq and Afghanistan operations. This year's budget deficit alone is more than that. So it ain't the wars that are causing all the budget problems. (See http://www.fas.org/sgp/crs/natsec/RL33110.pdf)"

LFF: ...(recap of how government debt grew from 2000 - 2007...) "Increased spending was needed last year to boost the economy out of recession. There are plenty facts to support that this is working. To ensure the economy did not falter, spending has continued this year. So by 2011, deficit spending should be reduced. The most recent budget forecast from the Office of Management and Budget (OMB) showed the budget deficit at $1.3 trillion in FY 2011, more than the $1.17 trillion deficit for FY 2010, but down from the $1.7 trillion deficit for FY 2009."

LFF: "By the way… Babyboomers paid extra into Social Security to ensure there would be enough funds to support our retirement. Well it’s all gone and do you know what it was spent on? Yep. the stupid, winless wars all about greed."(...more stuff on the Social Security mess...)

ME: "I think you're making my point for me. The single-year budget deficits in FY2009, FY2010, and projected deficit for 2011, are all greater than the total amount spent on Iraq and Afghanistan in the last nine years. The War On Terror represents only a small part of the spending problem."

LFF: (Silence)

Now you, gentle reader, have no doubt spotted a number of other points in LFF's comments that could have been challenged:

• Reference to the top 2% "paying their part." For the love of God, the top 1% of income earners already pay nearly 40% of all income taxes collected, and the top 5% pay over 50%, while 47% of households pay no income tax at all. How much do they have to pay before they're "paying their part?"
• The comment that none of the wars and bailouts have done any good. I'm tempted to agree on the bailouts, but the wars haven't done any good for the people of America? That comment alone is worth several blog posts.
• The comment that increased spending was needed last year to boost us out of recession. Really? Can I see a show of hands of all of you who feel boosted out of the recession?
• There are plenty of facts to support that this is working? Care to share any of them?
• By 2011, deficit spending should be reduced. Yes, I believe it will be, but only because so many Democrats are going to be kicked out of office in November.
• The "stupid winless wars" were all about greed. That's odd, because I thought they were all about terrorist attacks on American soil that killed thousands of our fellow citizens.

And that, gentle reader, illustrates one of the biggest challenges of talking to your liberal friends: it's difficult to stick to one subject, because so many fallacies get dumped on you so quickly that your first reaction is to just walk away shaking your head and wondering what universe they've been living in for the last several years. Be patient with them, and try to stick with whatever the original point was without getting sidetracked. If that doesn't work, you can always walk away shaking your head.

Thanks for listening.

And They Call Themselves Christians...

Greetings from the Left Coast!

I have several Facebook Friends who are, shall we say, quite a ways to the left side of the political spectrum. Wonderful people otherwise, but definitely part of the group for which the Left Coast is named. On several occasions, I've seen conservative political views criticized as lacking basic human compassion, and heard some variation of, "And they call themselves Christians? What must Jesus be thinking now?" This has always bothered me at a visceral level, but it took me a while to figure out exactly why:

Jesus taught that we should care for the needy personally. He never taught that we should turn that job over to government and let government do it for us. I believe there are two good reasons why personal involvement is better than government involvement.

First, Jesus never taught that anyone should be forced to care for the needy. There is no spiritual benefit in doing the right thing because you are forced to do it. That, in fact, is the essence of the doctrine of human "agency" - that we are free to choose to do what God asks of us, or not to do so. But when the government forcibly takes money from someone (which, after all, is what taxation fundamentally amounts to), even for the best of causes, that person's agency had nothing to do with it. Left to his or her own devices, that person might or might not have chosen to give to the cause in question...but it's a moot point. That person won't get the opportunity to make that moral judgment, for better or for worse.

Second, and this is possibly more subtle, by shifting the responsibility to the government, we don't have to take any responsibility ourselves. We don't have to personally face the poor, the orphan, the widow, the sick, the dying. We can, in fact, ignore them and go on with our lives, because, after all, there's a government program to take care of them.

So I submit that it is not at all a violation of Christian principles to want to place limits on government-imposed income redistribution and the creeping expansion of the "Nanny State." And I find it interesting that conservatives, who tend to want those limits, are, statistically, more charitable personally than liberals. Conservative families give more than liberal families, across the board, in every income bracket. Republicans, statistically, are more charitable than Democrats. "Red" states are more charitable than "blue" states. The residents there volunteer more, both for religious and secular causes. They're even more likely to donate blood.

Does that mean that we should remove all government safety nets? No, not at all. But if I had to judge which philosophy was more consistent with the teachings of Jesus - to say, "We need to raise taxes so we can fund another government program," or to say, "No, it's not the government's job to do this, it's my job, and I'll put my money where my mouth is!" - I would have to say it's the latter.

Thanks for listening.

Thanks, Newsweek, Now I KNOW I'm Gonna Love It!

Greetings from the Left Coast!

When I woke up this morning and first launched my browser, two things caught my eye on the msn.com home page: first, a big headline that said "GOP Pledges to Cut Taxes, Spending." Hmmmm. Republican leaders are circulating a draft of a new "Pledge to America." OK. A couple of lines below that? Another link that said, "Analysis: 'Pledge' Unlikely to Inspire Voters," that led to a Newsweek article that - surprise, surprise - didn't think much of the new Pledge.

Since I am somewhat familiar with the political slant of Newsweek, i.e., if you offered me a free copy, I wouldn't bother to walk across the street to get it, that suggested to me that I might, indeed, find this new pledge inspiring.

So I did what I would urge everyone to do - I read it for myself. It's only 21 pages long (less than 1% the size of, say, the ObamaCare bill), so it didn't take me all that long.

Over the coming days and weeks, lots and lots of people are going to try to tell you what it says and why it should, or shouldn't, matter. Ignore them all and read it for yourself, then draw your own conclusions.

My personal reaction to it? If I could have presented a document to Congress in a big red binder labeled, "PLEASE - just do these things for me, and I'll be content!" this is the document I would have written. Yes, I know it's only a draft at the moment. Yes, there's a little, cynical voice in the back of my mind that whispers, "Yeah, it sounds good, but will they really follow through?" But it's being drowned out by the louder voice that's saying, "My God, if they actually do these things, it will make such a difference!"

OK, OK, here are a couple of teasers:

In a self-governing society, the only bulwark against the power of the state is the consent of the governed, and regarding the policies of the current government, the governed do not consent...

We pledge to honor the Constitution as constructed by its framers and honor the original intent of those precepts that have been consistently ignored – particularly the Tenth Amendment, which grants that all powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people...

The American people know that to boost the economy, spending must be slashed, tax increases must be prevented, and small businesses must have certainty that the rules won’t change every few months so they can get back on their feet. The constant threat of new taxes and new regulations prevents investors and entrepreneurs from putting capital at risk. These private sector employers must be given the certainty that if they take a risk to expand their company or hire a new employee, Washington won’t yank the rug from under their feet...

We will ensure that bills are debated and discussed in the public square by publishing the text online for at least three days before coming up for a vote in the House of Representatives. No more hiding legislative language from the minority party, opponents, and the public. Legislation should be understood by all interested parties before it is voted on...

We will require each bill moving through Congress to include a clause citing the specific constitutional authority upon which the bill is justified....

Got your interest yet? By the way, Newsweek really didn't like that last point, for the very convoluted reason that it somehow encroached on the power of the judiciary, which is supposed to determine whether or not legislation is constitutional. But, dang, if I didn't know better, I'd think they (the GOP, not Newsweek) had been reading this blog!

Please. Just read it. Don't take anybody else's word for it - not even mine. Read it for yourself, then make up your mind.

Thanks for listening.

Why Political Parties Are Important

Greetings from the Left Coast!

All his life, my father was an independent voter. He never joined a political party, and took pride in voting "for the man, not the party." When I became old enough to vote, my first inclination was to do the same. But in the forty years since then, I've discovered why my father was wrong:

First, after politicians get into office, they generally vote the way their party tells them to vote. This has never been more obvious than in the last 18 months. Why? Well, there isn't much of a future for a freshman Senator or Congressman who opposes his party leadership. You don't get the choice committee assignments that way. In fact, you may find that you don't even get any help the next time you're up for re-election. So you may think that you're voting "for the man," but you're really voting for the party, whether you intended to or not.

Second, with the sole exception of the Senate Ethics Committee (a.k.a. the Oxymoron Committee), the membership of every committee in each house of Congress is determined by the ratio of Democrats to Republicans in that house. E.g., if the House of Representatives is 60% Democrat, then the Democrats will also have 60% of the seats on each and every House committee. Moreover, the majority party will also hold the chairmanship of each and every committee.

And that's where the work gets done. The committees determine what legislation gets drafted, and are largely responsible for drafting it. The committees determine whether a particular piece of legislation even gets brought to the floor of the chamber for a vote. When the Senate and House pass slightly different versions of a bill, a joint reconciliation committee tries to come up with an acceptable compromise.

In short, the committees are where the power resides. Yet there is little or no personal accountability for the members. Everybody knows who the President is - he's an easy target. But can you name even one member of the House Committee on Energy and Commerce? This lack of personal accountability explains why, although the overall approval rating of Congress is lower than the proverbial snake's belly, individual incumbents keep getting re-elected over and over again.

The takeaway from all this is clear: if you want to change the direction of the country, you must change the party that controls Congress. It's just that simple.

Thanks for listening.