Can a GOP midterm win stop an Obama regulatory assault?

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While the conservative world is beside itself giddy with an anticipated landslide in November, and “hope” has re’sprung eternal for a floundering Sharron Angle in Nevada, the burning question on my mind has been just what effect a GOP Congress – likely at best a slim majority – will have in the last two years of an Obama term, and stopping an agenda already well underway?

The answer to that will be just how much of a majority the GOP can pull off.

At the forefront is the ugly reality of the Obama agenda. “Change” has already been quite successful with this POTUS and his supermajority legislators. The foundation of “change” has been laid with the passage of Obama’care and financial reform…. tho neither has done whit to raise the proffered campaign slogan bandied about – “hope”. Simultaneously, that “change” has burdened current and future generations with so much debt that even Moody’s Mark Zandi is noting the rising probability of a double dip recession, just a few short months after avering the “recovery” would “remain intact”.

We’re a few months out from the midterms, and much can happen. I’m not one to put a happy face on polls this early in the season… or any poll, for that matter. One thing I’m certain we can expect…. there will be no GOP supermajority. This means we can forget legislative correction. Repeal of the onerous and fiscally debilitating legislation, put into place by devious hook and crook methods or partisan majorities (generally aided by three GOPers), have no chance of being nipped in the bud without a veto proof majority.

But I can envision two nightmares come true from a GOP takeover.

~~~

The first is a Clintonesque sequel. Obama wins a second term as he takes credit for a GOP Congress, reining in the big spending. Not because they will spend less, mind you… but because for the first time in four years, they will have the power to stop the even higher spending penchant of the Democrats. Forcing Obama to the center with a fiscally responsible Congress makes a truly less than a mediocre POTUS shine just via reflection. Of course, when it comes to 2012 talking points, we all know a Dem Congress gets a pass for over spending if there’s a GOP president they can blame. And if there’s a Dem president, they are quick to take credit for any fiscal restraint shown by a GOP Congress.

While the latter scenario has been true (i.e. Clinton accolades for GOP fiscal successes in the 90s) – the former (the oxymoron of a fiscally responsible GOP Congress) has skipped a generation in reality.

It is true, historically, that the US economically fares better when the GOP is in charge of purse strings and a Dem holding down the Oval Office swivel chair. But we can all agree that today’s GOP is not the conservative GOP of Reagan’s days. Nor is Obama your typical Dem POTUS. Does his narcissistic personality crave the power of second term more than the one-term legacy of taking the ship of the USA into a socialist U-turn?

And therein lies the worry…. Will a GOP midterm win of one or both chambers saddle us with another four years of Obama? And, can a GOP win thwart the Obama agenda during the remaining lame duck years? The same agenda for which Obama has admitted he is willing to be a one term President in order to achieve?

My fears are that, at best, a fiscally responsible GOP Congress will only be able to slow the fully loaded log truck, approaching red light at the bottom of a 2 mile long, 6% grade hill… not stop it.

~~~

Yesterday Jon Ward at Daily Caller echoed my second quiet nightmare that keeps resurfacing…. with the past legislation already passed, who needs legislation or Congress now to continue? With healthcare and financial “reform” passed, plus a ga’zillion zeros after our debt numbers to use to put the fear of god into voters, Obama’s agenda can be accomplished by unilateral regulations from here to the end of his term.

More simply put, Obama has potential to easily bypass a politically hamstrung Congress.

EPA has been ready, willing and chomping at the bit to regulate CO2 since late last year. Without a doubt, we will find the armaggedon-that-wasn’t…. aka the Deepwater Horizon oil spill… a fertile well of propaganda that will be reopened at regular intervals to add another need push to the agenda.

We’ve already seen that Obama’care isn’t the deficit reducer it was touted to be since the devil is in the regulation details. Barney Frank’s financial reform will be the same. And both regulations have, again, shifted power formerly in the hands of an elected Congress to appointed civil servants in sundry, newly created, federal agencies. Appointees that hang around in these same federal agencies long after the appointing POTUS has left.

Karl Rove shines a small flashlight at the end of the tunnel.

But Karl Rove, who advised former President Bush throughout a presidency dominated by questions about executive powers, said that while “the president’s field of action in foreign affairs is broad, it is much more limited and at risk of congressional restraint in the domestic arena.”

This, Rove said in an e-mail, is where Republican control of the House would be a big deal.

“Rules can be overturned or blocked by congressional action. They can be tied up or sued in court. Agencies can be defunded or their budgets crimped. Executive branch officials outside the White House can be called before Congress to explain,” he said.

Vin Weber, an influential Republican lobbyist, notes that the GOP – confident of major gains – are already plotting their confrontation over regulatory reform.

“If you really want to fight the regulatory approach, the money bills originate in the House of Representatives. You simply put language in the money bill for whatever agency is doing the regulating, saying, ‘No money in this bill shall be used to implement regulation xyz,’” Weber said. “ The president can decide to sign the bill or not sign the bill, but that’s the kind of confrontation you’ll have if the administration gets too aggressive in its regulatory approach.”

“Also, hauling people up to testify, that’s going to happen anyway,” he said.

This is absolutely true… any bill can prohibit funding the Obama agenda already implemented, if not already funded in the original legislation. But it’s unlikely that Obama’s going to sign a bill that halts his legacy agenda. This leaves us two options as a means of defense.

The GOP would have to have a veto proof majority to override the Presidential rejection, or….

… we have a very uncomfortable dependence on the Blue Dog Democrats, breaking ranks with the rigor mortis grip Pelosi/Reid have over them.

A veto proof majority isn’t something I see in the cards. Historically they don’t roll around that often. Which means strategically, we need to plan for the latter – working with the Blue Dogs.

For Blue Dogs to change directions and climb aboard the GOP “change” bandwagon, they will have to be adamantly opposed to changes they supported in the prior Congress… or their quest for continued power has to override their convictions. Or put another way, they will have to put their finger in the air on constituent polls, and vote the direction the winds of public opinion blow.

Certainly gaining a more balanced governance in the chambers of Congress will be a step forward. But after that, we are at the mercy of Blue Dogs, their quest for continued power, and ever on watch for the mounds of regulations that will be created in the meeting rooms of federal agencies in order to slow… even if not stop… the Obama agenda.

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Mata, as usual you have a very thought provoking article. One question. As you say if the House deletes or underfunds regulations, Obama does not have to sign the bill. However if the House is adamant doesn’t that lead to no funding bills? For example a shut down of government with lots of finger pointing? As bad as that could be, it still may force the Pontus into compromise in favor of the Nation.

The first is a Clintonesque sequel. Obama wins a second term as he takes credit for a GOP Congress, reining in the big spending. Not because they will spend less, mind you… but because for the first time in four years, they will have the power to stop the even higher sending penchant of the Democrats. Forcing Obama to the center with a fiscally responsible Congress makes a truly less than a mediocre POTUS shine just via reflection.

It echoes the point made in a Michael Medved article:

One crucial factor shared by the three fortunate White House survivors was that they all presided over eras of divided government with opposition parties controlling at least one house of Congress during most or all of their presidencies. For Republican Dwight Eisenhower, the Democrats controlled both the House and the Senate for six of his eight years with huge majorities his last two years. Under Reagan, Democrats controlled the House for all eight years of his Presidency, and the Senate for the last two years. Bill Clinton began his term with solid Democratic majorities in both Houses, but after his crushing mid-term losses in 1994, he spent his last six years— 75% of his presidency– working with energized Republican majorities in both Senate and House.

Its not an accident that all three of the most durably popular presidents of the last three generations have learned to cope with two-party rule: American voters clearly prefer dividing the power in Washington to giving either Republicans or Democrats full authority over both Congress and the White House. Since the end of World War II, a single party controlled the two elected branches of government only 28 years, while the electorate chose to divide authority between the two big parties for 36 years.

~~~

Barack Obamas grandiose agenda offers the GOP a grand opportunity in the upcoming Congressional elections. Republicans shouldnt attack the President himself, who remains personally popular (according to all the polls) even while the voters disapprove of his policies. In any event, President Obama will retain the White House until 2013 and fulfill the term he was elected to serve, so the opposition and the public ought to make the most of it by providing President Obama with the balance and even keel that he desperately needs. The GOP should field candidates who promise to pull the president back to the center, back to the mainstream and who decry the ultra-liberal Pelosi-crats who have been dragging him to the extreme left. The nation will benefit, and Barack Obama will probably lead more effectively, when hes forced to cobble-together consensus with a revitalized opposition, rather than competing with his Democratic colleagues in Congress over who maintains the purest commitment to the doctrinaire liberal agenda.

Republicans can plausibly argue that a GOP comeback would help President Obama find a pragmatic, unifying path rather than continuing to pursue the shrill hyper-partisanship of a shallow hack like Harry Reid. If he continues with big Democratic majorities, he may go the way of over-reaching, imperious, ultimately discredited presidents like Lyndon Johnson or Jimmy Carter (whose 292 House seats gave him a veto-proof, two-thirds majority) or even, arguably, George W. Bush. If his supporters want President Obama to enjoy the consistent popularity of practical, deft, consistently popular chief executives like Eisenhower, Reagan and Clinton, they should welcome a GOP takeover of one or both Houses of Congress in 2010.

A Republican comeback a year from now wouldnt destroy the Obama presidency and it may, in fact, promise the best hope for saving it.

OK, lets have a little fun here. 😉

Which Federal Agencies, Departments, Commissions… etc can We do without?
Which Programs need to get the axe?
Which Promises does the Federal Government need to keep?

Many States have a Balanced Budget Amendment in their Constitutions.
Should the Congress enact one to keep unwarranted spending in check?

Think on that for a moment or two. I have my list and I will get back to you on that.

Trooper: I already have my list. Defense, Justice, Treasury, Interior, and State are the only cabinet-level departments to stay, as they are the only ones listed in the Constitution. Departments that can be eliminated completely are Labor, HUD, Energy, Education, and EPA. Most of the other departments can be deeply gutted and their remaining functions placed under the listed 5. Defense is obvious, as is Justice. Most of Homeland Security’s functions will be transferred to those 2 departments. Agriculture can be cut and moved under Interior. Anything having to do with taxes, tariffs, and other financial matters will be put under Treasury. Veteran’s Affairs goes back under DoD, and Commerce gets divvied up between the 5. HHS gets cut and moved under Treasury, and any welfare programs get eliminated and turned back over to the states.

Social Security should be eliminated as we know it, and everyone that’s in it now should be able to take out a lump sum amount equal to what they paid in and roll it into a private retirement account. The deduction for FICA will still be taken, but that money will be rolled into the private retirement account of the employee’s choice.

There needs to be a balanced budget amendment, but we’re never going to see it. The main reason is because fedgov spending keeps going up and up, and most of it is nothing but waste.

And two questions arise…will the new congress be peopled with conservatives enough to make the legislative difference? And perhaps of greater importance, will a massive election day purge of leftist forces throw enough of a scare into remaining dem Marxists and ever present republican RINOs to force their capitulation to an agenda of greater benefit to the nation than to themselves! I guess we’ll find out.

@Smokey

I agree completely with your assessment of the cabinet level departments.

However, a lump sum payment of money contributed to SS is not an equitable way to go about the privatization of the program. Had that money been in a private retirement account from the git-go it would have grown to considerably more than the lump sum of contributions. Those that are currently retired or very near retirement would/could be devastated. For those further away from retirement age, a lump sum transfer to private investment vehicles makes sense as they would have time to grow their contributions to a viable amount necessary for retirement.

Perhaps a mandatory payout for those more than 20 years from retirement and the option for those within 20 years would be more prudent.

Mata’s back! 😀

*happy-dance*

Maybe conservative pundits ought to concentrate less on hoping for a miracle win, and more on giving the rest of us advice on how to survive the next ten years or so.

Ok, I admit that I am not the most knowledgeable on how government works but I was watching the remake of Dr. Zhivago with Kiera Knightly and Hans Christian (Not sure how to spell his name) and this Obama situation is scaring me. So I am going to put forth my fears and what ifs here and I am asking for basically reassurance–like this can’t happen in America, right? This is what I fear.

What if the government runs out of money, inflation goes through the roof and you see massive layoffs, and rioting in the streets? Can Obama and his goons then seize control through martial law and the next thing you know we are Socialist or Communist.? Will congress at that point have any power to save us. Would they become irrelevant at that time. He seems to be able to do a lot with executive orders, more than I have seen from other presidents.

Maybe I am just paranoid, but I have seen a lot of thugs coming out of the woodwork and just recently on the Fox Nation, I have seen a report where he is recruiting students to attend his speeches. What else is he recruiting students for?

So this topic kind of bothers me.

Tammy… you aren’t paranoid if they really are out to get you! Collapsing the system is exactly the strategy that the leftists Cloward and Piven advocate to be used to push the US into a socialist/marxist system. Obama is an ideologue so don’t be surprised if collapsing the system is an integral part of his plan!

@ post #10: “Can Obama and his goons then seize control through martial law…?”

Few conservatives seemed worried about such things when George W. Bush issued NSPD 51/Homeland Security Presidential Directive HSPD-20, which remains in effect. Maybe they should have been paying more attention.

http://en.wikipedia.org/wiki/National_Security_and_Homeland_Security_Presidential_Directive

@Mata: Welcome back!

@ OT2: The Rural Electric Agency STILL exists…. why? And I vote to get rid of the NEA. The feds have no business getting involved in education.

RH Junior I stronly suggest you stop playing attention to what these pundits have to say , their wrong vrs. right tallys are higher most of the time. I have always found the old addage of “opinions are like a butthole, everyones got one and they all stink”. Make it your first goal to get out from under your personal debt, start saving, buy massive quanities of food, guns and ammo ( try to stay with the same caliber), water purification devices, barter items, and seeds for a garden. It matters little with out the means to defend one’s family, community and Country against the evil that we’ve been witnessing these days if you fail to see the forrest beyond the trees.
Good luck. Semper Fi.

a) Similar to the marxist Democrats, the socialist Republicans have never shut down a significant program or seriously defunded any federal agency. In fact they have created quite a few!!

b) the socialist Republicans will not shut down the Government…they tried that once…didn’t work out too well for them.

c) in any showdown, the weak-kneed will fold…the weak-kneed has always been the socialist Republicans…

Just think, with millions of life-long working Americans who have lost their jobs and many lost their homes, we still provide free housing to those who don’t work and never have worked.

Will this change? Not by the socialist Republicans, not in a million years….

Divided government won’t mean Obama can be stopped, he may even become more effective (as if that’s possible given how he has totally commanded the scene aided by Pelosi and Reid and flung socialist Republicans around like a dog with a rag doll).

Socialist Republicans are for welfare, free housing to those that don’t work, free food, bailouts to everyone no different in reality from Obama except Obama is a bit more honest in displaying his marxist desires. And if you are thinking not all Republicans are socialists you are absolutely dead wrong. Ron Paul will fold in office as have all the others. And If he doesn’t play to get along he will be marginalized by the socialist Republicans.

Finally, all socialist Republicans except one (Brown) voted to seat an usuper to the Office of the President in contravention of the Constitution. Like the traitor generals, they will not reverse the decline in America fed by ever new generations of slackers.

@Greg:

Experts: Prez Directive Nothing New

National Security Presidential Directive 51 or Homeland Security Presidential Directive 20 is posted here. Have a look.

Presidential directives outlining how the executive branch will remain intact in the event of an emergency have been around since the Cold War. The directive posted this month is the first to be made public, to the best of German’s recollection. (A description of Clinton’s continuity directive is available here.) German called the release a positive sign, but said he urges the release of all previous directives so we can get a real sense of what has changed.

The concept of continuity of government applies to all branches of government. Christopher Kelleye, a presidency expert and political science professor at Miami University Ohio told me in an email that he didn’t see any new powers listed in the directive, but wondered why Congress hasn’t done the same thing.

http://tpmmuckraker.talkingpointsmemo.com/archives/003310.php

This replaced President Clinton’s directive “Enduring Constitutional Government and Continuity of Government Operations” signed October 21, 1998.

@Greg,

You know at the time when President Bush was instituting Homeland Security, I was nervous about that. I was nervous about the cost. I couldn’t understand why many of those functions couldn’t be incorporated in the FBI (internal matters), Customs (Airport Security), DEA (Drug Enforcement and Border patrol). I could not see why they had to create a new department. That should go. They would have been able to expand thier functions with liason officers (additional employees will be needed, but far less than the that which would be required from an entire new agency). As a matter of fact, NSA could have covered it all. So I agreed with you. I didn’t think that Homeland Security was needed. It seemed overkill. Just use what you currently have. That was one thing that disappointed me about Bush.

However I am realistic. There is no such thing as a perfect candidate or one that fits what I believe. I think that the reason that Obama scares me so much is that he is surrounded by people that don’t like America very much or believe in her core principles, which are life, liberty, and the pursuit of happiness. And the people he has appointed to key places like Secretary of State, like Hillary Clinton, for example are progressives. I believe in fundamentally what this country stands for and the separation of the powers. I think that is crucial.

@Tammy:

Tammy, this is about a directive, it’s like a presidential order/executive order, not the Homeland Security agency… that has to be voted on and then funded through Congress. Homeland Security a massive outfit that President Bush at first resisted, I’m remembering it as one of Senator Lieberman’s big dreams. After 911 Bush relented under pressure, flack, etc. As it always goes, bad Bush that at first wasn’t cooperative turned into bad Bush the spender when the monstrosity had to be built, staffed and funded and yes, it’s functions are duplications of what was already being handled elsewhere.

Greg is insinuating that this directive would have empowered President Bush to be able to declare Marshall Law…..here, in the United States. He obviously didn’t know these directives have been around through several presidents, President Bush was the first to make it his directive public.

They are to ensure continuity within our government should a disaster or attack should occur here. It would have to be something extreme.

Perhaps Obama will have one written in the near future, seems to enjoy putting that big O on everything, he better get cracking, 2012 will be here before we know. 😉

Thanks for the clarifications Missy. 🙂

>>Many States have a Balanced Budget Amendment in their Constitutions.
Should the Congress enact one to keep unwarranted spending in check?>>

I’d settle for requiring that Governmental accounting practices be the same as those required for business.

A balanced budget simply means that your assets = your liabilities. Balancing the budget doesn’t mean you can’t have any debt – and that’s the change we need … that Congress can’t spend more than it takes in. Or that it took in last year…unless there’s a war or other emergency that would then require a 2/3 vote.

, #19:

I was alarmed by the broadened definition of a “catastrophic emergeny” that would allow a president to unilaterally envoke NSPD-51/HSPD-20 and assume a range of powers vastly exceeding those spelled out in the Constitution. Note how the words “any” and “or” are used in the directive:

(b) “Catastrophic Emergency” means any incident, regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the U.S. population, infrastructure, environment, economy, or government functions;

http://www.fas.org/irp/offdocs/nspd/nspd-51.htm

A president, for example, could theoretically evoke this in response to an economic situation. The scope of application seems very different here from earlier directives.

I would have felt easier about the whole thing, had non-public provisions of the directive not been considered so secret by the White House that they refused to allow even the head of the U.S. House Committee on Homeland Security to review them.

I’ll leave it at that. I’m getting increasingly off topic.

Why Obama will be re-elected:

1. GOP will win the House and maybe the Senate.

Unintended consequence:

No more Pelosi/Reid bogeypeople to kick around

2. The recession will be a fading memory. Things will have already begun to turn, obviously, by January 2011. It will be hard for the GOP to claim that they fixed things over Obama’s dead body. The Dems will get their message together, i.e. the fact that unemployment was ALREADY above 8% before the first stimulus dollar left D.C. The fact that Bush’s Treasury Secretary (Paulson) said that, absent the massive Federal intervention, unemployment would have gone above 25%. etc.

3. The GOP will hold hearings. The GOP loves to hold hearings, even more than the Democrats. This will harken back to Whitewater, which will help Obama channel his inner Clinton.

4. No, they won’t be able to derail, much less repeal Obamacare. Only weapon is holding back funding, but doing this will produce California-style budgetary gridlock. Won’t win the GOP any points.

5. For the rest, read Mata’s blogpost (above).

The one guy who could plausibly beat Obama would be General Petraeus. I think he may, in fact, have been a Republican, but his current views are a bit murky. Don’t count, however, on Princeton PhDs, even if they happen to be generals.

– Larry Weisenthal/Huntington Beach

@Greg:

I would have felt easier about the whole thing, had non-public provisions of the directive not been considered so secret by the White House that they refused to allow even the head of the U.S. House Committee on Homeland Security to review them.

Are you forgetting this?

, but said he urges the release of all previous directives so we can get a real sense of what has changed.

Evidently the other presidents considered them so secret they didn’t post anything about them….at all. Of course there were non-public provisions and due to the comfortable relationships some in the House and their aides had with the NYTimes it was most likely necessary to keep some of it under wraps. You do realize the democrats were in power when Bush did this, yeah, go ahead and trust them. 🙄

There is an enemy out there that would probably like to know who is going where in the midst of a catastrophe. Again, this is nothing new and according to one of the “experts” mentioned in the “very conservative site” Talking Points Memo/Muckraker:

Christopher Kelleye, a presidency expert and political science professor at Miami University Ohio told me in an email that he didn’t see any new powers listed in the directive,

Same ‘O, same ‘O, cept this time it was Bush. 🙄

You jumped the gun on this one Greggie, kind of reminds me of that birther crap.

@openid.aol.com/runnswim:

For you Larry:

@ Missy, #26:

“Same ‘O, same ‘O, cept this time it was Bush.”

If you’re comfortable with the thought that a president can unilaterally declare a “catastrophic emergency” under terms so broadly defined, and essentially take control of the government to a degree exceeding what is spelled out under the Constitution, I suppose there’s no need to worry that an important checks and balances mechanism–the authority of a designated Congressional oversight committee–has been evaded to begin with. Bear in mind that to whatever degree the Bush White House may have extended Executive power, those extended powers now belong to Barrack Obama, and will also belong to his unknown successors.

It seems to me that republicans won’t take the issue seriously because taking it seriously implies criticism of the Bush administration; democrats won’t dig into it at this point because their guy is now in the White House.

I don’t find Dr. Kelley’s e mail comment especially reassuring, since he’s commenting on something that he hasn’t read either.

@Greg:

I bet you avoid heliports like the plague. Clinton’s directive was in effect all through 911 Bush didn’t overthrow the government. Also we do have checks and balances and doubt that this country would face a catastrophe that would not allow the other branches of government to function.

Cripes, even Honduras had the necessary tools to thwart a dictator. But, oh wait, it is Obama in office now:

http://www.examiner.com/scotus-in-washington-dc/corrupt-bullying-nicaraguan-ruler-emboldened-by-obama-demand-that-honduras-reinstate-bullying-ruler

Watch out! 8)

MATA: wow, you are pilling them,one best over another best,and another best,so on so on.
we sure need you around, to put the ARROGANTS LIBTARDS exactly where they belong.
bye

openid aol com./runwin: hi, YOUR message look like a WiSH, only fear
CAN one have to bring that kind of statement. good day.

GREG: hi, there is the argument that OBAMA has given so much power to his unions organization, that now are acting over his head, and scaring the wit of him now,
enough to give him the desire to crush their power by using this law in effect,
IT seems obvious that when you make a deal with bullies,there is no way to get out of it,
EVEN if you are one of them,

@Mata (#28).

We’ve been arguing for the past year whether, in fact, Obama has presided over the executive branch as a “moderate.”

You have to start with the fact that he did run on a specific platform, and made specific campaign promises, among those being withdrawal from Iraq, closing of Gitmo, ending of the more egregious “enhanced interrogation” techniques, universal health care, opposition to blanket extension of Bush tax cuts, financial reform, reduction of carbon emissions, education reform, and so on.

Now, with respect to the war on terrorism-related issues, he’s been much closer to the policies of the Bush administration than he has been to the positions of Pelosi and, I dare say, the majority of registered Democrats. The war on terrorism was the number one issue of the elections of 2002, 2004, and 2006; so Obama’s “moderate” positions regarding national defense and the war on terrorism is actually a BFD.

What does the GOP gripe about, Obama war-on-terrorism-wise? That he “dithered” on formulating his Afghanistan policy. That he ended waterboarding. That he gave a (very) soft deadline for the beginning of the American military drawdown in Afghanistan. The “dithering” was, in fact, praised by most. He had been Commander-in-Chief only 10 months; the Afghanistan decision was of enormous importance. He took the necessary time to get all the information and all the advice to make the best decision he could. In the immortal words of Ross Perot (circa 1992 Presidential campaign), he measured twice and cut once. As far as waterboarding, he followed the advice of his generals and John McCain and not the advice of Dick Cheney. As far as the soft date for withdrawal, it’s been argued both ways, just as it was for Iraq. If the idea is that the enemy will just lay low until we leave and then storm back, well, that’s a good thing. It gave Iraq the time to consolidate their own resources and control. It gave Iraq an incentive to solve their internal problems and do the things required to get the job done, while the “softness” of the deadline gave the US wiggle room. Same thing for Afghanistan. You are entitled to remain critical, if you choose, but you simply can’t deny the central point that Obama’s national defense/war on terrorism policy has been moderate to right.

Oh, yeah, there’s the issue of the Czech anti-missile missiles. We lost those, but we gained Russia as a much more cooperative ally in the war on terror. I’d call it a good trade.

Health care? I wanted Medicare. Instead, I got Romneycare. Health care was the number one plank in his campaign platform. You expected him to abandon it? He didn’t abandon it, but he greatly moderated it. It also wasn’t his idea, I’m sure, to deny federal funding for abortion. This was chiseled in stone in the (more liberal) House version of the health care bill. It would have been chiseled in stone in the final version, as well, save for the ironic fact of Scott Brown’s victory in Massachusetts, which made it impossible to have the House version prevail in reconciliation. The only way to get it done was to pass the Senate version, with a very strongly worded Executive Order, which will, I’m sure, be observed until there’s a clear consensus in the country that it should be modified. But, again, the important point is that Obama was obviously willing to go along with the chiseled in stone House version.

By the way, had a single Republican senator agreed to sign on to health care, with the proviso that it contain meaningful malpractice tort reform, I’m sure that this would have happened, also. But the final bill was, in fact, as moderate as it could be, given the campaign promise to take a big step toward universal coverage.

The bank bailouts? Continuation of Bush policies. GM/Chrysler rescues? Ditto. And, don’t look now, but history is going to label these a big success. I give the biggest credit to Dick Cheney. He’s the one who told Bush that, if he let GM fail, he’d go down in history as Calvin Coolidge.

Financial reform? A moderate bill.

The stimulus? Paul Krugman wanted $1.5 trillion. The GOP offered $500 billion. Obama ended up spending $730 billion.

Cap and trade? He was working with Lindsay Graham and others. Didn’t happen, for political reasons. Those being that the GOP saw a winning strategy in just making the economy issue number 1 and blaming this on the Democrats and in distorting the health care bill.

Let’s look at health care:

http://www.healthkey.com/health/sns-health-healthcare-costs,0,5858306.story

“A new survey shows an average worker with a family plan pays nearly $4,000 a year, up 14% from 2009. Meanwhile, the average employer contribution to a family plan hasn’t increased at all.”

Meanwhile, for those of us who must purchase our own health insurance (e.g. self-employed small business owners), we are being hit by rate hikes of up to 20% (Blue Cross) and 29% (Blue Shield). Can you imagine the outcry if Medicare taxes were increased by 14% to 29% in a single year? This is why private insurance companies have better balance sheets than Medicare. The former can increase premiums, virtually at will. Blue Cross shocked California regulators with an opening offer of a 39% increase, then graciously settled for increases averaging 14% and going up to 20%.

There is no purely private sector answer to the challenge of exploding health care costs. I remain a strong supporter of Obamacare. However, after all the distorted, intellectually-dishonest accusations against it, I’d frankly welcome the GOP finally deep sixing it and then taking full responsibility for the fiasco to follow, when the vacuous inadequacy of their Plan B of “incremental” changes quickly became obvious to all.

Adam Smith economics doesn’t work for health care, because the “sellers” (doctors) and health insurance companies make most of the purchase decisions for the “buyers” (patients). The amount of medical care sold is proportional to supply, much more than it is proportional to the ostensible demand. Health care is not governed by the competing interests which make other sectors of the capitalist economy so efficient.

Anyway, as I said, we’ve been over and over this stuff.

Let me close by recalling the immortal words of Bill Clinton:

It depends on what the meaning of “moderate” is.

– Larry Weisenthal/Huntington Beach, CA

I am not in favor of a Constitutional Amendment calling for a balanced budget, for as Mata points out, it is the government’s license to raise taxes.

Instead I would like to see a Constitutional Amendment that calls for spending to be fixed at a certain percentage of GDP.

The Big Boo: hi, GEE you are so negative with the REPUBLICANS, dont you know that the DEMOCRAT have a majority to do anything in there with EXECUTIVE ORDERS under the pile
OF other bills, THATS what they where doing in the back of BUSH because of their majority,
SO dont blame anyone else but the GOVERNMENT in present place.

I love Larry’s predictions:

Nov 2008

Here’s what I predict. He’s basically going to toss the hard core liberal “base” under the bus. Where else are they going to go? Are they going to vote for Sarah Palin? And he’s going to move as far as he can to the Right to marginalize the GOP and possibly to destroy the GOP, which will lose the economic conservatives to Obama and which will lose the strong national defense segment to Obama and which will be left only with the Evangelicals and racists and anti-immigrants as a dependable base.

April 2009:

You really do run the risk of sending the GOP into the political wilderness for 40 years, which is what happened with FDR. I think that this is precisely where it’s headed. Just a prediction.

Sept 2009

Here’s my prediction. Health Care will get passed. The American people will love it, as they loved Medicare and as they are loving the equally controversial Prescription Drug Law passed by Bush. Just like it is in every country in the world in which a government health care plan got enacted into law. Wildly popular, even in places like Canada and Britain, who have two of the suckiest health care programs in the Western World, in contradistinction to the vastly superior system in France, which is where I’m very sure Obamacare is headed. And Obama will get the credit for standing up to withering criticism, from both Right and Left, to get it done. The more the criticism heaped on him now, the more a profile in political courage and political competence he will be come to be viewed. Judge the greatness of a leader by the strength of his enemies. It’s always been that way. It’s easy to get things done when everyone agrees with you and when your poll numbers are in the 60s. It’s vastly more difficult when many vocal people don’t agree with you and when your poll numbers are tanking. I look forward and I can easily see a political legend, in the making, right before our very eyes.

Oct 2009 –

Prediction: I see the economy coming back strong over the next 3 quarters. I also see health care being passed. I also see the election prospects for 2010 being quite a bit different from what is being currently forecast

I like my own predictions made on Dec 31, 2008:

In no particular order:

1. With the election of Obama and more Democrats its near certain more and more industries will be socialized with bailouts.

2. The far left will get their panties twisted over Obama and the fact that he is forced to govern with at least a bit of common sense on a few things.

3. The MSM will provide cover for Obama over the same things they raked Bush over the coals for.

4. The Democrats will raise taxes, forcing the rich, who pay the majority of taxes, to downsize the job market. Unemployment will rise with the raising of taxes.

Or Aye’s in Feb 2009:

Yes, Mike, I think that enthusiasm is definitely returning.

The Dims will overreach on everything they try to do. They always do.

The American People are going to recoil from them. It’s already begun.

Santelli was just a very public salvo, a ’shot cross the bow’ if you will, of an undercurrent which has already begun to shift.

The American People are tired of this foolishness. They are tired of working hard to support themselves and their families and to provide for their futures only to have Nanny Gov’t come in and take it from them so that the leeches and non-producers of society can suck some more out of the gov’t teat.

The tide is turning.

As Rush said on Thursday, there’s a “whiff of revolution” in the air.

This Revolution will be bloodless, but no less transformational.

Samuel Adams said:

“It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in the people’s minds.”

That quote is now my mantra.

2010 is right around the corner.

. Excellent post (#37), but, you know what, I’m still sticking with my predictions, save for the outcome of the mid-terms (2010).

Obama and the Dems have allowed the GOP to define them (Obama and the Dems). Objectively speaking, Obama has tried to do pretty much what I said he would, and he’s succeeded pretty well. Where he hasn’t succeeded is in communicating what he’s done.

Americans will like health care, once it kicks in, just like the people of MA like their Romneycare, which is virtually the same thing as Obamacare. It won’t kick in for another 4 years. By that time, it’s going to be apparent that most people won’t have the same employer paid health insurance that they had in 2008, and it won’t the fault of Obamacare, it will be the fault of a failed private health care system which is collapsing under its own weight, because, as explained, it doesn’t respond to the market forces which drive other segments of the economy. Americans don’t like Obamacare now, because they don’t understand it and they don’t understand — yet — precisely what’s happening in health care, with respect to cost and cost-shifting from employers to employees. The ones who are beginning to see it are people (like small business owners) who are being hit with massive rate increases and restrictions in choice (rationing, if you will). I just dare the GOP to kill Obamacare and then to take ownership of health care. It would be very bad for the country, but it would serve the purpose of educating voters, and maybe that would provide some long term benefits.

As far as the economic recovery, it’s pretty much on the track I predicted. Maybe behind a quarter. What’s lagged is employment. Businesses and upper income people are sitting on hordes of cash, which is why tax cuts won’t do a thing to bring back jobs. Truth be told, many of the old jobs are never coming back and many of my fellow baby boomers are going to have to downsize their retirements and work at lower level jobs than they had before the meltdown. Of course, Obama and the Dems will take the hit, but I can’t believe that any serious person could believe for a minute that things wouldn’t have been worse without the measures which were taken — by both Bush/Paulson and Obama/Geithner.

As far as taxes go, the best succinct discussion I’ve heard on this was on today’s PBS Newshour, with Shields and Brooks:

MARK SHIELDS: And I just wanted to point this out, that Bill Clinton came into office on January 20, 1993. He left on January 20, 2001. He raised taxes to a spectacularly high level, by Republican standards, to 39.6 percent. There were, in Bill Clinton’s eight years, 21,872,000 jobs created in the private sector.

George Bush came in, and, following the lead of Mr. Taylor and others, cut taxes to their lowest, to 33 percent. During George Bush’s eight years in the White House, from January 20, 2001, to 2009, the country lost 672,000 jobs.

JIM LEHRER: And you think there is a direct connection?

MARK SHIELDS: Well, I mean, there obviously is, because David told us last week that, if we raised it, it was going to hurt the economy.

DAVID BROOKS: Wait. No.

(LAUGHTER)

MARK SHIELDS: But I would just like to say, the last eight years, we have — they have had their 33 percent tax cut for the last eight years. What did they do with it? How much longer do we have to indulge these millionaires and billionaires before they finally give some crumbs off of their china plates to the rest of us?

DAVID BROOKS: Mark has been losing a lot of sleep on this one.

(LAUGHTER)

DAVID BROOKS: I guess — I guess I — on substance, I sort of agree with Mark. The top tax rate fell from 39 to 36.

JIM LEHRER: On substance, you sort of agree with him.

DAVID BROOKS: OK. This is as close as I can go.

JIM LEHRER: OK.

DAVID BROOKS: Sorry.

JIM LEHRER: All right. OK. OK.

(LAUGHTER)

DAVID BROOKS: And it dropped from 39 to 36. Did that improve business and would it hurt business on a raw sense if we jumped it up from 36 to 39? Frankly, I doubt it. I buy the evidence of the 1990s. I think, if you take marginal tax rates up to 50, then you really do have an effect on incentives. But we’re not close to there.

I’d also add that we came out of World War II with a debt/GDP ratio well above 1.0 and a marginal tax rate of 90% — yet the 50s were boom years and the Debt/GDP ratio got paid down sharply. Every time the GOP cuts taxes, the debt/GDP goes up. Every time the Dems raise taxes, the debt/GDP comes down.

The entire GOP economic policy is based around borrowing money to cut taxes, with the result that the debt/GDP goes up. The way to control spending is to raise taxes to pay for what we are spending. If there is one macroeconomic principle which has been proven beyond the shadow of a doubt, it’s that tax cuts (below a 50% marginal rate) are bad for the long term economy, because they are the number one cause of debt. Let’s raise our taxes, pay for our own government, in real time, and then we’ll finally be forced to decide just how much government we want to be paying for.

But it’s easy to convince voters to accept tax cuts. That takes no political guts at all. We’ll cut your taxes and declare war at the same time. No worries. It all just goes on our Chinese Platinum Visa card, to be paid for by people not yet born, long after you are dead.

Why has the debt/GDP gone up so much in the past 18 months? It’s because the economy crashed and tax revenues crashed and we needed to bail out Wall Street to prevent the next Great Depression. The way to bring the debt down is to raise taxes back to where they were under Reagan.

Anyway, pat of the back to Curt for the great gotcha, but it ain’t over until it’s over and it ain’t gonna be over for a bit longer. At this point in Reagan’s first term, unemployment was double digits and his approval was in the range of Obama’s. I look forward to revisiting my predictions, down the road.

– Larry Weisenthal/Huntington Beach, CA

@runnswim/Larry:

Americans don’t like Obamacare now, because they don’t understand it…

Okay, I won’t even bother with trying to get my head around the fact that us poor, dumb Americans will like Obamacare once we FINALLY understand it. I choose instead to let that comment speak for itself.

You also said:

I’d also add that we came out of World War II with a debt/GDP ratio well above 1.0 and a marginal tax rate of 90% — yet the 50s were boom years and the Debt/GDP ratio got paid down sharply.

Um, JFK cut the top marginal tax rate – which was 91% BTW. In those “boom” years of the ’50s, the GDP had grown by only an average of 2.2% and in Ike’s last year in office, the GDP declined by 1% and unemployment had risen to 7% from under 3%.

Under JFK’s tax cuts, the economy in the ’60s prospered. GDP expanded by an astounding 5.5%, inflation held steady and unemployment began to shrink.

As for your prediction about the GOP vs. the Dems on taxes:

Every time the GOP cuts taxes, the debt/GDP goes up. Every time the Dems raise taxes, the debt/GDP comes down.

Well, I will let Micheal Eden do the talking on this one.

In 1921, President Harding asked the sixty-five-year-old [Andrew] Mellon to be secretary of the treasury; the national debt [resulting from WWI] had surpassed $20 billion and unemployment had reached 11.7 percent, one of the highest rates in U.S. history. Harding invited Mellon to tinker with tax rates to encourage investment without incurring more debt. Mellon studied the problem carefully; his solution was what is today called “supply side economics,” the idea of cutting taxes to stimulate investment. High income tax rates, Mellon argued, “inevitably put pressure upon the taxpayer to withdraw this capital from productive business and invest it in tax-exempt securities. . . . The result is that the sources of taxation are drying up, wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people” (page 128).

Mellon wrote, “It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower taxes.” And he compared the government setting tax rates on incomes to a businessman setting prices on products: “If a price is fixed too high, sales drop off and with them profits.”

And what happened?

“As secretary of the treasury, Mellon promoted, and Harding and Coolidge backed, a plan that eventually cut taxes on large incomes from 73 to 24 percent and on smaller incomes from 4 to 1/2 of 1 percent. These tax cuts helped produce an outpouring of economic development – from air conditioning to refrigerators to zippers, Scotch tape to radios and talking movies. Investors took more risks when they were allowed to keep more of their gains. President Coolidge, during his six years in office, averaged only 3.3 percent unemployment and 1 percent inflation – the lowest misery index of any president in the twentieth century.

Furthermore, Mellon was also vindicated in his astonishing predictions that cutting taxes across the board would generate more revenue. In the early 1920s, when the highest tax rate was 73 percent, the total income tax revenue to the U.S. government was a little over $700 million. In 1928 and 1929, when the top tax rate was slashed to 25 and 24 percent, the total revenue topped the $1 billion mark. Also remarkable, as Table 3 indicates, is that the burden of paying these taxes fell increasingly upon the wealthy”

But what about FDR?? His New Deal saved America, right?

Wrong.

Under FDR tax revenues nearly evaporated, going from $1.096 billion in 1929 to $527 million in 1935. And he increased the tax burden on the poor with his big excise taxes which went from $540 million in 1929 to $1.364 billion in 1935.

But what about Reagan?

Eden says that under Reagan:

The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.”

So Ronald Reagan a) collected more total revenue, b) collected more revenue from the rich, while c) reducing revenue collected by the bottom half of taxpayers, and d) generated an economic powerhouse that lasted – with only minor hiccups – for nearly three decades.

So it would appear Larry that you are wrong about your statement on raising taxes and increasing the GDP. Every Conservative politician that has cut taxes has increased the revenues that flow into the government. You talk about the American people not understanding Obamacare, but it is you liberals who do not understand that when Uncle Sam lets you keep more of your money, you tend to put it back into the economy, which in turn raises revenues back TO Uncle Sam.

It is simply a matter of empirical fact that tax cuts create increased revenue, and that those [Democrats] who have refused to pay attention to that fact have ended up reducing government revenues even as they increased the burdens on the poorest whom they falsely claim to help.
Source

It is a fascinating article, you really should take the time to read it.

@runnswim/Larry:

Sorry, but I just couldn’t help but make a comment about something else you said:

But it’s easy to convince voters to accept tax cuts. That takes no political guts at all. We’ll cut your taxes and declare war at the same time. No worries.

That sounds an awful lot like when Obama said:

“If you’ve got health insurance through your employer, you can keep your health insurance, keep your choice of doctor, keep your plan,” Mr. Obama said in his Oct. 15, 2008 debate against McCain. “The only thing we’re going to try to do is lower costs so that those cost savings are passed onto you. And we estimate we can cut the average family’s premium by about $2,500 per year.”

But this piece from Real Clear Politics really sets the record straight.

The ink was barely dry on President Obama’s signature before the RAND Corporation released a report concluding that not only would the hard-won health care package fail to curb premium increases, but the bill would drive premiums up as much as 17 percent for young people.

This should not have been a surprise: the Congressional Budget Office had already warned that the bill would do almost nothing to reduce future premium hikes.

Source

Besides the price tags of BOTH the Iraq and the Afghanistan Wars barely equals the trillion plus stimulus package, but I don’t hear you saying anything about it’s cost.

With respect to health care insurance premiums and the Congressional Budget Office:

Peter Suderman recently tried to make the same points in an op-ed in Reason Magazine:

To paraphrase your words, this piece from the Washington Post really sets the record straight:

Or look at No. 7. Suderman calls out the administration for saying the bill “will bring down the price of insurance.” In reality, he says, “CBO predicted that the law will cause average health insurance premium prices to rise by 10-13 percent in the individual market.” That’s not right, either.

We’ll start at the beginning: CBO reported that costs in the employer markets, which serve 150 million, would go down slightly. So already, the bill brings down the price of insurance for most people. But Suderman, despite the expansive headline, is only talking about the individual market. He doesn’t even mention the employer market findings.

The individual market serves 30 million people. And what the CBO found there is that the price of a given insurance plan would go down, but because of the subsidies, the price of the insurance plans that people will choose to buy will go up. Think of it this way: If I put everything in my TV store on sale, and you then walk in and win $1,000 for being my 1,000th customer, you might buy a more expensive TV than you would have otherwise. But the TVs in my store will still be cheaper than they were before.

And, yes, Americans don’t understand the economics of health care and where we were headed, absent Obamacare, and where we’ll end up, should the GOP actually be dumb enough to repeal it and therefore take ownership of the issue.

With respect to that oft-repeated claim that tax cuts increase tax revenues, the main reason tax revenues increase is that the GDP increases. Whenever the GDP doesn’t increase, we are in a recession and tax revenues fall. When we get out of a recession, GDP increases, and tax revenues increase. Most of the time (GOP or Dem) GDP is growing. In most countries of the world, most of the time, GDP is growing. Whenever GDP grows, tax receipts grow.

But raw tax receipts are not the relevant metric. What’s relevant is the ratio of debt to GDP. If I have personal debts of $50,000 and a yearly income of $100,000, then I’m in pretty good shape. If my income rises to $110,000 but my debt load rises to $100,000, then I’m not in such good shape. If my debt load rises to $200,000 but my income rises to $500,000, I’m back to being in good shape, And so on. So it’s not gross debt and it’s not gross revenue, it’s the ratio of debt to revenue.

Reaganomics was a disaster for the country. If tax cuts really stimulated economic growth sufficient to overcome the debt generated by the tax cuts, then ratio of debt to GDP would fall.

But many a beautiful theory is ruined by an ugly fact:

President(s): Debt as a percentage of GDP (beginning of term -> end of term):

http://zfacts.com/p/318.html

Truman 120% -> 72%
Eisenhower 72% -> 55%
Kennedy-Johnson 55% -> 38%
Nixon-Ford 38% -> 35%
Carter 35% -> 32%
Reagan-GHWBush 32% -> 67%
Clinton 67% -> 57% (n.b. raised taxes, created 22,000,000 private sector jobs)
GWBush 57% -> 69% (n.b. cut taxes, lost 700,000 private sector jobs)

Now, let’s look at the Truman and Eisenhower years and that 90% marginal tax rate. Sure, a 90% rate is a heavy load to pull, but look what it did: It reduced debt to GDP from a staggering 120% down to only 55%, in just 15 years. You want to know why the “Greatest” generation really was the greatest? Not only did they win the war, but they paid off the debt we incurred to fight the war. Compare and contrast that with today’s America. We whine that we’ll have no incentive to work if our tax rates go up above 35%! That we’ll have no incentive to invest, if capital gains tax rates go up above 15%!

No one is proposing a return to the 90% marginal rate. Obama wants to bring back the marginal rate on the top 3% back to where it was under Reagan. And this makes him a socialist! And, yes, I do blame him for not raising the rates on ALL Americans back to where they were under Reagan. I blame him for not having the guts to tell Americans that this isn’t just a rich person’s responsibility, it’s the responsibility of all Americans to pay for their government.

– Larry Weisenthal/Huntington Beach, CA

The “Greatest Generation” coming out of that depression had incentive to work, as well as work ethics, intact, one earner families and no global competition. They were frugal, bartered with local business and their health care providers……tax free, they also shared with the unfortunate among them personally and through the church they attended. Those health care providers also worked with them…..no immediate demands for payment or interest tacked onto the bill. Mamas were also seamstresses, gardened, canned and no fast foods.

The Reagan Revolution still had the benefit of mines, oil fields, timber that, due to later environmental policies, have been drastically cut back, jobs…gone, gone to countries that took advantage of those policies. Manufacturing has since moved on due to tax policy and regulation….more jobs….gone.

Tax rates are just a part of the overall problems we face, raising them now will not have the same “positive” results especially when our global competition is lowering theirs.

:

You say:

The Reagan Revolution still had the benefit of mines, oil fields, timber that, due to later environmental policies, have been drastically cut back, jobs…gone, gone to countries that took advantage of those policies. Manufacturing has since moved on due to tax policy and regulation….more jobs….gone.

Manufacturing hasn’t been outsourced because of tax policy, regulation, and “loss” of the “benefit” of mines, oil fields, timber, etc. It’s gone because our labor costs are high. China has a personal income tax rate of 45% and, on top of this, a national sales tax of 17%. All of our competitors have higher overall tax rates. http://www.taxrates.cc/ Our corporate tax rates are a bit on the high side, but this isn’t the reason for outsourcing. A bigger competitive burden than tax rate differentials is the cost corporate America must pay for health care. Auto companies pay more for employee health care than they do for steel. The fact that Americans get health care through their employers creates free market distortions, in that people are tethered to their jobs (to retain health care benefits), which discourages entrepreneurship (leaving the corporate womb) and discourages employee mobility, to other jobs and to other locations.

I do want to agree with you, with respect to one thing you said, about health care providers in days of yore:

Those health care providers also worked with them…..no immediate demands for payment or interest tacked onto the bill.

Today’s doctors are, in too many cases, in medicine for the wrong reasons. All around the world, medicine is the same great job, and there will never be a shortage of highly qualified young people who want to do this work. Medical school admissions have never been more competitive. The idea that reducing doctors’ incomes will reduce the number of good doctors is absolute rubbish.

Here’s a little video I took at the University of Colorado’s “White Coat Ceremony” for new medical students, one month ago.

The med school dean asks the incoming class: “how many of you were advised (by doctors in your community) not to be doing this?” About two thirds raised their hands. Yet the students keep coming. Later on, the dean notes that the health care system is broken, and it will be up to these young people to fix it. They are going into med school with the expectation not of a life of great wealth, but with the challenge of taking care of sick people and remaking a health care system that the incumbent generation has broken, in large measure owing to greed. As I wrote before, greed is good in ordinary capitalism, but health care doesn’t obey capitalist marketplace principles, because the sellers (doctors) make the purchase decisions on behalf of the buyers (patients). Later generations of US doctors have exploited this unbalanced marketplace to have finally consumed the golden goose. Fortunately, there’s a new generation of young people going into medicine with more realistic expectations, greater idealism, and medical values more in line with the professional tradition.

– Larry Weisenthal/Huntington Beach, CA

– Very well said, those are salient points that show not just facts and figures help explain why things happen the way they do.

@runswimm/Larry:

China is a communist country, so comparing their dictatorship form of quasi-capitalism to ours is apples to oranges.

Those jobs (timber, oil and mining) went overseas because of overbearing regulation by the EPA and other Enviro Statists.

You said:

With respect to that oft-repeated claim that tax cuts increase tax revenues, the main reason tax revenues increase is that the GDP increases. Whenever the GDP doesn’t increase, we are in a recession and tax revenues fall. When we get out of a recession, GDP increases, and tax revenues increase.

This is a circular argument that is true on the face of it, but you neglect to mention what stimulates economic growth (GDP), and that is tax cuts. When the small business owners of this country get to keep more of their own money, they spend it, they invest it, they hire new employees, they expand their businesses. This is what economic growth is.

You also neglect to mention that Reagan’s Presidency resulted in the longest period of peacetime sustained growth in U.S. history.

Many critics of reducing taxes claim that the Reagan tax cuts drained the U.S. Treasury. The reality is that federal revenues increased significantly between 1980 and 1990:

Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990. In constant inflation-adjusted dollars, this was a 28 percent increase in revenue.3

As a percentage of the gross domestic product (GDP), federal revenues declined only slightly from 18.9 percent in 1980 to 18 percent in 1990.4

Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990.5 In inflation-adjusted dollars, this amounts to a 25 percent increase.

Source

His economic policies created between 16 and 22 million new jobs, going from over 10% unemployment shortly after he took office (thanks in large part to Democrat Jimmy Carter) to half that in 1989.

Federal tax revenue increased an astounding 106% under Reagan, so with all this evidence it is hard to fathom why anyone would think that raising taxes helps grow the economy. Each time a U.S. President has cut taxes, the economy has thrived.

Was it all roses and sunshine under Reagan? No, of course not, but his economic policies set this country on a course that made America stronger not only domestically, but on the world stage as well.

BTW, raising taxes isn’t what makes Obama a socialist. It is his penchant for redistributing wealth. As he said on the campaign trail, “I think when you spread the wealth around it’s good for everybody.” He has demonstrated this time and again, just look at what he did to the secured creditors of GM and Chrysler. They got screwed and the UAW and the Obama admin took over both car companies.

No, that’s not socialism…

Oh, and you also left Obama out of that GDP chart you provided. His GDP to Debt ratio is a whopping 94%. If I were a supporter of him, I would have been tempted to leave that out, too.

There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and they are growing faster as well.”

http://www.huppi.com/kangaroo/L-taxgrowth.htm

China is a communist country, so comparing their dictatorship form of quasi-capitalism to ours is apples to oranges.

Pick any of our competitor countries in the link I’ve provided; they’ve all got higher tax rates than we’ve got. Check Germany, Japan, South Korea, Singapore. Whatever. And China’s economy is not a communist economy, in the former sense of the word; it’s a capitalist economy, regulated by an authoritarian government. Don’t confuse authoritarian rule with communist economics.

Those jobs (timber, oil and mining) went overseas because of overbearing regulation by the EPA and other Enviro Statists.

Good grief, many jobs can be outsourced, but not harvesting of natural resources. Some of us believe in taking everything possible out of the ground and using it within our lifetimes. Others of us believe in environmental stewardship, either because of the teachings of our church or because of our own values. That’s why we’ve got two different parties.

I said:

With respect to that oft-repeated claim that tax cuts increase tax revenues, the main reason tax revenues increase is that the GDP increases. Whenever the GDP doesn’t increase, we are in a recession and tax revenues fall. When we get out of a recession, GDP increases, and tax revenues increase.

You respond:

This is a circular argument that is true on the face of it, but you neglect to mention that what stimulates economic growth (GDP), and that is tax cuts. When the small business owners of this country get to keep more of their own money, they spend it, they invest it, they hire new employees, they expand their businesses. This is what economic growth is.

No tax cut since Kennedy has ever paid for itself. Reagan’s tax cuts cost the treasury 70 cents in lost revenue for every 30 cents they generated in economic growth. Point to a single GOP tax cut which ever came close to paying for itself. You don’t need to cut taxes to generate economic growth. Giving tax policy credit for the business cycle is like giving a rooster credit for making the sun come up. The economy has always grown, in our country and all over the world, and this growth has little to do with tax policy.

You state:

You also neglect to mention that Reagan’s Presidency resulted in the longest period of peacetime sustained growth in U.S. history.

At the expense of a doubling of debt to GDP ratio. It’s easy to live high on the hog when you are borrowing money to finance your profligate lifestyle.

With respect to job growth under Reagan, there was greater private sector job growth under Clinton, who raised taxes, after GHW Bush had also raised taxes and there was net job loss under GW Bush who cut taxes even more than Reagan. As I said, there’s no lasting relationship between economic growth and tax policy. Economic growth is based on innovation, discovery, global market forces beyond anyone’s control, consumer confidence, and many other things which can’t be readily measured — otherwise economic performance could be accurately forecast — which it can’t. That’s the business cycle.

You say:

Many critics of reducing taxes claim that the Reagan tax cuts drained the U.S. Treasury. The reality is that federal revenues increased significantly between 1980 and 1990:

Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990. In constant inflation-adjusted dollars, this was a 28 percent increase in revenue.3
As a percentage of the gross domestic product (GDP), federal revenues declined only slightly from 18.9 percent in 1980 to 18 percent in 1990.4

Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990.5 In inflation-adjusted dollars, this amounts to a 25 percent increase.
Source

His economic policies created between 16 and 22 million new jobs, going from over 10% unemployment shortly after he took office (thanks in large part to Democrat Jimmy Carter) to half that in 1989.

Federal tax revenue increased an astounding 106% under Reagan, so with all this evidence it is hard to fathom why anyone would think that raising taxes helps grow the economy. Each time a U.S. President has cut taxes, the economy has thrived
.
Was all roses and sunshine under Reagan? No, of course not, but his economic policies set this country on a course that made America stronger not only domestically, but on the world stage as well.

Firstly, don’t you understand that it’s not raw tax receipts which matter, it’s the amount of debt you are accumulating, relative to the economic growth you are achieving. If you don’t understand this, then there’s no point in continuing our conversation. Many a beautiful theory has been ruined by an ugly fact. The ugly fact being that cutting taxes always raises debt to GDP ratio. Raising taxes always reduces debt to GDP ratio. No GOP tax cut has ever come close to paying for itself. These tax cuts are, in fact, Keynesian stimuli (borrowing money to increase economic activity), but they are much less efficient stimuli than than direct, targeted spending (e.g. aid to state and local government to keep cops on the street, teachers in the classroom, maintenance workers on the job, prisoners in prisons, etc.). When you are constantly increasing debt to keep the economy going, you are engaging in the most irresponsible form of Keynesian stimuli, which should be targeted and limited in time and scope. Simply continuing to run up debt to keep the economy going is just as bad as simply printing money.

You say:

BTW, raising taxes isn’t what makes Obama a socialist. It is his penchant for redistributing wealth. As he said on the campaign trail, “I think when you spread the wealth around it’s good for everybody.” He has demonstrated this time and again, just look at what he did to the secured creditors of GM and Chrysler. They got screwed and the UAW and the Obama admin took over both car companies.

Rhetoric isn’t socialism; actions are socialism. Let me tell you something about how investments work, secured or not. I started a company, funded by venture capital. At one time I owned 4/7s of the company. After Saddam Hussein invaded Iraq, a planned IPO failed, and the company was going to go under. A bottom feeder investor came in and made the company an offer for needed capital. The founders were utterly gutted — no more so than yours truly.

There were no angel private sector investors willing to come in and rescue GM and preserve equity value for their shareholders. That’s why Cheney told Bush to poney up 20 billion to keep GM afloat; so that it wouldn’t fail on his watch. When Obama took over, his economic team provided GM with the capital it needed and the unions – OF COURSE – got themselves the best deal they could, just as all self-interested players do in these circumstances. The purpose of government intervention wasn’t to gain permanent ownership of GM and it wasn’t to bail out GMs shareholders. The purpose was to keep the company from failing and, at this juncture, it looks as if they are likely to succeed, with the result that millions of jobs were saved and with the result that the government will be able to sell off its ownership share, make the company private again, and re-capture much if not most if not all of taxpayer investment.

No, that’s not socialism…

No, that’s not socialism. Any more than bailing out Chrysler back in the days of Lee Iacocca was socialism.

Oh, and you also left Obama out of that GDP chart you provided. His GDP to Debt ratio is a whopping 94%. If I were a supporter of him, I would have been tempted to leave that out, too.

This gets the prize for the most intellectually dishonest statement of the day. Did you look at that curve? It started going straight up at the time of the financial meltdown, which happened on Bush’s watch and largely as a result of Bush fiscal policy and Fed monetary policy. Obama took over and he had two choices: First, he could have let the banks fail, let state and local governments go bankrupt, let millions of unemployed workers and their families go hungry, and let the economy go into free fall. As it is, he VERY UNWISELY tried to work with the GOP and included massive tax cuts, which are the least effective form of Keynesian stimuli, as noted earlier and as discussed by me in comments to other Flopping Aces blog posts. The GOP proposed twice as much in the way of Keynesian tax cuts (Keynesian tax cuts being tax cuts financed by borrowing, as opposed to being financed by cutting spending). The absolute difference between the size of the proposed Bush budget for 2009 and what Obama ended up spending was on the order of 1% or so. The absolute difference between the GOP proposed Keynesian stimulus and the Obama stimulus was on the order of $230 billion — not inconsequential, but in the same ball park. What I’d have done would have been to have not given the tax cuts — that would have saved the $230 billion difference and would have made both stimulus packages equal in magnitude, only the aid to state and local governments, extended unemployment benefits, and (much small in magnitude) spending for infrastructure and R&D is, by far, the most effect part of the stimulus package.

You guys scream “socialist,” and you keep defending what George HW Bush rightly labeled “voodoo economics.” It’s hysterical demonization and disingenuous distortion of objective economic facts, just as in the case of what you are trying to do with the health care debate. As I wrote before, it takes no political courage to cut taxes and pay for them by borrowing money from future generations. It takes guts to actually solve problems through shared sacrifice. I’ve already stated that Obama is 100% right to let the Bush tax cuts expire on the wealthy. I’ve also stated that he’s 100% wrong in not allowing them to expire, also, for everyone else.

The last politician I ever saw at the national level who had both guts and integrity was Walter Mondale. In the 1984 debates with Reagan, Mondale said that “both of us are going to raise your taxes, he won’t say so, I just did.” Of course, Mondale got creamed, when Reagan got Americans to believe that there was such a thing as a free lunch. Reagan didn’t tell the American people that his free lunch came at the expense of doubling the nation’s debt ratio, which, until Reagan, had been steadily coming down through the high tax Presidencies of Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter. The nation has always had a business cycle, with recessions punctuating an overall pattern of steady growth. Reagan used the Carter recession (which wasn’t caused by tax policies) as an excuse to test the theory of supply side economics. This theory has, on account of this, been duly tested and it has resoundingly failed.

– Larry Weisenthal/Huntington Beach, CA

@runswimm: You said:

And China’s economy is not a communist economy…

Yes, that is why I called it a communist, quasi-capitalist economy.

You also said:

Good grief, many jobs can be outsourced, but not harvesting of natural resources.

Really? Then tell me why oil platforms in the Gulf of Mexico have pulled up anchor and left for other countries. Because Obama put a moratorium on off shore drilling. Also, due to stiff Enviro Statist regs, the EPA is all but killing off all industries tied to our natural resources.

EPA Goes After Missouri Timber Industry

EPA Stops Largest Mountaintop Mine in Appalachia

You then said:

Reagan’s tax cuts cost the treasury 70 cents in lost revenue for every 30 cents they generated in economic growth.

Reagan had a Democratic Congress which spent $1.98 to every dollar he brought in. Do ya think THAT had something to do with it?? Nah it’s just supply side economics, right?

Wrong.

And BTW, I completely understand that “raw tax receipts” don’t matter – especially when Democratically controlled Congresses spend more than is brought in.

Tell me, what part of that don’t you understand?

You keep harping on this:

Raising taxes always reduces debt to GDP ratio.

If you take more money from the private sector, they have less to spend in the economy. Also ask any small business owner right now if they are going to be hiring. They will tell you that they are afraid to lay out any more money on new hires, expansion of business, etc.. right now because Obama is going to let the Bush tax cuts expire. When the private sector has to be afraid of how much more the government is going to take from them, they hold tight to their purse strings.

No GOP tax cut has ever come close to paying for itself.

I find it a very narrow view that a tax cut must pay for itself. First of all, it isn’t the government’s money that is being taken, it is ours. Secondly, it isn’t a zero sum game. Explain how Reagan slashed tax rates and doubled revenue if cutting taxes doesn’t pay for itself? Had the Dems in Congress not spent so much, then there might very well have been a surplus. Especially because Reagan cut domestic spending greatly, but I will admit he increased Military spending. However, it led to the collapse of the Soviet Union, so in the long run it was worth it.

I think this says it all about the Reagan years:

The economy bottomed out in the fourth quarter of 1982 under Reagan, and the economy bottomed out in the second quarter of 2009 under President Obama. As can be seen in the accompanying chart, the economy grew more than twice as fast in the first four quarters after the 1982 bottom as it has in the four quarters since the 2009 bottom. During the 1983 recovery, the unemployment rate fell two full points, while during the present recovery unemployment has barely changed. Why the difference?

Reaganomics vs. Obamanomics

Four Quarters of Reaganomics After Recession Hit Bottom

Period GDP (% Change) Jobless Rate
1st Quarter 1983 5.1 10.3%
2nd Quarter 1983 9.3 10.1%
3rd Quarter 1983 8.1 9.2%
4th Quarter 1983 8.5 8.3%

Four Quarters of Obamanomics After Bottom of Recession

Period GDP (% Change) Jobless Rate
3rd Quarter 2009 1.6 9.8
4th Quarter 2009 5.0 10.0
1st Quarter 2010 3.7 9.7
2nd Quarter 2010 2.4 9.5

Reagan’s policy was to cut individual and corporate tax rates sharply, and to restrain the growth in government spending and regulation. The Democrats, who were in control of the House, resisted and delayed the Reagan tax cuts, so they were not fully implemented until 1983. Obama had the luxury of having his party in control of both houses of Congress, so he was able to get his proposed, massive government spending increases enacted almost immediately.

When Reagan left office in January 1989, he had presided over “seven fat years,” as Bob Bartley, the now-deceased editor of The Wall Street Journal, called the Reagan era. Unemployment was half of its recession high, economic growth averaged more than 4 percent after the recession bottom in 1982, the deficit was falling and was under a very manageable 3 percent of gross domestic product, the GDP-debt ratio was falling, inflation had dropped by about two-thirds, and every American individual and company had seen very sharp reductions in their marginal tax rates — the maximum rate fell from 70 percent to only 28 percent by the time Reagan left office.
Keynesian economics, practiced during the late 1960s and 1970s, became thoroughly discredited with the stagflation of the 1970s — which, in theory, was impossible under the old model — and the subsequent Reagan supply-side boom.

As for Clinton raising taxes and spurring growth? Well that is just false on the face of it.

The Clinton administration, after its so-so economic performance in the first term with small increases in tax rates and government spending, partially reverted to Reaganomics in its second term; with a capital-gains rate cut and reductions in spending as a percentage of GDP. The result was very strong economic growth and budget surpluses.

Given the above facts, which have the benefit of being true (unlike many “facts” delivered by our elected officials), would you follow the Reagan/Clinton II economic policies or the Obama ones? Where is the evidence — empirical evidence, as contrasted with theoretical models — that Obamanomics will work, particularly, since it is not now working as advertised?

Source

So you see, it doesn’t matter if one cuts taxes and raises revenues when an out of control Congress spends like drunken sailors – oops, at least drunken sailors only spend their own money.

Fiscal Year Proposed Actual % Difference
1982 695.3 745.8 7.3
1983 773.3 808.4 4.5
1984 862.5 851.8 -1.2
1985 940.3 946.4 0.7
1986 973.7 990.3 1.7
1987 994.0 1003.9 1.0
1988 1024.3 1064.1 3.9
1989 1094.2 1144.2 4.6
Totals 7,357.6 7,554.9 Avg 2.8

Sources:
Budget Message of the President, FY’s 81 to 89
Budget of the United States, FY 1993, Part 5, Table 1.3, page 5-18.
Proposed outlays for 1981 from 1981 FY 1982 Budget Revisions

As one can see from the chart, Reagan’s budget (proposed) was substantially less than Congress’ (actual) every year, save 1984. Even with Reagan’s massive defense buildup, the liberals were still able to outspend him! Had the actual budget equaled the proposed budget every year (including the one year Reagan’s budget just barely exceeded the Congressional one), the debt would have been far less than the multi-trillion figure that was incurred. It was the Democratic House that was responsible for this debt not Reagan. In fact, the Democrats, in an effort to secure tax increases, promised to cut three dollars in spending for every dollar Reagan agreed to raise in tax hikes. Reagan did agree to raise ONLY excise and corporate taxes; We are still waiting for the Democratic spending cut.

Contrary to conventional knowledge (liberal revision) the deficits caused by the actual budgets throughout the Reagan presidency were a result of increases in defense spending and the 1981-82 recession NOT tax cuts.

Source

You accused me of being a liar:

This gets the prize for the most intellectually dishonest statement of the day. Did you look at that curve? It started going straight up at the time of the financial meltdown, which happened on Bush’s watch and largely as a result of Bush fiscal policy and Fed monetary policy.

Now who is being intellectually dishonest?

Do you deny that Bush tried, TRIED to regulate Fannie and Freddie and stop the impending bubble burst?

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

Source NY Times

President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Source

And who do you suppose stopped this plan? Chris (friend of Angelo’s) Dodd, Democrat and Chairman of the Senate Banking Committee.

You said:

As it is, he VERY UNWISELY tried to work with the GOP and included massive tax cuts…

You mean those welfare checks that folks who don’t even PAY taxes got? Bush tried that and it didn’t work, and Obama tried it and it didn’t work; but “massive?” Not even close.

From CBS News and they were very KIND to Obama on this one:

While the majority of the tax cuts, passed last February, affected 95 percent of working families, when they took affect by April of 2009, the monetary value was not too large — most families saw about $70 more in take home pay every month. Individual workers saw about $13 more a week.

Enough said on that.

Then you went on to blame Bush some more:

The absolute difference between the size of the proposed Bush budget for 2009 and what Obama ended up spending was on the order of 1% or so.

Even the White House disputes this assertion. By looking at the 2009 budget Bush left, the overview for it is only a 200K pdf file, while Obama’s 2010 budget overview is TWO MEGABYTES. LOL. Even his budget overviews are massive! And in the first paragraph of his overview, he blames Bush! That’s Obama for ya, our teflon President.

The bottom line is that it took Bush 8 years to add a horrendous amount of $3 trillion to the national debt. Obama surpassed that in his first 20 months in office.

Your words:

As I wrote before, it takes no political courage to cut taxes and pay for them by borrowing money from future generations. It takes guts to actually solve problems through shared sacrifice.

Um, okay. You can actually say that with a straight face?? I mean Obama is saddling our children AND our grand-children with debt out the wazoo. And please tell me ONE thing, ONE problem Obama has “had the guts to actually solve?”

Anticsrocks, #47:

“If you take more money from the private sector, they have less to spend in the economy.”

Does government spending somehow take place outside the private sector economy?

The public and private sectors are two interrelated components of a single national economy. Government dollars spent flow back into the private sector. Paying taxes is part of the cycle.