Our economy was, and still is, the most critical issue facing our country today. Recent news events have pretty much sent the internet’s bandwidth toward the president’s most spectacular foreign policy failure yet along with the media’s attempts to cover for him. I’ve strayed recently as well, as last week’s blogging for me focused on that all important news item facing our country today, namely The Philadelphia Eagles’ chances in 2012. I’m not sure when or if the media will follow suit, but I’m getting back to my sweet spot of my favorite blogging topic – Economics!
Did you know that the money in your neighbor’s wallet that you fail to take from him at gunpoint is actually a household expense for you personally? I never would have thought that either, but apparently the left thinks that it is. Let’s back up a bit…
A few weeks ago one of my lefty pals sent me a chart that definitively "proves" that the current debt is not Obama’s fault. Being the data analysis geek that I am I did that extremist action that leftists most despise – I dug down to validate the data. First off, the article being from Ezra Klein immediately had my bull snot detectors going off based on "evidence" I’ve seen him present in the past. The pretty, colorful chart was created by a leftist think tank, and at the bottom it "cited" that it used data from federal government sources, but of course it stopped there.1 There was no raw data available, and of course their methodology for how their stats were generated consisted of vague, twisted logic. As one might expect, according to the chart two of the biggest causes of our debt are both the responsibility of… George W. Bush. These were represented by the costs of the Bush wars, and the Bush tax cuts.
The wars I can give some defense to, but not too much. When Obama became president and his intention was to surrender on a timeline (which Bush did lay the foundation for), why not make it immediate and start withdrawing the forces on January 20, 2009? We were facing the worst economic crisis of our time, and why not eliminate this expense right off the bat? As for the Bush tax cuts, all that the president had to do was immediately raise taxes across the board. For those who don’t remember January 2010, Obama had the world in the palm of his hand. He had majorities in both houses, and between the financial crisis and electoral pounding the GOP had just taken the Republicans were all but completely cowed at this point. There is the problem of that dirty secret of how serious our debt is and what it would take to actually pay it off. But there is more to it than that.
How on earth is money that you fail to take from someone an expenditure? Looking at the expenses that Sister Babe have for our household we have the same ones that many normal households would – Mortgage payment, groceries, utility bills, clothing, entertainment, gasoline, etc. On the revenue side we have our paychecks, along with whatever miscellaneous income we may see – the occasional bonus check from work or getting a few dollars for selling some old junk on Craigslist. Oddly enough, we don’t include the money that we fail to steal from our neighbors at gunpoint – neither under expenses nor revenue. Under basic accounting principles most houses and businesses wouldn’t either. It also leads to another question. If the tax cuts were paid for by somebody else’s expenditures…
What did you get for this "Spending" in lost revenue to the government? We can tangibly see what we’re spending our federal dollars on in terms of failed green energy companies, unprofitable car companies, the costs of waging war, subsidies for industries that pay the proper tribute to both parties, etc. But if some jet fuel genius is claiming that the Bush tax cuts are an expense, what was that money spent on? Was it put in the bank where it was earning taxable interest income? Was it being used to invest in a business or simply in buying stock? Was it used to hire new employees for a business? How much extra taxable revenue was generated off of the sum of all of these transactions? And, by creating extra economic activity, how many more people were hired to perform work that generated taxable income? And by extension, how many fewer people needed transfer payments in unemployment or food stamps? What were the government’s savings off of these lower expenditures? It’s easy to claim how much a tax cut "cost", but without a very in-depth analysis even this ballpark number can at best be suspect, and at worst a straight up lie.
It never ceases to amaze me how far our president’s supporters will leap to find ways to justify their support for him. And sadly, like any true believer there is no amount of math or facts that will even get them to question their views or waver in their loyalty to President Obama. Hopefully there are enough people in the middle that we can persuade, because our economy faces some grave challenges and right now I don’t see enough people ready to acknowledge this issue, much less deal with it.
Cross posted from Brother Bob’s Blog
1. This is the reason I rarely source any studies from places AEI or Heritage. As much as I love these guys, if I can’t drill down and validate the data and methodology I don’t use it. Not that I want to deter you from reading them of course, but when a big part of your blogging angle is that of analytics you need to be able to get down into the weeds.