Political Quote of the Day

Today's winner is from Senator Mike Lee, as it appeared in the Washington Examiner:

Senator Mike Lee (R-UT)

From an op-ed, "Obama's Unserious Plans are Losing the Future,"  published in the Washington Examiner on Sept. 27, 2011:

In consecutive weeks, President Obama has presented two painfully unserious and economically misguided proposals. The first, his $450 billion "American Jobs Act," is another stimulus proposal, based on the ill-conceived notion that more government spending is the answer to what ails the economy. The second is the president's plan to raise taxes by $1.5 trillion on American job creators. Both plans are a far cry from "winning the future," as the president claims on the campaign trail.

Read more at the Washington Examiner

Debt Ceiling Deal Pending

Negotiations continue over debt ceiling and spending cuts

Politics is a treacherous but ever-so-predictable business these days. What seemed within reach a few days ago to stop the insanity over debt and spending is now slipping through the cracks of the time-honored traditions of political compromise.

Personally, I favor the ideologically pure notions presented by the "Cut, Cap and Balance" idea coupled with the Lee/Hatch/Cornyn (et. al.) Balanced Budget Amendment, but now the "smart money" tells us there is no chance of passage. They wanted no increase in the debt ceiling without an up or down vote on the BBA. It's the members of the Utah congressional delegation who are leaders in the fight, specifically Hatch and Lee in the Senate and Jason Chaffetz in the House. Watch for the tea-party-dominated House to pass Cut, Cap and Balance this week, then watch it die in the Democrat-laden Senate.

The reason it isn't going to happen, apparently, is because the ideology on the other side in the personification of Barack Obama senses no urgency and wants tax increases on the rich. "We don't need a Balanced Budget Amendment," he says, "We just need to do our jobs." Well, we've all seen how that has worked out. "Doing our jobs" on his watch has included running up record debt, deficits, stimulus bills that didn't stimulate anything, the biggest entitlement program in the history of man, threats of more taxes as far and the eye can see, printing worthless currency and regulating everything that moves in the economy. They don't seem to be aware that tax increases on the wealthiest Americans just isn't enough to close the gap mathematically. If you confiscated, not merely taxed, that wealth it still wouldn't be enough. Perpetuating the myth that you can tax the rich to help the poor is what I've labeled "The Great Big Fat Lie." (Click the link to my post on April 16, 2011, and watch the embedded video).

Yes, blame Bush too -- government programs, unfunded wars, TARP, etc. -- so don't single out the criticism for Obama alone. But you can top all that history with a presidential threat just last week that Social Security recipients might not get their checks in August unless Congress comes to heel at his command. That kind of threat, first, isn't very presidential, and second, it's a big fat whopping lie.

The lies are piling up with every news conference.

Despite it all, there will be a budget spending deal along with an increase in the debt ceiling struck here in the next few days; Washington working in its "finest hour," some will yet say. However, it will be a watered down deal and the questions will remain to haunt us going forward: Will whatever they come up with satisfy the rating agencies, Moody's and S&P as being "sufficient" to stave off a downgrade of America's "AAA" bond rating? Both agencies upped the ante last week in the political poker game, by signalling they will not hesitate to degrade the rating if meaningful progress is not achieved. A downgrade in the bond rating of America would mean higher borrowing costs for everyone.

I suspect Americans, however, are growing weary of the same old rhetoric and class warfare struggles -- "tax the rich for the benefit of all who aren't." Tax revenues have been historically low these last three or four years because of the collapse of the financial markets in the wake of the toxic mortgage securitization marketplace, and this much is clear in hindsight: the federal government promoted that market and its interventions have proven catastrophic in the aftermath.

There have been reams of paper and gallons of newspaper ink spilled over whether or not to raise the debt ceiling. When he was a freshman senator from Illinois, Barack Obama assailed George W. Bush for lack of leadership in coming to Congress to raise the debt ceiling back then, and now as POTUS, Obama rides to the rescue once again proclaiming the end of the world as we know it unless he gets a big budget deal to carry him through the 2012 election. He doesn't really want to have to deal with this question of fiscal responsibility and accountability between now and then. Truth is, the Republicans voted many times under George Bush to raise the debt ceiling. The hypocrisy on both sides is stunning, and they expect Americans to keep buying their explanations? I don't think so.

In the back and forth for over two years now, one detail is seemingly lost. The President has a Constitutional duty to propose a budget each year. This president, however, has failed to do so for two and a half years, abdicating his responsibility to Congress and carping over every proposal that comes his way. John Boehner, Speaker of the House, complained the other day that negotiating with Obama is like trying to strike a deal with Jell-O; he's a little slippery and wiggly. So much for golf diplomacy.

The historic election of 2010 notwithstanding, where Obama was handed an overwhelming rebuke by the voters, political sea changes are slow in translating into reality and seemingly impossible to make stick. One thing is clear: this president thinks he's got the voters with him. He was bold enough to quote a fuzzy poll result the other day, claiming 80% of Americans favor a tax increase on the wealthy. Really? Whether it's true or not, he absolutely believes he is doing the right thing for America and the people are on his side. That's the belief of an avowed extremist, and one could say the same thing about the other end of the spectrum perhaps.

So this morning it appears likely we will see the classic result coming from Washington once again. Negotiations over political positions where both sides can claim some watered down portion of victory. Political maneuvering continues to plague our national debate. This morning it is reported Paul Ryan, the House's Budget Chief, who actually had the courage to propose a sound but politically suicidal budget a few months ago, and got it passed in the House, has been lecturing the freshmen House members about the futility of pressing their case not to raise the debt ceiling. The voters back home won't be pleased who sent them there to put a cap on the spending spree and to take away the blank checks from the president, but until there is a majority in both houses of Congress and the present occupant of the White House is expelled, there are going to be half-measures that please no one.

There are about four options that are still on the table that can be identified by their biggest supporters. 

• The McConnell plan would force Barack Obama to take some very uncomfortable public positions but, policy-wise, would likely mean the fewest amount of real spending cuts. 
• The plan Eric Cantor is pushing for is a short-term small-cut deal that would cut much less than the "grand bargain" and would force more debt ceiling votes and negotiations before the 2012 election. 
• Barack Obama is negotiating for a medium-term cuts-and-taxes deal that would solve the issue past 2012. 
• And finally, there's the John Boehner-backed "grand bargain" that would contain up to a reported $4 trillion in cuts.

The average American doesn't wake up every morning wondering whether or not the planet has been saved from a potential debt crisis in the USA. Instead, they awaken to another day oblivious to the issues their elected representatives are tasked to tackle. Even with all the angst on display in the election of 2010, it appears we're back to business as usual in Washington, and both sides are dug in until they find the partial solutions they are so adept at crafting together -- wait for it, it's coming -- "This isn't a perfect deal, but it's the best we could do under the circumstances."

There is a titanic struggle for the future unfolding before our eyes, however, that looms ahead. As anyone who carries enormous debt obligations will tell you, freedom is curtailed with debt and spending money at a rate that cannot be sustained. America has always been among the leaders in freedom in virtually every category, but we are threatened by our self-inflicted cancer of debt and deficits:



We are under siege and sometimes don't even know it or understand what's at stake. It's true for individuals, businesses and countries. We may not see the effects immediately, which is why life appears to go on as normal each day, but the underlying erosion is taking place imperceptibly but unrelentingly.

Until the political gimmickry stops and we put this federal government in a straight jacket that binds future congresses and the president to fiscal sanity, we are in bondage even if we don't see the velvet shackles binding our wrists and ankles. I remember a wise old businessman telling me years ago, "Borrowing money is like wetting the bed -- it keeps you warm for awhile, but eventually you have to get up and change the sheets."

I don't really care much for political parties and their partisan rhetoric that merely keeps them wetting the beds. As I've said before, what we need now are patriots who can rise above party and stop the insanity by changing the course of America. If we can't do it ourselves, the consequences will overtake us.

One final point: The underlying issue distills to whether we should have a larger and more expensive federal government. Over many years, federal spending has averaged about 20 percent of gross domestic product.

The Obama Democrats have raised that to 24 or 25 percent. And the president's budget projects that that percentage will stay the same or increase far into the future. The decision point has arrived at our doorstep. In the process, the national debt as a percentage of gross domestic product has increased from a manageable 40 percent in 2008 to 62 percent this year and an estimated 72 percent in 2012. And it's headed to the 90 percent level that economists Kenneth Rogoff and Carmen Reinhart have identified as the danger point, when governments face fiscal collapse. Those are the stakes and the politicians are still posturing.

I'm still waiting for the serious debate.

"Symbolic" House Vote Repeals Obamacare

It was newsworthy last week only if you don't tune in to the mainstream media.  They didn't give it much play.  But the newly-elected Republican-dominant U.S. House of Representatives resoundingly voted anyway by a margin of 245-189 to repeal the most costly entitlement program in nation's history.  They don't call this body "The People's House" for no reason!

It's no secret I was opposed to it from the moment it was announced, but more than being opposed to it, I was opposed to HOW it was done.  It is that aspect of the ongoing debate that interests me most today.

There was opposition to Social Security when it first was introduced and enacted into law.  But there was no vote within a year to repeal it.  That was also the case when Medicare was first introduced, along with Medicaid.  None of those programs faced this kind of perpetual anger and frustration from the public, united in their dislike in majority numbers. 

How it was done

The difference in my mind is that unlike Obamacare, the other entitlement programs listed did not pass on a one vote margin bought and paid for in the middle of the night on Christmas Eve in the Senate.  Further, one year after its passage Obamacare has managed to inflame half the states in the nation who have gone to court to challenge its constitutionality.  None of those other programs were struck down within a year of their passage as "unconstitutional" by a federal court.

Handout or empty hand?

We have all been partaking at the trough of government entitlement programs for a long time, and the majority of Americans now like them.  The difference with Obamacare, in my humble opinion, is that it represented a bridge too far in the minds of Americans.  Rather than welcome a handout when the economy had punished so many so severely recently, they pushed back knowing it was not a hand up, only an empty hand promising unsustainable debt and deficits.

Most economists and others who have studied its provisions (I have not) now conclude there is little of anything representing cost savings in the measures enacted.  It went too far, and fewer and fewer have indicated they really want more government intruding into their lives and their choices, especially when it is being paid for with more foreign debt.

Maybe more than symbolic

There is some indication, however, the vote may actually be more than symbolic.  Often, split government produces real progress.  A measure proposed by the White House to a divided Congress thought to be DOA is often debated fairly, both sides expressing their views and a helpful and useful conclusion reached.  Those were the days when a Ronald Reagan could persuade a Tip O'Neill that tax cuts in a bad economy might just be a good idea to present to a Democratic Congress.  It's happened before, why not again? 

The useful reality about debate and a straight up or down vote on proposed measures is that such actions put people on the record, forcing them to declare themselves, compelling them to take a stand for their constituents, and revealing whether or not they give a hang about what their bosses, the people, think and believe.  That's why this vote to repeal is maybe more than symbolic, even though everyone knows it's not a big enough margin of victory to be veto proof and Harry Reid won't let it see the light of day in the Senate, thus dooming it to "symbolic" status.  But only for now, perhaps.

I'm hoping what will happen is Obamacare will die a death of a thousand cuts.  This vote last week extends the debate; opens it up for the first time, really.  Voters will increasingly use the information they glean from successive votes to gauge whether or not they need to do further reassessments about whom they will choose to represent their wishes.  In that sense it may go beyond "symbolic."

SCOTUS will weigh in

I'm wondering what impact this vote will have on the eventual judgment to be rendered by the Supreme Court, where Obamacare will ultimately be adjudicated.  Knowing the Constitution trumps all the laws of the land, will the expressed will of the people stand?  I'm wondering if the SCOTUS also realizes they are subject to the people.  I hope they still are.

Predictably, the administration poo-pooed the whole exercise last week.  Nancy Pelosi openly ridiculed a reporter last year who asked her if she was concerned about its constitutionality, with "Are you serious?"  Well, now we know the people are serious, and so was at least one federal court judge in Virginia.  If this repeal vote was merely "symbolic," then someone forgot to inform the White House about how seriously the new members of Congress have taken their oath to reflect the people's will when they got to Washington.  They heard the message from the voters, loud and clear.  That's why the vote had to be taken -- it's the primary reason they were sent there.

Real health care reform will happen when Obamacare is reversed.  Congressman Jim Matheson (D-UT) said it best:  "It reforms too little and costs too much."  He voted against it last year because he knew he would have no chance for re-election if he had done otherwise, and remains practically the lone man standing among the so-called "Blue Dog" Democrats in Congress who went along with Obamacare.  However, last week he reversed course and voted against repeal.  Go figure.

Why the sustained anger?

So maybe, just maybe, it is more than "symbolic."  There was more than Obamacare factoring into the historic tidal wave that washed ashore last November in Washington.  The voters felt disenfranchised and they were angry at not having their wishes realized.  For me and the vast majority, it started with TARP that opened the floodgates for rampant ($862 billion) stimulus spending failing to stimulate as promised, and a $1.3 trillion price tag on health care reform.  The deficit climbed rapidly to over $1 trillion, then the red ink flowed to overflowing with bailouts for "Government Motors" and Chrysler.

So Americans reacted justifiably -- we tossed out nearly everybody we could and began again, as America does every two years.  It's why this country is so viable.  Even when we make mistakes in judgment the founders gave us the reassurance we could begin afresh every two years.  We've all had to make readjustments in our lives these last two years.  We've cut back, we're learning how to save again, we're reducing debt, and we're somehow surviving in spite of it.  And now we demand the same of our federal government.  Some say individual households don't operate the same way as government.  That's true, because the government can print money.  We can't.  We can send representatives to Washington, however, who will do as we do and stop the presses.

Watch for more fiscal responsibility and big reductions in spending.  Those who refuse will be voted out.  That's the way politics works.  The Piper will be paid.

Chipping away now at Obamacare, and if Americans increasingly can stand by their convictions that it won't produce anything but grief if left to another generation to pay for it, then a large enough majority in both houses of Congress and maybe the White House in 2012 can finally bury it so deeply it cannot resurrect.

Federalism must be re-enthroned

The analysts I have read have been uniformly critical about the measure doing nothing to solve the upward tilt of the cost curve associated with health care, references to "bending the curve" in the years ahead notwithstanding.  Obamacare doesn't address the escalating costs associated with malpractice lawsuits.  The states were given virtually no latitude to develop their own solutions, since health care, like education, is administered at the local level.  Utah was already well underway in its efforts.  Federalism (giving states the right to be self-determining) has all but died in the wake of Obamacare.

Finally, one would hope the individual mandate in the law, forcing Americans to buy health insurance or face fines, must certainly be declared unconstitutional in the end.  This is still America, the land of the free.

But rather than let the moniker "the party of NO" stick, Republicans would be well advised to form committees, hold hearings, and work to craft real solutions lacking in Obamacare.  Keep the parts (if there are any) that might work, and scrap the rest.  We do have a health care crisis.  The costs are out of control, the incentives are skewed in the wrong direction, and Medicare and Medicaid are already too much to bear in a bankrupt nation borrowing to sustain an "even keel" level of care.  What do I mean by "incentives" being skewed?  Physicians and health care providers are reimbursed for a never-ending cycle of life-sustaining expenditures for seniors that extend life but sometimes with the tradeoff for quality of life compromises in the name of advancing medical science.  Aged grandparents and great-grandparents become little more than lab rats for government funded research.  Is that too harsh for you?  That's what we've got now.

Re-enthroning states' rights linked with free market competition among carriers would be a huge first step.  Given choices, let consumers be in charge of their care.  Intermountain Health Care is well on the way to showing the path to the rest of the nation.  The federal government needs to stand down and get out of health care reform and education.

The House last week finally heard and acted based upon the will of the electorate.  Yes, it may be "symbolic" as a repeal vote this year, but if the trend continues look for the electorate to take back the other chamber and the White House before the real damage is done when Obamacare kicks into high gear in 2014.  The question remains, will the angst survive another two years?

Power still resides in the majority that can choose to defund or repeal.  This "symbolic" vote was the first step.

Political Quote of the Day

President Obama's former director of the White House Office of Management and Budget from 2009 to 2010, Peter Orszag, offered an op-ed piece that caught my eye today in the New York Times.  Presumably free to speak his mind now, this is what he said:

"The nation faces a nasty dual deficit problem: a painful jobs deficit in the near term and an unsustainable budget deficit over the medium and long term. This month, the Senate will be debating an issue with significant implications for both — what to do about the Bush-era tax cuts scheduled to expire at the end of the year.

"In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.

"Why does this combination make sense? The answer is that over the medium term, the tax cuts are simply not affordable. Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned."

 Cutting taxes right now on people who create jobs?  Gee, now there's a thought. 

After throwing a TRILLION DOLLARS at the economy in "stimulus spending" that hasn't stimulated much yet, with another $50 Billion announced today, and watching unemployment rise to 9.6 percent in August. . .

. . . cutting taxes sounds like something right out of the Ronald Reagan playbook.

But we didn't have to wait long for Obama's response.  We won't adopt, he adamantly proclaims, "the same philosophy that led to this mess in the first place."

Top Four Reasons Liberalism is Failing

I hate to be the messenger of bad news -- I'm always looking for the bright side.  However, there are hard data now emerging to suggest the liberal agenda advanced by President Barack Obama for the past eighteen months is failing miserably.  It isn't just your imagination.  I have been stunned -- more honestly AMAZED -- that we have been revisiting socialist ideas as the way to heal America's economy.  I thought we had grown up in our thinking.

But I digress.  Here are the top four reasons I'm seeing:

1.  The housing market is still in dire straits despite all the bailouts and the stimulus legislation that's been thrown at it.  Instead of the government trying to solve this problem, letting foreclosures proceed and the market finding its own bottom, the administration has actually slowed the readjustment in pricing by artificially trying to prop it up.  The first-time home buyer tax credit expired in July.  The result from this artificial "prop" to housing pricing was predictable, reaffirming we haven't found the bottom yet.  This week, the National Association of Realtors reported July sales of existing homes fell by 27 percent from June of this year and by 25.5 percent compared to July 2009.  The annual sales rate of 3.83 million homes, they stated, was the lowest since NAR began keeping track of sales in 1999.  Further, the Commerce Department reported July sales of new homes fell 12.4 percent from June and by 32.4 percent compared to July 2009.  The annual rate of 276,000 new units sold is the lowest since 1963, when government records were first kept.  The source of the plunge is no secret: July's numbers reflect the first month when existing home sales received no boost from the home buyer tax credit.

2.  New automobile sales are drying up after the ill-fated "Cash for Clunkers" program ended.  Again, it was an artificial "fix" that didn't fix anything.  New automobile sales tanked when the program ended.  General Motors' sales dropped 36 percent in September 2009 compared with August.  Ford collapsed by 37 percent, and Chrysler sales dropped by a similar percentage, 33 percent.  So who's benefiting in the car market?  It's not the manufacturers of new vehicles.  Used car sales have rocketed up this year, and your local mechanic is doing a land office business.  Because everyone's credit has been dinged, people are hanging on to their used cars and getting them repaired or buying a lower-priced used car.  It can be traced to the government's intrusion into the marketplace.  When does the government finally wake up to the reality that you can't provide a "free lunch" to everyone?  When you provide this grab bag of goodies with borrowed money from the Chinese, you don't create new wealth in the U.S.  All that happens is the government moves money around from one "pocket" to another, but nothing of value is being created.  It's Economics 101.  Unfettered markets would find the right places to put the money without a government-mandated program.

3.  Stimulus spending isn't stimulating much at all. Government spending does not stimulate economic growth. All it does is move resources away from one sector of the economy to another. Pick any "central government" in the world -- their track record for correctly and efficiently allocating resources is abysmal.  The USSR, with a GNP 1/6 the size of the U.S. economy in the 80s was outspending us in military spending 3:1.  We all know how Ronald Reagan exploited that disparity and convinced Mikail Gorbachev their priorities were going to bankrupt them.  All Reagan had to do to end the cold war was to convince them we were not the least bit interested in their destruction.  Remember "MAD?"  It was the acronym for Mutually Assured Destruction, and it was flawed.  When government attempts to allocate resources, jobs are lost, not created, in the shuffle and the transfer of the resources.  Why liberals can't see this simple fact is hard to fathom.  I was astounded back in February 2009, when I heard President Obama, say:  "This is not something that we're just doing to grow government. We're doing this because this is what the best minds tell us needs to be done." That statement is either naive or intentionally misleading.  Evidence from past history suggests exactly the opposite.  The "best minds" in today's administration must be dead wrong in their assumptions.  Forty-five years ago, when he was still Governor of California, Ronald Reagan asserted: "Anytime you and I question the schemes of the do-gooders, we're denounced as being against their humanitarian goals. They say we're always 'against' things — we're never 'for' anything. Well, the trouble with our liberal friends is not that they're ignorant; it's just that they know so much that isn't so."  I told you he was the "common sense purveyor," remember?  You could lift that line right out of today's headlines -- "The Republicans are the party of 'No.'"  Things haven't changed much.

4.  The Home Affordable Modification Progam has been a dismal failure.  I was invited to participate in the program last year -- one year ago this month -- by making three months of reduced mortgage payments during a "trial period."  So I made the first three trial payments, then the fourth, fifth, sixth, seventh, and eighth without so much as a word about what was happening to my loan.  Finally, four months ago I was told I was approved for my modification, and to be sure to look for my new modified mortgage papers in the mail "within a matter of days."  You guessed it -- nothing yet, and we're now in the second year of waiting patiently for President Obama's rescue package.  Some stimulus.  At a meeting last week with leading economic bloggers, attended by Obama's economic advisor, Treasury Secretary Timothy Geithner, the program designed to help homeowners avoid foreclosure was discussed.  Not surprisingly, the "best minds" in government judged "HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock."  Really?  Because it "helped banks" it's a success?  Really?  And what about the little people?  How's that been working out so far for all of you? 

Shocked at the admission that HAMP was meant to bail out banks and not help owners, Media Matters fellow Duncan Black wrote: "When Liberalism Doesn't Work It Discredits Liberalism." 

Liberalism is not working. Socialism is a failed experiment.  Charles Krauthammer weighed in on this topic in the Washington Post.  As usual, he nailed it on the head with even more ammunition than I've used here.  The sooner we leave it in our rearview mirror, the sooner the American economy can get back on track unaided by its government's "best minds." 

We'll find out in the coming months just how discredited it is in the eyes of the American people.  The best gauge you can watch is what happens in the mid-term elections on November 2nd.  And, yes, I AM wishing time away until then. . .