Economics Archives

Obama’s Budget vs Ryan’s Budget

(And by "Obama’s budget", I mean the one unanimously rejected even by his own party.)

What are those "draconian cuts" that Paul Ryan has proposed in his budget? Is he really going to throw Granny off the cliff with his changes to Medicare?

The Independent Voter Network has an interactive graph where you can see the spending over the next 9 years with the two different budgets. You can also choose a specific area (Medicare, Social Security, interest on the debt, security, etc.) to see how that particular area is affected.

What you’ll see is that, under the Ryan budget, spending increases every year. The "cuts" that Democrats and the media keep referring to use the typical DC definition. "If you don’t raise spending on X as much as I want to, you are therefore "cutting" spending to X."

The one exception is Medicaid, where spending dips slightly early on, but over the 9 year span does indeed increase slightly.

Point your friends at this page when they start believing the Democratic talking points. We simply cannot have a rational discussion on the debt problem facing us if we demagogue what amounts to a tepid response to the problem.

Follow Up: Smashing the Charity Stereotypes

Way back in 2006, I blogged about how cheap Hollywood liberals thought we were as a country, and then noted a study by Arthur Brooks that showed that, the more conservative and/or religious you were, you gave more than the liberals complaining about how stingy we were.

Six years later, the trend has continued.

Red states give more money to charity than blue states, according to a new study on Monday.

The eight states with residents who gave the highest share of their income to charity supported Sen. John McCain in 2008, while the seven states with the least generous residents went for President Barack Obama, the Chronicle of Philanthropy found in its new survey of tax data from the IRS for 2008.

The eight states whose residents gave the highest share of their income — Utah, Mississippi, Alabama, Tennessee, South Carolina, Idaho, Arkansas and Georgia — all backed McCain in 2008. Utah leads charitable giving, with 10.6 percent of income given.

And the least generous states — Wisconsin, Connecticut, Rhode Island, Massachusetts, Vermont, Maine and New Hampshire — were Obama supporters in the last presidential race. New Hampshire residents gave the least share of their income, the Chronicle stated, with 2.5 percent.

“The reasons for the discrepancies among states, cities, neighborhoods are rooted in part in each area’s political philosophy about the role of government versus charity,” the study’s authors noted.

But it’s not just about politics — “religion has a big influence on giving patterns.”

This particular study only included taxpayers with incomes of $50,000 or more, so it didn’t factor in the poor, as the Brooks study did. Still, the results pretty much line up with his findings; the more conservative and/or religious you are — that is, the more you believe that charity is a personal issue — the more you put that belief into action. I would add that the more you think it’s the government’s issue, well then, the more you put that belief into action.

Now that Paul Ryan is the VP nominee on the Republican ticket, his budget proposal has been in the spotlight all over again, and all the same distortions about it are being trotted out. Guy Benson writing at TownHall.com gives us 5 facts to remember about the Ryan budget.

  1. "The Republican reform plan totally exempts anyone over the age of 55 from any changes." Basically, if you like your plan, you can keep it. (I know I’ve heard that somewhere before.)
  2. The Democrats have already raided $741 billion from Medicare to pay for ObamaCare. They are the ones cutting Medicare.
  3. "Medicare’s own accountants have calculated that Medicare will be insolvent within 12 years." This means that doing nothing is really what guts Medicare.
  4. Ryan’s Medicare proposal is actually the result of a bipartisan solution, "co-authored by a committed liberal who understands that the clock is running out to save the program." And it’s means-tested so that the poorer get more protection.
  5. The plan increases spending every year, just not as much as Obama wanted in his budget proposal (which was, just to remind you, unanimously defeated by his own party).

That last point, calling a spending increase a "cut", is a ploy used by Democrats and parroted by the news media.

Keep these in mind when you hear talk of "gutting" Medicare. It’s just not true.

Episode 5 of the "Consider This!" podcast is out today and it’s all about a single topic, so I thought I’d post the script here for those who don’t do podcasts. If you do do podcasts, click here for the show notes and ways to subscribe, or just listen, to the show.


I mentioned previously that while the individual mandate was struck down as an exercise of the Commerce Clause, it hung in there as an exercise of the taxing authority of the federal government. That is to say, the way it was sold to the American people, and the way the Obama administration is continuing to try to defend it, is unconstitutional. By being given the authority to regulate commerce, Congress cannot force you to engage in commerce so that they can then regulate it. However, if arranged in a way such that you have to pay a tax if you don’t comply, well then it’s all hunky-dory. So then, when you hear Democrats insist that the mandate is not a tax, as they have been saying, remember that they are therefore arguing that it’s unconstitutional. They’re trying to have their mandate and eat it, too.

The main reason they’re arguing that it’s not a tax — going against a Supreme Court ruling that they are ostensibly in favor of — is because of the legislative ramifications. A tax can be repealed on a bare majority vote, and is not subject to a 60 vote Senate filibuster. This makes it much easier for, say, a President Romney and a Republican House and Senate to repeal. I would have thought that trifecta tough to accomplish this November, but with this ruling, I suspect a fire is going to be lit under many a conservative, and I hope that this translates into votes. I think Democrats, too, see this scenario as more plausible today than it was before the ruling, which is why they’re trying to make this particular hard sell. Billy Mays, the TV pitchman who used to try to sell you so many handy items, would be proud.

If you insist, against the advice of the Supreme Court, that the Commerce Clause should be good enough to implement a mandate, consider this. The intention of the clause itself was a negative power; a preventative, restraining one. It was written so that there was an authority to appeal to when there were trade disputes among the states. It was never intended to be a positive power by the federal government; one that allowed it to act on its own. Those aren’t my words. Those are James Madison’s. But hey, he’s just what some people call The Father of The Constitution. What would he know?

Read the rest of this entry

Friday Link Wrap-up

“I would not have you exchange the gold of individual Christianity for the base metal of Christian Socialism.” – Charles Spurgeon. He had quite a bit to say on economic and political issues of the day, applicable to that day and this.

For those still blaming Bush for our economic situation, Paul Mirengoff reminds us that the housing  market collapse was the main cause of it, and the Bush administration tried to keep it from happening. Democrats would have none of that.

"The New York Police Department, the mayor and the city’s top prosecutors on Monday endorsed a proposal to decriminalize the open possession of small amounts of marijuana…." But the real scourge, Big Gulps, will not be tolerated.

A cautionary tale about hyper-partisanship.

Remember those advertisers that left the Limbaugh show after his remarks about Sandra Fluke? One big one tried to come crawling back, and Limbaugh just said No.

The Obama administration is against voter ID laws, but Michelle Obama herself required IDs to get a book signed. Irony. Meter. Pegging.

Austerity works, when it’s actually implemented. Just ask the European country who’s economy outpaced the average growth in the euro-zone by 500%, and has the only budget surplus there.

Obama actually was a member of a socialist political party while in Chicago. Stanley Kurtz of National Review has the documentation. Where was the mainstream media on this 4 years ago?

In case you heard otherwise, no, the Boy Scouts are not changing their policy on gay scouts and scout leaders.

Friday Link Wrap-up

Mitt Romney, a real community organizer.

Record-breaking attendance at Canada’s March for Life. Over 19,000 people participated. Support is growing.

Around the world, Obama has become something of a disappointment. He talked a good game, but was a bit short on follow-through.

However, the President has certainly had his share of ‘firsts’ while in office. Doug Ross enumerates 3 dozen of them.

If you personally know thieves that otherwise live their lives with "goodness and holiness", does that mean thieving is, therefore, condoned? This press release from the Episcopal Diocese of Washington, DC seems to suggest that.

RIP OWS. We hardly knew you (and I think you hardly knew yourself).

After being voted down unanimously in the House, Obama’s budget is unanimously voted down in the Senate. One word: Leadership.

An admission that environmentalists sat on their hands during the BP oil spill because Obama was in the White House. Again, for the Left, it’s always political. Principle always gets the back seat.

And finally, what’s next to "evolve"? (Click for a larger version.)

Smackdown: California vs. New Jersey

Rarely do you get a pair of situations so similar at the same point in time that allows you to compare and contrast the policies used to deal with it. But we have one with California and New Jersey.

In his January 2011 inaugural address, California Gov. Jerry Brown declared it a "time to honestly assess our financial condition and make the tough choices." Plainly the choices weren’t tough enough: Mr. Brown has just announced that he faces a state budget deficit of $16 billion—nearly twice the $9.2 billion he predicted in January. In Sacramento Monday, he coupled a new round of spending cuts with a call for some hefty new tax hikes.

In his own inaugural address back in January 2010, New Jersey Gov. Chris Christie also spoke of making tough choices for the people of his state. For his first full budget, Mr. Christie faced a deficit of $10.7 billion—one-third of projected revenues. Not only did Mr. Christie close that deficit without raising taxes, he is now plumping for a 10% across-the-board tax cut.

It’s not just looks that make Mr. Brown Laurel to Mr. Christie’s Hardy. It’s also their political choices.

Each had a huge deficit going in, but New Jersey is coming out of this looking far, far better than California.

Hard economic times bring their own lessons. Though few have been spared the ravages of the last recession and the sluggish recovery, those in states where taxes are light, government lives within its means, and the climate is friendly to investment have learned the value of the arrangement they have. They are not likely to give it up.

Meanwhile, leaders in some struggling states have taken notice. They know the road to fiscal hell is paved with progressive intentions. The question regarding the sensible ones is whether they have the will and wherewithal to impose the reforms they know their states need on the interest groups whose political and economic clout is so closely tied with the public purse.

The same goes for the next presidential election.

Austerity Works

In Europe, it is supposedly "austerity" measures that are killing their economy. Now, let me ask you this, does this look like austerity to you?

No, me neither. And yet ballot after ballot in Europe is turning out those who pushed for fiscal responsibility. When you’re in a hole, especially a financial one, stop digging. Call Dave Ramsey and cut up your credit card. But experiments with socialism always sound like the Pied Piper, until the bill comes due. By then, everyone is addicted to the "freebies" and there’s no turning back.

Austerity is the answer, but liberal economists always seem to think that government spending is the answer, not the problem, and that austerity leads to all sorts of problems. Except that, when the United States tried it, against the liberal naysayers’ warnings, it worked.

This is what austerity looks like.

After the huge spending during World War II, the US got seriously austere, with regards to government spending. What happened?

Superstar economist and devout Keynesian Paul Samuelson—later to become the first American to win the Nobel Prize in economics—predicted such shock austerity would cause “the greatest period of unemployment and industrial dislocation which any economy has ever faced.” That dire, disastrous prediction was widely held by his fellow Keynesians, with one even predicting an “epidemic of violence.”

Except the doomsayers were wrong, even though Washington obviously ignored Samuelson’s call for gradual spending reductions. Despite cuts which dwarfed those seen in the EU today—not to mention those Republicans are calling for here at home—the U.S. economy thrived. There was no mass unemployment despite rapid demobilization of the armed forces.

(Yeah, another Keynesian, Nobel-prize-winning economist predicted doom. How much more of a parallel with Paul Krugman do you need?)

Don’t say that austerity won’t work, when you haven’t really tried it, and it’s worked in the past.

Friday Link Wrap-up

The Southern Poverty Law Center, who (supposedly) goes after hate groups, admit, “We’re not really set up to cover the extreme Left.” Once again, it’s all political with the Left. Hate is only hate if it’s right-wing hate.

Life is wasted without Jesus. That’s a pretty benign Christian aphorism. You can agree or disagree, but is it hate speech? It is in Canada.

The Post Office, supposedly, allegedly privatized, is going to cost the taxpayers $34 billion dollars. It could cut costs, but Congress won’t let it.

A 20+ year study proves conclusively that outlawing abortion does not lead to "coat hanger deaths". Bonus: NARAL co-founder admits they made up numbers to garner sympathy for their cause.

Foiled bomb plots: Occupy Wall Street – 1, Tea Party – 0. The same goes for dozens of incidents (enumerated at the link) that, had they happened at a Tea Party rally, would have headlined national news for day. (I know this because charges of racial epithets with no actual proof did just that.)

VP Joe Biden lauds NBC for moving American towards same-sex marriage. How? “I think ‘Will & Grace’ probably did more to educate the American public than almost anything anybody’s ever done so far.” The next time someone tells you "It’s just a TV show" or "Just change the channel" for complaining about TV show content, ask them to get a new writer. The old script is a lie.

And speaking of same-sex marriage, Nancy Pelosi seems to think that her religion provides the reason why she must act against her religion on the matter.

For what it’s worth, "An official from Iran has refuted claims of plans to execute imprisoned pastor Youcef Nadarkhani, who has been imprisoned for almost three years on accusations of apostasy, a crime where one disaffiliates themselves from a religion." This from a country not even holding to its own laws regarding the case.

Ask not what you can do for your country, ask what your country can do for Julia.

Extremists? I don’t think that word means what you think it means. And here’s an article I wrote in 1996 regarding another right-wing extremist you’re sure to know.

Looks like Mitt Romney’s school days will be vetted by the media more than Obama’s ever was. Too bad their first attempt failed so badly.

And finally, the recent European elections in perspective. (Click for a larger image.)

Friday Link Wrap-up

"The nation’s Social Security and Medicare programs are sliding closer to insolvency, the federal government warned Monday in a new report underscoring the fiscal challenges facing the two mammoth retirement programs as baby boomers begin to retire." (And some think that making Medicare required for everyone is the solution. Only in Washington is failing on an even larger scale considered success.)

FALSANI:
What is sin?
OBAMA:
Being out of alignment with my values.
FALSANI:
What happens if you have sin in your life?
OBAMA:
I think it’s the same thing as the question about heaven. In the same way that if I’m true to myself and my faith that that is its own reward, when I’m not true to it, it’s its own punishment.
(What brand of Christianity does this represent?  Honestly, I have no idea. Read the whole interview.)

“Nice work, occupiers,” tweeted Jeremy Tooker, owner of the popular Four Barrel Coffee. “You made me leave my sick kid at home to go clean paint bombs off my windows. That’ll show Wall Street, fellas.” (More May Day Occupy Wall Street madness at Yourish.com.)

"For activists and Christians opposed to the so-called Israeli occupation, two key votes by the United Methodists will certainly serve as a discouragement. On Wed., May 2, the denomination twice voted to reject resolutions that called for a divestment from companies accused of assisting Israel in the ongoing dispute over Middle Eastern lands." (The UMC cares for both the Jews and the Palestinians, and won’t blame one side for violence from both. Good for them.) (Oh, and on May 1st, "A Qassam rocket was fired from the Gaza Strip and exploded in an open area in Ashkelon Coast Regional Council.")

And finally, Economics 101, from Chuck Asay. (Click for a larger version.)

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