Tag Archives: spending

Chuckleheads, Again

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The House chuckleheads are at it again, acting like two-year-olds, throwing tantrums and blocking progress because they can’t get all of their way, and they can’t get it immediately.  They’ve lost sight of, or they’re wilfully ignoring, the legislative version of the Buckley Rule.

House Speaker John Boehner had a strategy that would have, in this run-up to the 2014 elections, forced Senate Democrats, especially those in vulnerable states, choose between voting to defund Obamacare or being responsible for shutting down the government for lack of funding past the current fiscal year.

The plan essentially called for the House to vote on defunding ObamaCare and the temporary spending bill, then send the package to the Democrat-controlled Senate, which almost certainly would have jettisoned the defund part and allowed the chambers to negotiate on a “clean” funding bill.

But

“The Ruling Elite is up to it again,” the Tea Party Patriots group said Wednesday.  “They want you to think they have voted for defunding ObamaCare.  But it’s another shell game.”

And the chuckleheads in the supposedly conservative caucus acceded to the TPP’s demands and forced the Boehner Plan to be withdrawn, at least for now.  How do these politicians propose to defund Obamacare without the votes to do so?  At least this, as I said, would have put Democrat Senators on record as voting for the Obamacare that their constituents do not want.

And they should ask themselves how much of a tax cut their “Tax cut, or nothing” stubbornness got them last year.

These guys’ hearts are in the right place, but their heads…are not.

The Coming Budget Debacle

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House Speaker John Boehner (R, OH) has figured out—or is finally willing to say out loud—that attempts to negotiate with President Barack Obama or with Senate Democrats over the content of the next budget, or on the debt ceiling, are wastes of bandwidth.

Obama already has announced that he won’t discuss the debt ceiling—he simply demands that it be raised commensurate with his spending increase demands.  The rest of the Democrats demand tax increases—or else.

In line with this, Senate Budget Committee Chairman Patty Murray (D, WS) is demanding a balanced approach to “deficit reduction.”

Actually, there’s much with which to agree in Murray’s demand.  We should have a balanced approach: to debt reduction, though (which, of necessity, includes deficit reduction, to the point of its elimination).  That balance is eminently well achieved by reducing taxes and then cutting spending to pay for that.

But this is a thing utterly inconceivable to Democrats, hence the coming debacle.  Or, Republicans will fold, again, creating an even bigger debacle.

The Recovery that Isn’t

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In a recent piece in The Wall Street Journal about post-Panic borrowing increases, James Sterngold and Matt Wirz had an interesting graphic showing the evolution of the US economy from just prior to that Panic to today.  Excerpted below is the part of that graphic indicating the jobs market evolution.

The graph is hard to read; here are some highlights:

  • More than 21 million Americans wanting a job at the 2010 peak, over 18 million still in that strait today.
  • Just under 16 million Americans out of work for at least 27 weeks (over 6 months), still nearly 12 million in that strait today.
  • Dropping out of the market due to discouragement in finding work—of any sort—peaking at over 1 million per year and still nearly that today.
  • Labor force participation rate near a 35 year low.

And there’s this, which takes a longer look at that last bullet:

Notice that bit on the right: after the Panic’s official end, participation rate continued to plummet.

As the WSJ points out,

If the participation rate merely returned to what it was at the end of the recession, nearly four million more Americans would be collecting a paycheck.

Had our recovery progressed as a normal one does, we’d be here:

A normal recovery coming out of a downturn as deep and steep as the Panic of 2009 typically sees growth rates of 5%-6% per year, or more.  This Obama recovery has been 6.7% over the entirety of his term in office—nearly five years.  Had we seen a normal recovery (and using a pessimistic 5%/year growth rate), we would have reached today’s unemployment rate after a bit over one year—late 2010—and we would have been back to full employment (in the range of 4.8%-5.5%) in just under 2 years—two years ago.

Had our recovery progressed as President Barack Obama promised it would when he was stumping for and signing the massive 2009 Stimulus Bill, we’d be here:

He promised in 2009 a 5.5% unemployment rate by a couple of years ago.  How many new jobs would have been created had we actually reached his promised number?  In December 2009 (some six months after the nominal end of the Panic of 2009), the civilian labor force was 153 million, of which 137.8 million Americans were employed, a 10% unemployment rate, according to BLS statistics, and using round numbers.

In August 2013, again using BLS numbers, the civilian labor force was larger, at 155.5 million (and it had a smaller participation rate than in 2009, but we’ll gloss over that for now).  There were some 144.2 million Americans actually employed.

However, a 5.5% unemployment rate corresponds, if my 1st grade arithmetic serves me well, to 94.5% of the civilian labor force actually employed: 146.5 million Americans.  Again consulting my 1st grade arithmetic book, there are some 2.3 million Americans that should be employed but aren’t—because Obama’s proudly proclaimed policies have come up short, and we aren’t anywhere near 5.5% unemployment.

Finally, there’s this:

Current population: 313.9 million
Current civilian labor force: 155.5 million
Current labor force participation rate: 63.2
Current unemployment rate: 7.3%
Employed Americans: 144.2 million
Unemployed Americans: 11.3 million of those looking for work

2007 population: 301.1 million
2007 civilian labor force (last full year before the Panic): 153.1 million
2007 labor force participation rate: 65.8%
2007 unemployment rate: 4.6%
2007 Employed Americans: 146 million
2007 unemployed Americans: 7.1 million

Over the last six years, our population grew by 4.3%; our labor force population grew less than that, at 1.6%; our employed population shrank by 1.2%; and our unemployed population grew, a lot.  We’re not even keeping up.

Yet despite these obvious failures of Progressive policies, Obama and his Senate counterparts threaten to shut down our government and blow up our national credit rating and with it our economy, if he’s not allowed to have more spending increases, yet higher taxes, and a yet higher debt ceiling so he can borrow to pay for his spending (because he knows higher taxes won’t cover it; he just wants the higher taxes because…well, just because).

National Competitiveness

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James Pethokoukis had some thoughts on this in his recent AEIdeas article, “We’re #5: US gains in global competitiveness rankings.  But guess what our biggest problems are…”  In citing the World Economic Forum’s Global Competitiveness Report, he noted

After having declined for four consecutive years in the ranking, the United States reverses its downward trend, rising by two positions to take 5th place this year and overtaking the Netherlands and Sweden.

And

While the economy is getting back on track, the deleveraging process in the banking sector continues to show positive effects on the stability and efficiency of the country’s financial markets, improving from 31st three years ago to 10th this year in that pillar.

But.  There’s always a but, and Petholoukis doesn’t disappoint.  See this graph:

The graph is hard to read; the “most problematic factors” in the red box are, in order, Tax regulations, Tax rates, and Inefficient government bureaucracy.  (Note: The numbers (e.g., Tax regs’ 16.3) are businessmen responses on a scale of 1 (best) to 5 (worst), which are then weighted so that the final values for the 16 factors sum to 100.  Thus, Tax regulations can be interpreted as held roughly 16 times more important than Foreign currency regulations.  The bars visualize the numbers.)

Yet our man in the White House demands to continue raising taxes, to the point he’s willing to shut down the government and blow up our economy (he also refuses to negotiate over the debt ceiling, remember) if he can’t get more and higher taxes.  And it’s his tax collection agency that targets political groups and their speech of which he disapproves.

Hmm….

An Argument for Reducing Federal Spending

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Treasury Secretary Jack Lew wrote a letter to House Speaker John Boehner (R, OH).  The gist of it:

[T]he Obama administration warned House Republicans that a deal on increasing the federal debt limit may have to come sooner than expected.

Anyone but a Progressive would see this as confirmation of the need to reduce spending, so as to reduce the debt and, consequently, the need to raise the debt ceiling.  The Progressives in our government, though, see this as a need to raise the debt ceiling: we have a credit card; of course there’s still money in the bank.

Or, it’s Mardi Gras all year ’round for Progressives.

Laissez le bon temps rouler.

As Sander Levin (D, MI), Ranking Member of the House Ways and Means Committee confirms:

It is time for Republicans to do the right thing

and spend and borrow more.