Tag Archives: spending

Keynesian Stimuli

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If the point of Keynesian spending is to inject money into the economy to make up for diminished private demand, then an equally valid Keynesian stimulus would be to reduce taxes and leave the money in the private economy in the first place.

Which, in fact, Keynesians actually recommend: Galbraith, John K, The Great Crash 1929.  And as that Evil Republican (!?) John Kennedy actually did in the early ’60s, that Evil Republican Ronald Reagan did again in the ’80s, and that Evil Republican George Bush the Younger did yet again in the early 2000s.

Spend more, tax less—either one produces the deficit spending that is actually what Keynes thought appropriate.  Except that taxing less—eliminating the government as (inefficient) middleman in the deficit spending—produces the more efficient stimulus, to the extent that government stimulus can have any beneficial effect at all.  And spending more is how politicians buy votes.

Hmm….

Spend, Spend, and Tax

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President Barack Obama offered, the other day, a “grand bargain” on taxes and spending that only a Progressive could love.  Obama offered to lower corporate tax rates (so long as he got to delete enough non-“green energy” subsidies to get a net increase in Federal revenues), if only he could use that increase to spend more (and not pay down our Federal deficit).

“I’m just going to keep on throwing ideas out there,” Obama told a crowd of supporters, challenging Republicans to offer counterproposals.

Never mind that those Evil Republicans in the House already have passed a large number of…counterproposals…over the last couple of years.  Those jobs bills, among all the other counterproposals, are languishing in the Democrat-controlled Senate.

It Isn’t Your Money

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Or, gimme, gimme, gimme.

Treasury Secretary Jack Lew told “Fox News Sunday” that President Obama will neither sign government funding bills that slash domestic spending nor negotiate with Republicans over spending cuts to reduce the federal debt limit.

That’s not all.  He told ABC’s “This Week”

I think the president has made crystal clear, he’s not going to negotiate over the debt limit.

But he’s willing to “work with” all comers.  Sure.

This President, and his cronies in the Senate, are perfectly willing to blow up our credit rating (or what’s left of it after their last fiasco just a couple of years ago) and shut down the government if they’re blocked from taking more of your money away from you (in their demanded higher taxes) or taking more of your children’s money away from them (in their demanded continuing borrowing) and spending ever more of your money (their demanded spending increases).

All because these…politicians…think they know better than you—or your children—what that money should be spent on, and they’re convinced it’s their money and not yours in the first place.

Spinning

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From the National Republican Congressional Committee, and on the heels of President Barack Obama’s latest Presidential Bull on the economy, comes this compilation of the…pivots…that  Obama has made during his administration.

  • “Obama Aims to Shift Focus To Boosting Jobs, Economy” (Wall Street Journal, 7/18/13)
  • “Obama Pivots to Jobs Tour at End of Scandal Filled Week” (ABC News, 5/18/13)
  • “Obama’s Texas Trip An Attempt To Refocus On Jobs, Economy” (Washington Times, 5/8/13)
  • “Obama: State Of The Union To Focus On Jobs” (USA Today, 2/8/13)
  • “Obama Turns To Congress For Jobs Help” (The New York Times, 6/1/12)
  • “Obama Turns Attention To Economy After Fundraising Pitch” (Associated Press, 5/11/12)
  • “Fresh Off Debt-Ceiling Brawl, Dems Pivot To Talk About Jobs” (The Hill, 8/3/11)
  • “Obama To Focus On Jobs” (San Jose Mercury News, 1/23/11)
  • “Obama To Focus On Jobs, Spending In State Of The Union Speech” (The Tennessean, 1/27/10)
  • “Hill Democrats Set To Pivot To Job Creation” (Washington Times, 1/25/10)
  • “Obama Pivots To Jobs As Key Theme” (Politico, 1/8/10)
  • “Obama Turns Focus To Job Creation” (Associated Press, 12/5/09)

Sort of gives new meaning to the phrase “political spin.”

Detroit and the Nation

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In Detroit’s bankruptcy filing, Michigan Governor Rick Snyder (R) included a letter outlining his reasons for his approval of the filing.  Here are some of them [emphasis added].

  • The City’s unemployment rate has nearly tripled since 2000 and is more than double the national average.
  • Its citizens wait an average of 58 minutes for the police to respond to their calls, compared to a national average of 11 minutes.
  • The City’s police cars, fire trucks, and ambulances are so old that breakdowns make it impossible to keep up the fleet or properly carry out their roles.
  • The City has more than $18 billion in accrued obligations.
  • Detroit tax rates are at their current legal limits, and that even if the City was legally able to raise taxes, its residents cannot afford to pay additional taxes. Detroit simply cannot raise enough revenue to meet its current obligations….
  • The City’s population has declined 63% from its peak, including a 28% decline since 2000.
  • A decreasing tax base has made meeting obligations to creditors impossible.

Horribly high expenditures against a tax system that’s already very expensive for the citizens has driven Detroit into the ground and forced restructuring through bankruptcy.

What are the implications for the nation as a whole?

On the one hand, bankruptcy—legal bankruptcy—is not an option for the US.  Nations have no bankruptcy system available to them; all a bankrupt nation can do is to repudiate its debts or debase its currency, repaying with devalued (dollars)—to repudiate its debts through subterfuge.

Here lies the United States: we have horribly high expenditures (see Obamacare, Medicare, Medicaid transfer payments, Social Security, Federal public service union pensions, Stimulus spending, etc) against a tax system that is hammering the paying population into the ground while, by design, excluding half the tax base from tax obligations.   This combines to create on the national level massive annual deficits, exploding national debt, and increasing costs to borrow (presently low, Bernanke’s artificially suppressed interest rates will not be able to stop the market’s assessments of our national creditworthiness).

Detroit is the future of the United States under our current policies.  In that light, notice the loss of population as Detroiters fled the disaster—28% of its people just since 2000.  As our national disaster unfolds—unless we move to terminate our Federal government’s destructive policies and put aside our own disdain for work and responsibility—where will Americans go?