Tag Archives: spending

Lies of my President, Part 3

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This is Part 3 of my series on the lies told by Democratic Presidential Candidate Barack Obama in the nearly four years in which he’s been in office.  As I said earlier, I’m not concerned with his broken campaign promises so much as I am with his dishonesty while in office.

Last February, Obama had this to say through his Chief of Staff and former Budget Director, Jack Lew.  The remarks first came in response to a question from Dick Gregory, of MSNBC’s Meet the Press, and then in an interview with CNN’s Candy Crowley.

Gregory: Here’s a stat that a lot of people may not know, but it’s pretty striking.  The number of days since Senate Democrats passed a budget is 1,019.  Can you just explain as a former budget director, how do you fund the government when there’s no budget?

Lew: Well, you know, one of the things about the United States Senate that I think the American people have realized is that it takes 60, not 50 votes to pass something.  And there has been Republican opposition to anything that Senate Democrats have tried to do.

and

Crowley: I want to read for our viewers something that Sen Harry Reid, the Democrat Majority Leader in the US Senate, who said, “We do not need to bring a budget to the floor this year.  It’s done, we don’t need to do it.”

Lew: He’s not saying that they shouldn’t pass a budget.  But we also need to be honest.  You can’t pass a budget in the Senate of the United States without 60 votes and you can’t get 60 votes without bipartisan support.

It stretches credulity far beyond the breaking point for Obama—or his ex-budget director—not to know that it takes 51 votes to pass a budget resolution; budget resolutions cannot be filibustered, the point of the 60-vote red herring.  This is a lie, pure and simple.

On the Keystone XL pipeline, there’s this bit of dishonesty.  Recall that Obama killed the pipeline that would have run from Canadian oil sands into central and Gulf-coastal US because he felt “rushed” by Republicans.  Last March, he staged a photo-op to take credit for “expediting” the permit process for a southern portion of Keystone XL, a part that runs in Oklahoma.  And a part that doesn’t need his, or State’s, approval since it doesn’t cross an international border.

And this one:

If you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you.

Never mind that more and more companies are limiting the health insurance coverage they’re offering as insurance costs rise (wait—weren’t these supposed to come down?).  Never mind that as health insurance coverage alters, doctors are increasingly opting out of—or being driven from by the insurance companies—accepting patients with this or that insurance company’s policy.  And never mind that Sears and Darden Restaurants are moving to a plan where they don’t offer health insurance coverage at all.  Instead, they’ll give their employees a sum of money and allow them to shop for their own coverage via an online exchange.

And this: Senator Barack Obama spoke against recess appointments, including signing a letter to President Bush the Younger objecting to a recess appointment.  He also insisted that it’s “the wrong thing to do,” to appoint people who “couldn’t get through a Senate nomination.”

As president, though, Obama has made “recess appointments” while deliberately bypassing any opportunity for the Senate to weigh in: Donald Berwick to Administrator of the Centers for Medicare and Medicaid Services after leaving the position vacant for 15 months before nominating any one at all, just because he didn’t want to hassle with Republicans; Professor Elizabeth Warren to a created just-for-the-purpose “special assistant” position in his office in order to make her the functional head of the new CFPB, when it became clear that she had no hope of being confirmed; three people to the NLRB while the Senate was still in session.

Welfare, Work, and the Stimulus

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It turns out Obama’s HHS waiver of the work requirement for welfare (in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, signed into law by President Bill Clinton) wasn’t the first Obama waiver of the work requirement.  No, it’s just one more instance of the wealth redistribution in which Democratic Presidential Candidate Barack Obama believes so much.

The Congressional Research Service has a new report out, albeit one done at the behest of an Evil Republican, House Majority Leader Eric Cantor (the report can be found here or here).  This report demonstrates that the Obama Stimulus Package, drafted up shortly after his inauguration in 2009 and passed just after that also waived the requirement for work in order to get welfare.

Typically the food stamp program requires that group [“able-bodied adults” between 18 and 49 years old who have no dependents] to work or participate in a training program at least 20 hours a week to continue receiving benefits after three months. The stimulus law, though, allowed states to suspend the rule from April 2009 to October 2010—and most states did.

The CRS study showed that in fiscal 2010, the last year for which data was available, the number of food-stamp recipients in that group was at nearly 3.9 million. That’s up from 1.9 million in 2008.

Though food-stamp enrollment was already rising at the time in part due to the recession, the study noted the number in this group “increased more rapidly than the overall caseload.”

Their percentage of that caseload grew from 6.9 percent in 2008 to 9.7 percent in 2010.

This was no effort to accommodate spiking unemployment, though.  Indeed, it never was intended to—unemployment would never rise above 8% and would fall back to 5.5% by the end of 2009 with the stimulus, Obama promised us.  The waiver was, nevertheless, extended beyond 2010.

The latest CRS report noted that while the stimulus law lifted the food stamp work requirement until late 2010, the law allowing extended unemployment benefits likewise allowed most states to waive those work requirements in 2011 and 2012.

Bread and circuses.

Tomorrow

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I’ll kick the habit tomorrow.  I promise.  I need to get ready, get my mind right, build up to the effort.

That’s what Democratic Presidential Candidate Barack Obama said last Sunday about his spending addiction.  Speaking through his senior campaign advisor, David Axelrod, on “Fox News Sunday,” he said,

You can’t balance the budget in the short term, because to do that would be to ratchet down the economy.

What an awesome display of economic ignorance, even for someone who’s never worked in a real economy in his life.

The economy isn’t already ratcheted down?  With 23 million Americans still out of work or actively underemployed (as in, scratching with part-time jobs, but wanting full-time work)?  With fewer Americans employed today than at the start of his term?  With unemployment above 8% for his entire term?  With a “recovery” since that Panic’s definitional end in early 2009 the worst in American history?  With the Obama tax increases and the rest of his “taxmageddon” set to hammer us in a shade over three months?  With three years of trillion-dollar-plus deficits?  With the nation’s debt $5 trillion larger—one-third larger—than at the start of his term?

Then Obama insisted, again using Axelrod’s mouth, that he’s created 4.3 million jobs since the Panic.  Never mind that while accepting that figure there remain those fewer Americans employed today than then.  Never mind that Obama continues to decline to offer any evidence that he’s responsible for those “added” jobs, that they were not added by what would otherwise be an ordinary business cycle recovery, suppressed by his policies.

Obama insisted, also (through Axelrod, again), that our auto industry was “saved” by his bailout.  Never mind that of the seven major car companies in the American auto industry (GM, Chrysler, Ford, Toyota, Hyundai, Honda, Nissan—all of which import their constituent parts from overseas, and all of which assemble those parts in their plants in the US), only two took his bailout money, and those two are still suffering under significant government ownership.  The other five car companies—albeit generally without significant union employment, and so not in league with Obama—didn’t need “help” at all; the industry was never at risk.  And never mind that had GM and Chrysler been allowed to go through bankruptcy, they would have recovered much faster, without government encumbrances, and without stiffing senior creditors in favor of Obama’s unions.

If the time to balance the budget isn’t now, then when will it be time?  Oh, yeah.  Tomorrow.  I just need another day.

Renewable Energy

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Has German Chancellor Angela Merkel figured out something Barack Obama hasn’t?  As recently as last June, her government had set a goal that by 2020, renewable energy (vis., wind and solar) would comprise 35% of Germany’s electricity production.  In the first half of 2012 (ending that June), Germany already was generating 25% of its electricity from wind and solar, among other renewables.

Then some other things became apparent.  Germany’s Renewable Power Act requires power companies to buy wind- and solar-originated electricity in significant quantities.  Their largest industrial electricity users consume 18% of the electricity produced,  However, they pay only 0.3% of the extra costs generated by those required buys—German taxpayers pay the difference.

The power grid hasn’t kept up with the growth in alternative energy sources—like the offshore windparks in the Baltic and North Seas off the country’s north coast.  Many of those projects are at a standstill, with no way to deliver the power they generate to the mainland.

That Renewable Energy Act provides incentives to build wind turbines, but it doesn’t provide incentives to build the natural gas-fired power plants the country needs for when the sun isn’t shining and the wind isn’t blowing (see the figure).

Withal, German consumers are faced with skyrocketing electricity bills.

Now Merkel is changing her mind.  She; her Environment Minister, Peter Altmaier; and her Economy Minister, Philipp Rösler are meeting with industry and union representatives “to discuss the rising costs for consumers.  In the run up to that meeting, Altmaier has indicated that he hopes to…put the brakes on the current rush toward renewables.”

In the US, we have these: green energy subsidies (guaranteed loans, tax credits) and a Federal requirement that power companies buy power from renewable energy producers.

Off the New England coast, special interests found the views from their beach front manses would be offended by wind farms, and the potential farms themselves were declared a “hazard” to aircraft, so they are not even being built.  In central California, environmentalists won’t allow some solar farms to be built and won’t allow the power cables that would deliver solar electricity to cities to be built.

The EPA still requires ethanol to be blended into our gasoline, even though not enough of that is being produced to meet EPA requirements, much that is produced is exported, and the whole charade is driving up the cost of food.

Maybe we should, in  this case, try Obama’s meme of being more like Europe, or at least more like Germany.

Government Spending

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Much of this originated as a comment to a Gay Patriot post.  I strongly recommend the post and then the accumulating commentary.

It’s important to note at the outset that government has no money of its own.  It only can act as intermediary in the (forced) process of transferring money from one group of private citizens to another.

Now a few remarks on government spending.  First, much of the money taken from private individuals and/or their businesses (which are just agencies of private individuals) to pay for government spending is lost to friction, including outright waste (I won’t get into losses to graft.  Could the graft be identified, it’d be rooted out.  Right?).  The waste includes money spent on government middlemen, money spent on government contractors hired to oversee the transfers and transferees, time and money spent schmoozing with lobbyists (both the good ones who are only identifying constituent needs—Congressmen generally fit this bill, for instance—and the bad ones, who are sure to take a taste of their own as the money flows, or to provide some vig in return for future consideration), and so on.

Second, money taken from private individuals to pay for government spending—whether through current taxes, current borrowing (future taxes), or printing money (future inflation)—is money that is not spent in the private sector, or husbanded against future spending in the private sector.  Thus, the multiplier effect of government spending, such as it is, is cancelled, if not exceeded, by the known, and fairly large, multiplier effect of private spending that is lost.  In many sequences of private spending, for instance, that multiplier effect runs out to 1.7x.  The best Keynesian estimate for the government spending multiplier is 1.5x.

Third, those husbanded funds generally are deposited in financial institutions as savings, and these deposits then are loaned to borrowers: these deposits are the primary source of loanable funds.  Taxes, then, reduce the amount of private money available for saving and so reduce the amount of lending that can occur.  This effect isn’t enough to cause a credit crunch like the one coming out of the Panic of 2008, but it hasn’t helped.  Further, that future inflation from printing to support excessive public borrowing devalues the funds that are saved.

There’s more.  As government debt grows, more private funds become husbanded, not against future spending goals in the private sector, but against those future taxes.  And even more borrowing is encouraged by that inflation (in the period before the recession that is the inevitable result of that high inflation)—in both the private and government sectors—since the repayment will be with inflation-devalued dollars.  Then that inevitable recession hits, and payback becomes, as they say, a bitch.

In sum, government spending isn’t zero-sum, it’s negative sum.

Update: clarified the second point.