The Final Minority Report

Because Even Minorities Oppose Liberalism & Statism

Obama Promised to Lower Taxes, Will Raise Them Instead

Vindication of how dumb voters are and how dumber our politicians are when it comes to slogans and promises:

Only five months after Inauguration Day, the focus of Washington’s economic and domestic policy is already shifting. This reflects the emergence of much larger budget deficits than anyone expected. Indeed, federal deficits may average a stunning $1 trillion annually over the next 10 years. This worsened outlook is stirring unease on Main Street and beginning to reorder priorities for President Barack Obama and the Democratic congressional leadership. By 2010, reducing the deficit will become their primary focus.

Why has the deficit outlook changed? Two main reasons: The burst of spending in recent years and the growing likelihood of a weak economic recovery. The latter would mean considerably lower federal revenues, the compiling of more interest on our growing debt, and thus higher deficits. Yes, the President’s Council of Economic Advisors is still forecasting a traditional cyclical recovery — i.e., real growth of 3.2% next year and 4% in 2011. But the latest data suggests that we’re on a much slower path. Probably along the lines of the most recent Goldman Sachs and International Monetary Fund forecasts, whose growth rates average about 2% for 2010-2011.

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06/30/2009 Posted by | Free Market Economics, Government Debt, Liberal Business, Obama - Domestic Policy, Obama Budget, Redistribution of Wealth, socialized medicine, tax cheats, Useful Idiots | Leave a comment

Do Democrats Pose Hurdles for Obama’s Agenda?

Will Democrats truly pose hurdles for Obama?

WASHINGTON — As Congress tackles President Barack Obama’s top two domestic priorities — climate change and health care — he faces some of his most serious challenges from fellow Democrats.

The narrow passage Friday of an environment bill came with nearly one in five Democrats defecting, and only after supporters from coal-producing and agriculture districts won concessions that eased the impact on business and aggravated some environmentalists. Prospects for the measure remain uncertain in the Senate, even though Democrats hold a 59-40 voting majority.

Some Democratic defections were to be expected. Republicans’ argument that the cap-and-trade program would effectively impose a national energy tax on consumers and businesses was a message likely to resonate in conservative congressional districts won by moderate Democrats in the past two elections.

06/30/2009 Posted by | Government Debt, Liberal Business, Obama - Domestic Policy, Redistribution of Wealth, socialized medicine, Useful Idiots | Leave a comment

Rationing Healthcare – The Obama Way

Who do you think will get the health care in the end?

Here is a handy-dandy way to determine whether the failure to order some exam or treatment constitutes rationing: If the patient were the president, would he get it? If he’d get it and you wouldn’t, it’s rationing.

It may seem absurd to worry about whether wealthy or well-insured people get every last test and exotic or speculative treatment when millions of Americans have no health insurance and millions more have gaping holes in their coverage. But the well-insured happen to include virtually all the people making the key decisions about health-care reform — members of Congress and their staffs, the White House staff, Washington journalists, and so on. These people’s fears that they would lose the right to “choose my own doctor” (code for getting treatment with all the bells and whistles) helped kill Hillary Clinton’s attempt to reform health care in the early 1990s. Fear of rationing could kill Obamacare for the same reason.

06/30/2009 Posted by | Government Debt, Health Care, Useful Idiots | Leave a comment

Why Obamacare may be Flatlining

Hooray!

So what just happened? How is it possible that Democrats cruised to a huge victory on Election Day in November 2008 and are yet again unable to make good on their top legislative priority? Why are the ghosts of Bill Clinton’s 1994 healthcare reform debacle suddenly flitting about Capitol Hill? What happened was the Great Recession, the political impact of which the Obamacrats completely misunderstood. Oh, they knew the financial and economic crisis helped sweep them to office. That part they got just fine.

But they also assumed that the downturn would create such a sense of economic insecurity that time would be ripe for the sort of expansive, government-led healthcare changes that the party has been dreaming of for two generations. Instead, the Great Recession made healthcare less of a priority for voters than economic recovery — as fast as possible, please — and job creation. A recent spate of polls shows concern about healthcare (and climate change and pretty much everything else) lagging concern about unemployment. Healthcare lags concern about the shocking enlargement of the federal budget deficit, which has grown partly due to government actions — such as the $800 billion Obama stimulus package — to deal with the recession, as well as by the decline in tax revenue caused by the downturn itself.

06/23/2009 Posted by | Free Market Economics, Government Debt, Liberal Business, socialized medicine, The Left, Useful Idiots | Leave a comment

Pension costs can ruin cities and states

Indeed.

California has exerted a weird, hypnotic pull lately, as Americans have watched the Golden State roll toward what might just be financial Armageddon. The state government is facing a $24 billion deficit, but Democrats and Republicans in Sacramento, Calif., are showing very little ability to get the problem solved.

As a result, California is “less than 50 days away from a meltdown of state government,” the state controller said last week.

It’s hard to know whether to stare in horror or avert your eyes.

Our advice: Stare. Because in California’s example, there are lessons for Minnesotans and North Dakotans to learn.

One such lesson has to do with public-employee pensions and a state’s fiscal health. California faces unfunded public employee retirement benefits of somewhere between $300 billion and $1 trillion, a panel discussion at the Milken Institute’s State of the State Conference concluded in May.

06/23/2009 Posted by | Economy, Government Debt, Liberal Business, Redistribution of Wealth, Strange but True, Useful Idiots | Leave a comment

Terrorism Reinsurance Scaled Back by Obama

For a political animal such as myself, I’ve never heard of this:

Kudos to the President for his proposal to scale back the subsidy for terrorism reinsurance. I wish he had gone all the way to eliminate this program during this term, but I’ll take the partial win.

After the 9/11 attacks, parts of the market for insurance against terrorist attacks evaporated. Insurers rely on statistical data to determine the chance of a future terrorist attack, and therefore the chance that they will have to pay a claim. Insurers were no longer able to estimate the chance that the Empire State Building, or a new stadium, would be attacked, and so they were unwilling to sell terrorism insurance for these kinds of high-value terrorist targets.

This caused further problems, because some real estate developers could not get bank loans without insurance against a terrorist attack.

06/23/2009 Posted by | Government Debt, Obama - Domestic Policy | | Leave a comment

Person to Head GM Restructuring is a Thirty-Something Law Student

Trust your government
They know better than you

Imagine you had to pick someone to shepherd a gigantic multinational corporation through a bankruptcy in order to salvage it. Would you look for someone with extensive experience in the firm’s industry, or would you prefer someone with demonstrated savvy on Wall Street in turning around troubled firms? If the firm made cars, perhaps you could think of it as a choice between a Lee Iacocca or a Mitt Romney.

Or, maybe, you’d just pick someone from the mail room, as Barack Obama apparently has in the GM bankruptcy:

It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.

“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”

Scary? Well, yes, and not just for Mr. Deese, whose executive experience actually is less than Obama’s. He’s never run any business, let alone worked in the auto industry. He joined the Hillary Clinton campaign by taking a hiatus from law school, which he began after working as an assistant to Gene Sperling, now an advisor to Tim Geithner. His entire resume consists of campaign work.

Perhaps Deese will do a good job, but I’m not terribly sanguine about the prospects of GM prospering under the guidance of someone who hasn’t ever met a payroll or sold a car. A President who took his own job seriously would never have appointed a second-tier adviser to this position. A national media who took their jobs seriously wouldn’t let him get away with it, and don’t count this NYT piece in their favor. They give a glowing report to this political-hackery appointment.

06/04/2009 Posted by | Economy, Going green, Government Debt, Liberal Business, Obama - Domestic Policy, Redistribution of Wealth, Useful Idiots | , | Leave a comment

Obama’s Quadruples Deficit in 100 Days

White House: Budget deficit to top $1.8 trillion, 4 times 2008’s record

* Andrew Taylor, Associated Press Writer
* On Monday May 11, 2009, 11:09 am EDT

WASHINGTON (AP) — With the economy performing worse than hoped, revised White House figures point to deepening budget deficits, with the government borrowing almost 50 cents for every dollar it spends this year.

The deficit for the current budget year will rise by $89 billion to above $1.8 trillion — about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama’s economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.

As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.

For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration’s plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.

The developments come as the White House completes the official release of its $3.6 trillion budget for 2010, adding detail to some of its tax proposals and ideas for producing health care savings. The White House budget is a recommendation to Congress that represents Obama’s fiscal and policy vision for the next decade.

Annual deficits would never dip below $500 billion and would total $7.1 trillion over 2010-2019. Even those dismal figures rely on economic projections that are significantly more optimistic — just a 1.2 percent decline in gross domestic product this year and a 3.2 percent growth rate for 2010 — than those forecast by private sector economists and the Congressional Budget Office.

For the most part, Obama’s updated budget tracks the 134-page outline he submitted to lawmakers in February. His budget remains a bold but contentious document that proposes higher taxes for the wealthy, a hotly contested effort to combat global warming and the first steps toward guaranteed health care for all.

Obama’s Democratic allies controlling Congress have already made it clear that they will reject key elements of his plan. Already apparently dead is a plan to raise $267 billion over the next decade to pay for his health care initiative by curbing the ability of wealthier people to reduce their tax bills through deductions for mortgage interest, charitable contributions and state and local taxes.

And the congressional budget plan approved last month would not extend Obama’s signature $400 tax credit for most workers — $800 for couples — after it expires at the end of next year.

Obama’s remarkably controversial “cap-and-trade” proposal to curb heat-trapping greenhouse gas emissions is also reeling from opposition from Capitol Hill Democrats from coal-producing regions and states with concentrations of heavy industry. Under cap-and-trade, the government would auction permits to emit heat-trapping gases, with the costs being passed on to consumers via higher gasoline and electric bills.

Among the new proposals is a plan — already on its way through Congress — that would increase the Federal Deposit Insurance Corporation’s borrowing authority from $30 billion to $100 billion in order to grant a two-year reprieve from higher deposit insurance premiums while the industry is struggling.

Also new are several tax “loophole” closures and increased IRS tax compliance efforts to raise $58 billion over the next decade to help finance Obama’s health care measure. The money makes up for revenue losses stemming from lower-than-hoped estimates of his proposal to limit wealthier people’s ability to maximize their itemized deductions.

The updated budget also would repeal an unintended tax windfall taken by paper companies that use a byproduct in the paper-making process as fuel to power their mills. The tax credits were never intended for paper companies, but now they could be worth more than $3 billion a year, according to a congressional estimate.

The budget would make permanent the expanded $2,500 tax credit for college expenses that was provided for two years in the just-passed economic stimulus bill. It also would renew most of the Bush tax cuts enacted in 2001 and 2003, and would permanently update the alternative minimum tax so that it would hit fewer middle- to upper-income taxpayers.

05/11/2009 Posted by | Free Market Economics, Government Debt, Obama - Domestic Policy, Obama - Spending Bills, Obama - Stimulus Bill, Obama Budget, Personal Debt, Redistribution of Wealth, Useful Idiots | Leave a comment

Finding Some Public Accountability in UK

NOTE: MP = Minister of Parliment

MPs’ EXPENSES: The Telegraph’s investigation into how politicians – from Gordon Brown and his Cabinet to backbenchers of all parties – exploit the system of parliamentary allowances to subsidise their lifestyles and multiple homes.

It’s not just an American thing!

05/10/2009 Posted by | Equal Opportunity, Free Press, Government Debt, Pensions, Redistribution of Wealth | , | 1 Comment

How Does Obama’s Bullying of Investors Affect America?

A pithy observation:

Does Obama’s bullying of investors portend real problems for the US?
Johnathan Pearce (London) Globalization/economics • North American affairs

I have not written about the subject of the Chrysler bailout so far since, not being close to the action in the US, I did not feel I had much to say that was not already voiced by the US blogs. But it does occur to me that there is a general problem right now in the way that the US administration – and arguably the UK one as well – has been acting in respect of bailouts of certain industries, such as carmakers as well as banks. What do I mean? Well, this report (H/T: Instapundit) suggests there is real fear about the “Nixonian” tactics employed by Mr Obama’s administration against bond-holders who have been angered by the expropriation of their capital via the Chrysler bailout.

For those who have not been following this story, bond-holders have been pushed to the back of the queue, as far as potential recovery of capital is concerned, with the auto union membership getting preferential treatment. Maybe Mr Obama figures that investors can be rained on right now because it is more important to get the votes and support of traditionally Democrat-leaning car workers. With mid-term Congressional elections a couple of years away, he will have his sly, Chicago machine-politics mind working out how to garner important support in the event that the US economy is still sluggish by that time. But pissing off investors – such as, let it be noted, pension funds – is not smart. The US requires large amounts of capital for any economic recovery that may take place. Ask yourself one of the most basic questions any investor should ask: can I get my money back if I need to? If the answer is no or only maybe, and if there is the threat of governments robbing investors, then less investment occurs. The problems of such behaviour explain why, for example, Africa has been such a bad investment bet for so many years.

It is an ugly business. Part of the trouble with the automakers is that even if they had been put into a Chapter 11 bankruptcy process, with the banks and bondholders put on a more even footing for any recovery of assets, there is still the issue of what to do about the enormous unfunded pension obligations that these heavy industrial companies have. It is the same with airlines and steel. I have heard it said of British Airways – to take a UK example – that is is a pension scheme that happens to have a lot of aircraft. The pension tail can wag the corporate dog. And that is a hideous issue to deal with against the background of an ageing population. So in fairness to US policymakers, running down Chrysler involves dealing with a lot of tricky contractual issues.

Even so, it strikes me that the Obama administration is showing a level of political ruthlessness and “bugger-the-investor” attitude that is hardly going to endear people towards investing in that economy. My fear is that Mr Obama is making the cynical calculation that memories will fade; after all, how many investors in the UK remember how the Blair government, in the form of the charmless Stephen Byers, the-then industry minister, shafted investors in Railtrack?

Like I said, an ugly business.

05/10/2009 Posted by | Former Obama Supporters, Free Market Economics, Government Debt, Liberal Business, Obey Obama, Redistribution of Wealth, TARP, tax cheats, Useful Idiots | Leave a comment