Posts Tagged 'Bush'

Have you heard the one about Obama’s budget?

Democrats are saying Obama’s budget is strategic genius.  It avoids recommending any unpopular choices or dealing with any difficult topics so that Republicans will have to take those up and be hated by the masses for doing so.  That is the excuse for Obama skipping over any sort of entitlement reform.  Others are saying he is “establishing credibility with the voters” by writing some unpopular budget cuts into his plan so that he can negotiate with Republicans.

So now the President’s responsibility is reduced to a subtle way of taking partisan jabs at his political enemies?

It doesn’t seem that way to me.  It seems to me that Obama’s budget is much more like a bad joke or embarrassing bodily noise that one tries to avoid making in public.

Obama has come out now saying that his budget cuts the deficit and that we “can’t run up the credit card” anymore.  This is an odd claim since Obama’s budget actually runs up an additional $250 billion on the card this year, setting his deficit at a new record of $1.65 trillion.  And he doesn’t even have a stimulus bill to show for it.

The real joke is that Obama’s budget reduces the deficit to $607 billion after ten years.  Of course, Presidential budget projections ten years out are as on target as a superbowl prediction ten years out.  But even if Obama does cut the deficit to $607 billion it will still be over $100 billion higher than Bush’s worst deficit in 2008.

Don’t worry, Obama’s deficit doesn’t have a chance at getting as low as $607 billion.  Obama’s “tough choices” on budget cuts circumvent entitlements altogether, but he does have cuts to education funding and heating for the poor.  That’ll pass.

Obama also includes tax hikes that his own party wouldn’t pass.  This must be part of his genius strategy where he somehow hangs his deficit around the Republican’s neck.  Obama’s spending cuts and tax hikes will never pass.

A liberal friend of mine informed me that the President’s budget really doesn’t matter, what counts is what Congress does.  Apparently he was trying to make me feel better about the President’s embarrassing budget.  I’m fine with that.  Bush was crucified for his last two years in office for high budget deficits.  Nevermind that Obama dwarfed those deficits his first year in office (and again his second and now third year), does this mean we can now blame Pelosi/Reid for Bush’s budget deficits?  The last time Republicans controlled Congress they had a $248 billion deficit.  That is less than the increase in Obama’s $1.65 trillion deficit this year.

Obama is betting on his skills of manipulation and a willfully ignorant voting public.  He has offered a sham budget with hopes that Republicans will do his job for him so that he can blame them for failure or take credit himself for success.  Clinton did the same thing when Gingrich and co. shut down the government and balanced the budget.

Obama’s budget is a shameful joke.  Liberals love him for it because they see his partisan agenda.  Hopefully the majority of voters see it for what it is: a waste of Obama’s time and our tax dollars.

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Obama’s big win of 2010:extending Bush’s biggest win of 2001

Victory, Immortal Fame!  So cries the last warrior standing, ironically right before he himself dies, after defeating his surrounding army.  The warriors of the mythical army, raised from serpent’s teeth planted in the ground, are tricked by Jason into battling each other.  So ends this humorous battle in Argonautica.

Not so different was the media coverage of the passing of the Bush tax cut extension.  After Obama defeated his fellow Democrats in passing this extension, the media hailed it as a much needed victory for the White House.

Wait.  What?

If you read Obama’s Tax Cuts of 2010, you shouldn’t be too  surprised.  In fact, the only thing that should surprise you is exactly how much of the Republican agenda Obama acquiesced to in this tax rate extension.  I predicted back in October, 2009 that Obama would extend the Bush tax cuts for at least the middle class, and that he would herald them as tax cuts instead of merely extensions of the Bush tax rates.  But at the time I figured it would come at the cost of no estate tax fix, higher rates for upper income earners, and other built in tax hikes.  Instead, this “White House victory” looks more like something from the last 8 years that supposedly “got us into this mess in the first place”.

The question then, if this is truly a White House victory, is if Obama has become a born again Capitalist.  The tax extension doesn’t just extend Bush tax rates for two years, it also gives a generous estate tax system that increases the exemption from $1 million to $5 million and lowers rates to 35%.  It also gives businesses of any size 100% bonus depreciation on new asset purchases in a tax gift to huge corporations.  And lastly, it replaces the Making Work Pay Credit with a 2% across the board cut in Social Security taxes.

The 2% Social Security cut was Obama’s answer to the expiring Making Work Pay Credit and is perhaps the greatest evidence of either a change of heart on Obama’s part, or a total victory on the Republican’s part.  In 2010, the Making Work Pay Credit will give families making less than $40,000 a credit of $800, while denying families making more than $175,000 any credit.  It was a perfect Liberal tax cut.  It was even poorly administrated.

On the other hand, the 2% Social Security cut is an across the board flat cut that is easy to administer and has no AGI cap.  So in 2011 a family that makes less than $40,000 will actually be paying more taxes, while a family with  a working husband and wife who make $200,000 combined will get a tax cut of $4,000.  This year they would have no tax break.  This non-progressive change is a White House victory?

The 2010 tax rate extension was an acknowledgment by the left that the policies of the last 8 years did not get us into this mess.  The Bush tax cuts got us out of the last mess and just might work this time too.  How they can claim that this Republican victory was anything else is beyond me.

The only thing the Democrats got out of this deal was not having to pay for the next unemployment benefits extension.  But in the end, Obama found it easier to defeat his own majority party than to take out the minority Republicans.  The result?  Your taxes aren’t going up next year no matter who you are.  And just as expected, Obama is saying it is because of him.

How Third Party Candidates Will Help TEA Party

I’m sure you read the title of this blog and scratched your head.  I assure you I am not crazy.

In 1992 and 1996 Republican candidates who leaned moderate were defeated by Bill Clinton.  In neither election did Clinton get 50% of the popular vote.  In fact, George W. Bush and Al Gore both came closer to 50% in 2000 than Clinton ever got.  In both the 1992 and 1996 elections, Republicans were hijacked by the third party candidacy of Ross Perot.    Perot was a spunky, debt-conscious candidate who predicted many of the troubles we face today.  Though some conservatives would have preferred Perot to George H. W. Bush and Bob Dole, it was from these elections that we had ingrained in our minds that a vote for a third party was a vote for the Democrat.

In 2006 the electorate shifted.  We had RINO Republicans in office, who had easily ridden George W. Bush’s coat-tails and the architecture of Karl Rove.  Conservatives did not like these RINOs and moderates couldn’t tell the RINOs from the Democrats and didn’t like our hundred billion dollar deficits.  In 2006 conservatives stayed home.  Or, in some cases, they voted for the third party candidate.

In this case, I am not talking about a conservative third party candidate, but I am talking about the 2006 re-election of Joseph Lieberman in Connecticut as an independent.  Joe had lost to his radical leftist opponent Ned Lamont, and decided to leave the Democrat party and run on a third party ticket.  In this race, moderate Republicans dumped their no-chance-in-hell (or any other blue state) candidate and voted with the moderate Lieberman.  Lieberman won.

Lieberman’s victory against the radical wing of his party, assisted by moderate Republicans, has given hope to moderates everywhere.  When Marco Rubio went from double digits behind Charlie Crist to the obvious winner, Crist dropped the Republican party and ran as a third party candidate.  Rubio still leads him and his opponent by double digits in a state Democrats gave to Obama in 2008, and the other Senators are a true blue Democrat and a moderate Crist appointed Republican.

You can’t blame RINOs for being upset about their upset losses to TEA party candidates.  Basically, they have been fired by the people in their party.  They didn’t expect it; their bosses in the party kept telling them they were awesome.  Crist will be giving up his Jim Greer expense account and his wife won’t be able to use tax dollars to go to Disney World or partying in NYC anymore.  Murkowski won’t get the lobbyist attention anymore.  Castle is left friendless and embarrassed in Delaware.

So what has changed since 1996?  Now the moderate is the third party.  Instead of the conservative vote being split between the candidate who can win and the candidate who we like, while the moderates and Democrats give the Democrat the victory, conservatives will be united against a candidates whose electorate will be split between radical Democrats and moderates.  Did I mention that Rubio holds a double digit lead over Crist and Meek?

Gallup shows that conservatives make up the largest group percentage-wise in this country.  They accounted for 40% back in 2009 when the deficit was only a trillion dollars and people still thought everything was Bush’s fault.  Moderates accounted for 35% and liberals took 21%.  That leaves “don’t knows” of 4%.  When Republicans were acting like moderates (safe word for mildly liberal), Democrats won.  Why not?  It was 50% to 40%.  Moderates looked at both parties, asked what’s the difference, and then voted for the party that wasn’t pretending to be something it’s not.

But split the liberal and moderate vote, and conservative TEA Party Republicans have a 5% advantage over their RINO opponents.  Still think I’m crazy?  The latest Reuters-Ipsos poll has Marco Rubio at 40%, Charlie Crist at 26% and Kendrick Meek at 21%. Sounds like Gallup got it about right.

So, Conservatives, call Lisa Murkowski and Mike Castle and encourage them to start write-in campaigns.  The moderates in this country need someone to vote for.

Debunking Obama’s Business Tax Break

Obama is touting a new business deduction that could save companies up to $200 billion dollars.  The tax break will allow businesses to expense capital property and equipment 100% right away instead of depreciating them up to 39 years.  However, this plan will have limited effects until the fourth quarter of 2011.  Here is why:

Just like the Healthcare credit, this business deduction will only reach a very limited range of companies.  While Obama is heralding it as a small business tax break, small businesses already can expense equipment and some capital improvements through Section 179 deductions.  In fact, they can expense up to $250,000 in 2010.  Most small businesses will never purchase that much new equipment in one year.  So already this break for 2010 is only for medium to large businesses.  In 2011, this business tax break will act simply as an extension after Obama let’s the Section 179 provision expire.

What Section 179 does not cover is the physical building and most capital improvements to the building itself.  That is where this tax break may actually be effective for small businesses.  However, Obama runs into another snag here that most tax professionals and analysts miss.  In order to take losses in your business, you have to have basis.  In other words, you can only take out of your company what you put into it or make in the process of carrying on business.  If you borrow $100,000 from the bank and put it into your company, and then spend it all without making any money, you cannot deduct that $100,000 until you have built up basis in your company.

Most building property and significant improvements are purchased through outside financing on the small business scale.  This means that most small businesses will not be able to take the losses from this tax deduction until they are able to build up basis in the company.  In fact, companies who choose to take this deduction and then take distributions out of the company in excess of their basis will face double taxation.

The final nail in the coffin for this tax break for 2010 is that many tax advisers are telling business owners to put off capital investments until 2011 when the Bush tax cuts expire and rates go up.  Many small businesses make capital purchases and take advantage of 179 expensing in the fourth quarter as part of their year end tax planning.  This year, many businesses are planning on putting those purchases off until next year when the deduction can save them an additional 3-8.4% in taxes.  By putting off property purchases until 2011 when Obama let’s taxes go up, small businesses can save tens of thousands of dollars.

In that sense, this tax break may be a good thing.  As businesses are losing tens of thousands with the expiring Bush tax cuts, maybe this will help save some jobs in 2011.  Don’t expect it to solve anything this year.

With Nothing Else to Lose, Obama Claims Victory

July private sector job gains have been revised down by 5,000.  10,000 private sector jobs were lost in August.  Now even liberal media outlets are beginning to wonder if the double dip recession will materialize.  They are a little late to the game, and uncharacteristically so.  When Bush’s recession began, it had already been in the news cycle for a couple quarters.

The surge in Afghanistan is costing as many US lives as the surge in Iraq that Obama so heatedly objected to.   On the foreign and domestic fronts there is not much to be cheerful about.  So just as predicted, President Obama has found the silver lining in the form of his own metaphorical “Mission Accomplished” banner in Iraq.

While trying not to sound like the Iraq war was a good thing, yet attempting to make victory in Iraq sound like a great accomplishment of his, Obama signaled an end to combat missions in Iraq and an early withdrawal of additional troops.  This will leave about 50,000 in the country, despite Iraq having no formal government after their recent closely divided elections.

Not surprisingly, Obama did not give credit where due.  Though he opposed the war that he now admits made America safer, and forcefully opposed Petraeus and the surge (which he is now employing in Afghanistan), Obama attempted to walk the fine line of turning victory in Iraq into victory for Obama.

But this gamble may have no downside for Obama politically.  Democrats have nothing to campaign on this fall.  Their best bill, the overly liberal and unconstitutional health reform bill, has more than half the country supporting repeal and bureaucratic nightmares hidden in the pages that are just now starting to come out.  This fall, Obama may be counting on campaigning on Iraq.

If the end of combat missions is indeed successful, Obama may actually claim success in his promise to peacefully end the Iraq war.  With the immense success of the Bush Surge strategy, this is a real possibility.  On the other hand, if things go south Obama can once again label this as one more catastrophe of the previous administration.  After all, hasn’t he said the mission in Iraq was doomed from the start?

As I have posted before, Democrats will once again be counting on the gullibility of the American public this election cycle.  This time, win or lose, Iraq will once again be a center stage issue of the left.

GDP on loan from China

Although the economy shrank overall in 2009, plenty of media outlets and Democrats are overjoyed to point out that the economy grew at a rate in the last quarter that was higher than we’ve seen since all the way back in, well, the Bush years.  The 5.7% GDP growth in the fourth quarter of 2009 was more than a lot of economists expected.  Economists who know what happens when you throw trillions of debt spending at the economy weren’t too surprised.

Once again, debt does not equal wealth.  Obama increased spending by 33% his first year while revenues fell.  This year he is doing the same, even without unplanned stimulus spending.  Every jobs bill Obama thinks up is nothing more than borrowing hundreds of billions more and throwing it at short-term government infrastructure projects.  I still haven’t found out how many times you have to repave the same stretch of road before the government counts as a job saved or created.

If you lend a homeless man a million dollars at a high interest rate, he buys a house, and then the house drops in value to $800k, is his wealth growing?  He does have an $800,000 house that he didn’t have before.  I hate to say it, but our growth in the fourth quarter of 2009 is no different.

In the fourth quarter of 2009 the market value of our domestic product increased by $221 billion.  That’s not bad.  It’s not quite as good as the 7.2% GDP growth Bush’s tax cuts produced, but it’s definitely better than the economic retraction we saw in the first half of 2009.  At the same time though, debt spending increased by $260 billion in the fourth quarter.

So we borrowed $260 billion and the value of our domestic product increased by $221 billion.  Meanwhile more than 600,000 jobs were lost in the fourth quarter.  And lots of roads got repaved again.  Oh yeah, and plenty of Democrat congressional districts got new duck ponds, skate parks, and honey bee insurance.

Now we have to pay for our borrowed growth.  Someone finally read my blog and figured out that Obama is going to raise taxes by not renewing the Bush tax cuts.  Obama has already written Cap and Trade (which would increase energy costs by thousands for each American family) into his budget.  The sad thing is that with all these tax increases we still are expecting a $1.6 trillion deficit for 2011.  This is only twice what Obama was projecting for 2011 when he took office.  For the record, Bush’s worst deficit was just over $400 billion after a year of Democrat control of the Congress.  Bush even inherited the tech bubble, loose fiscal policy, and a decimated terror intelligence community (who couldn’t stop 9/11) from the previous administration.  By the way, if you think Bush inherited a surplus you haven’t been reading my blog.

Obama kept telling us that only government can fix the economy.  Many believed him.  Hopefully we have learned our lesson.  The government doesn’t make money.  The government doesn’t produce goods and services that people want at prices they are willing to pay.  The government cannot produce growth.  All the government can do is beg, borrow, and steal from some and benevolently hand out to others while calling it growth.  If Obama has caused anything to change, hopefully it’s that we finally know better.

The Experts Are Catching Up

Someone once said that debt spending doesn’t equal wealth.  That same individual said that stimulus dollars on so-called “shovel ready” projects  was nothing more than short term revolving door jobs that would not result in growth.   Now I don’t claim to be an economic genius or some sort of scholar or market guru, but it is nice when the experts finally catch up to me and I can once again say told ya so.

Allow me to quote: “But AP’s analysis, which was reviewed by independent economists at five universities, showed the strategy of pumping transportation money into counties hasn’t affected local unemployment rates so far.”

“”My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who also reviewed AP’s analysis.”

“Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.”

This last month we were surprised to learn that 85,000 jobs were lost.  It was supposed to be the first month in two years that we had positive job growth.  Now, with the poor economic progress, Obama is planning a second stimulus bill to give the appearance that he is doing something to solve the problem.  Will another stimulus plan bring unemployment below 10%?

Compare the result of the pork stimulus bill to the results of the Bush tax cuts.  In the six months leading up to the 2003 Bush tax cuts we lost 267,000 jobs.  In the six months after the 2003 tax cuts we gained 307,000 jobs.  We went from 1.7% GDP growth to 4.1%.   And before you argue about Bush’s tax cuts increasing the deficit, it took Obama 7 months to increase the deficit more than Bush did in 7 years.

If we want economic growth we need to take more money out of the hands of government and put it in the hands of small businesses and individuals.  How long until the experts figure out that Cap and Trade, mandatory insurance, and more pork bills are not going to fix our economy?


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