Posts Tagged 'cap'

Don’t Blink

This Saturday morning, July 23rd, the Senate was originally scheduled to vote on Cut, Cap and Balance, the Republican plan to cut $111 billion out of this year’s deficit, trim $4 trillion over ten years, and present a balanced budget amendment to the states.  Instead, Harry Reid moved the vote up to Friday morning, calling it a waste of time and the worst piece of legislation to ever come to the Senate floor.  It failed to pass on strict partisan lines.

Senator Schumer called the bill “Cut, Cap and Kill” because he insisted that the bill would kill Medicare.  Debbie Wasserman-Schultz declared in the House of Representatives that the bill would kill seniors and that it was the Paul Ryan plan on steroids.   The only problem is that in three different places Cut, Cap and Balance specifically exempted Medicare and Social Security from cuts and caps.  Had Republicans known, some of them might have been a little bit more up in arms about the bill.  It was actually a very good compromise.  It cut and cap wasteful spending on liberal social programs and government bureaucracy, not hot buttons like military, Social Security and Medicare.

Perhaps that is a more reasonable explanation of why Harry Reid went back on his promise to allow debate on Cut, Cap and Balance and instead moved the vote up.  Perhaps someone in the Senate actually read the bill and told Reid what was in it.  And then, as if scripted, suddenly news outlets started declaring a deal between Boehner and Obama that was so close Reid needed to get this bill off the floor and stop “wasting time” on it.  The only problem is there was no such deal.  Somebody was lying to provide the sense of urgency needed to cut off debate on Cut, Cap and Balance before it got out that Democrats were lying about it killing Medicare.

This has become the name of the game in budget talks.  Neither side is willing to give in because both sides know that 2012 elections hang in the balance.  The difference is that Republicans have actually gone so far as to write a good compromise bill.  Democrats can’t vote yes on it, not because it “kills Medicare” or kills seniors.  They can’t vote on it because passing Cut, Cap and Balance would destroy Democrat re-election hopes for 2012.  It would be a huge Republican victory because Republicans came up with it.

On the other hand, Democrats can’t write a plan of their own.  They haven’t submitted a budget in over 800 days, and they can’t submit one now or that will also destroy their chances of getting re-elected in 2012.  Democrats can’t write a bill that says “We want to raise taxes so that we don’t have to cut spending as much” and still win in 2012 because the vast majority of the country doesn’t want Democrats to raise taxes so that they can spend more.  They are spending enough already, and we are taxed enough already.  On the other hand, Democrats can’t write a plan saying “Ok, no higher taxes, just cuts” or they will lose their class warfare base.  The liberal base of the Democrat party does not want a bill that doesn’t raise taxes on the “rich”.  It’s not about raising revenue, it’s about punishing upper classes more.

Republicans submitted a plan and it was a good plan.  Obama has signaled that he is willing to let the country default on its debt rather than compromise with Republicans.  Democrats have proven that they are the party of no on a budget deal.  If Republicans end up caving in order to save our credit rating, I hope Americans get the right message.  It doesn’t mean Republicans are wimps and we need to get rid of them.  It means they can only do so much with just a majority in the House.  We need to give them the Senate and the Presidency in 2012 if we expect anything to get accomplished.

With Republicans Like These, Who Needs Democrats?

Last year, Senator Isakson of Georgia sponsored a bill that gave us the $8,000 first time home buyer credit.  Isakson is a Republican.  It was a year when even the best conservatives turned into redistributive socialists.  They joined the leftist majority and borrowed from China in order to redistribute money to Wall Street and its benefactors.  They robbed from the rich and gave to the rich.  Now he wants to extend the bill, nearly double the credit, and open it up to investors as well.  Does he not realize that we are about to do the same thing to Democrats that we did to Republicans in 2006; kick the bums out for spending too much?

In 2008, home values were dropping like crazy.  That’s great news for people without a whole lot of money who need to buy a house.  That’s terrible news for people who build houses.  But the fact is, we had way too many houses on the market.  There was no demand for houses.  The bubble had burst and there was no way around it.  The housing market had become an inefficient use of resources.

In the real world, that is when the over abundance of housing contractors find a new job, as do excess realtors, until the number of houses on the market no longer exceeds the number of families looking to buy a house.  Yeah, it sucks.  Yes, it is also temporary and eventually results in a more efficient growing economy with expanded wealth and opportunity.  But in 2008, Bush, Paulson and the Democrat Congress invented a new term: too big to fail.

Instead, Congress decided to re-inflate the bubble.  Instead of allowing the market to drop the price of houses by $8,000 on its own, which would automatically create demand among the new homebuyer market, Congress decided to borrow money and give Americans $8,000 to buy a new home.  This kept prices inflated, created artificial demand, and kept the bubble inflated.  Until, that is, December 2009 when the program ends.  At that point, Congress must either allow the bubble to burst again, or they must borrow and tax even more so that they can continue to kick the economic can down the road.

We saw the exact same thing with Cash for Clunkers.  Ford even hired a bunch of new people and increased production.  What’s going to happen when the artificial Cash for Clunkers demand ends?  We will soon find out.

What is depressing our economy right now is the anticipation of the next dip.  This dip will be a result of the end of Cash for Clunkers and the first time home buyer credit, TARP repayment, government sales of bailout stock (Citigroup, GM), Cap and Trade that Obama has now admitted will cost every American family $1,700, and the socialization of the healthcare industry.

Is there hope?  Sure.  We can drill for our own oil, creating a whole new economic segment of growth and employing millions while increasing economic demand in other areas.  We can start to pay down debt instead of increasing it so that 10 years from now half our federal budget isn’t going to pay for interest to China.  We can enact free market healthcare reforms that create competition, create tort reform, and cover people in an efficient, constitutional way.  We can cancel plans to tax every American through Cap and Trade and $350 billion in new taxes for Obamacare.  But you won’t get any of this with the current crowd.  Our best shot for economic recovery is the 2010 election.

And then along comes Isakson and the McCain Republicans.  Perhaps, when they stand next to us and before us at the TEA party rallies they are too busy scoring easy political points to actually listen to what we are saying.


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