SIZE MATTERS

For those interested, you can view my recent editorial by clicking on "SIZE MATTERS" on the right margin of this page. Enjoy.

DWD

QUOTE OF THE DAY

"The political class looted the future to bribe the present, confident that tomorrow could be endlessly postponed."  -- Mark Steyn, Syndicated Columnist

QUOTE OF THE DAY

A voice of reason:

“Whenever there is no absolute necessity, whenever legislation may fail to intervene without society being overthrown, whenever, finally, it is a question merely of some hypothetical improvement, the law must abstain, leave things alone, and keep quiet."    Benjamin Constant (1767–1830)

WHERE DOES "MORE" COME FROM?

For those interested, you can view my most recent editorial by clicking on "Where Does 'More' Come From?" on the right margin of this page.

Have a Happy Thanksgiving.

DWD

HALLOWEEN ECONOMICS

This comedian offers a good lesson in economic incentive. Enjoy.

http://feedproxy.google.com/~r/Cato-at-liberty/~3/zkCJAdueTK0/?utm_source=feedburner&utm_medium=email

ANOTHER REASON GOVERNMENT WILL ONLY GET BIGGER

As this video explains, the diffused costs of government programs deceives voters.

http://www.youtube.com/watch?v=6uR4lqa7IK4&feature=player_embedded

THE TAX THE RICH "SOLUTION" IS A PIPE DREAM

Whatever you think about the "tax the rich" solution, it will not come close to getting us out of the hole we are in. This video explains:

http://www.youtube.com/watch?v=JY8LKII_MNA

GOVERNMENT CAN ONLY GROW BIGGER

If you're interested, you can view my latest editorial by clicking on "GOVERNMENT CAN ONLY GROW" on the right margin of this page.
Have a great day.
DWD

WHY IS OUR ECONOMY DOING SO POORLY?

And what is the solution? This video can help.

http://danieljmitchell.wordpress.com/2011/10/13/new-video-has-important-message-freedom-and-prosperity-vs-big-government-and-stagnation/

ISN'T IT OBVIOUS?

Where we're headed (and where we've already arrived)?

PROFIT: VILE OR VIRTUOUS?

Those that may be intersted can view my most recent editorial by clicking on the link "Profit: Vile or Virtuous" on the right margin of this page. The editorial was published in the Orange County Register on September 29, 2011.

Have a nice day.

DWD

OBAMA'S ECONOMIC PLAN IS AN OBVIOUS FAILURE

Obama's economic advisor's attempts to "stimulate" the economy have been a dismal failure. Here is an update on what they originally projected the stimulus would accomplish with respect to unemployment and what actually has occurred. Despite their horrendous miscalculations, they remain true believers and continue only to prescribe more of the same types of "remedies."
DWD--My advise: Prepare for many more months of economic stagnation.

GOVERNMENT CONDEMNS TWINKIES AND PEANUT BUTTER

MICHELLE OBAMA'S WAR ON CHILDHOOD OBESITY IS MISGUIDED AND ADVERSE TO PERSONAL FREEDOM

This from the Heritage Society:

Now it is getting more serious, with food regulators starting to infringe on the free speech rights of advertisers.

In the latest upset, four federal agencies known as the Interagency Working Group (IWG) have delivered a plan to drastically censor food advertisers with products deemed to be “too high” in sodium, sugar, or fat that cater to any viewing audience between the ages of two and 11. These advertisers would lose key slots during some of America’s most popular shows, like American Idol, America’s Got Talent, and Glee—simply because the nanny state is “uncomfortable” with what they are selling.

It’s not just Twinkies and cookies that will be affected, either. Anything deemed to have a little too much sodium or fat will be tested under the new rules, including foods whose very production requires a high sodium content (like pickles) and those that are naturally high fat (like peanuts).

As Heritage's Diane Katz wrote, “Nutritional staples such as Cheerios, peanut butter, and yogurt are verboten under the proposed standards, which effectively constitute a government-regulated grocery list.”

The regulations hit traditional favorites where it hurts. In turn, the free market and consumer choice is manipulated to fit a misplaced government agenda that doesn’t solve the problem.

The regulators plan to get away with this by disguising their rules as “voluntary guidelines.” In reality, the guidelines are anythingbut optional, according to food manufacturers affected by them.

Not only do regulations hinder the market and censor speech; they hurt the businesses behind the labels. Sara Lee CEO Christopher J. Fraleigh recently spoke on the overextended regulations, which will hurt his business in particular:

A turkey sandwich made with Sara Lee fat-free lean turkey meat, we would not be able to advertise that on venues, be it the Superbowl or anything that would have a significant child audience, because the product is a little bit too high in sodium…. Current regulation of advertising toward children is a perfect example of regulation that just goes way too far.

DWD: When did child nutrition stop being the responsibility of parents?

SOCIAL SECURITY AND MEDICARE EDITORIAL

If the U.S. goes bankrupt Social Security and Medicare will be the reason. These two programs account for about 44 percent of annual government spending. And the amount of waste and fraud is beyond belief (lots of documented proof of this, even 60 Minutes had to weigh in). For comparison, the defense budget accounts for 25 percent of spending and welfare 13 percent.
If interested, read my editorial "An Appeal to the Greatest Generation" found on the right margin of this page.

THE FUTURE OF U.S. GOVERNMENT AND THE ECONOMY

The more government has control over a country's resources, the more its citizens look to it for help. The more a country's citizens look to government for help, the more that government can command yet greater control of its citizens resources. In 1969, the U.S. government controlled about 30 percent of annual U.S. economic output (gross domestic product--GDP). In 2010, the U.S. government controlled over 40 percent of annual GDP. Most of this increase consisted of government transfer payments (i.e., government payouts to individuals and households). Thus, in 2011, far more U.S. citizen's than ever are looking to government for help.
Socialism can be loosely (but not unreasonably) defined as government control of a nation's resources. So if you are wondering in what direction this country is heading and how fast, well you do the math.
As for the future of the U.S. economy, this blog has cited numerous studies documenting the inverse relationship between the size of government and the economy.

REGARDING THE DEBT LIMIT

"I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing."

Thomas Jefferson--1798

THE FUTURE OF THE US ECONOMY

As the man says in this video, everyone has to hear this (3 min.) message. Brace yourself.

http://www.youtube.com/embed/VtVbUmcQSuk

GOVERNMENT AT WORK

Almost two thirds of government spending amounts to no more than taking money from one person and giving it to another. In 1960, this type of activity accounted for only about 30 percent of government spending, now it's over 60%--see below. The blue line depicts government transfer payments as a percent of government spending.

MORE ON THE PROPROSED SPENDING "CUTS"

$2 Trillion in Cuts in Perspective
Congressional Republicans have said that spending cuts must be at least as large as an increase in the debt ceiling. Negotiations over lifting the debt ceiling are ongoing, but the “magic number,” so-to-speak, would be around $2 trillion in spending cuts.
Cutting $2 trillion in federal spending sounds like a lot, but it’s actually relatively small because the cuts would likely occur over ten years. According to the Congressional Budget Office’s most recent budget baseline, the federal government will spend almost $46 trillion over the next ten years.
The following chart shows what $2 trillion in spending cuts over the next ten years looks like when measured against the CBO’s baseline. Even with the cuts, federal spending would still increase by $1.8 trillion:

 Rather than actually cutting spending, federal spending (and debt) would continue to grow – just at a slightly lower rate. And as Chris Edwards continues to warn, there is a strong possibility that some or all of the “cuts” could be phony.

This Week in Government Failure is a post from Cato @ Liberty - Cato Institute Blog

THE UNBELIEVABLE DEPTH OF OUR SPENDING PROBLEM

This is a repeat of a previous post--but it bears repeating. PLEASE watch the video.

http://wimp.com/budgetcuts/

MORE ON: GOVERNMENT CAN'T CREATE JOBS

This from an article in Politico:
Some policymakers are now looking at expanding job training and other federal employment programs. Even conservative House Budget Committee ChairmanPaul Ryan (R-Wis.) proposed to “strengthen” these programs in his recent fiscal plan. Alas, the history of waste and failure in these programs argues for termination, not expansion.

Federal programs for unemployed and disadvantaged workers now cost $18 billion a year, yet the Government Accountability Office recently concluded that “little is known about the effectiveness of employment and training programs we identified.” Indeed, many studies over the decades have found that these programs — though well intentioned — don’t help the economy much, if at all.

DWD--The above actually doesn't go far enough. There is considerable evidence that government job programs actually "create" a net loss in jobs!

GOVERNMENT TO THE RESCUE?

Robert Lucas of the University of Chicago offers a couple of telling graphs. This first chart shows the history of U.S. economic growth over the past 140 years. As you can see, the growth rate was remarkably constant over time, and there were always periods of rapid growth following economic downturns.



Lucas, who won the Nobel Prize in economics in 1995, then looks at the data for the recent downturn and recovery. As you can see, we have been struggling to get back to average growth rates and we have not enjoyed any of the above-average growth that normally follows a recession.



The key question, of course, is why growth has been anemic, resulting in (what seems to be) a permanent loss of output. In his presentation, Lucas warns that bad government policy is playing a big role. He says that “the problem is government is doing too much,” and he specifically highlights the “likelihood of much higher taxes, focused on ‘the rich’” and a “large increase in the role of government” in the healthcare sector.
In his conclusion, Professor Lucas is not overly optimistic about recovering lost output. He doesn’t make any flamboyant claims, but he does note that “European economies have larger government role and 20-30% lower income level than US.”
The obvious connection is that America is becoming a European-style welfare state and it is unavoidable that we will suffer from European-style economic malaise.
To those of you who would like to see a more healthy economic recovery: please don't ask the government to help.

US CITIZENS ARE POLITICALLY DOUBLE-MINDED

If you're interested, please click on "WHO'S ON FIRST?" found in the right margin of this page.
Thank you,
DWD

WORDS OF WISDOM FROM ABE LINCOLN AND OTHERS

“You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away peoples initiative and independence.
You cannot help people permanently by doing for them what they could and should do for themselves.” -- Abraham Lincoln

“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” – Abraham Lincoln

The founding fathers preferred a Republican form of government over a simple democracy. As Thomas Jefferson said, “A democracy is nothing more than mob rule, where 51 percent of the people may take away the rights of the other 49.”

Here is the end result of democracies — “A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fical policy.” – Alexander Tyler, 1787 (Scottish history professor)

And finally,
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."              --  Cicero, 55 BC.

ADAM SMITH ON GOVERNMENT AND TAXES

Writing in the mid- to late-1700's, Adam Smith penned the following:

“The agents of [government] regard the wealth of their master {i.e., we the people} as inexhaustible; are careless at what price they buy; are careless at what price they sell.”

“Those unproductive hands...may consume so great a share...that all the frugality and good conduct of individuals may not be able to compensate...this violent and forced encroachment.”

“After all the proper subjects of taxation have been exhausted, if the exigencies of the state still continue to require new taxes, they must be imposed on improper ones.”

“The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would...assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”

GOVERNMENT AND JOBS

As I have argued before, government cannot create jobs (on net). Government actions are much more likely to destroy jobs (see editorial "Government Cannot Create Jobs" in right margin of this page). The following is a real world example of how government is a systematic destroyer of jobs, as described by an annomous business executive. I would argue that this is not an isolated case but is a common circumstance.

"In fact, I have witnessed the loss of jobs as a direct result of regulations by unnamed and unelected bureaucrats, who are backed up by threats of prosecution from the government. Our government is stifling job creation.

Although I am not a conspiracy theorist, I am certain that if I wrote about my experience with specifics, the company for which I work would suffer retribution by our government. I do not have the right to put them in jeopardy. And if the legal department of my employer knew I was writing this, they would "lose it." For these reasons, I feel it necessary to write anonymously and with some imprecision.

This fear of retribution, in and of itself, is a powerful statement about the sad conditions in which we live and do business in the United States. So, here is the sanitized version of my story:

My employer makes very expensive pieces of equipment for use in an industry that has itself sustained undeserved attacks by our government and by unscrupulous so-called environmentalists.[1]

In any case, our pieces of equipment (let's call them tractors) use expensive components (let's call them engines) made and sold by Americans. The engines are used by American workers in multiple states and they make more energy available for Americans. That fact alone attracts the ire of some. But the fact that our service is very valuable and produces large profits makes the industry and the service an irresistible target.

This year, I learned that one agency of the federal government has created and is enforcing rules that strictly limit the types and numbers of engines we can buy to make our tractors. They limit how many of each type of engine we can buy in a year, and they limit the grand total we can buy. This is offensive for many reasons — not the least of which is that we would hire more people if we were allowed to make more tractors.

I could make an endless list of the unseen and damaging effects of their nonsense. But here is a short list:

1.     Without these rules, we would hire more welders, assemblers, and accountants. This would result in the improvement of our local economy, because the new employees and their families would all need food, clothing, housing, entertainment, etc.

2.     To keep up with our increased demand for the tractor engines we need, the engine manufacturers, their employees, and their families would benefit.

3.     The companies to which we sell tractors would hire more operators. Their families and the places they shop at would benefit.

4.     The companies who request our product would become more profitable, resulting in expansions, bonuses, etc.

5.     And, last (and totally forgotten) are the American citizens. Each and every citizen would benefit from the larger supply of energy and the resultant lower prices.

Some people might say that it is good to limit the numbers of these engines in order to protect the environment. But that argument only holds water long enough for a ten-second sound bite. The reality is that this destructive government agency also has rules that permit smaller versions of the same engines. What that means is that we would be permitted to create 50 tractors using the (approved) smaller engines instead of 20 using the larger ones. It is true that the larger engine pollutes more than the smaller one. But using the smaller engines would require more tractors to be built and more fuel to bring them to the job sites. In other words, using fewer tractors with the larger (evil) engines produces fewer net emissions than more tractors with the smaller (approved) engines would.

So, who is causing all this, and why are they doing it? You can answer that question for yourself by discovering who benefits from the regulations. The list includes the politicians who use these issues to their advantage regardless of the truth. It includes the government bureaucrats who want more power to justify their own salaries and positions. It also includes reporters who can't wait for the next "breaking news" about an "environmental threat," or "dire emergency." And it includes university professors and other academic elites who come in to petition for huge government grants and to get paid to speak as "experts." The dark irony is that all these supposed protectors are really engaging in a self-serving round robin of deceit.

The truth is they are horrifically destructive to the prosperity and well-being of all Americans. But because their public faces hide the despicable truth, they have been able to get away with it. Our only hope is to get these people out of business — literally and figuratively. I've got to be honest, though. It won't be easy. They are fighting for their livelihoods, too."

GOVERNMENT TO THE RESCUE

After spending trillions of tax payer dollars to "stimulate" the economy, this is how Obama's economic plan panned out compared to what he said would happen. Maybe he and his experts aren't as smart as they claim. (The blue line shows Obama's projections--the dots are what actually happened.)

THE GAS PRICE CONUMDRUM

Recently, we have experienced another jump in gasoline prices causing outcries among consumers and prompting debates as to what ought to be done about the situation. These outcries and debates beg two questions: How “high” are gas prices? What, if anything, can be done about it?

To read further, check out my editorial with this title found on the right margin of the screen.

           

THE VIRTUES OF SCHOOL CHOISE

Besides the obvious one--freedom of choise--not to mention lower cost, the virtues of increasing educational choise by enabling private schools to compete for students on a fair basis with public schools are many. This from the Cato Institute:

Call me old fashioned, but I prefer to reach policy conclusions based on empirical research. So after comparing the performance of alternative school systems over the past 2,000 years, I surveyed the modern econometric literature on the subject for the Journal of School Choice. What I found is that the freest, most market-like education systems consistently outperform the sorts of state monopolies preferred by Ms. Weingarten and her fellow travelers. Appended below is the chart counting up how many studies favored education markets over state school monopolies, and vice-versa, in each of six outcome areas.

If Ms. Weingarten is aware of a similar weight of scientific evidence favoring her position, she should present it. Otherwise, why would anyone bother to heed her? More puzzling still, what was it about her alleged-dog-allegedly-bites-man op-ed that the WSJ thought worth publishing?

OUR PREMIER UNIVERSITIES AND ACADEMIC FREEDOM

UCLA fired a professor of 34 years for publishing a scientific report that they disagreed with--not based on the science but on the politics. The professor's report disputed a major finding of the California Air Resources Board (CARB) about air polution. After submitting his report to CARB, the professor (James Enstrom) was fired. Turns out two of the people associated with CARB were powerful UCLA professors and his report was in opposition to regulations that they were tying to get implimented. CARB had based their actions on a "scientific" report by someone who it turns out had purchased a PHD from a bogus university.

TAXES AND THE DEFICIT

If government had to raise taxes to cover all spending for 2011 it would need to more than double income tax collections (144% incr. needed).

If government only raised taxes on those making more than $250,000 their rates would have to be raised to over 100 percent. But even that wouldn’t do it because government would still need 30+% more from other tax payers than they are already paying. -- Curtis S. Dubay (Heritage Foundation)

“The American Republic will endure until the day congress discovers that it can bribe the public with the public’s own money.” -- Alexis de Tocqueville (philosopher)

"After that point the system will collapse under its own weight." -- David W. Dickey (economist/writer)

GOV REGULATIONS COST JOBS

'Hidden Tax': Govt Rules Cost Economy Nearly $2 Trillion

Tuesday, 19 Apr 2011 09:20 AM

By Mike Tighe

That staggering figure comes courtesy of Wayne Crews, policy vice president at the Competitive Enterprise Institute, who scrutinized the 81,405 pages of the Federal Registry. That catalog chronicles the nation’s regulations on businesses and state and local governments.
Crews' report, titled Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, contends that government regulations cost the economy $1.75 trillion in 2008.

Amid all the debates about the nation's economy, hardly anyone pays attention to the cost of the rules, which Crews describes as the "hidden tax." After all, such costs don't end up on people's pay stubs or tax bills from state and local governments.

Crews' report notes: “Because such regulatory costs are not budgeted and lack the formal public disclosure of federal spending, they may generate comparatively little public outcry." That off-the-radar aspect of regulations makes them an inviting way for governments to raise Money, Crews contends.

“If regulatory costs remain largely hidden from public view, regulating will become increasingly attractive compared with increasingly unpopular taxing and spending,” Crews writes. “Rather than pay directly and book expenses for new initiatives, the federal government can require the private sector — as well as state and local governments — to pay for federal initiatives through compliance costs.”

Although Crews' report acknowledges that getting a precise tally of government regulation is impossible, he stresses that every new rule costs business owners and consumers more money.

The Daily Caller lists just some of the report's significant points, including the following:

·                       In 2010, federal agencies issued 3,573 final rules.

·                       Although agencies issued 3,573 final rules, Congress passed and the president signed into law a comparatively “few” 217 bills. Considerable lawmaking power is delegated to unelected bureaucrats at agencies, an abuse addressed recently in proposals such as the REINS Act.

·                       Proposed rules in the Federal Register have surged from 2,044 in 2009 to 2,439 in 2010, a jump of 19.3 percent.

·                       Almost 225 of the 4,225 rules now in the regulatory pipeline are “economically significant” meaning they wield at least $100 million in economic impact, an increase of 22 percent over 2009’s 184 rules.

·                       Given 2010’s government spending of $3.456 trillion, the regulatory “hidden tax” of $1.75 trillion stands at an unprecedented 50.7 percent of the level of federal spending itself.

·                       Regulatory costs exceed all 2008 corporate pretax profits of $1.463 trillion.

·                       Regulatory costs dwarf corporate income taxes of $157 billion.

© Newsmax. All rights reserved.

FUN WITH TAXES

This from the Cato Instutute:

According to tax publisher CCH, there are now 72,536 pages of federal tax code rules, regulations, and IRS rulings.

THE U.S. BUDGET

IF the Federal budget is cut by the proposed $38 billion, then Federal government outlays will RISE by $177 billion in FY 2011. See below. We're in a very, very bad and sad situation.


Source: Congressional Budget Office, Cato Institute

INCOME TAXES

Letter submitted to the Orange County Register:

Apr. 14, 2011

Dear Editor,

You recently published an article from The Associated Press that stated that “54 percent of Americans believe their tax bills are either somewhat fair or very fair, compared with 46 percent who say they are unfair.” What the article did not say was that 47 percent of Americans do not pay any income tax. So it should be no surprise to anyone that these people plus a few others are quite happy that most taxes are being paid by someone other than themselves. 

David W. Dickey

Mission Viejo

U.S.: A NATION OF DEPENDENTS

The chart below shows how dependent Americans have become on government money. The chart tells a very sad story and the situation is only getting worse. What the chart doesn't show is that it is largely government policies that are creating this pattern of rising dependence. Our government confiscates 40 percent of private resources, primary out of peoples incomes. Then it gives that money to someone else. These policies dictate that dependence on government MUST NECESSARILY rise. Money that is taken from wages and given to the government obviously cannot also be received by individuals as wages. (Further description of the graph and what it shows is provided below)



Source: Bureau of Economic Analysis, Credit Suisse

The graph was created by Credit Suisse’s chief economist, Neal Soss. The red line shows what share of personal income comes from wages — that is, what Americans earn from working. The blue line shows what share comes from transfer payments, which are made to individuals, usually by the federal government, through social benefit programs like unemployment insurance, disability insurance and Social Security. As you can see, the share of income that Americans earn by working has been falling, from more than two-thirds of their income in the mid-1950s to just over half of their income today. Meanwhile, they have been growing more and more dependent on money from social benefits programs, growing from about 4 percent in the mid-’50s to about 18 percent in February 2011.

ECONOMIC MYOPIA

We are mortgaging our children's future, no doubt about it. To learn more, click on "ECONOMIC MYOPIA" under PAGES on the right margin of the screen.

HOW BIG IS OUR PROBLEM? LOOK AND SEE, I DARE YOU.

The Federal budget--an enlightening (and frightening) perspective.

http://wimp.com/budgetcuts/

ABC NEWS REPORT ON "BUY AMERICAN" IS MISGUIDED

Most economists are of the opinion that free trade is good for everybody, and that it's good for jobs in America. There is nothing wrong with buying US-made products, but neither is there any wrong in buying foreign products. The reason so many of us buy foreign products is because we choose the product that offers the best quality-price value. The world economy is amazingly intertwined. We benefit from doing business with China (or whoever) just as they benefit from us. Moreover, there are social benefits with trade among countries--doing a lot of business with another nation is possibly the most beneficial way of promoting world peace, and it raises the living standards of poorer nations (NOT at the expense of our own standard of living). "Buy American" is a compelling social slogan, but it offers no benefit toward promoting the US economy or jobs.

BLOCK RAISING THE DEBT LIMIT!!!

Threats by government officials that not raising the debt limit will cause the U.S. to default are seditious. There are innumerable ways of avoiding any sort of default. NOT blocking the raise in the debt limit is the way to future default and economic ruin.

One simple solution is being proposed by Senator Toomey of Pennsylvania. According to the Cato Institute blog, the senator "has a proposal to protect the "full faith and credit" of the United States by requiring the federal government to make interest payments a top priority....The federal government is expected to collect more than $2.1 trillion of tax revenue this year, while interest payments on the publicly held debt will only be about $200 billion. So even without an increase in the debt limit, the Treasury Department will have more than enough revenue to cover its interest obligations and avoid a default. That being said, financial markets are sometimes spooked by uncertainty. And since Treasury Secretary Timothy Geithner began making some irresponsible statements about the risks of default, there is growing interest in legislation by Senator Pat Toomey, a Republican of Pennsylvania, to alleviate the market’s fears. Quite simply, Toomey’s bill would require the federal government to fulfill obligations to bondholders before making any other disbursements. ...If the Toomey legislation is adopted, fiscal reformers will have a powerful weapon at their disposal. Secure in the knowledge that default no longer is a possibility, they can be much tougher in their negotiations with the politicians who favor the status quo."

Sounds good to me, how 'bout you?

MORE ON GOVERNMENT SPENDING AND JOBS

Based largely on the video presented in the previous blog, I submitted a new editorial to the Orange County Register. To read the editorial, click on "GOV. SPENDING AND JOBS" under PAGES in the right margin of the screen.

TOO MUCH GOVERNMENT SPENDING DESTROYS JOBS

Here is a good video that explains this title. Most of those who watch it will learn something useful.

Posted by Daniel J. Mitchell

There is considerable academic research on the growth-maximizing level of government spending.

Daniel J. Mitchell • June 29, 2010 @ 10:35 am

MORE ON THE SEPARATION OF CHURCH AND STATE

If you want to know the truth about the whole sad story of our lost heritage, you must check out David Barton's website--Wallbuilders--it's really great!

http://www.wallbuilders.com/ABTbioDB.asp

THE SEPARATION OF CHURCH AND STATE "DOCTRINE" IS MISGUIDED

Grossly misguided as a mater of fact. To get a taste of how misused this "doctrine" is, check out my latest editorial published in the Orange County Register Febuary 10, 2011. Of course you know that the phrase "a wall of separation between church and state" doesn't appear in the Constitution, the Preamble, or in any of the amendments, yes? To view the editorial, look under "PAGES" on the right margin of the screen and click on "CHURCH & STATE".

GOVERNMENT CANNOT CREATE JOBS

The Cato Institute has brought attention to a telling graph offered by the Federal Reserve Bank of Philidelphia. The graph (below) shows the trends of employment during the 1981 (Reagan) and 2007 (Obama) national economic recessions. Reagan sought to keep government out of the way of the private sector and Obama has tried to use government spending to lead our economy out of its problems. It is obvious which was the best policy. While there are many differences between the mechanics of the two recessions, among the biggest is the amount of government intrusion.
Government cannot create jobs on a net positive basis, it can only cause a misallocation of resources which always results in fewer net jobs. The job of government is to facilitate the flow of resources to the most productive uses, not to disrupt that flow. This usually means they should stay out of the way.

SCHOOL CHOICE EDITORIAL

National School Choice Week--DWD editorial published in the Orange County Register Friday, January 28th. To read the text, select "NATIONAL SCHOOL CHOICE" under PAGES in the right margin of the screen.

Thank you.

U.S. SOCIALISM

Reacting to Obama's State of the Union speech, Roger Pilon of the Cato Institute said this:

With uncontrolled deficits well into the future and a debt exceeding $14 trillion, for Obama to propose saving only $40 billion per year in discretionary spending over the next five years, while “investing” in pie-in-the-sky things like high-speed rail, wind farms, environmentally destructive ethanol, and the like, is worse than unserious — it’s an insult to our intelligence. Like Obama, many Republicans too treat military spending, among other things, as sacrosanct, but at least they’re proposing more serious budget cuts.

The deeper problem, of course, is systemic. Socialism, a large dose of which we have in America today, brings out the very worst in people. In the name of collective responsibility, it saps and then destroys individual responsibility, leading to a war of all against all. No one wants “his” entitlement cut for fear that his neighbor might profit at his expense — because, after all, “we’re all in this together.” Suspicion and envy are the order of the day. Meanwhile, dreamers like Obama (at least that’s his pose), who promote our collective drift, either can’t or won’t grasp the hard reality until it crashes down upon them, and us, as it is doing now in several of our states and in Europe. For the “hard-hearted” realists among us, November 2012 can’t come soon enough.

The emphasis was mine (DWD)

STUDIES: RAISING TAXES DOESN'T REDUCE THE DEFICIT

This was taken from a blog post by the Cato Institute:

Two recent studies published by the European Central Bank unambiguously make the case for smaller government. These studies largely echo the findings of recent research by the International Monetary Fund.  The first study looks at real-world examples of debt reduction in 15 European nations and investigates the fiscal policies that worked and didn’t work. The report unambiguously concludes that spending restraint is the right way to reduce deficits and debt. Tax increases, by contrast, are not successful. The study doesn’t highlight this result, but the data clearly show that “revenue increases do not seem to have induced debt reductions, whereas cuts in primary expenditure seem to have contributed significantly in the case of major debt reductions.”

Here’s a key excerpt:

"First, major debt reductions are mainly driven by decisive and lasting (rather than timid and short-lived) fiscal consolidation efforts focused on reducing government expenditure, in particular, cuts in social benefits and public wages. Revenue-based consolidations seem to have a tendency to be less successful. Second, robust real GDP growth also increases the likelihood of a major debt reduction because it helps countries to “grow their way out” of indebtedness. Here, the literature also points to a positive feedback effect with decisive expenditure-based fiscal consolidation because this type of consolidation appears to foster growth, in particular in times of severe fiscal imbalances."

The last part of this passage is especially worth highlighting. The authors found that reducing spending promotes faster economic growth. In other words, Obama did exactly the wrong thing with his so-called stimulus. The U.S. economy would have enjoyed much better performance if the burden of spending had been reduced rather than increased. Equally interesting, the report notes that reducing social welfare spending and reducing the burden of the bureaucracy are the two most effective ways of lowering red ink:

The estimation results indicate that expenditure-based consolidation which mainly concentrates on cuts in social benefits and government wages is more likely to lead to a major debt reduction. A significant decline in social benefits or public wages vis-a-vis the overall decline in the primary expenditure will increase the probability of a major debt reduction by 31 and 26 percent, respectively.

The other study takes a different approach, looking at the poor fiscal position of European nations and showing what would have happened if governments had imposed some sort of cap on government spending. This report finds that restraining spending (what the study refers to as a “neutral expenditure policy”) would have generated much better results. 

The authors basically said that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by as much as 10 percentage points of GDP. To put that figure in context, reducing the burden of government spending by that much in the United States would balance the budget overnight.

THE CONSTITUTION AND CONGRESSIONAL AUTHORITY

Here's a portion of a good article from one of my favorite people--Walter Williams. (To read the full article, see "THE CONSTITUTION AND CONGRESS" under "PAGES" on the right side of this page.)

Here's the House of Representatives new rule: "A bill or joint resolution may not be introduced unless the sponsor has submitted for printing in the Congressional Record a statement citing as specifically as practicable the power or powers granted to Congress in the Constitution to enact the bill or joint resolution." Unless a congressional bill or resolution meets this requirement, it cannot be introduced.

If the House of Representatives had the courage to follow through on this rule, their ability to spend and confer legislative favors would be virtually eliminated. Also, if the rule were to be applied to existing law, they'd wind up repealing at least two-thirds to three-quarters of congressional spending.

Suppose a congressman attempts to comply with the new rule by asserting that his measure is authorized by the Constitution's general welfare clause. Here's what Thomas Jefferson said: "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated."

Madison added, "With respect to the two words 'general welfare,' I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators."

John Adams warned, "A Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever." I am all too afraid that's where our nation stands today and the blame lies with the American people.

CATO AT LIBERTY WEB SITE

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AMERICA'S NEW RALLYING CRY "TAX THE RICH!"

According to a new poll conducted by 60 Minutes/Vanity Fair, 61% of Americans say taxing the rich is the best method for reducing the deficit. The second most popular approach was to decrease the defense budget (20%). 4% would cut Medicare and 3% would cut Social Security.
In my opinion this is the exact WRONG order of preference. The priorities should be flipped. This thinking (i.e., that of the poll responders) is how we got into this mess in the first place. More of it will only sink us further into the deficit muck which ultimately will have to be paid for by our children and our grandchildren.
What do you think?