Economics
When Water Reaches the Ceiling, Don’t Raise It–Start Pumping!
I believe we need to bring back an important word that people hesitate to use in politics:
Lie.
Have you noticed that politicians usually skirt that little word? The news anchor says, “Do you think you lied about this or that?” The answer usually comes back, “Well, it might be an untruth , but”….or “I wouldn’t call it a lie, but…”
That’s not good enough anymore. We are being told a number of lies by our government because we are in grave trouble and there is much to cover up. We don’t tolerate lies in our personal lives and dealings, and we shouldn’t in the civil sphere either.
The current lie being told is that we need to raise the United States debt limit or go into default. They’re lying to us because because they need to scare us into getting their way–to keep on spending recklessly.
But it’s a lie–and it’s time we called their bluff.
Yes, we can with integrity oppose the raising of the US debt ceiling; No it will not cause a default or put in jeopardy “the full faith and credit of the United States;” And we must oppose it at this hour because our burgeoning debt is grossly immoral and could cause a collapse of the entire world economy.
Now is the time to say NO.
I cannot un-wrap this subject better than Redstate.com and the Heritage Foundation have done in the following articles. Please read them carefully and do everything in your power to oppose the raising of the US debt ceiling.
It’s not time to raise the ceiling. It’s already far too high. We need to start pumping the flood of government debt out of the precious dwelling we call the United States of America.
On April 25, Redstate exposed the debt ceiling lie quite clearly. Here is their take:
“Reporters, Democrats, and even some Republicans have begun repeating an infectious lie in the prelude to the debt ceiling debate. Secretary of Treasury Tim Geithner started it off and it has been repeated by reporters in print, on radio, and on television, including Fox News.”
“The lie is very simple: a failure to raise the debt ceiling will cause a default on American debt. This is utterly and categorically a lie. Anyone who says otherwise is a liar.”
“As Senator Pat Toomey noted the other day,
“Next year, about 7 percent of all projected federal government expenditures will go to interest on our debt. Tax revenue is projected to cover at least 70 percent of all government expenditures. So, under any circumstances, there will be plenty of money to pay our creditors.”
‘Moreover, as the Congressional Research Service has noted, the Treasury secretary himself has the discretion to decide which bills to pay first in the event that a cash flow shortage occurs.’
“Nonetheless, the media and Democrats keep repeating the lie. And it is a lie.”
“Veronique de Rugy and Jason Fichtner chronicled debt ceiling fights in the Washington Times and, from their writing, we can categorically show it to be a lie to claim a failure to raise the debt ceiling will cause a default on American debt obligations.”
‘In 1985, Congress waited nearly three months after the debt limit was reached before authorizing a permanent increase. In 1995, 4 1/2 months passed between hitting the ceiling and congressional action. And in 2002, Congress delayed raising the debt ceiling for three months. In each case, the U.S. and the economy survived.’
“Not only did the economy survive, but the United States did not default on its debt obligations, the United States did not lose its credit rating, and interest rates did not go up as a result of the default.”
“To say that failing to raise the debt ceiling will cause a default is a lie and anyone who says it is a liar.”
“If we fail to raise the debt ceiling and do default, it will not because because of a failure to raise the debt ceiling. It will be because Barack Obama and Tim Geithner chose to default for political gain.”
“Again, as Senator Toomey points out:
‘As the Congressional Research Service has noted, the Treasury secretary himself has the discretion to decide which bills to pay first in the event that a cash flow shortage occurs. Thus, it is he who would have to consciously, and needlessly, choose to default on our debt if the debt ceiling is not promptly raised upon reaching it. It takes a lot of chutzpah to preemptively blame congressional Republicans for a default only he could cause.'”
The Heritage Foundation gives this wise explanation to the debt ceiling debate:
“All across Western Europe—the land of platinum-plated social benefits, the 35-hour work week, tony retirement plans and government-funded health care—countries are coming to the realization that they can no longer afford these luxuries amid skyrocketing deficits. Yet here in the United States, as we face a $14.3 trillion deficit, some are calling for increasing our government’s ability to borrow even more money without any concern for spending reform. Congress can’t allow that to happen, lest we become the Europe of the West.”
“The U.S. government is fast approaching its $14.294 trillion debt ceiling — the statutory limit on how much money it can borrow to finance spending. Just how big is that? To put it in perspective, it would take essentially everything that Americans produced in all of last year to pay off the existing national debt. That comes out to $45,000 of debt for each American.”
“Unfortunately, it’s all too common for Congress to reach that ceiling and keep raising its own credit limit, letting itself borrow and spend even more. In fact, Congress raised the debt ceiling from $6.4 trillion in 2002 and nine times thereafter to its present levels. Hopefully, though, this time will be different.”
“Yesterday on “Face the Nation,” Senator Mark Kirk (R-IL) said, “I will vote ‘no’ on raising the debt ceiling unless we have comprehensive, dramatic, effective, and broad-based cuts to federal spending including the reform of entitlement spending.” Sen. Kirk’s instincts are right. The solution starts with Congress. David Addington, Vice President for Domestic and Economic Policy at The Heritage Foundation, writes:
‘Federal spending has been out of control for decades, and federal borrowing has therefore also been out of control for decades. America has amassed a giant, unaffordable debt and a giant, intrusive government. This did not happen by accident. Congress passed all the laws that made it happen. Fortunately, Congress has under the Constitution all the power it needs to solve the problem it created. It needs only the will to do so and the support of the American people.'”
“Here’s how Congress should use that power. As Addington writes, Congress should not increase the debt limit until it puts the government firmly on the path to financial responsibility. And it can get there by cutting current spending, restricting future spending, and putting a more effective federal budgeting process in place.”
“The Heritage Foundation identified $343 billion of potential spending cutsthat could be made on top of the cuts passed by the House in February and the repeal of Obamacare appropriations, which the House approved in January. When it comes to future limits on spending, Congress can impose enforceable caps on out-of-control entitlement programs and pass a balanced budget amendment. The budgeting process should be reformed, too, by making it more transparent and imposing new limits on federal agencies. Merely raising the limit without reforms is the worst option, Addington says:
‘The least acceptable outcome is for Congress to continue to raise the debt ceiling over and over, doing nothing to drive down federal spending and borrowing, and to pile trillions of dollars in debt upon the shoulders of America’s children and the generations to follow.'”
“President Barack Obama and White House officials have warned of global economic Armageddonif Congress does not act now to raise the debt limit. Their warnings, though, are reckless hyperbole. A greater threat is the U.S. government’s unchecked expansion of unsustainable deficit spending. Congress must break its pattern of borrowing more and spending more by acting now to cut spending and get the government’s fiscal house in order. Only then can it avert a real crisis.”
Now that’s the TRUTH about the grossly immoral US debt and debt ceiling.
No more raising the lid. It’s time to drain the swamp to salvage the nation we call “home.”
Congressional leaders: Just say NO.
President Obama and Administration: Don’t tell us a lie.
Forget the debt ceiling and start pumping! We’re ready to help you with the clean-up and re-building of our once financially prudent nation.
But the buck stops (being borrowed and cheapened) with you.
The Meaning of the Madison Protests
If you’re like me, you’ve been watching the protests in Madison, Wisconsin–and indeed throughout the Middle East and the world–with great interest and some fear and trepidation.
On the one hand it’s good to see people standing up for what they believe. On the other hand, the Madison protests in particular seem bullyish and quite deceptive–with teachers closing down the schools with faked sick notes and fourteen Democratic law-makers fleeing the state to shirk their legislative responsibilities.
For the protesters, their main justification seems to be that the end justifies the means.
But that principle only applies to despots, tyrants, or anarchists. It does not apply to Judeo-Christian-based republics, their ethics and manners.
Does that give us a hint of the meaning of Madison?
For those who haven’t been following this story, here’s a little background. The 2010 elections saw a large number of conservative governors, legislators, and representatives rise to leadership promising a return to fiscal sanity. Many of them were elected in states where the previous liberal leadership had run up huge budget deficits through unrestrained growth of government workers and services.
In Wisconsin, enter newly elected Governor Scott Walker who inherited a 3.6 billion dollar deficit from the out-going administration. As in many other states, the people elected him to reverse direction and deal with the budget problem caused by egregious spending.
Governor Walker remarked last week: “I’ve said all along the protesters have every right to be there, but I’m not going to let tens of thousands overload or overshadow the millions of people in Wisconsin, the taxpayers of the state, who want us to do the right thing and balance the budget,”
Walker decided to take his budget axe to the root of the problem: the unsustainable and unfair growth of government employee entitlements. He proposed having government workers:
- Pay twelve percent of their own health insurance costs. That seems reasonable.
- Pay five percent of their pensions. That seems fair too.
- Have some limitations on their collective bargaining agreements. (More on that later.)
The first two points are no-brainers. These are modest changes that are totally necessary. We are in a deep recession. People in the private sphere are struggling to make ends meet, and, in some cases, are making draconian cuts to their businesses and lifestyles to survive.
Shouldn’t government workers be asked to make some sacrifices too?
The average America believes so. That’s why deficit-reducing governors, legislators and representatives were swept into office in record numbers in November.
In fact, the problem is much bigger than just asking government workers to give a little. The truth is that times have changed radically in America over the past fifty years.
It might even be necessary to re-define “white collar” and “blue collar” workers.
For most of America’s history, white collar stood for the private sector professionals and business people who wore nice suits and made more money than farmers, factory workers and people in the trades. The blue collar workers were the lower rung of society who got dirty for a living.
How times have changed. Today, the white collar workers are the government folks (plus some professionals and business people). They wear the nice suits and work for a smorgasbord of agencies like the IRS, FAA, FDA, NSA, and thousands more. And today’s blue collar are the self-employed and small business owners who are being strangled by government regulations, fees, and rising taxes to pay for the salaries and benefits of the new government white collar class.
It’s the new American reality–and it’s a huge economic problem.
According to the generally liberal newspaper–USA Today–this growing discrepancy between the salaries of government white collars and private blue collars is exploding. Here’s their take:
“At a time when workers’ pay and benefits have stagnated, federal employees’ average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds. Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.”
“Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.”
“The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.”
“What the data show:
•Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government’s contribution to pensions. Employees contributed an additional $10,569.
•Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.
•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.”
USA Today’s number relate to the federal government work force. But the same escalation in state government entitlements–especially pensions–has followed the national curve.
At a basic level, the current battle in Madison boils down to the simple need of shrinking the size of government and its perks. It will soon spill over to many other American states that are also “government-heavy.”
It’s way past due.
Government service has been historically viewed in this nation as “public service”–a sacrifice one makes for less pay and benefits to “serve” his country. This concept comes directly from the Bible in Romans 13 where government is viewed as a “minister of God for good.” A minister is a servant. He’s not the boss, the wealthy owner, but rather the one who sacrifices for the greater good.
For over two hundred years, America kept to this wise political model.
But over the part few decades the power of government unions has changed all that. Instead of seeing government employment as a “service,” it is now viewed as a right that demands more money and higher benefits than those who pay the bills in the private sector.
Let’s talk about unions for a moment. I was a union member for a short time in my life, and I’m certainly not against the concept. The union movement was born during a time in which private business was neglectful of a number of basic human rights. The early unions helped correct that by encouraging and passing some good child labor laws and eventually the five day work week. I’m not sure that is biblical (six days in the Scripture norm), but it was a healthy step.
Unions helped balance the economic ledger in the early days of the Industrial Revolution.
However, today, unions have become a noose around the neck of business trying to compete in a global marketplace. With basic human rights issues settled decades ago, unions have become primarily a potent liberal political force–without the concurrence of members. They have gotten in bed with state and national lawmakers in raiding the government till for health services and pricey pensions that the average taxpayer cannot afford to underwrite.
Truth be told, union power and their demands are financially raping many state governments. Wisconsin and many other states are broke because the private sector has been forced to support out-of-control government growth and its associated costs.
Now to the controversial part. The union members are saying that the Wisconsin protests are not about paying their fair share of health care and pensions. They say it is about collective bargaining rights. But history is clear on this point: Government unions should not have collective bargaining rights. So said Franklin Delano Roosevelt in the 1940s and every president prior to him. Roosevelt believed government workers were servants of the people, and should never be put in the position where they can paralyze or shut the government down–as they doing in Wisconsin.
Private unions can collectively bargain–not government ones. They are essential to the smooth functioning of a civil society.
If you’re interested in the “facts” about the Wisconsin protests, click here for valuable information.
But there is a bigger meaning to the Wisconsin riots that are destined to hit other cash-strapped states. It is this: A battle is going on for the heart and soul of the American nation. It is a 230 year battle between the forces of liberty and those who look to government controls.
America began in liberty–essentially the first constitutionally-born Christian republic in the history of the world. America’s great experiment in liberty was the result of spiritual revivals, faith in God, morals in society, and godly principles in family life, economics and civil polity.
Over time, the forces of tyranny turned the American nation from a Christian republic to a Christian-based democracy; Then to a secular-based democracy; Following the election of Barack Obama–they were on the verge of changing the American nation into a secular-based social democracy with huge government overreach (programs and entitlements) and a great erosion of freedom.
But the people rose up in 2010. Step one in restoring the American heritage of liberty was the Tea Party movement. Step Two was the landslide November 2010 elections which included the election of Scott Walker as governor of Wisconsin.
We are now entering Step Three in the reformation process–the paring back of bloated governments and its restraints on American competitiveness, greatness and freedom.
Many battles lie ahead in various state capitals. In Washington, D.C., a revitalized House of Representatives is leading the way for federal reforms in the growth of Big Government. It will be a a test of wills, but the cause of liberty is worth fighting.
Step Four will be the 2012 national elections. We need a US president and administration that is committed to scaling back the crippling power of the Entitlement State. We also need a United States Senate that is willing to look at vital tax reform, a balanced budget, and dealing with the federal entitlement monsters of Social Security, Medicare, and Obamacare.
This is the meaning of the Madison protests.
Step Three has begun.
It is a fight for America’s future under God and his principles of freedom.
Will you pray and join the side of liberty?
The Meaning of the Tax Rate Debate: American Socialism’s Hail Mary?
For the past week various pundits, commentators and politicians have been trying to wrap their mind around the tax rate compromise put together by President Obama and Republican leaders.
For awhile, I must confess, it was very confusing.
But now I understand.
The Obama-brokered tax rate compromise is American Socialism’s version of a Hail Mary Pass.
Let’s hope it is incomplete.
For non-football fans, a little explanation is in order. A Hail Mary pass is a desperation heave that is usually the last play of a football game. The team with the ball is behind by less than a touchdown and has much of the field to cover if they are to score and win the game. The time has clicked down to the final seconds, and there is time for only one more play.
The quarterback takes the snap and throws the ball as far as he can–usually into the end zone–hoping, saying a prayer (Hail Mary), that one of his teammates will out jump the defenders, catch the ball, score a touchdown and win the game.
One of the most remembered Hail Mary passes in history was Doug Flutie’s forty-eight yard toss on October 20, 1999 that allowed Boston College to defeat its arch-rival, the Miami Hurricanes
Barack Obama is now trying to do the same.
The tax compromise is American socialism’s desperate Hail Mary.
But before we describe the Obama Hail Mary strategy, let’s look at the confusing rhetoric of the past week. I’ve rarely seen such political confusion in all of my life.
Conservative Angst
When the tax compromise was first announced by the White House, many conservatives applauded the plan because it extended the current tax rates for two years. However, they didn’t like the extension of unemployment benefits and other special interests earmarks.
The Heritage Foundation was cautiously supportive at first, while echoing conservative concerns. In their first Morning Bell on the subject, they stated “The deal originally cut by Republicans had some good economic policy in it, but it also had a lot of harmful provisions. The temporary two-year nature of the arrangement did not provide the long-term certainty that businesses need to make long-term investment plans that create substantial economic growth and jobs.”
Tony Perkin’s Family Research Council was also ambivalent at first saying “Congress has had two years to deal with this ticking time bomb called tax relief–and they have less than 14 days to diffuse it. The Senate is scheduled to vote on a “compromise” tax package on Monday afternoon with both good and bad provisions. It does maintain the current tax rates, preserves the Child Tax Credit , and keeps married couples from being penalized. On the negative side, it’s all still temporary and raises the death tax by 35 percent.”
Liberal Concerns
Some liberals also accepted the bill because they thought it it was the best they could get after the November 2 election “shellacking.” Vice President Joe Biden reportedly told House Democrats that the tax deal cut with Republicans was a “take it or leave it” proposition that could not be changed.
Others hated it because the president caved on his pledge to raise taxes on “the rich.” During Democratic caucus meetings, various members were overheard cursing the president and his unwillingness to raise taxes on the wealthy and small businesses.
Vermont Senator Bernie Sanders, a committed socialist, was so livid about the compromise that he filibustered the Senate for a grueling 8 hours and 37 minutes, speaking nearly non-stop about class warfare and the blessings of national socialism.
Fidel Castro would have been proud.
Two Who Got It Right
Though at first, there was widespread confusion over the compromise, two men got it right from the beginning.
Maybe we should elect one as president and the other as VP in 2012. They seem to be the sharpest minds in the republic.
Columnist Charles Krauthammer called it the “swindle of the year,” and said from the very beginning that the only person who truly benefits from passing it is Barack Obama. “[With this deal], the President negotiated the biggest stimulus in American history, larger than his $814 billion 2009 package.”
His column in the Washington Post is worth reading.
I don’t know where Charles got his $814 billion number–some (like Sean Hannity) question it, but still believe that Krauthammer is right. I must admit, when I first heard Charles’ take I was skeptical.
Then I began to think and pray–and concluded he was correct.
Senator Jim DeMint also made headlines by becoming the first Republican politician in Washington to declare his opposition to the tax compromise. He even threatened to filibuster the deal.
In an e-mail via DeMint’s PAC Senate Conservatives Fund, DeMint laid out why he is opposed to the tax deal.
“First, I do not want to see anyone’s taxes go up and I have been fighting for years to permanently extend all the tax rates. I disagree with the President that we cannot afford to extend these rates for everyone. It’s the people’s money and we should not raise taxes on hardworking American families.”
“But this bill does much more than simply extend tax rates. For starters, it includes approximately $200 billion in new deficit spending and stimulus gimmicks… The bill also only extends rates for two years. We don’t have a temporary economy so we shouldn’t have temporary tax rates.”
“The bill also fails to extend all of the tax rates. It actually increases the death tax from its current rate of zero percent all the way up to 35 percent. One economic study shows that this tax increase alone will kill over 800,000 jobs over the next ten years.”
“Finally, the bill now includes dozens of earmarks for special interests, including ethanol subsidies, tax breaks for film and television producers, give aways for rum manufacturers, favors for auto racing track owners, and a hand out for businesses outside [the United States].”
One reason I like Jim DeMint because he lives at 133 Street–my old office on Capitol Hill.
One other former Senator and Hollywood star, Fred Thompson, also was prescient on the error of extending unemployment benefits yet another year (totalling three years).
He remarked, “With unemployment being extended another 13 months, is it maybe time to just start calling it welfare?”
Or maybe socialism.
That’s what the battle is about.
For nearly one hundred years, a portion of our society has been trying to change America from a Christian-based, freedom-oriented society to a secular-leaning socialist model. There are many forms of national socialism, but the bottom line is trust in and control of people by ever-expanding government.
Our founding fathers called it tyranny.
Its opposite is liberty. William Penn spoke for all colonial Americans when he said, “Men must be governed by God or they will be ruled by tyrants.”
He was referring to Europe at the time.
Europe has known many forms of tyrannical governments. Prior to the Reformation, kings and princes lorded it over their subjects for hundreds of years. In the 20th century Benito Mussolini and Adolph Hitler gave birth to national socialistic regimes that became cruel and oppressive. Communist Russia took socialism a step further when it seized economic control of the State through “the barrel of gun.” More recently, European states created vast welfare states under the banner of democratic socialism.
But its all the same at the core: Power comes from government, not from the people.
European nations have experienced many forms of socialism.
Different teams. Same game.
The American experiment was exceptionally different. Backed by a Christian world view that recognized the sovereignty of God and the power of Christ in the individual, our early founders and settlers established the United States on faith, character and freedom.
This was a new “team” the world had never seen before.
This team believed in freedom. Their faith produced a great nation. “Team Tyranny” was always there, trying to even up the score. but never able to get ahead.
Then came Woodrow Wilson and his secular progressive plans, next FDR and the New Deal (vast expansion of the Federal Government), and finally LBJ and the Great Society. “Team Tyranny” was gaining ground on “Team Liberty.” The battle was enjoined. America’s future had truly turned into a competitive civilizational struggle.
Jimmy Carter was socialism’s next attempt to take the lead in the game. But he was petty and inept as a leader, and freedom-loving Ronald Reagan was swept into office. His influence kept “Team Liberty” ahead in the game for another twenty years.
Then following some missteps by the Republicans who were supposed to key players on “Team Liberty,” Barack Obama was elected to national office. In two short years he took “Team Tyranny” into the lead in American life via massive government stimuli, a takeover of various businesses and the financial sector, and finally the crowning jewel–creeping socialized medicine through Obamacare.
At that point, socialism was winning the game and Bernie Sanders was no longer the lone kook.
His team was now ahead.
But then “Team Liberty” awoke through the Tea Party Movement and concerted prayer. They “scored” big in the November 2, 2010 elections and re-gained the lead for the forces of freedom. On many fronts, freedom and common sense triumphed and was preparing to add a larger national advantage on January 3, 2011 when the new 112th Congress convenes and in 2012 when a new president can be elected.
So Barack Obama, captain of “Team Tyranny,” saw the victory slipping away and let fly with his Hail Mary.
Don’t be deceived by other members of his team that are yapping and swawking. They’re just decoy receivers that are really working for the same goal. Barack Obama was throwing to other “receivers”–Independents–who he needs to score a winning touchdown.
The Compromise was all about his re-election in 2012. Without it, socialism will not be able to win the game.
Barack Obama has not changed. He’s still a socialist-of-some-type at heart. But time was running out and momentum had swung.
He desperately heaved a Hail Mary to try and get re-elected.
Let’s hope and pray that his pass is incomplete during the Lame Duck Session.
As Heritage Foundation and many others now understand, the compromise must fail.
Then “Team Liberty” can once again get the ball back on January 3, 2011 and make permanent the tax rates, begin repealing Obamacare, and soundly defeat the socialists in 2012. Next, a new generation of leaders must stop frivolous spending, balance the budget, promote faith and morality, strengthen national defenses and encourage an American spiritual awakening.
That’s the meaning of the tax rate debate.