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The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Archive for December 20th, 2010

Democrats Yearly Deficit Spending 6.5 Times Higher than Republicans. Democrats Pork Spending 50 Times Higher – UPDATED!

Posted by iusbvision on December 20, 2010

UPDATE – The Treasury just released new numbers. This is truly staggering. What do we have to show for all this madness?

2010 YEARLY DEFICIT: $2.08 Trillion. That is 10 times higher than the last year Republicans had budgetary control.

CNS News reported:

When Rep. Nancy Pelosi (D-Calif.) gave her inaugural address as speaker of the House in 2007, she vowed there would be “no new deficit spending.” Since that day, the national debt has increased by $5 trillion, according to the U.S. Treasury Department.

“After years of historic deficits, this 110th Congress will commit itself to a higher standard: Pay as you go, no new deficit spending,” Pelosi said in her speech from the speaker’s podium. “Our new America will provide unlimited opportunity for future generations, not burden them with mountains of debt.”

Pelosi has served as speaker in the 110th and 111th Congresses.

So much for that promise.

Byron York of the Washington Examiner:

Press coverage of the budget frenzy on Capitol Hill has suggested that pork-barrel earmark spending is still a bipartisan problem, that after months of self-righteous rhetoric about fiscal discipline, Republicans and Democrats remain equal-opportunity earmarkers.It’s not true. A new analysis by a group of federal-spending watchdogs shows a striking imbalance between the parties when it comes to earmark requests. Democrats remain raging spenders, while Republicans have made enormous strides in cleaning up their act. In the Senate, the GOP made only one-third as many earmark requests as Democrats for 2011, and in the House, Republicans have nearly given up earmarking altogether — while Democrats roll on.

The watchdog groups — Taxpayers for Common Sense, WashingtonWatch.com, and Taxpayers Against Earmarks — counted total earmark requests in the 2011 budget. Those requests were made by lawmakers earlier this year, but Democratic leaders, afraid that their party’s spending priorities might cost them at the polls, decided not to pass a budget before the Nov. 2 elections. This week, they distilled those earmark requests — threw some out, combined others — into the omnibus bill that was under consideration in the Senate until Majority Leader Harry Reid pulled it Thursday night. While that bill was loaded with spending, looking back at the original earmark requests tells us a lot about the spending inclinations of both parties.

In the 2011 House budget, the groups found that House Democrats requested 18,189 earmarks, which would cost the taxpayers a total of $51.7 billion, while House Republicans requested just 241 earmarks, for a total of $1 billion.

Where did those GOP earmark requests come from? Just four Republican lawmakers: South Carolina Rep. Henry Brown, who did not run for re-election this year; Louisiana Rep. Joseph Cao, who lost his bid for re-election; maverick Texas Rep. Ron Paul; and spending king Rep. Don Young of Alaska. The other Republican members of the House — 174 of them — requested a total of zero earmarks.

Talk to Republicans, and they’ll say it would be nice if there were no earmark requests at all, but party leaders can’t control everybody. “Brown’s retiring, Cao’s defeated, Paul is Paul and Young is Young,” one GOP aide shrugs. Still, the bottom line is that the House GOP’s nearly perfect renunciation of earmarks is striking. “For a voluntary moratorium, it was impressive that there were only four scofflaws,” says Steve Ellis of Taxpayers for Common Sense.

The Senate is a different story. But even though some Republicans are still seeking earmarks, Democrats are by far the bigger spenders. The watchdog groups found that Democrats requested 15,133 earmarks for 2011, for a total of $54.9 billion, while Republicans requested 5,352 earmarks, for a total of $22 billion.

If you look at the top 10 Senate earmarkers as measured by the total dollar value of earmarks requested, there are seven Democrats and three Republicans. (The leader of the pack is Democratic Sen. Mary Landrieu, who requested $4.4 billion in earmarks.) The three Republicans are Sens. Roger Wicker, Sam Brownback and Thad Cochran. One of them, Brownback, is leaving the Senate, while the other two are from Mississippi, which is apparently earmark heaven.

IUSB Vision Editor Commentary:

Isn’t it interesting that the only time you hear about “deficits” from the Democrats and the elite media is when they want to raise tyour taxes? Then the Democrats drop a 1.1 trillion dollar spending bill in the hopper near the end of a lame duck session and what do we hear? The  ….chirp….chirp….chirp… of crickets in the silence.

As the Deficit Commission has rightly pointed out tax rates need to be lowered for most individuals and businesses because the higher the rate the less the compliance, the higher the rate the more wealth goes overseas, the higher the rate the fewer will take risk, the higher the rate the less small businesses can hire. The simple truth is that the wealthy and upper middle class can take money and park it in a tax free growth account and leave it there. They have the option of not moving their money thus it cannot be taxed. It is for these reasons it is economic growth that generates real revenue, not high tax rates.

You heard the rhetoric all over the elite media and from the Democrat leadership, “If we don’t raise taxes on the “rich” the government will lose half a trillion dollars a year in revenue”. That entire narrative is a canard for the following reasons.

There are very few wage earners who make $250,000 a year.

The way the tax code is set up the majority of people who pay the top marginal tax rate and not individuals at all, but are Sub-S small businesses with 5 – 200 employees.

The half a trillion dollar number is generated from a series of formula’s that make up what is known as the “static Keynesian model”. These models not only are not accurate, but usually are not even clos,e as they do not account for changes in behavior that result from people changing the rules. For example: the government taxes every cheese burger 100 dollars. Since America consumes a billion cheese burgers a year the government estimates that the tax revenue will be $100 billion dollars.

Of course this leaves out the obvious, who would buy a cheeseburger of the government taxed each one $100? So along comes a Republican who proposes to lower the tax to $50 per cheese burger; along comes the media and the Democrats to cry that the tax cuts are costing the government $50 billion a year! Quite dishonest isn’t it?

Lowering tax rates resulted in increased revenue under Coolidge, Kennedy, Reagan, Clinton (second term tax cuts), and Bush II.

Posted in 2012, Chuck Norton, Economics 101, Is the cost of government high enough yet?, Obama and Congress Post Inaugration | 4 Comments »

Obama Administration moves to regulate internet against court ruling and will of Congress.

Posted by iusbvision on December 20, 2010

Congress wouldn’t pass it. The government sued for the authority to regulate the internet and lost. So of course the Obama Administration has decided to do it anyway.

The regulations passed are not onerous but that isn’t the point. By declaring the internet to be phone lines the FCC has made a massive power grab of which this is only the first step. This is one of the important messages of this election; the American people have had enough of government officials who simply refuse to recognize any limits on their power.

Wall Street Journal:

Tomorrow morning the Federal Communications Commission (FCC) will mark the winter solstice by taking an unprecedented step to expand government’s reach into the Internet by attempting to regulate its inner workings. In doing so, the agency will circumvent Congress and disregard a recent court ruling.

How did the FCC get here?

For years, proponents of so-called “net neutrality” have been calling for strong regulation of broadband “on-ramps” to the Internet, like those provided by your local cable or phone companies. Rules are needed, the argument goes, to ensure that the Internet remains open and free, and to discourage broadband providers from thwarting consumer demand. That sounds good if you say it fast.

Nothing is broken and needs fixing, however. The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that net-neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.

Analysts and broadband companies of all sizes have told the FCC that new rules are likely to have the perverse effect of inhibiting capital investment, deterring innovation, raising operating costs, and ultimately increasing consumer prices. Others maintain that the new rules will kill jobs. By moving forward with Internet rules anyway, the FCC is not living up to its promise of being “data driven” in its pursuit of mandates—i.e., listening to the needs of the market.

It wasn’t long ago that bipartisan and international consensus centered on insulating the Internet from regulation. This policy was a bright hallmark of the Clinton administration, which oversaw the Internet’s privatization. Over time, however, the call for more Internet regulation became imbedded into a 2008 presidential campaign promise by then-Sen. Barack Obama. So here we are.

Last year, FCC Chairman Julius Genachowski started to fulfill this promise by proposing rules using a legal theory from an earlier commission decision (from which I had dissented in 2008) that was under court review. So confident were they in their case, FCC lawyers told the federal court of appeals in Washington, D.C., that their theory gave the agency the authority to regulate broadband rates, even though Congress has never given the FCC the power to regulate the Internet. FCC leaders seemed caught off guard by the extent of the court’s April 6 rebuke of the commission’s regulatory overreach.

In May, the FCC leadership floated the idea of deeming complex and dynamic Internet services equivalent to old-fashioned monopoly phone services, thereby triggering price-and-terms regulations that originated in the 1880s. The announcement produced what has become a rare event in Washington: A large, bipartisan majority of Congress agreeing on something. More than 300 members of Congress, including 86 Democrats, contacted the FCC to implore it to stop pursuing Internet regulation and to defer to Capitol Hill.

Facing a powerful congressional backlash, the FCC temporarily changed tack and convened negotiations over the summer with a select group of industry representatives and proponents of Internet regulation. Curiously, the commission abruptly dissolved the talks after Google and Verizon, former Internet-policy rivals, announced their own side agreement for a legislative blueprint. Yes, the effort to reach consensus was derailed by . . . consensus.

After a long August silence, it appeared that the FCC would defer to Congress after all. Agency officials began working with House Energy and Commerce Committee Chairman Henry Waxman on a draft bill codifying network management rules. No Republican members endorsed the measure. Later, proponents abandoned the congressional effort to regulate the Net.

Still feeling quixotic pressure to fight an imaginary problem, the FCC leadership this fall pushed a small group of hand-picked industry players toward a “choice” between a bad option (broad regulation already struck down in April by the D.C. federal appeals court) or a worse option (phone monopoly-style regulation). Experiencing more coercion than consensus or compromise, a smaller industry group on Dec. 1 gave qualified support for the bad option. The FCC’s action will spark a billable-hours bonanza as lawyers litigate the meaning of “reasonable” network management for years to come. How’s that for regulatory certainty?

To date, the FCC hasn’t ruled out increasing its power further by using the phone monopoly laws, directly or indirectly regulating rates someday, or expanding its reach deeper into mobile broadband services. The most expansive regulatory regimes frequently started out modest and innocuous before incrementally growing into heavy-handed behemoths.

On this winter solstice, we will witness jaw-dropping interventionist chutzpah as the FCC bypasses branches of our government in the dogged pursuit of needless and harmful regulation. The darkest day of the year may end up marking the beginning of a long winter’s night for Internet freedom.

Mr. McDowell is a Republican commissioner of the Federal Communications Commission.

Posted in 2012, Chuck Norton, Government Gone Wild, Is the cost of government high enough yet?, Obama and Congress Post Inaugration | 2 Comments »