American Elephants

The Border is Not Secure, and The Senate’s Bill is Not Going to Fix It. by The Elephant's Child

Back in February, Bloomberg Businessweek had a headline that proclaimed “While Nobody Was Looking, The Border Got Secured.” Reporter Elizabeth Dworkin said “Obama has poured money and resources into border security. In his first term, he spent $73 billion on immigration enforcement. That’s more than the budgets of all other federal law enforcement agencies.” Well, yes. In his first term Obama squandered money right and left. Dworkin depended on falling numbers of illegals apprehended, but doesn’t count the ones who got away.  President Obama has also tried to claim that the border is “secure.”

Janet Napolitano visited the border south of San Diego and announced “I believe the border’s a safe border. That’s not to say everything is 100 percent.” Well, yes, it’s not 100%, that’s why ICE agents are suing Secretary Napolitano and Homeland Security and the Obama administration for not letting them do their jobs.

The Heritage Foundation noted:

Last week, government watchdog Judicial Watch issued a report that shows the Department of Homeland Security  (DHS) was abandoning ordinary background checks due to a surge in amnesty applications as a result of President Obama’s executive action last year.

If DHS cannot manage a few hundred thousand temporary amnesty applications, it is scary to think about how it will handle 10 million or more amnesty applications that would occur as a result of the Senate’s immigration reform bill.

Under the Senate’s immigration bill, the majority of the estimated 11.5 million unlawful immigrants would get provisional immigrant status after passing a background check. Not going to happen if DHS can’t keep up with the sudden surge. ICE admitted in March that it has released more than 2,000 unlawful immigrants, including serious offenders. ,Since those released are no longer confined in immigration jails, who knows if they will turn up for their court hearings.

The U.S Judicial Conference, the policy-making body for the federal judiciary has issued a scathing letter on the enormous costs and problems the Schumer-Rubio amnesty bill would create for the court system involving enforcement, legalization, immigration courts and E-Verify.

The talking points about the “path to citizenship,” offer many barriers that illegal immigrants must pass to receive “earned legalization,” but the barriers have no teeth, the path is phony, and the record of adherence to the rules— by the administration— is bleak.

  • They must pass background checks. DHS does not have the ability to handle present amnesty applications, a surge of 11 million is impossible.
  • They must learn English. The 1986 law required this, but in practice attendance at a  handful of classes was sufficient, INS weakened the requirement after the law was passed, last time, and exempted many.
  • They must pay back taxes. Those who have been working off the books have no history with the IRS about back taxes. The requirement is that illegals must come clean with the IRS, but if there’s no record? So the idea is sign up and we’ll send the IRS after you? That’s sure to work.
  • They must pay a fee and a fine. Mr. Obama called it a ‘penalty’, but a fee is meant to cover the cost of administering amnesty. How much? To be decided by DHS. The fine or penalty was $500, then another $500 six years later, and if a person wants to switch from provisional status to green card status, there’s another $1,000. Lots of exceptions and waivers. If you came in under age 16, you don’t have to pay, or if you’re under 21, or on welfare. The original bill grants non-profits $150 million to help illegals apply for amnesty.
  • They must go to the back of the line.  Those approved for provisional legal status immediately get a work permit, Social Security account, travel documents, drivers licenses, many public benefits, and state level benefits. Those who receive amnesty are better off compared to those overseas who have applied to come to the U.S. legally. Amnesty, thus, is a powerful incentive to encourage illegal immigration. Why wait around to do it legally? We would be sending the message illegal entry is a legitimate path to US citizenship, The Border Patrol chief recently testified to Congress that even the discussion of amnesty has increased illegal immigration.

What has changed in the hastily rewritten Hoeven-Corker version, I don’t know, but you can be sure that it is all window dressing. The administration has just spent almost 5 years demonstrating that an administration does not have to abide by the rules if they don’t want to.

The Congressional Budget Office foresees a net increase of 10,4 million legal immigrants through 2023 on top of the 10 million expected under current law.  Add another 4.8 million new illegals and we could be looking at more than 25 million new immigrants in the next ten years. We have never had immigration on that scale. Never. If millions of Americans cannot find work, what are all the new people going to be doing? Lowering wages and increasing unemployment? The CBO also finds that even with stronger economic growth the bill would decrease the wages of working Americans, especially the least well off.

Here’s another interesting factoid. Sharia Law allows adherents to take the Oath of Allegiance which begins “I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state or sovereignty to which I have heretofore been a subject or citizen… ” and lie about it. Sharia trumps American oaths, and one is free to lie to unbelievers.

Truly promising, isn’t it?

CBO: Obama’s Stimulus Gets an “F.” by The Elephant's Child

The American Recovery and Reinvestment Act of 2009 (ARRA)

Full Title: An act making supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, State and local fiscal stabilization for the fiscal year ending September 30, 2009 and for other purposes.
Enacted by 111th Congress         …………………….  Effective: February 17, 2009

Better Known as “The Stimulus”

The Congressional Budget Office (CBO) issued its quarterly report on Feb. 22 on the impact of ARRA from October 2012 through December 2012, as required by law. CBO estimates that ARRA will increase budget deficits by about $830 billion over the period. Close to half that impact occurred in fiscal year 2010 and more than 90 percent of ARRA’s budgetary impact was realized by the end of December 2012.

In the long run, ARRA will reduce output slightly in the long run, by between zero and 0.2 percent after 2016, CBO estimates. ARRA’s long run impact on the economy will come primarily from the resulting increase in government debt. To the extent that people hold their wealth in government securities rather than in a form that can be used to finance private investment, the increased debt tends to reduce the stock of productive private capital. In the long run, each dollar of additional debt crowds out about a third of a dollar’s worth of private domestic capital, CBO estimates.

To translate, when the government borrows, it is selling debt (government bonds). The money that goes into financing the debt is unavailable for private investment. In the long run, each dollar of additional debt crowds out about a third of a dollar’s worth of private domestic capital.

Over the long term, the output of the economy depends on the stock of productive capital, the labor supply, and productivity. The less productive capital there is as a result of lower private investment, the smaller will be the nation’s output over the long term.

To grow the economy, you need private spending, not government spending.

The lasting effect of the $878 billion stimulus which has been 90% spent, compared with what would have occurred otherwise, CBO estimates:

  • Real, inflation-adjusted, gross domestic product raised by between 0.1 percent and 0.6 percent.
  • Unemployment rate lowered by between 0.1 percent and 0.4 percent.
  • Number of employed increased by between 0.1 million and 0.8 million.
  • Number of full-time-equivalent jobs by 0.1 million to 0.8 million.

After four years and almost a trillion dollars in stimulus payments, all we have to show for it is 113,691 full time equivalent jobs, $16 trillion in debt that will never be repaid, 7.9% unemployment (14.9% real unemployment), negative GDP, and continuing record deficits.

Wasted billions. Ongoing false rhetoric. No 3.5 million jobs created or saved. False hope. Continued fierce demand to spend  more, lots more, to little effect.

White House Lies About Costs Of ObamaCare by The Elephant's Child

Today the hapless Jay Carney, who came to the post of White House Press Secretary from Time  (formerly Time Magazine) announced that ObamaCare should not be considered for any deficit reduction because “The Affordable Care Act reduces the deficit considerably.”

I would simply point out to you that the Supreme Court has spoken, the American people have spoken, congressional leaders of both parties have spoken and we’re going to continue with implementation.

This White House has its very own facts, which are not to be disagreed with. Their facts are whatever Obama said they are. Obama has admitted to being bad at math, which perhaps accounts for the problem. John Boehner said that the fiscal cliff negotiations need to include Obamacare:

The president’s health care law adds a massive, expensive, unworkable government program at a time when our national debt already exceeds the size of our country’s entire economy.

In March 2010, leading democrats and their media supporters were just “giddy” to report they had crunched some numbers and found the nationalized health care bill they were pushing would reduce the deficit by $138 billion. Perhaps that’s where Democrats come from — all the people who flunk math become liberals. It was, of course, complete hooey. They used phony numbers, counted some things twice, made bad assumptions, and created a huge straw man.

The Congressional Budget Office does good work, but they can give estimates only with the information they are given. That is, they can’t go out looking for contrary evidence, or any evidence. They must devise their numbers with the information that is given to them.

The latest CBO estimate says that ObamaCare , over ten years, will now cost $2.6 Trillion — nearly three times a much as the initial estimate. And it is sure to cost far more. The incentives built into the program are not measured, and they are mostly bad. There are many problems with the bill that remain officially unconsidered, but are huge — like the shortage of physicians to serve Medicare and Medicaid patients. We’re already nearly 50,000 short of the needed doctors, and the numbers who will leave the profession are increasing. The bill funnels ever more people into Medicaid, and demands more time and service from the attending doctor, with no idea where they are going to get the needed doctors. ………………………………………………….. …………..(click to enlarge)

ADDENDUM: Reader Lon Mead corrected me. Mr. Carney was press secretary for V.P. Joe Biden before coming to the White House — after Time. So he has been flacking longer than I thought.

Tax Hikes Don’t Mean More Revenue, or So the Evidence Says. by The Elephant's Child

Across the waters, the Labour government in its last days increased the marginal tax rate to 50%, in a tax-the-rich move, and the Tory-Liberal Democrat coalition kept it in place. The tax rate which kicked in at £150,000 a year was the first increase since then Chancellor Nigel Lawson cut it to 40% from 60% in the late 1980s.

The argument (does this sound familiar?) was that “rich bankers” were responsible for the economic crisis and should pay for the clean-up. Mr. Cameron preferred to say those with the “broadest shoulders” should bear the heaviest burden.

Well, once again, it didn’t work. Preliminary figures show that there has been ‘manoeuvering’ by well-off Britons to avoid the new higher rate. Revenue has dropped by around 5%. The Treasury had projected that monthly revenues would actually increase by more than a billion pounds.  When will they ever learn?

The state of Illinois, Obama’s home state, increased its corporate tax rate to 7.0% from 4.8% in January 2011. (Yes, if you want the economy to recover, raise taxes). That’s a 45% increase in the overall corporate rate. Caterpillar made it clear to Illinois officials that it chose to build its newest manufacturing plant outside of Illinois due to the “business climate and overall fiscal health” of the state. And took 1,000 jobs with it. They have also threatened to move their corporate headquarters. Modern Drop Forge and FatWallet have taken their jobs and moved. Canadian National Railway moved its locomotive repair shop and 250 jobs to Indiana. Other major corporations’ threat to move, with their 8,500 jobs, have gotten tax breaks over the next ten years to remain in Illinois.

High taxes and mandatory union membership participation have forced over 800,000 residents to leave Illinois for neighboring states over the past 15 years. But the most growth has occurred in no income tax, right-to-work states Texas and Florida. Illinois has led the country in job losses — over 100.000 — since the increase in taxes, and raised the unemployment rate to 10.1%.

U.S. taxes really are unusually progressive, and more progressive that almost every other rich country. And the rich have options. Steeper tax rates are a dumb way to try to improve fairness and raise revenue. The high-tax states are losing businesses and losing high income residents. California has a huge out-migration. Indiana has lowered rates and become a right-to-work state and is gaining businesses and driving the unemployment rate down.

Small business is not hiring because they are concerned about rising health care costs, government regulations, and the economic climate. Twenty-four percent are worried about being in business in 12 months. 85% say they are not hiring. 61% say they’re worried about economic conditions. But nobody listens.

Treasury Secretary Timothy Geithner says that “If you don’t try to generate more revenues through tax-reform, if you don’t ask, you know, the most fortunate Americans to bear a slightly larger burden of the privilege of being an American, then you have to —the only way to achieve fiscal sustainability is through unacceptably deep cuts in benefits for middle class seniors, or unacceptably deep cuts in national security.”(This is the throw Granny over the cliff gambit)

The Congressional Budget Office (CBO) rejects President Obama’s oft-repeated argument that in order to lower the deficit, it is mathematical certainty that taxes must go up. If President Obama and Congress set spending to match its historical level of 20 percent of GDP and keep it at or below that level, the deficit would be at its historical level in 2017, and the debt would fall as a share of the economy over time.  All that without raising taxes a dime.  Deficits are unsustainably high because the government is spending too much, not because it is collecting too little revenue.


CBO Assumptions Are Scary, The Reality is Worse. by The Elephant's Child

The Congressional Budget Office (CBO) released it’s Budget and Economic Outlook for years 2012 to 2022 yesterday.  Not Good.

  • The 2012 deficit, projected to be $1.079 trillion, represents the fourth consecutive year of deficits exceeding $1 trillion. All Obama’s.
  • The debt held by the public is $11.2 trillion, nearly 3/4 of total economic output.
  • This year’s $3.6 trillion in spending is almost 1/4 the size of the economy, and way above average spending at 20% of GDP.

The CBO’s assumptions, Heritage expert Patrick Knudsen says, understate the problem, because they employ unrealistic assumptions.  They assume that Congress will allow a sharp reduction in payments to Medicare physicians. That the Bush tax cuts will expire this year as scheduled, and that the Alternative Minimum Tax will broaden to capture a greater number of families.

Over the next decade, federal spending on health care will double.  It is particularly those dratted baby boomers, always causing trouble. They started retiring last year, and will retire in increasing numbers till 2025.  That’s growth from 48 million beneficiaries now to 66 million in 2022, and on top of that spending per beneficiary will grow. If you think that what you pay for health care will go down, welcome to fantasyland.

If payments to physicians remained at their 2011 amounts through 2022, the outlays over the next 10 years would be about $316 billion higher than CBO estimates.

Federal spending on Medicaid will shoot up drastically under ObamaCare. But if it is not repealed, you can expect drastic changes. Right now, Medicaid recipients are having a very hard time finding a doctor who will treat them, which means more emergency room use.

Look to Britain to see how it progresses. Doctors become public servants, working for the government. Fewer of the best and brightest go into medicine, Increasing shortages of doctors. Long waits for treatment, more people die unnecessarily, hospitals decline in quality and care. The goal of providers becomes trying to get reimbursement rather than trying to give patients excellent care. The goal of the all-powerful government becomes keeping costs down so they can go on pretending that medical care is free. It is essential to offer “free” care since that is what keeps the people who aren’t actually in need of much care supporting the system and the political party that guarantees “free” care.

Medicare, Medicaid and Social Security are all social welfare programs were never planned to cover the enormous population bulge of the baby boom. It has long been known that the entitlements were going to cause major trouble, but instead of figuring out how to provide a safety net for the elderly and infirm, Congress has resisted any changes. That is why Democrats, in every electoral campaign, try to tell the old folks that the Republicans are trying to take their Social Security away.  These entitlements were begun by Democrat administrations as a way to guarantee votes for themselves, and they have resisted reform with all their strength.  Not to let Republicans off the hook, they’re not anxious to get seniors mad either.

Paul Ryan has developed a plan to save Medicare and Social Security and been excoriated for it. It will be a major battle. But it is important to understand what the battle is really about, and what our real options are, and not get confused by fancy footwork.

It’s not good, but there is still time to get serious about fixing things.

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