American Elephants

“We Tried Our Plan,” Obama Said, “And It Worked!” by The Elephant's Child

87,897,000 Americans are no longer in the work force. Nearly 13 million are officially unemployed. So the Democrats in the Senate narrowly voted (51-48) to raise taxes on 1.2 million small businesses. Senators Joe Lieberman (I-CT) and Jim Webb (D-VA) joined the Republicans in voting against the tax hike, which would likely kill more than 700,000 jobs. Ernst and Young estimates that these small businesses  who pay their taxes as flow-through  businesses employ 54 percent of the private sector work force.

The rule that you just don’t raise taxes in a recession is denied by Democrats who expect to win the election by running against “the rich” and portraying Mitt Romney as unspeakably, disgustingly rich. They hope to impress voters with how thrifty they are by insisting that the rich pay just a little more of their “fair share.”

And if that weren’t enough, the Senate actions would raise the death tax from 35 percent to 55 percent. Democrats try to portray this as the (probably illegally gotten ) gains of people who got rich through no efforts of their own. The rich can usually deal with their wealth with foundations or trusts.  Small businesses and farms often have to sell all or part of the business to pay the death tax. Ruins many, and slows the growth of others. And to top that they would increase the top tax rate on capital gains and dividends from 15% to 20%.

The President recently told a fundraising crowd that his economic plan has been working. “Just like we’ve tried [Republicans’] plan. We tried our plan— and it worked, he said.  To prove that it worked, he cited the auto industry bailouts. “I refused to turn my back on a great industry and American workers,” he said. “Three years later, the American auto industry has come roaring back.”

Obama’s violations of bankruptcy law made the bailout of GM and Chrysler $26.5 billion more expensive than it had to be. Taxpayers stand to lose around $35 billion if GM stock were sold today. GM’s recovery is based, at least in part, on the increasing use of subprime loans.

It is becoming apparent that President Obama will say anything if he thinks it will help him win the election. He is currently running an ad that says he has a plan to “pay down the debt in a balanced way.” He tries to justify his call for a tax increase on the grounds that the increased revenue will reduce the deficit. Obama belatedly — July 27 — complied with the law that requires that he submit a budget every year no later than July 16. Senator Jeff Sessions said:

His updated budget proposes a $10.6 trillion increase in gross debt through 2022, with debt remaining permanently above 100 percent of GDP. The picture in the out-years looks even bleaker. No change is proposed to our dangerously unsustainable debt course.

The President’s claim his tax hikes are for deficit reduction is shown to be false as well. His budget proposes to spend $46.2 trillion over ten years—an increase of nearly one-and-half trillion dollars above the current law baseline and a 57 percent increase above today’s spending levels. The President’s $1.8 trillion tax increase is not used to reduce the deficit but to fund this massive increase above what we are currently planning to spend.

His economic plan has been working? The only president who combined tax cuts and spending cuts as policy was Ronald Reagan, and that brought us  a twenty year-long economic boom. This wasn’t the worst recession since the Great Depression, as Obama has constantly claimed. But instead of correctly addressing the downturn, the administration turned at once to a huge, unfunded, unworkable  government-sponsored health insurance program that nobody wants. Layer on a huge financial bill that strangles business, and does not address the factors that caused the recession, and add on a war on fossil fuels with an attempt to replace them with two ancient technologies hampered by the same drawbacks that made them only mildly useful centuries ago. It didn’t have to be this way, and we didn’t have to be in such disastrous straits.  His plan has been working?

Fortunately, Obama’s plan will not pass the House.

(click to enlarge)

This is the President’s economic plan.

2008 Obama Supporter Interviews Her 2012 Self: by The Elephant's Child

Romney ad: So, what ever happened to that “hope & change” thingy? by American Elephant

“Hope” Is Not a Recipe For Success. Try Common Sense and Hard Work! by The Elephant's Child

President Obama’s “green jobs” program promised to weatherize 1,000,000 homes each year. A report issued by the U.S. Department of Energy in February 2010, issued two conclusions: Out of the $4.73 billion that the stimulus bill provided for weatherization work, only $368.2 million had actually been spent. (Less than 8 percent). Of the 10 highest grant recipients, only two had completed more than two percent of the planned units.

The weatherization program was supposed to be the quickest and most effective of job-creation programs, but to quote the report: “The Nation has not, to date, realized the potential economic benefits of the $5 billion in Recovery Act funds allocated to the Weatherization Program.” Why not?

A Depression-era law, known as the Davis-Bacon Act, meant that recipients of weatherization funds had to pay laborers a locally “prevailing wage.” States and counties didn’t actually know what the prevailing wage was. Most chose not to begin projects until wage rates were formally established. California had “furloughs.” The Energy Dept. mandated that all workers receive additional training — budget shortfalls and “furloughs.”

Idled oil-rig workers in the Gulf who are receiving compensatory benefits from BP aren’t going to get any relief from the IRS.  Their benefits will be fully taxable, the IRS wants their share of that $20 billion fund demanded by the federal government to help spill victims.

Eight of the deepwater drilling rigs in the Gulf of Mexico have either left, or are finalizing their plans to do so.  The administration apparently thought that they would sit around idle for six months.  There is an economic disaster to accompany the ecological disaster.  Some 16 shallow-water rigs are sitting idle, and in 30 days that total will grow to 34 rigs.  Approximately 50 offshore marine service and supply vessels are already out of work and that number is expected to grow to 100 shortly.  Louisiana’s shipbuilding industry is bracing for a potentially devastating drop in new business and likely cancellation of existing contracts.

With the overhaul of financial regulation nearing completion, some Democrats are hoping that Congress can turn to the next big legislative challenge – energy and climate change. There is no consensus yet what such legislation should include, but there is strong determination on the part of the White House and Democratic leaders in Congress to try to move something – anything – before Congress leaves town in August. Um — anything?

These are just a few examples of the mindset.  They must do something! They will make a law, turn out a regulation, mandate — something or other. Because there has been no careful investigation of what is actually needed, no consideration of possible unintended consequences, things simply do not work.

Efforts to salvage things in the Gulf are hamstrung by red tape issued by bureaucrats who know less than nothing about the problems.  Priorities are misplaced, expertise ignored, ideas discarded, common sense and simple straightforward economics are left out of the equation.

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