PLEASE CONSIDER TALKING TO YOUR FRIENDS. NEIGHBORS, RELATIVES, BUSINESS ASSOCIATES…..and DISTRIBUTING THIS E-MAIL TO ENERGIZE PEOPLE TO SUPPORT SAM AND COME OUT TO VOTE TUESDAY AUG. 10th.
Sam was the Chair of the Cobb County Commission for 8 years and just stepped down as Chairman of the Atlanta Regional Commission. As CEO of one of the metro's largest counties, he has earned a national reputation for keeping Cobb's taxes and crime rates the lowest in metro Atlanta. As a public servant, he's earned a reputation throughout the region as a true consensus builder and has taken a leadership role in the region's water and transportation issues. Sam's character is above reproach and "ethics reform" is one of his central campaign themes.
Georgia has an historic election this year - we have not had an open seat for the powerful office of Attorney General in 68 years! Sam is the only candidate with the legal knowledge to successfully uphold the Constitution; the leadership to manage the office of the Attorney General; and the courage to tackle corruption, abuse and misuse of power.
I encourage you to vote for Sam Olens in the Republican primary runoff August 10th or in Advance Voting which begins today.
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This cartoon was in the Chicago Tribune in 1934. Look carefully at the plan of action in the lower left corner.
The Boy Scouts celebrate their 100th anniversary only once but Obama could not make time for them so he opted to attend an inane talk show and then raise campaign money.
It is a matter of priorities and his decision tells us where his are. (See 1 below.)
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This from a recent Wall Street Journal article. (See 2 below.)
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After a closer look at Berwick and Obamascare it just gets worse. More radical appointments and legislation by Obama.(See 3 and 3a below.)
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Jesse Jackson, Charlie Rangel and others have used race as a means of political extortion and scamming. Perhaps the Sherrod matter is going to bring this all to a crashing end.
The bill for past sins only last so long. (See 4 below.)
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Is Lebanon about to erupt and can anything be done about it?
Rocketing aimed at thwarting peace? (See 5 and 5a below.)
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Two opposing views regarding tax cuts etc..
I pay my taxes and I take my deduction and if I thought the government was trustworthy when it comes to the management of my taxes and our nation's economic affairs I would gladly pay more. However, more taxes simply results in more spending.
For example, once the government began funding education the cost of college tuition sky rocketed because the money was available.
If you want more of something fund it.
No one in D.C. knows how to spell cut spending! The glass is always empty no matter how much water you pour in it.
But you decide. (See 6 and 6a below.)
And then there is Rep. Ryan. (See 6b below.)
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Dick
-----------------------------------------------------------------------------------1) Obama refused an invitation to speak to Boy Scouts on the occasion of the 100th anniversary of the organization's founding. Instead, he appeared on a morning talk show on TV, a visit he could make any time he chose. The message is clear: Obama is not supportive of, and in fact rejects, the simple values of character building promoted by the Boy Scouts of America. Does anyone now have any question as to where he stands on issues of patriotism and devotion to the Almighty?
For those who may not know, here are the basic precepts of the Boy Scout movement in this country.
Scout Oath
On my honor I will do my best
To do my duty to God and my country
and to obey the Scout Law;
To help other people at all times;
To keep myself physically strong,
mentally awake, and morally straight.
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2)This is the nugget from the article –
"We fear that core inflation readings in the United States could dip into outright deflationary territory in coming months," Argonaut Capital, whose returns are flat for the year, recently told investors. "This should be a positive for longer-dated fixed income."
Mr. Fournier's $4 billion hedge fund Pennant Capital says "political winds shifted" when European nations recently told U.S. Treasury Secretary Timothy Geithner at the Group of 20 summit they will focus on balancing their budgets rather than stimulating economic growth. The rising clout of the Tea Party movement in the U.S. also has colored his view that elected officials won't have the ability to spend.
Mr. Fournier and some others say Tea Party adherents are appropriately worried about hefty government debts, but that without near-term spending and programs by elected officials, the economy could sink further.
"The U.S. economy has to grow north of 2% to avoid deflation, and we're right around there," he says.
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3)Will Make You Sicker
By Eileen F. Toplansky
In addition to the grave medical concerns pertaining to the appointment of Dr. Donald Berwick to the Centers for Medicare and Medicaid Services (CMS) is another issue that speaks to his political perspectives. Berwick has been actively involved with the international advocacy group Physicians for Human Rights (PHR), which was established with funding from the Ford Foundation.
In 2000, Berwick "began donating thousands of dollars [to PHR] when PHR was focusing most, if not all, of its investigations on Israel's treatment of terrorists during the Intifada." The PHR engaged in the false claim that the Israel Defense Force (IDF) massacred the (Palestinian) population during the Jenin episode.
PHR has a disproportionate concern with Israel; equally alarming is the fact that the PHR gave an award to Eyad Sarraj, an activist in Gaza who justified homicide bombings. Yet Berwick steadily increased his contributions to PHR. Furthermore, a PHR press release all but accuses Israel of deliberately targeting wounded civilians and medical facilities during Operation Cast Lead. In addition, Physicians for Human Rights has played "a pivotal role in the campaign to prosecute American officials for alleged acts of torture committed at the Guantanamo Bay prison camp." PHR uses standards derived from the so-called "Istanbul Protocol" for investigating torture charges. These are standards promoted by the European Union.
Why would Berwick financially support and be a board member of an organization that singles out Israel for human rights abuses and mistreatment of civilians? Why does Berwick consider international law above American law? It is but another example of the anti-Israel, leftist-leaning people whom Obama chooses. There is an anti-Israel and anti-American venom that courses through Obama and the people he surrounds himself with.
So in what is becoming his standard operating dictatorial approach, Obama has pushed through another appointee, with the result that Berwick now has enormous power over Americans' health care. In essence, Berwick will head the Centers for Medicare and Medicaid Services (CMS) and control a budget larger than the Pentagon's.
Obama snuck Berwick in on Independence Day weekend with a recess appointment. That alone should have gotten everyone's radar up. Berwick thus bypassed any Senate questioning of him. The reason given for this action was that the White House did not want the Republicans to stall since "the agency [faced] new responsibilities to protect seniors' care under the Affordable Care Act" and they did not wish to waste time with "Washington game-playing." Yet again, the American people have deliberately been kept in the dark by this president. So much for the most transparent presidency ever!
According to Sally C. Pipes of Investors Business Daily, "Berwick's task under the new health reform law will be to take from Medicare, the program for seniors, and give to Medicaid, the program for low-income Americans." Berwick is a fan of the United Kingdom's NHS, which routinely rations care and medicines. In a New York Times article of 2008, a British man was refused medication to treat his kidney cancer."If [he] lived in the United States ... [he] would most likely get the drug, although he might have to pay part of the cost." In a 2010 article from the British Telegraph, reports of bureaucratic red tape indicate that patients cannot get information about lifesaving drugs. Yet the (British) National Health Service is the system that Berwick "is romantic about." In 2009, Berwick said that "the decision is not whether or not we will ration care; the decision is whether we will ration with our eyes open." In 2005, he said that he doesn't "care so much what doctors say." Other comments of Berwick's should put everyone on notice. They include:
•"I would place a commitment to excellence-standardization to the best-known method-above clinician autonomy as a rule for care."
•"Young doctors and nurses should emerge from training understanding the values of standardization and the risks of too great an emphasis on individual autonomy."
•"Political leaders in the Labour Government have become more enamored of the use of market forces and choice as an engine for change, rather than planned, centrally coordinated technical support."
Clearly, Berwick falls in line with the ideas of central planning, socialism, and loss of personal autonomy, in addition to his Israel and American animus -- precisely those core beliefs that clearly define Obama and his circle of appointees.
To add salt to the wound, "at the same time that Berwick was waxing enthusiastically about Britain's National Health Service, he was, according to Robert M. Goldberg, pocketing millions in compensation and free lifetime health benefits courtesy of the corporations and health interests he will now both regulate and reward."
So the boomer generation is going to be in for a rude awakening as Obama's lies keep piling up. Berwick advocates rationing for seniors. People will not be able to keep their health insurance or their own doctors, and there certainly will be no reduction in the deficit. In fact, as Sally C. Pipes has written, "with Berwick heading up CMS, seniors and the poor will serve as the initial laboratory rats. Soon enough, however, everyone will be affected."
Repeatedly, Obama's appointments are made in the shadows. And each time this occurs, it is an insult to the American people. Obama continues to circumvent public inspection of ideas and people who will have tremendous impact on Americans. That the American people did not have the opportunity to engage in a public debate over these ideas is evidence of Obama's ever-evolving tyrannical hold on the nation.
Indeed, the double standards, the philosophical ideas at odds with American beliefs, and the clear harm that is intended confirm the idea that "Barack Obama is aggressively destroying our country" and its core beliefs.
3a)Obamacare Only Gets Worse Upon Further Review:
By Kevin Hassett
One of the more illuminating remarks during the health-care debate in Congress came when House Speaker Nancy Pelosi told an audience that Democrats would “pass the bill so you can find out what’s in it, away from the fog of controversy.”
That remark captured the truth that, while many Americans have a vague sense that something bad is happening to their health care, few if any understand exactly what the law does.
To fill this vacuum, Representative Kevin Brady of Texas, the top House Republican on the Joint Economic Committee, asked his staff to prepare a study of the law, including a flow chart that illustrates how the major provisions will work.
The result, made public July 28, provides citizens with a preview of the impact the health-care overhaul will have on their lives. It’s a terrifying road map that shows Democrats have launched America on the most reckless policy experiment in its history, the economic equivalent of the Bay of Pigs invasion.
Before discussing what the law means for you, we have to look at what it does to government. That’s where the chart comes in handy. It includes the new fees, bureaucracies and programs and connects them into an organizational chart that accounts for the existing structure. It’s so carefully documented that a line connecting two structures cites the legislative language that created the link.
Ornate System
This clearly is a candidate for most disorganized organizational chart ever. It shows that the health system is complex, yes, but also ornate. The new law creates 68 grant programs, 47 bureaucratic entities, 29 demonstration or pilot programs, six regulatory systems, six compliance standards and two entitlements.
Getting that massive enterprise up and running will be next to impossible. So Democrats streamlined the process by granting Health and Human Services Secretary Kathleen Sebelius the authority to make judgments that can’t be challenged either administratively or through the courts.
This monarchical protection from challenges is extended as well to the development of new patient-care models under Obama’s controversial recess appointment, Donald Berwick, whom Republicans are calling the rationer-in-chief. Berwick will run the Centers for Medicare and Medicaid Services, where he can experiment with ways to use administrative fiat to move our system toward the socialized medicine of Europe, which he has at times embraced.
Closer to Home
A sprawling, complex bureaucracy has been set up that will have almost absolute power to dictate terms for participating in the health-care system. That’s what the law does to government. What it does to you is worse.
Based on the administration’s own numbers, as many as 117 million people might have to change their health plans by 2013 as their employer-provided coverage loses its grandfathered status and becomes subject to the new Obamacare mandates.
Those mandates also might make your health care more expensive. The Congressional Budget Office predicts that premiums for a small number of families who buy their insurance privately will rise by as much as $2,100.
The central Obamacare mechanism for increasing insurance coverage is an expansion of the Medicaid program. Of the 30 million new people covered, 16 million will be enrolled in Medicaid. And you could end up in the program whether you want it or not. The bill states that people who apply for coverage through the new exchanges or who apply for premium-subsidy credits will automatically be enrolled in Medicaid if they qualify.
Hurting the Elderly
To pay for this expansion, the bill takes $529 billion from Medicare, with roughly 39 percent of the cut coming from the Medicare Advantage program. This represents a large transfer of resources, sacrificing the care of the elderly in order to increase the Medicaid rolls.
For all this supposed reform, you, the American taxpayer, can expect a bill to the tune of $569 billion.
Front and center among the new taxes is the 40 percent excise tax on those lucky people with so-called Cadillac health plans. The higher insurance costs that are driven by the government mandates will push many more ordinary plans into Cadillac territory.
If the idea of taxing people with coverage deemed too good doesn’t bother you, maybe the new 3.8 percent tax on investment income will. That will apply even to a small number of home sales, those that generate $250,000 in profit for an individual or $500,000 for a married couple.
In vivid color and detail, Congressman Brady’s chart captures the huge expansion of government coming under Obamacare. Harder to show on paper is the pain it will cause.
(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Republican Senator John McCain in the 2008 presidential election. The opinions expressed are his own.)
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4)Shirley Sherrod and the Race Grievance Industry
By Rosslyn Smith
Shirley Sherrod, litigant and co-mastermind of the Pigford settlement, which bestowed large checks on 86,000 of the country's 40,000 black farmers, ironically may help usher in a long-overdue post-racial era in America. Publicity, once the ally of the racial grievance industry, is now the enemy of deals done in quiet.
After Dan Riehl linked to a law firm that specializes in filing complaints in the Pigford settlement for a 33.5% contingency fee -- Pogust, Braslow & Millrood, LLC, in Conshohoken, Pennsylvania -- their site at http://www.blackfarmersjustice.com seems to have gone offline. Riehl notes this language from the law firm's 2008 press release:
Last summer, Senator Barack Obama (IL) introduced legislation to allow these individuals the opportunity to prove their claims of racial discrimination on the merits. Senator Obama's legislation ultimately became part of the Food and Energy Security Act of 2007, passed by Congress on May 22, 2008.
Another site that Riehl linked on the Pigford case was still up. He said this about the comments there.
Kind of, like -- hey, I had an uncle who farmed, I think, back in the day. Or, maybe it was a second cousin. Can I get in on some of this fast cash, too? Sure, just kickback 33.5% to the lawyers, maybe we can get you signed up. I smell major scam.
My comment is more pointed than Riehl's. Since the 1960s, I have heard endless acclamations of black pride that, in terms of policy, progressively became little more than groveling for government handouts. The last American who personally experienced slavery died in 1948, five years before I was born. 1948 also happened to be the year the Democratic Party, traditional political home of Southern segregationists, adopted a specific four-point political platform dedicated to Civil Rights.
Racial discrimination has been considered a legal abomination by both political parties since then. Outside of a few lunatic fringe groups, it has been considered a social faux pas since the early 1960s. Indeed, the number of people who actually lived in a legally segregated society is rapidly diminishing. With Obama in the White House, a black man recently beating Strom Thurmond's son like a drum in a South Carolina Republican primary, and the last Democrat practitioners of de jure segregation -- such as Robert "Sheets" Byrd -- rapidly assuming room temperature, as a practical matter, the segregationist race card is now dead as a political weapon. Americans have absorbed the lesson that we judge people on the soundness of their ideas and the content of their character rather than the color of their skin.
With the passing of the last of those who once saw race as definitive, we want the bill for the racial sins of the past to be finally be stamped paid in full! Our patience with the political class's subjective definition of racism as anything that offends a person of color is virtually nonexistent. Attempts to lay a guilt trip on us as have been made in the past, and now they are going to end only in pushback against those who have done very well for themselves by claiming racial injury.
It would indeed be time to be bored with race except for one thing. Racial preferences enacted in past decades continue to cost us a fortune we no longer can afford to spend. No matter how boring the topic has become on an intellectual level, race-mongering continues to cost us a lot of money. Political interest groups such as the NAACP have a vested interest in keeping the idea of racial injustice alive. They do so by falsely equating unequal outcomes as the result of luck, talent, and temperament, with unequal treatment as a matter of law. Agencies at all levels of government, college admission officers, and a small army of private-sector diversity training consultants and Human Resource administrators also have a vested interest in the idea of racial injustice.
The real estate bubble happened in part because lenders were told they had to extend credit to people who weren't creditworthy, and on properties in substandard neighborhoods lest they be seen as discriminating on the basis of race. The recent so-called financial reform bill contains similar racial and gender preferences that will distort the credit market.
As long as there is a buck to be made by someone who cites racial discrimination, whether in personal or historic terms, the topic will remain part of the national political conversation. The difference is that from now on, anyone who cites past discrimination in expectation of a handout is increasingly going to be told, Life sucks for all of us. Stop whining about race and do something useful for a change.
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5)If Lebanon erupts again
A new U.S. memorandum doubts the Obama administration's ability to dissuade Israel or Hezbollah from attacking.
By Amir Oren
The rockets that struck Ashkelon and Sha'ar Hanegev, and the IDF's retaliation in Gaza over the weekend, demonstrated once again how deceptive and fragile the quiet on the border is. This could happen in Lebanon too, due to the sensitivity of the Syria-Lebanon-Hezbollah triangle, as the noose tightens around the suspects in the murder of former Lebanese prime minister Rafik Hariri, father of the current prime minister.
Last month the Council on Foreign Relations in New York published a contingency planning memorandum by Daniel Kurtzer, who was once an ambassador to Egypt and Israel. Kurtzer's essay, which looks to the future, was titled "A Third Lebanon War."
This is a common mistake. Only one of several campaigns took place in the summer of 2006, perhaps the eighth, of the Lebanon war, which has been going on for 40 years. From the armored Operation Extended Turmoil 4 in September 1972 against bases in southern Lebanon, through Operation Litani, Peace for Galilee, setting up the security zone and the South Lebanese Army, Operation Accountability and Grapes of Wrath, to withdrawing the IDF to the international border.
Whether it's a war or merely a campaign, Kurtzer urges preparation for the next event, which in his opinion could begin (less probably ) at Hezbollah's initiative or (more likely ) at Israel's undertaking - a decision to be made vis-a-vis Iran.
Israel will lie in wait for an opportunity to strike in Lebanon, or at training camps and missile storage sites in Syria earmarked for Hezbollah. The operation will hurt Hezbollah's rocket capabilities, thus denying Iran a 'second-strike' capability, in case Israel decides to hit its nuclear facilities.
Kurtzer doubts the Obama administration's ability to dissuade Israel or Hezbollah from attacking. Washington has no negotiation channel with Hezbollah, a terror organization and partner to Lebanon's government, and has nothing effective to convey through such a channel. Israel could perhaps be tempted with military equipment or "some other strategic enhancement as an incentive for not going to war," Kurtzer writes.
But pressure on Israel, including a threat to initiate or support a Security Council resolution against it, would encounter firm political resistance and be futile.
Kurtzer says the Americans will not receive early and sufficient warning of the IDF's preparations for a strike. The alternatives he proposes include renewing the Israel-Lebanon Monitoring Group - which held meetings of Israeli, Lebanese and UNIFIL officers - to supervise the understandings following Operation Grapes of Wrath. (A similar framework is used today for meetings of IDF and Northern Command officers with senior Lebanese and UNIFIL officers ).
Kurtzer suggests American encouragement for a limited preemptive Israeli strike against military targets, rather than infrastructure and government targets, as a substitute to a wider military operation. If this option is chosen the administration must make the limits and limitations of such an operation very clear to Israel, because Jerusalem tends to interpret U.S. ambiguity as supporting its own views, Kurtzer says.
Even a restricted IDF operation in Lebanon or against Hezbollah targets in Syria holds risks, Kurtzer says. It would freeze the peace negotiations and spur Syria to assist anti-American organizations in Iraq. But it could also weaken Hezbollah and break the standstill in the Palestinian or Syrian channel with the help of an American initiative.
Too large and fast an achievement would increase Israel's appetite for widening the military operation beyond its original objectives, says Kurtzer. Early failures on the battlefield, however, would drive Israel to continue the hostilities until the battle turns in their favor. In both cases there would be substantial civilian casualties. Hence, Kurtzer says, the United States should generate a cease-fire within a diplomatic context, with an optimal but not maximal IDF success highlighted.
Most important, he says, is to authorize the American ambassadors in Tel Aviv, Beirut and Damascus in advance "to intervene immediately and at the highest level to forestall escalation arising from incidents on the border," because the hours and first days after the outbreak of war or campaign are the most crucial (and due to the time differences, Washington sleeps when Tel Aviv decides to attack ).
Once in five years, on average, a major event takes place on the Israel-Lebanon front. Four years have passed since 2006. Kurtzer's memorandum indicates there are people trying to figure out two moves in advance. Unfortunately, none of them is sitting has a decision-making role in the Benjamin Netanyahu/Ehud Barak government.
5a)'Israel, Jordan take on terror together'
Peres expresses sadness over Jordanians injured in rocket attacks.
Israel and Jordan are working together in the fight against terror, President Shimon Peres said Monday, in reaction to the rocket attacks in the Eilat area
"There is a real battle in the Middle East between the peace camp, and the extremist camp who want to destroy any chance of peace," Peres said.
Peres expressed his sadness over the attacks on innocent people on the Jordanian side of the border.
MK Uri Ariel (National Union) also reacted to the rocket attacks, that were reported to have been launched from Egypt's Sinai,saying that they require a clear and powerful response against the perpetrators.
"Before Egypt can host peace talks, it must act to eradicate terror within the country," said Ariel.
The rockets landed in the area around Eilat Monday morning, one of which injured four people in nearby Jordan, in front of the Intercontinental Hotel. One of the casualties was in serious condition, the other three were lightly wounded.
A second rocket also landed on the Jordanian side of the border, a third north of Eilat's hotel area, and two more in the Red Sea. The projectiles were Grad-type Katyushas, suspected to have been launched from the Sinai Peninsula in Egypt.
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6)The Soak-the-Rich Catch-22
By ARTHUR LAFFER
Tax reduction thus sets off a process that can bring gains for everyone, gains won by marshalling resources that would otherwise stand idle—workers without jobs and farm and factory capacity without markets. Yet many taxpayers seemed prepared to deny the nation the fruits of tax reduction because they question the financial soundness of reducing taxes when the federal budget is already in deficit. Let me make clear why, in today's economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarged the federal deficit—why reducing taxes is the best way open to us to increase revenues.
—President John F. Kennedy,
Economic Report of the President,
January 1963
If only more of today's leaders thought like JFK. Sadly, in the debate over whether to extend the 2001 and 2003 tax cuts, and if so whether the cuts should be extended to those people who are in the highest tax bracket, there is a false presumption that higher tax rates on the top 1% of income earners will raise tax revenues.
Anyone who is familiar with the historical data available from the IRS knows full well that raising income tax rates on the top 1% of income earners will most likely reduce the direct tax receipts from the now higher taxed income—even without considering the secondary tax revenue effects, all of which will be negative. And who on Earth wants higher tax rates on anyone if it means larger deficits?
Since 1978, the U.S. has cut the highest marginal earned-income tax rate to 35% from 50%, the highest capital gains tax rate to 15% from about 50%, and the highest dividend tax rate to 15% from 70%. President Clinton cut the highest marginal tax rate on long-term capital gains from the sale of owner-occupied homes to 0% for almost all home owners. We've also cut just about every other income tax rate as well.
During this era of ubiquitous tax cuts, income tax receipts from the top 1% of income earners rose to 3.3% of GDP in 2007 (the latest year for which we have data) from 1.5% of GDP in 1978. Income tax receipts from the bottom 95% of income earners fell to 3.2% of GDP from 5.4% of GDP over the same time period. (See the nearby chart).
These results shouldn't be surprising. The highest tax bracket income earners, when compared with those people in lower tax brackets, are far more capable of changing their taxable income by hiring lawyers, accountants, deferred income specialists and the like. They can change the location, timing, composition and volume of income to avoid taxation.
Just look at Sen. John Kerry's recent yacht brouhaha if you don't believe me. He bought and housed his $7 million yacht in Rhode Island instead of Massachusetts, where he is the senior senator and champion of higher taxes on the rich, avoiding some $437,500 in state sales tax and an annual excise tax of about $70,000.
Howard Metzenbaum, the former Ohio senator and liberal supporter of the death tax, chose to change his official residence to Florida just before he died because Florida does not have an estate tax while Ohio does. Goodness knows what creative devices former House Ways and Means Chairman Charlie Rangel has used to avoid paying taxes.
Associated Press
The stern of John Kerry's yacht
.In short, the highest bracket income earners—even left-wing liberals—are far more sensitive to tax rates than are other income earners.
When President Kennedy cut the highest income tax rate to 70% from 91%, revenues also rose. Income tax receipts from the top 1% of income earners rose to 1.9% of GDP in 1968 from 1.3% in 1960. Even when Presidents Harding and Coolidge cut tax rates in the 1920s, tax receipts from the rich rose. Between 1921 and 1928 the highest marginal personal income tax rate was lowered to 25% from 73% and tax receipts from the top 1% of income earners went to 1.1% of GDP from 0.6% of GDP.
Or perhaps you'd like to see how the rich paid less in taxes under the bipartisan tax rate increases of Presidents Johnson, Nixon, Ford and Carter? Between 1968 and 1981 the top 1% of income earners reduced their total income tax payments to 1.5% of GDP from 1.9% of GDP.
And then there's the Hoover/Roosevelt Great Depression. The Great Depression was precipitated by President Hoover in early 1930, when he signed into law the largest ever U.S. tax increase on traded products—the Smoot-Hawley Tariff. President Hoover then thought it would be clever to try to tax America into prosperity. Using many of the same arguments that Barack Obama, Nancy Pelosi and Harry Reid are using today, President Hoover raised the highest personal income tax rate to 63% from 24% on Jan. 1, 1932. He raised many other taxes as well.
President Roosevelt then debauched the dollar with the 1933 Bank Holiday Act and his soak-the-rich tax increase on Jan. 1, 1936. He raised the highest personal income tax rate to 79% from 63% along with a whole host of other corporate and personal tax rates as well. The U.S. economy went into a double dip depression, with unemployment rates rising again to 20% in 1938. Over the course of the Great Depression, the government raised the top marginal personal income tax rate to 83% from 24%.
Is it any wonder that the Great Depression was as long and deep as it was? Whoever heard of a country taxing itself into prosperity? Not only did taxes as a share of GDP fall, but GDP fell as well. It was a double whammy. Tax receipts from the top 1% of income earners stayed flat as a share of GDP, going to 1% in 1940 from 1.1% in 1928, but at what cost?
We all know that there are lots of factors influencing tax revenues from the rich, but the number one factor has to be the statutory tax rates government tells the rich they have to pay. Not only do the direct income tax consequences of higher tax rates on those in the highest brackets lead to higher deficits, the indirect effects magnify the tax revenue losses many fold.
As a result of higher tax rates on those people in the highest tax brackets, there will be less employment, output, sales, profits and capital gains—all leading to lower payrolls and lower total tax receipts. There will also be higher unemployment, poverty and lower incomes, all of which require more government spending. It's a Catch-22.
Higher tax rates on the rich create the very poverty and unemployment that is used to justify their presence. It is a vicious cycle that well-trained economists should know to avoid.
Mr. Laffer is the chairman of Laffer Associates and co-author of "Return to Prosperity: How America Can Regain Its Economic Superpower Status" (Threshold, 2010).
6a)Raise My Taxes, Mr. President!
By Fareed Zakaria
We can’t afford the Bush cuts anymore.
For the last few months, we have heard powerful, passionate arguments about the need to cut America’s massive budget deficit. Republican senators have claimed that we are in danger of permanently crippling the economy. Conservative economists and pundits warn of a Greece-like crisis, when America can borrow only at exorbitant interest rates. So when an opportunity presents itself to cut those deficits by about a third—more than $300 billion!—permanently and relatively easily, you would think that these very people would be in the lead. Far from it.
The Bush tax cuts remain the single largest cause of America’s structural deficit—that is, the deficit not caused by the collapse in tax revenues when the economy goes into recession. The Bush administration inherited budget surpluses from the Clinton administration. What turned these into deficits, even before the recession? There were three fundamental new costs—the tax cuts, the prescription-drug bill, and post-9/11 security spending (including the Iraq and Afghanistan wars). Of these the tax cuts were by far the largest, adding up to $2.3 trillion over 10 years. According to the Congressional Budget Office, nearly half the cost of all legislation enacted from 2001 to 2007 can be attributed to the tax cuts.
Those cuts are set to expire this year. The Republicans say they want to keep them all, even for those making more than $250,000 a year (less than 3 percent of Americans). They say that higher taxes will hurt the recovery. But for months now they have been arguing that the chief threat to the economy is our gargantuan debt and deficit. That’s what’s scaring consumers, creditors, and businesses. Given a chance to address those fears by getting serious about deficit reduction, though, they run away. Look by contrast at British Prime Minister David Cameron, a genuine fiscal conservative. To deal with his country’s deficit, which in structural terms is not so different from America’s, he concluded that he would have to raise taxes as well as cut spending.
The Democrats, for their part, are also running scared, proposing to keep all the tax cuts except those affecting the very rich. But they were opposed to these tax cuts in 2001 and 2003. If they were a bad idea when budget deficits were small, why are tax cuts a good idea when deficits are in the $1.3 trillion range?
The idea that the average American is overtaxed is a nice piece of populist pandering. In fact, federal taxes as a percentage of the economy are at their lowest level since the presidency of Harry Truman. Chuck Marr and Gillian Brunet of the Center on Budget and Policy Priorities have calculated that a family of four at the exact middle of the income spectrum will pay only 4.6 percent of its income in taxes. Remember, almost half of the country pays no income taxes at all. The top 3 percent of Americans contribute almost 50 percent of federal income taxes.
The simple fact is this: all the Bush tax cuts were unaffordable. They were an irresponsible act of hubris enacted during an economic boom. Conservatives thought they would force us to shrink the government. But with Republicans controlling the White House and both houses of Congress, did reduced taxes cause reduced spending? No, they led to ever-increasing borrowing and a ballooning deficit.
We have one of the smallest governments among all the rich countries in the world. Yet we refuse to pay for it. (Yes, health-care spending is the big exception and, yes, we will have to get those costs under control.) I understand the fear that this is not a good time to raise taxes. But the impact of marginal shifts in tax rates on growth is pretty unclear. Clinton raised taxes in 1992 and ushered in a period of extraordinarily robust growth. Bush cut taxes massively in 2001 and got meager growth in return. Three tax cuts enacted since the financial crisis have done little to spur growth. In any event, if timing is the issue, Congress could extend the tax cuts for a year but then let them expire. Better yet, spend money on far more efficient ways to spur job creation, such as tax credits for jobs, which the CBO estimates would create four to six times as many jobs as would tax cuts.
I don’t like our current tax system. It’s unwieldy, taxes the wrong things (income instead of consumption), and is filled with loopholes that are legalized corruption. But we are not going to create the perfect tax code today. We have in front of us a simple, easy way to bring America’s fiscal house in order, reduce our dependence on foreign borrowing, restore U.S. credibility and power, and give us a stable revenue base from which to make key investments for future growth. All we need is for Congress to do what it does so well—nothing.
6b)Rep. Ryan pushes budget reform, and his party winces
By Perry Bacon Jr.
"Political people always tell their candidates to stay away from controversy," Rep. Paul Ryan said.
Viewing him as a rising star in the party, Republicans in Congress often talk up Rep. Paul Ryan as a potential governor, senator or House leader. The lanky, youthful-looking congressman from Wisconsin has begged off, citing his young children and limited desire to spend all his time raising campaign money.
Instead, Ryan is running a campaign of a different sort, one his party has so far refused to adopt: He is determined to persuade colleagues to get serious about eliminating the national debt, even if it means openly broaching overhauls of Medicare and Social Security.
He speaks in apocalyptic terms, saying the debt is "completely unsustainable" and warning that "it will crash our economy." He urges fellow politicians, and voters, to stop pretending that this problem will go away on its own.
He administers his sermons with evangelical zeal. He will go anywhere and talk to anyone who will listen. When he is not writing op-eds and appearing on television, he can often be found speaking to liberal and conservative audiences alike about his "Roadmap for America's Future," a plan he says would fix the problem.
"Political people always tell their candidates to stay away from controversy," said Ryan, 40. "They say, 'Don't propose anything new or bold because the other side will use it against you.' "
While he does not name the "political people," they no doubt include many Republican colleagues, who, even as they praise Ryan for his doggedness, privately consider the Roadmap a path to electoral disaster. Unlike most politicians of either party, he doesn't speak generically about reducing spending, but he does acknowledge the very real cuts in popular programs that will be required to bring down the debt.
His ideas are provocative, to say the least. They include putting Medicare and Medicaid recipients in private insurance plans that could cost the government less but potentially offer fewer benefits; gradually raising the retirement age to 70; and reducing future Social Security benefits for wealthy retirees.
Of the 178 Republicans in the House, 13 have signed on with Ryan as co-sponsors.
Ryan's proposals have created a bind for GOP leaders, who spent much of last year attacking the Democrats' health-care legislation for its measures to trim Medicare costs. House Minority Leader John A. Boehner (R-Ohio) has alternately praised Ryan and emphasized that his ideas are not those of the party.
Ryan has not helped to make it easy for his leaders. He is a loyal Republican, but he is also perhaps the GOP's leading intellectual in Congress and occasionally seems to forget that he is a politician himself.
At a recent appearance touting the Roadmap at the left-leaning Brookings Institution, someone asked Ryan why more conservatives weren't behind his budget plan. "They're talking to their pollsters," Ryan answered, "and their pollsters are saying, 'Stay away from this. We're going to win an election.' "
His remarks illustrate the tension among Republicans over their fall agenda. Some strategists say the GOP should focus on attacking the Democrats; others want the party to offer a detailed governing plan.
The discomfort some Republicans feel for Ryan's proposals goes beyond November. If Republicans were to take control of Congress next year, Ryan will rise to chairman of the Budget Committee. He could use the position to hold colleagues accountable for runaway budget deficits and make it more difficult for fellow Republicans -- and Democrats -- to stuff bills with expensive projects that add to the problem.
In an interview, Ryan played down any tensions between himself and GOP leaders, saying both parties are to blame for the lack of action on controversial issues, such as Social Security.
He is one of six congressional Republicans on a commission that President Obama created to propose solutions to the debt; but he is worried that neither party will be eager to adopt the commission's ideas because of politics. He acknowledged causing his party some discomfort. Democrats, he said, are "going to try and wrap my Roadmap around people's necks."
At the same time, some Republicans, few of them politicians, praise the bold proposals. Fred Barnes, executive editor of the Weekly Standard, an influential conservative magazine, recently wrote a piece titled, "Think Big: Republicans should embrace Paul Ryan's Road Map."
Ryan, who represents his home town of Janesville, a small city in southern Wisconsin, does not fit the picture of a typical congressman. He is cerebral and slips easily into academic jargon; he grew up with plans to be an economist. But Ryan worried that his ideas would stay buried in unread journals and decided to run for office, so he would have a larger stage and a chance to make policy instead of writing about it.
He was elected to the House in 1998, at the age of 28. He gained attention for his expertise in fiscal and budget matters. Four years ago, Republicans passed over several more senior lawmakers to make Ryan the top member of the GOP on the Budget Committee.
In 2008, he put out the first version of his budget-balancing plan. It has grown into a voluminous document that includes page after page of minutely detailed charts and tables, and includes a 75-year analysis of how the changes he proposes would affect the federal debt.
Ryan is no moderate, and his proposal reflects that. It would slow the expected growth in benefits for many Social Security recipients and would effectively give people on Medicare and Medicaid income-based vouchers to buy private insurance, bringing down the costs of those programs. Democrats say the vouchers would leave many seniors unable to afford coverage.
At the same time, Ryan's plan includes ideas that are attractive to conservatives but do little to reduce the deficit initially, such as allowing people under 55 to put their Social Security tax payments into personal accounts (similar to what President George W. Bush proposed in 2005). The ideas have sparked much interest on op-ed pages and in think tanks. Liberals oppose the private accounts and other parts of the plan, but Democrats and Republicans alike praise Ryan as one of the few members of either party to offer a fix for costly entitlements.
Alice M. Rivlin, an economic policy adviser in the Clinton administration, said to Ryan at the Brookings event, "I think absolutely you've done a huge service in getting [the plan] out there."
Last year, during the health-care debate, Ryan and a few colleagues tried to push a comprehensive health-care bill, modeled on the Roadmap proposal, that would remake Medicaid. But other Republicans viewed Ryan's plan as too radical, and they worried that conservative and independent voters would turn against it as they had against the Democrats' proposals. The GOP offered a bare-bones plan that would not have radically altered the health-insurance system or dramatically expanded coverage.
As the November midterm elections approach, GOP leaders have pledged to put out a "Commitment to America" plan outlining what they would do if Republicans regain control of the House. They say it will include specific details on policy issues. A few Republicans have already voiced concerns that the document will be more about political positioning than policy.
"Any plan that does not include a recognition of the entitlement problem is not credible," said Devin Nunes (R-Calif.), a Ryan ally.
Ryan said he does not think that voters would punish the GOP for shunning attack politics and for speaking plainly about the country's problems. He notes his own political success: He won reelection in 2008 with 62 percent of the vote despite coming from a district and a state that voted for Obama.
"It's really important, I think, not to run campaigns on some vague platitudes and rip down the other party, to hopefully win an election by default," he said. "You have to win an election by acclamation, by aspiration, by telling people who you are and what you are going to do, and then go do it once you get there."
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