I suspect Warren has plenty of tax advice on how to keep his own tax rate of 11% low. If wealthy liberals want to be fairer all they have to do is send a voluntary check to The Treasury. No one is stopping them from this act of tax heroism except their own hypocrisy. (See 1 below.)
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Unintended consequences of 'Obamascare' will begin gathering momentum. Way to get rid of bad law is enforce it! (See 2, 2a and 2b below.)
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One we move beyond the Constitution as an anchor, the rule of law and every thing else that has held out Republic together is up for grabs and re-interpretation.
This has always been the goal of Progressives and now they have a third demagogic president (Wilson and FDR being the first two) to tie the final bow. (See 3 below.)
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More details on what I reported several months ago and which was really not picked up in our national press. (See 4 below.)
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More from Bill Whittle: http://www.americanthinker.com/video/2012/11/bill_whittle_on_what_it_would_be_like_to_have_a_candidate_who_really_believes_in_conservatism.html
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Finding the Hispanic vote. (See 5 below.)
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Obama raises the ante hoping the Republicans will be left without a pot.. (See 6 below.)
Time well past for entitlement reform. (See 6a below.)
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Dick
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1)Warren Buffett and the Corrupting of the American Soul
“Bottom line…would raising taxes on the wealthiest Americans have a chilling effect on hiring?”
It was Matt Lauer’s final interview question for his guest, on last Tuesday’s episode of NBC-TV’s “Today” show.
“No,” the guest adamantly replied. “No… and I think it would have a great effect in terms of the morale of the middle class..”
The guest was famed investor Warren Buffett, CEO of the Berkshire Hathaway holding company and a personal friend of President Obama (and by the way, did you know that Obama calls him, and not the other way around? Mr. Buffett would want you to know). He was spouting the usual “it’s time to raise taxes on us rich folks” rhetoric for which he’s become famous.
But Buffett’s closing comments were a bit different this time. Higher taxes on the rich will provide a “morale boost” for those of us in the middle class? How is that so? Why would I, a mere middle class guy, be made to feel better simply because my government is confiscating greater portions of somebody else’s money?
Buffett’s remarks during the NBC TV interview, while in-step with prevailing political sensibilities, were nonetheless mostly illogical. Earlier in the interview Lauer brought up a recent quote from Honeywell CEO David Cote who had noted on another national TV program that he (Cote), and others like him, were feeling a lack of confidence in the political process, so much so that the uncertainty was making them keep their money on the sidelines and preventing them from making additional investments and hiring new workers.
“Well,” Buffett responded, “At Berkshire Hathaway, we're investing 9 billion in plant equipment, that’s a record, breaking last year's record.” That was an interesting response, and it was certainly a nice “plug” Mr. Buffett offered for his own company.
It was also a very artful “dodge” from the facts, and rather irrelevant to the discussion. Cote has articulated some grave concerns about a lack of leadership at the White House, and in Congress, and has noted how this lack of leadership has created serious, stifling uncertainty in the business market. So has Cisco CEO John Chambers, Wynn Resorts CEO Steve Wynn, and Intel CEO Paul Otellini (who, ironically, serves on President Obama’s Council on Jobs and Competitiveness). Buffett would prefer to ignore this (it’s always uncertain” he told Matt Lauer).
Buffett also reiterated in the interview that people like him have not been paying their “fair share” of taxes for all these many years. This is where his illogic hits a crescendo. If Mr. Buffett (or anybody else) isn’t paying enough in taxes, then he’s only got himself to blame. He could easily choose to make an extra contribution to the I.R.S. He could also instruct his staff of lawyers and accountants who represent him to the I.R.S., to stop calculating all the legal, allowable tax deductions that are available to him. All of these methods, and others, would allow Mr. Buffett to pay more in taxes – if that’s really what he wants.
But then Buffett had to go and perpetuate the same myth that he and the President have been perpetuating for over two years, when he alleged (once again) that his secretary pays more in taxes than he does. This is not only a myth, it is a lie. Buffett, and wealthy Americans like him, don’t draw “income” like most working Americans do; they get paid with investment dividends. Dividend earnings are created when somebody takes money that they have already earned, and they invest that money. That it is to say, dividend earnings are produced with money that has already been taxed as income, and when dividend earnings are taxed, the original investment capital is, in essence, being taxed for the second time.
This is why our government taxes dividends at a lower rate than it taxes income. It is to create an incentive for people to put their capital at risk, and invest in business enterprises (rather than merely holding on to that money and enjoying it in less risky ways). When Buffett compares his secretary’s income tax to his own dividend tax, he’s comparing apples and oranges, and 18% of Buffett’s dividend earnings no doubt amounts to a lot more money than 30% of his secretary’s salary. Dividends and income are treated very differently, and for good reason – but his comparisons make for amusing soundbytes.
As for Buuffett’s assertion about an alleged “morale boost” – this, also, makes for amusing sound bytes and headlines, and allows Buffett to provide some political cover for the President (you know, the President who calls him). Yet the real disgrace is if he is right about this.
Are Americans really so petty and covetous that we are comforted when “rich” people have their money taken away from them? Or do sufficient numbers of us still understand America to be a meritocracy – a society where we all achieve in different measures, yet we are all blessed with the freedom to try and achieve all that we can?
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2)HOSPITALS WILL SEE MASSIVE LAYOFFS, DECLINE IN 2013
By Russ Jones
Hospitals are expected to cut some 93,000 jobs in 2013 in anticipation of ObamaCare. A former presidential candidate and conservative advocate says America needs to prepare for major changes in the medical industry.
Orlando Health, a not-for-profit network of community and specialty hospitals, is just one example of the massive layoffs expected in the coming year. Officials with the Central Florida-based healthcare services provider announced on Monday that the largest staff reduction in its nearly 100-year history will result in cutting up to 400 jobs, starting immediately.
Gary Bauer, president of Washington DC-based American Values, warns that this is only the beginning of an economic catastrophe that will impact America for years.
"The ripple effects, the negatives on our economy, are going to be playing out for not just months, but for years," he says. "And I doubt we will ever be able to totally measure the complete cost in manpower and in money -- in addition to taxes -- that ObamaCare will end up costing the American people, proving once again there is no such thing as a free lunch, and there is no such thing as free healthcare."
Bauer is sadly confident that the quality of healthcare, in a nation known for its excellence in medical services, will see a decline.
"I think that what the public still doesn't realize is that all the savings the president projected are literally savings that come from not paying hospitals, doctors and other care centers for services," he tells OneNewsNow. "And if you don't pay them, you're not going to get the services, unless somehow through courts or otherwise we can restrict the impact of ObamaCare."
Louisiana State University announced in October it would cut 1,495 positions and various programs across its seven hospitals to trim more than $150 million from its budget.
2a)ObamaCare: A Law That The Feds Never Intended To Implement By Themselves!
The signature power grab of the left may be the “law of the land” as conceded by ever-conciliatory House Speaker John Boehner, but getting the massively complex statute up and running will be far more difficult than getting it passed.
When Democrats rammed ObamaCare through Congress in 2010, their intent was to literally acquire the power of life and death over the American people, not create a workable healthcare plan. And this becomes increasingly apparent as the requirements of the 2700 page behemoth are gradually made known.
Those who wrote the law believed that elected officials in the 50 states would eagerly invest an untold number of taxpayer millions for the creation of ObamaCare exchanges within their borders, dramatically increase state Medicaid outlays, and permit the federal bureaucracy to legislate everything for which the state treasury would be responsible in perpetuity!
And now these fanciers of death panels and infanticide are stunned, simply stunned at the number of governors who refuse to finance an in-state testing ground for Barack Obama’s overpriced scheme of personal enslavement. For that reason, the federal government’s “…blaming of governors for not implementing ObamaCare is in hyperdrive…”
As of November 28th, 17 governors have refused to set up ObamaCare exchanges within their borders, and 10 others remain undecided. Six states have opted for a state/federal “Partnership” exchange, meaning the state has foolishly invited the HHS to set up an exchange but will not assist in any way. All in all, this will eventually put the federal government on the hook for doing all of the work–from inventing computer systems that currently do not exist to providing and training employees–for half of the states in the nation!
The creators of ObamaCare intended to rule, not work. Even the New York Times admits that “…exchanges are a centerpiece of President Obama’s health care law, and running them will be a herculean task that federal officials never expected to perform.”
And even if Kathleen Sebelius’ HHS ObamaCare exchanges were somehow up and running in the 50 states, the problems of the healthcare fiasco will have only just begun. For the federal government must decide whether certain applicants are eligible for healthcare subsidies,and the ObamaCare law “…only establishes subsidies through state-based exchanges, not the federal one[s].” This means a “constitutional fight” can begin over whether HHS can offer subsidies through its own exchanges. And that battle could be waged in over half the states in the country!
The deadline for states informing HHS of their preference on the implementation of exchanges has been moved back twice. Between now and the current date of December 14th, look for Obama’s minions piling blame on Republican governors and legislators throughout the nation for their unwillingness to provide healthcare for the deserving in their states.
After all, “…in the world of an ObamaCare supporter, all of the mistakes made in drafting the law or overestimating the ability of the federal government to implement it can be laid at the feet of Republican governors, not you know, the people who drafted the law.”
If anyone believes that all the disgraceful behavior took place during the passage of ObamaCare, stick around for what happens in getting it implemented!
2b) Washington TimesEDITORIAL: Obamacare’s Medicaid time bomb
States have a chance to reject a future budget-buster
States already struggling to get by will face even tighter fiscal constraints thanks to yet another costly Obamacare mandate. A study last week from the Kaiser Commission on Medicaid and the Uninsured revealed President Obama’s health care takeover would dump $1 trillion in new costs on federal and state taxpayers over the next decade.
By Kaiser’s calculation, following Obamacare’s loosened eligibility conditions for Medicaid could add an additional 10 million people to the rolls of the insured. The tab for this will exceed $1 trillion by 2022 with Uncle Sam picking up $952 billion, leaving states on the hook for $76 billion. That represents a 26 percent increase in federal outlays, but the state share represents modest 3 percent increase — for now. The real crunch will come after 2022, when Uncle Sam is no longer required to foot the bill for the Medicaid expansion.
States have a way out of this budget-busting dilemma. The Supreme Court’s Obamacare ruling earlier this year left it up to the states to decide whether to expand Medicaid under the Obamacare guidelines or not — in return for the federal cash. Governors would be wise to decline Uncle Sam’s white elephant, as they will hard pressed to find enough money in their coffers to cover costs once the federal largesse begins to taper off in 2022.
Medicaid already consumes a quarter of state budgets, on average. In some states it’s either the single largest budget item, or second only to education. Even if states decline to expand Medicaid, other provisions of Obamacare, including the requirement to purchase insurance or face a penalty, will swell Medicaid rolls. The program’s expenses have also soared in the past few years. State Medicaid outlays jumped 20 percent in the last fiscal year on top of a 23 percent increase in the year before that, according to a report from the bipartisan National Governors’ Association. Expanding Medicaid further will put even greater pressure on states already struggling with future deficits and looming pension shortfalls. Whether it’s at the federal or state level, it’s ultimately taxpayers who will wind up paying.
Some of the increase in Medicaid costs at the state level will be offset by decreases in expenses currently created by uncompensated care to the uninsured, as the Kaiser study points out. This is, at best, a short-term offset. The Kaiser study also expects savings from participation in the state exchanges contemplated in the Obamacare legislation that might never materialize. So far, 18 states have categorically declined to create exchanges, and many more have indicated their reluctance to proceed.
Medicaid is extremely costly and rife with waste. It’s reckless to expand such a program so dramatically for the benefit of a small fraction of the population. States should reject Obamacare’s new burden and explore better ways to take care of those who are currently uninsured
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3)Does The U.S. Constitution Even Matter Anymore?
BY
It has become abundantly clear that our Constitution is having less and less to do with governing our country. It would appear that “we the people” have lost our power to govern under our Republic. America has fast become catagorized as a democracy (a country ruled by a few who were placed in power.)
How has this been accomplished, you ask? This has been a long and patient process that was planned and carried out by the communists and socialists on the left. It has taken at least 100 years for them to get this far. So far, their plan has panned out perfectly.
This plan is multi-faceted, so please bear with me. It starts with education, or lack thereof. Michelle Obama stated it perfectly. She said that we must change our history and our traditions. Has anyone heard about the attacks on the FEDERAL holiday of Christmas? Has anyone heard about our children being taught that the great Patriots of the Boston Tea Party were nothing more than terrorists? How about Thanksgiving? Our children are now taught that the new world settlers were only occupiers who brought death, disease, and slavery to the indigenous people of this land.
Now lets look at the legal standpoint. The US Constitution was originally written as the ultimate rule of law, in which our freedoms are guaranteed. By brainwashing the electorate and not educating them properly, people now believe that the Constitution can be overridden by laws passed by liberal/communist bodies and upheld by liberal/communist judges. Examples of this would include the Proposition 8 battle in California. The people voted against it; and because it wasn’t the outcome that the liberals/communists wanted, they took the case to court in an attempt to override the will of the people. Another example would be the several attempts that have been made over the past ten years by the US Congress to pass a law that would circumvent the Constitution regarding Presidential Eligibility (Article one, Section four). These attempts are all documented in the federal congressional record; and shockingly enough, most of the same players are involved in each attempt.
The bottom line is this: the Republic is DEAD! We the people have lost our power to govern. We now merely exist in what is a shell of a Democracy, where a select few have all of the power over us. Our country is in dire need of a Constitutional Reset as was prescribed in our ORIGINAL FOUNDING DOCUMENTS. We can either continue to sleep through this communist takeover of our nation, or we can STAND and usher in the reset. The choice is clear. Until the time arrives, stay safe and always be aware of your surroundings.
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4)Israel Hits Missile Site In Dry Run For Iran
A long-range Israeli bombing raid last week that was seen as a dry run
Preparations for the attack in Sudan began more than two years ago after
The Israelis discovered later that a large contingent of Iranian
A British munitions adviser added: "There is a very clear and established
The threat of a new source of missiles set off alarm bells in Israel.
Major-General Amir Eshel, the new commander of the Israeli air force,
It was just before 10pm last Tuesday that the F-15I pilots took off from
The F-15I fighters flew high above their comrades, ready to pounce if the
4)Israel Hits Missile Site In Dry Run For Iran
By Uzi Mahmaini and Flora Bagenal
A long-range Israeli bombing raid last week that was seen as a dry run
for a forthcoming attack on Iran's nuclear facilities has destroyed an
Iranian run plant making rockets and ballistic missiles in Sudan.
Eight Israeli F-15 I planes — four carrying two one-ton bombs, escorted
by four fighters — struck the giant Yarmouk factory on the southwestern
outskirts of Khartoum, the capital, in the early hours of Wednesday.
The raid, in which two people died, triggered panic across the city.
Witnesses said they heard a series of loud blasts followed by the sound
of ammunition exploding.
"It was a double impact — the explosion at the factory and then the
ammunition flying into the neighborhood," said And-al Ghadir Mohammed,
31, a resident. "The ground shook. Some homes were badly damaged."
According to western defense sources, the 2,400-mile return flight took
the Israelis four hours, with the jets flying south along the Red Sea and
crossing into Sudan from the east, bypassing Egypt's air defense system.
"This was a show of force but it was only a fraction of our capability —
and of what the Iranians can expect in the countdown to the spring," said
a defense source, referring to possible airstrikes against Tehran's
nuclear programmed.
Preparations for the attack in Sudan began more than two years ago after
Mossad agents suffocated Mahmoud al-Mahout, the top weapons buyer for the
Palestinian group Hamas, in his hotel in Dubai.
Before they left Mabhouh's room they removed a number of documents from
his briefcase.
One of them, according to intelligence sources, was a copy of a defense
agreement signed in 2008 by Tehran and Khartoum. It committed Iran to
build weapons in Sudan under full Iranian command.
The Israelis discovered later that a large contingent of Iranian
technicians had been sent to the Yarmouk factory, where Human Rights
Watch had reported in 1998 that chemical weapons were being stored.
Under Revolutionary Guard supervision, the Iranians were building
advanced Shahab ballistic missiles and rockets at a plant in the factory
compound.
"The Iranians had been facing growing difficulties in transferring
weapons and munitions to Hamas and their other allies in the region," an
Israeli defense source said.
A British munitions adviser added: "There is a very clear and established
arms smuggling network that goes through eastern Sudan northwards to
Sinai and then on to the Gaza Strip."
The threat of a new source of missiles set off alarm bells in Israel.
"These ballistic missiles could be launched towards Israel from either
Sudan or from the Sinai peninsula," an Israeli security expert said.
"They pose a direct threat."
Major-General Amir Eshel, the new commander of the Israeli air force,
assured Binyamin Netanyahu, the prime minister, that the strike would
succeed. He personally supervised the operation from the air force's
command and control bunker in Tel Aviv.
Training took many weeks, using a model of the factory. At least two
long-haul rehearsals were held. America was alerted and closed its
embassy in Khartoum to avoid any revenge attacks.
It was just before 10pm last Tuesday that the F-15I pilots took off from
an airbase in southern Israel. Several hours earlier, two CH-53
helicopters had set off, flying low over the Red Sea.
Each carried up to 10 commandos as a rescue team should a pilot be forced
to bale out. They landed in darkness and waited for the jets to arrive.
Radio traffic was muted as the jets raced towards the Red Sea. "There
were two potential obstacles," a military source said. "The first was
Djibouti civil air traffic control. The second was not to 'wake up'
Egyptian radar." The Israelis nevertheless maintained the advantage of
surprise.
After 90 minutes, the jets linked up with a Boeing 707 refuelling tanker.
Then, with full tanks of fuel, roughly 18 tons each, they crossed into
Sudan.
At this stage a Gulfstream G550 filled with electronic warfare equipment
began to jam the Sudanese air defence system and the radar at Khartoum
airport.
"Sudan's air defence is based on old but lethal Russian AS-2
anti-aircraft missiles and a squadron of over 20 Russian MiG-29
interceptors," a military source said.
The F-15I fighters flew high above their comrades, ready to pounce if the
MiGs took off. But they remained grounded throughout the attack.
Immediately afterwards the squadron leader, an Israeli colonel, flew low
over the factory to survey the destruction. Halfway home, he sent a coded
message to his commanders.
In Tel Aviv the chief of the defense staff picked up the phone to Balfour
Street — Netanyahu's Jerusalem home.
"All went well," he said. "The guys are on their way home."
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5)The Republican Hispanic Challenge
Although Mitt Romney took flak for his statement that he lost the election because President Obama bestowed “gifts” on key parts of the electorate, what he said is basically true.
5)The Republican Hispanic Challenge
Although Mitt Romney took flak for his statement that he lost the election because President Obama bestowed “gifts” on key parts of the electorate, what he said is basically true.
We’re stuck in a deadly spiral where economic growth is retarded because the economy is larded with enormous and ever-increasing government spending and debt. Yet, more and more Americans want the lard.
President Obama got re-elected by promising to continue to serve it up.
Romney’s failure, and the failure of the Republican Party, is not that Obama is pulling this off, but that they can’t get their act together to explain the problem to enough Americans to stop it.
There seems some hope that this disaster of an election is waking up Republicans that there are major, growing constituencies in the country that they must stop ignoring – one major one being Hispanics.
But the big challenge is that, although these constituencies would be far better off in a nation with limited government and conservative values, they by and large have already bought into the welfare state.
This includes Hispanics, and many Republicans seem to be dangerously clueless about this.
For example, Republicans like former CEO of Kellogg, Carlos Gutierrez, who oversaw Romney’s Hispanic outreach.
Gutierrez expressed “shock” at Romney’s candor and offered his own take on what happened: “…..we lost the election because the far right of this party has taken the party to a place where it doesn’t belong.”
Somehow, many Republicans have bought the myth that the immigration issue is the main barrier between Hispanics and the Republican Party.
No doubt the immigration issue is a factor. But this misses the point by many, many miles.
The rapidly growing Hispanic sector of our nation is, on average, a low-income population – with many of the deep social problems similar to those of blacks – who already have come to love the welfare state.
Median Hispanic income is $38,409 compared to a national median income of $60,008.
Fifty three percent of Hispanic babies are born to unwed mothers and the high school graduation rate of Hispanic kids is 65.9 percent.
Thirty eight percent of Hispanic children live in single parent households.
Compared to the national poverty rate in 2011 of 15 percent, Hispanics had a poverty rate of 25.3 percent.
In a survey done last December by the Pew Research Center, 55 percent of Hispanics said their view of “capitalism” was negative and 32 percent said it was positive.
In the same survey, 67 percent of Hispanics said their view of the label “liberal” was positive.
For anyone who believes that America’s future lies in restoring limited government, this snapshot of the most rapidly growing segment of our population, whose share of the electorate is expected to double by 2030 according to the Pew Hispanic Center, is sobering.
According to Ron Haskins, co-director of the Center for Children and Families at the Brookings Institution in Washington, DC, the antidote to poverty is work, intact family life, and education.
As Haskins reports, “In 2009, the poverty rate for children in married-couple families was 11.0 percent, the poverty rate in female-headed households was 44.3 percent.”
What America’s Hispanics need is a growing, prosperous economy so they can work and get a decent wage. The anemic, government larded economy of today is not going to deliver this to them.
They need to get their kids out of failing public schools and have choice to attend private, church schools.
And they need to live in a nation in which the traditional family is the standard and it is once again shameful for women to give birth out of marriage.
In other words, they need the “far right” agenda that Mr. Gutierrez thinks is the problem.
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6)I'll See Your Economic Collapse and Raise You National Demise
By Selwyn Duke
Being just weeks away from reaching our debt ceiling and with frightening talk about a fiscal cliff, there's much sympathy in Washington for tax increases. Even conservatives are wavering. A few Republicans have dumped their anti-tax pledges, and former Nixon official-turned-actor Ben Stein favors taxing the wealthy. He says that we can't cut our way to a balanced budget and insists that the revenue end must be addressed. But I have news for him: he'll have a better chance finding Ferris Bueller on his day off than he will locating fiscal sanity through tax increases.
6)I'll See Your Economic Collapse and Raise You National Demise
By Selwyn Duke
Being just weeks away from reaching our debt ceiling and with frightening talk about a fiscal cliff, there's much sympathy in Washington for tax increases. Even conservatives are wavering. A few Republicans have dumped their anti-tax pledges, and former Nixon official-turned-actor Ben Stein favors taxing the wealthy. He says that we can't cut our way to a balanced budget and insists that the revenue end must be addressed. But I have news for him: he'll have a better chance finding Ferris Bueller on his day off than he will locating fiscal sanity through tax increases.
Let's get real. Federal revenue this year will be approximately $2.5 trillion.
That's $2,500,000,000,000.
How much, again? Well, updating some examples Rob Bluey provided at The Foundry lends the following perspective:
- It is 2,500 billion.
- At $45.8 million per year, LeBron James would need to work 54,607.5 years to earn it.
- Average life in the U.S. lasts 2.4 billion seconds.
- 2.5 billion seconds ago = 1933.
- 2.5 trillion seconds ago = 74,250 BC.
Furthermore, a stack of 2.5 trillion dollar bills would reach a height of 169,665 miles -- more than two thirds the way to the moon. This brings us to the second part of the problem.
We're set to spend this year $3,500,000,000,000.
Stacked up, that many bills reach to the moon. And that's where we're headed fiscally.
To the moon, Alice.
Now, let's get back to calls for more revenue. Imagine you had a teenager to whom you gave $1,000 a month, and he not only squandered it every time, but also continually maxed out his credit cards. Would your solution be to give him even more money and/or secure him a credit-line increase? Or might you, outraged, cut up the credit cards and tell him he must live within his means? (In reality, you should cut him off completely.)
This may seem a ridiculous example, giving a teenager one grand a month. But is it any more ridiculous than giving the feds $208,000,000,000 a month and then entertaining the notion that they should perhaps get even more? Bueller? Bueller?
Stein?
Listen, if the government cannot get by on $2.5 trillion a year, guess what!
Pull it up root and branch and start anew.
Root and branch.
Also note that the government did get by on $2.5 trillion as recently as 2005; thus, a balanced budget could be achieved simply by resurrecting the spending levels of seven years ago. And if we returned to the 2004 budget, we'd run a surplus exceeding $200 billion with current revenue.
But it'll never happen.
Part of the reason why brings us back to Stein's belief that we can't cut our way to a balanced budget. He's actually correct -- given the feds' definition of a "cut." I'm referring to Washington's accounting trick known as "baseline budgeting," a process by which the government labels any proposal to reduce the rate of spending growth of an already inflated budget projection a cut. Citizens Against Government Waste explains the warped thinking:
[I]f an agency's budget is projected to grow by $100 million, but only grows by $75 million, according to baseline budgeting, that agency sustained a $25 million cut. That is analogous to a person who expects to gain 100 pounds only gaining 75 pounds, and taking credit for losing 25 pounds.
If liberal politicians were truly serious about fiscal restraint, they'd eliminate this sleight-of-hand. But they won't, because they're not. Ronald Reagan learned this the hard way in the 1980s when he agreed to a budget deal that included three dollars in spending cuts for every dollar in tax increases. The taxes came first.
The cuts never came at all.
As Reagan later wrote, "[t]he Democrats reneged on their pledge and we never got those cuts."
So here's a message for Republicans who think that liberals can be negotiated with on the budget. I'll be blunt.
Hey, idiots, they're not going to stop spending. Capisce?
Yes, I screamed that. How do I know they won't stop? Ooh, maybe because they haven't stopped for 50 years? Maybe because the best predictor of future behavior is past behavior? It's also because a liberal is a liberal is a liberal. A scorpion stings, a cuttlefish expels ink, a skunk sprays mercaptan fluid, and a liberal spends. It's what the species does.
Many conservatives don't grasp this, however. They make a common mistake: they assume that others think as they do. They're largely rational, so they expect rational behavior from their fellow man. But as I explained recently, emotion prevails in people's decision-making far more than you may think. What feels right often trumps what is right, even when the former is downright stupid.
It's as with an old friend of my father's whom I'll call Sal. Sal had a gambling problem and spent and spent and borrowed and borrowed until he could borrow and spend no more. Bankruptcy finally "cured" him. And such is the fate of the soon-to-be late, great United States. The dependency class will go over the cliff grasping at their freebies, and the politicians will take us over the cliff dispensing them. Hey, a civilization's gotta die a' somethin', right?
This is one reason I'm adamantly opposed to tax increases. Like the reckless teenager or Sal, the federal beast will simply consume whatever ventures near its insatiable maw and then some. So my message would be: get by on what you have -- or to Hades with you. Go over that cliff. Because like any addict, you can't help yourself. And better it happens sooner, while Americans still have a bit more change in their pockets (for whatever it's worth), than after they're further impoverished in the name of balancing the budget.
So what's the endgame? First, our more than $16 trillion national debt increases by an average of $3.87 billion per day and amounts to $52,000 for every man, woman, and child. This will never be paid off.
Never.
Yet I do see one way out of our debt hole. When the profligates in government (and their sheeple voters) finally collapse the system, there won't even be a common federal feeding trough to hold our culturally, ethnically, and ideologically balkanized land together. We then may dissolve as the Soviet Union did, with various states, or blocks of them, going their separate ways. And guess who'd be left holding the bag? Note: the $16 trillion we owe is federal debt, not state. And I'd just say, hey, Washington, D.C., you know that debt thing? Good luck with all that.
Of course, the Chinese would end up getting stiffed. But they pony up the dough only because they have a symbiotic relationship with us: they keep us afloat so we can buy their goods. Besides, anyone foolish enough to lend money to our government gets no sympathy from me. The only question is whether we'll be foolish enough to believe that throwing good taxes after bad will change bad spenders into good shepherds.
6a)An Entitlement Reform Guide
A list of changes worth the effort, if Obama is really serious.
President Obama has said he wants to reform entitlements eventually, someday, after Republicans raise taxes. Republicans want the President to sign on to serious reform now as part of any deal, since AARP and the left will kill anything that isn't passed immediately.
Given the political difficulty of reforming entitlements, Republicans are right to try to get Mr. Obama's fingerprints on such a deal this year. But the reforms have to be worth it. With that in mind, we thought we'd offer a clip-&-save guide to reforms that would make a difference. None of this is commensurate with the scale of the problem, but then Mr. Obama won't sign anything that is. These changes are pragmatic and politically realistic, at least if Republicans drive a hard bargain.
• Medicare. ObamaCare exhausted the familiar Beltway gambit of squeezing down Medicare price controls for providers. (Also note that the White House offer of $346 billion in less Medicare spending is far smaller than its $716 billion ObamaCare raid.) Absent a larger reform, that leaves asking seniors to contribute more for benefits and take a larger role in their own care.
Higher-income seniors already receive less of a Medicare subsidy as a result of aGeorge W. Bush policy in 2004 and then again in ObamaCare. A third expansion of means-testing is inevitable, and one useful proposal is known as comprehensive cost sharing.
Traditional Medicare is divided into three different programs that cover hospitals, doctors and drugs. This idea would consolidate the complex deductibles and copays into one modern, unified insurance system, with limits on the wraparound "Medigap" policies that seniors buy so they pay little or nothing out of pocket. Eliminating this patchwork of first-dollar coverage would be an incentive to discipline costs, and a (very) mild version is included in the 2013 White House budget.
Republicans can also continue to refine "premium support" on the Paul Ryan model, on a smaller scale. Mr. Obama campaigned as a defender of the status quo but now that the election is over some liberals are giving the concept a second look. Zeke Emanuel and others at the Center for American Progress recently endorsed competitive bidding to replace some of Medicare's administered prices. The danger is that a denuded plan would give a market gloss to a process akin to Pentagon procurement, but this is a potentially helpful intellectual concession.
Another option is raising the retirement age, which is already rising to 67 in Social Security. Longevity has increased by about 10% since 1965, and most reform plans would raise Medicare eligibility to 67 from 65 by the 2020s. This doesn't reduce the deficit now but is a credible way to reduce future liabilities.
• Medicaid. Republicans may have more leverage than they think. States can opt out of ObamaCare's Medicaid expansion as a result of this year's Supreme Court ruling, and Governors are demanding more flexibility in how they manage their own programs.
Block grants are the best solution, but a deal short of that could expand and expedite so-called Section 1115 waivers that suspend "maintenance of effort" and other federal mandates and give states the discretion to innovate. Governors would receive rebates if they found ways to lower spending below their current trends.
A deal also ought to end the long-running "bed tax" scam in which states charge hospitals a fee to increase health-care spending and thus their federal matching rate. Then they launder some of the money back to the hospitals to offset the fee. This is real waste, fraud and abuse, not the talking-point version.
• Social Security. The consensus in Washington is that the retirement program ought to be decoupled from the fiscal negotiation and fixed so that it is sustainable by itself for the next 75 years. Fine, but this still means slowing the growth of benefits and making Social Security a supplement to private saving, not a substitute.
Currently, Social Security's cost-of-living adjustment is determined by the rise of average wages, which wasn't carved in stone by FDR. The formula was created in the 1970s and overstates the rate of inflation and thus increases real benefits substantially over time.
Changing monthly payments to grow with prices, not wages, would resolve 75% of Social Security's financial problems. A version of this change called "progressive indexing" developed by Democratic financier Robert Pozen would slow the increase in future benefits for the most affluent seniors, while lower-wage workers would be held harmless.
This reform is far superior to the other idea on the table—simply replacing the wage formula with the "chain-weighted" consumer price index, which adjusts for how people change their buying habits when prices change. Some Republicans think chain-CPI is all they can get, and it is better than nothing.
But others oppose progressive indexation because it is tantamount to a tax increase, which is true. But means-testing is a train that left the station a long time ago (see Medicare above). The truth is that nobody is "paying into" a universal pension system any longer. These are now current transfer payments, and it far better to make middle- and high-earning seniors save more through slower-growing benefits and a higher eligibility age than adding more destructive taxes.
On that score, Democrats will try to lift the cap on the income to which the Social Security payroll tax is applied, currently a few clicks over $100,000. But another 6.2% hit on every dollar over that level is a dramatic departure from current tax policy, even for the modestly affluent. On top of ObamaCare's payroll "surcharges," the top marginal rate would rise into the mid-50% range. Republicans should oppose any payroll tax increase.
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Republicans can win this debate, but they're going to have to make the case better than they've done so far. For starters, they should stop talking about "cuts" to these programs since they're not cutting anything. If Mr. Obama won't agree to even these de minimis reforms, then Republicans should let Mr. Obama own the debt crisis he has done so much to create.
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