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Just when you thought media bias couldn't possibly be more blatant, along comes this article from MarketWatch, a purportedly trusted source of Wall Street news. (Never mind that MarketWatch is operated by CBS, who should change their acronym to Cooing Barack Supporters ... but I digress).
This article so blatantly misrepresents the facts that it's difficult to know where to start:
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — Of all the falsehoods told about President Barack Obama, the biggest whopper is the one about his reckless spending spree.
As would-be president Mitt Romney tells it: “I will lead us out of this debt and spending inferno.”
Almost everyone believes that Obama has presided over a massive increase in federal spending, an “inferno” of spending that threatens our jobs, our businesses and our children’s future. Even Democrats seem to think it’s true.Government spending under Obama, including his signature stimulus bill, is rising at a 1.4% annualized pace — slower than at any time in nearly 60 years.
But it didn’t happen. Although there was a big stimulus bill under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.
Even hapless Herbert Hoover managed to increase spending more than Obama has.
Here are the facts, according to the official government statistics:
• In the 2009 fiscal year — the last of George W. Bush’s presidency — federal spending rose by 17.9% from $2.98 trillion to $3.52 trillion. Check the official numbers at the Office of Management and Budget.
• In fiscal 2010 — the first budget under Obama — spending fell 1.8% to $3.46 trillion.
• In fiscal 2011, spending rose 4.3% to $3.60 trillion.
• In fiscal 2012, spending is set to rise 0.7% to $3.63 trillion, according to the Congressional Budget Office’s estimate of the budget that was agreed to last August.
• Finally in fiscal 2013 — the final budget of Obama’s term — spending is scheduled to fall 1.3% to $3.58 trillion. Read the CBO’s latest budget outlook.
I've even seen Tea Party members start to panic - "ZOMG IT WAS BUSH'S FAULT!"
I'll tackle the first section before I post the second section with rebuttal. It's pretty basic, really. The rate of growth in spending is NOT equivalent to spending as an overall percentage of GDP. This is a selective look at statistics without giving the overall context. Yes, the rate of growth has leveled off. But ONLY after spending was raised to unsustainable levels!
But the second argument is even more powerful. The Bush budgets - you remember, back in the day, when we actually passed budgets - never exceeded $2.5 Trillion, and deficit spending never exceeded $500 Billion. DEFICIT SPENDING HAS MORE THAN DOUBLED SINCE OBAMA TOOK OFFICE. Overall spending has increased by upwards of 50% since 2006, when the Democrats took control in Congress and the Senate. This chart is from the White House website:
|Table 1.1—SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS (–): 1789–2017|
|(in millions of dollars)|
|Receipts||Outlays||Surplus or Deficit (–)||Receipts||Outlays||Surplus or Deficit (–)||Receipts||Outlays||Surplus or Deficit (–)|
|* $500 thousand or less.|
James Pethokoukis reframes this even more starkly on his blog:Actually, the Obama spending binge really did happen
As the chart indicates, Nutting arrives at that 1.4% number by assigning 2009—when spending surged nearly 20%—to George W. Bush: “The 2009 fiscal year, which Republicans count as part of Obama’s legacy, began four months before Obama moved into the White House. The major spending decisions in the 2009 fiscal year were made by George W. Bush and the previous Congress. Like a relief pitcher who comes into the game with the bases loaded, Obama came in with a budget in place that called for spending to increase by hundreds of billions of dollars in response to the worst economic and financial calamity in generations.”
Let me complete the metaphor for Nutting: “Then as those runners scored, Obama kept putting more on base.”
Obama chose not to reverse that elevated level of spending; thus he, along with congressional Democrats, are responsible for it. Only by establishing 2009 as the new baseline, something Republican budget hawks like Paul Ryan feared would happen, does Obama come off looking like a tightwad. Obama has turned a one-off surge in spending due to the Great Recession into his permanent New Normal through 2016 and beyond.
So, the author took 2009 and lumped it in with Bush (BLAME BUSH!) and failed to separate out the Omnibus Spending Bill of 2009, TARP, and the Stimulus. No biggie. You see, here's the whole point of Democrat budgeting. This is one of the oldest tricks in their book. They raise the baseline spending by whatever means necessary - emergency spending usually does the trick because a giant increase in a proposed budget generally doesn't garner a lot of votes on the floor. All of the increased spending rate occurs in one event, instead of a series of budgets passed over several years. Once the baseline is raised, that's the new normal, and future budgets (if they're ever actually, you know, passed) work from the previously established precedent of higher spending. Plus that makes it easier to blame the last president for all of your spending malfeasance. At this point in the budget approval process, if someone is sharp enough to pick up on their little trick, they typically come back with something that sounds a lot like, "But, it's for the CHILLLLDRENNNNN!"
Ok now let's tackle the second chart in this article. This is where the author really shows how stupid he thinks his readers (and Obama sycophants) really are.
The big surge in federal spending happened in fiscal 2009, before Obama took office. Since then, spending growth has been relatively flat.
Over Obama’s four budget years, federal spending is on track to rise from $3.52 trillion to $3.58 trillion, an annualized increase of just 0.4%.
There has been no huge increase in spending under the current president, despite what you hear.
Why do people think Obama has spent like a drunken sailor? It’s in part because of a fundamental misunderstanding of the federal budget.
Do you notice something funny? That supposed lowest spending ever year, 2012? Doesn't that bar seem like it's taller than the other ones? Sure seems like that means spending is higher, not lower. Take 2009 and blame it on your predecessor, if pressed on the issue say that you inherited this mess from him, put it all in a blender for maximum spin, and voila! You're not a drunken sailor anymore!
The disrespect for the voters in these budget games never ceases to amaze. In fact, they seem to raise the baseline every time they open their mouths.
Just when you thought media bias couldn't possibly be more blatant, along comes this article from MarketWatch, a purportedly trusted source of Wall Street news. (Never mind that MarketWatch is operated by CBS, who should change their acronym to Cooing Barack Supporters ... but I digress).This article so blatantly misrepresents the facts that it's difficult to know where to start:By Rex Nutting, MarketWatch
Yesterday President Obama unveiled his budget for 2013. The budget is filled with higher taxes and more spending, however something is missing, The D.C. Opportunity Scholarship Program. This program grants educational opportunities to mostly poor and minority students in Washington D.C. The Heritage Foundation reported that “[t]he D.C. OSP has been highly successful. According to federally-mandated evaluations of the program, student achievement has increased, and graduation rates of voucher students have increased significantly. While graduation rates in D.C. Public Schools hover around 55 percent, students who used a voucher to attend private school had a 91 percent graduation rate.” Not only has this program been effective, it was also cheap. “[A]t $8,000, the vouchers are a bargain compared to the estimated $18,000 spent per child by D.C. Public Schools.” Despite being cost effective and saving children from failing schools President Obama decided to play politics with the future of thousands of children in the District. Better yet, President Obama violated the trust of his own constituents’, mainly inner city Democrats.
President Obama promised hope and change in 2008 and in just three years has managed to destroy the hope of thousands of D.C. children. The question is: why? Simple, President Obama was indebted to the teachers union. When campaigning in 2008, President Obama earned the support of the nation’s two largest Unions, the American Federation of Teachers and the National Education Association. These two groups are arguably the two most powerful special interests in the country. With millions of dues paying members and budgets that rival that of some small countries they have some serious power. For candidate Obama to earn their support he would have to show them just how loyal he could be. This meant backing off anything remotely considered to be education reform. Like 99.9 percent of Democratic candidates before him, Obama towed the union line saying American schools fail because they don’t have enough money. This argument has proved false over and over yet the unions hold enough power that candidates live in fear of straying from this message, knowing it would be extremely dangerous to their campaigns. Once he fell in lock-step with this message, the unions were his.
So what does this have to do with Obama’s budget? The answer: everything! 2011 was dubbed by many: “The Year of School Choice” with tremendous victories for education reformers in states all over the country dealing huge hits to the educational establishment. With all these successes it became only a matter of time before the teachers union would take notice and strike back. The unions made their strike with Obama’s budget. Not only did they get Obama to kill the D.C. Opportunity Scholarship Program but also achieved total education spending increases; a major blow to the school choice movement. According to the Heritage Foundation: “The Department of Education’s budget will increase 3.5 percent if the proposal is enacted, continuing a failed trend of spending more taxpayer dollars through Washington on a myriad of programs with a poor track record.” This increase is nothing more than a political stunt meant to appease the unions. Obama’s education minions had a bad year in 2011 and they needed to right the ship. What better a way to do this than to demand payback for all that support then in a re-election year? Obama knew if he didn’t act the teachers union wouldn’t back him in the 2012 election. A funny side note, the NEA has already endorsed him, ignoring every single Republican candidate. Knowing the power the unions carry Obama kissed the proverbial ring.
The saddest part about this episode is not the politics, as many groups use bargaining power to move legislation, but rather the fact that those who suffer are innocent children. Some 10,000 plus children, most of whom never had the opportunity to succeed, have been thrown out in the cold to fend for themselves in often dangerous and under performing schools. Many kids may have just literally seen their future evaporate into thin air.
If Obama was indeed the president of hope and change he would have stood up against these unions and fought for new and exciting education reform programs that produce results. Things like parental choice, charter schools or digital learning. Obama towed the party line. Obama should take a look at leaders like Governor Bobby Jindal (R-LA) or former D.C. Chancellor of Schools Michelle Rhea who, despite outrageous odds, has managed to institute programs with a real success record; programs which have brought real hope and change!
Yesterday President Obama unveiled his budget for 2013. The budget is filled with higher taxes and more spending, however something is missing, The D.C. Opportunity Scholarship Program. This program grants educational opportunities to mostly poor and minority students in Washington D.C. The Heritage Foundation reported that “[t]he D.C. OSP has been highly successful. According to federally-mandated evaluations of the program, student achievement has increased, and graduation rates of voucher students have increased significantly. While graduation rates in D.C.
It has been just over a year since Congress and President Obama passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The massive piece of legislation was intended promote financial stability and prevent another major Wall Street collapse. One year later, most of the rules and regulations required by the law have yet to go into effect. However, the law has spawned a massive network of bureaucracy responsible for creating hundreds of new financial sector regulations. Less than ten percent of the over 400 new regulations the law requires have been drafted, but the act has already begun to inflict serious harm on the economy.
Proponents of Dodd-Frank promised that it would create economic growth, but so far it has only placed additional burdens on the economy. The Congressional Budget Office has estimated that within ten years the direct costs of Dodd-Frank, the costs of running regulatory agencies and the cost of expected fines, fees, and assessments, will be over $27 billion. When the costs that businesses and financial institutions will have to pay to comply with the regulations are considered the true cost grows even higher. Less than 10 percent of the rules have been written, but according to the estimates of the federal agencies that wrote the rules, 2.2 million work hours a year, equivalent to 1,100 full time employees, will have to be devoted to complying with existing regulations.
As regulations continue to pile up, the heaviest costs are likely to fall on mid-sized and regional banks. Some regulations will apply only to large banks, but the majority of Dodd-Frank regulations affect large and small banks equally. The largest national banks have more capital available to weather the costs of regulation. Small local banks with less available funds and smaller staffs will struggle to stay abreast of the onslaught of federal regulation.
One of the most dangerous aspects of Dodd-Frank is the uncertainty that it creates in an already weak economy. When the act was passed, treasury secretary Timothy Geithner promised that the act would, “streamline and simplify” the regulatory environment by eliminating or simplifying existing outdated regulations. However, more than a year later not one existing financial regulation has been reformed or eliminated. Instead Dodd-Frank promises to pile up an ever increasing amount of bureaucracy and regulation. The sheer complexity of the act is mind numbing; the 2,300 page act contains 16 separate titles and several amendments. It creates several new regulatory bodies, and gives 11 separate regulatory agencies the power and the legal responsibility to create over 400 new regulations. At this point no one knows what the final regulatory landscape will look like when all the required regulations are in place. In the face of uncertainty businesses and individuals are less likely to take risks and make new investments, slowing the already weak financial sector.
So far the Dodd Frank Wall Street reform and consumer protection act has not reformed Wall Street or protected consumers. One of the main reasons that Dodd-Frank was enacted was to prevent another bailout, of “too big to fail” Wall Street banks. President Obama said:
“Because of this reform the American people will never again be asked to foot the bill for Wall Street’s mistakes. There will be no more taxpayer-funded bailouts-period.”
It appears that once again the president was making an empty promise. In reality Dodd-Frank preserves a system of corrupt crony -capitalism where Washington picks the winners and losers at taxpayers’ expense. Dodd-Frank includes provisions which allow the FDIC to purchase assets from failing firms or guarantee a failing firm’s dangerous assets with taxpayer money. According to Dodd-Frank the FDIC is permitted to borrow up to 90% of a failing firm’s assets, meaning that if Bank of America, the largest bank in the United States, went belly up tomorrow American taxpayers could be on the hook for as much as $2.1 trillion.
The Durbin amendment, which establishes price controls on debit card interchange fees, is one of the more egregious examples of how Dodd-Frank will harm consumers. The amendment, which goes into effect in October, will limit the fees which debit card providers are allowed to charge to retailers. Of course most of the cost to banks and debit card companies will be passed along to consumers in the form of higher fees and cuts in rewards programs.
When Speaking on the long term costs of the Dodd-Frank act Ben Bernanke, who supported the law, said:
“Has anybody done a comprehensive analysis of the impact on [credit markets, businesses, and job creation]? I can’t pretend that anybody really has.”
Sadly, Bernanke’s remarks are not atypical. Congress and the president simply did not consider the costs that Dodd-Frank would inflict on the economy. It harms consumers, while undermining the free market and further entrenching the same crony-capitalism mindset which led to the Wall Street bailouts. As regulations pile up the costs to the economy will continue to grow. One year after the passing of the Dodd-Frank act we have only seen the beginning of the regulatory storm that it will let loose on the American economy.
Click the link below to view the full Capitol Comment:
It has been just over a year since Congress and President Obama passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The massive piece of legislation was intended promote financial stability and prevent another major Wall Street collapse. One year later, most of the rules and regulations required by the law have yet to go into effect.
Behind the scenes, while Washington and the United States focus on the debt crisis, President Obama’s EPA has been quietly implementing one of the most radical and costly policies of his administration. Ever since the failure of cap-and-trade, the administration has turned to the EPA to carry out its radical environmental agenda. Immediately after the 2010 election Obama was quoted saying “Cap-and-trade was just one way of skinning the cat; it was not the only way.” The EPA is in the process of completing and finalizing 30 major regulations and 170 major policy rules that would impose hundreds of billions of dollars of compliance costs on the economy, killing jobs and threatening the economic recovery. Because of the disastrous affects that the EPA’s new regulations will have on the already struggling economy, many have taken to calling the administration’s aggressive stance the “EPA train wreck.”
The train wreck is comprised of a series of sweeping new regulations that cover everything from industrial emissions of mercury, ozone, and carbon dioxide to new permitting requirements. The EPA claims that these regulations are necessary to protect public health, even though America’s air is already the cleanest it has been in the last thirty years. Increasing the prices of traditional fossil-fuel energy sources has been a long time goal of many radicals on the left. President Obama has openly admitted that his under his proposed cap-and-trade program “electricity rates would necessarily skyrocket.” Unsurprisingly, the EPA train wreck would be just as disastrous to American energy. Many regulations specifically target America’s coal industry, and will result in much higher electricity prices. Estimates indicate that if all proposed regulations are finalized 22 percent of coal fired plants would not be able to meet requirements and would be forced out of business, eliminating 75 gigawatts (enough electricity to power around 50 million homes) of coal produced electricity. In turn, rising electricity prices will take their toll on employment.
The EPA regulation train has already left the station and is hurtling toward an economic derailing. On July 6 the EPA finalized the Cross State Air Pollution Rule (CSAPR), the first of many in the EPA’s newest wave of regulation. CSAPR, is an air transport rule that regulates emissions from coal fired power plants in 27 states. It imposes unrealistic cuts on the emissions of sulfur dioxide and ozone. The rule is designed to prevent emissions from drifting over state lines, but in order to “protect” the states, the EPA has trampled on states’ rights. Instead of following usual procedure and allowing states to propose their own plans to enforce EPA regulations, the EPA is directly mandating individual plans for each regulated state. The EPA is enforcing immediate adoption; new rules will go into effect January 1, 2012, meaning that utilities will have almost no time to adapt to new regulations.
The EPA plans to continue its onslaught of new regulation with new Maximum Achievable Control Technology (MACT) rules on track to go on the books this November. These rules also target coal fired power plants and call for huge reductions in mercury, particulate matter, and other common emissions. Under MACT rules, all power plants will be required to meet the same standards as the top 12% of plants.
The EPA is also preparing to by revise its National Ambient Air Quality Standards (NAAQS) for industrial ozone emissions this year. The decision to increase standards is based on selective sampling of scientific research to arrive at the conclusion that reducing Ozone emissions would reduce asthma rates. Tighter NAAQS standards could cost the economy as much as $90 billion a year, according to the EPA’s own overly conservative estimates, and according to research by MAPI/Manufacturers Alliance could result in the loss of as many as 7 million jobs by 2020.
The CSPAR, MACT, and NAAQS rules are just the beginning of the EPA’s new regulatory package. The EPA is currently developing a slew of new anti-energy rules that would enact unnecessary regulations on everything from greenhouse gas emissions to cooling water intake at electricity generating facilities. Although it is difficult to measure what the final cost of the EPA train wreck will be until the rules are finalized and go into effect, the America Legislative Exchange Council cites estimates that indicate that proposed EPA regulations could cost the economy as much as $920 billion in the next few years and much more money in the future.
Just the CSPAR and MACT rules alone will have disastrous effects on our already fragile economy. Most power plants will have to invest millions of dollars in expensive new capital in order to comply with new regulations. These costs will inevitably be passed on to consumers in the form of higher electricity prices. Other plants will be unable to comply with regulations and will be forced out of business, resulting in job losses and even higher energy prices. The American Coalition for Clean Coal Electricity estimates that CSPAR and MACT rules will result in the net loss of 1.44 million job-years. Electricity prices are estimated to grow by 12% across the nation and by as much as 24% in regions that depend heavily on coal. Higher energy prices mean that individuals and businesses have less money available to spend and invest in the economy. The EPA’s flurry of regulation is also creating an atmosphere where potential investors are afraid to invest in energy dependent industries, creating a further drag on economic growth.
Fortunately, it is not too late to stop the EPA train wreck. A House bill sponsored by Rep. John Sullivan would delay the enactment of costly EPA regulations. The Transparency in Regulatory Analysis of Impacts on the Nation (TRAIN) Act calls for the creation of a committee to investigate the economic consequences of proposed EPA regulations, before the regulations go into effect. The bill would slow the EPA’s out-of-control agenda and force the EPA and the administration to take a closer look at the true cost of regulation. The House appropriations committee has also passed an appropriations bill cutting EPA’s budget by 18% and defunding its ability enact many proposed regulations such as greenhouse gas rules and regulations that would define coal ash as a hazardous waste. The bill also includes an amendment added by Rep. Lummis which would force the EPA to assess the economic impact of all proposed regulations and prohibit funds from being expended on the air transport (CSPAR) and MACT rules. If passed by Congress, the bill will slow the EPA’s regulatory agenda, allowing a more careful assessment of the costs of these new regulations.
Obama’s EPA is ignoring the costs to the economy, as it pushes for new regulation. An EPA official testifying before congress about an upcoming regulation admitted, “We have not directly taken a look at jobs in the proposal.” The EPA is at the forefront of the administration’s regulatory agenda. At a time when the economy is struggling to recover from recession, more regulations that increase energy prices and destroy jobs are the last thing the nation needs. Unless the EPA’s radical agenda is stopped the economy could be heading toward a train wreck.
Click the link below to view the full Capital Comment:
Behind the scenes, while Washington and the United States focus on the debt crisis, President Obama’s EPA has been quietly implementing one of the most radical and costly policies of his administration. Ever since the failure of cap-and-trade, the administration has turned to the EPA to carry out its radical environmental agenda.
The Austrian school of economic thought has made a prominent comeback and has risen to a newfound popularity in our political discourse today. However, but has one ever wondered where did this school come from? What are its origins? Who are the founders of this magnificent school of economic thought? This blog series "Meet the Austrians" will highlight those who contributed, and what their contributions to the Austrian School were.
Some argue that the Austrian school has its roots back to the thirteenth century, with the teachings of St. Thomas Aquinas (1225-1274). Thomas was born at Roccasecca, which is an area half way between Rome and Naples. He started receiving education at the age of five at the Benedictine abbey of Montecassino. Later Thomas transferred to the University of Naples in order to escape the battle that was to take place at the abbey. While at Naples, Thomas learned about the teachings of Aristotle and was introduced to the Order of Preachers, which at the time was a recently founded mendicant order. Later at the age of 17 Thomas joined the Dominican order, and studied in Cologne and at Paris under the tutelage of Albert the Great. After completing his studies he took his doctorate at the University of Paris, and later taught there and at a number of universities in Europe.
Throughout his life Thomas was a prolific writer; however, his most famous works was Summa Theologica. In which, Aquinas argues in favor of private property, and that the role of the state is to prevent theft, force and fraud in economic transactions. In this work, Aquinas also made the argument that prices should be set by the market, and brings up that prices will fluctuate due to the supply and demand of a particular product. Thomas was very much in favor of merchants, and as a result of his work in Summa Theologica he helped shift the negative view of mercantile trade.
How Thomas viewed economic thought is due largely to his perception of natural law. Aquinas believed that since God created everything, God had a plan for everything. Thus an unlawful act inhibits God’s plan from occurring. Economic transactions, he argues are to be placed in this framework, since capital is provided to them by nature and used to reach a certain end.
Saint Thomas Aquinas has earned the label of being a proto-Austrian due to the number of contributions he made to the later to come Austrian school of economics. Thomas supported the ownership of private property, argued that the price of goods are to be set by the laws of supply and demand, supported small businesses, and argued for a very limited role of the state. All of which are trademarks of the Austrian school.
The Austrian school of economic thought has made a prominent comeback and has risen to a newfound popularity in our political discourse today. However, but has one ever wondered where did this school come from? What are its origins?
Question: Do big government policies create jobs? Answer: No. Question: Do free markets and less regulation create jobs? Answer: Just ask Texas!
I often hear liberals criticize those who advocate for small market solutions to our economic troubles say that, “a small market approach will not work.” Of course these same people cannot produce a single example of their claim; however they continue to make it. Usually, saying that conservatives are heartless and our policies outdated the left continues this circus act to the amusement of anyone with half a brain. With this in mind I present, Liberal Kryptonite…Texas! Enjoy and Remember…God Bless Texas!
The Lone Star Jobs Surge
The Texas model added 37% of all net U.S. jobs since the recovery began.
Richard Fisher, the president of the Federal Reserve Bank of Dallas, dropped by our offices this week and relayed a remarkable fact: Some 37% of all net new American jobs since the recovery began were created in Texas. Mr. Fisher's study is a lesson in what works in economic policy—and it is worth pondering in the current 1.8% growth moment.
Using Bureau of Labor Statistics (BLS) data, Dallas Fed economists looked at state-by-state employment changes since June 2009, when the recession ended. Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state. New York was second with 98,200, Pennsylvania added 93,000, and it falls off from there. Nine states created fewer than 10,000 jobs, while Maine, Hawaii, Delaware and Wyoming created fewer than 1,000. Eighteen states have lost jobs since the recovery began.
The data are even more notable because they're calculated on a "sum of states" basis, which the BLS does not use because they can have sampling errors. Using straight nonfarm payroll employment, Texas accounts for 45% of net U.S. job creation. Modesty is not typically considered a Texas virtue, but the results speak for themselves.
Texas is also among the few states that are home to more jobs than when the recession began in December 2007. The others are North Dakota, Alaska and the District of Columbia. If that last one sounds like an outlier at first, remember the government boom of the Obama era, which has helped loft D.C. payrolls 18,000 jobs above the pre-crisis status quo. Even so, Texas is up 30,800.
What explains this Lone Star success? Texas is a big state, but its population of 24.7 million isn't that much bigger than the Empire State, about 19.5 million. California is a large state too—36.9 million—and yet it's down 11,400 jobs. Mr. Fisher argues that Texas is doing so well relative to other states precisely because it has rejected the economic model that now prevails in Washington, and we'll second that notion.
Mr. Fisher notes that all states labor under the same Fed monetary policy and interest rates and federal regulation, but all states have not performed equally well. Texas stands out for its free market and business-friendly climate.
Capital—both human and investment—is highly mobile, and it migrates all the time to the places where the opportunities are larger and the burdens are lower. Texas has no state income tax. Its regulatory conditions are contained and flexible. It is fiscally responsible and government is small. Its right-to-work law doesn't impose unions on businesses or employees. It is open to global trade and competition: Houston, San Antonio and El Paso are entrepôts for commerce, especially in the wake of the North American Free Trade Agreement.
Based on his conversations with CEOs and other business leaders, Mr. Fisher says one of Texas's huge competitive advantages is its ongoing reform of the tort system, which has driven litigation costs to record lows. He also cited a rule in place since 1998 in the backwash of the S&L debacle that limits mortgage borrowing to 80% of the appraised value of a home. Like a minimum down payment, this reduces overleveraging and means Texas wasn't hurt as badly by the housing crash as other states.
Texan construction employment has contracted by 2.3% since the end of the recession, along with manufacturing (a 1.8% decline) and information (-8.4%). But growth in other areas has surpassed these losses. Professional and business services accounted for 22.9% of the total jobs added, health care for 30.5% and trade and energy for 10.6%.
The Texas economy has grown on average by 3.3% a year over the last two decades, compared with 2.6% for the U.S. overall. Yet the core impulse of Obamanomics is to make America less like Texas and more like California, with more government, more unions, more central planning, higher taxes. That the former added 37% of new U.S. jobs suggests what an historic mistake this has been.
Question: Do big government policies create jobs? Answer: No. Question: Do free markets and less regulation create jobs? Answer: Just ask Texas!
In NBC’s hit comedy The Office one of the main character’s Angela is currently dating a state senator. Angela, being one for flaunting her self-perceived superiority has made a big deal out of the fact that she is dating a state senator. However her colleagues in the office constantly make fun of her due to the fact that state politicians have been widely perceived as being insignificant. Yet this ignorance and indifference towards state politicians is not uncommon in America.
Before our nation became a nation we were thirteen individual colonies who came together to throw off the yoke of tyranny. Despite this coming together each state retained a significant amount of sovereignty. Even after the states abandoned the articles of confederation and created the constitution they still retained a large amount of sovereignty. Yet today the states are largely ignored and viewed as an annoyance by the white house. There are no greater examples of this than the white house’s attempts to vilify Governors Scott Walker (R-Wi) and Rick Scott (R-Fl). Sadly state governments are only deemed noteworthy when they act in opposition to the Federal Government.
However, Senator Marco Rubio and Representative Denny Rehberg have introduced legislation that would change all of that. Senator Rubio has introduced Senate Bill 1009 also known as the Refund Act, which would allow state legislatures to rescind unwanted federal funds. Those unwanted funds would then be used to help pay off the national debt. Also in the House of Representatives Congressman Rehberg has introduced the house companion to Rubio’s bill H.R. 1358.
These bills would help give back some sovereignty to the states and the state legislatures. By allowing each state to have the capacity to reject federal funds they are inherently placing another check on the power of the president. If these bills where to be passed they would increase the notoriety and importance of state elections, while also working to reduce the national debt. These are important issues facing our country and they need to be addressed which is why I urge you to contact your congressman and tell them to support H.R.1358 and S.1009.
In NBC’s hit comedy The Office one of the main character’s Angela is currently dating a state senator. Angela, being one for flaunting her self-perceived superiority has made a big deal out of the fact that she is dating a state senator. However her colleagues in the office constantly make fun of her due to the fact that state politicians have been widely perceived as being i
No real surprises occurred during the Chicago mayor’s race, but the election was a landmark in the sense that the city elected a candidate who was not named Daley. It is hard to see any other way that this election was transformative; conservatives had virtually no chance of electing a mayor in a city which has been ruled by a single party since the Great Depression. Chicago voters were not faced with a decision of whether to elect a Democrat, but rather which Democrat to elect.
Now that former-Chief of Staff Rahm Emanuel has been elected mayor, his first order of business will be to balance Chicago’s budget, currently suffering from a $654 million deficit. To put this in context, this is just $75 million less than the deficit of the entire state of Indiana in 2010. This runaway debt is not the result of low taxation—Chicago is tied with Los Angeles for the highest sales tax rate of all major American cities.
Whether the new mayor will pursue policies to moderate draconian taxation remains to be seen, though his platform pledge is to lower, while also broadening, the sales tax and to focus on spending cuts rather than tax increases. Liberal pundits have already declared that “tax cuts aren’t an option” with the deficits that Chicago faces, but this does not take into account that the state and local governments will have to compete with neighboring governors who are looking to attract Illinois's businesses, especially as the state of Illinois recently passed a 66% increase on its corporate tax rate.
Chicago has been one of America’s 10 largest cities since the Civil War and among the top three since 1890, and transforming from a grain port and meat-packing hub to a modern financial metropolis has given the city a 21st century economy. But it has also made the city's strategic location—accessible to the Midwest by land and the coast by water—less important. Chicago now has an economy based on businesses for which its government will have to compete. How should it compete? The new mayor could do worse than to look to neighboring governors for some ideas.
No real surprises occurred during the Chicago mayor’s race, but the election was a landmark in the sense that the city elected a candidate who was not named Daley. It is hard to see any other way that this election was transformative; conservatives had virtually no chance of electing a mayor in a city which has been ruled by a single party since the Great Depression.
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Despite the fierce opposition from powerful teachers’ unions, the school choice movement is growing across the nation. In Pennsylvania, State Senators Anthony Williams (D-Philadelphia) and Jeffrey Piccola (R-Dauphin) introduced the Opportunity Scholarship and Educational Improvement Tax Credit Act (SB1) that would expand educational options for children. In the first year of implementation, the bill would allow low-income children trapped in persistently lowest-achieving schools to attend the school of their choosing. By the third year, all low-income students regardless of school will be afforded such an opportunity. Poor students will be granted financial assistance that is equal to 100 percent of the state’s annual per-pupil funding.
Many Pennsylvania schools have failed to live up to expectations. Unfortunately, Pennsylvania school spending per pupil has skyrocketed with no signs of any educational improvement. In Philadelphia, half of the students in the district fail to meet basic reading and math skills on a state administered exam. American students are falling behind in the world. The world is becoming increasingly competitive and globalized. The educational quality of Pennsylvania students is vital in order for them to compete on a national and global scale. The National Center for Education Statistics found that Americans ranked 16th and 21st out of 29 developed countries in science and mathematical scores, respectively. It is dangerous for America’s future prosperity if the academic gap continues to grow between American and international students.
School choice is a win-win for all. By increasing choice and competition, similar programs have been shown to increase student test scores across the nation. Multiple studies have confirmed that school choice boosts parental satisfaction in their child’s education. Many parents have expressed gratitude that they could choose a better and safer learning environment for their children. While the Opportunity Scholarship and Educational Improvement Tax Credit Act would expand the educational opportunities to needy families that lack access to educational alternatives, we support giving all Pennsylvania families the same opportunities regardless of income and zip code. This bill is just the first step to ensuring school choice for all.
Sadly, the Pennsylvania State Education Association wants to trap students in a costly “one size fits all” public school that has failed to meet their academic standards. The teachers unions have stated that the solution to improving education is more taxpayers’ money. However, academic studies have shown that there is no correlation between increased per-pupil expenditures and student achievement. On average, the cost of educating one student in a Pennsylvania public school for a year is an outrageous $14,420. It’s clear that Pennsylvania needs dramatic education reform.
Pennsylvania must allow parents to have more control over their child’s education. The Opportunity Scholarship and Educational Improvement Tax Credit Act would give students the freedom to opt out of their chronically failing school. It would also increases funding for the Educational Improvement Tax Credit to $100 million which grants companies tax credits if they donate to a non-profit educational scholarship program. The best solution to improving educational quality in Pennsylvania is to reduce cost and increase academic satisfaction by giving low-income students the opportunity to attend a better school that meets their personal needs.
According to the bill sponsor Senator Williams (D-Philadelphia), “If a charter school or a private school spending between $16,000 and $20,000 per student doesn't produce positive results, parents will withdraw their children from the school and the school will—deservedly—fail. But parents don't have the option of withdrawing their children from a failing public school. Today's system permits failing schools to continue, penalizing less fortunate children who only get one chance for an education.”
The Supreme Court has already upheld the constitutionally of similar school choice programs. In 2002, the Supreme Court found the Ohio voucher program to be constitutional. Chief Justice Rehnquist, writing for the majority, stated that: “This Court’s jurisprudence makes clear that a government aid program is not readily subject to challenge under the Establishment Clause if it is neutral with respect to religion and provides assistance directly to a broad class of citizens who, in turn, direct government aid to religious schools wholly as a result of their own genuine and independent private choice.” As long as parents who receive the aid have a wide array of religious and non-religious schools to choose from, it does not conflict with the Constitution.
The Opportunity Scholarship and Educational Improvement Tax Credit Act would allow children the opportunity to attend a better school. Pennsylvania children and parents should be empowered to escape their zip code in order to choose the school that best suits their individual needs. With a conservative governor and General Assembly this year, we believe that Pennsylvania has a great opportunity to pass education reforms that emphasizes choice and competition.
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Unless Congress takes action, the largest tax hike in American history will occur on January 1, 2011. The series of tax cuts passed in 2001 and 2003 lowered taxes for almost all taxpayers. While the Obama administration claims to be focused on job growth, such a dramatic tax hike will result in higher unemployment.
Increased Income Tax Rates
• Currently, all income tax rates are set to increase on January 1, 2011. If passed, President Obama’s 2011 budget would increase the personal income tax rates for the top two tax brackets. As a result, two-thirds of small businesses would be taxed at a rate of 39.6 percent. (1).
Return of the Death Tax—At 55 Percent
• The Bush-era tax cuts eliminated the death tax entirely in 2010. However, the death tax is scheduled to come back in 2011. All individuals who have personal assets valued at more than $1 million will be taxed at a rate of 55 percent upon his or her death. The return of the death tax will likely put small businesses and family farms out of business that cannot afford to pay for this immoral form of double taxation. (2).
Increased Capital Gains Taxes—To 20 Percent
• The capital gains tax will rise from 15 to 20 percent. The increased capital gains tax will deter small businesses from creating new jobs. In addition, the capital gains tax discourages investment and punishes Americans who save money for the future. (3).
Increased Dividends Tax –To 39.6 Percent
• The dividend tax will rise from 15 to 39.6 percent in 2011. The dividend tax is a form of double taxation since a company has already paid corporate taxes on their profits. As a result, investors are harmed in the process. (4). The dividend tax discourages investment in business which is essential to job growth.
Increased Energy Taxes
• Various tax cuts will be repealed for companies that produce energy. Since these new taxes will be passed on to consumers in the form of higher prices, expect your energy costs to skyrocket. (5).
Increased Health Care Taxes
• “The Medicine Cabinet Tax”: Individuals will no longer be able to use pre-taxed dollars in their flexible spending accounts or health savings accounts to purchase over the counter medicines available without a doctor’s prescription.
• “Brand Name Drug Tax”: ObamaCare will impose a hefty tax on name-brand drug manufacturers. This tax will be passed onto all consumers in the form of higher medicine prices. (6).
On January 1, 2011, the largest tax hike in history will occur. The list above includes only a few of the many tax increases that are expected. The increased taxes on small businesses, family farms, investors, parents and consumers will destroy job creation. During these hard economic times, Congress should be focusing on reducing the tax burden for all Americans in order to restore prosperity and boost job growth. Instead, the scheduled 2011 tax hikes will stifle economic growth while creating widespread uncertainty for small businesses and taxpayers.
1. Ellis, Ryan. “Six Months to Go Until The Largest Tax Hikes in History.” Americans for Tax Reform. 7 July 2010. <http://atr.org/six-months-untilbr-largest-tax-hikes-a5171>
2. Dubay, Curtis. “Obama’s 2011 Budget Tax Hikes Contradict Focus on Job Creation.” Heritage Foundation. 3 Feb 2010. <http://www.heritage.org/Research/Reports/2010/02/Obamas-2011-Budget-Tax-...
3. Laffer, Arthur. “Tax Hikes and the 2011 Economic Collapse.” Wall Street Journal. 6 June 2010. <http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704113504575264...
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