EPA and Obama are Bullies
Please email your Senator in support of Senator. Mike Johanns, R-Neb., bill introduced into the Senate on Nov. 3 that prohibits the U.S. Environmental Protection Agency from rejecting a state implementation plan under certain provisions of the Clean Air Act when the state has not been given “reasonable time” to develop the plan.
The bill, S. 1805, comes in response to EPA’s Cross-State Air Pollution Rule, which addresses power plant emissions the agency has identified as crossing state lines. The EPA rule became final in July and requires compliance starting in January 2012, a timeframe many state officials have argued will be nearly impossible to meet. Under the legislation, the compliance deadline for the rule would be
delayed until states have been given at least two years to develop a state regulatory plan.
The fact is that the EPA is crafting new rules left and right with little to no regard for their practicality and negative consequences on our economy, the cost of electricity, and the severe unemployment situation that the US is currently dealing with at this time. Complying with these rules under the current timeline is not feasible and freezing states out of the due process is unprecedented and wrong,” The states in the past have always had a chance to at minimum develop their own rules to try to balance environmental issues and to protect jobs and avoid skyrocketing electricity bills. The proposed legislation trying to move back to the ways the process used to work, not as it is working under the current administration.
States have long been given the power to develop their own regulatory regimes, with federal intervention occurring only under limited circumstances.
EPA and the Obama administration in recent months has taken steps to disregard this process by implementing federal emissions rules on a rushed timeline without giving states adequate time to develop their own plans. Unless action is taken states are faced with meeting new EPA regulations starting in January, which could lead to layoffs, tens of millions of dollars in increased utilities costs and dramatically increased electricity prices for many Americans. S. 1805 requires the EPA to give states at least two years to submit their own regulatory plan and prohibits the agency from implementing a federal plan if states have not been given enough time.
By a vote of 249-169, the House of Representatives on Sept. 23 approved H.R. 2401, the Transparency in Regulatory Analysis of Impacts on the Nation Act, which mandates a study of the cumulative impact of several EPA rules, including the cross-state rule, on the economy. The White House threatened to veto the House legislation.
The Obama administration under his leadership either doesn’t appreciate or understand the impact of these onerous EPA mandates or they do and are supporting them with no interest of truly trying to get our country back on the right track but instead are doing it exclusively for political means. I think the latter is the case.
During these difficult times, why is our administration and the EPA pushing accelerated and overly controlling restrictions on our economy when in fact our economy especially now, needs to recover. It simply makes no logical sense. There are reasonable balances and trade offs in all choices that are made—why doesn’t our federal government recognize this—well—you know the answer to that question now don’t you?
The Federal Government is Out of Control
Our founding fathers warned us about the natural progression of the federal government—and they drafted a brilliant document called the US Constitution to try to preclude this from happening. However, the majority of our elected officials today either don’t understand or appreciate what is in this document—the attached video is worth watching—all this is going on under “YOUR” watch—and there is only one way in this country that you can change this—it will happen in November of 2012—don’t miss it—each and everyone of you can make a “CHANGE”. If it is not changed in Nov 2012—it is not “their” fault—it IS YOURS!
A short video you really should see
Government jobs – This is truly shocking
Just a short video you really should and must see…..a real eye opener!
If you seldom watch a forwarded video, I urge you to watch this one.
I did not realize that the numbers were this large and was very shocked.
It’s rather short so does not take long to view it….
If this doesn’t open your eyes nothing will.
Obama Administration Energy Obstructionism- Part II
There are so many examples demonstrating that this administration policy of anti-energy policy for the United States. Here is yet another example of this administrations agenda to drive energy prices higher and make us dependent on foreign energy sources when we have within our own indigenous country vast sources of energy.
There is current a pipeline trying to be developed by TransCanada, a large Canadian pipeline and energy company. The name of this pipeline is called the Keystone XL pipeline which if built, could deliver 830,000 barrels of crude oil a day from the tar sands of Alberta to refineries in Oklahoma and Texas. Just to give you an idea of how much oil this represents, Oman a country in the Middle East produces about this much oil! TransCanada estimates that this would bring $20 billion in investment to the US along with 13,000 jobs with sub-suppliers engaging another 118,000 jobs.
There is one big hurdle—the US State Department. Getting approval has proven to be extremely difficult in getting the 1,170 mile underground (that’s right underground so it would not be an eyesore or serve as an obstruction to some rare animal in it’s path)pipeline approved. In fact, TransCanada filed for a permit in 2008—that right almost four years ago. After dozens upon dozens of meetings, hundreds of thousands of comments, and extensive interaction with the EPA, DOT, USDA, DOI, DOE and numerous other federal and state agencies, finally an environmental impact statement was finally issued stating that the pipeline posed little risk to the environment.
The issuance of this EIS was in April of 2010. But, the EPA cried foul. Sixteen months later, another impact statement was produced. The first volume of the EIS was more than 500 pages, and there were actually eight volumes. Once again, in the second report, the conclusion was that the pipeline posed no significant impact to the environment.
The State Department is the ruling authority for the final permitting. After the submission and approval of the second EIS, the State Department issued a press release stating that the impact statement now will be followed by a 90 day review to “determine if the proposed project is in the national interest.”
During this time period, the State Department will consult with at least eight agencies identified in President Obama’s executive order to obtain their views. The State Department will also solicit public comments and meetings in at least six states through which the proposed pipeline will pass.
Meanwhile, separately, the “greenies” are gearing up for a fight with the Administration that they feel they were not given an ample opportunity to resist the project and state their opposition. There actually have been days of protests outside the White House resulting in arrests of a number of these greenies. The Sierra Club is warning President Obama that is will not mobilize its environmental voter base if he approves the project.
We yet do not know where Obama will come down on this; however don’t hold your breath. On the one hand he has driven unemployment to unprecedented levels even after clearly his fiscal stimulus give away has failed. This was substantiated just today when the White House projects unemployment to remain above 9% throughout calendar year 2012! What a sad state of affairs—we need energy security, we need jobs, and this kind of opposition goes on right before our very eyes.
Ladies and gentlemen, change is not only desired it is a necessity—get out and vote in November 2012 and make some real change—the Presidency and the Senate must be placed in the hands of people that will return our nation to greatness!
Obama Administration Energy Obstructionism
I have in the past written a number of articles on the current administrations “anti-energy” policy. Regardless of what this administration says, it is imperative to watch what they do because their actions are generally diametrically opposite to what they say!
Consider the recent discovery by ExxonMobil of the Julia oil field in the Gulf of Mexico. The field is believed to hold more than 700 million barrels of oil and gas equivalent. Exploiting the newly discovered field would yield billions of dollars for both ExxonMobil and royalties paid to the US government, not to mention the creation of thousands of jobs. In fact, a 1 billion barrel field could generate around $10.95 billion in government royalties—Mr. Obama—that is revenues—like taxes! Mr. Obama—this is called becoming “energy independent” and less dependent on the 60% of our oil that we now import from hostile people that want to do ill will to the United States. Get it!
Obama’s Interior Department is fighting this development. The Interior Department regulates offshore drilling and they are claiming that Exxon’s leases have expired and the company hasn’t’ met the requirements for an extension. In this industry, the re-instatement of leases has been in the past almost a rubber stamp, but for whatever reason, this is not the case for the Julia field. This discovery is one of the largest ever.
There is currently a court battle in place and the government is denying the oil company’s lease on the field, despite it being the biggest oil find ever! Furthermore, the signal to the industry that the Interior Department’s current position is extremely damaging for oil producers—typical Obama administration behavior—that is create as much uncertainty for industry so they do nothing—don’t invest, don’t create jobs—it is the same signal that they continue to send industry either through this kind of governmental restrictions or EPA rulings or nationalized healthcare. Same old same old.
Please find one of the best articles that I have recently read that appeared in today’s Wall Street Journal opinion page. The fallacy of “green energy” producing jobs has been proven over and over—it doesn’t—in fact, it costs jobs as these projects do not require nearly the labor to build as conventional sources plus the high cost of subsidy pulls money from the economy that private industry otherwise would invest in real wealth producing ventures that would in fact produce jobs. The cost of energy resulting from these green technologies also drive companies to move overseas for production due to higher electricity costs all of which diminish the number of US jobs!
Please read this article–it is very good!
By STEPHEN MOORE WSJ Opinion Section September 2, 2011
CLICK HERE for the article.
How Long Can We Ignore Our National Debt?
It continues to amaze me how grown men and women in Congress can continue down the path to disaster by taking no serious action on our debt issue. This has to go down as one of the most irresponsible and despicable behaviors of our President and Congress in our nation’s history. And where are the young folks who are going to have to bear this burden? They are nowhere to be seen.
A friend recently sent me an email to better characterize the recent “cuts” that Congress made. When you see the numbers it pretty much puts everything in perspective when looking at our spending problem—and THAT is the problem—yes, federal revenues are down due to an impotent growth strategy (s) that the current administration is promoting, but the real problem is spending. We all know this clearly.
Here are the numbers for this fiscal year:
US Tax Revenues: $2,170,000,000,000
Federal Budget: $3,820,000,000,000
New Debt: $1,650,000,000,000
National Debt: $14,272,000,000,000
Proposed Budget Cuts $38,500,000,000
Now just remove eight (8) zeros and pretend this is your family budget to get a real feel for how our gutless Congress and President acted a few months ago in “cutting” spending.
Annual Family Income: $21,700
Money the Family Spent: $38,200
New Debt on the Credit Card $16,500
Balance on the CC $142,710
Total Budget Cut $385
So you see, the budget cuts that were made are actually far less than the debt service even on the new debt on the credit card for the year—not to mention the debt service on the total outstanding balance. Would we get away with running our family budgets this way? Why should our elected officials get away with managing “our” money this way?
Let’s take a look at our total debt– $14,587 trillion (it is actually higher than reflected above in the numbers). This can be divided into public debt, that is, the Treasury securities held by individuals, financial institutions, and foreign governments AND the intra-government debt, the sum of Treasury bonds held by agencies of the federal government, principally the so-called Social Security Trust Fund. The liabilities represent the future pensions, health care, social security payments, etc that are promised under current legislation—both are REAL obligations.
The split between public debt and intra-governmental debt is $9.924 trillion and $4.666 trillion respectively. This is over 300 million times the country’s median household income! Stacked as dollar bills, it would reach 920,953 miles high, almost four times as far from Earth as the moon. The real issue here is the debt’s size relative to gross domestic product—what this is saying is no different than the way we individually measure our own debt. Translated, it is our personal debts measured against our income. The GDP of the US was $15 trillion at the end of the first quarter in 2011. This translates to making our public debt at 66.1% of GDP and the intra-governmental debt at 31.1%. Total debt is now 97.2% of GDP and growing!
The scary part is of course the size but the scarier part is the rate of growth. For example, our debt in 1946 was $269 billion and 14 years later in 1960 it was $286 billion. The economy during these years grew rapidly so that in 1960, the debt was only 58% of GDP.
In the 1970’s under Paul Volcker as Fed chief, the debt began its soaring. Why? Quite simple—Washington continued to increase spending faster than government revenues increased (Note: revenues increased a huge 99.4% in the 1980’s). The debt was 58% of GDP in 1990, a full 24 percentage points above its 1980 lows. It continued to increase dramatically in the early 1990’s under President Bill Clinton reaching 68% of GDP in 1994.
But, Newt and the republican Congress came into power, and represented the first time the Republicans controlled both houses of Congress since 1954. In the next six years, while revenues increased 61%, federal outlays increased ONLY 22%! As a result, the debt relative to GDP declined between 1994 and 2000 to 57% from 68%–and in 1998-2000 actually showed the first surpluses in the federal budget in over 30 years. I have written about this before—it was not due to Bill Clinton’s policies—it was due to the republican controlled house under Newt Gingrich-and their ability to cut spending—and move Clinton to the center. That is fact!
In 2001 following the collapse of the dot com bubble and rising unemployment, the 2003 debt to GDP ratio had risen to 61.7% Many did and continue to blame the Bush tax cuts for this however, that is simply wrong. As I have written many times in the past—when you cut rates, tax revenues actually increase because companies and individual entrepreneurs go out and invest, create jobs, and more jobs and healthier economies produce more wealth, which in turn generates more tax revenues. This is exactly what happened after the Bush tax cuts were put into place. Federal revenues before the Bush tax cuts were put into place declined 12% in the early part of the decade, but when the tax cuts were implemented in 2003, the economy began to grow strongly and federal revenues in the next four years grew by a staggering 44% while unemployment fell to 4.2% from 6.2%. Federal outlays increased during these years by a meager 26.4% and debt-to GDP ratio increased to 64.8% by 2007, which was below what it had been in 1994 (read this Mr. Obama and Nancy P, and Harry R).
In 2008, the debt-to GDP ratio soared to 67.7%. A year later, under President Obama, it took another leap to 84.4%, a year later to 93.8% and it is headed real quickly to 100%.
No one expects to pay off our $14 trillion debt, but we do expect our government officials to get a handle on our debt issue and put into place a comprehensive spending cutting plan that will get our debt- to –GDP ratio back down to historic levels. Specifically, they must not only stop the rate of growth, they must reduce the rate of growth over the next ten years. I have represented in the past that we should have a debt plan to reduce our debt by $1 trillion/year for the next 10 years!
This can ONLY happen if the American electorate sends a solid message in November 2012 and do exactly what they did in November of 2010. This is our system—this is our way to effect “change”.
Ruby Red Tape- A Case study in the costs of regulation
An article below appearing in the Opinion section of the Wall Street Journal in August 16, 2011 edition is worthy of reading and understanding what Allen West said last night at the Palm Beach County Tea Party meeting. The current administration has so many barriers in place to constrain businesses from investing—the EPA’s environmental impact statement process is tantamount to putting shackles and handcuffs on private sector investment. We as citizens are paying for this—and can you only imagine the impact this has on job creation? You multiply this Ruby Red Tape scenerio by thousands upon thousands of proposed projects in the US and it does not take a rocket scientist to see why we continue to be in recession and it is almost impossible to break out!
See Ruby Red Tape for the article.
When Will Folks Figure Out That the Federal Government Simply Does not Deliver as Promised
In spite of the federal government’s best intentions, they simply do not deliver what they say they are going to deliver. Furthermore, when they do deliver, it ends up costing 10 to 20 times what they originally said it was going to cost. In the private sector, doing this just one time would get folks fired yet we continue to empower our government to do this over and over and over again? Why? Here are just a few examples.
The United States Post Office (USPS) lost $5.7 billion during the nine-month period ended June 30th compared to $5.4 billion in the same period of 2010! In its fourth straight year of declines, the agency has a net loss of $8.5 billion for the 2010 fiscal year. In spite of the overall losses, the USPS said shipping and standard mail saw growth in the third quarter, with revenues up 7.3 percent and 1.7 percent respectively. Why is this happening? In the private sector, adjustments would be made to obviously get a handle on their costs. Why can’t the postal service do the same?
Large cost overruns are routine on federally funded transportation projects. An example is the Springfield, VA highway interchange project. This project was estimated to cost $241 million, but ended up costing $676 million. Then officials involved with the project claimed the project was completed on time and under budget when in fact the project cost 3 times what it was intended to cost. Did heads roll? —of course not.
How about the “Big Dig” in Boston. This is the underground local highway project that all of us taxpayers outside of the state of Massachusetts ended up paying for thanks to former Senator Kennedy. The Big Dig was the most expensive highway project ever to be done in America. It was plagued with escalating costs, scheduling overruns, leaks, design flaws, charges of poor execution and use of substandard materials, criminal arrests, and even four deaths. The project was scheduled to be completed in 1998 at an estimated cost of $2.8 billion. The project was not completed, however, until December of 2007 at a cost of over $14.6 billion. The Boston Globe recently stated that the project is still not completed as originally specified and that it will ultimately cost $22 billion included interest and not be paid off until 2038!
Not all federal government projects are mismanaged like the Big Dig but cost overruns and delays are routine. A government accountability office study found that half of the federal highway projects it examined had significant cost overruns in excess of 25%! And nothing is being done about this!
It goes on and on and one. Despite billions of dollars in cost overruns and years of delay, Lockheed Martin Corp and US Navy officials are hanging on to the development of a new “Presidential helicopter.” The program initially called for $6.1 billion in spending to develop and build the next generation of Marine One choppers—but the expected cost of the program is now estimated to be $11.2 billion.
In 2008, the GAO completed a review of costs and schedule of approximately 72 weapons program and found that the average cost overrun for development was 40 percent! A recent study by Deloitte Consulting agrees that defense cost overruns are getting worse.
Who is to blame—that’s an easy one—our Congress. They hold the purse strings and rather than looking after taxpayers interests, most members fight attempts to reduce spending in their districts.
These cost overruns go on forever. The Erie Canal project incurred a 46% cost overrun, the Panama Canal 106%, Hoover Dam a small 12%, Louisiana Superdome 366%, and the renovation of Yankee Stadium 317%.
The system is broken. Many times these proposed project are low-balled when they are proposed to Congress, and then after approval, it moves ahead and becomes very difficult to terminate even if it becomes an obvious boondoggle.
This kind of low-balling happens also in entitlement programs. When Medicare Part A was enacted in 1965, costs were projected to rise to $9 billion by 1990, but the costs were actually $67 billion that year! When home care benefits were added to Medicare in 1988, they were projected to cost $4 billion by 1993, but ended up costing $10 billion. When the 1996 farm law was passed, subsidies were stated to be $47 billion in total between 1996 and 2002, but were in fact $121 billion.
Now for the big one. The 2003 Medicare prescription drug bill. Bush promised that the legislation would cost $400 billion in the first 10 years, but in fact after passage, this number was immediately adjusted to $534 billion.
What is the solution? Simple—reform the procurement process and terminate or privatize as many federal activities as possible. Move state projects back to the states and get the federal government out of play, which in effect will shrink the size of government.
One more detailed example please. Amtrak ridership has increased year after year and has climbed 18 consecutive months. Yet, Amtrak’s financial losses are projected to widen this year. Amtrak officials project an operating loss of $506 million in the current fiscal year ending September 30th, up from a loss of $419.9 million last year. Amtrak officials have projected a loss next year of $616 million. This is a waste of taxpayer money. Federal subsidies cover about 16% of Amtrak’s operating expenses, which are projected to total $3.94 billion this year. How can you be serving more and more passengers yet at the same time, losing more and more money? Amtrak was created by Congress. Besides the operating subsidies, it also received recently a $450 million capital appropriation to upgraded a 24 miles segment between Morrisville, PA and New Brunswick, NJ. Why are we not pushing to open Amtrak lines to competing rail operators thereby creating some competition? All of these costs translates into American taxpaying citizens providing a subsidy of $32 for each and every passenger who rides an Amtrak train during the year which is four times the operator’s estimate-seeing a pattern here?
I could give so many more examples. I will mention just a few here—but the point is made—we must get control of this spending and these overruns—they simple are not tolerated in the private sector so why are we accepting them in the public domain.
Denver International airport—original estimate was $1.7B—final cost $4.8 billion.
Clinch River Breeder Reactor program-original estimate $400 million- final cost $4 billion
Future Gen clean coal project- original estimate $1 billion—final cost $1.8 billion
C-130J Hercules- original estimate $10.9 million- final cost $430.3 million
Extended Range Munitions- original estimate $86.8 million—final cost $ 500.1 million
Air Traffic control modernization- original estimate $8.9 billion- final cost $14.6 billion
Why would anybody in their right mind believe the Obamacare projections—or that the federal government is actually capable of curing the high cost problem in healthcare? Only a fool. The government is simply incapable as demonstrated time and time again of hitting their budgeted targets or that of the CBO—it simply does not happen. So we should as prudent and common sense people just assume that Obamacare in the end will most likely cost 10X of what is proposed. Logic and demonstrated track record here prevails. It is for this reason, that hopefully after the elections in 2012, we can again put our representatives in Washington back to work to kill this really ugly piece of legislation.
Are You Really Interested in Creating Jobs, Mr. President?
Earlier in the year, I had the privilege of speaking to a local Tea Party group on why it is imperative that we have a national energy policy. I have spent much of my professional career in the energy field, particularly the electric utility industry. It is incredulous to me how our President cannot see or understand the severe damage he is creating by supporting and endorsing the ridiculous EPA regulations now being promulgated and the impact these regulations will have on job creation and getting things “built in America.”
To think President Obama won praise from businesses in January when he promised to bring “reason and balance” to a 21st century regulatory system is a real crock. Once again, watch what he does vs what he says because most of the time, they are diametrically opposed. Six months later after making this statement, he is preparing to issue the single most expensive environmental regulation in US history. There is simply nothing “reasonable or balanced” about the EPA’s proposal to tighten national air quality standards on ozone emissions. The EPA’s new standards are currently under review by the OMB but could end up on the President’s desk very soon. The tightening of the standards from 0.075ppm to 0-.070 ppm or even 0.060ppm would mean that 85% of the counties in the country would fall into nonattainment status.
The EPA estimates and their estimates are always way low is the cost of attainment is anywhere from $20 to $90BB annually. The estimate itself further should convince us they do not have a clue! Existing businesses or new businesses will be bound by these new regulations and will result in significantly higher costs and uncertainty of marginal facilities that would have to be retrofitted.
The EPA readily admits based on their own data that between 1990, when the Clean Air Act underwent its last major revision, and 2008, emissions of the six common pollutants including ozone were down 41! The EPA and President Obama simply have no understanding of the economic penalties that these regulations have on businesses and job creation. They have no concept of the “law of diminishing returns” that is to say, once you get down to a certain emission levels with respect to many of these regulated substances, the cost of incremental increases exponentially, far greater than the benefit to society. In other words, what is reasonable, and what is unreasonable! What is the cost vs benefits of tighten down further on these regulations?
In my talk to the Tea Party I referred to earlier, I quoted a few statements that Newt Gingrich made while campaigning in Iowa. He stated, “the EPA has rarely been innovative and has focused only on issuing regulations and litigation. What you have is a very expensive bureaucracy that across the board makes it hard to solve problems, and slows down the development of new innovations.” He goes on to say “we need to have an agency that is first of all limited, but cooperates with the 50 states. The EPA is based on bureaucrats centered in Washington issuing regulations and litigation and basically opposing things.
I would replace it with an environmental solution agency—we need an agency that would get up every morning, very much like the national institutes of health or the NSF, and try to figure out what do we need to do today to get a better environment that also gets us a better economy. The level of control that Washington bureaucrats want to extend over topics they don’t understand and communities they don’t live in is wrong. Having an attitude of getting up every morning and trying to stop the economy is just a very destructive attitude.”
If Obama was acting as he is saying, he would send the new ozone rules back to the EPA until a thorough scientific review was done as planned, to confirm the likely outcomes of the legislation. He would also ask for an accurate cost of implementation and then make an reasonable assessment on how this might affect recovery and job growth. But, he won’t!
Obama: The Politics of Blame
I was embarrassed after listening to President Obama’s speech last night on television. He is so transparent as what he is doing. Clearly, he is setting up to blame the Republicans for any debt default AND to inoculate himself in case the US loses its AAA credit rating. He dishonestly tied the debt-ceiling debate to the credit-rating issue with full knowledge that Standard and Poor’s has already said that it may cut the US rating even if Congress moves on the debt ceiling. He want to avoid accountability when he and the democratically controlled Congress over the last three years has raised the national debt held by the public from 40% in 2008 to 72% next year, and rising in subsequent years! This spending is the REAL CAUSE of any downgrade—uncontrolled spending—no budget established by the Democrats while in 100% control of congress and the presidency—for over 800 days! Are the American people this stupid not to see through this lie? Well maybe they are getting smart. The latest Obama Gallup poll numbers show his approval rating dropped again to 43%, the lowest level of his presidency and lower than Bill Clinton at a similar stage of his budget standoff with the Republicans in 1995. And, by the way, did you also notice in his speech last night the absence of the word “veto” when talking about the Republicans and Boehner’s current proposal. Wonder why? Doesn’t take a genius to figure that one out!
Let’s review some facts once again about the debt at the risk of repeating myself over and over again. We must get this through to the general population—tell your friends—and go to this link
http://www.youtube.com/embed/VtVbUmcQSuk
Send this to everybody you know. Let’s be straight and once again examine the real facts. Budget reforms need to remember that that this is NOT a political fight between Republicans and Democrats; it is a fight against a 50-year trend toward socialism. Moreover, it is a moral fight, not an economic one. Lastly, this is a fight that anyone can win in 16 months from now to the presidential election. It will take hard work for 10 years or more to undo what has been done over the past 50 years.
Let’s review the facts again. The Bureau of Economic Analysis tells us that total government spending at all levels has risen to 37% of gross domestic product today from 27% in 1960—and will reach 50% by 2038 at our current rate of spending. The Tax Foundation reports that between 1986 and 2008, the share of federal income taxes paid by the top 5% of earners has risen to 59% from 43%. Between 1986 and 2009, the percentage of Americans who pay zero or negative federal income taxes has increased to 51% from 18.5%. All of this is accompanied by an increase in our national debt to 100% of GDP today from 42$ in 1980. Do we have a problem?
Where will all this lead—for those who should ask? Two scenarios—the first we will eventually hit a point where so few people actually pay for their share of the growing government that a majority become completely invested in the social welfare state, which stabilizes at some very high level of taxation and government social spending—think Europe, Greece, Portugal, Ireland, and Italy. Alternatively the social system collapses under its own weight, and we get some kind of permanent austerity after the rest of the world finally comprehends the depth of our national spending disorder and stops lending us money at low interest rates—again—think Greece!
Then think Rome—what have we learned in 2066 years?
“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.” Cicero, 55 BC
Ladies and gentlemen—we must stop this—please, please spread the word!
Let The Truth Be Told
The real culprit in the current financial crisis is the current administration and the previous democratic controlled Pelosi-Reid congress. Americans need to understand (and of course with no support or help from the press) that the current debt ceiling is only a trigger on the proverbial “gun”—the gun has been the enormous spending boom of the last three years under the complete control of Obama-Pelosi-Reid. What makes matters worse is that two of the these three players and the press lack the political will to reduce spending in years to come—and are simply doing everything in their power to focus away from spending and instead muddying the water with tax revenue promotion. What a crock!
Spending is the problem and in the last three years the Obama-Pelosi-Reid regime has had an extraordinary blowout. We have not seen anything like it since WWII. Nothing even close—and no, not even during Bush’s second term. The chart below gives a graphical depiction of what we are talking about—and this should be place on every news wire day after day after day until folks can understand what the real problem is.
This chart clearly tracks federal outlays as a share of Gross Domestic Product since 1960. The early peaks represent the Johnson “Great Society” spending and then the high of 23.5% with the recession of 1982 coincident with Reagan’s defense buildup.
From this point, spending declined mostly during the 90’s when Clinton radically cut back defense spending to 3% of GDP in 2000 from Reagan’s peak of 6.2% in 1986. During George W Bush’s years spending bounced back up to roughly 20% of GDP, but no more than 20.7% as recently as 2008!
Then the Obama “blowout” in concert with his team in Congress—Pelosi-Reid! The Democrats basically blew up the national balance sheet, lifting federal spending to 25% in 2009, the highest level since 1945. Though the supposed recession ended in 2009, spending in 2010 stayed high at nearly 24%, and this year, 2011, it is heading back toward 25%.
Federal debt held by the public as a share of GDP is another interesting perspective. In 2008, it was 40.3%, then 53.5% in 2009, 62.2% in 2010 and an estimated 72% this year, and is expected to continue rising in the future—driven of course by ObamaCare. These are heights not seen since the Korean War, and many analysts think the US debt will soon hit 90% or 100% of GDP—-think Greece boys and girls!
Now, Congress, under the leadership of Pelosi-Reid was responsible for the way so much spending was wasted, resulting in little job creation and the slowest economic recovery since 1930s. In the US system however, historically, President’s are supposed to be the fiscal watchdogs. When they fail to do so, the Congress if allowed spends like they are on steroids! This is exactly what has happened.
Now, what is all ironic about this is that all of a sudden, President Obama has got religion, and is claiming to now have found “fiscal virtue.” In fact, what he is really doing is using the debt-ceiling debate as a battering ram not to control spending but to command a tax increase! Why is the press not demanding specifics from Obama on the spending side of the equation! He has provided nothing—that is fact and what little he has said about cuts in spending are negligible. The only things that I have heard is his offer for immediate domestic nondefense discretionary cuts of $2BB—a drop in the proverbial bucket!
As for Obama’s proposed entitlement cuts—nada! His vague suggestions are nibbling around the edges of programs that are growing faster than inflation—and ObamaCare—is untouchable despite its $1 trillion in additional spending over the next several years and growing faster even afterwards!
So, now the showdown over the debt limit which has to be raised to accommodate all of “his” spending. And Obama of course instead of taking responsibility for the spending and focusing on reducing it is blaming the Republicans for being irresponsible because they won’t raise taxes in return for modest future spending restraints. And people are falling for this BS and the media does not have the guts to speak the truth! What a sad state of affairs!
