Conservative Wanderer

“A troubled and afflicted mankind looks to us, pleading for us to keep our rendezvous with destiny; that we will uphold the principles of self-reliance, self-discipline, morality, and, above all, responsible liberty for every individual that we will become that shining city on a hill.” — Ronald Wilson Reagan

Tag Archives: budget

Did Obama Turn Down A Bipartisan Plan To Raise Debt Ceiling?

If this story is true, Obama just made a huge blunder… not his first, alas, and almost certainly not his last, but possibly one of the worst.

A Republican aide e-mails me: “The Speaker, Sen. Reid and Sen. McConnell all agreed on the general framework of a two-part plan. A short-term increase (with cuts greater than the increase), combined with a committee to find long-term savings before the rest of the increase would be considered. Sen. Reid took the bipartisan plan to the White House and the President said no.”

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Allen West Supports Boehner Plan

…at least that’s what The Weekly Standard is reporting, based on a Jamie Dupree tweet.

As Fred Barnes writes, it’s not clear that there are enough Republican votes for John Boehner’s new debt ceiling plan. But the speaker got a big boost on his right flank today from Congressman Allen West (R, Fla.). Jamie Dupree reports that West, an outspoken conservative and Tea Party favorite, is supporting Boehner’s plan.

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I’m Changing My Mind On The Gang Of Six Plan

A couple of days ago, I posted that the Gang of Six Plan was about the best we could hope to get… now, prodded by a man whose economic wisdom far outstrips mine, I’ve decided to change my mind. Here’s what that man–Keith Hennessy–has to say in summary:

First I’ll flag a few things I like in the plan.

  • I support making a technical correction to CPI, even though it would result in higher revenues.
  • Repeal of the CLASS Act is great.
  • It’s good they included medical malpractice reform.

That’s it. Others right-of-center are salivating at the low marginal income tax rates described in the plan, both for individuals and corporations. I think those low rates never materialize, for both arithmetic and legislative reasons, and explain why below.

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Senate Gang Of Six May Have The Best Deal We Can Expect

Given that both the Senate and the White House are in the hands of Democrats, the plan developed by the Senate’s “Gang of Six” may just be the best we can get passed:

Sen. Tom Coburn (R-Okla.), who had pulled out of the Gang of Six in May, also rejoined the group and praised the plan as something that could win the 60 votes needed to pass the Senate.

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Obama Holding SS Checks Hostage

Now, who’s “holding a gun to the heads of the American people,” specifically, our elderly people?

President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.

Er… yes, he can (to borrow a phrase).

Treasury is part of the Executive Branch, therefore Obama can order his Treasury Secretary, the tax cheat Tim Geithner, to make sure to cut the SS checks first, so they will all get paid.

However, he won’t do that for two reasons: (1) that would remove the “scare the old folks” tactic from the predictable Democrat bag of tricks, and (2) if he did that, some of the federal bureaucrats that he’s depending on to vote for him might not get their paychecks.

Cold and cynical politicking… just what we’d expect of a Chicago Machine pol like Obama.

Debunking Myths About Stimulus Spending

With certain folks issuing loud calls for yet another stimulus, it’s worth it to take a good long hard look at the last one, and Veronique de Rugy does just that:

Myth 1:Stimulus spending can jump start the economy and fix unemployment.

Fact 1:Recent experience suggests stimulus spending won’t help.

[...]

As you can see, the administration’s promise that the American Recovery and Reinvestment Act (ARRA) would keep unemployment rates from reaching 8.8 percent and would create some 3 million jobs—90 percent of them in the private sector—did not materialize.

The unemployment rate started at 7.6 percent when President Obama took office and peaked at 10.2 percent in October 2009. Since the enactment of the stimulus bill in February 2009, the unemployment rate has not approached pre-ARRA levels, even though $382 billion has been made available by government departments and agencies (on top of tax credits and other tax-related items). In fact, unemployment recently edged up, from 9 percent in April to 9.1 percent in May.

[...]

Myth 2:Additional infrastructure spending is an effective way to stimulate the economy and create jobs.

Fact 2:In theory, infrastructure spending injects more money into the economy than other types of government spending. In reality, however, politicians rarely include infrastructure spending in stimulus bills. Instead, they spend money on items like transfers and tax cuts. Only 3 percent of the last stimulus went to infrastructure.

[...]

But experience tells us that the next stimulus won’t be any better. As the chart above shows, only 3 percent of the last stimulus went to infrastructure spending. Why? Because such programs are not political winners. For one thing, they take too long to produce results. Therefore they always take a back seat to politically-popular tax credits and transfers to the states.

[...]

Myth 3:Tax rebates will stimulate the economy.

Fact 3:The evidence says they don’t. First, people usually save the extra money. Second, even if tax rebates did increase consumption, companies don’t hire employees or build new plants because of a one-time boost.

The theory that tax rebates and payroll tax cuts will result in an increase in consumption suffers from several serious problems. First, it assumes people don’t realize that the extra cash flow is temporary and that businesses don’t realize that the new consumption won’t last. Tax rebates, for example, assume that if people get extra money to increase their consumption, businesses will then expand production and hire more workers. But this is not true. Even if producers notice an upward blip in sales after the rebate checks go out, they will know it’s temporary. Companies won’t hire more employees or build new factories in response to a temporary increase in sales. Those who are foolish enough to do so will go out of business.

These are just excerpts, the charts and more data are available at the link above.