AMERICA-Where Are You?

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Since President Barack Obama was sworn into office, the U.S. economy has shed 3.4 million jobs and the unemployment rate has risen to 10 percent. But not all sectors of the economy have been suffering equally. In fact, the sector of the economy most supportive of President Obama has not only avoided contraction, but has actually managed to grow instead, says Conn Carroll, Assistant Director for the Heritage Foundation’s Strategic Communications.

According to a recent report released by the Bureau of Labor Statistics (BLS):

• In 2009 the number of federal, state and local government employees represented by unions actually rose by 64,000.
• Coupled with union losses in the private sector economy, 2009 became the first year in American history that a majority of American union members work for the government.
• Specifically, 52 percent of all union members now work for the federal, state or local government, up from 49 percent in 2008.
• To better illustrate these statistics: three times more union members work in the Post Office than in the auto industry.

So why should Americans care, asks Carroll? There’s one simple reason: private firms face competition; governments don’t. If a union extracts a contract from a private firm that eats up too much of the profits, then that firm will be unable to reinvest those profits and will lose out to competitors. But when a union extracts a generous contract from a government, the answer is always higher taxes or borrowing to pay for the bloated spending:

• The average worker for a state or local government earns $39.83 an hour in wages and benefits compared to $27.49 an hour in the private sector.
• While over 80 percent of state and local workers have pensions, just 50 percent of private-sector workers do.

Unionized government employees not only want to keep their bloated compensation packages, but their leaders are desperate for more members and more union dues. That is why public-sector unions have become a fierce lobbying force for higher taxes and more spending across the country. Organized labor once fought against taxes and regulations that impeded the economic interests of their employers, but now they are in alliance with environmentalists pushing private sector and economy-crippling cap-and-trade legislation, says Carroll.

Source: Conn Carroll, “Government Unions Win, You Lose,” Heritage Foundation, January 25th, 2010

The era of big government has returned with a vengeance, in the form of the largest federal work force in modern history, says the Washington Times.

The Obama Administration says the government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that “the era of big government is over” and joined forces with a Republican-led Congress in the 1990s to pare back the federal work force.

• Most of the increases are on the civilian side, which will grow by 153,000 workers, to 1.43 million people, in fiscal 2010.
• From 1981 through 2008, the civilian work force remained at about 1.1 million to 1.2 million, with a low of 1.07 million in 1986 and a high of more than 1.2 million in 1993 and in 2008. In 2009, the number jumped to 1.28 million.
• Including the civilian and defense sectors, the federal government will employ 2.15 million people in 2010 and 2.11 million in 2011, excluding Postal Service workers.

According to the Obama Administration:

• Some 79 percent of the increases in recent years are from departments related to the war on terrorism: Justice, Defense, Homeland Security, State and Veterans Affairs.
• The Pentagon will have 720,000 employees this year and 757,000 employees next year — up from a low of 649,000 in 2003.
• The Department of Homeland Security will grow by 7,000 a year in 2010 and 2011, and the Veterans Affairs Department will grow by 12,000 in 2010 and an additional 4,000 in 2011.

Obama is in a situation similar to that of Clinton, who took office when the budget deficit was at a record high and government bureaucracy was expanding, even though the Pentagon was shedding workers with the end of the Cold War. Clinton in 1996 declared that “the era of big government is over” and took steps to work with Congress to control spending and cut the work force, which already had been trending lower. As he left office in 2000, Clinton boasted that his administration had helped cut 377,000 government jobs, leaving the smallest civilian federal work force since 1960. Obama, though, appears to be accepting a larger federal work force, says the Times.

Source: Stephen Dinan, “Largest-ever federal payroll to hit 2.15 million,” Washington Times, February 2, 2010.

During his State of the Union Address, President Obama said that if “anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.” Earlier that day, Rep. Paul Ryan (R-Wis.) introduced his “Roadmap for America’s Future Act of 2010,” which provides all of the above, according to the Heritage Foundation.

The Congressional Budget Office’s (CBO) analysis of Rep. Ryan’s legislation proves the plan would accomplish President Obama’s goals by reforming entitlements, reining in government spending, and setting the country on a long-term path to economic prosperity, says Heritage.

CBO found that the Roadmap would reduce Medicare and Medicaid spending, slightly increase Social Security spending and lower tax revenues. Overall, these changes would reduce federal budget deficits and the federal debt:

• Federal outlays would decrease from 26 percent of gross domestic product (GDP) in 2009 to 19 percent in 2020 and eventually 14 percent in 2080.
• After 2030, federal revenues would be maintained at 19 percent of GDP. By 2080 the budget would experience a surplus of approximately 5 percent.

The Roadmap’s effect on the federal debt reverses the unsustainable course of current policies:

• Under the current trajectory, debt would skyrocket in the decades to come, reaching over 200 percent of GDP by 2043 and nearly 700 percent of GDP by 2080 (of course, this isn’t actually possible — the country would incur financial ruin well before it reached these levels).
• But under Rep. Ryan’s proposal, the debt would peak at 100 percent of GDP in 2043 and then decrease to zero by 2080.
• Specific to Social Security, revenues would exceed outlays by 2083 and would create a surplus for the trust funds thereafter; conversely, under currently law the trust funds would be exhausted by 2042.

Finally, CBO predicts that the economy at large would benefit tremendously under the Roadmap, with real gross national product (GNP) per person achieving levels 70 percent higher due to the Roadmap than would otherwise occur.

Source: Kathryn Nix, “A True Roadmap to Fiscal Sustainability: The Numbers Don’t Lie,” Heritage Foundation, February 1, 2010.

For the next few years, Social Security is fine, however, the system is already setting off alarm signals. The disability program is already in a negative cash flow position and the retirement and survivor’s income program is expected to have a negative cash flow in 2010-2011. If we keep on doing nothing until the trust funds that finance the program run dry in 2037, monthly benefits will have to be cut by about 24 percent across the board and the cuts will get deeper than that, says David Walker, who served as the seventh comptroller general of the United States and was the CEO of the U.S. Government Accountability Office.

In his new book, “Comeback America,” Walker has several suggestions on how to save Social Security.

Benefits:

• Focus on people who are most in need; provide a new higher-level floor benefit for Americans who have worked at least 30 years to insure they will not live in poverty.
• Do not eliminate Social Security benefits for higher-income individuals but reduce the relative benefit for middle- and upper-income persons through progressive wage indexing or otherwise.
• Raise the normal and the early retirement eligibility ages on a gradual basis, and require that they keep pace with increases in life expectancy; a relatively modest increase phased in over a 20-year period would have a significant impact.
• Allow all individuals to defer their Social Security benefits to any age they choose and increase their monthly benefits based on life-expectancy tables; this would encourage people to work longer.

Revenues:

• Increase tax revenue; keep the payroll tax rate at the current level of 6.2 percent but raise the cap on taxable wages from the 2009 level of $106,800 per person to around $150,000.
• This would be less than the historical dollar level at which 90 percent of total wage income would be subject to the Social Security payroll tax ($171,900 in 2009).

Savings:

• Require supplemental savings accounts; an additional 2 or 3 percent payroll deduction would go into an individual account for each worker.
• Individuals would have several professionally managed investment options to choose from along the lines of the Federal Thrift Savings Plan, which is now used for federal elected officials and employees.

Source: David M. Walker, “Comeback America: Turning the County Around and Restoring Fiscal Responsibility,” Random House, January 12, 2010.

Of all the taxes in the U.S. tax system, the estate tax probably does the most damage to output and income per dollar of revenue raised. The high rates discourage saving and investment at the margin, while the base amount that is exempted from the tax reduces the average tax rate and tax revenues. A tax with a large difference between its average and marginal rates does far more damage per dollar of revenue raised than a lower rate on a broader base, says Stephen J. Entin, President and Executive Director of the Institute for Research on the Economics of Taxation.

If estate tax rates revert to pre-2001 levels:

• Private sector output and labor compensation would be cut by $183 billion and $122 billion, respectively.
• Gross domestic product (GDP) would eventually be reduced by $183 billion.
• By contrast, repealing the estate tax entirely would boost labor income by $79 billion and add $119 billion to GDP.

Furthermore, the loss in GDP, wages and other income reduces other tax collections by more than the estate tax brings in — resulting in a net revenue decrease from having the tax, explains Entin. One source of loss comes from giving assets to one’s heirs over many years prior to death. Indeed, Professor B. Douglas Bernheim of Stanford University estimates that estate tax avoidance by giving assets to children, most of whom are in lower income tax brackets than their parents, costs more in income tax revenue on the earnings of the assets than the estate tax picks up.

The economy, the pretax and post-tax incomes of workers, savers, and investors, and federal, state, and local revenue would all be higher if the estate tax was eliminated, says Entin.

Source: Stephen Entin, “The High Marginal Cost of the Estate Tax,” National Center for Policy Analysis, Brief Analysis No. 688, January 28, 2010.

If we’re serious about restoring science to its rightful place, the head of the U.N.’s panel on climate change should step down. Evidence shows he quarterbacked a deliberate and premeditated fraud, says Investor’s Business Daily (IBD).

The U.N.’s Intergovernmental Panel on Climate Change has been forced to back off its now-discredited claim that the Himalayan glaciers would soon disappear. But it’s not true, the panel’s vice chairman, Jean-Pascal van Ypersele, told the BBC, that it was simply a “human mistake.”

• The panel’s chairman, Dr. Rajendra K. Pachauri, who was forced to admit the claim had no basis in observable scientific fact, said its inclusion was merely a “poor application” of IPCC procedures, acting as if the original source of the claim, Indian scientist Dr. Syed Hasnain, was a total stranger.
• In fact, as Christopher Booker of the London Telegraph points out, Dr. Hasnain “has for the past two years been working as a senior employee of the Energy and Resources Institute (TERI), the Delhi-based company of which Dr. Pachauri was director-general.”

So after the 2007 assessment that included Hasnain’s claim, Pachauri was impressed enough to hire him as an employee. Pachauri should have been familiar with both his work and the fact the claim had not been peer-reviewed, and aware that it had been challenged by reputable geologists, says IBD.

Before the 2007 report was published, Hasnain’s claim was challenged by another of its lead authors, Austrian glaciologist Dr. Georg Kaser. He described Hasnain’s prediction of glaciers vanishing by 2035 as “so wrong that it is not even worth dismissing.”

So why was it included in the 2007 IPCC assessment? In an interview with the London Daily Mail on Sunday, Dr. Murari Lal, the coordinating lead author of the chapter on Asia, gave a disturbing answer, says IBD. “It related to several countries in the region and their water sources,” he said. “We thought that if we can highlight it, it will impact policymakers and politicians and encourage them to take some concrete action.”

In other words, the motive was political, not scientific, in contradiction to the IPCC mission statement that says its role is “to assess on a comprehensive, objective, open and transparent basis, scientific, technical and socioeconomic information — the IPCC reports should be neutral with respect to policy.”

Source: Editorial, “United Nations’ Climate Chief Must Go,” Investor’s Business Daily, January 28, 2010.

In the wake of Barack Hussein Obama’s first State of the Union address, much of the critical analysis from Republicans posited that he should do “this” instead of “that.”

Unfortunately, when there is no more constitutional authority for a president to do this rather than that, Republicans fail to distinguish themselves from Democrats since both parties are then advocating unlawful extra-constitutional policies.

Obama’s SOTU teleprompters fed him a steady stream of poll-tested rhetoric, none of which comports with the authority granted the Executive Branch, unless, of course, one subscribes to the adulterated “living constitution” as amended by judicial diktat.

Predictably, Obama offered only Socialist solutions to all ills, and not a single suggestion that individual responsibility or the private sector economy should shoulder that burden, at least not without government “incentives,” a.k.a. centralized social and economic planning.

In 6,200 words (second longest SOTU after Bill Clinton — two narcissists who just can’t hear enough of themselves), Obama referred to himself repeatedly, and alleged that he was the anointed spokesman for “we,” the American people, more than 100 times.

On the other hand, he mentioned the Constitution only twice.

First, in his opening remarks Obama said, “Our Constitution declares that from time to time the president shall give to Congress information about the state of our union.”

Correct.

Second, he asserted, “We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution, the notion that we’re all created equal…”

As the Internet meme goes these days: FAIL! Uh, uh, uh, — that “notion” was enshrined in our Declaration of Independence, third paragraph, first sentence. One would think that this alleged professor of “Constitutional Law” at the University of Chicago Law School would have noticed such a simple, yet substantial, error.

Our Constitution is devoted to clearly delineating the limited role of the central government from the unlimited rights of the states and the people.

To that end, James Madison, author of our Constitution, wrote, “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.”

Accordingly, Obama mentions freedom only once, and made absolutely no reference to liberty.

Nowhere in our Constitution is there any authority or provision for these key proposals from Obama’s SOTU:

1. The power to further centralize regulation of our economy.

2. The power to completely regulate our national health care system. (Note: both the Democrat and Republican proposals lack constitutional authority). Obama even repeated his claim that the American people are just not smart enough to get on board: “I take my share of the blame for not explaining it more clearly to the American people.”

3. The power to further regulate and tax the production of CO2.

Obama reiterated his claims that the current recession was caused by “Wall Street,” and then went on to insist that the only hope for ending the recession was government “investment,” a euphemism for taxing money out of the private sector, taking bureaucratic handling fees out, then giving it to political constituencies.

To correctly interpret Obama’s SOTU, you need only filter everything he says through his foremost pledge that the his administration’s charge is the “fundamental transformation of the United States of America.”

That is a line Obama lifted from the primary architect of his Socialist platform, Robert Creamer, who had earlier proclaimed, “If Barack Obama is elected president, then we have the opportunity to fundamentally transform American politics and the economy.”

It’s likely that you’ve never heard of Bob Creamer, because Barack Obama is very adept at concealing his association with his Marxist patrons.

In his younger days, Obama was not concerned about such associations: “I chose my friends carefully,” he wrote. “The more politically active black students; the foreign students; the Chicanos; the Marxist professors and structural feminists and punk-rock performance poets.”

But when he announced his aspirations to become a U.S. senator in 2004, Obama began to cover his tracks.

He stopped associating publicly with Leftist colleagues and mentors such as Jeremiah Wright, Michael Pfleger, William Ayers, Bernardine Dohrn, Khalid al-Mansour, Rashid Khalidi, Bob Creamer and others.

Creamer is a member of Obama’s Chicago mob, a fellow “community organizer” and disciple of Saul Alinsky.

Like all of Obama’s Chicago benefactors, Creamer believes that he is above the law, or, more appropriately, that he is the law in today’s age of the rule of men. But like Tony Rezko, another of Obama’s slick Chicago political backers, Creamer was caught with his hand in the till and was convicted of a felony (bank fraud) back in 2004 when Obama was a state senator. Creamer got a softball sentence, though: five months in a minimum-security facility for white-collar criminals and another 11 months of house arrest.

With all that time on his hands, Creamer authored a book, “How Progressives Can Win,” which, along with Alinsky’s “Rules for Radicals,” serves as the template for Obama’s campaign to “fundamentally transform” America.

Obama didn’t use the word “transform” in his SOTU, but he did insist that government must “lay a new foundation for long-term economic growth,” under the pretense of “reform,” in order to “give our people the government they deserve.”

“I campaigned on the promise of change, change we can believe in. I know there are many Americans who aren’t sure if they still believe that I can deliver it. I never suggested that change would be easy … and when you try to do big things and make big changes, it stirs passions and controversy.”

And well, it should.

Though Obama’s efforts to nationalize the nation’s health care sector have been temporarily stalled, he has no intention of giving up, announcing that he is redoubling his efforts to expand central government controls over the private sector under cover of “economic crisis.” As White House Chief of Staff Rahm Emanuel said, “Never let a good crisis go to waste.”

Leading up to his SOTU, Obama endeavored to portray himself as a fiscal conservative: “We can’t continue to spend as if deficits don’t have consequences, as if waste doesn’t matter, as if the hard earned tax dollars of the American people can be treated like monopoly money, that’s what we’ve seen time and time again, Washington has become more concerned about the next election than the next generation.”

This is subterfuge.

Obama endeavors to portray himself as a constitutional conservative: “We will lead in the observance of … the rule of law. … Don’t mock the Constitution. Don’t make fun of it. Don’t suggest that it’s not American to abide by what the Founding Fathers set up. It’s worked pretty well for over 200 years.”

This is deception.

Obama endeavors to portray himself as a resolute commander in chief. Regarding Operation Iraqi Freedom he decreed, “Let me say this as plainly as I can: By August 31st, 2010, our combat mission in Iraq will end.” On Operation Enduring Freedom in Afghanistan, he declared, “After 18 months, our troops will begin to come home.” On the treatment of captive terrorists, he says, “I will restore America’s moral standing.” On the Long War with Jihadistan, Obama claims, “The United States is not, and will never be, at war with Islam.”

This is farce.

Obama is a dangerous neophyte in matters of national security, and he shows no signs of improving.

If Republicans really want to defeat Obama’s Leftist agenda, they need to adopt the tried and true conservative message founded on Essential Liberty. Only then can they truly take control of the debate.

And while Virginia Governor Bob McDonnell’s response to Obama’s SOTU address was encouraging, the current crop of Republican leaders continues to play by Democrat rules, attempting to sell a dangerous and debilitating elixir: “We don’t offend the Constitution as bad as they do.”

Bottom line: Republicans must refocus on First Principles and govern accordingly.

Republicans can best distinguish themselves from Democrats by, first and foremost, honoring their sacred oath to “support and defend” our Constitution.

To that end, Obama declared, “If you abide by the law, you should be protected by it.”

True, but on the other hand, if you are not going to abide by the law, you should be impeached.

P.S. If you are going to seat two police officers next to your wife in the gallery, the two who brought down the Ft. Hood jihadi terrorist, you might at least acknowledge them
.
Semper Vigilo, Fortis, Paratus et Fidelis!
Mark Alexander
Publisher, PatriotPost.US

In the nine quarter-century periods since the American republic was founded in 1789, the one with highest economic growth and job creation was the period from 1983 through 2007. Particularly remarkable — there were just four quarters (out of 100) of negative economic growth in that entire interval, says Richard W. Rahn, a Senior Fellow at the Cato Institute and Chairman of the Institute for Global Economic Growth.

• That period of time was characterized by a reduction in government spending from 23.5 percent of gross domestic product (GDP) to 20 percent (the low point was 18.4 percent in 2000), and a reduction in marginal tax rates.
• Despite the reduction in tax rates, tax revenues both in absolute terms and as a percentage of GDP grew in the 1983-2007 period because of the improved work and investment incentives.
• As a result, the deficit fell from 6 percent of GDP in 1983 to just 1.2 percent in 2007.

For many years (until 1983), the Federal Reserve implicitly followed the Taylor Rule (a formula that provides central bankers with information about whether they are creating too much or too little money) to guide monetary policy, which gave the United States both a falling and relatively stable rate of inflation, says Rahn.

During that golden quarter-century, both the presidency and Congress switched parties a couple of times. Thus, it should be politically possible to go back to the policies that gave us the golden quarter. Most people understand that if the government is growing faster than the economy (as it has been for the past two years) disaster ultimately will occur, but if the economy and the private sector grow faster than the government, as they did from 1983-2007, almost everyone can be far better off, says Rahn.

As noted, the golden quarter was characterized by a long-term trend toward lower tax rates. The current Congress and administration have been enacting tax increases and proposing many more, which will only cause more economic misery. Many tax rates, particularly on capital, such as the capital gains tax and corporate income tax, are well above their revenue and welfare-maximizing rates and should be reduced, not increased, says Rahn.

Source: Richard W. Rahn, ” Recouping the golden quarter,” Washington Times, January 27, 2010.

In a speech about “jobs,” Obama refers to tax cuts twice, small business eight times … and himself 132 times.