Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 45)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
Washington, DC (August 1, 2011) Today,Congressman Steve Pearce voted against S. 365, the Budget Control Act Agreement.
“While today’s proposal isn’t the solution we need, it does show that the people are beginning to make their voices heard,” said Pearce. “For years, Washington has tried to spend our way out of debt through tax and borrow bailout schemes. The discussion in Washington this week has shown that those days are drawing to a close. The American people said in November that they want a new direction, and they are successfully holding Congress accountable. Still, the down payment on our national debt that was proposed today was simply not enough.”
“Job creation, not temporary cuts, will be the key to truly solving our national debt problem,” Pearce continued. “We need to reform the burdensome taxes and unnecessary regulations that are preventing small businesses across America from creating the jobs we need. Only by putting Americans back to work can we hope to truly solve our debt crisis.”
While Rep. Pearce has always hoped to avoid default, he will not support a debt limit increase that does not include fundamental, lasting solutions to America’s economic turmoil. In recent weeks, he joined colleagues in the House from both sides of the aisle to pass the “Cut, Cap, and Balance Act of 2011,” and the “Budget Control Act of 2011.”
Hopefully the House of Representatives will tell President Obama his plan will not pass. It is very costly and would not accomplish anything positive. In fact, the White House tells us that this plan will be paid for by the rich and no one will notice at all. Take a look at this video clip from the Cato Institute:
Jagadeesh Gokhale is a senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Policy Options University of Chicago Press (2010).
President Obama hopes that his jobs plan will be passed quickly by Congress. It shouldn’t be passed at all.
The president’s speech centered on two key ideas: additional spending on construction projects and hiring incentives, and a tax cut for low- and middle-class families through an extension and expansion in the temporary payroll tax cut scheduled to expire this year.
The total package is expected to cost about $450 billion — about half the size of the stimulus enacted in 2009. However, a quick look at statistics on domestic investment, trade, and consumption suggests that this new stimulus is not needed. Indeed, it would be a mistake to pass it if the objective is to create sustainable job growth.
Congress should ignore Obama’s repeated calls to pass his domestic policy proposals.
The president linked his spending proposals to the need to put construction workers back to work. These workers are the largest group among those who lost jobs during the 2007-09 recession, initially from the housing-sector bust and later because of a steep decline in investment spending by firms that ditched plans to add to their production capacity. But data from the U.S. Bureau of Economic Analysis shows that both private and total domestic investment spending (mostly the former) are already recovering from the decline they suffered during the recession.
Growth in investment spending, which cratered after the first quarter of 2008, is now back to its prerecession level. That means the lack of progress in reducing the unemployment rate is not because firms are not spending to increase capacity, but because there is a mismatch in jobs available and worker skills. Increasing government spending on additional construction projects is therefore misguided: It will simply slow the change in skills and training that workers must undergo to be successful in a changing economy. We might want to “out-educate, out-invest, and out-innovate the rest of the world,” but doing so by siphoning away resources that private firms could invest, while encouraging a stagnant skill pool, is the wrong direction.
That brings us to the payroll-tax cuts that are intended to stimulate consumption spending. Again, however, BEA data show that private consumption growth is already on the mend. The steep decline in consumption growth during 2008-09 has already been restored.
Consumption growth averaged 1.3 percent per year from 2002 to ’07 and this growth has already recovered back to above 1.0 percent per year since the second quarter of 2009. This is consistent with a recovery in firms’ expectations of sustained growth in demand and should lead to continued recovery in domestic investment spending. Adding a stimulus to consumption spending does not appear justified, except to purchase an insurance policy for Obama’s reelection bid at taxpayer expense.
Foreign trade is the one sector where BEA data show the balance of trade and income has worsened since early 2009. A renewed push to expand trade agreements and markets is the only economically sound element in the president’s speech to Congress on job creation.
Obama said that every dollar of the new spending and tax cuts will be paid for. The question is, who will pay and when? The clear answer is that the election insurance policy the president is demanding will be deficit financed. The only payment mechanisms Obama identified was a one-line exhortation for the super-committee to “do more” and a vague reference to working on Medicare reform.
Finally, cutting payroll taxes but keeping the Social Security and Medicare trust funds whole by transferring IOUs to them shifts the burden of funding entitlements to taxes on capital income. Warren Buffet notwithstanding, taxing capital income is well known to degrade economic incentives to save and invest — a policy contradictory to the president’s objective of creating sustainable job growth. Such a policy may deliver a bang, in terms of jobs, that the president wishes today, but it will demand more bucks and induce more job losses in the future.
Congress should ignore Obama’s repeated calls to pass his domestic policy proposals.
In his address to the joint session of Congress last week, President Barack Obama called for $477 billion in new federal spending, which he said would give hundreds of thousands of disadvantaged young people hope and dignity while giving their low-income parents “ladders out of poverty.” And today, the U.S. Census released its annual poverty report, which declared that 46.2 million persons, or roughly one in seven Americans, were poor in 2010. What President Obama didn’t tell America as he was pleading for more spending–and what the Census Bureau didn’t report–is what it really means to be poor in America.
In a new report, Heritage’s Robert Rector and Rachel Sheffield lay out what the U.S. government’s own facts and figures really say about poverty in the United States. The results might surprise you, especially if your view of poverty is the conventional one, perpetuated by the media–namely, destitute conditions of homelessness and hunger. In reality, though, the living conditions of those defined as poor by the government are much different than that popular image. The following are facts about persons defined as “poor” by the Census Bureau:
80 percent of poor households have air conditioning
Nearly three-fourths have a car or truck, and 31 percent have two or more cars or trucks
Nearly two-thirds have cable or satellite television
Two-thirds have at least one DVD player and 70 percent have a VCR
Half have a personal computer, and one in seven have two or more computers
More than half of poor families with children have a video game system, such as an Xbox or PlayStation
43 percent have Internet access
One-third have a wide-screen plasma or LCD television
One-fourth have a digital video recorder system, such as a TiVo
As for hunger and homelessness, Rector and Sheffield point to 2009 statistics from the U.S. Department of Agriculture showing that 96 percent of poor parents stated that their children were never hungry at any time during the year because they could not afford food, 83 percent of poor families reported having enough food to eat, and over the course of a year, only 4 percent of poor persons become temporarily homeless, with 42 percent of poor households actually owning their own homes. Want an international comparison? The average poor American has more living space than the average Swede or German. You can read even more of those facts in their report, “Understanding Poverty in the United States.”
None of this is to say that the poor have it easy. Sadly, one in 25 will become temporarily homeless during the year, and one in five poor adults will experience temporary food shortages and hunger at some point in a year. But exaggerating the conditions of poverty does not do America any good, as Rector and Sheffield explain:
The poor man who has lost his home or suffers intermittent hunger will find no consolation in the fact that his condition occurs infrequently in American society. His hardships are real and should be an important concern to policymakers. Nonetheless, anti-poverty policy needs to be based on accurate information. Gross exaggeration of the extent and severity of hardships in America will not benefit society, the taxpayers, or the poor.
Those exaggerations about the symptoms of poverty don’t solve the root causes of the problem, either. As Rector and Sheffield write, “Among families with children, the collapse of marriage and the erosion of work ethic are the principal long-term causes of poverty.” In order to truly benefit the poor, they say, welfare policy must require able-bodied recipients to work or prepare for work as a condition of receiving aid. And it should strengthen marriage in low-income communities, rather than ignore and penalize it.
Poverty is a serious problem that requires serious solutions. But policymakers and the public need accurate information about what poverty in the United States really means. Only then can they implement the right policies to help those Americans who are truly in need.
Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:
Obama Calls for Tax Hikes on Job Creators – In Jobs Speech
It was expected that President Obama would rehash and recycle a litany of policies that have no hope of stimulating job creation in his big speech tonight. What comes as a surprise is that he called for offsetting the costs of his sure-to-be-ineffective policies with tax hikes. On job creators.
The President has said himself that tax hikes slow economic growth and deter job creation. That was the justification he gave in December for extending the Bush tax cuts through 2012. It seems he has forgotten what he himself said less than a year ago.
The President called for raising taxes on investors, businesses, and entrepreneurs in his speech. These are the job creators he so desperately needs to help revive the economy. Raising their taxes will reduce the already limited incentives they have to invest and add new workers right now.
This is akin to bailing water into an already-sinking ship.
If Congress foolishly passed the President’s ill-advised plan the tax hikes would be permanent and the jobs policies permanent. The American people would get a permanently enlarged federal government for temporary jobs policies that won’t create any jobs.
Uncertainty is the major factor causing businesses to hold back on new investment and refrain from adding workers. One of the biggest sources of that uncertainty is the President’s never-ending crusade to raise taxes. As long as their taxes might go up, job creators will be hesitant to add new workers.
If the President stopped incessantly demanding higher levies it would relieve some of the uncertainty. That alone won’t cure all that ails the economy, but it would be a big help.
C’mon Mr. President, surprise us in your next major speech by not calling for tax hikes.
– Curtis Dubay
Unsurprisingly, Obama Ignores Energy Exploration as a Solution
Increasing energy supply should have been a no-brainer for President Obama. It’s a policy that can lower energy prices, create jobs and generate hundreds of billions in revenue from more royalties, leases, and rent. And it’s a massive revenue raiser that occurs without raising taxes. Instead, the president used the opportunity to take a jab at oil companies and the “tax loopholes” they receive.
The reality is the economy is weak and steep energy prices will hurt the economic recovery. Despite the fact that oil settled at $89 per barrel, gas prices remain high and the economic pain as a result of higher gas prices spreads far beyond the pump. Higher energy prices also drive up production costs, which must be reflected in product prices, especially for goods reliant on transportation. Since higher prices reduce quantities sold, producers produce less. In turn, this drives wages down and incomes decline.
At least the people of Louisiana have the Saints to watch, because they don’t have jobs. Despite the fact that the administration lifted the official moratorium on deepwater drilling, the molasses-like permitting process is impeding the Gulf’s economic recovery; 20 rigs are in jeopardy of leaving the Gulf.
But it’s not just the Gulf that would benefit from allowing access for energy exploration and creating an efficient regulatory process that allows energy projects to move forward in a timely manner. Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming have all suffered from a slower permitting process would see tremendous economic benefits if companies could explore and drill in a more timely manner. Alaska has 19 billion barrels of oil of its coasts and another 10.4 billion in the Arctic National Wildlife Refuge (ANWR). Increased proven natural gas reserves increased states like Pennsylvania, New York, Texas, Oklahoma, Arkansas and Louisiana has increased regional interest.
Increasing access to oil and natural gas reserves in the United States both onshore and offshore, would help offset rising demand, increase jobs and revenue, and provide the real economic boost our country needs rather than more the same tried-and-failed government spending programs.
Professor Williams explains what’s ahead for Social Security
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Governor Rick Perry got in trouble for calling Social Security a Ponzi scheme and I totally agree with that. This is a series of articles that look at this issue.
This article appeared on Forbes.com on September 11, 2011.
Rick Perry’s recent comparison of Social Security to a Ponzi scheme has resurrected the long-running debate over the solvency of Social Security. Many libertarians and conservatives advocate shifting from the current pay-as-you-go system — in which taxes on today’s workers finance the Social Security checks of today’s retirees — to a system of personal accounts in which each worker’s retirement funds are set aside for his own retirement. One of the key arguments for such a system is that the stock market’s historically high returns would allow the average worker to retire with more money in his pocket than the meager returns the Social Security system now promises (and projections suggest the system may not even deliver on those promises).
The underlying reason this works is that the money in personal accounts would be invested in private sector businesses, which would use them to create new wealth. In contrast, Social Security taxes are used to finance current government spending. But in a blog post last month, Karl Smith argued that the two situations are more similar than they seem:
I think that sometimes lay people get confused and think that a private retirement system implies that people will only be paying in and thus adding to the capital stock. They forget that on the opposite end people will be extracting and thus depleting the capital stock.
Timothy B. Lee is an adjunct scholar at the Cato Institute. He covers tech policy for Ars Technica and blogs at Forbes.com.
The “investment bonus” is only the time between when the money goes in and when it comes out. I wish I could go into more detail, but you actually get the exact same effect from a Social Security trust fund. Less borrowing by the government — and hence a higher capital stock — when money is going in. More borrowing by the government — and hence a lower capital stock — when money is going out.
To unpack this a bit, the Social Security administration was (until last year) taking in tens of billions of dollars more from payroll taxes than it is sending out in Social Security checks. The difference was lent to the Treasury Department to finance other government programs.
Smith’s point is that if the SSA weren’t running a surplus, then the Treasury Department would have had to go to borrow that money from private bond markets instead, which would have meant less money being invested in private-sector wealth creation. Hence, switching to private accounts doesn’t actually increase the amount of money being invested in the private sector, and hence doesn’t produce any new wealth that can be used to pay future retirees.
In theory, this argument makes sense. But it has a couple of practical problems. First, it assumes that a dollar invested in stocks should have the same wealth-creating effect as a dollar invested in bonds. It’s not obvious that this is true. Stocks have historically generated a higher rate of return than bonds, after all, and it’s not crazy to think this reflects the fact that equity investments generate more wealth per dollar than debt investments.
But the more serious problem with the argument is that it implicitly holds other taxes and government spending constant. That is, it assumes that when the SSA lends a dollar to the Treasury, the result is one less dollar of private-sector borrowing rather than one more dollar of government spending or one more dollar of tax cuts.
But this isn’t a reasonable assumption at all. Consider the late 1990s, the only period in my lifetime the federal government has run a surplus. Bill Clinton began bragging that he’d balanced the budget toward the end of fiscal year 1998. And in that year, the federal governmentdid run a slight surplus of $70 billion dollars. But this surplus is the result of adding a $30 billion “on budget” deficit to Social Security’s $100 billion surplus. If Social Security is ignored, the government didn’t reach a surplus until 1999.
If the US had a system of personal accounts in the 1990s, then elected officials couldn’t have plausibly counted the accumulation of funds in peoples’ accounts as part of a federal budget surplus. And so the deficit would have looked worse than it did. It’s impossible to know how that would have affected the budget debates of the 1990s, but it seems reasonable to assume that politicians would have enacted deeper spending cuts and/or larger tax increases to close what was perceived as a substantially larger deficit.
In other words, one way to think about personal accounts is as a mechanism for Congress to exert self-discipline. As long as Social Security surpluses are saved in a single giant lockbox managed by the government, politicians are going to face irresistable temptations to raid it to finance other programs. It’s simply not credible to think the federal government can “save” money by lending it to itself.
Splitting the lockbox up into millions of individual accounts with peoples’ names on them makes that harder to do, because people are going to be much more sensitive about the government pretending the money in their personal accounts really belongs to the government.
And this means that personal accounts are likely to increase the savings rate. Not because Smith’s technical point is wrong, but because switching to personal accounts changes the political dynamics of the budget process. Without the ability to hide deficits behind Social Security surpluses, politicians in the coming decades would face greater pressure to cut spending and/or raise taxes in order to produce budgets that are actually balanced.
Cenk Uygur (host of The Young Turks) filling in for Chris Jansing on MSNBC talks to Dan Mitchell of the Cato institute to compare Reaganomics to Obamanomics.
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What should we do when we are caught in a slow economy? What did Reagan do in 1981? He lowered taxes to stimulate the economy. However, President Obama wants to raise taxes.
When President Obama unveiled his much-hyped American Jobs Act to a joint session of Congress last week, he promised that the increased spending and temporary tax cuts the plan entails would be fully “paid for.” He did not specify in that speech the details of how he would offset the costs of his plan other than he would charge the “super committee” with this responsibility.
This week, he released his own proposals to pay for the plan. To no one’s surprise, the plan would offset the costs of its jobs policies solely with tax hikes and not one penny of spending reductions.
The tax increases the President proposes are the same old hodgepodge of tax hikes he has proposed often since taking office, and they have been rejected by Democratic and Republican Congresses alike each time he’s pushed for them. In the end, the tax hikes would be permanent while the jobs policies temporary; thus, the proposal is really a tax hike plan rather than a jobs plan.
Tax Hike on Job Creators
Almost all of the $447 billion in increased revenue called for by President Obama would come from raising taxes on job creators,[1] the same job creators whom President Obama wants to hire more workers to reduce the unemployment rate.
The plan would raise taxes on job creators by capping the deductions that families and businesses earning more than $250,000 a year could claim. It would reduce the deductions of these families and businesses to the amount they could claim had they only earned enough to qualify for the 28 percent tax bracket instead of the higher tax brackets (33 percent and 35 percent) they face now.
For example, under the current tax code, $100,000 of deductions for a family that pays the 35 percent rate reduces its tax bill by $35,000. Under the plan’s tax hike, this family’s deductions could only reduce its tax bill by $28,000, or what it would have been under the 28 percent rate. The tax hike would be bigger as the family’s deductions increase.
This tax hike would be on top of the 3.8 percent surtax on investment income (passed as part of Obamacare) that these same families and businesses will pay beginning in 2013 and the higher marginal income tax rates they will pay if President Obama gets his way and the Bush tax cuts expire at the end of 2012. If marginal income tax rates rise, the tax increase from limiting deductions would increase as well.
The families that would pay these higher taxes are the investors that the economy needs to provide capital to businesses and entrepreneurs so they can expand and start new operations that would employ new workers. A recent study from President Obama’s own Treasury Department shows that 90 percent of businesses that pay their taxes through the individual income tax code and employ workers would pay the higher taxes under the President’s plan.[2]
This tax hike would negate any benefits of the President’s jobs policies. Capping deductions as President Obama’s plan does would raise the marginal effective tax rate of these important job creators and therefore reduce their incentives to invest and take on new risk—permanently. Less investment and less risk-taking means fewer new jobs created.
Since it is likely President Obama’s job proposals would create few, if any permanent, positions, taken together with the tax hike on job creators, his plan would likely reduce employment in the long term.[3]
Industry Specific Tax Hikes
The rest of the tax hikes in President Obama’s plan specifically target the oil industry and jet manufacturers. He would mostly raise their taxes by limiting their ability to “expense” (or deduct at the time of acquisition) their purchases of capital equipment.
The President’s desire to strip these targeted industries of the ability to deduct their capital purchases faster than current depreciation schedules allow is at odds with his own position on expensing. The President insisted that the 2010 tax deal to extend the Bush tax cuts include 100 percent expensing for all capital purchases for all businesses for one year. This latest jobs bill—which oil and jet tax hikes are supposed to help pay for—includes an extension of that expensing policy.
More troubling is the President’s apparent lack of understanding of the actual impact that his policies would have. He frames the jet tax hike as a hike on the owners of corporate jets, but the burden of his policy would fall on the workers that manufacture the jets. The tax hike would raise the cost of jets, which would reduce the demand for them. Reduced demand would ultimately result in fewer jobs for the blue-collar workers who manufacture the planes.
This is not just theory. In 1990, a 10 percent tax on luxury yachts went into effect. Congress passed the measure assuming that the rich buyers of yachts would pay the burden. But when the price of yachts rose, orders dried up and the yacht-building industry dried up as well. As The New York Times chronicled then, it was the blue-collar workers who lost their jobs and ended up bearing the pain of the tax.[4] The situation was dire enough that Congress repealed the devastating tax in 1993.
Stop Digging
In the Administration’s poorly crafted and contradictory jobs package, the American people get permanent tax hikes that would enlarge the federal government to offset the cost of temporary jobs policies that would not create any jobs. In the long run, the tax hikes in this plan are more likely to destroy more jobs than the jobs policies create.
Unfortunately, President Obama will not consider policies that would actually create jobs by reducing the high level of uncertainty that persists in the economy today. This would include doing things such as:
Fundamental revenue-neutral tax reform that repairs the tax base and lowers marginal tax rates to improve the incentives for income production;
Reducing the crushing amount of regulations coming from various federal government agencies;
Repealing Obamacare and its onerous regulations and taxes;
Repealing the Dodd–Frank financial reform legislation; and
Stopping incessant calls for higher taxes.
American workers do not need policies that will further inhibit job creation and dig deeper the already-deep jobs hole that the President’s policies have created.
Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
Taylor Swift, hot; “Ring of Fire” at the renovated Arkansas Rep, great; “Judgment at Nuremberg” at the Weekend Theater, moving. But the biggest art event in Arkansas this fall has nothing to do with the performing arts: It’s the opening of Crystal Bridges Museum of American Art, Alice Walton and family’s billion-dollar investment in Bentonville.
Even if portraits of George Washington by Gilbert Stuart and Charles Willson Peale don’t make your heart beat faster or bring you to tears, they are part of American history and treasured works of art. And the sweep and beauty of Asher Durand’s “Kindred Spirits” just might make you sob a bit (folks in New York have definitely wept bitter tears over their masterpiece going to Arkansas, Alice Walton having outbid, at $35 million, the Metropolitan Museum of Art for the painting).
The museum won’t be all portraits of significant figures in history, but a broad look at the history of American art, from rare 17th century portraits to the Hudson River School, early 20th century art to contemporary installation pieces. So there will be plenty to see at Crystal Bridges when it opens Nov. 11, 2011, or 11-11-11 (which happens to be Veterans Day) and for years to come. The museum puts Arkansas on the map.
The opening day celebration is sure to be accompanied by much as yet unpublicized but sure to happen hullaballoo. Having no facts, let’s suppose: One of the museum’s acquisitions is a Nick Cave “Soundsuit,” which is just as it sounds: A sculptural costume crafted to make sound when the wearer moves. Naturally, dancers have choreographed performances for the suits, and what better way to tie performance art and the CBMAA collection together than to have dancers in soundsuits swishing and swirling about the spring-fed ponds the museum bridges?
Alice Walton announced she would build the museum in 2006, then expected to be a three-year project. Her vision for the museum continued to grow, and she ditched the planned 1950s cut-off date to expand into contemporary work. The Moshe Safdie-designed complex began to grow too. A rectangle of connected buildings, tucked into a ravine that recalls “Kindred Spirits,” bank the reflecting pools fed by Crystal Springs. Six galleries showcase the art chronologically; one of the bridges contains the restaurant. A library holds manuscripts and other ephemera Walton has collected to support study of the collection, an amphitheater (nicknamed “the turtle” for its shape) will accommodate public gatherings, classrooms will be available for students and studios for artists. Of course, there will be a gift shop. More than three miles of trails crisscross the 120-acre site and they, too, are galleries of sorts, passing through Ozark uplands and wetlands, by cultural features, all dotted with sculpture.
So what’s on the walls? The museum has made periodic announcements of acquisitions, crumbs that Arkansas’s art lovers will follow to Bentonville. Paintings, drawings, sculpture. The work, bought at auction and privately, is by such American masters, besides those already mentioned, as John Singleton Copley, Thomas Eakins, Thomas Moran, Benjamin West, Winslow Homer, John Singer Sargent, Maxfield Parrish, George Wesley Bellows, Marsden Hartley, Norman Rockwell. Romare Bearden. Thomas Hart Benton. Jacob Lawrence. Andrew Wyeth. Ground-breaking modern artists Jackson Pollock, Arshile Gorky and Adolph Gottlieb. Pop artists Andy Warhol, Roy Lichtenstein, Marisol and Claes Oldenburg. Hyperrealist Chuck Close. Silhouette cutting artist Kara Walker. Contemporaries we won’t have to travel to the coasts to see: Sculptor Karen LaMonte. Installation artists Jenny Holzer and Devorah Sperber. Weird naturalists Walton Ford and Tom Uttech. Social commentator Kerry James Marshall. You get the picture.
Walton has collected work by Arkansas artists as well — Carroll Cloar, George Dombek, Pat Musick, Doug Stowe. If there’s not sculpture by Anita Huffington, I’d be surprised.
All of this is richly supported by the Walton Family Foundation, which announced a staggering $800 million contribution to the endowment last spring, the largest gift ever made to an American museum at one time (according to the Wall Street Journal) and a sum that puts the museum in the big leagues. (The Metropolitan Museum of Art has a billion-dollar endowment, but it’s been around awhile.) Northwest Arkansas businesses are making donations to the museum as well.
Admission to Crystal Bridges is free, thanks, the museum says, to a $20 million contribution by Walmart. Memberships (whose costs range from $35 for students to $5,000 for benefactors) bring certain perks, including free admission to special exhibits and store discounts. The first 3,000 to buy memberships were rewarded with invitations to preview the museum Nov. 9; the museum will be open around the clock to accommodate them. Museum hours are still to be determined.
Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 44)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
WASHINGTON, August 1, 2011 – Rep. Scott Garrett (R-NJ), Vice Chairman of the House Budget Committee and Chairman of the Budget and Spending Task Force for the Republican Study Committee (RSC), issued the following statement tonight after voting against the agreement to raise the debt ceiling:
“While a step in the right direction, this is hardly the resolution I was hoping to come out of this process. The American people wanted to see us come up with an actual solution to address our deficit and debt crisis, not another ‘deal’ rushed through Congress at the last minute. Aside from an insufficient amount of spending cuts and the threat of tax hikes on the American people, what is most unfortunate about this bill is the fact that it doesn’t address the exploding costs of our entitlement programs, which are by far the biggest threat to our credit rating.
“Above all else, I am most disappointed in the lack of commitment on the part of negotiators to seeing that a balanced budget amendment was sent to the states for ratification. No matter how much spending we cut, no matter how many blue ribbon commissions we form, a balanced budget amendment is the only solution that will resolve our long-term deficit and debt problem. The American people expected more of us—it’s regrettable we put off the tough decisions once again.”
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen.
For the past 7 years Maureen Ramsey has had to buy food and clothes for her family out of a government handout. For the whole of that time, her husband, Steve, hasn’t had a job. Each week he collects what’s known in Britain as Social Security. The government looks after him, his wife and their children. But accepting welfare payments means accepting the rules of those who hand them out.
Mrs. Ramsey: My opinion, anyway you feel as they own you. You know, there is no other way of putting it. Say I got a job tomorrow, because I needed something, well I know that means I’ve got to go down there and report it. Because I couldn’t go into the job because you’d be looking over your shoulder thinking well the Social Security is coming in. And I’m going to be done for it. It’s just hopeless, you can’t fight against that.
Mr. Ramsey: The jobs are out there you only come up with about 45 pounds a week. And you need a doctors stamp over there. You see, you finish up with about 29 pound. So what good is it working? You still get the same thing, you know what I mean? I can’t make any sense of it.
Friedman: Of course, he’s quite right. It may not pay to get a job now. That’s not his fault and I don’t blame him. He’s acting sensibly and intelligently for his own interest and the interest of his family. It’s the fault of the system which takes away the incentive from him to get a job.
But suppose you were cruel and simply took away the welfare overnight. Cut it off. What would happen? He would find a job. What kind of a job? I don’t know. It might not be a very nice job. It might not be a very attractive job. But at some wage, at some level of pay, there will always be a job which he could get for himself. It might be also that he would be driven to rely on some private charity. He might have to get soup kitchen help or the equivalent. Again, I’m not saying that’s desirable or nice or a good thing it isn’t, but as a matter of actual fact as to what would happen, there is little doubt that he would find some way to earn a living.
The American government is trying to break the welfare trend. These people were unemployed. They are now being trained at the taxpayers expense. It may or may not lead to a real job.
Lawrence Davenport: Here we have a vast national welfare system which is diametrically opposed to everything that America believes in. Because America was founded on a work ethic, has practiced a work ethic, and it’s said this is what we want everybody to do. An opportunity to hold a job in America.
Friedman: Everyone here has to clock in and do a full days work. It’s an attempt to make it seem like a real job.
Lawrence Davenport: We’re saying a job is a part of the American way of life and we’re going to help you find a job. So that you can get a piece of the pie. You can pay taxes, you can become a part of that American dream.
Friedman: But the dream isn’t working. Schemes like this run under the government’s Comprehensive Education and Training Act (CETA) have a high drop out rate and many trainees end up back where they began, on welfare.
The men and women who administer CETA and similar programs, the officials of the Department of Health, Education and Welfare are dedicated people. Their motives are good. Their achievements are not.
The results of these programs have been disappointing. Why? I believe that the basic reason is because it is very hard to achieve good objectives through bad means. And the means we have been using are bad in two very different respects.
In the first place, all of these programs involve some people spending other people’s money for objectives that are determined by still a third group of people. Nobody spends somebody else’s money as carefully as he spends his own. Nobody has the same dedication to achieving somebody else’s objectives that he displays when he pursues his own.
Beyond this, the programs have a insidious effect on the moral fiber of both the people who administer the programs and the people who are supposedly benefiting from it. For the people who administer it, it instills in them a feeling of almost Godlike power. For the people who are supposedly benefiting it instills a feeling of childlike dependence. Their capacity for personal decision making atrophies. The result is that the programs involved are misuse of money, they do not achieve the objectives which it was their intention to achieve. But far more important than this, they tend to rot away the very fabric that holds a decent society together.
If you think that’s overstating the case, look what ATW found when it made a special investigation into the spending of the vast funds it administers.
Public Health Service worker: We just got the plan from the Public Health Service on reducing unnecessary beds.
Friedman: In these reels of tape that record every payment made, every recipient, they found evidence that a staggering $7.5 billion had been lost by fraud, waste and abuse in one year.
Doctors, building contractors, hospitals, schools, welfare recipients, everyone had been fraudulently dipping into the pot. And the investigation isn’t over yet.
The inevitable consequence of having a huge pot of taxpayers money is that all of us want to get our hands in it. You can be sure that we’ll all be able to find very good reasons why we should be the ones to spend somebody else’s money.
Somebody or other put up a good case for spending taxpayers money to subsidize rents in New York City, including the rents of these apartments. The people who occupy these apartments pay something like $200 a month less than the market rent. And that subsidy comes out of the taxes of people, most of whom are much poorer than the people who live here. It’s not unusual for this sort of thing to happen when government tries to do good with our money.
Look at what happened in Chicago. For most visitors, the immediate impression is of a rich, prosperous, bustling city. But like every large city in America, it has its problem areas. Over crowded slums breeding poverty and crime.
After WWII, one such area developed in Hyde Park. In the 50’s, plans were drawn up to pull down large areas of slum buildings and to rebuild using government funds under an urban renewal program. It was to be a show project replacing a blighted area with an integrated community. Who controlled the spending of that government money? It was in fact, my own University of Chicago which felt it’s very existence threatened by the spread of urban blight and crime. Government money was used to tear down an area that contained many small shops as well as families of low income. Once the area was cleared, private money rebuilt it with middle class apartments, townhouses and shopping complexes. The blight had been cleared here, but only to be shifted elsewhere.
Joe Gardner: In may instances, when government administers large grants, a lot of those funds don’t wind up directly serving the people and achieving the objectives that were the intent of the programs. Because the grant has too feed that large government bureaucracy.
The details surrounding the $535 million government loan to Solyndra – the now-bankrupt solar energy company that had been the green apple of the president’s eye – are still emerging. It remains to be seen whether or not the Obama administration broke any laws when it pushed the loan out the door despite obvious problems with the company’s finances.
At the very least, the administration is guilty of wasting taxpayer money. In that regard, it’s no different than all the other administrations that have tried to tinker with energy markets. When the dust settles, Solyndra will take its place alongside other infamous federal energy boondoggles, including the Synthetic Fuels Corporation, the Clinch River Breeder Reactor, and the Superconducting Super Collider. (All of these and more are discussed in a Cato essay on federal energy subsidies.)
Congressional Republicans are salivating over the prospects of a scandal involving a key initiative of the administration. But Republicans should be careful when casting stones given their past and present support for energy subsidies. (Note to investigative reporters: Republican [and Democratic] governors like to hand out subsidies to businesses, which often backfire on taxpayers. I’d know.)
As the political circus over the Solyndra loan unfolds, let’s not lose sight of the fact that the more important question is whether taxpayers should be forced to subsidize energy companies to begin with. The Cato essay argues that they shouldn’t:
The private sector is entirely capable of performing research into coal, nuclear, solar, and alternative energy sources for itself. Businesses will fund new technologies when there is a reasonable chance of commercial success, as they do in every other private industry. Federal subsidies may even be actively damaging to our energy future by steering markets in the wrong direction, away from the best long-term energy solutions…
Policymakers often make grandiose promises, such as proposing to make America ‘energy independent’ or to convert the nation to a ‘green economy.’ Those visions don’t make any sense, but even if they did history shows that the Department of Energy would be incapable of putting them into place with any degree of competence. Federal energy schemes are often poorly managed and generate huge cost overruns, or they aim at objectives that make little economic sense[.]
The Daily Hatch 