I have a great article below from the Cato Institute that refutes this claim. Automation does not hurt employment in the long run. I read this incorrect claim all the time.
Here is a portion of interview by NBC’s Ann Curry with President Obama:
Q: Why, at a time of record profits, have you been unable to convince businesses to hire more people Mr. President?
A: [….] the other thing that happened, though, and this goes to the point you were just making: there are some structural issues with our economy, where a lot of businesses have learned to be a lot more efficient with a lot fewer workers. You see it when you go to a bank and there’s an ATM, you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.
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President Obama blames America’s current unemployment problem on… automation. ATMs and airport kiosks are singled out.
These words could only be uttered by someone who knows very little about economics or the history of human progress. In fact, they could only be uttered by someone who has never reflected on this question before in his life. Because if you reflect for one moment, you come up with this glaringly obvious counterfactual: we use a lot more labor-saving technology today than in previous generations, and yet we also employ far more people. Therefore, increased automation does not lead to decreased national employment.
If you do more than just think for a second — if you read an economic history book, for instance — you discover that increased automation doesn’t even necessarily lead to decreased employment in the industry being automated! The classic example is the 19th century British textile industry. The so-called “Luddites” smashed automated looms fearing that they would lead to rampant unemployment in their industry. But, as the new technology proliferated, textile industry employment rose. Among other reasons, increased efficiency drastically lowered the prices of textile goods, that shot demand through the roof, and to meet the new demand new workers were required to operate and maintain the new machinery.
There are other examples, of course, and the president will save the American people a great deal of hardship, and himself further embarrassment, if he familiarizes himself with them. Here’s a good brief introduction from the British Secretary of State… under Margaret Thatcher.
Pele as can be expected came back to play with Brazil in the 1962 World Cup which was played in Chile. This time however Pele was much more known to the fans as well as opposing players; who were not really all that eager to see him score another six goals or perhaps more in this world cup. Brazil were defending champions with basically the same players which won the world cup in 58 and who despite the passage of four years were still relatively young. All of which making it easy to see why a second world cup for Brazil in as many tournaments was not out of the realms of realistic possibilities. Specially since there were no other teams which were really strong enough to challenge them. Germany going through a rebuilding period while Italy still did not have the sort of team which could aspire to recapture their glory days of the 30s. Uruguay pretty much being but a shadow of their former selves.
The world cup known as Chile 62 however become a very defensive affair as teams were no longer willing to score as many as three goals or more in loosing efforts as had been the case in Switzerland 54 and Sweden 58. Teams became more eager to hold on to their leads once they had them and not risk them by going forward for more goals. This making most teams play with four defenders and only three forwards where before it had been with two defenders and five forwards.
Brazil for its part got off to what looking back might have been considered a good start in beating Mexico by 2-0 with Pele scoring Brazil’s first goal yet despite this victory; Brazil was severely criticized with much of the blame falling not only on their performance but on Pele. This despite Pele’s having scored one of Brazil’s two goals. This perhaps allowing Pele to see for himself what Mazola had experienced four years earlier when despite having scored two goals in Brazil’s first match; still had people saying he should not be on Brazil’s team. It being a case that Brazilian fans in those days were used to seeing Brazil beat Mexico by much more goals than only two. Brazil, after all had beaten Mexico by 5-0 in Brazil 50 and by 4-0 in Switzerland 54. All of which standing to their reason that a defending world champion should be able to beat Mexico, once again by at least as wide a margin as their teams in the past had done if not by a wider one.
Brazil’s next game came against Czechoslovakia. This a match which ended in a 0-0 draw and with even more criticism aimed at Brazil by their fans and media back home. It was also in this match that Pele left the field injured not to return for the rest of the tournament. Pele had not even been touched by any of Czechoslovakia’s players yet despite this managed to do damage on himself which would take him out of the remainder of the world cup.
For my part, I being skeptical about almost everything, wonder if Pele’s injury was such that he could not have played Brazil’s next game against Spain. Pele after all had not broken anything and had not even been fouled. Was it perhaps an attempt to try another player? Pele had not really played all that well in Brazil’s first two matches or such it was perceived by the fans and the media back home. So I often wonder if perhaps Brazil’s trainer did not exaggerate the gravity of Pele’s injury in order to try another player in his place like he had done with Pele in Mazola’s place four years earlier. It being Amarildo who took Pele’s place against Spain in a game which though not an absolute must win game for Brazil; was one in which they would have to do better than they had in their first two matches. This if perhaps not to qualify, at least to demonstrate to their fans that they were still a team capable of producing great football.
The game started with Spain taking a 1-0 lead when Adelardo scored 35 minutes in to the game. Spain would even take a 1-0 lead in to the second half. This something which had not happened in a very long that that Brazil ended the first half behind on the scoreboard. Brazil at this point even finding themselves in danger of being eliminated in the first round. This being the case that Spain with a win would have had four points which would have put them first in the group. Brazil with a loss would have had three points which would leave them depending on what Mexico (who was already out of the competition) could do against Czechoslovakia. Naturally a Czech victory or even a tie would have left Brazil out had they lost.
All however proved to be academic, as Brazil came back in the second half to win the game by two goals to one with both goals being scored by Amarildo; who just happened to be the man playing in Pele’s place. Obviously Pele’s replacement was doing his duty so I wonder if Pele would have been able to return to the starting team even if he had been healthy or if his injury was such that it was the real reason he was kept out of the starting lineup.
Amarildo had played well against Spain, this there was no doubts about and specially in a world cup in which defensive play was the order of the day unlike it had been in the last two previous world cups. Spain, in fact having a strong team back then which two years later went on to win the European nations cup.
Brazil went on to win their next two matches with relative ease. First against England by 3-1. This in a game which Garrincha scored two truly amazing goals. First one off a header and the next one of a free kick which could not have been better placed. Brazil’s other goal being scored by Vava, who continued where he left off in Sweden 58. Brazil’s next win came in the semifinals against the home team, Chile whom they defeated by a score of 4-2 with once again; Garrincha and Vava doing the scoring for Brazil. It being Garrincha who scored Brazil’s first two while Vava scored Brazil’s third and fourth.
Brazil was clearly playing well and was in top form and all without Pele. It was a case of this team being of such a high quality that even the absence of Pele did not disturb anything. Apparently Amarildo had been more than capable of filling the void left by Pele while the rest by just keeping up their level allowed Brazil to easily get in to the final. Of course, one could always say that this world cup did not really have very strong teams and those which were in fact solid such as the Soviet Union (winner of the 1960 European Championship) and Hungary did not really live up to expectations; apart the fact that Brazil did not have to face them anyway. Brazil was in the finals however and to their credit deservedly so and all without the man who many would later call the best player of all time.
In the finals Brazil met Czechoslovakia for the second time in the tournament yet unlike in their first match; this one could not end in a draw. Czechoslovakia, for its part like Sweden four years earlier also scored the first goal though not as early in the match as Sweden. Czechoslovakia in fact having to wait till the 15th minute of the game when Masopust slipped past Brazil’s defense to give his team a 1-0 lead. Brazil however being the solid team they were did not take long to reply. Brazil in fact having to wait but two minutes till Amarildo (Pele’s replacement) scored to level matters at one a piece. Amarildo, scoring a brilliant goal from a very tight angle which perhaps Czechoslovakia’s goalkeeper; Schroijf should have saved yet the score none the less was tied at one all.
Czechoslovakia for what concerned them, were playing well and went in to the half time break tied at one though it is my opinion that they perhaps celebrated too much after scoring. This allowing Brazil to get back in to the game after only two minutes of having gone down by a goal to nil. Czechoslovakia had its chances in the first period and had it not been for their lack of concentration after scoring and Schroijf’s error perhaps would have gone in to the half time break with a one goal lead or perhaps a two goal lead. This if they had continued with the solid play which had gotten them to the final in the first place.
Brazil however regrouped at the half and came out strong with Zito scoring his first world cup goal and Brazil’s second in the final to put them up by 2-1. Brazil perhaps was not dominating as strongly as they had in 58 yet were definitely in the drivers seat. It being in the 78th minute of the game that Garrincha sent up a high ball which in all honesty should not have given Czech goalkeeper, Schroijf any problems what so ever yet he somehow managed to drop it. The ball falling straight in to the path of the ever opportunistic Vava, who scored his first goal of the match and Brazil’s third to make the score 3-1; which is how it would end.
This last goal making Vava the first player to score in two finals. Brazil had won the world cup and became just the second team, after Italy to win two in a row and to a certain extent Pele had picked up his second world cup win though in all truth, as I have clearly pointed out; he hardly played. Naturally, to many at the time this did not really matter as Pele was a man who at the age of 21 had already won two world cups even if the second one was just for being on the team and little else. This perhaps making it possible for Argentina to say that Pasarella won two world cups with Argentina, who as a matter of fact only played in their first game against South Korea but I ask is this enough to say he is a double world champion? I would go one step further and ask if Brazil had beaten France in 98 then could Ronaldo claim to have won three world cups as well since he was on their world cup winning team in 94 though did not play at all? This being a matter of interpretation of course.
As an added comment, I would like to say that I feel it is sad that Amarildo did not really get the credit he earned for his performance in Chile 62. It being Amarildo, who to a certain extent with his two goals against Spain saved Brazil from the humiliation of being eliminated in the first round. Amarildo even scoring in the final when Brazil was loosing by 1-0 yet despite his efforts which were important in Brazil’s second world cup win, is rarely if ever mentioned amongst the great players of all time though he undoubtedly was.
My name is Gianni Truvianni, author of many an article to be found on the internet along with the book “New York’s Opera Society”. My works also include the books “What Should Not Matter”, “Love Your Sister” and several others which still remain unpublished though I am presently looking to change this.
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 16)
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.
Congressman Paul Broun, M.D. (GA-10) today released the following statement on his vote against the Republican Budget Control Act, which passed the House of Representatives 218 to 210 votes:
“I cannot in good conscience vote for a bill that puts the future of my grandchildren and of generations to come in jeopardy. While I respect my Republican colleagues’ efforts to come up with a compromise, the people in the 10th Congressional District of Georgia did not send me to Washington to follow the herd. They sent me here to protect their liberty and to fundamentally change the way our federal government spends their money. I do support a Balanced Budget Amendment, but I do not support raising the debt ceiling and allowing President Obama to put more debt on the backs of the American people. Congress needs to first acknowledge that we have lost all control of our fiscal house, and then we need to focus on finding a real solution for paying down the national debt.”
Total Welfare Spending Is Rising Despite Attempts at Reform
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
Total means-tested welfare spending (cash, food, housing, medical care, and social services for the poor) has increased 17-fold since the beginning of Lyndon Johnson’s War on Poverty in 1964. Though the current trend is unsustainable, the Obama Administration plans to increase future welfare spending rather than enact true policy reforms.
WELFARE SPENDING IN INFLATION-ADJUSTED DOLLARS (2010)
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Source: Heritage Foundation calculations based on data from current and previous White House Office of Management and Budget documents and other official government sources.
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Authors
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor
Science Matters: Former supermodel Kathy Ireland tells Mike Huckabee about how she became pro-life after reading what the science books have to say.
My good friend Dr. Kevin R. Henke is a scientist and also an atheistic evolutionist. I had a lot of discussions with Kevin over religious views. I remember going over John 7:17 with him one day. It says:
John 7:17 (Amplified Bible)
17If any man desires to do His will (God’s pleasure), he will know (have the needed illumination to recognize, and can tell for himself) whether the teaching is from God or whether I am speaking from Myself and of My own accord and on My own authority.
I challenged Kevin to read a chapter a day of the Book of John and pray to God and ask God, “Dear God, if you are there then reveal yourself to me, and I pledge to serve you the rest of my life.”
Kevin did that and he even wrote down the thoughts that came to his mind and sent it to me and these thoughts filled a notebook.
Kevin did not become a Christian, but I am still praying for him. I do respect Kevin because he is an honest man. Interestingly enough he told me that he was pro-life because the unborn baby has all the genetic code at the time of conception that they will have for the rest of their life. Below are some other comments by other scientists:
Dr. Hymie Gordon (Mayo Clinic): “By all criteria of modern molecular biology, life is present from the moment of conception.”
Dr. Micheline Matthews-Roth (Harvard University Medical School): “It is scientifically correct to say that an individual human life begins at conception.”
Dr. Alfred Bongioanni (University of Pennsylvania): “I have learned from my earliest medical education that human life begins at the time of conception.”
Dr. Jerome LeJeune, “the Father of Modern Genetics” (University of Descartes, Paris): “To accept the fact that after fertilization has taken place a new human has come into being is no longer a matter of taste or opinion . . . it is plain experimental evidence.”
Back on April 27, 2009 Fox News ran a story by Hollie McKay(“Supermodel Kathy Ireland Lashes Out Against Pro Choice,”) on Jill Ireland.
It’s no secret that the majority of Hollywood stars are strong advocates for a woman’s right to choose whether or not she wants to terminate a pregnancy, however former “Sports Illustrated” supermodel-turned-entrepreneur-turned-author Kathy Ireland has gone against the grain of the glitterati and spoken out against abortion.
“My entire life I was pro-choice — who was I to tell another woman what she could or couldn’t do with her body? But when I was 18, I became a Christian and I dove into the medical books, I dove into science,” Ireland told Tarts while promoting her insightful new book “Real Solutions for Busy Mom: Your Guide to Success and Sanity.”
“What I read was astounding and I learned that at the moment of conception a new life comes into being. The complete genetic blueprint is there, the DNA is determined, the blood type is determined, the sex is determined, the unique set of fingerprints that nobody has had or ever will have is already there.”
However Ireland admitted that she did everything she could to avoid becoming a believer in pro-life.
“I called Planned Parenthood and begged them to give me their best argument and all they could come up with that it is really just a clump of cells and if you get it early enough it doesn’t even look like a baby. Well, we’re all clumps of cells and the unborn does not look like a baby the same way the baby does not look like a teenager, a teenager does not look like a senior citizen. That unborn baby looks exactly the way human beings are supposed to look at that stage of development. It doesn’t suddenly become a human being at a certain point in time,” Ireland argued. “I’ve also asked leading scientists across our country to please show me some shred of evidence that the unborn is not a human being. I didn’t want to be pro-life, but this is not a woman’s rights issue but a human rights issue.”
Ernest Istook at the Saint Paul Tea Party Rally 4/16/2011 Part 1
Ernest Istook, US Congressman, Heritage Foundation, http://www.heritage.org, spoke at the Saint Paul Tea Party Rally 4/16/2011. Hosted by North Star Tea Party Patriots, and Sue Jeffers.
I love going to the Heritage Foundation website for articles like this:
Heritage’s experts watched President Barack Obama’s debt reduction and tax increase proposal. Here are their immediate reactions:
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Who Really Is Paying Obama’s Latest Tax Hikes
Over half of President Obama’s deficit reduction plan announced today would come from tax increases – to the tune of $1.5 trillion – on families and businesses earning over $250,000 a year.
His plan singles out both industries and individuals, such as oil companies and corporate-jet owners. This is a worn out, faulty proposal for a tax system that needs major restructuring rather than a few fine-sounding flourishes. Taxing those who Obama calls the wealthiest of Americans won’t solve our deficit problem – and it certainly won’t solve our spending problem. The top 10 percent of earners in America already pay about 70 percent of federal income taxes. And adopting the flawed deficit reduction proposal of taxing the wealthiest Americans would require mathematically unfeasible tax rates.
How ironic for this speech – specifically its tax hikes component – to come on the heels of Obama’s speech on job creation? Never mind the President’s flawed assumption that the federal government can and should be in the business of creating jobs. But to propose taxing further the very Americans who should be the ones creating jobs in our economy flies in the face of logic. Rep. Paul Ryan (R-WI) summed up the situation well over the weekend:
If you tax job creators more, you get less job creation. If you tax investment more, you get less investment.”
Mr. President, America needs more investment and it needs more job creation. It needs Washington to get out of the way.
Emily Goff
This is not Tax Reform Mr. President
President Obama’s says he wants to debt committee to reform the tax code but raise taxes by $1.5 trillion at the same time. That isn’t tax reform. It is dressing up tax hikes in tax reform’s robes.
Tax Reform entails fixing the tax base so it does not favor certain economic behaviors or deter others. This is done by closing so-called “loopholes.” The revenue raised from eliminating those credits, deductions, and exemptions is then used to lower income tax rates and eliminate taxation on saving and investing to encourage more productive activity. The new and improved tax code should raise the same amount of revenue as the old code.
The new revenue would come from allowing the Bush tax cuts to expire for families and small businesses earning more than $250,000 a year, limiting deductions their deductions, and the President’s new “Buffett Rule” that would further raise these job creator’s taxes in some way which the President has not defined. He also wants to eliminate deductions, credits, and exemptions. This is a war the President is waging on success – as if so-called fat cats were the root of our spending problems.
The $1.5 trillion in higher taxes would grow the already bloated federal government by that amount. Congress never uses tax hikes for deficit reduction. It always uses the extra revenue to pay for new programs.
The brunt of these tax hikes would fall on job creators – businesses that employ workers and investors – that the economy desperately needs to start adding new jobs. Raising their taxes will only cause them to cut further back on their hiring plans or scrap them altogether. And without seriously tackling spending, taxes will have to rise perpetually.
The economy and the American people cannot afford the President’s government-growing, job-killing conception of tax reform.
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 15)
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.
“The Chairman of the Joint Chiefs of Staff identified our deficit crisis as America’s greatest threat, and this measure does not go far enough in holding down the growth in our national debt,” said Rep. Cliff Stearns (R-Sixth). “Without significant spending cuts and reforms to essential programs, we are facing fiscal insolvency and the collapse of essential programs such as Social Security and Medicare.”
Stearns today opposed passage of S. 365, the Budget Control Act, which would increase the debt limit by $2.4 trillion. “The final measure cuts less spending in the first year than the Boehner plan; the Boehner plan cut $22 billion compared with as little as $6 billion in this measure,” added Stearns. “I supported the Boehner plan to move us forward in reaching the $4 trillion in savings needed to avoid a ratings downgrade. This bill is $1.6 trillion short of what is needed to prevent a downgrade.”
Concluded Stearns, “This measure also makes it easier for the President to increase the debt limit in the future. In addition, the language for a balanced budget amendment is less precise and only requires a vote in the House and Senate instead of its actual passage by both that would result in it being sent to the states for ratification. Another concern was that this final plan sets discretionary spending for fiscal year 2012 at $24 billion higher than in the Ryan Budget Resolution, which I supported.”
President Obama and other politicians are advocating higher taxes, with a particular emphasis on class-warfare taxes targeting the so-called rich. This Center for Freedom and Prosperity Foundation video explains why fiscal policy based on hate and envy is fundamentally misguided. For more information please visit our web page: www.freedomandprosperity.org.
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President Obama really does stick to his view that the wealthy need to rescue the rest of us on everything, but that view does not work. There are not enough rich people out there to solve our budget woes. Actually what has happened in the past when the government wants more money it starts off going after the rich, but when that does not bring in much money then the only alternative is to go after the rest of us.
Max Brantley argues on the Arkansas Times Blog that most of us are taxed too much so we must tax the rich more but that will not come close to bringing us to a balanced budget. However, it will destroy job creation.
Like the villain in a horror movie, the many-lived millionaire tax is once again back from the dead. Senate Majority Leader Harry Reid (D–NV) dusted off this economically frightening tax hike that has repeatedly failed to pass Congress to pay for President Obama’s jobs plan (American Jobs Act of 2011, S. 1660) after Senate Democrats rejected the tax hikes the President proposed to pay for his bill.
This is the third time in the past two years that congressional Democrats have proposed a millionaire tax. The first time it was a 5.4 percent surtax to pay for health care reform. The second time was in “the People’s Budget” released by the Congressional Progressive Caucus. It failed to garner much support either time.
If the third time is the charm for the millionaire tax to become law, the economy would suffer lasting damage and reduced international competitiveness. And American workers would bear the brunt of the pain.
Permanent Tax Hike on Job Creators
The millionaire’s tax would be a 5.6 percent surtax on incomes of married filers earning over $1 million starting on January 1, 2013. The surtax would kick in at $500,000 for individual filers, so it cannot be called a true millionaire tax. It would take the place of several tax hikes President Obama proposed to pay for his jobs plan, the biggest of which was capping the deductions of high-income earners.[1] It would raise approximately $450 billion over 10 years.
The millionaire surtax is contradictory to the stated aim of the President’s jobs plan, which is to create jobs. The tax hike would fall squarely on the very job creators that the President wants to add jobs and reduce their incentive to add new workers.
Taxpayers earning more than $1 million per year are investors and businesses that are directly responsible for creating jobs. Investors provide the capital to existing businesses and startups so they can expand and add new workers. Raising their taxes would deprive them of resources they could invest in promising businesses that are looking to add employees. Raising their tax rate would deter them from taking the risk to invest.
The President and his allies say often that only a few businesses would pay higher taxes under their soak-the-rich policies. But a recent study from President Obama’s own Treasury Department shows that 50 percent of the income earned by businesses that pay their taxes through the individual income tax code and employ workers would pay the millionaire tax.[2]
The millionaire tax is a direct blow to the pass-through businesses that employ the most workers. Higher taxes would deprive these important job creators of resources they could use to add new workers or pay their workers higher wages, and it would reduce their incentive for adding new workers. These impediments to economic growth and job creation would plague the economy permanently, while the questionable jobs policies the millionaire tax would pay for are temporary.
More Job Destruction
The millionaire surtax would also apply to capital gains and dividends. This would be yet another surtax on investment income, as Obamacare already applied an extra 3.8 percent tax. Combined with that surtax and the President’s policy of increasing the capital gains and dividends rate to 20 percent from the current 15 percent rate, the millionaire surtax would raise the total rate to 29.4 percent—a 96 percent increase over the current rate.
Higher capital gains taxes would further impede job creation because it would increase the cost of new capital for businesses looking to grow or replace worn-out capital. This would make it more expensive for businesses to buy the equipment, tools, and other things they need to employ more workers and make their current workers more productive. The end result would be fewer jobs and lower wages for American workers.
The President frequently calls his tax hike plans “tax reform.” But one of the goals of tax reform is to lower the cost of capital to improve economic growth and enhance job creation. Higher taxes on capital are opposed to the aims of true tax reform.
Highest Tax Rates in the World
The U.S. is generally regarded as a low-tax nation compared to other industrialized countries. This is one of the main factors that has allowed the U.S. economy to grow at a faster rate than other developed countries for decades and has made it the envy of the world. If the millionaire surtax becomes law, the U.S. would no longer enjoy the advantages of being a low-tax country.
After adding state and local income tax rates, the 39.6 percent top federal income tax rate long fought for by President Obama and his congressional allies, the higher Medicare surtax from Obamacare, and the new millionaire surtax, the average top marginal income tax rate in the U.S. would be 55 percent. A rate at that level would leave the average U.S. rate as the third highest among developed nations in the 30-member Organization for Economic Cooperation and Development (OECD). It would be behind only Sweden and Denmark.
Taxpayers in states with above-average top marginal income tax rates would compare even worse. In fact, taxpayers in Oregon, Hawaii, and New York would pay the highest tax rates in the developed world. Taxpayers in California, Iowa, New Jersey, Vermont, Maine, Maryland, Minnesota, Idaho, North Carolina, Wisconsin, and Ohio would pay higher rates than every developed country except Denmark.
Taxpayers in the nine states without state income taxes—and therefore with the lowest income tax rates in the U.S.—would still be taxed at a higher rate than in all but seven other developed countries. Their rates would be higher than traditional high-tax countries such as France, Germany, Italy, and Spain.
In the global race for investment and capital, the millionaire tax would make almost every other developed country more competitive than the U.S.
Real Reform
The millionaire tax would end up costing the U.S. economy more jobs than the President’s jobs plan it is supposed to pay for would ever create. It would ruin American competitiveness among other developed countries.
The President and his congressional allies are better off spending their time pursuing true tax reform, which would repair the tax base and lower marginal tax rates. That would mean dropping their class warfare policies for the good of the economy and the country.
Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
Discussing the troubles facing social security, with Mark Walsh, Left Jab host and Dan Mitchell, Cato Institute.
Social Security is a Ponzi scheme (Part 4)
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.
So, President Obama believes that Republican leaders are “pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall.”
To which one responds, “If only!”
There is no doubt that Social Security desperately needs reform. Social Security is already running a temporary deficit, and that deficit will turn permanent in just five years. In theory, the Social Security Trust Fund will pay benefits until 2037. That’s not much comfort to today’s 35-year-olds, who will face a 27 percent cut in benefits unless the program is reformed before they retire. But even that figure is misleading, because the trust fund contains no actual assets. The government bonds it holds are simply IOUs, a measure of how much money the government owes the system. It says nothing about where the government will get the $2.6 trillion to pay off those IOUs.
Even if Congress can find a way to redeem the bonds, the trust-fund surplus will be completely exhausted by 2037. At that point, Social Security will have to rely solely on revenue from the payroll tax — and that won’t be sufficient to pay all the promised benefits. Overall, the amount the system has promised beyond what it can actually pay now totals $18.7 trillion.
Moreover, Social Security taxes are already so high, relative to benefits, that Social Security has simply become a bad deal for younger workers, providing a below-market rate of return. In fact, many young workers will end up paying more in taxes than they receive in benefits. And most important, workers have no ownership of their benefits. This means that they are left totally dependent on the goodwill of 535 politicians to determine what they’ll receive in retirement.
Benefits are not inheritable, and the program is a barrier to wealth accumulation. Lower-income families, African-Americans, and working women suffer disproportionately.
But Republican leaders, battered by the failure of President Bush’s reform initiative and years of Democratic demagoguery, show no signs of venturing back into this issue. In fact, the only senior Republican willing to support personal accounts these days appears to be Rep. Paul Ryan, who has included in his “roadmap” a plan to allow younger workers the option of investing slightly less than half of their Social Security taxes. However, it is telling that Ryan’s roadmap has just 13 co-sponsors, none of whom are among the Republican leadership.
Given their large lead in current polls, it is perhaps understandable that Republicans don’t want to risk offending voters, particularly seniors, by wading back into the Social Security thicket. But they are making a mistake.
From a purely political standpoint, if Republicans think that remaining silent on the issue will protect them from Democratic attacks, they are the stupid party indeed. The president’s comments should serve clear notice that Democrats are not going to let a simple thing like Republicans’ actual position to get in the way of a good political weapon. Senate Majority Leader Harry Reid has run television ads attacking his opponent, Sharron Angle, for wanting “to wipe the program out,” even though she’s made clear she wants to keep it. In Kentucky, Republican senatorial candidate Rand Paul is being criticized for remarks he made in favor of Social Security privatization — in 1998. There isn’t any escape.
Even worse, as a matter of policy, by taking personal accounts off the table, Republicans may be boxing themselves into a very bad corner. There are, after all, only three options for Social Security reform: raise taxes, cut benefits, or switch to personal accounts. While benefit cuts are defensible economically, they are not likely to prove any more politically popular than personal accounts, probably less so. Democrats are already organizing to fight any reductions. And, if Republican opposition to the Medicare cuts under Obamacare is any indication, no one should expect an overabundance of courage in fighting to cut Social Security benefits.
Therefore, if Republicans are not willing to embrace personal accounts, they will be left with … tax hikes, which has been the Democrats’ goal all along.
One reason the Democrats have been so successful in expanding the government year after year is that they have the courage of their convictions. They lose on an issue time after time, but they keep coming back until they win. Take national health care: After Hillarycare went down to defeat in 1993, the Left didn’t give up. And today we have Obamacare. Republicans lost on Social Security and curled up into a fetal position, begging for mercy.
Factcheck.org rates the president’s statement that Republicans want to privatize Social Security as “mostly false.” Before too long, we may come to wish that this time he had been telling the truth.
I am currently going through his film series “Free to Choose” which is one the most powerful film series I have ever seen
worked pretty well for a whole generation. Now anything that works well for a whole generation isn’t entirely bad. From the fact __ from that fact, and the undeniable fact that things are working poorly now, are we to conclude that the Keynesian sort of mixed regulation was wrong __
FRIEDMAN: Yes.
LEKACHMAN: __ or alternatively that we need still more regulation. That’s my conclusion, I might say.
FRIEDMAN: You want the right people manipulating the leaders. But go back. Memory smooths things out. If you really look at that 25_year period you’re talking about, it was not a period of stability; it was a period that was punctuated by the very sharp inflation of the Korean War. It was a period that was punctuated by three recessions in the course of about eight years in the fifties and early sixties. It was a period in which you had a __ inflation really starting to go from creeping to running, in the latter sixties. It was a period which laid the ground work for the kind of situation in which we are now, where you have both higher unemployment and higher inflation. It was __
TEMIN: I don’t think that followed. I mean there were these movements, as we say, but they weren’t the movements like the 1930s. There was a recession in ’58, yes.
FRIEDMAN: I agree.
TEMIN: We all called it a recession. We all worried about it and so on, but it was a small thing, little potatoes.
FRIEDMAN: The same thing was true in earlier periods between The Great Depression. If you take the area between the great depression in the United States of the 1870s and the 1890s, again you had a period like that. If you take it between The Great Depression of the 1890s and World War I, with a minor __ with one minor exception, it was similar to that. So that what you have, and this is a historical fact, is that except for the great depressions, all of which are linked to monetary collapses and to governmental involvement, in the interim period, the society has been reasonably stable.
MCKENZIE: Haven’t we reached the stage, incidentally, where we need not again see anything like the great depression. You say recessions, yes; but it bears no relationship to what we knew __
FRIEDMAN: No.
MCKENZIE: __ in the thirties. Have we solved that problem now? People are deeply __
JAY: No, we haven’t. Because I think the seeds of it remain there. I don’t agree with Professor Lekachman that everything was __ I don’t want to misparaphrase him __ but did pretty well until 1973 and then it suddenly all went wrong. It seems to me that the seeds of the subsequent instability, stagflation, were there before. That each time round the economic cycle inflation went a little faster. Each time around the economic cycle unemployment tended to be a bit higher. But this brings me to what is my disagreement with Professor Friedman. I agree with him that government has failed to correct, and is bound to fail to correct that instability. I do not agree with him that it is the root cause of that instability or simply removing or containing the government will remove that instability. Because his constitution, and I agree with all the things he wants to put into it, but I want to put more into it, leaves big capital entirely free to operate. Now he doesn’t mind that. In response to big capital, you are bound to get __ as a simple, natural reaction __ big labor. He doesn’t mind that. He’s quite happy with that. But my contention is that once you have big labor, you have a way of setting rewards in society, not only by trade unions, but through all sorts of other processes whereby groups get together in order to exploit the political process and legal rights, and to protect themselves from competition, in which, inevitably, people set rewards above what economists call the “market clearing price” for labor. They set levels of rewards which make it impossible that everybody should be employed and you therefore have a built-in tendency to high unemployment. If governments react to that on the Keynesian pattern by trying to inject spending which will enable these people to be employed, then I agree with Professor Friedman that all you get is faster and faster inflation, and that if you like, is caused by the government. But the government is a proximate cause of an original instability that is already there. And there’s nothing in Professor Friedman’s constitution which would correct that inherent, if you like, contradiction or flaw in classical western political economy.
FRIEDMAN: Do you deny, Peter __
MCKENZIE: Let me get the reaction to that __
FRIEDMAN: __no, I want to ask just one question of Peter. Do you deny that big government plays a large part in the rise of big capital and big labor?
JAY: I think they’re interactive. I once said big capital causes big labor, causes big government, causes big failure. That is the tragic story, in my opinion, of the 20th century.
FRIEDMAN: And what about if you start that __
JAY: We have to unravel that.
FRIEDMAN: __ if you start that route with big government. Will it be wrong? Big government causes big capital, causes big labor, causes big failure?
JAY: I don’t think historically that’s what happened. But you and I are agreed, we don’t want big government.
FRIEDMAN: That’s right.
JAY: What we’re disagreed about is what else we need.
LEKACHMAN: I think something is seriously wrong with a beautiful system which develops this big, clumsy, aggressive government, huge corporations, with more influence over their markets than is desirable from the standpoint of free competitive theory, trade unions, which at least according to some opinions, have a similarly malignant influence on their markets. There must be something radically flawed with the capitalist system which allows these institutional developments. This doesn’t alarm me because I’m a socialist, but I would __ I would readily __
FRIEDMAN: There must be something radically wrong with socialist philosophy which allows the __ extraordinary __ the much worse developments that have occurred, wherever there has been any real significant attempt to put a thoroughgoing socialism into practice.
LEKACHMAN: Socialism is a word of many meanings.
MCKENZIE: Now I think we might easily get into a quite serious debate on that point.
VOICE OFF SCREEN: Right.
JAY: I think it’s possible to note in passing that they may both be right.
MCKENZIE: Yes.
JAY: That conventional capitalism, conventional socialism, as conceived in the 20th century, are both wrong and that the polarization of the debate between those simple two alternatives greatly impoverishes the real range of political-economic choices which modern societies have.
FRIEDMAN: But what has happened? Over and over again one claim after another for the kind of socialism __ this kind of socialism or that kind of socialism __ has turned to ashes. And each time the answer has come, “Oh well, it was a wrong brand of socialism that was adopted, or the wrong people were running it.”
VOICE OFF SCREEN: But you’re saying __
JAY: You’re arguing with yourself when you’re saying __
FRIEDMAN: No I’m not.
JAY: The Federal Reserve in 1929 failed to do the right thing. It was the wrong brand of government.
FRIEDMAN: It was the wrong brand, absolutely, but what I’m saying is something different. I can at least point to examples in history of systems of capitalist systems in which the government had a fairly limited role, not my ideal government. Many things, doing many things I would not want it to do. But I’m going to point to such examples over long stretches of history in __ which have been relatively successful. Where the major achievements of humankind, not merely in economics, but in all other areas, have largely arisen. It is very difficult to point to any similar examples __
TEMIN: But then you are pointing back __
FRIEDMAN: __ of where big government has achieved such success.
TEMIN: But you said before you didn’t like to go back. You’re now talking about going back.
FRIEDMAN: No, no. I didn’t say I didn’t like to go back.
TEMIN: They took place in different times.
FRIEDMAN: What I said is going back or forward is irrelevant. What we want to do is __
TEMIN: But it’s not irrelevant to this discussion __
FRIEDMAN: __ the right thing wherever it comes from.
TEMIN: __ because as Bob Lekachman said earlier, things have increased in scale, and the scale of business and increased, and you were saying just before, big government, big labor, big industry, big firms go together, and you didn’t accept it before, when Bob said you’ll accept it now from here.
FRIEDMAN: No, no. I don’t accept it. What I accept is that big government is a major factor promoting big labor and big capital. I did not accept that in the absence of big government you would have the big capital and big labor that worries him.
More Than Half of the President’s Budget Would Be Spent on Entitlement Programs
Runaway Spending, Not Inadequate Tax Revenue, Is Responsible for Future Deficits
The Daily Hatch 