Monthly Archives: October 2012

Milton Friedman: “the purpose of the balanced-budget-and-tax-limitation amendment is to limit the government in order to free the people — this time from excessive taxation.”

October 11, 2012 – 6:59 am

Friedman on Reagan

Uploaded by on Aug 19, 2009

Nobel Laureate Dr. Milton Friedman discusses the principles of Ronald Reagan during this talk for students at Young America’s Foundation’s 25th annual National Conservative Student Conference

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Passing the Balanced Budget Amendment would be what the founding fathers would have wanted. Look at what my favorite economist once said.

“The amendment is very much in the spirit of the first 10 amendments — the Bill of Rights. Their purpose was to limit the government in order to free the people. Similarly, the purpose of the balanced-budget-and-tax-limitation amendment is to limit the government in order to free the people — this time from excessive taxation.”

The Return of the Balanced Budget Amendment

By: jmattera
3/7/2011 03:01 AM

“The balanced budget amendment has good aspects, but it is simply not good enough in dealing with fundamental constitutional change for our country.” And thus with that 23-word statement in 1997, Democrat Sen. Robert Torricelli of New Jersey sunk conservative spirits. No longer did the U.S. Senate have the two-thirds it needed to enshrine a fundamental principle of governing into the highest law of the land: that politicians should pay for what they spend.

Controversial, I know. Pfft.

Due to Democrat Torricelli’s jellyfish backbone, the 1997 Balanced Budget Amendment fell one vote short of hitting the needed threshold, which was the same margin of failure as just one year before. And liberals couldnt have been happier. Their penchant for obligating the taxpayers of tomorrow to pay for the spending binges of today remained unbroken.

Not that the dissenting senators worded their objections that way. Nope. To Vermont’s incorrigible leftist Sen. Patrick Leahy, inserting a mechanism into the Constitution that would enable our government’s books to mirror the realities American businesses and families face daily was “bumper sticker politics” and “sloganeering.” The way toward rectifying Uncle Sam’s balance sheet was, according to Leahy, “political courage,” not tinkering with the Constitution. Thirty-three of Leahy’s Democratic colleagues agreed.

Mind-Boggling Debt

Of course, by “political courage,” Leahy didnt mean reforming our insolvent entitlement systems or abolishing many of the improvident, senseless, and unconstitutional government bureaucracies and programs in existence. Nah. He meant tax increases on the rich. You know the drill, people.

Prescience, however, is not a valued commodity in Washington, D.C., as lawmakers pursue policies that are in the best interest of their reelection, not of the republic.

When the balanced budget amendment failed in 1997, the federal deficit stood at just $22 billion and the national debt hovered around 5.5 trillion — meager compared with today’s obscene figures, where we have a deficit topping $1.6 trillion this year alone accompanied by a mind-boggling debt of $14 trillion and growing.

To put our debt in perspective, Kobe Bryant makes $25 million playing for the Los Angeles Lakers. Any guesses on how many seasons Kobe would have to play in order to pay off today’s national debt? How about a whopping 560,000. That’s chilling, and quite frankly, incomprehensible.

Heck, we’ve run deficits in 54 of the last 60 years, as the National Taxpayer Union points out. That’s a figure that would make Keynes himself blink.

Ironically, Leahy was on the right track when he spoke of the need for political courage. This country desperately needs it, but it must manifest itself in the form of politicians who will defend the property rights of all Americans as opposed to the current lawmaking that treats this nation’s treasury as a personal ATM card.

The brute political courage we need is for politicians to plug Congress’s desire to ransack the appropriations process to engineer winners and losers in the marketplace and thus perpetuate a class of constituents whose inspiration to vote is driven by keeping the government gravy train on a track straight to their bank accounts.

Thanks to the midterm elections, the time for real political courage is now: The balanced budget amendment is making a comeback thanks to one veteran and one freshman senator.

“The people are calling for it. They are clamoring for it. They’re demanding it,” said newly elected Utah Sen. Mike Lee, who has 19 of his colleagues, including Jim DeMint and Rand Paul, rallying in support of his balanced budget amendment. “The American people overwhelmingly demand it, and if members of Congress value their jobs, they are going to vote for it,” he told Human Events in an exclusive interview.

Lee’s a Tea Party faithful who believes his job boils down to this bare-bones task: produce a government in the original mold of the Constitution, which is to say, one whose legislative reach is restricted and clearly defined. In other words, a federal government that looks absolutely nothing like what we have today.

Opportune Time Needed

Lee is so intent on getting a vote on his balanced budget amendment that he’s ready to filibuster the vote on whether or not to raise the debt ceiling as a tactical move.

“I can tell you that there are a lot of people who will not even consider it [a vote on the debt limit] without a balanced budget amendment first being proposed by Congress,” he said emphatically.

That’s certainly one approach — to hold the Senate hostage until real, austere statutory spending limits are adopted.

Utah’s senior Sen. Orrin Hatch doesnt see it that way. He’s looking for a vote on his balanced budget amendment too, but at a time believed to be the most opportune for passage. He hasn’t set firm timetables or made any strict demands.

“You have to have a bipartisan vote. You have to have a President that does care, and you have to have a setting in time where people can’t do anything but vote for it,” Hatch explained. “Right now, I don’t think we have that.”

If youre keeping score, the two senators from Utah both have competing balanced budget amendments floating around the Senate. In some ways, these jockeying amendments are a reflection of the Tea Party being a big kid on the block within the GOP.

Hatch, though, has been in the Senate for more than three decades, and is confident that he can get a balanced budget amendment through, which is why he’s taking a softer tone and insisting on waiting for the best moment to accomplish that.

And there’s something to be said for Hatch’s, well, “political,” approach. He’s shepherded the balanced budget amendment since 1982, when it was approved in the Senate, but torpedoed in the House by then-Speaker Tip O’Neill. And, as noted above, Hatch came painstakingly close twice in the Senate, both in 1996 and 1997.

“It’s every bit as difficult now, but it’s important that we bring it up and that we make all the strides we can,” he said.

The long-serving senator has 32 co-sponsors for his bill, including Chuck Grassley of Iowa, who is the ranking member on the Judiciary Committee.

When it comes down to it, both Hatch and Lee’s amendments have the same goal: ending profligate spending. In fact, as Nobel Laureate James Buchanan said, “The balanced budget norm is ultimately based on the acceptance of the classic principles of public finance, meaning that politicians shouldn’t spend more than they are willing to generate in tax revenues, except during periods of extreme and temporary emergency.”

Wait, why is this concept controversial again? Because it handcuffs Big Government believers from exerting influence over our personal decision making, thats why.


Courts Involved

There are notable differences between the balanced budget amendments of Hatch and Lee, which we lay out in detail in the accompanying chart. While Mike Lee would restrict government spending to 18% of the gross domestic product (GDP), Hatch’s limits the figure to 20%. The 40-year average of tax receipts to GDP is around 18%, and Hatch knows this to be the case, but, to quote him, “If you get it too low, then you lose any chance with the Democrats.” And that, right there, encapsulates the internal friction the GOP will face with this budding Tea Party caucus going head-to-head with those who are willing to work with Democrats to deliver a final product.

But there’s more: Hatch’s proposal allows a simple majority vote to waive the balanced budget requirement when there’s a declaration of war or a designated military conflict, whereas Lee’s amendment provides no such exception. His threshold is much higher — a two-thirds vote.

When aren’t we in a military conflict? Lee quips.

There are also differences in the enforcement mechanism. Lee would grant standing in federal court to members of Congress if flagrant violations of the amendment occur. Hatch doesnt want the courts anywhere near enforcement, believing that public pressure placed on politicians instead provides the best form of accountability. Plus, “Who wants the courts doing it?” asked Hatch, alluding to their predilection toward activism.

Lee himself acknowledges that court intervention would be rare, but that the mere possibility that it could occur would add some additional incentive to Congress to make sure that it stays within their restrictions.

So far, so good.

But procedurally, how would our gargantuan budget ever get balanced? We’re dealing with trillions of dollars here, after all, a highly complex web of arithmetic. Congress must make a good-faith effort, say Hatch and Lee, to use the best possible projections of spending and receipts. Even with the accurate projections, economic conditions change throughout the year that may inhibit the Feds’ budget from being balanced, such as underestimating costs, which happens more frequently than not these days. If such a scenario plays out, and a fiscal year does end with a deficit, such spending cuts can be incorporated into the next fiscal year’s budget and make up the difference on the back end. Under both plans, by the way, two-thirds of Congress would be needed to raise taxes, so it would be more likely than not that the budget would be balanced by spending cuts, not tax increases.

Hey, were all game for that.

Naturally, getting a balanced budget amendment adopted as part of the Constitution will not be an easy feat. And not because of the numerical hurdles and multiple steps needed to get any amendment through the Constitution (the process should be difficult). It’s because Democrats will kick and scream over the severe cuts to spending that would ensue after the adoption of a balanced budget amendment.

Heck, Senate Majority Leader Harry Reid and his left-wing posse went apoplectic at a proposed spending reduction of $61 billion over the next seven months, calling it “extreme” and “draconian.” Just $61 billion. Thats it. To realize just how absurd such objections were, $61 billion is only a one-third of the money needed to cover the interest payments for U.S. bondholders this year alone.

Imagine when formal debate begins on the need to cut trillions in spending to rein in our deficit? Democrats may cut off their right arms in protest.

“This is exhibit A for why we need a balanced budget amendment,” responded Lee. “Politicians have reached the conclusion that they are the bad guys unless they say ‘yes’ to more spending, and it’s in light of that aspect of human nature that particularly tends to affect politicians, and that’s why we need a constitutional amendment.”

Unified GOP Caucus

“If this is going to get passed in the next two years,” says Hatch, “President Obama will have to step to the plate. Ultimately you’ll need presidential leadership because everybody knows that you’re not going to get spending under control until we take on entitlements as well. You cannot do it without presidential leadership.”

Remider: There’s always new presidential leadership come 2012. Well, we hope so anyway.

In the end, expect the GOP to have a unified caucus on a merger of the Hatch and Lee balanced budget amendments. It’s hard enough (almost impossible) to get one through when Democrats are in control of the Senate and the presidency, so the Republicans will need a unified front like they’ve had in the past.

A balanced budget amendment restricts the power of lawmakers, and that’s why the left despises it, and will work vigorously to defeat it. Get ready.

In the end, it is exactly what the Constitution needs. And esteemed economist Milton Friedman identified why two decades ago.

Said Friedman: “The amendment is very much in the spirit of the first 10 amendments — the Bill of Rights. Their purpose was to limit the government in order to free the people. Similarly, the purpose of the balanced-budget-and-tax-limitation amendment is to limit the government in order to free the people — this time from excessive taxation.”

If we cannot cut the Welfare State under these distressing economic conditions, then we’ll never do it. Now’s the time.

By Everette Hatcher III | Posted in Milton Friedman, spending out of control, Taxes | Comments (0)

1980 Presidential Debate Reagan v. Carter video and transcript, 8th issue: Opponent’s greatest weakness

October 11, 2012 – 6:53 am

1980 Presidential Candidate Debate: Governor Ronald Reagan and President Jimmy Carter – 10/28/80

Above is the video of the complete debate. Below is the 8th part of the transcript that deals with the question of the opponent’s greatest weakness among other things. This segment begins at  1:20  minute mark.

October 28, 1980 Debate Transcript

October 28, 1980

The Carter-Reagan Presidential Debate

MR. SMITH: Thank you Mr. President, Governor Reagan. We now go to another question – a question to President Carter by Barbara Waiters.

MS. WALTERS: Thank you. You have addressed some of the major issues tonight, but the biggest issue in the mind of American voters is yourselves – your ability to lead this country. When many voters go into that booth just a week from today, they will be voting their gut instinct about you men. You have already given us your reasons why people should vote for you, now would you please tell us for this your final question, why they should not vote for your opponent, why his Presidency could be harmful to the nation and, having examined both your opponent’s record and the man himself, tell us his greatest weakness.

MR. CARTER: Barbara, reluctant as I am to say anything critical about Governor Reagan, I will try to answer your question. First of all, there is the historical perspective that I just described. This is a contest between a Democrat in the mainstream of my party, as exemplified by the actions that I have taken in the Oval Office the last four years, as contrasted with Governor Reagan, who in most cases does typify his party, but in some cases, there is a radical departure by him from the heritage of Eisenhower and others. The most important crucial difference in this election campaign, in my judgment, is the approach to the control of nuclear weaponry and the inclination to control or not to control the spread of atomic weapons to other nations who don’t presently have it, particularly terrorist nations. The inclination that Governor Reagan has exemplified in many troubled times since he has been running for President – I think since 1968 – to inject American military forces in places like North Korea, to put a blockade around Cuba this year, or in some instances, to project American forces into a fishing dispute against the small nation of Ecuador on the west coast of South America. This is typical of his long-standing inclination, on the use of American power, not to resolve disputes diplomatically and peacefully, but to show that the exercise of military power is best proven by the actual use of it. Obviously, no President wants war, and I certainly do not believe that Governor Reagan, if he were President, would want war, but a President in the Oval Office has to make a judgment on almost a daily basis about how to exercise the enormous power of our country for peace, through diplomacy, or in a careless way in a belligerent attitude which has exemplified his attitudes in the past.

MR. SMITH: Barbara, would you repeat the question for Governor Reagan?

MS. WALTERS: Yes, thank you. Realizing that you may be equally reluctant to speak ill of your opponent, may I ask why people should not vote for your opponent, why his Presidency could be harmful to the nation, and having examined both your opponent’s record and the man himself, could you tell us his greatest weakness?

MR. REAGAN: Well, Barbara, I believe that there is a fundamental difference – and I think it has been evident in most of the answers that Mr. Carter has given tonight – that he seeks the solution to anything as another opportunity for a Federal Government program. I happen to believe that the Federal Government has usurped powers of autonomy and authority that belong back at the state and local level. It has imposed on the individual freedoms of the people, and there are more of these things that could be solved by the people themselves, if they were given a chance, or by the levels of government that were closer to them. Now, as to why I should be and he shouldn’t be, when he was a candidate in 1976, President Carter invented a thing he called the misery index. He added the rate of unemployment and the rate of inflation, and it came, at that time, to 12.5% under President Ford. He said that no man with that size misery index has a right to seek reelection to the Presidency. Today, by his own decision, the misery index is in excess of 20%, and I think this must suggest something. But, when I had quoted a Democratic President, as the President says, I was a Democrat. I said many foolish things back in those days. But the President that I quoted had made a promise, a Democratic promise, and I quoted him because it was never kept. And today, you would find that that promise is at the very heart of what Republicanism represents in this country today. That’s why I believe there are going to be millions of Democrats that are going to vote with us this time around, because they too want that promise kept. It was a promise for less government and less taxes and more freedom for the people.

MR. SMITH: President Carter?

MR. CARTER: I mentioned the radical departure of Governor Reagan from the principles or ideals of historical perspective of his own party. I don’t think that can be better illustrated than in the case of guaranteeing women equal rights under the Constitution of our nation. For 40 years, the Republican Party platforms called for guaranteeing women equal rights with a constitutional amendment. Six predecessors of mine who served in the Oval Office called for this guarantee of women’s rights. Governor Reagan and his new Republican Party have departed from this commitment – a very severe blow to the opportunity for women to finally correct discrimination under which they have suffered. When a man and a women do the same amount of work, a man gets paid $1.00, a women only gets paid 59 cents. And the equal rights amendment only says that equality of rights shall not be abridged for omen b the Federal Government or by he state governments. That is all it says a simple guarantee of equality of opportunity which typifies the Democratic arty, and which is a very important commitment of mine, as contrasted with Governor Reagan’s radical departure from the long-standing policy of his own party.

MR. SMITH: Governor Reagan?

MR. REAGAN: Yes. Mr. President, once again, I happen to be against the amendment, because I think the amendment will take this problem out of the hands of elected legislators and put it in the hands f unelected judges. I am for equal rights, and while you have been in office for four ears and not one single state – and most f them have a majority of Democratic legislators – has added to the ratification r voted to ratify the equal rights amendment. While I was Governor, more than eight years ago, I found 14 separate instances where women were discriminated against in the body of California law, and I had passed and signed into law 14 statutes that eliminated those discriminations, including the economic ones that you have just mentioned – equal pay and so forth. I believe that if in all these years that we have spent trying to get the amendment, that we had spent as much time correcting these laws, as we did in California – and we were the first to do it. If I were President, I would also now take a look at the hundreds of Federal regulations which discriminate against women and which go right on while everyone is looking for an amendment. I would have someone ride herd on those regulations, and we would start eliminating those discriminations in the Federal Government against women.

MR. SMITH: President Carter?

MR. CARTER: Howard, I’m a Southerner, and I share the basic beliefs of my region that an excessive government intrusion into the private affairs of American citizens and also into the private affairs of the free enterprise system. One of the commitments that I made was to deregulate the major industries of this country. We’ve been remarkably successful, with the help of a Democratic Congress. We have deregulated the air industry, the rail industry, the trucking industry, financial institutions. We’re now working on the communications industry. In addition to that, I believe that this element of discrimination is something that the South has seen so vividly as a blight on our region of the country which has now been corrected – not only racial discrimination but discrimination against people that have to work for a living – because we have been trying to pick ourselves up by our bootstraps, since the long depression years, and lead a full and useful life in the affairs of this country. We have made remarkable success. It is part of my consciousness and of my commitment to continue this progress. So, my heritage as a Southerner, my experience in the Oval Office, convinces me that what I have just described is a proper course for the future.

MR. SMITH: Governor Reagan, yours is the last word.

MR. REAGAN: Well, my last word is again to say this: We were talking about this very simple amendment and women’s rights. And I make it plain again: I am for women’s rights. But I would like to call the attention of the people to the fact that that so-called simple amendment would be used by mischievous men to destroy discriminations that properly belong, by law, to women respecting the physical differences between the two sexes, labor laws that protect them against things that would be physically harmful to them. Those would all, could all be challenged by men. And the same would be true with regard to combat service in the military and so forth. I thought that was the subject we were supposed to be on. But, if we’re talking about how much we think about the working people and so forth, I’m the only fellow who ever ran for this job who was six times President of his own union and still has a lifetime membership in that union.

By Everette Hatcher III | Posted in Ronald Reagan | Comments (0)

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (“Thirsty Thursday”, Open letter to Senator Pryor)

October 11, 2012 – 6:29 am

House Republicans for a Balanced Budget Amendment

Uploaded by on Nov 17, 2011

This week, House Republican freshmen Members held a press conference to discuss the importance of passing a balanced budget amendment to the United States Constitution and how now is the time for a permanent solution to our nation’s spending-driven debt crisis. We need a balanced budget amendment to ensure a prosperous future for our children and grandchildren. It’s the right thing to do.

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Dear Senator Pryor,

Why not pass the Balanced  Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion).

On my blog www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, I did not see any of them in the recent debt deal that Congress adopted. Now I am trying another approach. Every week from now on I will send you an email explaining different reasons why we need the Balanced Budget Amendment. It will appear on my blog on “Thirsty Thursday” because the government is always thirsty for more money to spend.

Over and over in the past Milton Friedman pleaded for restraint in our federal spending. Below you will see a fine article supporting the Balanced Budget Amendment and it points out that Friedman favored this mechanism to control our spending.

The Answer Is a Balanced Budget Amendment

By from the October 2011 issue

The question is how to solve our problem of unsustainable debt.

The United States of America is on the road to bankruptcy, with a federal debt of more than $14.2 trillion, almost half of which is owned by foreign countries. (Communist China alone owns fully a quarter of the foreign-held portion). The problem is so well known that it almost came as an anticlimax when Standard & Poor’s recently downgraded U.S. debt from its coveted AAA rating to an unheard-of AA+. As for the budget deficit, it is expected to total $1.3 trillion for this year alone, with tax revenues of about $2.3 trillion and total expenditures of about $3.6 trillion. If a household ran its budget like that, we would say it was headed for a rude shock.

Making matters worse is that our debt is structural rather than cyclical: the federal budget is in deficit both in good economic times and bad. When George W. Bush took office in 2001, the gross federal debt was $5.76 trillion. When he left eight years later, the debt was up to $10.626 trillion, an increase of $607 billion a year. During Barack Obama’s presidency it has risen by $1.7 trillion a year and now almost 40 percent higher than when he took office. Deficits of this size are quite simply unsustainable.

The only way to fix this mess is to radically cut federal spending, cap the budget with pay-as-you-go spending rules, and then enact a balanced budget amendment (BBA).

The most important point is that we need to cut spending, not raise taxes. Total federal spending as a percentage of Gross Domestic Product (GDP) has skyrocketed from around 18 percent, when George W. Bush became president, to more than 25 percent today. This shows that our current deficit problem is entirely due to overspending. If tomorrow we cut spending back to the levels of January 20, 2001, when Bush took office, the deficit would almost disappear.

Then we need to cap and balance the budget, once we’ve cut overall spending back to 2001 levels. To do this effectively, we need to enact a federal BBA to the U.S. Constitution. This amendment should have several features.

First, it should require that the president submit to Congress each year a balanced federal budget with no fiscal gimmicks. Presidential failure to do so would be an impeachable offense. Congress should be constitutionally required to hold a vote in both houses on the president’s proposed budget within three months, with the president and Congress having up to six months to adopt a final budget in any given calendar year (this requirement should be waivable during any time of declared war for up to two years). If they fail to do that, all federal spending except for payments on the debt should be frozen at levels 10 percent lower than in the preceding fiscal year. To help impose this, any one of the several states should have standing to sue in the Supreme Court’s original jurisdiction for enforcement of this requirement.

Second, the BBA should cap federal spending at 18 percent of GDP. A spending cap of this proportion would keep the federal government at the size it was under President Bill Clinton — hardly onerous or severe. The amendment should require a two-thirds vote of both houses of Congress to enact any new taxes or to raise tax rates. Votes to raise the national debt limit should also require a two-thirds majority. These provisions are essential to prevent a BBA from becoming just an excuse to raise taxes.

THE USUAL RESPONSE to calls for such an amendment is that we ought not tamper with the Constitution. Critics of a BBA also claim it is not needed since a majority of Congress could balance the budget today if it really wanted to. There are at least five reasons why those critics are dead wrong.

First, it is a core principle of American constitutionalism that there be no taxation without representation. The American Revolution was fought in part to prevent taxation by a British Parliament in which Americans were not represented. When Congress borrows 40 cents of every dollar it spends, as it is doing today, it passes the burden of paying for current spending on to our children and grandchildren who cannot vote right now — nothing less than taxation without representation.

Second, a core purpose of the Constitution is to protect fundamental principles like freedom of speech and of the press from being whittled away during moments of legislative passion. Exactly the same argument holds true with respect to spending more money than the government collects in tax revenue. Constitutionalizing the balanced budget requirement is as necessary as constitutionalizing the protection of freedom of speech and of the press. This is an argument that was first made more than 30 years ago by Noble Prize laureate Milton Friedman. It is just as true today as it was then.

Third, there is an economic reason why it is easier to assemble lobbies for government spending than it is to assemble a nationwide lobby for a balanced budget. Consider the farm lobby that argues for agricultural price supports, or the AARP that lobbies for benefits for the elderly. It is cheaper and easier for small groups with a shared common interest to lobby Congress than for a large, diffuse majority of the American population to do the same. That’s why the silent majority is silent. A BBA in the Constitution would prevent the special interests from ripping off the children and grandchildren of the silent majority. James Madison wrote in The Federalist No. 51 that the secret of constitutional government was to make ambition counteract ambition. The way to check and balance over-spending is to constitutionalize a pay-as-you-go rule while making tax increases hard to enact.

Fourth, yet another economic reason for a BBA is that it would reduce risk and thereby promote investment. When people are looking for a place to invest, one of their first questions is how risky is the investment and how large is the potential reward. Foreign and American investors since World War II have invested in the U.S. and in its debt because our Constitution of checks and balances makes it hard to do crazy things like nationalize industries or set up a single payer health insurance monopoly.

A BBA would reduce further the risk of investing in the U. S., and that would promote investment and economic growth by constitutionally committing itself not to overspend. The risk of inflationary devaluation of the dollar would thus go way down. This in turn would bolster the dollar as the world’s reserve currency. It would also prevent federal borrowing from crowding out private sector borrowing in the U.S. This would free up a capital for investment in job-creating ventures.

A fifth argument for the BBA paradoxically grows out of one of the arguments commonly made against it: it would be purely symbolic. Or as James Madison would have said, “a mere parchment barrier” against overspending.

This criticism fails for many reasons. A BBA of the kind I argue for would have enforcement teeth. Presidential failure to submit a good-faith balanced budget would be a specific ground for impeachment. Then too, if Congress failed to enact a balanced budget, state governments could sue for an across theboard spending cut of 10 percent.

But suppose Congress wimps out and enacts a BBA without teeth. Would such a symbolic victory be worth anything? The answer again is clearly yes. Almost every state has some form of a balanced budget requirement in its constitution or law. The fact is that balanced budget requirements actually do work at the state level. This strongly suggests they would work at the federal level as well.

CONSTITUTIONAL PROVISIONS, even symbolic ones, set the agenda of political debate. The Second and Tenth Amendments clearly do that in the U.S. today, even though the federal courts almost never enforce them. A BBA would work very much the same way.

The case for a BBA is so powerful that Germany and Switzerland — both models of fiscal sobriety — actually require a balanced budget in their own constitutions. And now Germany and France have actually proposed requiring that all Eurozone countries amend their national constitutions to require a balanced budget. What is good enough for almost every state in the Union and for many countries of Europe is certainly worth trying at the federal level here.

So what harm could come from enacting a BBA to the U.S. Constitution? Is there any argument against such an amendment that outweighs the arguments in favor of it?

One concern conservatives have is that it might lead to tax increases. I share that concern and therefore would couple it with a super-majority requirement for tax increases. That should make a BBA clearly appealing to conservatives of all stripes. But what if such an amendment gets ratified that does not protect against tax increases? Would we then be worse off?

I think the answer is no. It is harder politically for Congress to tax real people living today than it is to borrow money from the children and grandchildren of the silent majority. People living today will mobilize in many ways against tax increases. The correct solution is to cut, cap, and balance, but I would not let concerns about tax increases stop us from doing what virtually every state constitution does.

Another real concern for conservatives is that a BBA could lead to dangerous cuts in spending on national defense. This concern I share. The U.S. is a world leader and the greatest force for liberty and economic opportunity in history. We must always be ready to defend liberty worldwide.

The problem is, however, that current levels of deficit spending — almost half of which is financed by foreign countries — is itself a threat to U.S. global might. We simply cannot defend liberty in Asia, for example, if we continue to borrow massively from the Chinese. We cannot defend freedom in Arab countries while being so dependent on Saudi Arabia and others for imported oil and purchases of our debt. The status quo is at least as threatening to America’s military might as is living under a BBA, for the status quo is not sustainable.

Finally, some conservatives argue that the solution to congressional deficit spending is a line item veto amendment giving the president the same power over spending enjoyed by a majority of state governors. I am quite skeptical about such an amendment because of the enormous power it would shift from Congress to the president. Imagine for a moment that President Obama could threaten senators or representatives with line item vetoes of locally important spending projects unless they voted his way on socialized medicine. Or on a card check law reform making it easy to fraudulently form a union. Do we really want to cede that much power from Congress to the president? I do not think so.

In sum, we need to cut, cap, and balance. To do that permanently, we must enact a BBA. Nothing less than the future of government of the people, by the people, and for the people is at stake.

By Everette Hatcher III | Posted in Milton Friedman, Social Security, spending out of control | Comments (0)

Open letter to President Obama (Part 153B)

October 11, 2012 – 1:22 am

Milton Friedman The Power of the Market 4-5

President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

I know that every President says he believes in freedom but how many have fought hard to protect both our economic and personal freedoms?

How can we have personal freedom without economic freedom? That is why I don’t understand why socialists who value individual freedoms want to take away our economic freedoms.  I wanted to share this info below with you from Milton Friedman who has influenced me greatly over the last 30 plus years. Here is part four which consists of a lively discussion between Friedman and several other interested scholars concerning his film.
To take an example that at first sight seems about as far away as you can get __ the language we speak; the words we use; the complex structure of our grammar; no government bureau designed that. It arose out of the voluntary interactions of people seeking to communicate with one another. Or consider some of the great scientific achievements of our time __ the discoveries of an Einstein or Newton __ the inventions of Thomas Alva Edison or an Alexander Graham Bell or even consider the great charitable activities of a Florence Nightingale or an Andrew Carnegie. These weren’t done under orders from a government office. They were done by individuals deeply interested in what they were doing, pursing their own interests, and cooperating with one another.This kind of voluntary cooperation is built so deeply into the structure of our society that we tend to take it for granted. Yet the whole of our Western civilization is the unintended consequence of that kind of a voluntary cooperation of people cooperating with one another to pursue their own interests, yet in the process, building a great society.DISCUSSIONI’m Linda Chavez. Welcome to Free to Choose. Joining Dr. Friedman in a discussion of the power of the market are David Brooks of the Wall Street Journal, and James Galbraith of the University of Texas at Austin. Dr. Galbraith, should we follow the example of Hong Kong and simply allow an unregulated free market?Galbraith: I think we do better in this country whereas the combination of a free market and its advantages, and a well regulated, carefully thought out structure of government, which provides a chance to pick up some of the losers from the market process and give them a second start. It provides us with a chance to make the economic process a little safer, a little healthier, a little more environmentally sound and protective, than you might get from a strict adherence to the free market such as Professor Friedman has described in the case of Hong Kong.Chavez: Dr. Friedman, is there any such thing as a well-regulated market?Friedman: No. He is begging the question. Obviously he is right. If you could have a well-regulated, carefully thought out, properly done market, benevolent dictatorship is the best of all forms of government.

Galbraith: Oh, I don’t agree with that at all.

Friedman: Neither do I.

Galbraith: Constitutional democracy is the best of all forms of government.

Friedman: No. Constitutional democracy is the least bad of all forms of government. But you beg all the questions when you talk about well-regulated, carefully thought out __ if you look at the actual programs that governments follow, they most always have effects that are the opposite of those that were intended by their well-meaning advocates.

Galbraith: Let me tell you what troubles me.

Friedman: I will tell you something. Matching the invisible hand of the market is the invisible foot of government.

Galbraith: You make the point in the program that in every case where you have a smaller role of government and a freer market, you have a higher standard of living.

Friedman: No. I didn’t say that. I didn’t say that. I said there are better conditions for the poorer people.

Galbraith: Okay. Better conditions for the poorer people. Fine, I will accept that. At the same time you are making the argument in the program that the conditions in Hong Kong are better, for example, than in the United States, which is manifestly not true. You are making the argument that Hong Kong is more free than we are.

Friedman: It is more free.

Galbraith: Does it then follow that the conditions for poor people in Hong Kong are better than they are in the United States? That I don’t believe is true.

Friedman: I said in there where you compare like with like.

Galbraith: Okay this is an important qualification.

Friedman: Hong Kong obviously started out from a much lower position. If I were to compare conditions in Hong Kong in 1945 or 1950 with conditions in the United States in 1820 or 1830, you would have a much closer comparison.

Galbraith: Are you then saying, a position which I would find much more congenial, that where you have a country which has developed a base of material wealth, a degree of comfort for the average citizen, that it is then legitimate for the government of that country to step in and provide some guarantees and some security for poor people and old people.

Friedman: No. I am not saying that at all. Every time they step in and try to do that, they end up doing the opposite.

Galbraith: This discussion reflects a feature of the program that I found to be most troubling which is the failure to make a distinction between governments of the kind that we have developed in this country over 200 years, and governments of the kind that you described in the People’s Republic of China. It’s perfectly clear that one can have, and many countries do have, the curse of repressive dictatorships. It is also perfectly clear that an economy that is organized by Commissars is going to fail. We have certainly seen laid out before us over the last several years, the ashes of those failed economies. But is it possible to take the example of the Soviet Union, Poland, Hungary, and to say that because their governments, which were after all dictatorships modeled after the system of government installed in the Soviet Union by Stalin, are in fact parallel to the actions of our government which is a government which operates on many different federal levels, and where fundamentally what you have is the ability of the ordinary citizen whose power is not weighted by the amount of money he or she has, to use the vote in order to make some collective decisions. Granted, after ten years of Reagan’s Washington, you’ve got a serious problem of corruption. Does that mean we should abandon the idea that you have a democratic process that should be entrusted with certain important decisions __ I don’t think so.

Friedman: You don’t have a democratic process in the sense in which you mean it. We have a democracy. We have a majority rule, but the majority that rules is a collection of minorities. It is a collection of special interests. You cannot tell me that the consumers in this country would vote for a sugar quota that makes the price of sugar three times the world price. When you say you can’t compare it to Russia, you are quite right, but only because they are 100% and we are 50%. If our system, if our present regulations and rules had prevailed, our scope of government had prevailed 100 years ago, we wouldn’t be where we are today.

Chavez: Let me understand you Dr. Friedman. Do you believe that there should be no role at all, whatsoever, for government?

Friedman: Of course there should be a role for government __ a very important role for government.

Chavez: What is that role?

Friedman: The role for government is first of all, to protect people from physical coercion by their neighbors or by foreign countries, that is to protect the national defense and to protect law and order at home. There is a role for government enabling us to have a mechanism whereby we decide on the rules which we want to run, how we define private property, what we mean by private property. There is a role for government in adjudicating disputes between us. There is a role for government. A very important role and I believe our government played that role quite well for about 100 years until the Great Depression.

Brooks: I would go a little further. I think there is a health and safety role as well. The problem is that you have to keep your regulations simple and minimal. You have to realize that there are costs and often the costs outweigh the benefits. In fact, in Washington there are interests who want to divert costs to themselves, so there is sort of a built in structure, a dynamic to make costs outweigh the benefits.

Galbraith: We are making progress here. I would add that the government has a role to protect the environment. I would say the government has a role to set standards for products, where information is very costly for the individual consumer to obtain. I like very much the fact that the steaks that the dentist was eating were inspected by the USDA. Their purity was guaranteed by a rather well-functioning aspect of our government.

Brooks: On the other hand, you have the FDA which has these long delays, 10 years to get a drug approved so that the effect is that you have to be a big drug company to get any kind of dent of the market. Basically you are closing off the market.

Galbraith: On the other hand, you have had a set of regulations which have disappeared without any well-justified regrets. For example, the regulations that govern the entry into interstate trucking; the regulations that govern entry and rates in the airlines.

Friedman: Don’t tell me that that was done under the Reagan administration.

Galbraith: Oh no. Those reforms were done under the Carter administration.

Brooks: There is no doubt that Carter did the heavy lifting on deregulation.

___________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your committment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

By Everette Hatcher III | Posted in Milton Friedman, President Obama | Comments (0)

Milton Friedman: “The key problem is not deficits but the size of government spending”

October 10, 2012 – 6:54 am

Ronald Reagan Describes Milton Friedman

Uploaded by on Oct 2, 2011

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My hero Milton Friedman was a big supporter of the Balanced Budget Amendment and in an article on this subject in 1983 he wrote:

“The key problem is not deficits but the size of government spending. […] I have never supported an amendment directed solely at a balanced budget. I have written repeatedly that while I would prefer that the budget be balanced, I would rather have government spend $500 billion and run a deficit of $100 billion than have it spend $800 billion with a balanced budget. It matters greatly how the budget is balanced, whether by cutting spending or by raising taxes.”

A Balanced Budget Amendment Should Make Tax & Debt Increases Difficult

As a member of the Conservative Action Project, CEO Susan Carleson and leaders of 28 other organizations, representing a broad cross section of the conservative movement, are united in supporting a Balanced Budget Amendment that actually reins in national spending and increasing our national debt – without raising taxes.

MEMO FOR THE MOVEMENT: A Balanced Budget Amendment — in addition to balancing the budget — should make it difficult to raise taxes, tough to increase the debt, and prohibit any court from ordering a tax increase or deciding budget priorities.

“I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing.”
Thomas Jefferson, 1798

RE: In accordance with the Budget Control Act of 2011, sometime between October 1 and December 31, 2011 both houses of Congress must vote on a balanced budget amendment (BBA) to the U.S. Constitution. It is important that any such amendment must protect taxpayers by not forcing automatic tax increases to keep revenues in line with rising expenditures. Our fiscal problems are caused not by under taxation–but by over-spending.

ISSUE-IN-BRIEF: Not all balanced budget Amendments were created equal. The most comprehensive BBA proposed is S.J. Resolution 10 co-sponsored by all 47 Republican members of the United States Senate. It caps spending at 18% of GDP; requires a 2/3 vote of congress to raise taxes; requires a 3/5 vote of congress to increase the debt ceiling; and prohibits any court from ordering an increase in taxes. Proposed BBA’s that do less can have the unintended effect of managing a tax increase instead of limiting spending and would be counter-productive and must be opposed.

A STRONG BBA MUST BE EASY TO UNDERSTAND AND NOT HAVE LOOPHOLES:

  • Require a Balanced Budget every year: The federal debt is on track to consume our country’s entire Gross Domestic Product. The BBA would force Washington to live within its means.
  • Prohibit Perpetual Deficit Spending: Deficit spending is a tax on future earnings.
  • A debt ceiling will actually be a ceiling: The debt ceiling has been raised 11 times in the past decade. S.J. 10–co-sponsored by 47 members of the U.S. Senate– would require a three-fifths majority in both chambers to raise the debt ceiling. This is also an important provision to prevent cheating and other budget gimmicks because actual spending cannot exceed actual revenue for long without hitting the debt limit.
  • Congress may waive BBA requirement by simple majority if a declaration of war is in effect; and it would require a three-fifths majority to waive if the country is engaged in a military conflict that causes an imminent and serious military threat to our national security.
  • Courts setting any budget priorities would be a problem. Court-ordered military cuts or activist “declaratory judgments” requiring increased welfare spending would also be intolerable. S.J. 10 can be improved with an explicit ban on courts exercising jurisdiction on any of these essential political questions.

A “Weak” BBA will increase the size of Government and pave the way for Tax Increases:

  • Unlike other proposals, such as a “Weak” BBA, not only should a BBA have a supermajority requirement to raise taxes, there should be no loopholes for creative accounting.
  • Without a limitation on tax increases and a specific prohibition on courts ordering revenue increases a “Weak” BBA would allow judges the power to implement higher taxes to bring the budget into balance.
  • A “Weak” BBA would allow a simple majority of Members of Congress to raise the federal debt ceiling and continue to borrow against future generations. That’s why there is a three-fifths majority requirement to raise the debt ceiling in S.J. 10

Why the Tax Hike Limitation Component is Important to any BBA:

As Milton Friedman wrote in defense of the Balanced Budget Amendment in 1983 in response to skepticism from the Wall Street Journal editorial board: http://www.theatlantic.com/magazine/archive/1983/02/washington-less-red-ink/5450/

“The key problem is not deficits but the size of government spending. […] I have never supported an amendment directed solely at a balanced budget. I have written repeatedly that while I would prefer that the budget be balanced, I would rather have government spend $500 billion and run a deficit of $100 billion than have it spend $800 billion with a balanced budget. It matters greatly how the budget is balanced, whether by cutting spending or by raising taxes.”

Americans Support a Balanced Budget Amendment:

Americans have always overwhelmingly support a balanced budget amendment. A Fox News poll (June 30), shows support is 72-20.

On Message, Inc., on behalf of Let Freedom Ring, shows 81% of the American people (including 74% of Democrats) support Congress balancing their budget every year. In addition 66% of Americans favor capping federal spending at the historically average 18% of GDP.

“Of course, the best way to permanently reduce spending would be to enact a balanced-budget amendment to the Constitution requiring a supermajority in both houses of Congress to run an annual deficit, raise tax rates, or increase the debit ceiling.”
James A. Baker III, Ronald Reagan’s Secretary of the Treasury from 1985-1988

By Everette Hatcher III | Posted in Milton Friedman, spending out of control, Taxes | Comments (0)

Paul Finebaum speaks at Little Rock Touchdown Club Part 3

October 10, 2012 – 6:51 am

Harvey Updyke Interview on The Paul Finebaum Show 4 21 11 Part 3

Bobby Petrino going to Tennessee later this year? I thought he would jump at the chance to do that. However, the Vols have looked pretty good this year and if they go into Miss St’s homefield this week and beat the #17 ranked Bulldogs and get on a roll then the Vols may end up ranked at the end of the year and be happy with Derek Dooley. Paul Finebaum is not buying that theory. He actually even said that Tennessee would not be interested in Petrino because of his baggage and everything they have been through recently.

I heard Finebaum speak on Oct 8, 2012 at the Little Rock Touchdown Club and below is the report from the Arkansas Sports 360 website:

10/8/2012 at 3:42pm

Image by Finebaum.com

Paul Finebaum, the Birmingham, Ala.-based national radio talk show host and sports columnist, had plenty of regional targets for his witty jabs Monday in a return visit to the Little Rock Touchdown Club.

Finebaum, who last visited the club in 2006 — just before Houston Nutt’s star rose again at Fayetteville and Mike Shula’s fell at Alabama — found plenty to work with just from the weekend, where the clownish John L. Smith finally got a Football Bowl Subdivision win as Arkansas’ head coach at the expense of the beleaguered Auburn head coach, Gene Chizik.

Finebaum admitted that Arkansas had “made my life easier since April 1,” when Bobby Petrino had his infamous motorcycle wreck that ultimately led to his firing nine days later.

Finebaum, ranked by one national sports site as one of the top 25 most influential figures in college sports, and only one of two media members on the list, said that Arkansas Athletic Director Jeff Long and the university are at a crossroads, much like what faced Alabama at the end of the 2006 season, before Crimson Tide AD Mal Moore continued to pursue Miami Dolphins Coach Nick Saban until he hired him.

Finebaum noted the university’s strong academic standing, like Alabama’s, but said there is a need for such a school to have a great football program as the face of the school.

“Jeff Long is about to make not only the most important decision in his career, but the most important decision in the history of the University of Arkansas,” Finebaum said.

Noting the entrance of neighbors Missouri and Texas A&M to the Southeastern Conference this year, Finebaum added, “A bad hire here is going to cripple the program for a long time. … He better get it right because from the people around here I’ve talked to, he has a short leash.

“We all talked about what a courageous decision [Long] made in the spring [firing Petrino]. It was the only thing he could do. … The damage to the program has been incalculable, but it can come back.”

Finebaum reminded the audience, who after six years might have thought Saban ran to Alabama, that the fact was Saban turned Moore down and West Virginia’s Rich Rodriguez briefly accepted the Tide head coaching job before having second thoughts. Moore was being scathed by columnists and TV commentators but “took a deep breath,” Finebaum said, went back after Saban and wouldn’t take no for an answer “and hired the best coach he could find.”

Who the current “next Nick Saban is” was a question even Finebaum couldn’t answer, nor could anyone who asked questions about the coaching search during a Q&A to wrap up the luncheon.

Finebaum did toss out the familiar names gracing most Hosg coaching search speculation reports, starting with Batesville native and UCA grad Charlie Strong, who last week attempted to distance himself from the Arkansas job and pledge his loyalty to a Louisville program that gave him his first head coaching job.

Other names of possibilities with even remote connections to the UA, and whether Finebaum thought they were viable, were Baylor’s Art Briles, former UA assistant and first-year UAB head coach Garrick McGee, Texas Tech’s Tommy Tuberville (greeted with silence by the crowd, by the way), Butch Davis (“he’d be a home run hire,” Finebaum said, “but does he have too much baggage?”), South Florida’s Skip Holtz and Arkansas State’s Gus Malzahn.

“Did anybody see the Auburn offense without Gus Malzahn?” Finebaum joked. “He can coach.”

Mississippi State’s Dan Mullen and Vanderbilt’s James Franklin were mentioned, as was Alabama defensive coordinator Kirby Smart. “Is he hirable? I thnk the job he’s looking at is Tennessee,” Finebaum said.

TCU’s Gary Patterson “would be a slam dunk, but is he hirable,” Finebaum said, and Boise State’s Chris Peterson isn’t leaving Boise.

And, about the most recent Arkansas head coach who was unceremoniously disposed, Finebaum said, “Bobby Petrino makes more sense than the guy that’s in there now. But according to John L. Smith, he’s already signed up with Auburn.”

After the luncheon, with a handful of local media, Finebaum said he could see Petrino back in the game as a coordinator or perhaps as a head coach in the right situation. He said he believed Petrino was earnest in his public apology and his interview in August on ESPN, and friends of Petrino have convinced Finebaum that the former Hog head coach is not the same person he was before April 10.

“Right now in terms of the SEC, Kentucky is doable,” Finebaum said of possible Petrino landing spots. “I don’t think Tennessee is. Unfortunately I think most athletic directors are concerned with what people are going to say and think on the higher-up levels of the NCAA hierarchy taking a chance on someone who’s made a terrible mistake but projects to be a great hire.

“But I would hire him.”

Auburn, he said, would have to have a disastrous season for Chizik to lose his job two years after winning a national championship with quarterback Cam Newton, but Saturday’s 24-7 loss to Arkansas and a 1-4 start now makes it look like “a disaster zone” for the Tigers’ faithful.

“I think if that situation becomes more unbearable, [Petrino] becomes more hirable,” Finebaum said. “I really do believe he would make someone a phenomenal choice.”

But it won’t happen at Arkansas. Razorback fans, though, won’t have to fret if Strong is summoned, Finebaum indicated.

“Charlie Strong is the most intriguing name right now for a lot of the obvious reasons,” Finebaum said. “To me, Charlie would be dynamic. A lot of those names would. But this changes by the day, it’s like the Heisman, whoever has a bad game isn’t going to be the leader. But today Charlie Strong looks like the name you hear more about than any other.”

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Harvey Updyke Interview on The Paul Finebaum Show – 4-21-11 – Part 2 Harvey Updyke Interview on The Paul Finebaum Show 4 21 11 Part 3 ___________ I attended the Little Rock Touchdown Club on Oct 8, 2012 and enjoyed it very much. Here is what the Democrat-Gazette had to say about the meeting. Finebaum: […]

Paul Finebaum speaks at Little Rock Touchdown Club Part 1

Harvey Updyke Interview on The Paul Finebaum Show – 4-21-11 – Part 1 Uploaded by imagecpr on Apr 21, 2011 ____________ Rex Nelson started things off on Monday Oct 8, 2012 by saying that at the Little Rock Touchdown Club they like to have at least one speaker from Alabama every year. Two weeks ago […]

 
By Everette Hatcher III | Posted in Current Events | Comments (0)

Do Americans still believe in limited government, self-reliance and personal responsibility?

October 10, 2012 – 6:48 am

Dan Mitchell discusses tax hikes on FOX

Uploaded by on Jul 14, 2009

7-13-09

_________

I am a firm believer that our country was built on the ideas of limited government, self-reliance and personal responsibility. I hope these values win out. Ronald Reagan believed in growing the economy and putting people to work. I think we need to cut government spending and end the welfare trap but requiring work out of those who recieve like Bill Clinton believed. We must change the direction the our country is heading (which is to Greece).

I’m part of a just-posted online Debate Club sponsored by U.S. News & World Report which asks “Is the United States a Nation of ‘Makers and Takers?’”

My contribution to the discussion is basically a reworked version of what I wrote last week about Romney and the infamous 47 percent remark, so there’s no need to regurgitate those remarks. Suffice to say that I gave an answer of “No” because Americans don’t (yet!) share the European belief that it is government’s responsibility to provide the basics of life.

What’s interesting is that the two other participants in the debate (Phil Kerpen and Scott Winship) who are closest to my views answered “Yes,” while the three leftists sided with me and voted “No.”

But not because the leftists agreed with me on policy, or because I disagreed with Phil or Scott. I think the strange divergence is a result of me being very literal (some would say pedantic) about the question that was asked while the rest of the participants addressed the broader issue of whether there’s too much or too little means-tested redistribution.

So allow me to take a moment to elaborate on my remarks. My answer was driven by my belief that American exceptionalism – limited government, self reliance, and personal responsibility – is still real. I linked above to one poll comparing American and European attitudes, but I also invite you to review very important polling data here and here.

But I’m not under any illusions that this is a permanent feature of the U.S. political landscape. People can be lulled into dependency. Indeed, some leftists are very honest about admitting their desire to turn more and more Americans into wards of the state. Bill Clinton’s pollster wrote a book in the 1990s in which he explicitly acknowledged that part of the debate over Hillarycare was about the degree to which the middle class would have to rely on the federal government.

And a recording of Barack Obama from 1998 has recently surfaced, and it reveals both an ideological and a political desire to expand government dependency. Here’s an excerpt from the Daily Caller.

The Daily Caller has obtained a complete audio recording of the October 19, 1998 Loyola College forum on community organizing and policymaking during which a future President Barack Obama said he favored the government redistribution of wealth. …Obama also said he viewed welfare recipients and “the working poor” as “a majority coalition” that could be mobilized to help advance progressive policies and elect their champions. …The full recording reveals that Obama saw welfare recipients and the working poor in Chicago as a “majority coalition” who could be leveraged politically.“What I think will re-engage people in politics is if we’re doing significant, serious policy work around what I will label the ‘working poor,’” he said… “They are struggling. And to the extent that we are doing research figuring out what kinds of government action would successfully make their lives better, we are then putting together a potential majority coalition to move those agendas forward.”

Set aside the policy arguments here about redistribution undermining progress in the fight against poverty and making it difficult for the less fortunate to climb the economic ladder.

What’s significant is the extent to which Clinton’s pollster and Obama both explicitly talk about redistribution as a political tool. Take money from a minority (i.e., class-warfare tax policy) and give it to enough voters to create a political majority.

I hate to admit it, but the evidence from Europe shows this can be a successful political strategy.

The only downside – as shown in this parable about beer and this great Chuck Asay cartoon – is that the scam only works so long as there are people willing to get fleeced.

I once argued on TV that leftists should be careful not to be too greedy because it doesn’t make sense for parasites to kill their host animals. And Michael Barone made the same point in a more eloquent fashion.

But I think this analysis is flawed. The Greek politicians who created the welfare state were very successful in buying votes. They’re now out of office, either dead or retired with fat pensions, as the house of cards is collapsing.

So if you’re Obama or some other current-day politician (and assuming you don’t care about the future), what’s the downside of expanding the burden of government spending?

P.S. You can vote for who had the best Debate Club argument, so please don’t hesitate to click the up arrow. Presumably thanks to readers of International Liberty, I’ve prevailed in previous debates on double taxation, European fiscal policy, flat tax, Internet taxation, and Obamanomics.

By Everette Hatcher III | Posted in Cato Institute, spending out of control, Taxes | Comments (0)

FIRST PRESIDENTIAL DEBATE – Barack Obama VS Mitt Romney (Part 5)

October 10, 2012 – 6:47 am

FIRST PRESIDENTIAL DEBATE – Barack Obama VS Mitt Romney (Part 5)

Published on Oct 3, 2012 by

Barack Obama & Mitt Romney Full Presidential Debate

__________

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To Mitt Romney, Box 96994, Washington, DC 20077-7556  From Everette Hatcher of http://www.thedailyhatch.org 13900 Cottontail Lane, Alexander, AR 72002 Did we forgive George Bush in 1988 for being pro-choice originally in 1980? We sure did. In fact, my former pastor, Adrian Rogers, had a chance to visit with Bush several times. He told him that the […]

Open letter to President Obama (Part 125B)

Obama Calls GOP Budget Plan “Prescription for Decline” Uploaded by PBSNewsHour on Apr 3, 2012 In a blistering attack on the House-Passed Republican budget Tuesday, President Obama called the plan proposed by Rep. Paul Ryan a “Trojan Horse” and “a prescription for decline.” Judy Woodruff, Jared Bernstein of the Center on Budget and Policy Priorities […]

President Obama responds to Heritage Foundation critics on welfare reform waivers

Is President Obama gutting the welfare reform that Bill Clinton signed into law? Morning Bell: Obama Denies Gutting Welfare Reform Amy Payne August 8, 2012 at 9:15 am The Obama Administration came out swinging against its critics on welfare reform yesterday, with Press Secretary Jay Carney saying the charge that the Administration gutted the successful […]

Open letter to President Obama (Part 117.3)

A Taxing Distinction for ObamaCare Published on Jun 28, 2012 by catoinstitutevideo http://www.cato.org/publications/commentary/it-now-falls-congress http://www.cato.org/publications/commentary/taxing-decision http://www.cato-at-liberty.org/supreme-court-unlawfully-rewrites-obamacare-to… http://www.cato-at-liberty.org/congress-its-not-a-tax-scotus-yes-it-is/ The Cato Institute’s Roger Pilon, Ilya Shapiro, Michael F. Cannon, Michael D. Tanner and Trevor Burrus evaluate today’s ruling on ObamaCare at the Supreme Court. Video produced by Caleb O. Brown and Austin Bragg. ____________ President Obama c/o The […]

Cartoons about Obama’s class warfare

I have written a lot about this in the past and sometimes you just have to sit back and laugh. Laughing at Obama’s Bumbling Class Warfare Agenda July 13, 2012 by Dan Mitchell We know that President Obama’s class-warfare agenda is bad economic policy. We know high tax rates undermine competitiveness. And we know tax increases […]

“Feedback Friday” Letter to White House generated form letter response June 15, 2012 on Healthcare (part 8)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on June 15, 2012. I don’t know which letter of mine generated this response so I have […]

Letter to White House generated form letter response April 3, 2011 (part 4)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on April 3, 2011. I don’t know which letter of mine generated this response so I have linked […]

“Feedback Friday” Letter to White House generated form letter response (on how to jumpstart the economy) March 7, 2011 (part 3)

I have been writing President Obama letters and have not received a personal response yet.  (He reads 10 letters a day personally and responds to each of them.) However, I did receive a form letter in the form of an email on March 7, 2011. I don’t know which letter of mine generated this response so I have […]

 

By Everette Hatcher III | Posted in President Obama, spending out of control | Comments (0)

1980 Presidential Debate Reagan v. Carter video and transcript, seventh issue: Social Security

October 10, 2012 – 6:46 am

1980 Presidential Candidate Debate: Governor Ronald Reagan and President Jimmy Carter – 10/28/80

Above is the video of the complete debate. Below is the seventh part of the transcript that deals with the issue of Social Security among other things. This segment begins at  1:08  minute mark.

October 28, 1980 Debate Transcript

October 28, 1980

The Carter-Reagan Presidential Debate

MR. SMITH: Thank you Governor. Thank you, Mr. President. The next question goes to Governor Reagan from William Hilliard.

MR. HILLIARD: Governor Reagan, wage earners in this country – especially the young – are supporting a Social Security system that continues to affect their income drastically. The system is fostering a struggle between the young and the old, and is drifting the country toward a polarization of these two groups. How much longer can the young wage earner expect to bear the ever-increasing burden of the Social Security system?

MR. REAGAN: The Social Security system was based on a false premise, with regard to how fast the number of workers would increase and how fast the number of retirees would increase. It is actuarially out of balance, and this first became evident about 16 years ago, and some of us were voicing warnings then. Now, it is trillions of dollars out of balance, and the only answer that has come so far is the biggest single tax increase in our nation’s history – the payroll tax increase for Social Security – which will only put a band-aid on this and postpone the day of reckoning by a few years at most. What is needed is a study that I have proposed by a task force of experts to look into this entire problem as to how it can be reformed and made actuarially sound, but with the premise that no one presently dependent on Social Security is going to have the rug pulled out from under them and not get their check. We cannot frighten, as we have with the threats and the campaign rhetoric that has gone on in this campaign, our senior citizens – leave them thinking that in some way, they’re endangered and they would have no place to turn. They must continue to get those checks, and I believe that the system can be put on a sound actuarial basis. But it’s going to take some study and some work, and not just passing a tax increase to let the load – or the roof – fall in on the next administration.

MR. SMITH: Would you repeat that question for President Carter?

MR. HILLIARD: Yes. President Carter, wage earners in this country, especially the young, are supporting a Social Security System that continues to affect their income drastically. The system is fostering a struggle between young and old and is drifting the country toward a polarization of these two groups. How much longer can the young wage earner expect to bear the ever-increasing burden of the Social Security System?

MR. CARTER: As long as there is a Democratic President in the White House, we will have a strong and viable Social Security System, free of the threat of bankruptcy. Although Governor Reagan has changed his position lately, on four different occasions, he has advocated making Social Security a voluntary system, which would, in effect, very quickly bankrupt it. I noticed also in The Wall Street Journal early this week, that a preliminary report of his task force advocates making Social Security more sound by reducing the adjustment in Social Security for the retired people to compensate for the impact of inflation. These kinds of approaches are very dangerous to the security, the well being and the peace of mind of the retired people of this country and those approaching retirement age. But no matter what it takes in the future to keep Social Security sound, it must be kept that way. And although there was a serious threat to the Social Security System and its integrity during the 1976 campaign and when I became President, the action of the Democratic Congress working with me has been to put Social Security back on a sound financial basis. That is the way it will stay.

MR. SMITH: Governor Reagan?

MR. REAGAN: Well, that just isn’t true. It has, as I said, delayed the actuarial imbalance falling on us for just a few years with that increase in taxes, and I don’t believe we can go on increasing the tax, because the problem for the young people today is that they are paying in far more than they can ever expect to get out. Now, again this statement that somehow, I wanted to destroy it and I just changed my tune, that I am for voluntary Social Security, which would mean the ruin of it. Mr. President, the voluntary thing that I suggested many years ago was that with a young man orphaned and raised by an aunt who died, his aunt was ineligible for Social Security insurance because she was not his mother. And I suggested that if this is an insurance program, certainly the person who is paying in should be able to name his own beneficiary. That is the closest I have ever come to anything voluntary with Social Security. I, too, am pledged to a Social Security program that will reassure these senior citizens of ours that they are going to continue to get their money. There are some changes that I would like to make. I would like to make a change in the regulation that discriminates against a wife who works and finds that she then is faced with a choice between her father’s or her husband’s benefits, if he dies first, or what she has paid in; but it does not recognize that she has also been paying in herself, and she is entitled to more than she presently can get. I’d like to change that.

MR. SMITH: President Carter’s rebuttal now.

MR. CARTER: These constant suggestions that the basic Social Security System should be changed does call for concern and consternation among the aged of our country. It is obvious that we should have a commitment to them, that Social Security benefits should not be taxed and that there would be no peremptory change in the standards by which Social Security payments are made to retired people. We also need to continue to index Social Security payments, so that if inflation rises, the Social Security payments would rise a commensurate degree to let the buying power of a Social Security check continue intact. In the past, the relationship between Social Security and Medicare has been very important to providing some modicum of aid for senior citizens in the retention of health benefits. Governor Reagan, as a matter of fact, began his political career campaigning around this nation against Medicare. Now, we have an opportunity to move toward national health insurance, with an emphasis on the prevention of disease, an emphasis on out-patient care, not in-patient care; an emphasis on hospital cost containment to hold down the cost of hospital care far those who are ill, an emphasis on catastrophic health insurance, so that if a family is threatened with being wiped out economically because of a very high medical bill, then the insurance would help pay for it. These are the kinds of elements of a national health insurance, important to the American people. Governor Reagan, again, typically is against such a proposal.

MR. SMITH: Governor?

MR. REAGAN: When I opposed Medicare, there was another piece of legislation meeting the same problem before the Congress. I happened to favor the other piece of legislation and thought that it would be better for the senior citizens and provide better care than the one that was finally passed. I was not opposing the principle of providing care for them. I was opposing one piece of legislation versus another. There is something else about Social Security. Of course, it doesn’t come out of the payroll tax. It comes out of a general fund, but something should be done about it. I think it is disgraceful that the Disability Insurance Fund in Social Security finds checks going every month to tens of thousands of people who are locked up in our institutions for crime or for mental illness, and they are receiving disability checks from Social Security every month while a state institution provides for all of their needs and their care.

MR. SMITH: President Carter, you have the last word on this question.

MR. CARTER: I think this debate on Social Security, Medicare, national health insurance typifies, as vividly any other subject tonight, the basic historical differences between the Democratic Party and Republican Party. The allusions to basic changes in the minimum wage is another, and the deleterious comments that Governor Reagan has made about unemployment compensation. These commitments that the Democratic Party has historically made to the working families of this nation have been extremely important to the growth in their stature and in a better quality of life for them. I noticed recently that Governor Reagan frequently quotes Democratic presidents in his acceptance address. I have never heard a candidate for President, who is a Republican, quote a Republican president, but when they get in office, they try to govern like Republicans. So, it is good fo the American people to remember that there is a sharp basic historical difference between Governor Reagan and me on these crucial issues – also, between the two parties that we represent.

By Everette Hatcher III | Posted in Ronald Reagan | Comments (0)

Open letter to President Obama (Part 153)

October 10, 2012 – 6:41 am
Federal Spending by the Numbers
 

President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here. 

I wondered how much debt has been run up during the last 3 years. The democrats downplay our debt problem and maybe the republicans have been making it sound worse than it is. What is the real truth? Is the current adminstration running up our national debt faster than any previous administration?

You are the President of the United States and I am sure you don’t want to be remembered as the man who did not ever cut anything from the budget. We need some major cuts now.

 
 
Posted: April 15, 2012 – 12:25am  

By Carole Fader jacksonville.com April 15, 2012 – 12:25am

Fact Check: President Obama ‘undisputed debt king’ of last 5 presidents

Times-Union readers want to know:

Is it true that the national debt has increased more under President Barack Obama than all the previous 43 presidents combined?

Sarah Palin told this to Fox News last year and it has been repeated in viral emails since.

It wasn’t true when she said it in May 2011 and it still isn’t true today. But partisan comments about the debt are nothing new and, according to fact-finding organizations, there’s been a lot of “sugarcoating” going on by both parties.

House Democratic leader Nancy Pelosi, for example, said on her website in early May 2011 that the debt had increased only 16 percent since Obama took office. That number was bandied about for a while by Democrats but, despite being corrected later, it is still being used in various postings and emails.

On a Flickr page, Pelosi had listed the following debt-increase numbers for these presidents: Ronald Reagan, up 189 percent; George H.W. Bush, up 55 percent; Bill Clinton, up 37 percent; George W. Bush, up 115 percent; Obama, up 16 percent.

PolitiFact.com, a Pulitzer Prize-winning fact-finding project of the Tampa Bay Times, took a hard look at the chart and found that Obama’s number was based on him taking office on Jan. 20, 2010, a year later than his actual inauguration date.

Using the real time frame, PolitiFact.com found that as of May 2011, George W. Bush had an increase of $4.899 trillion, or 86 percent, not 115 percent, and debt under Obama had risen $3.661 trillion, or 34 percent — not 16 percent. Numbers for the elder Bush, Reagan and Clinton were essentially correct.

When pointed out by PolitiFact.com, Pelosi’s office acknowledged the calculation error and changed the information.

PolitiFact.com also went one step farther. It looked at the debt as a percentage of the gross domestic product because this factors out complications such as economic cycles and inflation. Using Office of Management and Budget statistics, here’s what PolitiFact found:

Reagan, up 14.9 percentage points; George H.W. Bush, up 7.1 percentage points; Clinton, down 13.4 percentage points; George W. Bush, up 5.6 percentage points; Obama, up 21.9 percentage points.

PolitiFact.com reported: “So by this measurement — potentially a more important one — Obama is the undisputed debt king of the last five presidents, rather than the guy who added a piddling amount to the debt, as Pelosi’s chart suggested.”

It also depends on what kind of debt you look at: public debt, which is debt held by the public, or gross federal debt, which combines that debt plus debt held by the government itself. The Washington Post also pointed out other ways to look at presidential debt in an article at tinyurl.com/79erqx7.

Another way of checking out the national debt is at the Treasury Department’s “debt to the penny” website at tinyurl.com/djlqmw.

That database shows that Palin’s statement about Obama’s debt increase surpassing all previous presidents combined is not factual. The nation’s total debt was $10.626 trillion on the day Obama took office and, as of Thursday, it had increased to $15.614 trillion — a rise of $4.988 trillion.

Actually, Obama’s debt-increase number overtook that of George W. Bush — which rose from $5.727 trillion to $10.626, or $4.899 trillion — last month.

So, yes, the debt increase has risen more during Obama’s almost three years and three months in office than it did during eight years of Bush’s presidency — but obviously not more than all presidents combined.

carole.fader@jacksonville.com, (904) 359-4635

____________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

By Everette Hatcher III | Posted in President Obama, spending out of control | Comments (0)