Category Archives: spending out of control

Milton Friedman on tax freedom day

April 19, 2012 – 10:22 am

Why does the federal government have to take so much control of our lives? Back in 1929 the federal government spent 3% of GDP and now it spends 24.8%. Back then in 1929 there was 8.9% by State and local governments for a total of 11.9% and our freedom day was February 12th when we turn our attention to spending our money on the things we need. Now the government spends over 50% of our money and we don’t get our freedom day until sometime in July!!!

Milton Friedman on Tax Freedom Day

Posted by Chris Edwards

The Tax Foundation reported that Tuesday was Tax Freedom Day (TFD), which is the day that Americans stop “working for the government” through their tax payments and start working for themselves.

TFD is calculated by taking total federal, state, and local taxes and dividing by national income to get a ratio representing the share of income that the average person pays in all taxes. That ratio is applied to the 365-day calendar. This year the ratio is 29.2 percent, which translates into April 17 for TFD. Time to party!

But maybe not quite yet…

When I worked at Tax Foundation in 1993, I mailed a letter to Milton Friedman asking about his view on TFD. He kindly responded with a letter and a 1974 Newsweek article in which he proposed a “Personal Independence Day.” That day would be based on total government spending, which is larger than total taxes, and thus our day to celebrate freedom from the government hasn’t yet arrived this year.

In his letter to me, Friedman stressed that total spending is the important variable in assessing the burden of government: “If government spends an amount equal to 50 percent of the national income, only 50 percent is left to be available for private purposes, and that is true however the 50 percent that government spends is financed.” And while some economists focus on how government borrowing may “crowd out” private investment, Friedman said, “What does the crowding out is government spending, however financed, not government deficits.”

In its TFD report, Tax Foundation includes a supplemental calculation looking at spending. The thinktank figures that Americans will work until May 14 this year to be free from the burden of federal, state, and local spending. The Foundation is lacking a snappy name for that important day, but now we are reminded that Friedman has already suggested one.  

Friedman hoped that “Personal Independence Day” would complement our national Independence Day of July 4. The latter is the day we celebrate independence from the “Royal Brute of Britain,” as Tom Paine called him in Common Sense. But for Paine and the other Founders, the deeper goal of July 4, 1776 was to create a limited government to ensure the maximum space for the exercise of individual freedom. As Paine noted, private “society in every state is a blessing, but government, even in its best state, is but a necessary evil.”

So Milton Friedman’s Personal Independence Day can be our annual reminder that while our forefathers gave the boot to the “crowned ruffians” of Old Europe, we’ve still got work to do in limiting the power grabbing of our own elected ruffians in Washington.

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By Everette Hatcher III | Also posted in Milton Friedman, Taxes | Comments (0)

Senator Mark Pryor running for re-election in 2014, Open letter to Pryor

April 19, 2012 – 6:20 am

Today while reading the Arkansas Times Blog I discovered that Senator Pryor was going to run for re-election. I was quite surprised that he was doing so because he knows how much his support of President Obama’s agenda has hurt him in the state (Jason Tolbert did a great post on that on 4-10-12).

I have been writing Senator Pryor every Monday and Thursday for almost a year now. Every Monday I email a letter to him with suggested spending cut ideas (which he requested) and then I post my suggestions on my blog. Every Thursday I write a “Thirsty Thursday” post where I argue in open letters to Senator Pryor that we must pass a Balanced Budget Amendment.

The fact of the matter is that I have probably written more about Senator Pryor than any other elected official (except the president) and my blog has flourished. My blog www.thedailyhatch.org has  had over 300,000 hits over the last 17 months of being online. I think it is because people know that this reckless spending must be stopped.

Perhaps Thomas Jefferson put it best:

“To preserve our independence, we must not let our rulers load us down with perpetual debt.”

Today is Thursday and I continue with my “Thirsty Thursday” series below.

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.

There’s nothing nutty about a balanced-budget amendment
In fact, it makes a lot of sense
Thursday, July 21, 2011
By Dick Thornburgh

A late entry in the budget deficit-debt ceiling talkathon in Washington is increasing support for a constitutional requirement that the federal budget be balanced each and every year.

Doctrinaire liberals will no doubt characterize this proposal as a nutty one, but careful scrutiny of such an amendment to our Constitution demonstrates its potential to prevent future train wrecks in the budgeting process.

Coupled with a presidential line-item veto and separate capital budgeting (which differentiates investments from current outlays), a constitutional budget-balancing requirement makes sense. These tools already are available to most governors and state legislatures. And they work.

The current debate in the Congress will likely include the following arguments usually raised against a balanced-budget amendment.

First, it will be argued that the amendment would “clutter up” our basic document in a way contrary to the intention of the founding fathers.

This is clearly wrong. The framers of the Constitution contemplated that amendments would be necessary to keep it abreast of the times. It already has been amended on 27 occasions.

Moreover, at the time of the Constitutional Convention, one of the major preoccupations was how to liquidate the Revolutionary War debts of the states. Certainly, it would have been unthinkable to the framers that the federal government itself would systematically run at a deficit, decade after decade. Indeed, the Treasury did not begin to follow such a practice until the mid-1930s.

Second, critics will argue that the adoption of a balanced-budget amendment would not solve the deficit problem overnight.

This is correct, but begs the issue. Serious supporters of the amendment recognize that a phasing-in period of five or 10 years would be required to reach a zero deficit. During this interim period, however, budget makers would be disciplined to meet declining deficit targets in order to reach a balanced budget by the established deadline.

As pointed out by former Commerce Secretary Peter G. Peterson, such “steady progress toward eliminating the deficit will maintain investor confidence, keep long-term interest rates headed down and keep our economy growing.”

Third, it will be argued that such an amendment would require vast cuts in social services and entitlements or defense expenditures.

Not necessarily. True, these programs would have to be paid for on a current basis rather than heaped on the backs of upcoming generations. Certainly, difficult choices would have to be made about priorities and levels of program funding. But the very purpose of the amendment is to discipline the executive and legislative branches actually to debate these choices and not to propose or perpetuate vast spending programs without providing the revenues to fund them.

The amendment would, in effect, make the president and Congress fully accountable for their spending and taxing decisions, as they should be.

Fourth, critics will say that a balanced-budget amendment would prevent or hinder our capacity to respond to national defense or economic emergencies.

This concern is easy to counter. Any sensible amendment proposal would feature a “safety valve” to exempt deficits incurred in response to such emergencies, requiring, for example, a three-fifths “super majority” in both houses of Congress. Such action should, of course, be based on a finding that such an emergency actually exists.

Fifth, it will be said that a balanced-budget amendment would be “more loophole than law” and might be easily circumvented.

The experience of the states suggests otherwise. Balanced-budget requirements are now in effect in all but one of the 50 states and have served them well.

Moreover, the line-item veto, available to 43 governors, would assure that any specific congressional overruns (or loophole end-runs) could be dealt with by the president. The public’s outcry, the elective process and the courts would also provide backup restraint on any tendency to simply ignore a constitutional directive.

In the final analysis, most of the excuses raised for not enacting a constitutional mandate to balance the budget rest on a stated or implied preference for solving our deficit dilemma through the “political process” — that is to say, through responsible action by the president and Congress.

But that has been tried and found wanting, again and again.

Surely, this country is ready for a simple, clear and supreme directive that its elected officials fulfill their fiscal responsibilities. A constitutional amendment is the only instrument that will meet this need effectively. Years of experience at the state level argue persuasively in favor of such a step. Years of debate have produced no persuasive arguments against it.

Perhaps Thomas Jefferson put it best:

“To preserve our independence, we must not let our rulers load us down with perpetual debt.”

That is the aim of a balanced-budget amendment. Reform-minded members of Congress should choose to support such an amendment to our Constitution as a means of resolving future legislative crises and ending “credit card” government once and for all.

A nutty idea? Not by a long shot.

Dick Thornburgh, of counsel to the Pittsburgh law firm K&L Gates, is a former U.S. attorney general and governor of Pennsylvania.
First published on July 21, 2011 at 12:00 am
By Everette Hatcher III | Also posted in Jason Tolbert | Comments (0)

“People sitting on the couch waiting for their next government check”

April 19, 2012 – 4:16 am

Milton Friedman – The Welfare Establishment

Uploaded by on Apr 22, 2011

Professor Friedman looks at the dynamics of the welfare state.
http://www.LibertyPen.com

Source: Milton Friedman Speaks
Buy it: http://www.freetochoose.net/store/product_info.php?products_id=152

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Are we heading to Greece? It seems that a lot of people in Greece just sit around and wait for their government check to come in.

Christie the Prophet

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on April 18, 2012

This article appeared in National Review (Online) on April 18, 2012.

New Jersey governor Chris Christie recently warned that America is in danger of becoming a country of “people sitting on the couch waiting for their next government check.” Predictably, the Left was outraged, but Governor Christie wasn’t far off the mark.

During the 2011 debate over raising the debt ceiling, President Obama reminded Americans that the federal government sends out 70 million checks every month. That is probably an underestimate. According to the Washington Post, the president’s number included Social Security, veterans’ benefits, and spending on non-defense contractors and vendors, but not reimbursements to Medicare providers and vendors or electronic transfers to the 21 million households receiving food stamps. (Nor did he include most spending by the Defense Department, which has a payroll of 6.4 million active and retired employees and, on average, cuts checks for nearly 1 million invoices and 660,000 travel-expense claims per month.) The actual number might be closer to 200 million checks every month.

Of course it would be unfair to lump everyone who receives a check from the government in with the people Governor Christie was talking about (though it does say something about the size of government) but, nonetheless, we are becoming a society that relies on government to care for us.

[T]oday, every problem in society prompts calls for government action, response, or funding.

In 1965, just 22 percent of all federal spending was transfer payments. Today it has doubled to 44 percent. That means that nearly half of all federal spending is simply government taking money from one person and giving it to another.

Or look at it another way: In 1965, transfer payments from the federal government made up less than 10 percent of wages and salaries. As recently as 2000, that percentage was just 21 percent. Today, transfer payments are more than a third of salary and wages. Worse, if one includes salaries from government employment, more than half of Americans receive a substantial portion of their income from the government.

Conservatives often criticize transfer payments to the poor, and for good reason. At the federal and state levels combined, we spend nearly $1 trillion per year on anti-poverty or means-tested programs that do more to promote a permanent underclass than to eliminate poverty. But the modern welfare state is much more than programs for the poor. It includes middle-class welfare, such as Social Security and Medicare, which are the real drivers of our future national insolvency. We think of Medicaid as health care for the poor, but as much as two-thirds of Medicaid spending goes to pay for long-term care such as nursing homes for the elderly, much of it for middle-class people sheltering assets. And the modern welfare state also includes corporate welfare, the military-industrial complex, and others living off the taxpayer’s dime. The Export-Import Bank is as much welfare as TANF.

This is the road we are now on. The welfare state started with small programs targeted toward a small number of genuinely needy people. But as politicians figured out the electoral benefits of expanding programs and people realized they could let others work on their behalf, those programs grew until the point at which, today, every problem in society prompts calls for government action, response, or funding.

At the same time, as Governor Christie also noted, this implicitly tells people, “stop dreaming, stop striving.” We demonize those who do succeed, damning them as part of the evil “1 percent.”

This is the real danger of the welfare state. It’s not that it will bankrupt us — though it will. It is that it slowly and insidiously destroys our national character, saps our will to be great, and makes us content with the way things are rather than how they could be. We have seen where this road ends. As Governor Christie warns, it “will not just bankrupt us financially, it will bankrupt us morally.”

Biblical exegesis tells us that the Israelites needed to wander for 40 years in the desert after being released from bondage in Egypt because they couldn’t begin to build a new nation until a new generation grew up that hadn’t been raised in bondage. Those raised in slavery were not trained to think for themselves; they had become dependent on their masters to provide for them. Indeed, when they encountered hardships, many cried for a return to bondage.

Just look to Europe today. The welfare states of Europe are imploding, collapsing under the weight of promises that can no longer be met. Their citizens riot in the streets at the prospect that their government benefits might be reduced.

If anyone wants to know what this next election is really about, Governor Christie just told us.

By Everette Hatcher III | Also posted in Cato Institute, President Obama | Comments (0)

Is a lack of money the problem for our public schools?

April 18, 2012 – 11:38 pm

Is a lack of money the problem for our public schools?

Everything You Need to Know About Public School Spending in Less Than 2½ Minutes

Posted by Adam Schaeffer

Neal McCluskey gutted the President’s new “Save the Teachers” American Jobs Act sales pitch a good while back, as did Andrew Coulson here. Thankfully, it seems a lot of senators agree it’s a bad idea.

Last week, a $35 Billion piece of the president’s new “stimulus” plan, which included $30 Billion to bail out government schools—again—went down in the Senate:

Our public education problem is huge; we’re spending far too much and getting way too little. But most people don’t know the basic details. They still think we need to spend more on education.

So, for all of you who want to get the details but don’t have much time, or have family and friends who need to be introduced to reality, I present to you . . . Everything you need to know about public school spending in less than 2½ minutes.

Watch it, “like” it, post it on Facebook, email it around, comment, and generally get the word out . . . because we really do need to get the word out.

Public School Spending in Less than 2½ Minutes

Uploaded by on Oct 21, 2011

Everything you need to know about public school spending in less than 2½ minutes.

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Adam Schaeffer • October 25, 2011 @ 10:54 am
Filed under: Education and Child Policy; Government and Politics; Tax and Budget Policy
Tags: , ,

By Everette Hatcher III | Also posted in President Obama | Tagged , , , , | Comments (0)

An open letter to President Obama (Part 61)

April 18, 2012 – 6:30 am

Rep. James Lankford Responds to President Obama’s $3.8 Trillion Budget

Uploaded by  on Feb 13, 2012

Rep. James Lankford (R-OK) responded to President Obama’s FY 2013 budget proposal that fails to cut the deficit in half by the end of his first term as promised. The budget also delayed the tough decisions to cut spending and reform entitlements that are needed to avoid a debt crisis.

_______________________

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 really am offended when I hear that you claim that your budget cuts 4 trillion in the next 10 years but it really adds to the deficit many trillions of dollars. What kind of funny math is that? Take a look at this article below:

Feb 13 2012

Boozman Comments on President Obama’s Budget Proposal

WASHINGTON D.C. – U.S. Senator John Boozman (R-AR) issued the following statement on the release of President Obama’s budget proposal:

“America deserves better than a collection of tax hikes, phony savings and additional debt.  The President’s budget proposal is bad for seniors as it takes no steps to protect and strengthen Medicare and Social Security, will hurt chances of an economic recovery through tax hikes and will add $11 trillion more to our already staggering national debt in a 10-year period.”

“This is clearly an election year proposal.  Rather than a serious attempt to outline a direction for our economic future, the President is trying to be all for everyone with this plan.  Just as the President’s previous proposals have been voted down, I would not expect this one to pass should it come up for a vote in the Senate.”

“This budget proposal from the White House is stark reminder that we need to pass the Honest Budget Act that I have cosponsored.  The President’s budget is loaded with gimmicks and accounting tricks that our bill would put an end to so that the American people would have an opportunity to weigh in on a real budget that would get our fiscal house in order.”

“When it comes to our country’s budget, Americans have a right to expect accountability, honesty and responsibility.  This proposal has none of those.”

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 | Also posted in President Obama | Comments (0)

An open letter to President Obama (Part 60)

April 18, 2012 – 5:50 am

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Corker Says President’s 2012 Budget Proposal Shows “Lack of Urgency” on Spending

Uploaded by  on Feb 14, 2011

In remarks on the Senate floor today, U.S. Senator Bob Corker, R-Tenn., expressed disappointment in President Obama’s 2012 budget proposal, saying it displayed a “lack of urgency” to get federal spending under control. Corker has introduced the CAP Act to dramatically cut federal spending over the next decade.

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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.

Below are some comments that might interest you.

Feb 15 2012

Boozman Urges America to Reject the President’s Reckless Budget

WASHINGTON D.C. – U.S. Senator John Boozman (R-AR) took to the Senate floor today to urge America to reject President Obama’s reckless budget proposal and focus on passing a fiscally responsible budget.

“When you get down to it, President Obama was never serious about his pledge to cut the deficit in half by the end of his first term.  Like every budget this administration has proposed, this one was written with red ink.  The deficit spending proposed in the President’s FY13 budget topped a trillion once again.  This is an unsustainable rate of spending,” Boozman said in his speech.

The full text of the speech can be found here:

Madam President: On Monday morning, the country was presented with President Obama’s budget proposal for the fiscal year.

If you were to only listen to the President and his surrogates, you would think this proposal is great for the nation.

The acting budget director says the President’s budget “makes the right investments.”

The head of the President’s National Economic Council used a litany of sports metaphors to make the case that “the president has very much stepped up to the plate.”

And the President himself said his budget makes “some tough choices in order to put this country back on a more sustainable fiscal path.”

The reason they are so excited about this proposal is that, they believe, in an election year, they have offered every ally something to woe their support.  This budget proposal truly does try to be everything for everyone.  The problem is, however, no one wins with it.

When you scratch the surface of this proposal, the shine quickly wears off.

The deficit reduction claims that the administration throws out to defend this proposal don’t hold water.

You can’t claim $1 trillion in cuts that Congress pushed through during the debt ceiling debate as new cuts.

Nor can you say with all honesty that $850 billion in war savings are real cuts.  This money was never going to be spent in the first place.

When you get down to it, President Obama was never serious about his pledge to cut the deficit in half by the end of his first term.  Like every budget this administration has proposed, this one was written with red ink.  The deficit spending proposed in the President’s FY13 budget topped a trillion once again.  This is an unsustainable rate of spending.

On Monday, the President’s team was doing a full-scale PR push for this budget.  At one point during the rollout, a reporter asked the President’s top economic aides whatever happened to that pledge the President had made to the American people.

Gone from their answers was the tough talk of making “difficult decisions” and facing “challenges we’ve long neglected.”  Instead, his advisors were left to pull out the old standby excuse that the President and his team simply “didn’t realize how bad” the economy actually is when they first took over.

Clearly, they still don’t realize it now.

Not only does the President’s budget ignore the very real disarray our fiscal house is in, it makes the mess worse.

Since President Obama took office, our national debt has shot up 42%.   Under President Obama’s watch, the national debt has jumped to a jaw-dropping $15.1 trillion.

This is the fourth year in a row that the budget would run a deficit above $1.29 trillion.  When it comes to fiscal responsibility, this is not a record to be proud of.

America deserves better than a collection of tax hikes, phony savings and additional debt.

The President’s budget proposal is bad for seniors as it takes no steps to protect and strengthen Medicare and Social Security, will hurt chances of an economic recovery through tax hikes and will add $11 trillion more to our already staggering national debt in a 10-year period.

We cannot continue to keep going down this road.   America’s fiscal health is at stake.  We’ve got to stop spending more than we take in.  If not, we risk going the direction of Greece, Portugal, Italy and other European countries that have spent their way to the brink of default.

As we head into the final year of President Obama’s first term, we have already witnessed the most rapid increase in debt under any U.S. President.  With our national debt already the size of our entire economy, the President has proposed a budget that calls for hundreds of billions of dollars in new spending.

If we followed through with this budget, deficit spending would exceed $600 billion every year but one over the next decade.  Our national debt would grow to $18.7 trillion.

President Obama would like you to believe that if we simply raise taxes we can solve all of our fiscal problems. A recent CBO report shows that spending is the primary cause of our fiscal crisis and supports spending cuts rather than tax increases to reverse this trend.  But the President is holding steadfast to his desire to raise taxes as an answer.

The President’s failed policy of borrowing, spending and taxing is just what the CBO is warning us to avoid.   It hasn’t worked in the past and it won’t work in the future.

Washington does not have a revenue problem, it has a spending problem.  The fact that President Obama still believes we can tax our way out of the problem reveals a huge disconnect with the American people.

Madam President, when it comes to our country’s budget, Americans have a right to expect accountability, honesty and responsibility.  This proposal has none of those.

If President Obama refuses to acknowledge and address the very real economic crisis facing our country, let’s show America that we will.  We can do so by rejecting the White House’s proposal and passing a responsible budget that puts our nation back on a fiscally responsible path. 

___________________

We got to start making major cuts in our budget or we will never balance the budget and we will end up like Greece.

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 | Also posted in President Obama | Comments (0)

An open letter to President Obama (Part 59)

April 17, 2012 – 2:15 pm

 

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.

Dan Mitchell of the Cato Institute shows why your plan to tax the rich will not solve our deficit problem.  

Explaining in the New York Post Why Obama’s Soak-the-Rich Tax Policy Is Doomed to Failure

April 17, 2012 by Dan Mitchell

I think high tax rates on certain classes of citizens are immoral and discriminatory. If the government is going to collect revenue, all taxpayers should be treated equally, with something akin to a simple flat tax.

But most people don’t seem to care about having the law apply the same to all people, so I make a strictly utilitarian case for low tax rates in today’s New York Post. Here some of what I wrote.

Whether it’s through the Buffett Rule, higher income-tax rates or double taxation of dividends and capital gains, President Obama often demands that “rich” taxpayers and big corporations send more money to Washington. But…trying to get more money from upper-income taxpayers is like playing whack-a-mole. So long as tax rates are high, rich people will figure out ways to protect their income.It doesn’t take a tax genius; any rich person can make a phone call or hit a few computer keys and shift his or her investments to tax-free municipal bonds. It’s not good for the economy when capital gets diverted to help finance the excess spending of Detroit or California, but it’s an effective way of stiff-arming the IRS. Or the rich can play the green-energy scam, getting all sorts of credits to offset their tax liabilities. …Even if lawmakers abolished the various tax-code distortions, they might still be disappointed. The one sure way for rich people to lower their tax bills is by generating less income. …This isn’t some sort of modern-day revelation. Andrew Mellon, a Treasury secretary during the 1920s, noted that “the history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business.”

I then provide a specific example, looking at how Reagan’s lower tax rates resulted in a lot more revenue from the rich.

Unlike the rest of us, the rich have a great ability to alter the timing, amount and composition of their income. That’s because, according to IRS data, those with more than $1 million of adjusted gross income get only 33 percent of it from wages and salaries. The super-rich (those with income above $10 million) rely on wages and salaries for only 19 percent of their income. In 1980, when the top tax rate was 70 percent, rich people (those with incomes of more than $200,000) reported about $36 billion of income; the IRS collected about $19 billion of that amount. So what happened when President Ronald Reagan lowered the top tax rate to 28 percent by 1988? Did revenue fall proportionately, to about $8 billion? Folks on the left thought that would happen, complaining that Reagan’s “tax cuts for the rich” would starve the government of revenue and give upper-income taxpayers a free ride. But if we look at the 1988 IRS data, rich people paid more than $99 billion to Uncle Sam. That is, because rich taxpayers were willing to earn and report much more income, the government collected five times as much revenue with a lower rate.

I also included above, for readers of this blog, a table with the raw numbers from the IRS. Feel free to click for a larger image and see how the “rich” responded to better tax policy.

I then close with a warning about Obama’s class warfare policy.

Obama wants to run the experiment in reverse. He hasn’t proposed to push the top tax rate up to 70 percent, thank goodness, but the combined effect of his class-warfare policies would mean a big increase in marginal tax rates. That might be good for workers in China, India or Ireland, because American jobs and investment would migrate to those places. But it’s not the right policy for the United States.

In other words, even if you’re a leftist and your main goal is giving the government more revenue, higher tax rates are a bad idea. The rich will simply figure out ways to protect their earnings while the rest of us suffer because the economy loses some of its dynamism.

______________

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 | Also posted in Cato Institute, President Obama, Taxes | Comments (0)

An open letter to President Obama (Part 58) “Our national debt threatens our security”

April 17, 2012 – 11:41 am

Liam Fox Issues a Warning to America

Uploaded by on Feb 28, 2012

Britain’s Liam Fox has a warning for America: Fix the debt problem now or suffer the consequences of less power on the world stage. The former U.K. secretary of state for defense visited Heritage to explain why the America’s debt is a national security issue.

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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.

The Heritage Foundation points out how much the national debt has the potential of ultimately harming our ability to defend ourselves.

Britain’s Liam Fox has a warning for America: Fix the debt problem now or suffer the consequences of less power on the world stage. The former U.K. secretary of state for defense visited Heritage to explain why America’s debt is a national security issue.

>> Watch the full 45-minute speech, “Warning to a Superpower”

Fox faced cuts to the armed forces in the United Kingdom during his tenure. He said the amount of interest Britain pays on its debt is larger today than its budget for defense. Fox explained that both Britain and America should be concerned about the impact our national debt has on our security.

“The real issue is the indebtedness of Western nations,” he stressed, “Here in the United States, there is a certain irony in the fact that in order to maintain debt interest payment by the national government, America is having to cut its security budget so that some of that money on the debt interest ends up in Moscow and Beijing.” He underscored to the need for serious reforms to tackle what he described as our “absolutely unsustainable” level of national debt. Western economies, he warned “are up to their necks in debt and if they don’t do something about it, [they] will drown in that debt.”

___________

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 | Also posted in President Obama | Comments (0)

Interview with Paul Ryan

April 17, 2012 – 7:03 am

Rep. Paul Ryan’s Budget Problem – CBN.com

A biblical justification for getting our spending in order.

Ryan Messmore

April 16, 2012 at 1:00 pm

How should one’s faith shape his or her engagement in the policy arena?

Political Correspondent David Brody recently asked that question of House Budget Committee Chairman Paul Ryan (R–WI) concerning the Republican budget plan. In a taped interview for the Christian Broadcasting Network (CBN), Ryan, a Roman Catholic, identified care for the poor as a fundamental tenet in the social teachings of his Church.

For Ryan, that teaching means: “Don’t keep people poor, don’t make people dependent on government so that they stay stuck at their station in life. Help people get out of poverty.”

Ryan believes his federal budget plan helps accomplish that goal. In a letter last year to then-Archbishop (now Cardinal) Timothy Dolan of New York, Ryan stated that his proposed budget better targets assistance to those in need, repairs the social safety net, and fulfills the mission of health and retirement security for all Americans. Furthermore, if the U.S. government continues to drive up the deficit through reckless spending, Ryan wrote that “the weakest will be hit three times over: by rising costs, by drastic cuts to programs they rely on, and by the collapse of individual support for charities that help the hungry, the homeless, the sick, refugees and others in need.”

In the CBN interview that aired last week, Ryan highlighted an additional principle of Catholic social teaching that informs his engagement in public policy: the principle of subsidiarity.

Subsidiarity holds that decisions are best made at the most local level available. As Ryan noted, when applied to political authority, this means federalism. Subsidiarity also holds that larger, more powerful institutions should refrain from undermining the freedom and integrity of smaller, less powerful ones. This is the aspect of the principle that Ryan picked up on most pointedly:

[Subsidiarity means] not having big government crowd out civic society, but…having     enough space in our communities so that we can interact with each other, and take care of    people who are down and out in our communities.

This principle arises out of a larger vision of social flourishing, one in which the common good is advanced “through our civic organizations, through our churches, through our charities, through all of our different groups where we interact with people as a community.”

Ryan has been attacked by those who hold a different view of government’s relationship to social well-being. His critics, including President Obama, seem to prefer that Washington, D.C., play a more direct and comprehensive role in pursuing the common good, even at the expense of civil society organizations that are often better equipped to serve people in need.

Some have tried to make the budget debate a conflict between those who do or do not care about the poor. But at its heart, this debate is about two contrasting visions of government’s proper role—in relation to prosperity, the common good, and to other institutions in society.

Ryan has reminded Americans in general—and people of faith in particular—of a principle that deserves more attention in budget discussions. The morality of a budget cannot be evaluated solely in terms of government welfare spending; it must also consider effects to the long-term well-being of the poor, the financial viability of the nation, and the freedom of other social institutions.

These criteria inform The Heritage Foundation’s own proposal for addressing the debt crises, called Saving the American Dream.

A federal budget that continues to promote the same unsatisfactory programs and accumulate unsustainable debt—while crowding out smaller institutions of society—is neither moral nor helpful to the poor.

Subsidiary and federalism are important principles that can help drive America’s budget debate in a better direction.

By Everette Hatcher III | Also posted in Current Events, Taxes | Comments (0)

An open letter to President Obama (Part 57)

April 16, 2012 – 6:27 am

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.

Over the last 20 or 30 years I have heard conservatives say that it is  a real shame that we are headed towards a bankrupt European liberal socialist kind of state. However, we are now there.

We’re Already Europe

by Michael D. Tanner

Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Added to cato.org on February 22, 2012

This article appeared in National Review (Online) on February 22, 2012.

With seemingly every day bringing more bad news from Europe, many are beginning to ask how much longer the United States has before our welfare state follows the European model into bankruptcy. The bad news is: It may already have.

This year, the fourth straight year that we borrowed more than $1 trillion to support the U.S. government, our budget deficit will top $1.3 trillion, 8.7 percent of our GDP. If you think that sounds bad, it’s because it is. In fact, only two European countries, Greece and Ireland, have larger budget deficits as a percentage of GDP. Things are only slightly better when you look at the size of our national debt, which now exceeds $15.3 trillion, 102 percent of GDP. Just four European countries have larger national debts than we do — Greece and Ireland again, plus Portugal and Italy. That means the U.S. government is actually less fiscally responsible than countries like France, Belgium, or Spain.

And as bad as things are right now, we are on an even worse course for the future. If one adds the unfunded liabilities of Social Security and Medicare to our official national debt, we really owe $72 trillion, by the Obama administration’s projections for future Medicare savings under Obamacare, and as much as $137 trillion if you use more realistic projections. Under the best-case scenario, then, this amounts to more than 480 percent of GDP. And, under more realistic projections, we owe an astounding 911 percent of GDP.

At that point does the United States cease being the United States as we have known it?

Meanwhile, counting both official debt and unfunded pension and health-care liabilities, the most indebted nation in Europe is Greece, which owes 875 percent of GDP. That’s right, the United States potentially owes more than Greece. France, the second most insolvent nation in Europe, owes just 549 percent of GDP. Even under the most optimistic scenario, we owe more than such fiscal basket cases as Ireland, Italy, Portugal, and Spain.

So far we have been able to avoid the consequences of our profligate ways because the very public turmoil in Europe has helped prop us up as the world’s safe haven for foreign investment. Compared to the euro’s problems, the dollar looks pretty safe. This means that others are still willing to lend us money at absurdly low rates. But that won’t last forever. In fact, already seven European countries, including Germany and Sweden, have better credit ratings than the U.S.

Perhaps we can take some solace in the fact that our welfare state is not yet as big as Europe’s. But the key word here is “yet.” Today, our federal government spends more than 24 percent of GDP. Throw in state and local spending, and government at all levels consumes over 43 percent of everything produced in this country over the course of a year. As bad as that is, it’s still less than Europe, where the average of government spending at all levels is slightly more than 50 percent of GDP. But the Congressional Budget Office projects that federal-government spending in this country is currently on a path to exceed 42 percent of GDP by 2050. Government spending at all levels will exceed 59 percent of GDP. And CBO assumes state and local spending will decline in the future, which seems unlikely.

By way of comparison, today, Ireland is the only country in Europe with a bigger government than the U.S.’s will be in 2050. That’s right, one can look at countries like France and Greece, or even Denmark and Sweden, and realize that we will eventually have bigger governments than those quintessential welfare states have today.

At that point does the United States cease being the United States as we have known it? At the very least, can our economy survive such a crushing burden of government spending, and its attendant level of taxes and debt?

Given this looming disaster, President Obama has just submitted a budget that explicitly rejects “austerity,” avoids any reform of Medicare or Social Security, and adds some $7 trillion to the national debt over the next ten years….

___________

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

On Bloomberg, Sessions Discusses Astounding Gimmicks In President’s Budget

Uploaded by on Feb 13, 2012

By Everette Hatcher III | Also posted in Cato Institute, President Obama | Comments (0)