Category Archives: spending out of control

Spending is out of control but some insist on just asking for more revenue

December 18, 2012 – 1:05 am

Will Higher Tax Rates Balance the Budget?

Published on Apr 11, 2012

As the U.S. debt and deficit grows, some politicians and economist have called for higher tax rates in order to balance the budget. The question becomes: when the government raises taxes, does it actually collect a larger portion of the US economy?

Professor Antony Davies examines 50 years of economic data and finds that regardless of tax rates, the percentage of GDP that the government collects has remained relatively constant. In other words, no matter how high government sets tax rates, the government gets about the same portion. According to Davies, if we’re concerned about balancing the budget, we should worry less about raising tax revenue and more about growing the economy. The recipe for growth? Lower tax rates and a simplified tax code.

___________

Spending is out of control but some insist on just asking for more revenue.

Tax Increases Won’t Solve Washington’s Spending Problem

Emily Goff

December 11, 2012 at 5:45 pm

“We make some tough spending cuts on things that we don’t need; and then we ask the wealthiest Americans to pay a slightly higher tax rate. And that’s a principle I won’t compromise on.”

At yesterday’s fiscal cliff campaign stop in Redford, Michigan, President Obama delivered these remarks and hammered away at his “balanced” plan to avert the fiscal cliff. Balance, as defined in the President’s plan, consists of $4 in tax increases up front for every $1 in loosely defined spending cuts promised down the road. The balance scale at the White House, it seems, needs to be recalibrated.

Obama’s plan misses a crucial point: Washington does not have a problem of too little revenue. Its problem is too much spending. Though revenue has decreased during the recession, the nonpartisan Congressional Budget Office projects that revenues will return to their normal historical level once the economy fully recovers. Spending, however, is out of control. Instead of debating any variety of tax increases—hiking rates or limiting deductions—Congress and the President should be reducing spending. They can start with entitlement program reforms.

Raising taxes on more affluent Americans and businesses, as Obama’s plan would do, would not generate enough revenue to close our massive deficits. Doing so would require mathematically impossible tax rates. Any such attempt would also seriously hurt the economy and jeopardize job creation.

What if you stretched Obama’s version of balance a bit further, though, and let all current tax policy expire? Such massive tax increases—ignoring the certain economic damage that would occur—would STILL not balance the budget. Entitlement program spending would continue to rise dramatically, soaking up all available revenue and driving deficits deeper. (continues below chart)

Not even Obama is proposing this idea outright, but by virtue of Obama’s insistence on tax increases and unblushing silence on entitlement program reforms, he is leading the nation down this path.

A responsible solution exists to avoid the fiscal cliff without harming the economy. Bipartisan entitlement program reforms also exist that can begin to solve the country’s real fiscal crisis. President Obama insists on taxing his way to prosperity, dealing a blow to capital, investments, and small businesses. The only trouble is that he’s forgetting—or ignoring—that spending is the problem.

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

Open letter to Congressman Griffin: “Milton Friedman: “If taxes are raised in order to keep down the deficit, the result is likely to be a higher norm for government spending” (Charlie Rose interview pt 4)”

December 17, 2012 – 10:33 pm

 

December 17, 2012

Congressman Tim Griffin, c/o Little Rock Office, 1501 N. University, Suite 150, Little Rock, AR 72207

Dear Congressman Griffin,

This is the second time  I have written you on this subject. I have met you several times and I have always enjoyed visiting with you. I got to hear you speak at a town meeting at Shannon Hills about a year ago and I must say that you did a great job showing how our country is heading to Greece if we do not tackle entitlement reform in a serious way or we will not control our spending. The issue of runaway spending is one of the issues that I wanted to talk to you about today. 

It is obvious to me that if President Obama gets his hands on more money then he will continue to spend away our children’s future. He has already taken the national debt from 11 trillion to 16 trillion in just 4 years. Over, and over, and over, and over, and over and over I have written Speaker Boehner and written every Republican that represents Arkansans in Arkansas before (Griffin, Womack, Crawford, and only Senator Boozman got a chance to respond) concerning this. I am hoping they will stand up against this reckless spending that our federal government has done and will continue to do if given the chance.

I have written and emailed Senator Pryor over, and over again with spending cut suggestions but he has ignored all of these good ideas in favor of keeping the printing presses going as we plunge our future generations further in debt. I am convinced if he does not change his liberal voting record that he will no longer be our senator in 2014.

I have written hundreds of letters and emails to President Obama and I must say that I have been impressed that he has had the White House staff answer so many of my letters. However, his policies have not changed. He is committed to cutting nothing from the budget that I can tell.

Evidently the Republicans have proposed raising tax rates as a possible compromise to avoid going over the fiscal cliff. Let me make a few comments about that.

First, if raising the debt ceiling is part of this agreement then we are losing our leverage over President Obama. We have enough votes to block a debt ceiling increase. We want a balanced budget but if President Obama does not get a debt ceiling increase then he will have to balance the budget immediately.

Second, spending is our problem and it is not tax revenue. The problem in Washington is not lack of revenue but our lack of spending restraint. We almost had a balanced budget in 2007 and if we had frozen spending at 2007 levels then we would be close to a balanced budget now. Instead of controlling spending our spending has gone from 2.7 trillion to 3.8 trillion in just 5 short years!!!

Third, my blog has exploded the last few days with clicks on past posts I have done like the one below. Take a look at this post below and see why it is one of my most popular.

Fourth, I have included some wise words from a fellow Tea Party favorite like you below. Mo Brooks’ words are true now like they were in August of 2011 when he voted against the debt ceiling increase then.

Fifth, let me share these two videos with you that make very good points concerning this issue:

This video belows shows how silly the federal government is when they pass “spending cuts.”

The problem in Washington is not lack of revenue but our lack of spending restraint. This video below makes that point.

Please take the time to read Mo Brooks’ words and respond to me and tell me if you will vote against the debt ceiling increase. It is the only leverage we have on President Obama. Others have responded to me in the past and for that I am very grateful.

Thank you for your time.

Sincerely,

Everette Hatcher, 13900 Cottontail Lane, Alexander, AR 72002, cell ph 501-920-5733, lowcostsqueegees@yahoo.com, www.thedailyhatch.org

 

MILTON FRIEDMAN: THE MIND BEHIND THE REPUBLICAN TAX REVOLT

| Jul 22, 2011 | 0 comments

The on-going debate over raising the debt ceiling has focused on many areas of disagreement between Democrats and Republicans but none bigger than the Republican determination not to raise taxes.  Many pundits credit this to the political power of Grover Norquist and his Americans for Tax Reform who have spent years collecting “No Tax Increase” pledges from Republican candidates.  Others attribute Republican intransigence on taxes to a near religious belief in supply side economics, a school of thought founded by economist Arthur Laffer and journalist Jude Wanniski in the late 1970s.

The true seeds of this attitude toward tax increases, in my view, actually go back farther and can be traced to an even nobler pedigree.  The real inspiration for this conviction comes from the late Nobel prize-winning economist, Milton Friedman.  It is only by understanding Friedman’s reasoning and his values that one can fully understand why Republican refuse to see spending cuts and tax increases as simply two sides of the same budget-balancing coin.

This was not always the Republican, or even the conservative, position.  During the 1950s, it was Democrats who advocated tax cuts to stimulate the economy and President Eisenhower who insisted “we can never justify going further into debt to give ourselves a tax cut at the expense of our children.”

In 1964, the eventual Republican nominee for president, Senator Barry Goldwater, voted against the so-called Kennedy tax cuts (actually passed after Kennedy’s assassination the previous year) because he was convinced the resulting deficits would be inflationary.  Even after losing the presidential election to President Lyndon Johnson in a landslide later that year, Goldwater predicted a Republican comeback, telling U.S. News & World Report that a no-win war in Vietnam and high inflation would prompt a backlash against the Democrats two years later (he was right on both counts).

So if Eisenhower and Goldwater represented Republican orthodoxy in the 1950s and ‘60s, what happened?  In large part, it was an intellectual revolution in conservative/libertarian thought prompted by economist Milton Friedman.  While Friedman rejected the simplistic Keynesian (and later supply-side) notion that tax cuts automatically stimulate the economy, he believed that higher taxes were bad because they led to more and bigger government, which he was convinced at best led to waste and at worse to greater government control over our economy, our lives and our freedoms.

In 1967, three year’s after the Kennedy tax cuts, the Johnson Administration was already running huge deficits thanks to the a combination of Great Society social programs and the Vietnam War.  Writing in his regular Newsweek column on August 7, 1967, Friedman expresseded his concern that this would soon lead to higher taxes, using an analysis that would become familiar to his readers over the years:

“.If we adopt such programs, does not fiscal responsibility at least call for imposing taxes to pay for them?  The answer is that postwar experience has demonstrated two things. First, that Congress will spend whatever the tax system will raise—plus a little (and recently, a lot) more.  Second, that, surprising as it seems, it has proved difficult to get taxes down once they are raised.  The special interests created by government spending have proved more potent than the general interest in tax reduction.

“If taxes are raised in order to keep down the deficit, the result is likely to be a higher norm for government spending. Deficits will again mount and the process will be repeated.”

Sure enough, a year later a 10% income tax surcharge was enacted by Congress to cut the deficit and fight inflation.  His prediction having been confirmed, Friedman returned to the subject in another Newsweek column dated July 15, 1968.  He now described a familiar pattern of how Democrats used the traditional view of fiscal conservatism to convince Republicans to help pay for the Democrats’ own profligate spending:

“The standard scenario has been that the Democrats—in the name of the New Deal, the Fair Deal, or the Great Society—push through large spending programs . . . generally against the opposition of the Republican leadership.  The spending programs not only absorb the increased tax yield generated by the ‘fiscal drag,’ they go farther and produce deficits.

“The Democrats then appeal to the Republicans’ sense of fiscal responsibility to refrain from cutting tax rates or, as in this case, to raise them.  The Republicans cooperate, thereby establishing a new higher revenue base for further spending.  The Democrats get the ‘credit’ for the spending; the Republicans, the ‘blame’ for the taxes; and you and I pay the bill.”

Fast forward seven years, when Republican President Gerald Ford was proposing a tax cut to stimulate the economy during a brief recession.  As an economist who believed monetary, not fiscal, policy was the best way to keep the economy on a stable path to growth, Friedman did not believe the proposed tax cut would have its intended stimulatory effect.  He explained why in another Newseek column on July 15, 1975 but went on to say:

“Yet I must confess that I favor tax cuts—not as a cure for recession but for a very different reason.  Our basic long-term need is to stop the explosive growth in government spending.  I am persuaded that the only effective way to do so is by cutting taxes—at any time for any excuse in any way.

“The reason is that government will spend whatever the tax system raises plus a good deal more—but not an indefinite amount more.  The most effective way to force each of us to economize is to reduce our income.  The restraint is less rigid on government, but it is there and seems to be the only one we have.

“So hail the tax cut—but let’s do it for the right reason.”

Another six years went by and now it was the newly-elected president, Ronald Reagan, who was proposing a large, multi-year tax cut to get the economy moving. At the time, he was also proposing off-setting spending cuts (which we all know didn’t happen).  Friedman wrote yet another Newsweek column dated July 27, 1981, refuting objections to the plan by liberal economists while also discounting many of the claims of supply-siders in the Reagan Administration.  Friedman still supported the tax cuts, of course, and explained why liberals were suddenly worried about deficits:

“The analysis so far treats government spending and taxes as if they were two independent entities.  They clearly are not.  We know full well that Congress will spend every penny—and more—that is yielded by taxes.  A cut in taxes will mean a cut in government spending.  And there is no other way to get a cut in spending.

“That is the real reason why the big spenders and the big inflationists of the past have suddenly been converted to fiscal conservatism and to preaching the virtues of fighting inflation.  They know that a multi-year tax cut will force multi-year spending reductions.  They hope that a one-year tax cut will quiet public agitation and allow them to revert next year to their high-spending ways.”

Taken as a whole, these excerpts from columns written for a popular magazine by a Nobel laureate economist between 1967 and 1981—44 to 30 years ago—spell out precisely the philosophy that today motivates many Republicans in and out of Congress to firmly oppose any tax increase as part of a deficit reduction or budget-balancing plan proposed by Democrats.

Like Milton Friedman, they are firmly convinced that any taxes they raise will ultimately result in increased government spending.  They believe government spending necessarily translates into more and bigger government.  They believe the federal government is already too big, threatening not just the health of the economy but their freedom and way of life as well.

One can argue with Friedman’s assumptions as well as the conclusions he draws from them.  But until those on the other side—including the President, Democratic congressional leaders and the media—understand the reasoning and motivations behind the anti-tax sentiments of Republicans from Capitol Hill to the Tea Party activists, it’s hard to imagine anything more than a temporary truce in the battle being waged over the budget.

____________

Here is another Tea Party hero you need to listen to:
Rep. Brooks on Fox Business: BBA and the Debt Ceiling Vote

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Rep. Mo Brooks To Vote No On Obama-Reid-Boehner Debt Ceiling Bill

08/01/11

Washington, D.C. – Today Congressman Mo Brooks (R-AL) made the following statement concerning his vote on the Budget Control Act of 2011:

Summary

The Obama-Reid-Boehner Debt Ceiling Bill is bad for America, bad political process, bad for national defense, does not prevent unsustainable budget deficits, kicks the debt ceiling crises down the road to 2013 (when America will have more debt and less financial strength with which to fix the problem), and fails to satisfactorily decrease the risk of an American credit rating downgrade.

Overview

America must, and will, raise the debt ceiling.  The question is not whether Congress will raise the debt ceiling; the question is when and how.  Regardless of when the debt ceiling is raised, every bill and obligation of America to its citizens and creditors will be paid in full (albeit, with the exception of creditors, some payments may be delayed).

I have voted to raise the debt ceiling provided the debt ceiling bill makes America’s financial condition better, not worse.

I voted to raise the debt ceiling on July 22, 2011, when I voted for the Cut, Cap and Balance Plan (cutting FY 2012 expenditures by a modest $111 billion in the context of a $1.5 trillion deficit; capping federal government expenditures within historically justifiable 18-20% ranges; and passing a Balanced Budget Constitutional Amendment that protect future generations of Americans from revisiting the financial mess we face).

I voted to raise the debt ceiling on July 29, 2011, when I voted for the Boehner Plan (which included a Balanced Budget Constitutional Amendment requirement).

I will not vote for the Obama-Reid-Boehner Debt Bill (herein the “Debt Bill”) because it is not up to the financial challenges America faces. 

Background:  The Problem

Years of spending binges by the federal government have come home to roost.  America’s debt exceeds $14 trillion.  America has suffered three consecutive years of trillion dollar deficits (and faces trillion dollar deficits into the foreseeable future).

Annual deficits and accumulated debt force America to confront two major financial threats, both with one common cause: unsustainable budget deficits.

In the short term, America faces a debt ceiling crisis.  Over the longer term, America faces a debt crisis. 

If trillion dollar deficits continue indefinitely, America’s insolvency and bankruptcy is certain, thereby risking America’s national defense, Social Security, Medicare, Medicaid, NASA, and everything else the federal government does.

Debt Bill Deficiencies That Compel a “No” Vote

The accumulative deficiencies in the Debt Bill compel me to vote “No.”  The deficiencies are:

1. Minimal Time for Consideration and Deliberation.

The Debt Bill is 74 pages of interwoven, complicated legal and budgetary terms.  I have read and studied the Debt Bill in the limited time available.  The Debt Bill forces onto our children and grandchildren another $2.4 trillion in debt burden, yet we are expected to vote on it with less than 24 hours notice.

This is insufficient time to thoroughly understand the Debt Bill’s nuances, for budget experts to digest the Debt Bill and offer their insights, for the public to analyze the legislation and share their insight, and for Congress to make a wise and deliberative decision.

While some argue the Debt Bill must pass by the White House’s August 2 deadline; I believe it is better to act wisely than in haste.  The economy will be much worse if Congress, in haste, makes a $2.4 trillion error. 

2. Significant Defense Cuts in FY 2012 & 2013.

In FY 2012, the Debt Bill cuts national defense by $2 to $17 billion (the variance is due to different Debt Bill interpretations by the House Armed Services Committee).

The Debt Bill creates a 12-member Joint Select Committee (six Senators and six Congressmen; six Republicans and six Democrats).  By November 23, the Committee must recommend $1.2 trillion in deficit reduction measures (spending cuts and/or tax increases).  If the Committee makes a recommendation, Congress must vote on the recommendation on or before January 15. 

If the Committee splits 6-6 and makes no recommendation, or if either House of Congress rejects the Committee’s recommendation, then the Debt Bill mandates that the Defense budget be cut $60 Billion in FY 2013 (i.e. – in the fiscal year beginning 14 months from now, on October 1, 2013).

National defense is the top priority of the federal government.  If the Debt Bill passes, there is an unnecessary and substantial risk that it will trigger risky defense cuts in just 14 months that undermine the defense capabilities of America.

3. The Bill Does Not Fix the Underlying Problem.

The Bill makes America’s financial challenges worse by inadequately addressing unsustainable deficits that threaten America with insolvency and bankruptcy and force debt ceiling increases.

The Debt Bill’s “cuts” bind no future Congresses.  Hence, the only “cuts” that count are those for Fiscal Years 2012 and 2013.

In FY 2012, the Debt Bill cuts discretionary federal government spending by only $7 billion (versus FY 2011 levels), while overall federal government spending actually increases (“discretionary spending” is less than 30% of total federal government spending). 

In FY 2013, the Debt Bill increases discretionary federal government spending by $4 billion (over FY 2012 levels).  Overall federal government spending again increases significantly.

Hence, in both FY 2012 and 2013, the federal government deficit is estimated to exceed $1 trillion/year if the Debt Bill passes and, under the best of scenarios, the Debt Bill’s “solution” increases America’s debt by $2.4 trillion in less than two years, which makes America’s debt problem much worse, not better.

4. Balanced Budget Constitutional Amendment. 

The Debt Bill requires a vote of Congress on a Balanced Budget Constitutional Amendment but does not require that Congress pass a Balanced Budget Amendment. 

The July 29 Boehner Bill required passage of a Balanced Budget Amendment before the Phase II debt ceiling increase would occur.  The Debt Bill eliminates the requirement for a Balanced Budget Amendment, thereby eliminating the only long-term fix to America’s unsustainable deficits. 

5. Punting the Debt Ceiling Crisis to 2013. 

Because of 2012 election considerations, the Debt Bill “kicks the can down the road” to 2013, when a financially weaker America will be less capable of facing yet another debt ceiling crisis. 

America will be weaker because debt service burdens will be $2.4 trillion more and the total debt of $16.7 trillion will likely be subject to higher interest rates and more onerous payment obligations.

America must face its unsustainable deficit issue while it is stronger, not weaker.  The longer America waits, the worse the economic outcome will be.

6. Credit Rating Cuts.

In my judgment, the Debt Bill substantially increases the long-term risk of a cut in America’s credit rating. 

Standard & Poor stated on July 14, 2011, that America’s credit rating is at risk if Washington has “not achieved a credible solution to the rising U.S. government debt burden and [is] not likely to achieve one in the foreseeable future.”  Standard & Poor president Deven Sharma reiterated this concern on July 27, 2011 when he testified before the House Financial Services Committee that, “The more important issue is really the long-term growth rate of the debt… that is the more important issue at hand.”

Similarly, Moody’s stated on July 13, 2011 that, if the debt ceiling is raised, America’s credit rating outlook “would very likely be changed to negative… unless [there is a] substantial and credible agreement [on] long-term deficit reduction.”

The Debt Bill does not cut America’s short or long-term deficits enough to minimize the risk of downgrade in America’s credit rating… a downgrade that will, in turn, drive up America’s debt service cost and reduce funding for all other federal government programs.  To make matters worse, if America’s interest rates go up; state, local and private interest rates are likely to also go up… thereby hurting all Americans at every level.

The Solution

The best solution that protects America from the short term debt ceiling and long term insolvency threats is a debt ceiling increase coupled with a Balanced Budget Constitutional Amendment that is phased in over a 5 year period.

Inasmuch as constitutional amendments often take years to pass, time that America may not have, the debt ceiling should be raised in a two-step process.  The first step partially raises the debt ceiling when Congress passes a substantive and effective Balanced Budget Amendment.  If the Senate and House concur, this can be done in as little as a week.

The second step raises the rest of the debt ceiling requirement when the states ratify the proposed Balanced Budget Amendment.  This process gives the states an incentive to ratify the Balanced Budget Amendment in less than one year (or trigger the effects of not raising the debt ceiling).

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

Open letter to Speaker of the House John Boehner (Part 55)

December 17, 2012 – 4:33 pm

Open letter to Speaker of the House John Boehner (Part 55)

John Boehner, Speaker of the House

H-232, The Capital, Washington, DC 20515

Dear Mr. Speaker,

I know that you will have to meet with newly re-elected President Obama soon and he will probably be anxious for you to raise taxes and  federal spending, but he will want you to leave runaway entitlement programs alone. When that happens then you have one thing you can hold over his head and that is the debt ceiling.

You must stand up to him and tell him that you can not raise it. In December of 2012 or January of 2013 at the latest we will be shutting down the government if we don’t increase the debt limit according to the LA Times. You got to listen to the Tea Party heroes like Rep. Todd Rokita, Ben Quayle (R-AZ), Jeff Landry (R, LA-03), Raúl R. Labrador , Tim Huelskamp,  Rep. Justin Amash (R-MI),  , Brooks, Mo (AL – 5), Buerkle, Ann Marie (NY – 25),Chabot, Steven (OH – 1),Duncan, Jeff (SC – 3), Fleischmann, Chuck (TN – 3) ,Gowdy, Trey (SC – 4) ,Griffith, H. Morgan (VA – 9) , Harris, Andy (MD – 1) ,Huizenga, Bill (MI – 2) , Mulvaney, Mick (SC – 5) , Pompeo, Mike (KS – 4) , Ribble, Reid (WI – 8), Rigell, E. Scott (VA – 2) , Ross, Dennis (FL – 12) ,Schweikert, David (AZ – 5), Scott, Austin (GA – 8) , Scott, Tim (SC – 1) , Southerland, Steve (FL – 2) , Stutzman, Marlin (IN – 3) , Walberg, Timothy (MI – 7) , Walsh, Joe (IL – 8),and Woodall, Rob (GA – 7) .

__________

Here is another Tea Party hero you need to listen to:
Rep. Brooks on Fox Business: BBA and the Debt Ceiling Vote

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Rep. Mo Brooks To Vote No On Obama-Reid-Boehner Debt Ceiling Bill

08/01/11

Washington, D.C. – Today Congressman Mo Brooks (R-AL) made the following statement concerning his vote on the Budget Control Act of 2011:

Summary

The Obama-Reid-Boehner Debt Ceiling Bill is bad for America, bad political process, bad for national defense, does not prevent unsustainable budget deficits, kicks the debt ceiling crises down the road to 2013 (when America will have more debt and less financial strength with which to fix the problem), and fails to satisfactorily decrease the risk of an American credit rating downgrade.

Overview

America must, and will, raise the debt ceiling.  The question is not whether Congress will raise the debt ceiling; the question is when and how.  Regardless of when the debt ceiling is raised, every bill and obligation of America to its citizens and creditors will be paid in full (albeit, with the exception of creditors, some payments may be delayed).

I have voted to raise the debt ceiling provided the debt ceiling bill makes America’s financial condition better, not worse.

I voted to raise the debt ceiling on July 22, 2011, when I voted for the Cut, Cap and Balance Plan (cutting FY 2012 expenditures by a modest $111 billion in the context of a $1.5 trillion deficit; capping federal government expenditures within historically justifiable 18-20% ranges; and passing a Balanced Budget Constitutional Amendment that protect future generations of Americans from revisiting the financial mess we face).

I voted to raise the debt ceiling on July 29, 2011, when I voted for the Boehner Plan (which included a Balanced Budget Constitutional Amendment requirement).

I will not vote for the Obama-Reid-Boehner Debt Bill (herein the “Debt Bill”) because it is not up to the financial challenges America faces. 

Background:  The Problem

Years of spending binges by the federal government have come home to roost.  America’s debt exceeds $14 trillion.  America has suffered three consecutive years of trillion dollar deficits (and faces trillion dollar deficits into the foreseeable future).

Annual deficits and accumulated debt force America to confront two major financial threats, both with one common cause: unsustainable budget deficits.

In the short term, America faces a debt ceiling crisis.  Over the longer term, America faces a debt crisis. 

If trillion dollar deficits continue indefinitely, America’s insolvency and bankruptcy is certain, thereby risking America’s national defense, Social Security, Medicare, Medicaid, NASA, and everything else the federal government does.

Debt Bill Deficiencies That Compel a “No” Vote

The accumulative deficiencies in the Debt Bill compel me to vote “No.”  The deficiencies are:

1. Minimal Time for Consideration and Deliberation.

The Debt Bill is 74 pages of interwoven, complicated legal and budgetary terms.  I have read and studied the Debt Bill in the limited time available.  The Debt Bill forces onto our children and grandchildren another $2.4 trillion in debt burden, yet we are expected to vote on it with less than 24 hours notice.

This is insufficient time to thoroughly understand the Debt Bill’s nuances, for budget experts to digest the Debt Bill and offer their insights, for the public to analyze the legislation and share their insight, and for Congress to make a wise and deliberative decision.

While some argue the Debt Bill must pass by the White House’s August 2 deadline; I believe it is better to act wisely than in haste.  The economy will be much worse if Congress, in haste, makes a $2.4 trillion error. 

2. Significant Defense Cuts in FY 2012 & 2013.

In FY 2012, the Debt Bill cuts national defense by $2 to $17 billion (the variance is due to different Debt Bill interpretations by the House Armed Services Committee).

The Debt Bill creates a 12-member Joint Select Committee (six Senators and six Congressmen; six Republicans and six Democrats).  By November 23, the Committee must recommend $1.2 trillion in deficit reduction measures (spending cuts and/or tax increases).  If the Committee makes a recommendation, Congress must vote on the recommendation on or before January 15. 

If the Committee splits 6-6 and makes no recommendation, or if either House of Congress rejects the Committee’s recommendation, then the Debt Bill mandates that the Defense budget be cut $60 Billion in FY 2013 (i.e. – in the fiscal year beginning 14 months from now, on October 1, 2013).

National defense is the top priority of the federal government.  If the Debt Bill passes, there is an unnecessary and substantial risk that it will trigger risky defense cuts in just 14 months that undermine the defense capabilities of America.

3. The Bill Does Not Fix the Underlying Problem.

The Bill makes America’s financial challenges worse by inadequately addressing unsustainable deficits that threaten America with insolvency and bankruptcy and force debt ceiling increases.

The Debt Bill’s “cuts” bind no future Congresses.  Hence, the only “cuts” that count are those for Fiscal Years 2012 and 2013.

In FY 2012, the Debt Bill cuts discretionary federal government spending by only $7 billion (versus FY 2011 levels), while overall federal government spending actually increases (“discretionary spending” is less than 30% of total federal government spending). 

In FY 2013, the Debt Bill increases discretionary federal government spending by $4 billion (over FY 2012 levels).  Overall federal government spending again increases significantly.

Hence, in both FY 2012 and 2013, the federal government deficit is estimated to exceed $1 trillion/year if the Debt Bill passes and, under the best of scenarios, the Debt Bill’s “solution” increases America’s debt by $2.4 trillion in less than two years, which makes America’s debt problem much worse, not better.

4. Balanced Budget Constitutional Amendment. 

The Debt Bill requires a vote of Congress on a Balanced Budget Constitutional Amendment but does not require that Congress pass a Balanced Budget Amendment. 

The July 29 Boehner Bill required passage of a Balanced Budget Amendment before the Phase II debt ceiling increase would occur.  The Debt Bill eliminates the requirement for a Balanced Budget Amendment, thereby eliminating the only long-term fix to America’s unsustainable deficits. 

5. Punting the Debt Ceiling Crisis to 2013. 

Because of 2012 election considerations, the Debt Bill “kicks the can down the road” to 2013, when a financially weaker America will be less capable of facing yet another debt ceiling crisis. 

America will be weaker because debt service burdens will be $2.4 trillion more and the total debt of $16.7 trillion will likely be subject to higher interest rates and more onerous payment obligations.

America must face its unsustainable deficit issue while it is stronger, not weaker.  The longer America waits, the worse the economic outcome will be.

6. Credit Rating Cuts.

In my judgment, the Debt Bill substantially increases the long-term risk of a cut in America’s credit rating. 

Standard & Poor stated on July 14, 2011, that America’s credit rating is at risk if Washington has “not achieved a credible solution to the rising U.S. government debt burden and [is] not likely to achieve one in the foreseeable future.”  Standard & Poor president Deven Sharma reiterated this concern on July 27, 2011 when he testified before the House Financial Services Committee that, “The more important issue is really the long-term growth rate of the debt… that is the more important issue at hand.”

Similarly, Moody’s stated on July 13, 2011 that, if the debt ceiling is raised, America’s credit rating outlook “would very likely be changed to negative… unless [there is a] substantial and credible agreement [on] long-term deficit reduction.”

The Debt Bill does not cut America’s short or long-term deficits enough to minimize the risk of downgrade in America’s credit rating… a downgrade that will, in turn, drive up America’s debt service cost and reduce funding for all other federal government programs.  To make matters worse, if America’s interest rates go up; state, local and private interest rates are likely to also go up… thereby hurting all Americans at every level.

The Solution

The best solution that protects America from the short term debt ceiling and long term insolvency threats is a debt ceiling increase coupled with a Balanced Budget Constitutional Amendment that is phased in over a 5 year period.

Inasmuch as constitutional amendments often take years to pass, time that America may not have, the debt ceiling should be raised in a two-step process.  The first step partially raises the debt ceiling when Congress passes a substantive and effective Balanced Budget Amendment.  If the Senate and House concur, this can be done in as little as a week.

The second step raises the rest of the debt ceiling requirement when the states ratify the proposed Balanced Budget Amendment.  This process gives the states an incentive to ratify the Balanced Budget Amendment in less than one year (or trigger the effects of not raising the debt ceiling).

Sincerely,

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

___________

Related posts:

Government shutdown coming, will there be any tea party heroes available to stand up to Obama?

DEBT LIMIT – A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY. Uploaded by debtlimitusa on Nov 4, 2011 A satirical short film taking a look at the national debt and how it applies to just one family. Watch the guy from the Ferris Bueller Superbowl Spot! Produced by Seth William Meier, DP/Edited by Craig Evans, […]

Some Tea Party heroes (Part 1)

DEBT LIMIT – A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY. Uploaded by debtlimitusa on Nov 4, 2011 A satirical short film taking a look at the national debt and how it applies to just one family. Watch the guy from the Ferris Bueller Superbowl Spot! Produced by Seth William Meier, DP/Edited by Craig Evans, […]

Some Tea Party heroes (Part 8)

Rep Himes and Rep Schweikert Discuss the Debt and Budget Deal Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 […]

Some Tea Party heroes (Part 7)

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]

Who are the Tea Party Heroes from the 87 Freshmen Republicans?

Here is a study done on the votes of the 87 incoming freshman republicans frm the Club for Growth. Freshman Vote Study In the 2010 election, 87 freshmen House Republicans came to Washington pledging fealty to the Tea Party movement and the ideals of limited government and economic freedom. The mainstream media likes to say […]

Tea Party Conservative Senator Mike Lee interview

Tea Party Conservative Senator Mike Lee interview Here is an excellent interview above with Senator Lee with a fine article below from the Heritage Foundation. Sen. Mike Lee (R-UT) came to Washington as the a tea-party conservative with the goal of fixing the economy, addressing the debt crisis and curbing the growth of the federal […]

Some Tea Party heroes (Part 6)

I feel so strongly about the evil practice of running up our national debt. I was so proud of Rep. Todd Rokita who voted against the Budget Control Act of 2011 on August 11, 2011. He made this comment:   For decades now, we have spent too much money on ourselves and have intentionally allowed our […]

Some Tea Party heroes (Part 5)

Rep. Quayle on Fox News with Neil Cavuto __________________ We have to get people realize that the most important issue is the debt!!! Recently I read a comment by Congressman Ben Quayle (R-AZ) made  after voting against the amended Budget Control Act on August 1, 2011. He said it was important to compel “Congressional Democrats and […]

Some Tea Party heroes (Part 4)

What future does our country have if we never even attempt to balance our budget. I read some wise words by Congressman Jeff Landry (R, LA-03) regarding the  debt ceiling deal that was passed on August 1, 2011:”Throughout this debate, the American people have demanded a real cure to America’s spending addiction – a Balanced Budget […]

Some Tea Party heroes (Part 3)

I read some wise comments by Idaho First District Congressman Raúl R. Labrador concerning the passage of the Budget Control Act on August 1, 2011 and I wanted to point them out: “The legislation  lacks a rock solid commitment to passage of a balanced budget amendment, which I believe is necessary to saving our nation.” I just […]

Some Tea Party heroes (Part 2)

Congressmen Tim Huelskamp on the debt ceiling I just don’t understand why people think we can go on and act like everything is okay when we have a trillion dollar deficit. Sometimes you run across some very wise words like I did the other day. Kansas Congressman Tim Huelskamp made the following comment on the […]

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

Open letter to President Obama (Part 195)

December 17, 2012 – 6:58 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.

We need to make a good effort to cut spending.

 

Spending Cut Goal: 10% in Two Years

Posted by Chris Edwards

The new issue of International Economy has an article by Canada’s Liberal finance minister from the 1990s, Paul Martin, who succeeded in shrinking that country’s federal government. If a new President Mitt Romney wants to cut spending in Washington, Martin has some tips for him, such as cutting spending broadly, forecasting conservatively, and aiming to eliminate the deficit in a fixed time frame and sticking to it. (I’d also advise President Obama to follow the Canadian example, but he’s issued four budgets so far and seems to be more interested in following the Greek fiscal approach).

Paul Martin says:

I tabled the 1995 Budget in the House of Commons. No department of government escaped untouched. Transfers to the provinces for healthcare and education were reduced, public sector employment was cut by 20 percent, the Department of Transport was cut deeply, historic subsidies in the Department of Agriculture were eliminated, and spending in the Department of Industry was cut by 65 percent.

These were massive cuts, far greater than anything Canada had ever seen. Nor were the cuts simply reduction in the growth of future spending as is so often the case. These were absolute cuts in existing spending, such that by the end of the process the federal government’s expenditures as a percentage of GDP were lower than they had been at anytime in the previous fifty years.

From a libertarian perspective, Canada’s cuts weren’t actually “massive,” but for a Liberal government in a country with a population that had gotten used to government coddling, it was pretty impressive. As I noted in my recent article on Canada, Martin and his team cut the budget by 10 percent in just two years.

So my suggested goal for Romney and team if elected this Fall: at least match the Canadians and push for $380 billion of cuts out of otherwise expected spending in 2015 of $3.8 trillion. And do what the Canadians did: cut everything, including entitlements, aid to subnational governments, defense, business subsidies, farm subsidies, and much more in one big push. Many in Congress will resist of course, but presidents have their most leverage in the first year. Mitt will have nothing to lose but the country into a vortex of debt and economic despair if he doesn’t at least try.

___________

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 | Also posted in President Obama | Comments (0)

Open letter to Speaker of the House John Boehner (Part 54)

December 17, 2012 – 6:28 am

Open letter to Speaker of the House John Boehner (Part 54)

John Boehner, Speaker of the House

H-232, The Capital, Washington, DC 20515

Dear Mr. Speaker,

I know that you will have to meet with newly re-elected President Obama soon and he will probably be anxious for you to raise taxes and  federal spending, but he will want you to leave runaway entitlement programs alone. When that happens then you have one thing you can hold over his head and that is the debt ceiling.

You must stand up to him and tell him that you can not raise it. In December of 2012 or January of 2013 at the latest we will be shutting down the government if we don’t increase the debt limit according to the LA Times. You got to listen to the Tea Party heroes like Rep. Todd Rokita, Ben Quayle (R-AZ), Jeff Landry (R, LA-03), Raúl R. Labrador , Tim Huelskamp,  Rep. Justin Amash (R-MI),  , Brooks, Mo (AL – 5), Buerkle, Ann Marie (NY – 25),Chabot, Steven (OH – 1),Duncan, Jeff (SC – 3), Fleischmann, Chuck (TN – 3) ,Gowdy, Trey (SC – 4) ,Griffith, H. Morgan (VA – 9) , Harris, Andy (MD – 1) ,Huizenga, Bill (MI – 2) , Mulvaney, Mick (SC – 5) , Pompeo, Mike (KS – 4) , Ribble, Reid (WI – 8), Rigell, E. Scott (VA – 2) , Ross, Dennis (FL – 12) ,Schweikert, David (AZ – 5), Scott, Austin (GA – 8) , Scott, Tim (SC – 1) , Southerland, Steve (FL – 2) , Stutzman, Marlin (IN – 3) , Walberg, Timothy (MI – 7) , Walsh, Joe (IL – 8),and Woodall, Rob (GA – 7) .

__________

Here is another Tea Party hero you need to listen to:

Roby Comments on Debt Limit Vote

Aug 1, 2011 Issues: Spending Cuts and Debt
 
 
 

WASHINGTON—U.S. Rep. Martha Roby (AL-02), a member of the House Committee on Armed Services, made the following comments today regarding the House of Representative’s vote to increase the statutory limit on the national debt:

                “I applaud the efforts of Speaker Boehner, Majority Leader Cantor, Majority Whip McCarthy, and Budget Chairman Ryan over the last month. Every dollar saved under the plan approved tonight is a result of their steadfast advocacy on behalf of the American People. While the final legislation is far from perfect and while many of us would prefer the more fundamental reforms found in the ‘Cut, Cap, and Balance Act,’ this compromise cuts a dollar of spending for every new dollar of debt. That is a significant accomplishment given that Democrats—who wanted new taxes and no spending reductions—outnumbered Republicans two to one at the negotiating table.

                “During this debate, I voted for two separate proposals that would significantly cut future spending, put our nation on firmer financial footing, and avoid a potentially catastrophic default. Each was killed by Senate Democrats.

                “I am pleased that a default has been avoided as a result of the vote tonight. However, I was unable to support this legislation because, after a careful reading of the bill, I fear it could ultimately result in devastating and unjustified cuts to our national security. This bill, unlike previous proposals I supported, has a weak firewall against potentially destructive defense cuts. To be sure, there are savings to be found in the Pentagon’s budget, and I have already voted this year to trim wasteful and unnecessary defense spending. But this bill goes much too far. The legislation would use our defense budget as an insurance policy to guarantee savings in the event that the special joint committee, which this legislation creates, fails to achieve cuts in other areas of the government bureaucracy.

                “Of course we lack a crystal ball to know how it will play out, but my best judgment is that the chances the special joint committee will fail are too high to risk our national defense, which is one of few legitimate government functions enumerated in the Constitution. If required, the cuts would be so deep as to affect the readiness of our troops around the world—a risk I am not willing to take. As important as deficit reduction is, what good is it for a country that is unable to adequately defend the freedom and liberty it cherishes? Certainly there are other places in the massive federal bureaucracy that are more deserving of deep cuts.

                “I reject the idea that we need not worry about these cuts because Washington will never let them happen. To make that suggestion is to say that the legislation does not actually do what we have said it does.

                “In the end, I hope that the special joint committee will find the spending cuts that it is charged to identify, and I look forward to reviewing the product of its work. Our prayer is that the special joint committee members will do their jobs, thereby ensuring that the damaging military cuts that could occur never see the light of day.

                “On the broader question of restoring fiscal responsibility, our work has just begun. This has been a long and convoluted process, but the takeaway is simple: in a short period of time, House Republicans have successfully changed the conversation in Washington from ‘how do we spend more’ to ‘how do we spend less.’ Even so, much work remains, and only a sustained, dedicated effort will truly change the spending culture in Washington.”

# # #

NOTE: Congress debated how best to raise the debt limit for many months. Members considered numerous proposals, and the House of Representatives and the Senate each took several votes on the issue. On May 31, Rep. Martha Roby voted against President Obama’s original request for a clean debtincrease that would expand the government’s ability to borrow money without placing any restrictions on future spending. She saidthat any debt limit increase should be accompanied by “significant” spending cuts. On July 22, Roby voted in favor of the “Cut, Cap, and Balance Act,” referringto the “strong” measure as her “preference.” The Democratic Senaterejected the measure. With the debt deadline looming, Roby supported Speaker Boehner’sproposal on July 29, notingthat it was “far from perfect” but that it cut a dollar of spending for every dollar of additional debt and included no new taxes. Again, the Senaterejected that measure. On July 28, Roby opposed Sen. Reid’s proposal, which she pointed outincluded an unacceptable budget gimmick that would not result in real savings. (The Senatealso rejectedthe Reid proposal.) That vote was followed by the events described in the press release above.

Sincerely,

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

___________

Related posts:

Government shutdown coming, will there be any tea party heroes available to stand up to Obama?

DEBT LIMIT – A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY. Uploaded by debtlimitusa on Nov 4, 2011 A satirical short film taking a look at the national debt and how it applies to just one family. Watch the guy from the Ferris Bueller Superbowl Spot! Produced by Seth William Meier, DP/Edited by Craig Evans, […]

Some Tea Party heroes (Part 1)

DEBT LIMIT – A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY. Uploaded by debtlimitusa on Nov 4, 2011 A satirical short film taking a look at the national debt and how it applies to just one family. Watch the guy from the Ferris Bueller Superbowl Spot! Produced by Seth William Meier, DP/Edited by Craig Evans, […]

Some Tea Party heroes (Part 8)

Rep Himes and Rep Schweikert Discuss the Debt and Budget Deal Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 […]

Some Tea Party heroes (Part 7)

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]

Who are the Tea Party Heroes from the 87 Freshmen Republicans?

Here is a study done on the votes of the 87 incoming freshman republicans frm the Club for Growth. Freshman Vote Study In the 2010 election, 87 freshmen House Republicans came to Washington pledging fealty to the Tea Party movement and the ideals of limited government and economic freedom. The mainstream media likes to say […]

Tea Party Conservative Senator Mike Lee interview

Tea Party Conservative Senator Mike Lee interview Here is an excellent interview above with Senator Lee with a fine article below from the Heritage Foundation. Sen. Mike Lee (R-UT) came to Washington as the a tea-party conservative with the goal of fixing the economy, addressing the debt crisis and curbing the growth of the federal […]

Some Tea Party heroes (Part 6)

I feel so strongly about the evil practice of running up our national debt. I was so proud of Rep. Todd Rokita who voted against the Budget Control Act of 2011 on August 11, 2011. He made this comment:   For decades now, we have spent too much money on ourselves and have intentionally allowed our […]

Some Tea Party heroes (Part 5)

Rep. Quayle on Fox News with Neil Cavuto __________________ We have to get people realize that the most important issue is the debt!!! Recently I read a comment by Congressman Ben Quayle (R-AZ) made  after voting against the amended Budget Control Act on August 1, 2011. He said it was important to compel “Congressional Democrats and […]

Some Tea Party heroes (Part 4)

What future does our country have if we never even attempt to balance our budget. I read some wise words by Congressman Jeff Landry (R, LA-03) regarding the  debt ceiling deal that was passed on August 1, 2011:”Throughout this debate, the American people have demanded a real cure to America’s spending addiction – a Balanced Budget […]

Some Tea Party heroes (Part 3)

I read some wise comments by Idaho First District Congressman Raúl R. Labrador concerning the passage of the Budget Control Act on August 1, 2011 and I wanted to point them out: “The legislation  lacks a rock solid commitment to passage of a balanced budget amendment, which I believe is necessary to saving our nation.” I just […]

Some Tea Party heroes (Part 2)

Congressmen Tim Huelskamp on the debt ceiling I just don’t understand why people think we can go on and act like everything is okay when we have a trillion dollar deficit. Sometimes you run across some very wise words like I did the other day. Kansas Congressman Tim Huelskamp made the following comment on the […]

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

Republicans seem to give in most of the time on spending issues

December 14, 2012 – 6:40 am

Republicans seem to give in most of the time. I wish for the good of the country someone would step up and try to reverse the trend towards more spending and start cutting the budget for a change. We only had a budget deficit of about 161 billion in 2007 with income about where it is now. Then why do we have a budget deficit over one trillion today? It is because our problem is spending and not revenue!!!

It’s never a good idea to display weakness during negotiations. Your opponent will sense your fear and up his demands.

That’s certainly what we’re seeing in Washington. The cartoon at this link captures the GOP’s wobbly attitude on taxes, and this interview is about the ever-increasing demands of the Obama Administration.

It’s rather galling, by the way, to be lectured on taxes by a tax cheat like Tim Geithner.

But my key point is that the GOP’s preemptive surrender emboldened the White House, and helped move the debate even further to the left.

Let me elaborate on two points from the interview.

  1. We don’t need a tax increase. We can balance the budget simply by limiting spending so that it grows by “only” 2.5 percent annually. As I say to Cavuto, the White House is pushing higher taxes in order to enable a bigger burden of government spending.
  2. It’s important to define austerity correctly. To provide an analogy, we have to drink liquid to survive, but that doesn’t mean it would be a good idea to guzzle paint thinner. Likewise, we need austerity, but that shouldn’t mean higher taxes. We need to be like Estonia and tighten the belts of the public sector, not the private sector.

It’s not my job to give Republicans political advice, but I also want to expand upon the arguments I made a couple of days ago, when I wrote a post giving five policy reasons and five political reasons why the GOP shouldn’t surrender on tax increases.

A couple of readers correctly pointed out that I forgot to mention that tax increases are political poison because middle-class voters turn against the GOP once “revenue” is on the table. They are completely right, and my oversight is inexplicable since I’ve actually made that point in the past. Here’s some of what I wrote last year.

If Republicans put tax increases on the table, however, the politics get turned upside down. Instead of being united against all tax increases, voters realize somebody is going to get mugged and they have an incentive to make sure they’re not the ones who get victimized. That’s when soak-the-rich taxes become very appealing. Democrats, for all intents and purposes, can appeal to average voters by targeting the so-called rich. And even though voters will be skeptical about what Democrats really want, they don’t want to be the primary target of the political predators in Washington. Think of it this way. You’re a wildebeest running away from a pack of hyenas, but you know one member of your herd will get caught and killed. You despise hyenas, but at that critical moment, you’re main goal is wanting another member of the herd to bite the dust. This is why surrendering to tax increases put Republicans in a no-win situation. They oppose class-warfare taxes because they understand the disproportionately damaging impact of higher top income tax rates and increased double taxation of dividends and capital gains. So when GOPers get bullied into agreeing to raise taxes, they want to target less destructive sources of revenue. But that usually means…taxes that are more likely to hit the middle class. Needless to say, Democrats almost always win if there is a fight on whether to tax the middle class or to tax the rich.

I have to pat myself on the back for that passage, particularly the analogy that equates politicians with hyenas (though in the past I’ve apologized to hyenas for that unfair comparison).

Let’s close with a very good cartoon, which points out the foolishness of the media for wanting to send more money to Washington when even they understand that the town is filled with clowns and buffoons. That’s actually a very serious point, as I note about halfway through the interview included in my five-political-reasons-five-policy-reasons post.

Cartoon Beat the Press Tax Hikes

But it’s hard to laugh when you contemplate what’s happening. Obama is bullying the GOP, and the Republicans are in the process of surrendering to his class-warfare demands.

That will lead to bad policy, but it will also result in an emasculated, compliant, and house-broken GOP for at least the next two years, and perhaps even Obama’s entire second term. So even though the fiscal cliff tax hike is bigger than what Obama’s currently demanding, the long-run policy damage of surrender almost surely will be far greater.

Republicans don’t have many options in this fight. But they can show some cojones and tell Obama that the only way he’ll get a tax hike is if he wants to take the nation over the cliff.

P.S. If you like the Henry Payne cartoon in this post, you can enjoy some of his other work here, here, here, here, here, here, here, and here.

Cartoon GOP Reindeer

But what really makes the cartoon funny is the petulant stance of the elephants. Very effective artwork, mush as I praised Ramirez for the visual genius of his recent cartoon.

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

Open letter to President Obama (Part 193)

December 14, 2012 – 6:34 am

Eight Reasons Why Big Government Hurts Economic Growth

 

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.

We got to cut these welfare programs before everyone stops working and wants to get the free stuff. The Bible says if you don’t work then you should not eat. It also says that churches should help the poor but it doesn’t say that the government should step in and do that.

Patrick Tyrrell

June 5, 2012 at 1:30 pm

TANF

How many Americans depend on a government program for a basic (or not so basic) need? According to recently released Census Bureau data and Heritage Foundation calculations, the number is 128.8 million. That is the number of individuals directly receiving aid that they depend on for their daily consumption of things such as rent, prescription drugs, and higher education.

That is 41.3 percent of theU.S.population as of July 2011.

The Wall Street Journal puts the number of people living in a household where at least one member receives help at an even higher 49.1 percent.

The 41.3 percent number is surely undercounting. It is based on survey responses to the Census Bureau’s Current Population Survey (CPS) of March 2011. These responses are well known to undercount the number of people receiving Medicaid, Medicare, Social Security, State Children’s Health Insurance, and Temporary Assistance to Needy Families. Heritage research shows that the undercount in higher education subsidies may be the most dramatic.

The calculations that Heritage ran on the Census Bureau data do not, however, double-count individuals. So if someone receives Medicare and Social Security, he is counted only once. Therefore, the dramatic undercounting in higher education subsidy beneficiaries makes the biggest difference, because recipients of education subsidies are generally younger and not likely to be on other dependency-creating programs.

Those subsidized by the government for their higher education are generally dependent only on that government program. Heritage research shows that of the small number of people in the March CPS survey who admitted that they received higher education subsidies—about 2 million—less than one-half of 1 percent relied on Social Security retirement income; only 1.5 percent were on Medicare in 2011; and only 16 percent were on food stamps. The 2 million admitting they received higher education subsidies is assuredly a vast undercount, because the number of people receiving Pell grants in 2011 was 9.7 million, according to the Department of Education.

Just counting true Pell grant recipients would add millions to the lowball estimate of 128.8 million government dependents.

Sixteen years after President Bill Clinton erroneously declared “the era of big government” over, it’s not over; it’s still with us and growing. Unless something is done,Americaas we have known it will cease to exist.

There is a way out of the dependence-on-government trap. Steps are laid out in Heritage’s Saving the American Dream plan. If this plan were implemented, the economy would grow, government expenses would be held in check, and more Americans would support themselves. Some of the good results for individuals and the country would be:

  • More Americans climbing the prosperity ladder.
  • Fewer Americans stuck in the rut of “just getting by.”
  • Those who currently receive more from the government than they pay in taxes could become contributing taxpayers.
  • Catastrophe averted by shrinking the runaway national debt.
  • More happiness as the intergenerational cycle of government dependence would be shattered and replaced by an intergenerational cycle of self-reliance and private-sector opportunities for all.

All the government has to do is adopt the plan.

__________

Another good idea from Milton Friedman:

Milton Friedman – The Negative Income Tax

Published on May 11, 2012 by

In this 1968 interview, Milton Friedman explained the negative income tax, a proposal that at minimum would save taxpayers the 72 percent of our current welfare budget spent on administration. http://www.LibertyPen.com

Source: Firing Line with William F Buckley Jr.

________________

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 | Also posted in President Obama | Comments (0)

Fiscal Cliff deals of the past

December 13, 2012 – 7:02 am

Does Government Have a Revenue or Spending Problem?

People say the government has a debt problem. Debt is caused by deficits, which is the difference between what the government collects in tax revenue and the amount of government spending. Every time the government runs a deficit, the government debt increases. So what’s to blame: too much spending, or too little tax revenue? Economics professor Antony Davies examines the data and concludes that the root cause of the debt is too much government spending.

Ronald Reagan on our ability to solve our problems

Great article on what has happened in the past fiscal cliff deals. Patrick Louis Knudsen rightly points out, “… history shows that broad bipartisan compromises between the White House and Congress have typically just yielded higher taxes, while … deficit reduction have failed to materialize.”

It seems to me that we need to cut spending and avoid slowing the economy with tax increases. In the past we just raised taxes most of the time and never got around to cuttng spending.

The Fiscal Cliff and the Perils of Grand Budget Deals

By
December 10, 2012

One of the major complications in the current fiscal cliff debate is that both sides are overreaching, trying to tie a near-term resolution to a sweeping deficit reduction plan that would address the longer-term budgetary crisis looming in the years ahead. They see the cliff negotiations as a stage for a “grand bargain” on the budget between the President and Congress.

The tight time frame of the cliff’s approach makes such an aim increasingly impractical. Furthermore, history shows that broad bipartisan compromises between the White House and Congress have typically just yielded higher taxes, while the promised spending restraint (except in national defense) and deficit reduction have failed to materialize. Given the current state of divided government, these risks prevail today. More broadly, they also offer a warning to budget process reformers who seek to institutionalize regular budget negotiations between Capitol Hill and the President.

Experience of the Reagan Administration

After his inauguration in January 1981, President Ronald Reagan moved assertively to enact his budget plan, cutting taxes, boosting defense spending, and seeking to gain control of entitlements. With the economy still reeling from the prior years’ stagflation, however, deficits widened initially, leading Congress to push for a series of budget “summits,” as they were called then, to close the gap.

First came the 1982 Tax Equity and Fiscal Responsibility Act, “a $98 billion tax increase which supporters claimed would reduce the deficit from $128 billion in 1982 to $104 billion in 1983.” It did not. “Spending restraints never materialized…and the actual deficit jumped to $208 billion.”[1] (In today’s dollars, that tax hike would have totaled $204 billion and the deficit $432 billion—roughly a third of this year’s red ink.)

In 1984, the President agreed to yet another tax hike totaling $49 billion, which was supposed to reduce the deficit from $185 billion to $181 billion. Once again, however, the deficit increased—to $212 billion.[2]

The 1987 budget summit repeated the pattern. President Reagan swallowed a tax hike of $28 billion, but the result was the same: “The deficit, which was supposed to remain at $150 billion, jumped to $155 billion in 1988.”[3]

The 1990 Budget Agreement

Despite these failures, 1990 produced another major exercise in budget summitry. With deficits having swollen well beyond target amounts written in law at the time, the government by mid-year faced automatic spending cuts (called “sequestration”) that would slash defense spending by 42 percent and non-defense spending by 38 percent.[4] So President George H. W. Bush and the Democratic Congress agreed to a plan that was estimated to reduce deficits by $482 billion over five years.

Though the President had famously pledged never to raise taxes, his Administration by mid-1990 conceded to adding “revenue” as part of the deficit reduction plan. Predictably, this crack in the door widened during the arduous negotiations at Andrews Air Force Base. In the end, fully one-third of the package—$158 billion—consisted of tax hikes. The next largest savings came from cutting national defense by $91 billion over five years, which proponents rationalized by arguing that the Cold War had ended. Meanwhile, non-defense discretionary spending in the plan actually increased by $45 billion, offset by an empty promise of $144 billion in additional, unspecified discretionary cuts.[5]

The plan’s outcomes were no more satisfying. Even after the defense cuts, total outlays (excluding interest payments) increased by 13 percent from 1990 through 1993, and even with the tax hikes, the deficit worsened by 17 percent in the first two years of the plan.[6] When President Bill Clinton took office in January 1993, he promptly called for another deficit reduction plan, this one with $241 billion in tax increases over five years.[7]

The 1997 Balanced Budget Agreement

Even genuinely successful deficit reduction can lead to expanded government, allowing both parties to declare victory. Such was the case with the 1997 balanced budget agreement between a Republican Congress and President Clinton.

Although it cut taxes by $80 billion over five years—or perhaps because it did—the plan produced surpluses within a year of enactment. This was largely due to real growth in gross domestic product (GDP) that was greater than 4 percent per year from 1997 through 2000, which boosted tax revenue to 20.6 percent of GDP.

The problem was that the plan also increased spending. Though officially estimated to reduce outlays by $198 billion over five years,[8] the legislation contained a number of entitlement spending increases sought by President Clinton, including the creation of the State Children’s Health Insurance Program and expansions of food stamps, Supplemental Security Income, and welfare. Consequently, total “programmatic” spending (excluding interest) grew by nearly 3 percent to 4 percent per year faster than inflation and exploded by a total of nearly 14 percent from 1997 through 2001.[9] The effect was hidden because with the government running budget surpluses, interest payments declined, reducing the total spending increases.

Learn from History

The background outlined above should give pause to advocates of a grand budget deal between the President and Congress—especially those who are seeking to limit the size and scope of government. Such agreements tend to produce higher taxes and higher spending with little or no deficit reduction. Congress and the President should dispel any visions of a “grand bargain” and focus on the task at hand: avoiding the fiscal cliff.

This history also warns against budget process reforms that would institutionalize summitry by requiring the President to sign or veto the congressional budget resolution. Advocates argue that this change would create a forum for regular, early White House–congressional negotiations on broad budget levels, presumably making it easier to settle on specific spending and tax legislation later.

Some analysts, however, doubt whether the practice would actually produce agreements as often as its advocates think.[10] Equally important, the process could produce higher spending and higher taxes even more often. Thus, a reform aimed at budgeting more “efficiently” might only be more efficient at expanding government.

Patrick Louis Knudsen is the Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Kaitlyn Evans and Paul Bremmer, members of the Young Leaders Program at Heritage, contributed to this report.

By Everette Hatcher III | Also posted in President Obama, Ronald Reagan, Taxes | Comments (0)

Open letter to President Obama (Part 192)

December 13, 2012 – 6:30 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.

We seem to be spending too much like Greece then why do we expect a different result?

Amy Payne

June 18, 2012 at 9:04 am

The President and his team have been blaming “European headwinds” for some of the U.S. economy’s woes. But the truth is that the policies pursued by Washington and Athens are frighteningly similar—and the outcomes are not good for either country. Both countries are in need of comprehensive fiscal reforms, yet their leaders have avoided the tough decisions in favor of bailouts and political posturing.

In yesterday’s election, political parties supporting Greece’s bailout secured a narrow victory, causing Europe and world markets to breathe a temporary sigh of relief. The parties must now form a coalition government, despite continued protests from the radical party that sought to throw out the terms of the bailout assistance—which could have led Greece out of the euro currency. At 22 percent unemployment, Greek voters expressed disappointment with their limited options.

The Greek crisis was foreshadowed in this year’s Heritage Foundation/Wall Street Journal Index of Economic Freedom, with Greece registering the largest decline in economic freedom of any country in the world. Its economy is rated “mostly unfree,” and it has the fifth-lowest economic freedom score in Europe, beating only Russia and three former Soviet republics.

Why is it in such a state? The authors of the Index point to “decades of overspending, a lack of structural reform progress, and endemic corruption,” noting that Greece’s “lack of competitiveness and fading business confidence are serious impediments to economic revival. Adjustments in market conditions have been stifled or delayed by public unions.”

Sound familiar?

It should, because the similarities between the U.S. and Greece are alarming. Two years ago, Heritage’s J.D. Foster said that “We’re not Greece…yet.” Since he wrote that in May 2010, however, U.S. debt has nearly doubled as a share of the economy. Greece’s public debt, at 165 percent of gross domestic product (GDP), doesn’t seem that unreal any more.

A few other points of comparison: The U.S. corporate tax rate is higher than Greece’s. The Index of Economic Freedom pegged America’s overall tax burden at 24 percent of total domestic income, while Greece’s overall tax burden was 30 percent of GDP. Government spending inAmerica—42 percent of GDP—approaches Greece’s government spending level, which exceeds 50 percent of its GDP.

Both countries have structural economic deficiencies—like tax rates and labor regulations—that are causing deeply rooted problems. And both countries have tried to solve their fiscal problems through bailouts, to no avail.

Though it goes back to the adoption of the euro in 1999, the European crisis first broke into the open some 10 years later. In April 2009, the European Union told France, Spain, Ireland, and Greece to reduce their budget deficits in the wake of the credit crisis. Since the crisis began, Europe has substantially weakened its banking system, which is propped up only by central bank cash and shaky bailouts.

Now, defaulting on loans is a real possibility for Greece and other European nations. They have too long dismissed the need for economic growth in favor of government intervention.

Going into the G20 summit today and tomorrow in Mexico, President Obama “has called on European leaders to recapitalize weak banks and to focus on economic growth and not just budget austerity,” reports Reuters. Basically, he has been urging European governments to spend more now, even as their borrowing costs and debt far exceed sustainable levels. One wonders how countries that have limited or no access to credit markets because of their dire fiscal situations are supposed to borrow the money for all this additional spending. There is only one substantive difference between Obama’s policies for Europe and his domestic policy, where he has urged expanding government jobs as a solution to U.S. unemployment: The U.S. government can still borrow to finance its deficits, because we’re only partway down the road the Greeks have already traveled.

The overspending, overtaxing, over-borrowing and over-regulating approach does not work for Europe any more than it works for America.

To deal with any European financial fallout that might affect the U.S., we have to stop embracing the same policies. Congress and the President should rein in federal spending immediately by choice rather than being eventually forced to do so, as countries across Europe have been. They should declare a regulatory cease-fire and disarm the Taxmageddon threat.

America is responsible for its own economic problems, regardless of the winds sweeping across the Atlantic.

_____________

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 | Also posted in President Obama | Comments (0)

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

December 13, 2012 – 6:14 am

Stearns Speaks on House Floor in Support of Balanced Budget Amendment

Uploaded by on Nov 18, 2011

Speaking on House floor in support of Balanced Budget Resolution, 11/18/2011

___________

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.

Below are some of the main proposals of Milton Friedman. I highly respected his work.

David J. Theroux said this about Milton Friedman’s view concerning the Balanced Budget Amendment:

Balancing the Budget: Since deficit spending is simply a device for hiding tax increases, thereby lowering taxpayer resistance to government spending and impairing economic growth, all government spending should be handled according to the merits of each specific proposal in a pay-as-you-go basis. Fiscal policy should never be used to affect business cycles, and the Balanced Budget Amendment should be adopted.

Here is some more about Friedman’s life:

Milton Friedman (1912-2006)
By David J. Theroux  |  Posted: Sat. November 18, 2006

“Milton Friedman is a scholar of first rank whose original contributions to economic science have made him one of the greatest thinkers in modern history.”
—President Ronald Reagan

“How grateful I have been over the years for the cogency of Friedman’s ideas which have influenced me. Cherishers of freedom will be indebted to him for generations to come.”
—Alan Greenspan, former Chairman, Federal Reserve System

“Right at this moment there are people all over the land, I could put dots on the map, who are trying to prove Milton wrong. At some point, somebody else is trying to prove he’s right That’s what I call influence.”
—Paul Samuelson, Nobel Laureate in Economic Science

“Friedman’s influence reaches far beyond the academic community and the world of economics. Rather than lock himself in an ivory tower, he has joined the fray to fight for the survival of this great country of ours.”
—William E. Simon, former Secretary of the Treasury

“Milton Friedman is the most original social thinker of the era.”
—John Kenneth Galbraith, former Professor of Economics, Harvard University

“There are various ways to describe Friedman’s influence. But one way is to ask, ‘Has he helped many people—poor people in the world?’ And I would just take India and China, 37% of the world’s population. Hundreds of millions of people in these two countries, who used to live on less than one dollar a day or two dollars a day, are now able to live at a much more decent standard of living as a result of the reform of their economic policies toward more free-market policies, less regulation, less government and the like. There was one person who they are more indebted to than anybody else for their great improvement in their situation. In my judgment, that person is Milton Friedman.”
—Gary S. Becker, Nobel Laureate in Economic Science

Economist and former Newsweek columnist Henry Wallich has credited Milton Friedman with having “almost single-handedly” changed economic thinking on the subject of money.1 Indeed, Milton Friedman, the 1976 Nobel Laureate in Economic Science, was a world-renowned economist and an academician of the finest caliber. But he was much more. He was an articulate and persuasive advocate of individual freedom, and the private property, voluntary exchange economy, which is based upon and sustains that freedom. British Prime Minister Margaret Thatcher has stated, “Professor Friedman is usually referred to as a monetarist, but his basic belief is not in money. It’s in people’s inherent right and ability to choose how they will live.”

Among his proposals were the following:

Negative Income Tax: To eliminate the massive welfare system’s disincentives and enormous waste, abolish all welfare programs and replace them with a program of direct cash payments to those actually in need simply by adding a new income tax bracket (one for negative values of taxable income) to the tax code.

Educational Vouchers: To provide a competitive climate for public and private education, all parents of primary and secondary school children would be issued government vouchers to be spent at the school of their choice. Government’s only role would be to provide the vouchers; competition for clients would assure quality and innovation.

Flat Income Tax: To streamline the tax system and to lower its enormous direct costs to the general public and the indirect inefficiencies imposed on the economy, abolish the corporate income tax. In addition, tax individuals only at a non-progressive, low, flat rate, raising personal exemptions to some minimum income level, and ending all loopholes.

Stable Money Growth: To eliminate the recurring problems of inflation, unemployment, and decreased productivity, abolish the Federal Reserve System, legalize private monies, and peg the increase of the government money supply to the growth in GNP, perhaps 0 to 3 percent per year.

Floating Exchange Rates: To solve the nation’s balance-of-payments problems and to open the possibility of unilaterally eliminating anti-consumer protectionist measures, abolish exchange controls and let national and private currencies seek their own price levels in the market.

Balancing the Budget: Since deficit spending is simply a device for hiding tax increases, thereby lowering taxpayer resistance to government spending and impairing economic growth, all government spending should be handled according to the merits of each specific proposal in a pay-as-you-go basis. Fiscal policy should never be used to affect business cycles, and the Balanced Budget Amendment should be adopted.

Volunteer Army: To create a more efficient, better motivated, and morally tenable defense system, abolish the compulsory servitude of the draft and draft registration and maintain a voluntary system of enlistment based on competitive benefits and professional, career-oriented training.

No Victimless Crime Laws: To direct limited police and legal resources to the problems of violent crime, eliminate all laws creating “crimes with no victims.” More specifically, where consent is present between two or more adults no criminal injustice can be possible; hence, for Friedman government has no place in proscribing or regulating such areas as prostitution, profanity, pornography, drugs, and so forth. In this regard, Friedman was not condoning any such behavior, but instead noting that these and all non-invasive matters are best regulated by property owners via private-property agreements and institutions, as opposed to government command-and-control. Moreover, Friedman agreed with the late Harvard philosopher Robert Nozick’s position that such practices should be equally legal along with all “capitalist acts between consenting adults.”13

As a result of his devotion to individual freedom, Friedman was an early and vocal supporter of California’s Proposition 13 to reduce property taxes across-the-board, as well as President Ronald Reagan’s original proposal to cut individual and corporate income tax rates. He was opposed to price controls, farm subsidies, securities and exchange controls, tariffs, and, in fact, all government interventions into the peaceful pursuits of individuals. To Friedman, government’s role should be stringently restricted to defending the nation from foreign enemies, defending persons from force and fraud, providing a forum for decisions of the general rules determining property and similar rights, and providing a means to mediate disputes about the rules.

Perhaps Friedman’s greatest success began in 1979 when he and his wife Rose authored the book, Free to Choose, based on the famous ten-part TV series for PBS by the same title. Both the TV program and the book were drawn from an earlier series of lectures presented by Friedman. Because it aired during a period of critical economic distress during the Carter Administration and in the aftermath of the Vietnam War, Watergate scandal, and Richard Nixon’s resignation as President, the program is widely regarded as being a major factor in shifting American public opinion toward appreciating the need to dismantle government largess. The series was shown in England, Japan, Italy, Australia, Germany, Canada, and many other countries, and the book was translated for distribution around the world, selling more than one million copies.

As a result of his impact on academic and public opinion, Friedman was an economic advisor to 1964 Republican presidential candidate Barry Goldwater; Presidents Ronald Reagan, Gerald Ford, and Richard Nixon; as well as British Prime Minister Margaret Thatcher. But throughout this time, he consistently turned down full-time positions in government, preferring to continue his scientific work and leave public activities to full-time policymakers.

In addition, Friedman’s ideas were critically influential in the economic liberalization reforms in such countries as Estonia, Chile, Ireland, China, New Zealand, Czech Republic, and India. In the process, he was accused of complicity in the repressive regimes of Chilean dictator Augusto Pinochet and in Communist China. However, Friedman maintained that in advising any government, in no way was he supporting any policies that run counter to the principles of individual liberty. Indeed, he indicated that he instead sought to end all policies of oppression.

In short, Friedman believed that government’s sole functions should be to provide civil policing and justice plus national defense. For the latter however, he went further than merely supporting the protection of national borders from invaders. In the aftermath of World War II, Friedman became a supporter of the Cold War and the Wilsonian legacy of U.S. military interventionism around the world. This led him to support the Vietnam War and other overt and covert U.S. policies. However, in the process, he noted that, “I’m anti-interventionist, but I’m not an isolationist,”14 and upon reading the 1987 landmark book by Independent Institute Senior Fellow Robert Higgs, Crisis and Leviathan, which shows that war “crises” are the major engine of the very neo-mercantilism and Big Government he long opposed, Friedman became an increasing critic of “wars of choice,” including the war in Iraq.

The Friedman’s were married for 68 years and had two children: David, who teaches law and economics at Santa Clara University, and Janet, who practices law in California.

To recognize the enormous contributions of this man, I had the distinct pleasure and privilege to organize the gala National Dinner to Honor Milton Friedman on October 4, 1983, at the Fairmont Hotel in San Francisco, at which then struggling actor Arnold Schwarzenegger, who had been inspired by the “Free to Choose” TV series, first met Friedman in person.

In addition to the Nobel Prize, Friedman was the recipient of the Grand Cordon of the First Class Order of the Sacred Treasure of Japan (1987), National Medal of Science (1988), and Presidential Medal of Freedom (1988), and he was a member of the American Philosophical Society and the National Academy of Sciences.

In 1998, Milton and Rose Friedman penned their autobiography, Two Lucky People: Memoirs, which traces their remarkable personal journey and life experiences, and they both spent recent years working together pursuing their dream of educational choice for all parents throughout the U.S.

Milton Friedman died on November 16, 2006, from heart failure, in San Francisco. Unlike any other intellectual figure of the twentieth century, he transformed public debate away from the suicidal path of command economies and toward economies based on individual choice, free markets, and personal responsibility. Friedman was brilliant, creative, resilient, and effective. In his career, including the thirty years that I had the pleasure of knowing him, he was a champion who sought to facilitate greater opportunity for all, especially those most in need. In economics, education, finance, business, civil liberties, welfare, and a host of other areas, he has left a powerful legacy for the benefit of humanity.

Notes

1. John Davenport. “The Radical Economics of Milton Friedman,” Fortune, 1 June 1967, p. 131.

2. “Milton Friedman,” Current Biography 1969 (Bronx, NY: H.W. Wilson Company), p. 151.

3. “Milton Friedman,” Les Prix Nobel en 1976 (Stockholm: The Nobel Foundation, 1977), p. 239.

4. Karl Brunner. “The 1976 Nobel Prize in Economics,” Science 194 (November 5, 1976), p. 595.

5. Current Biography, p. 152.

6. Les Prix Nobel en 1976, pp. 240-41.

7. Current Biography, p. 152.

8. Les Prix Nobel en 1976, p. 241.

9. Ibid.

10. Current Biography, p. 152.

11. Milton Friedman. “He Has Set a Standard.” Wall Street Journal (June 31, 2006).

12. Milton Friedman. “Introduction.” New Individualist Review (Indianapolis: Liberty Press, 1981), pp. ix-xiv.

13. “Portrait: Milton Friedman,” Challenge (May-June 1978), p. 69; Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962); and Milton and Rose Friedman, Free to Choose (New York: Harcourt Brace Jovanovich, 1980).

14. “Best of Both Worlds: Milton Friedman reminisces about his career as an economist and his lifetime ‘avocation’ as a spokesman for freedom,” Reason (June 1995).

David J. Theroux is the Founder, President and Chief Executive Officer of The Independent Institute and Publisher of The Independent Review.__________Thank you again for your time and for this opportunity to share my ideas with you.

Sincerely,

Everette Hatcher
By Everette Hatcher III | Comments (0)