Category Archives: Taxes

Dan Mitchell on the Buffett rule

April 17, 2012 – 6:47 am

Dan Mitchell Debating the Buffett Rule on CNBC

Published on Apr 10, 2012 by

No description available.

Mike Brownfield

April 16, 2012 at 2:22 pm

President Obama says his “Buffett Rule” — which imposes higher taxes on wealthy Americans and job creators — will help “stabilize our debt and deficits for the next decade.” But if you compare how much money his policy raises with how much he’d like to spend, you get a much different picture.

The Buffett Rule would impose a minimum 30 percent tax on businesses and families earning $1 million. That would bring in $47 billion in revenue in ten years. Next to the President’s budget, which adds $6.7 trillion to the national debt, you can see that Obama’s answer to America’s budget woes isn’t much of an answer at all. Do the math, and you’ll find that the Buffett Rule would cover just 0.7% of all of Obama’s debt and .1% of Obama’s spending.

As you can see, that’s a small drop in a very large bucket.

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

Congress needs to avoid big tax increase at the end of 2012

April 17, 2012 – 6:40 am

Congress better step up to the plate and avoid the huge tax increase coming at the end of 2012.

Curtis Dubay

April 16, 2012 at 5:33 pm

In a bit of scheduling serendipity, Tax Freedom Day—the day when Americans finally earn enough income to pay off the bill for all federal, state, and local taxes for the year—falls on April 17 this year. That also happens to be Tax Filing Day 2012.

Absent tax changes made by Congress, Tax Freedom Day moves earlier or later in the calendar from year to year based on the economy. If the economy is stronger, then more Americans are working and wages are rising. Larger incomes mean they pay more taxes and Tax Freedom day falls later in the year. The reverse happens when the economy is weak, as it is today.

Tax Freedom Day next year promises to be much later than April 17, but unfortunately not because of a strong economy, which even the Obama Administration is not predicting. No, Tax Freedom Day will be much later if Congress and President Obama fail to act promptly and prevent Taxmageddon from striking America’s families and small businesses.

Taxmageddon is a $494 billion tax hike. Not only would it push Tax Freedom Day much deeper into 2013, it would also make next year’s Tax Day considerably more painful than it was this year: American households would face an average tax increase of $3,800.

A big portion of the Taxmageddon increase would occur because tax cuts enacted more than a decade ago lowered all tax rates and put in place a new 10 percent bracket. They also doubled the child tax credit from $500 to $1,000, reduced the marriage penalty, and reduced the tax disincentives toward saving. These tax cuts are all slated to expire at the end of 2012. In total, because of the expiration of just these three tax policies, 70 percent of Taxmageddon would fall directly on low-income and middle-income families. That’s about $346 billion less for families to spend and a whole lot more for government to spend.

That’s not all. If Congress fails to act, then a lot more Americans are going to pay the alternative minimum tax, or AMT. This tax was only supposed to be paid by “the rich.” But, as so often happens, a tax targeted at the rich expanded over time so that it now threatens millions of middle-income families.

If Congress fails to act, workers won’t have to wait very long to feel the effects. Every payday, they would see a jump in their payroll tax as it takes a bigger bite out of every paycheck. And that only reflects the direct hit they’ll face. The health care surtax on investment income and salaries over $250,000—which begins in 2013 along with five other tax hikes—would slow job creation, because it would take away resources from businesses, investors, and entrepreneurs.

Other Taxmageddon tax hikes, such as the expiration of the “tax extenders,” the rise of the death tax, and end of 100 percent expensing for business investment, would also slow the economy. These would make it harder for those out of work to find a job or for those looking for a new opportunity to land a better job. It would also slam the stock market, making it harder to rebuild depleted retirement savings.

Congress and President Obama need to show voters they actually can get important things done, even in an election year. Stopping a nearly $500 billion economy-crushing tax hike shouldn’t be controversial. So what’s the hold up?

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

Sweden cutting taxes and experiencing economic growth

April 17, 2012 – 6:30 am

 

One of my favorite groups growing up was ABBA. Here are some of my favorite songs:

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It is sad that we are heading to where Sweden used to be and they are heading to where we used to be. Here is a great article from the Heritage Foundation:

Anthony B. Kim

April 16, 2012 at 5:30 pm

Sweden is known for, among other things, Swedish meatballs, the pop group ABBA, and IKEA.

Well, here is another thing that Sweden should be recognized for: tax cuts. Yes, you heard right: tax cuts.

Sweden used to tax corporations at a 60 percent rate. Now that has come down to 26.3 percent. As noted in a recent article by the U.K.-based Spectator magazine, Sweden’s finance minister, Anders Borg, who was named the most effective finance minister in Europe by the Financial Times, got something awfully right.

Since becoming Sweden’s finance minister, [Borg’s] mission has been to pare back government. His “stimulus” was a permanent tax cut. To critics, this was fiscal lunacy—the so-called “punk tax cutting” agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result.… Three years on, it’s pretty clear who was right. “Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus,” he says. “Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.” Tax-cutting Sweden, by contrast, had the fastest growth in Europe last year, when it also celebrated the abolition of its deficit.… He continued to cut taxes and cut welfare-spending to pay for it; he even cut property taxes for the rich to lure entrepreneurs back to Sweden. The last bit was the most unpopular, but for Borg, economic recovery starts with entrepreneurs.

The tax cuts, combined with Sweden’s highly efficient regulatory system, have raised the Swedish economy to 21st place in the 2012 Index of Economic Freedom. By sharp contrast, the regulation-loving “Yes, We Can” U.S. Administration has driven down our economic freedom ranking over the past three years and is steering our economy into “Taxmageddon.”

Maybe it is time for President Obama to sit down with Sweden’s finance minister for a lesson on how to achieve economic recovery.

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

Obama wants to claim Reagan again

April 16, 2012 – 6:25 am

I have a son named Wilson Daniel Hatcher and he is named after two of the most respected men I have ever read about : Daniel from the Old Testament and Ronald Wilson Reagan.

One of the thrills of my life was getting to hear President Reagan speak in the beginning of November of 1984 at the State House Convention Center in Little Rock.  Immediately after that program I was standing outside on Markham with my girlfriend Jill Sawyer (now wife of 25 years) and we were alone on a corner and the President was driven by and he waved at us and we waved back.

My former pastor from Memphis, Adrian Rogers, got the opportunity to visit with President Ronald Reagan on several occasions and my St Senator Jeremy Hutchinson got to meet him too. I am very jealous.

This is not the first time,but President Obama is claiming that Reagan also would support his own position concerning raising taxes.

Leslie Grimard

April 12, 2012 at 1:00 pm

Yesterday President Obama tried to sell the “Buffett Rule” under a new moniker:

What Ronald Reagan was calling for then is the same thing that we’re calling for now: a return to basic fairness and responsibility; everybody doing their part. And if it will help convince folks in Congress to make the right choice, we could call it the Reagan Rule instead of the Buffett Rule.

Securing Ronald Reagan’s economic blessing is a new trend among liberals. And no wonder: Ronald Reagan is one of the most popular presidents in modern times.

But what did Reagan really say about the tax rates of the millionaire and the bus driver? Reagan proposed: “We’re going to close the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share, the loopholes” that “sometimes make it possible for millionaires to pay nothing.”

Reagan closed tax loopholes; President Obama wants to raise taxes.

President Obama does not acknowledge the profound difference between the “fair-share” solution Reagan sought in 1986 and the redistributionist tax hike he is proposing today. The 1986 law revolutionized the tax code by eliminating dozens of loopholes to make all incomes taxable (Like the Paul Ryan [R­–WI] tax reform plan). Reagan aimed to close tax loopholes, including the infamous three-martini lunch, but he never intended to take money from the small business owners who create the vast majority of American jobs.

It was Ronald Reagan who proposed the Economic Reform Tax Act [ERTA] of 1981, which cut marginal tax cuts by 25 percent across the board and reduced the highest marginal tax rate from 70 percent to 50 percent. Two years after ERTA was signed into law, America began almost two decades of robust economic growth.

Ronald Reagan knew from personal experience that if you raise taxes, you erect barriers to innovation and job creation. As a film star in the late ’40s and ’50s, Reagan was taxed at 91 percent, which caused him to remark: “Why should I have done [another] picture, even if it was Gone with the Wind?…What good would it have done me?” Reagan would’ve made only 9 cents on the dollar.

His rationale for cutting taxes across the board was based on more than just personal experience. Reagan believed—and was proven correct—that, “taken together, tax cuts and budget cuts…will put us back on the road to a sound economy, with lower inflation, more growth, and a government that lives within its means. Our goal is a very simple one: to rebuild this Nation so that individual Americans can once again be the masters of their own destiny.”

Obama is not honoring Reagan’s economic legacy. The President may see the same “Buffett” problem that Reagan saw, but he is proposing a radically different solution—one that will not work. Obama may not like it, but the real Reagan rule is that when you close loopholes and cut taxes for everyone—from the top to the bottom—everyone benefits.

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

President Obama uses the “Buffet Rule” as a distraction

April 14, 2012 – 12:41 pm

Dan Mitchell on Taxing the Rich

Why is the President changing the subject instead of addressing the real issues?

J.D. Foster, Ph.D. and Curtis Dubay

April 10, 2012 at 11:53 am

What do you do when you’re losing a debate?  Change the subject.  That’s really all you need to know to understand President Obama’s resuscitation of his infamous “Buffett Rule” that would impose a minimum 30 percent effective tax rate on businesses and families earning $1 million.

The Supreme Court gave Obamacare a nasty audition two weeks ago, leaving even staunch defenders of the law grasping for straws while the former constitutional law professor now in the White House outrageously flailed the court for doing exactly what the Constitution intends.  So what is the President’s response? Change the subject, of course.

After releasing a non-budget that completely ignored the nation’s near-term, medium-term, and long-term fiscal plight – an extraordinary trifecta not easily achieved – the President then tried to take the House Republicans to task for their proposed real solutions on all three. Nothing highlights irresponsibility like responsible behavior, and so Obama found sharp rhetoric and a frowning visage to be thin gruel when you’ve no policies of your own. Response? Change the subject.

Soaring gas prices have put enormous strains on family budgets and business plans. The President might deflect some of the resulting popular anger if he actually had an energy policy that might produce more energy. Instead, his policies have produced only more examples of why government should not be in the business of picking winners and losers (Solyndra). When your most notable policies relating to gas prices is to kill a major oil pipeline like Keystone, propose algae as an energy source and seek to raise taxes on oil companies, you’ve nowhere to hide. Response? Change the subject.

Then came last Friday’s jobs report, which was universally acknowledged as disappointing: job growth cut in half from the modest levels of previous months, and an unemployment rate that fell only because thousands of Americans just gave up looking.  If Washington had merely left the economy to heal itself, performance today would have been much stronger and unemployment markedly lower. Instead, almost everything this Administration has tried has failed noticeably, and voters have noticed. Response? Change the subject.

With nowhere else to go, Obama has fallen back to his most comfortable setting – class warfare. Now that it is painfully obvious the Buffett Rule is the President’s chief policy priority and the centerpiece of his reelection campaign, it is fair to ask, what would the policy do to address any of the nation’s problems?

The answer is – absolutely nothing.

Strengthen the economy? No, when it comes to economic growth the Buffett Rule would weaken the economy. The tax would fall most heavily on job creators like businesses that pay their taxes through the individual income tax, investors, and entrepreneurs. The higher levy would confiscate from them resources they would otherwise use to start new businesses, grow existing businesses, and hire more workers. This will slow economic growth, job creation, and wage increases.

Reduce the budget deficits? More like “budget pixie dust” in the words of House Budget Chairman Paul Ryan (R-WI). According to a recent analysis by the congressional Joint Committee on Taxation, the Buffett Rule would raise $47 billion over ten years. And that assumes no negative economic effects, which are certain to reduce the revenues gained. For perspective, during that period President Obama’s budget calls for adding $6.7 trillion to the national debt. The Buffett Rule would reduce the increase in debt in Obama’s budget by about one half of one percent.  No joke.

The Buffett Rule debate is desperate political prestidigitation. President Obama is losing the fight over Obamacare, which remains intensely unpopular. Gas prices show no sign of descending. The economy at best is muddling. And the nation is looking for answers on the budget and the President has none. The President needed a change of subject. For Obama, what better time for a distracting, divisive fight over fairness?

When a President refuses to address the issues the country cares about, they tune out.  Obama’s fairness fight is likely to fare about as well as the rest of his policies.

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

Dan Mitchell of the Cato Institute takes on the Buffett Rule

April 13, 2012 – 1:44 pm

Class warfare again from President Obama. 

I’ve already explained why Warren Buffett is either dishonest or clueless about tax policy. Today, on CNBC, I got to debate the tax scheme that President Obama has named after the Omaha investor.

One of my big points was that the United States already has a self-destructive set of tax laws for investment. As such, it would be very foolish to increase the double taxation of income that is saved and invested.

Dan Mitchell Debating the Buffett Rule on CNBC

Published on Apr 10, 2012 by

No description available.

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And my closing point, which I snuck in before they could go off air, was that the left should want lower tax rates if they want more revenue from the rich. It’s called the Laffer Curve.

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

Milton Friedman:Republicans are wrong to oppose payroll tax reduction (Part 2 of Friedman interview with John Hawkins)”Friedman Friday”

April 13, 2012 – 6:03 am

Milton Friedman and Ronald Reagan

John Brummett is critical of Republicans for opposing the payroll tax reduction and I have to agree with him on this.

In an interview shortly after the Bush Tax Cuts passed Milton Friedman was asked:

John Hawkins:Do you think George Bush, with the economy being as it was, did the right thing by cutting taxes?

Milton Friedman: I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, “How do you hold down government spending?” Government spending now amounts to close to 40% of national income not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.

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Here is some more of the interview:

Written By : John Hawkins

John Hawkins:I’d like to switch to a different area here. The economy certainly did well in the Clinton years except for the recession that started right at the end of his term. Was that because of Bill Clinton’s policies, a continuation of the success of Ronald Reagan’s policies, or something else?

Milton Friedman:I think it was #1 a continuation of the Reagan policies and #2 an indication of the virtues of a President of one party and a House and Senate of the other. That’s the best combination for economic growth…

John Hawkins:Because they hold down spending?

Milton Friedman:Yes, you have a deadlock. You can’t get any major spending programs through because one party or the other will oppose it. That’s why we have what looks like a paradox. The Clinton administration, in terms of the budget, has one of the best records of holding down spending. Spending went up less under Clinton than almost any other President.

John Hawkins:So do you think if we had Democrats controlling the House and Senate we’d have much less spending from the Bush administration?

Milton Friedman:If the White House were under Bush, and House and Senate were under the Democrats, I do not believe there would be much spending.

John Hawkins:That may be true. Switching directions again, Europe has been moving towards a single currency. Do you think that’s a wise move for all the states, some of them, or none of them? Why so?

Milton Friedman:We’re in the midst of a wonderful natural experiment. You have a really different arrangement with the euro than we’ve ever had historically. We’ve had many cases in which a number of countries have used the same currency. That’s when they’ve used gold or silver as money. But each individual country has been able to control the content of its own money. So while they were using the same commodity as currency, they were always in a position to determine what the terms of exchange were between their own currency and the other currencies.

But the euro is a very different arrangement. For the first time in history, we have essentially an independent central bank for a considerable number of distinct political entities. I, in advance, was very negative about it and have been very negative & pessimistic about it. We’ll see how the Europe plan does on the one hand and on the other, how the other countries of the world, the UK, the United States, Japan, which are linked together by flexible exchange rates, we’ll see how they do.

So we’ll have a really nice, natural experiment just as before the Soviet Union dissolved, we had a natural experiment comparing socialism and capitalism.

John Hawkins:If the euro were to replace the dollar as the medium of exchange, if everyone bought and sold their goods in euros instead of dollars, would that have an impact on the US economy?

Milton Friedman:The success of the United States will depend on how much it can produce at home, how much it can sell abroad, what it buys from abroad. It’s of less importance whether it is denominated in dollars or euros.

John Hawkins:So in the end, that is really not going to make a big difference one way or the other…

Milton Friedman:That’s not going to make a great deal of difference. What’s going to make the difference is the productivity of the different countries. But personally, as I say, I believe the Euroland is going to run into big difficulties. That’s because the different countries have different languages, limited mobility among them, and they’re effected differently by external events.

Right now for example, Ireland and Spain are doing very well, but on the other hand Germany and France are doing very poorly. The question is; “Is the same monetary policy appropriate for all of them?” Germany and France on one hand and Ireland and Spain on the other: it’s very dubious that it is. That’s why you’re having increasing difficulties within the Euroland group. As you probably know Sweden, which had not joined the European Monetary Union, voted down doing so and will keep its own currency.

John Hawkins: It was 56% to 42%so they voted it down by a good margin. Switching gears again here, in your opinion, what caused us to pull out of the Great Depression? Was it Roosevelt’s policies, WW2…

Milton Friedman:Roosevelt’s policies were very destructive. Roosevelt’s policies made the depression longer and worse than it otherwise would have been. What pulled us out of the depression was the natural resilience of the economy + WW2.

You know, it’s a mystery as to why people think Roosevelt’s policies pulled us out of the Depression. The problem was that you had unemployed machines and unemployed people. How do you get them together by forming industrial cartels and keeping prices and wages up? That’s what Roosevelt’s policies in the New Deal amounted to. Essentially, increasing the role of government, enhancing the monopolistic position of labor, and creating as I said before the equivalent of price fixing cartels made things worse. So most of his policies were counterproductive.

John Hawkins:Fast forward to today and there are a lot of Democrats & people on the left out there who say, “Why don’t we just have exorbitant taxes on the rich and minimal taxes on everyone else”? What would that do to the economy?

Milton Friedman:That would eliminate the rich.

John Hawkins:Right. Would it have a negative effect on economy overall?

Milton Friedman:Well, who would provide the funds, the capital, and the entrepreneurship for the new industries? In a world in which there were no rich people, how would you have ever gotten the capital to produce steel mills or automobile plants? You can do it through the state, but the world tried that with the Soviet Union.

It’s an interesting thing. If you ask yourself, “what tax system would be best for the low income group,” it’s the opposite of what they’re saying there. It would be a system with a maximum amount of taxation rather than a minimum. If you look at the taxation system in China for example, which is now doing very, very, well, that’s exactly what it is. In Russia you now have a 20% flat tax which is having the effect of increasing revenues rapidly and also stimulating production. You cannot help the poor by destroying the rich.

John Hawkins:If we don’t “fix” Social Security, what sort of impact is it going to have on the economy in say 10-20 years?

Milton Friedman:Well, Social Security is having a bad effect now through the tax system. But ya know, when Adam Smith was told that the British loss at Yorktown would be the ruination of Britain, Adam Smith replied, “Young man, there’s a deal of ruin in a nation.” So, we’re a very strong country, lots of able people, lots of active entrepreneurs, and so the Social Security system will be a burden, but it won’t destroy the country.

I think it will be changed of course. I think there is a great and growing pressure towards privatizing Social Security, converting it into individual accounts. We’ve been moving that way indirectly through 401ks and the equivalent retirement accounts. I think Mr. Bush will go back to his emphasis on privatizing Social Security. I think there’s a good chance it can be done. It has been done in a considerable number of countries around the world. There’s no reason why it couldn’t be done here.

John Hawkins:Are there any political websites you’d like to recommend to our readers?

Milton Friedman: No, I don’t really follow any political websites. I think they’ll do better reading the Wealth of Nations(laughs)…

John Hawkins:Last but not least, is there anything else you’d like to say or promote?

Milton Friedman:I’d like to promote lots of things. I’d like to promote elimination of drug prohibition. I’d like to promote parental choice in education through vouchers. Those are two things I think are very urgent and important. They’re both more important than the harm which Social Security will do.

I think that our policy with respect to drugs is fundamentally immoral and it’s really disgraceful that we cause thousands of deaths in South America because we cannot enforce our own laws. If we could enforce our own laws against consumption of drugs, there would be no drug cartels in South America. There would be no — nearly a civil war in a place like Columbia.

Similarly, I think the performance of our school systems is disgraceful. I think roughly a quarter of the population never graduates high school. We have a lower level of literacy today than we had a hundred years ago. That’s not despite, but because of the poor schools, particularly in low-income areas.

But I think that’s enough for you. It has been nice to talk to you.

John Hawkins:Thank you for your time Mr. Friedman.

If you’d like to find out more about Mr. Friedman, you can do so at the Milton & Rose D. Friedman Foundation & the Hoover Institution.

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

Videos by Cato Institute on failed stimulus plans

April 11, 2012 – 6:12 am

In this post I have gathered several videos from the Cato Institute concerning the subject of failed stimulus plans.

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Government Spending Doesn’t Create Jobs

Uploaded by on Sep 7, 2011

Share this on Facebook: http://on.fb.me/qnjkn9 Tweet it: http://tiny.cc/o9v9t

In the debate of job creation and how best to pursue it as a policy goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t create new employment.

Video produced by Caleb Brown and Austin Bragg.

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Keynesian Catastrophe: Big Money, Big Government & Big Lies

Uploaded by on Jan 19, 2012

The Cato Institute’s Dan Mitchell explains why Obama’s stimulus was a flop! With Glenn Reynolds.

See more at http://www.pjtv.com and http://www.cato.org

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Keynesian Economics Is Wrong: Bigger Gov’t Is Not Stimulus

Uploaded by on Dec 15, 2008

Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

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Obama’s So-Called Stimulus: Good For Government, Bad For the Economy

Uploaded by on Jan 26, 2009

President Obama wants Congress to dramatically expand the burden of government spending. This CF&P Foundation mini-documentary explains why such a policy, based on the discredited Keynesian theory of economics, will not be successful. Indeed, the video demonstrates that Obama is proposing – for all intents and purposes – to repeat Bush’s mistakes. Government will be bigger, even though global evidence shows that nations with small governments are more prosperous.

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Big Government Is Not Stimulus: Why Keynes Was Wrong (The Condensed Version)

Uploaded by on Jan 13, 2009

The CF&P Foundation has released a condensed version of our successful mini-documentary explaining why so-called stimulus schemes do not work. Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

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Eight Reasons Why Big Government Hurts Economic Growth

Uploaded by on Aug 17, 2009

This Center for Freedom and Prosperity Foundation video analyzes how excessive government spending undermines economic performance. While acknowledging that a very modest level of government spending on things such as “public goods” can facilitate growth, the video outlines eight different ways that that big government hinders prosperity. This video focuses on theory and will be augmented by a second video looking at the empirical evidence favoring smaller government.

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Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, Not the Other Way

Uploaded by on Nov 29, 2010

Politicians and journalists who fixate on consumer spending are putting the cart before the horse. Consumer spending generally is a consequence of growth, not the cause of growth. This Center for Freedom and Prosperity video helps explain how to achieve more prosperity by looking at the differences between gross domestic product and gross domestic income. www.freedomandprosperity.org

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Deficits, Debts and Unfunded Liabilities: The Consequences of Excessive Government Spending

Uploaded by on May 10, 2010

Huge budget deficits and record levels of national debt are getting a lot of attention, but this video explains that unfunded liabilities for entitlement programs are Americas real red-ink challenge. More important, this CF&P mini-documentary reveals that deficits and debt are symptoms of the real problem of an excessive burden of government spending. www.freedomandprosperity.org

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Now that I have been critical of the Democrat President, I wanted to show that I am not concerned about taking up for Republicans but looking at the facts. President Clinton did increase government spending at a slower rate than many other presidents. Here are two  videos that praise both Reagan and Clinton for both accomplished this feat.

Spending Restraint, Part I: Lessons from Ronald Reagan and Bill Clinton

Uploaded by on Feb 14, 2011

Ronald Reagan and Bill Clinton both reduced the relative burden of government, largely because they were able to restrain the growth of domestic spending. The mini-documentary from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to show how Reagan and Clinton succeeded and compares their record to the fiscal profligacy of the Bush-Obama years.

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Spending Restraint, Part II: Lessons from Canada, Ireland, Slovakia, and New Zealand

Uploaded by on Feb 22, 2011

Nations can make remarkable fiscal progress if policy makers simply limit the growth of government spending. This video, which is Part II of a series, uses examples from recent history in Canada, Ireland, Slovakia, and New Zealand to demonstrate how it is possible to achieve rapid improvements in fiscal policy by restraining the burden of government spending. Part I of the series examined how Ronald Reagan and Bill Clinton were successful in controlling government outlays — particularly the burden of domestic spending programs. www.freedomandprosperity.org

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It seems that liberals will never wake up. On 3-8-12 a Arkansas Times blogger pointed out that Obama’s stimulus in 2009 was not made up of just increased but also tax cuts. That is true but the real truth is that there have been about 1/2 dozen stimulus efforts by President Obama and all of them have failed.  Over and over they have tried stimulus plans but they don’t work. Take a look at this excellent article from the Cato Institute:

Keynesian Policies Have Failed

by Chris Edwards

Chris Edwards is the director of tax policy studies at the Cato Institute and the editor of Downsizing Government.org.

Added to cato.org on December 2, 2011

This article appeared on U.S. News & World Report Online on December 2, 2011

Lawmakers are considering extending temporary payroll tax cuts. But the policy is based on faulty Keynesian theories and misplaced confidence in the government’s ability to micromanage short-run growth.

In textbook Keynesian terms, federal deficits stimulate growth by goosing “aggregate demand,” or consumer spending. Since the recession began, we’ve had a lot of goosing — deficits were $459 billion in 2008, $1.4 trillion in 2009, $1.3 trillion in 2010, and $1.3 trillion in 2011. Despite that huge supposed stimulus, unemployment remains remarkably high and the recovery has been the slowest since World War II.

Policymakers should ignore the Keynesians and their faulty models, and instead focus on reforms to aid long-run growth…

Yet supporters of extending payroll tax cuts think that adding another $265 billion to the deficit next year will somehow spur growth. That “stimulus” would be on top of the $1 trillion in deficit spending that is already expected in 2012. Far from helping the economy, all this deficit spending is destabilizing financial markets, scaring businesses away from investing, and imposing crushing debt burdens on young people.

For three years, policymakers have tried to manipulate short-run economic growth, and they have failed. They have put too much trust in macroeconomists, who are frankly lousy at modeling the complex workings of the short-run economy. In early 2008, the Congressional Budget Office projected that economic growth would strengthen in subsequent years, and thus completely missed the deep recession that had already begun. And then there was the infamously bad projection by Obama’s macroeconomists that unemployment would peak at 8 percent and then fall steadily if the 2009 stimulus plan was passed.

Chris Edwards is the director of tax policy studies at the Cato Institute and the editor of Downsizing Government.org.

 

More by Chris Edwards

Some of the same Keynesian macroeconomists who got it wrong on the recession and stimulus are now claiming that a temporary payroll tax break would boost growth. But as Stanford University economist John Taylor has argued, the supposed benefits of government stimulus have been “built in” or predetermined by the underlying assumptions of the Keynesian models.

Policymakers should ignore the Keynesians and their faulty models, and instead focus on reforms to aid long-run growth, which economists know a lot more about. Cutting the corporate tax rate, for example, is an overdue reform with bipartisan support that would enhance America’s long-run productivity and competitiveness.

If Congress is intent on cutting payroll taxes, it should do so within the context of long-run fiscal reforms. One idea is to allow workers to steer a portion of their payroll taxes into personal retirement accounts, as Chile and other nations have done. That reform would feel like a tax cut to workers because they would retain ownership of the funds, and it would begin solving the long-term budget crisis that looms over the economy.

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

The real truth about the financial condition of Social Security can be seen on the www.thedailyhatch.org

April 10, 2012 – 3:00 pm

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Dan Mitchell on Social Security

 

 

By Everette Hatcher III | Also posted in Cato Institute, President Obama, Social Security, spending out of control | Tagged | Comments (0)

Obama’s big government solutions have not worked

April 6, 2012 – 8:48 am

Government Spending Doesn’t Create Jobs

Uploaded by on Sep 7, 2011

Share this on Facebook: http://on.fb.me/qnjkn9 Tweet it: http://tiny.cc/o9v9t

In the debate of job creation and how best to pursue it as a policy goal, one point is forgotten: Government doesn’t create jobs. Government only diverts resources from one use to another, which doesn’t create new employment.

Video produced by Caleb Brown and Austin Bragg.

___________________________

I don’t understand why people think that big government is the answer for everything when what the federal government should do is get out of the way. Cutting taxes and regulations would help us get out of the recession!!

Obama Has Tried All the Wrong Policies

by Daniel J. Mitchell

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.

Added to cato.org on March 13, 2012

This article appeared in U.S. News & World Report on March 13, 2012

The Minneapolis Federal Reserve Bank has a very useful interactive website that allows anybody to compare recessions and recoveries during the post-World War II era. It takes only a couple of clicks to complete the exercise, and does not reflect well on the current occupant of the White House—as you can see at this link.

This does not mean that Obama caused the economic downturn. That was the result of policies that were implemented during the Bush years (though the current president was a big supporter of the Fannie Mae and Freddie Mac subsidies that played such a big role in the financial crisis). Indeed, the recession officially began in December 2007, more than one year before Obama’s inauguration.

Taking money out of the economy’s productive sector and letting politicians engage in a spending spree is the opposite of prudent policy.

But we can hold the president at least partially responsible for an extraordinarily weak and slow recovery. It’s been nearly three years since the recession officially ended in June 2009, yet jobs are still well below their pre-recession levels. And overall economic output, or gross domestic product, has just now finally gotten back to where it was when the downturn began.

This is an anemic record. Especially since an economy normally enjoys a strong bounce when coming out of a deep recession.

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.

 

More by Daniel J. Mitchell

The problem is that Obama has tried all the wrong policies. He tried a big-spending Keynesian package that was supposed to be a “stimulus,” butthat’s the same failed approach that Bush tried in 2008, the same failed approach that Japan tried in the 1990s, and the same failed approach that Hoover and Roosevelt tried in the 1930s. Taking money out of the economy’s productive sector and letting politicians engage in a spending spree is the opposite of prudent policy.

The president also has continuously expanded subsidies for unemployment, even though academic scholars (and even left-wing economists) all agree that such policies cause more joblessness.

And now he’s demanding higher tax rates, holding a Sword of Damocles over entrepreneurs, investors, and small business owners.

The nation recently endured eight years of a big-spending interventionist in the White House. The problem with Obama is that he promised hope and change, but he’s continuing the failed statist policies of his predecessor.

By Everette Hatcher III | Also posted in Cato Institute, President Obama, spending out of control | Comments (1)