CRNC Debrief - August, 2010

8/8/2019 CRNC Debrief - August, 2010

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Debrief

CRNC Research Compendium

August 2010

Editor: Brandon Greife, Political Director

College Republican National Committee 600 Pennsylvania Ave SE, Ste. 215 Washington, DC 20003 T 202-608-1411 F 202-608-1429

www.collegerepublicans.org
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Table of Contents

Obama Using Remaining Stimulus Money to Fund Pet Projects 3

Obamas Short Term Policies Leaving Us With Long Term Debt 4

Democrat Pundits Fail to See The Deep Divisions in Their Own Party 5

Boehner and Biden Battle Over Stimulus Claims 6

Obamas Recovery Summer Has Been Anything But 8

Democrats Trying to Have it Both Ways In Tax Cut Debate 9

Reckless Spending Shows Liberals Dont Have a Monopoly on Compassion 10

Democrats Retreat on Obamacares Claims of Lower Costs 11

U.S. Headed for Double Dip as U.K. Swings Toward Recovery 12

President Obamas Pontificating Clouds the Bigger Issues 14

Healthcare and Social Security Parallels Bode Well for GOP in Midterms 15

Union Approval Falls to New Low in Face of Huge Wage Disparity 16

Public Sector Employees Refusing to Share in Private Sector Sacrifice 18

The Social Security Ponzi Scheme is Collapsing 19

Krugmans Baseless Attack On Paul Ryan Highlights Whats Wrong With Politics 20

Dems State Aid Bill Not the Key to Improving Education 21

Romers Departure Signals Rift in White House Economic Strategy 23

Obama is No Kennedy When It Comes to Stimulating the Economy 24

Obama Misrepresents Health Care Reforms Impact on Medicare 25

Democrats Nix Tax Credit to Funnel Money Toward Pet Constituencies 26

Public Sector Unions A Main Cause of State Debt Woes 27

Dems Tax Plans Could Cut the Legs Out From Beneath Limping Recovery 29

College Republican National Committee

August Compendium! 1


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Democrats Tax Hikes Will Not Lead To Increased Tax Revenue 31

Obama Should Learn Some Economic Lessons From Chile 32

The Liberal Mandate on America 34

Democrats Corruption Charges Could Pave the Way for Republican Majority 35

John Kerrys Tax Lesson for Democrats 36

Pelosis Summer PR Campaign Long on Rhetoric, Short on Reality 38

Obama and Krugman Undone by Keynes Animal Spirits 39




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Obama Using Remaining Stimulus Money to Fund Pet

Projects

House Speaker Nancy Pelosi laid out the three guiding principles of the economic stimulus package: that it be

timely, temporary and targeted.

More than a year later, it is clear that none of these principles has been fulfilled.

Timely? As CBS News reported as recently as August 16, almost all of the stimulus money has been awarded, butthat is very different from it all being spent. For instance, the U.S. Department of Energy has doled out $30.2 billionworth of stimulus grants, but only paid out $6.2 billion. Or Detroit, which has spent less than 1 percent of the $8.8million in stimulus funds it was given. All told, after nearly 18 months after passage, more than half of the stimulusfunds devoted to investment projects has not been spent.

Temporary? TheNew York Postreported today that some of the more popular stimulus programs look likely to bemade permanent in which case, the temporary fix could end up costing more than $3.2 trillion. What should wehave expected? The government loves to create programs, the appearance of doing something often leads to votes,but they are loath to take anything back. Government programs are like toothpaste, once it is out of the tube, it is

darn near impossible to get it back in.

Beyond the continued spending, one thing that is certainly not temporary is the debt burden that it has caused. Arecent CBO estimate found that the cost of the economic stimulus package was $814 billion a significant reasonwhy our government has run record deficits for the past two years. Those compounding deficits could have seriouslong-term consequences for our economy. The CBO admits as much, saying in a report that the long run costs ofeach additional dollar of debt crowds out about 33 cents worth of private investment. In other words, higherspending now leads to lower GDP later.

Targeted? This, more than any other guiding principle is where the stimulus has missed the mark. Things like$554,763 to replace the windows in a visitors center that has been closed since 2007, or $1.9 million spent to studyphotograph ants, or $89,298 spent to replace a new sidewalk with a newer sidewalk that leads to nowhere but aditch.

The waste is obvious. But even more nefarious is the idea that President Obama made a conscious decision totarget his own pet projects rather than surefire job creators. As TIME reported last week,

But in the words of Vice President Joe Biden, Obamas effusive Recovery Act point man, Nowthe fun stuff starts! The fun stuff, about one-sixth of the total cost, is an all-out effort to exploitthe crisis to make green energy, green building and green transportation real

Whereas Obamas Council of Economic Advisers wanted a textbook Keynesian response and argued for tax cutsand income transfers to get cash circulating quickly, Obama wanted something else. As TIME reported,

Obama and Biden also saw a golden opportunity to address priorities; they emphasized shovel-worthy as well as shovel-ready.

Im sorry, but in the worst economic downturn since the Great Depression the only priority the Obamaadministration should have been addressing was the lack of jobs.

Worse, Obamas pet projects may actually hurt us fiscally in the long-term. Moreover, other nations experience withimplementing a green economy suggests that their may be a net job loss. For instance, Spain has lost two jobs forevery one jobs created with windmills and solar farms. In Denmark, a study finds that the cost of each green job tothe government costs $90,000 to $140,000 annually and once the government handouts end, so do the jobs.Germanys green bubble also burst after a prominent think tank found that,


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Germanys PV [solar energy] promotion has become a subsidization regime that, on a per-workerbasis, has reached a level that far exceeds average wages, with per-worker subsidies as high as175,000 ! (US $ 240,000).

Obamas high-speed rail plans will likely cause similar problems. As Steve Forbes explains,

Bottom line: All of these rail projects couldnt pass even a laugh test in the private sector, yet

they will soak up capital that otherwise could be used for productive purposes. Almost all high-speed rail schemes around the world operate at a loss. Even those touted as turning a profit areusually helped with off-balance-sheet government subsidies.

For a list of other reasons why Americans should be skeptical when Vice President Joe Biden says, Now the funstuff starts, check out this AP Fact Check on Obamas latest stimulus assertions.

Contrary to Pelosis assertions the stimulus has proven to be neither timely, temporary, nor targeted. But those arenot the rubrics by which the success of the stimulus will be ultimately judged. The bottom line for most Americansis whether it created jobs. The answer to that, more than any other factor, is the reason for its failure.

Obamas Short Term Policies Leaving Us With Long Term

Debt

President Obama is enjoying his vacation in Marthas Vineyard. Im not here to begrudge the man some time off.But while hes been swimming in the Atlantic the political sandcastles his administration has built are being washedaway.

The administrations economic policy successes were all built for short-term success without consideration of thelong-term harm. As Josh Brown described on the blog The Reformed Broker,

We were promised stimulus, programs and policies that would have lasting effects. What we got instead was atrillion dollar sand castle. Now that the inexorable tides have eroded away our leaderships best-laid (and funded)plans, someone needs to be held accountable. . . In hindsight, virtually all of the fiscal stimulus and extraordinaryprograms adopted by this administration now look like they merely forestalled the inevitable. Hiring has nothappened and in the meantime, housing is headed down another leg and the almost-resillient consumer is back toplaying hard-to-get.




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Cash for Clunkers created an artificial bubble that led to a boom for car sales and car manufacturers. As soon as thegovernment removed the incentive the bubble popped and the car market collapsed. It turns out that the only thingthe program really did was convince a bunch of people who may have bought a car in the next year to buy a carduring this particular month. Ditto for programs like the First-Time Home Buyers Tax Credit.

But the mother of all sandcastles the stimulus is now eroding back into the earth, leaving a gaping hole ofgovernment debt in its place. The overwhelming majority of the stimulus has already been spent. What do we have

to show for it? The number of jobless claims has risen in each of the past four weeks and last week it hit its highestpoint in nine months. A report issued today by the U.S. Commerce Department found that the economy only grewby 1.6 percent in the second quarter. For some perspective, the economy needs to grow at about 2.5 percent just tokeep unemployment from going any higher. Even larger growth would be needed to begin to combat the pervasivejoblessness that now plagues our nation.

Even if youre willing to argue that the stimulus was a success in terms of keeping unemployment down it appearsthat it merely delayed our problems. Unwilling to admit this fact, many liberal thinkers have taken to thinking thatwe should have simply built a bigger sandcastle. Given the economy is still sputtering, its obvious that $800 billionjust didnt do the trick, so we should have gone bigger! Nevermind the fact that the U.S. stimulus was the largestgovernmental infusion of funds amongst any nation and the biggest in U.S. history, including the Great Depression.

Regardless of what we should have done, the stimulus is what we did. Now we find ourselves unsure about whetherthe stimulus created any jobs but absolutely sure are nations finances are in dire straights. Rather than attempt to

understand the forces of the tide, the Obama administration hastily built economic sandcastles. Should be be thatsurprised that they have now washed away?

Democrat Pundits Fail to See The Deep Divisions in Their

Own PartyWere a bunch of extremists. Or at least thats what E.J. Dionne says. Personally, Im surprised. I simply, and at leastin my own mind rationally, thought I was just concerned about the impact of todays spending on my future. I alsohappen to disagree with the liberal point of view on a number of issues, namely the size and role of government. Isthat really what qualifies for an extremist these days?

Then again, E.J. Dionne seems to have developed a recent fascination with his GOP has gone nuts thesis. Heres asample of his recent article titles:




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Primaries Show GOP Extremism The Politics of No The Politics of GOP Stupidity Time to Stand Up to the Right Wing

I think hes got something against the Right. But heres the key question: is that something real, or simply therantings of someone whose partys November hopes are dimming faster than Jennifer Anistons career.

His latest article sheds some light on the answer. Moreover, you really dont have to read past the first line to see it.In it Dionne argues that,

Republicans are in the midst of an insurrection. Democrats are not.

Hmm. As an example, or to be more specific, his only examples, Dionne points to the primaries in Florida andAlaska. In the spirit of writing a blog post rather than a tome, Ill dismiss the Florida example. Party-favorite RickScott, didnt lose to billionaire businessman Jeff Greene because of any sort of insurrection. Scott wasnt somesuper right wing fanatic who beat out McCollum because of his Tea Party-esque chops. No, he won, because hespent a bazillion dollars on the race. $50 million to be precise an unprecedented amount of money for a Floridagubernatorial race.

So Dionnes got one shining example of this so-called Republican insurrection. But has he cared to look in the

mirror at his own party?

Democratic candidates nationwide are hoping to win by doing their best to look least like the Democratic candidate.Examples are popping up everywhere. Indiana Rep. Joe Donnelly, seeking a third term, aired a new TV adhighlighting how independent he is. The ad says, points out that he voted against Nancy Pelosis energy tax onHoosier families. Rep. Bobby Bright (D-AL) put up an ad touting how he voted against the bailouts, againststimulus spending, against the massive government health care and the trillion dollar federal budget. Rep. JasonAltmires (D-PA) ad features a man saying I like that Jason Altmire is not afraid to stand up to the president whilea woman chimes in And Nancy Pelosi.Lest you believe that this is just a few isolated incidents Ive chosen to make a point, check out some more examplescompiled by ABC, here.

The various ads highlight the growing fracture, or insurrection to steal a term from Dionne, that is growing withinthe Democratic Party. If you can name an issue I can guarantee they are fighting over it. Stimulus? Edolphus Towns(D-NY), chair of the House Committee on Oversight and Government Reform, said it is unclear as to whetherrecovery act funds are going where they are needed most. The need for more stimulus? Rep Gerry Connolly (D-VA) says I think we have just got to get serious about the deficit. Immigration reform? Rep. Luis Gutierrez useswords like disillusionment and betrayal to describe President Obamas lackadaisical stance towards reform. Headds, were going to make it uncomfortable for the Democratic Party. Or how about the Ground Zero mosque?

Politico reports that several House Democratic sources said they are furious with the White House for keeping thedebate over a New York mosque in play for two weeks.

Dionne has gone to great lengths to highlight the divisions within the Republican Party. He argues that Republicansare being dragged to the far-right which ultimately will cost them in November.What he fails to realize is that Democrats are doing their best to drag their party back to the middle, but is runninginto the wall of their partys leadership. Their inability to tackrightwill ultimately be what costs them in November.

Boehner and Biden Battle Over Stimulus Claims

Two days ago House Minority Leader, and Speaker of the House hopeful, John Boehner made public his criticismsof the Obama administrations failure to stimulate the economy.

In what has been viewed a first test of his Speaker chops, Boehner ripped into Democrats economic plans (or lackthereof). He criticized the job-killing tax hikes Democrats hope to pass in a down economy. He demanded thePresident denounce the job-killing bills like a national energy tax and card check. He called for bipartisan efforts torepeal the job-killing paperwork mandates of the healthcare bill. Bottom line: hes really against job-killing.




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Although he may have over-used the phrase, his point remains true: over the past two years Democrats have done alot more to discourage, rather than encourage, job creation. He argued that Washington must be aware of not onlythe intended results of their legislation, but also the unintended consequences.

Take something big like the stimulus. Pumping money into a down economy sounds great both in theory andpractice. But, Democrats failed to think of the long term negative pressure that enormous government debt has on

private investment. Or take something small like cash-for-clunkers. Getting old cars off the road while creating aboom period for struggling car makers seemed like a great idea. But, Democrats failed to consider what wouldhappen to the market when their artificial stimulus was removed.

The point is that Democratic policies, however well intentioned, have side-effects. Sadly, the most prevalent sideeffect thus far has been uncertainty. Big businesses are afraid of pending regulatory burdens and are now sitting ontheir cash reserves rather than gamble on hiring. Small businesses are wary of looming tax hikes and red tape andare going into survival mode rather than hire mode.

Then came Vice President Joe Bidens response. First, let me compliment Mr. Boehner on the strategical brillianceof giving an economic speech when the President was on vacation. Joe Biden, in all his folksy charm (read:tendency to put foot in mouth), is no President Obama when it comes to undressing Republican attacks on theeconomy.

Fortunately for Democrats Joe Biden flashed his rhetorical brilliance, thoroughly dismantling Boehners claims, andreminding America why President Obama chose Viden as his right hand man. Ha. Who are we kidding. All Bidendid was pull his best imitation of a scared child, point his finger, and yell Nu uh! Its YOU GUYS fault!

Even you guys is a little generous. The finger of blame was pointed specifically at one person. Bush. TheDemocratic totem of all things evil. Dont have an answer? Blame Bush. Something goes wrong? Its Bushs fault.Bill didnt live up to expectations? Bush doomed it to fail. In other words the specter of a guy who has been out ofoffice for two years has somehow infiltrated the collective psyche of a party who has done its best to distance itselffrom his policies. I guess it beats coming up with real answers.

In Bidens words, Mr. Boehner is nostalgic for those good old days, but the American people are not. They dontwant to go back, they want to move forward. But in the same breath that he declared people are tired of lookingbackwards he brings up the Bush administration. Which is it? Are we going to point fingers at who is to blame forthe problem are we going to work towards the future.

Of course the Vice President did make some salient points. He disputed Republicans notion that the tax cuts wouldhave a dire impact on a significant number of small businesses. Then again he ignored the statements from his ownparty showing that the top 2% of earners purchase 33% of the goods being bought. How taxing them will help usclaw out of this recession is beyond me.

Biden also discusses the new CBO report showing which outlines the good that the stimulus package has done forthe economy. Of course he omits that the CBO was also the one who initially predicted that because of the stimulusunemployment would average about 9% in 2010. Thus far we havent crossed below 9.5% (masked even further bythe fact that a significant number of the population has dropped out of the workforce). So if their models failed topredict unemployment in the past how can we trust the model they use to assess the effects of the stimulus bill?

Finally, Biden discussed all the super-awesome projects the administration is about to kick off. He seemed especially

keen on the job creating effects of high-speed rail. Ill leave it to Steve Forbes to explain why that is one of the mostbone-headed ideas ever.

Our future is looking more bleak by the day. Our economy remains stagnant and now we have trillions of dollars indebt to show for it. This country needs a change, and no-Joe, Im not talking about a return to the Bush-era, but Imalso not talking about the Obama brand of change. Because frankly, that change has taken us from bad to worse.




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Obamas Recovery Summer Has Been Anything But

This has been the summer of poorly named projects. First weve got the follow-up season of Jersey Shore that wasactually shot inMiami? Then we got the Presidents Recovery Summer in which the economycontinued tolose jobs? How are those two things in any way related? Theyre not.

Nevertheless, who did they think they were fooling? At MTV, the home of My Super Sweet 16, Disaster Date, andTeen Mom, we dont expect much better. But really, this kind of branding flies in Washington? Then again,misnomers reign in DC. Democrats have tried a trillion different names for the trillion dollar spending package theypromised would create jobs. Last year Barney Frank said,

Im not supposed to call it stimulus. The message experts in Washington have told us that weresupposed to call it the recovery plan. I was puzzled by thatMost people would rather bestimulated than recover.

Regardless of what you call it, it didnt work. If it was a stimulus it wasnt exactly stimulating and if it was arecovery plan it hasnt led us to much of a recovery. Now the messaging geniuses at the White House decided toframe the last three months as the Recovery Summer. Bad move.

In their seemingly infinite navet, Obama and his crack team of advisers saw that thousands of projects funded by

the stimulus bill were going to be coming into effect over the summer. Surely, this would spur the much-ballyhooedjob creation the administration has been crowing about right! Right? Wrong. Despite Vice President Joe Bidensdeclaration that the economy would soon be pumping out 250,000 to 500,000 new jobs a month, our economy hashit a wall.

In August state initial claims for unemployment benefits increased 12,000 to 500,000, the highest since mid-November. Moreover, the 9.5 percent unemployment rate has remained at about the same level as it was in May.Finally, home sales plunged in July, falling 27 percent, the steeping one-month drop since we began keeping thestatistic in 1968.

Weve got more signs pointing towards a double dip than any sort of private sector recovery and the PresidentsRecovery Summer tour is taking a break on the beaches of Marthas Vineyard.

But things are bound to get better right? Sure, we may have been burned by the Recovery Summer, but theresalways Fall. Well have the Autumn Comeback, or the Fall Resurrection, or the Harvest Rebound (thanksthesaurus.com). Sadly, my Magic Eight Ball, which happens to be filled with economists, says outlook not sogood.

As Economic Policy Institute economist Josh Bivens told ABC:

Two thirds of all stimulus dollars will have been spent by the end of the summer, Bivens said. Theeconomy grew 3.7 percent in the first quarter of 2010 but slowed to 2.4 percent in the secondquarter.

Economic growth is going to drop rapidly for the rest of this year and the Recovery Act is goingto add zero. It will have run out, Bivens said.

As the economy remains on life support, the prognosis for Democrats November chances grows more bleak. A newWashington Post poll finds that a mere 27 percent of Americans see the economy as improving. Its unsurprisingthen that the same poll finds that a new low of 43 percent approve of Obamas handling of the economy.

As it turns out, people are smart enough to flip past the title page. Even Snookie knows that Recovery Summersimply doesnt mean anything without any actual recovery.




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Democrats Trying to Have it Both Ways In Tax Cut Debate

The golden rule of politics: Never let your opponent frame the debate. Not quite, do unto others as you would havethem do unto you, but work with me here, this is Washington.

The biggest battle for position is currently over the Bush tax cuts. Democrats are attempting to frame the debate sothat Republicans are up to their old tricks, helping the rich at the expense of the poor.

Paul Krugmans latest column pretty much sums up the liberal storyline.

We need to pinch pennies these days. Dont you know we have a budget deficit? For months thathas been the word from Republicans and conservative Democrats, who have rejected everysuggestion that we do more to avoid deep cuts in public services and help the ailing economy.But these same politicians are eager to cut checks averaging $3 million each to the richest 120,000 peoplein the country.

There are two enormous rhetorical flaws with this approach that Id like to address. First, Democrats attempt tosingle out the rich is purely a partisan word game. Contrary to the favoring the rich philosophy Democrats keeppushing, Republicans want to extend the Bush tax cuts foreveryone. Second, for Republicans, reducing government

spending is the end, reducing the deficit happens to be a beneficial byproduct of achieving that end.

Republicans arent the party of the rich. Were not looking out for their interests at the expense of everyone elses.No, were simply maintaining ideological consistency. We want everyone to be able to keep as much of theirmoneyin theirpocket as they can. Democrats myopia neglects the fact that they agree with Republicans on almost all of thetax cuts. But rather than admit to the consistency they employ a clever rhetorical trick that makes them look reallygood and Republicans really bad. Keith Hennessy explained the language trick today in his blog,

Most DC Democrats try to have it both ways they talk about preventing tax increases on themiddle class but oppose extending tax cuts for the rich. This rhetorical inconsistency masks a parallel situation in law and policy. Either theyre both extending tax cuts, or theyre bothpreventing tax increases.

Same action, different verb. Regardless of which tack you choose, lets at least be intellectually honest. Of course,

such parallels dont help Democrats with their message. Promoting tax cuts for everyone is not nearly asprovocative as extending tax cuts for the rich. The fact is Republicans arent out to rob from the poor to give to therich. Were out to stop the government from robbing from anyone at all. And sadly that is exactly what the debatehas devolved into.

When it comes to deficits, private citizens money is only viewed through the lens of government need. AsHennessey explains,

In this view of the world, revenues belong to the government and are allocated by policymakers asgifts to those who need or deserve them. When you hear that we cannot afford to cut taxes andwe should not give tax cuts to ______, you are hearing this philosophy.

The problem with this philosophy is that ultimately, whatever the government spends, is not in and of itselfgovernment money. Citizens are relatively happy to donate a portion of their income to the government to ensure

that certain infrastructure gets built, and certain services get done. However, citizens money should not be used asmerely a subsidy for the largesse of our government. The debate must never be framed in such a way that the moralimperative lies with taxpayers to pay for the expenditures of its government. The imperative always lies withgovernment to justify its expenditures in the context of how much it is taking from taxpayers.

Can the government justify its current spending levels? If not, can they justify asking more from any taxpayer beforefirst looking for places to cut?




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That concept it tied closely with the second fallacy of Democrats attempt to frame the debate over extending the taxcuts. Republicans are deeply concerned about the deficit. However, we recognize that the deficit problem is part andparcel of the greater government spending problem. As Congressman Mike Pence said recently on Meet the Press,

I think its apples and oranges. Here in Washington, DC they talk about tax cuts the same waythey talk about spending increases as if the government owned all the moneyI think deciding ona government spending increase is very different on whether or not we allow American people to

keep more of their hard-earned tax dollars.

That is the fundamental difference that Democrats fail to grasp. Republicans are all for lowering the deficit, but theyarent for raising taxes to do it, especially not when government spending is at its highest point in history.

Moreover, lets dispel the notion that Democrats are truly concerned about the tax cuts impact on the deficit. Theyare always the first to cite the Tax Policy Centers figure that extending the tax cuts for the rich would take away$680 billion in potential revenue over the next 10 years. What you never hear them say is that the cost in lostrevenue of extending the total package of tax cuts is $3.1 trillion. Then again Democrats justify the cuts for the restof society by saying that they will stimulate consumer demand so that we can escape the recession. FortunatelyGerry Connolly (D-VA) has the perfect response: its important for members to remember the top 5 percent ofearners generates 30 percent of consumer spending.

In other words, if Democrats really believe their own logic, then we get the biggest bang for our buck would comefrom extending tax relief to everyone. Then again, as we discussed earlier, internal consistency is not exactlyDemocrats strong suit.

Reckless Spending Shows Liberals Dont Have a Monopoly

on Compassion

In my heart Im a liberal. How could I not be? I see poverty that should be alleviated, hunger that should be fed,homeless that should be given shelter and sick that should be given care. What a world it would be if everyone hadno economic worries. They were born into comfort and died without an economic care in the world. That is the way

I want it to be, but I realize it cannot be so.

Nevertheless, each of the two political parties does their best to maximize this vision of utopia.

Dont be fooled. Liberals like to think that they have a monopoly on compassion, but that is not the case. Therehappen to be two brands of empathy. Regardless of intent, the liberal brand focuses on improving conditions in thehere and now. They want to expand entitlements, inch towards a cradle-to-the-grave welfare state, and spend asmuch money as society will let them to dig people out of economic trouble.

Any differing ideals are simply heartless. Reforming Social Security becomes an attempt to destroy grannysretirement. Asking that unemployment benefits be paid for by finding cuts elsewhere in the federal budget isinterpreted as lacking compassion for those struggling in a down economy. Wondering why healthcare reform wasnot focused on lowering costs became synonymous with denying care to the poor. As my colleague Zach Howell haspreviously explained, no lambast, hyperbole or imagination is spared in the Lefts attempt to convince Americans

that any action to control the growth of entitlement spending is a heartless sop to rich voters.

The conservative brand of compassion uses a more long-term frame of reference. It understands that our obligationto society expands beyond this generation. We understand that there is nothing inherently compassionate about asocial welfare program that benefits today at the expense of tomorrow. For instance, is anyone willing to argue thatCalifornias pension system is based in empathy? Todays recipients will surely retire in incredible comfort. Theycan retire generally around age 55 and receive monthly payments up to 90% of their income. This has led to thestates pension plan being more than $500 billion underfunded. Moreover this deficit will have real worldconsequences. The Los Angeles Times reported that:


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For a glimpse of Californias budgetary future, look no further than the $5.5 billion diverted thisyear from higher education, transit, parks and other programs in order to pay just a tiny bit towardcurrent unfunded pension and healthcare promises. That figure is set to triple within 10 years and absent reform to continue to grow, crowding out funding for many programs vital to theoverwhelming majority of Californians.

Todays empathy bankrupted tomorrow. The same overemphasis on the present is played out elsewhere. Social

Security is expected to run permanent deficits starting in 2015 and yet nothing has been done to ensure theprograms survival in the long term. By raiding Medicare to cover up the costs of the Democrats healthcare reformplan, the long-term stability of the program is in jeopardy. As the Center for Medicare and Medicaid reported,providerscould find it difficult to remain profitable and, absent legislative intervention, might end theirparticipation in the program. But more broadly the incessant spending on government programs is placingenormous strain on our future finances. According to CBO figures, our national debt will soar to 180 percent of GDPby 2035 a level well above that of Greece. There is simply nothing compassionate about being forced to spend$5.7 trillion on interest on our debt every decade. There is nothing compassionate about spending holes into oursocial safety nets.

Conservatives understand the desire to help, but we also understand that we cannot handcuff our ability to helppeople in the future. True compassion does not exist purely as an ephemeral idea, to work, it must translate intoimproving the plight of real people.

All of us, Republican or Democrat, share in our hearts a vision for this world. But throwing good money after badhelps today by hurting tomorrow. In our quest for social justice we must expand our worldview and understand thelong-term impacts of todays spending. With so much at stake, trillions of dollars in debt, is anything butcompassionate. To have the resources to help both today and tomorrow, we must put America back on the pathtowards responsible and sustainable spending.

As I said earlier, Im a bleeding heart liberal, but it is tempered by the rational mind of a conservative.

Democrats Retreat on Obamacares Claims of Lower Costs

Democrats have waved the white flag. They are in full retreat from a healthcare battle that has been fought for 18months. Theyve come to the realization that they had better cut their losses, head for higher ground, and regroup. It

cant be seen as anything but a tremendous victory for Republicans.

For over a year Republicans have been waging a messaging war on the Democrats claim that their healthcare reformbill would lower costs and reduce the deficit. President Obama campaigned (and possibly won) on the notion that hishealthcare reform bill would stem the persistent increase in healthcare costs. In 2008 he said,

[I]ts time we did something about the [cost crisis families are facing.] That starts with relievingthe biggest burden to families, state budgets, and business the crushing cost of health care. Myplan would bring down premiums by $2,500 for the typical family, and bring down costs for theentire country

In December 2009 President Obama became even more adamant on the necessity of passing healthcare to alleviatethe federal governments budgetary concerns. In an interview with Charlie Gibson Obama said point blank, [I]f wedont do this, nobody argues with the fact that health care costs are going to consume the entire federal budget.

Um, Republicans have been arguing that point since the beginning. We were always highly dubious of the notionthat you could add millions of people to Medicaid, exponentially expand the governments role in delivering care,and still lower costs. Over the course of time that suspicion turned into fact. At the beginning of the debate we wereattempting to stop the Democrats momentum with no weapons other than our fundamental belief that biggovernment is bad business. Then came the reinforcements.


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In June 2009 the CBO said that enacting the proposal would result in a net increase in federal budget deficit ofabout $1.0 trillion over the 2010-2019 period. In April 2010 the Center for Medicare and Medicaid Services foundthat we estimate the for calendar years 2010 through 2019, [national health expenditures] would increase by $311billion, or 0.9 percent, over the updated baseline projection. And on June 2010 CBO Director Douglas Elmendorffound that, In CBOs judgment, the health legislation enacted earlier this year does not substantially diminish [the]pressure of [rising health costs].

So much for President Obamas sales pitch. The latest sign that the battle has tilted in favor of Republicans is arecent Rasmussen poll which find that support for repeal of the health care bill has reached 60 percent.With factual bullets flying at them from every direction and voters abandoning their cause Democrats have begun tosense that the health care battle is lost.Politicos Ben Smith explains the retreat, found in a leaked DemocratPowerPoint presentation. As Smith writes,

Key White House allies are dramatically shifted their attempts to defend health care legislation,abandoning claims that it will reduce costs and deficit and instead stressing a promise to improveit.

The goal of the confidential presentation was to provide a focus-group tested way of discussing the healthcare law asmembers returned to their districts. It veers from the factually inaccurate, it is critical to reassure seniors thatMedicare will not be cut, to the sad, let public know that the rich will see a tax increase to pay for it, to the full-blown retreat, dont say the law will reduce costs and deficit.

It appears that Republicans have captured the healthcare frontline. The Democrats initial offensive has been heldback. BUT that doesnt mean they arent regrouping behind a new strategy to woo voters with their failed law.Rather than explain all the good things that it will do (because there arent many) Democrats new plan is to explainhow they are going to fix the bill.

Its the we just need another chance approach. Just reelect us and well totally go back and fix what we now admitis broken! Dont buy it. This bill doesnt need tinkering around the edges, it needs a full scale makeover. The entirepoint of healthcare reform was to stop the rise of healthcare costs Obamacare doesnt do that, in fact, I wouldargue, it cant do that. So dont give Democrats a chance to fix a bill they fought (and lied) for, give Republicans achance to replace it with something that works.

U.S. Headed for Double Dip as U.K. Swings TowardRecovery

Is the dreaded double dip here?

For the third straight week first-time jobless claims rose, suggesting that employers are once again laying offworkers in the face of a slumping economy. Given the current administrations policies it was hard to expect muchbetter. Looming tax increases on business income and capital investment dont give employers much reason to hireor invest. And if none of that makes you feel too cheery youll love the Administrations response today, right now,nothing is possible. Great!

While the U.S. economy crashes under the weight of its deficits, the U.K. took a decidedly different approach and is

getting decidedly better results.The United Kingdom was in a similar situation as the United States. Their unemployment reached a high of about 8percent, their total economy contracted by about 5.9 percent, and their national debt was 62.2 percent of GDP.Nothing exactly rosy about any of those figures.

How did they respond? They began pinching pennies. New Prime Minister David Cameron and a new coalitiongovernment enacted the deepest budget cuts in generations, they slashed the size of government (600,000 publicsector workers will be cut by 2015), and have begun devolving power from the central government to localcommunities.


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In doing so they have begun to wean themselves off of their reliance (read: addiction) to big government solutions.Some have embraced it. David Graham, chairman of a community trust in the U.K. told the Washington Post that[t]imes are hard, and they are going to get harder. Now is the time to help yourselves. Some have continued tofight for big government. The Labor Partys Jim Knight says that, in the end, for Big Society, just read SmallGovernment and fewer services.

In spite of its critics, the program is building confidence among the nations businesses, and that confidence is

translating into economic growth. The Financial Times reported that,

In the UK, shoppers had a surprisingly spry July. Though some economists had been predicting adrop in sales, the strongest jump since February 2008 in sales of discretionary items led theheadline higherThe jump in UK sales came at the same time the UKs public borrowing slowedto 3.2bn, including financial bail-out money. That eases worries that austerity will begin to knockEuropes relatively strong economy.

Among other positive indicators of growth, the U.K economy added workers at the fastest pace in 21 years andunemployment enjoyed the biggest drop since 2007. Moreover, the economy grew by 1.1 percent in the secondquarter doubling the predicted rate of growth.

In this tale of two economies it is pretty clear who is on the right track. One nation actually chose to admit theirunsustainable addiction to government spending and take steps to address it. The other chose to focus on healthcare

and Wall Street reform in the hopes that jobs would return on their own. While one nation is on the road to recovery,seeing simultaneous decreases in their budget deficit and increases in unemployment, the other continues to shedjobs.

Hopefully we will learn from our friends across the Atlantic and stop putting our faith in government to solve ourproblems. Weve seen the path were on and its leading us straight to a double dip. So come November justremember




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President Obamas Pontificating Clouds the Bigger Issues

President Obama is clearly a law school grad. As a fellow law school alum myself, I absolutely mean that in theworst way possible.

Law school is all about the Socratic method. First, you read a case where you usually come away with a clear

opinion of whether it was rightly or wrongly decided. Next, you attend class where the professor, through a series ofobtuse questions, attempts to completely demolish your understanding of what you thought you knew. What wasonce concrete turns to nothing but jell-o.

This is why lawyers are eternally frustrating to the rest of society. It is why we are the butt of endless jokes like,What happens when you give Viagra to lawyers? They grow taller. Zing. The fact is, lawyers, using impressivewords and varied tones are adept at talking a lot without saying anything. When we are forced to give something thatactually resembles an opinion, we couch it with so many disclaimers, qualifiers, money back guarantees andpreconditions that it really doesnt mean a darn thing.

This is the problem with our President. Hes like a law student trying to hide his face in the classroom so the teacherdoesnt call on him. Inevitably he gets called on, and with a quivering voice, tries his best to answer the question bynot answering the question.

The mosque masquerade is merely the latest example of this artful dodger attempting to skirt the issue. At the iftardinner at the White House, celebrating the beginning of the Muslim holy month of Ramadan, Obama declared that

[A]s a citizen, and as President, I believe that Muslims have the same right to practice theirreligion as anyone else in this country. That includes the right to build a place of worship and acommunity center on private property in lower Manhattan, in accordance with local laws andordinances. This is America, and our commitment to religious freedom must be unshakeable. Theprinciple that people of all faiths are welcome in this country, and will not be treated differently bytheir government, is essential to who we are. The writ of our Founders must endure.

A statement that in words clearly showed Muslims had the right to build the mosque, and in spirit clearly showed hebelieved the mosque should proceed. Then, in the true Socratic style, he was peppered with some questions. Hewilted like a first year law student in torts class. He retreated, on his previous comments, saying that he was notcommenting on the wisdom of putting a mosque at Ground Zero but instead was commenting very specifically onthe right people have.

This may be logically consistent, but gimme a break, those distinctions dont fly anywhere outside a ConstitutionalLaw classroom (which, interestingly enough is the exact class he taught at the University of Chicago). People dontparse the clauses of a statement. They cut through the crap to find the underlying message. And the message we gotfrom Obamas initial talk about the mosque was that based on our nations history of freedom, he encouraged peopleto be supportive. Even if its not what he meant, its what people took away from it. For instance, liberalcommentator Greg Sargent said the forceful speech will go down as one of the finest moments of his presidencybecause he didnt just stand up for the legal right of the group but also voiced powerful support for their moralright to do so.

Obamas penchant for pontification existed well before the mosque statement. It happened during the Gulf Oil crisis.Oil was gushing out of a well a mile under the surface of the ocean with no end in sight which is also where ourPresident was out of sight. Obama gave plenty of speeches and talks on the issue but they were all devoid of twothings the public craved emotions and solutions. As Keith Olbermann said after Obamas Oval Office talk, [i]twas a great speech if you were on another plant for the last 57 days. The entire response came off as more of a salespitch for a comprehensive energy bill than it did an empathetic response to the suffering of an entire region.

Weve seen the same thing with other seemingly big-ticket issues. Democrats lamented the muddled message onhealth care reform. Obama has lost credibility over his consistent overselling of the stimulus bill that many peoplefeel failed to budge the unemployment needle. Despite the persistent lack of jobs, Obama has failed to provideanything resembling a jobs bill. As New York Times columnist Maureen Dowd wrote.


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Obama got elected because of the clarity of his campaign and his speeches. But, surprisingly, hesin some ways an incoherent president. Hes with the banks, hes against the banks. Hes leavingAfghanistan, hes staying in Afghanistan. He strains at being a populist, but his head is in theclouds.

His messaging is simply all over the place because he wont give it to us straight. Hes constantly fumbling aroundtrying to triangulate his position based on a high minded opinion of how things should be, rather than a careful and

reasoned assessment of how things are. Were citizens, not law professors Mr. President. Were not going to flunkyou for making your position clear, were going to flunk you because you failed to give it to us straight. So step outof the classroom, tell it to us like it is, and lets actually figure out a way to solve the problems we face.

Healthcare and Social Security Parallels Bode Well for GOP

in Midterms

The upcoming debate over Social Security should make Democrats nervous. The quest for reform is beginning tolook an awful like the healthcare debate that dominated the 2008 elections. And we know how that turned out

Remember back to 2008. Healthcare was one of the dominant policy issues among voters trailing only the war in

Iraq in importance. The reason was the perception among Americans that rapidly rising healthcare costs werethreatening the financial security of families and the economic health of the nation. Increases in health care costs hadoutstripped inflation for many years, forcing Americans to devote an ever-higher portion of their salary to receivethe same goods.

The 2008 elections rolled around and Democrats (at least in perception) took the lead on the issue. Hillary Clintonand Barack Obama both had detailed plans attempting to finish the job they started in Bill Clintons first term. Youprobably still remember their plans and talking points universal coverage, minimum coverage standards, and anational insurance program. Does anyone remember what John McCains plan was? Im sure it had something to dowith free-market reforms, but other than that, Ive got nothing. Regardless of whether he had a plan, the perceptionwas that it was a dominant issue for Democrats and was on the backburner for Republicans.

Im not saying Social Security will represent the same driving force in 2010. Nevertheless, there are someinteresting parallels. Consider, that 73 percent of people in 2008 said that the U.S. healthcare system was in a state

of crisis or has major problems. Today, 77 percent of people say the same thing about the current state of theSocial Security system.

Sensing that the public is not liking what they see out of one of the federal governments biggest programs, BarackObama has gone on the offensive. He argued that Republicans are pushing to make privatizing Social Security akey part of their legislative agenda if they win a majority in Congress this fall. He went on, contending thatRepublican plans were an ill-conceived idea that would add trillions to the debt while destroying Social Security aswe know it.

Despite the fact that Obamas claims were thoroughly dismissed by the non-partisan Factcheck.org, Republicansshould be willing to embrace them.

The fact is, Social Security, like the healthcare system is failing. Despite Harry Reids insistence that the so-calledSocial Security crisis exists in only one place the minds of Republicans, the program is in fact, in dire financialstraights. But dont take it from me. The nonpartisan CBO recently said,

[A] longer-term decline in the trust funds financial condition is inevitable under current law,because the retirement of the baby-boom generation will cause benefit payments to increase morethan revenues. CBO anticipates that a primary deficit will return in 2016 and that deficit will reach$77 billion in 2020.


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Do the Democrats have a plan to fix this? Not that I can find. Turns out they are happy to pull a Kevin Bacon isAnimal House and say Remain calm. All is wellALL IS WELL! as they are run over by the problem. FixingSocial Security is a huge issue, one that many voters believe is facing a crisis, and the Democrats are content toleave it on the backburner. Kinda like Republicans and healthcare circa 2008.

The inverse parallel continues when it comes to the partys solutions. Democrats, to the extent that they have asolution, is to continue the program as it exists. What else can you do when you fail to admit there is a problem in

the first place? They point to the annual surpluses that the Social Security program has been stashing away as a signof its fiscal health. Sure, its ledger aint lookin so hot right now, but its a recession, nothing is exactly flush withcash. After all, arent these little financial blips the reason we have the Social Security Trust Fund.

Well, I would say touch, concede, and run away with my tail between my legs if one, the Social Security TrustFund existed or, two, this was nothing more than a blip. Though I wont get into the nitty-gritty of why the TrustFund is nothing but a sham, suffice it to say that the federal government isnt particularly adept at letting money sitaround without spending it. Turns out the government has been using Social Securitys annual surpluses to partiallymask its horrendous bottom line. It then replaces the raided funds with a nice little IOU. Sadly the IOUs areworthless. Its just more debt on top of a government that is incredibly deep in debt.

Second, this is a lot more than a blip. According to the 2009 Social Security Trustees Report, Social Security willbegin running deficits this year. There will then be a few years of tiny surpluses before the program dipspermanently into the red. As the Heritage Foundation explains,

In net present value terms, Social Security owes $7.7 trillion more in benefits than it will receivein taxes. This consists of $2.4 trillion to repay the special issue bonds in the trust fund and $5.3trillion to pay benefits after the trust fund is exhausted in 2037.

Harry Reids most successful social program in the history of the world is facing a bleak future. The governmentfailed. As weve learned through the healthcare debate, adding government is generally Democrats favored policy-answer to most problems. Unfortunately, for Democrats you cant make Social Security any more government run. Ittried, its failing, and millions of retirees are on the hook. (Authors aside: are we glimpsing the future of healthcare?)

But Republicans have actual solutions. Namely, allow individuals the right to do the same thing with their retirementmoney as members of Congress and federal workers do. Rather than putting your money in a trust fund (which thegovernment is frittering away) youll have the choice (keyword that Democrats often leave out) to place aportion ofyour payroll tax in a government-managed account. Let me be clear, were not talking about total privatization,were not talking about giving your benefits to the whims of Wall Street traders, and were not talking about amandate.

Despite all that the plan is not, it is a plan. A plan that the CBO says will make the program permanently solvent. In2008 Democrats coasted to victory largely because of their promises to reform a broken healthcare system.Republicans should not shy away from using Social Securitys obvious problems to undo those gains.

Union Approval Falls to New Low in Face of Huge Wage

Disparity

Labor unions are their own worst enemy.

They were formed with laudable goals, finding power in numbers to fight against the poor working conditions, longhours, and low pay of many early manufacturing jobs. Recently, unions have fallen on hard times. Their percentageof the workforce has fallen to a historical low of 8%. Moreover, In 1957 sixty-one percent more people approvedthan disapproved of labor unions. Today that number has plummeted to just eleven percent.


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In this time of economic crisis the perception of shared sacrifice is important to Americans. Unions, and especiallypublic sector unions, appear to be exempt from the financial plight of the rest of us. As their wage disparitycontinues to grow, they should expect their approval ratings to continue to fall.

Public Sector Employees Refusing to Share in Private

Sector Sacrifice

We as a society love teachers. They are the nurturers of talent. The cultivators of intelligence. The rudder that steersthis nations future generations. They represent some of our fondest memories. But that doesnt mean they arentpart of the sacrifice that we are making as a nation to get our finances back on track.

Let me repeat: they must be part of the sacrifice. Unfortunately, the Obama administration doesnt think so. Instead,they have chosen to use teachers as a national lightning rod. Teachers hold a revered place within our psyche. Weassume that what is best for them is best for the nation. Because of that fundamental, and consistently unquestionedbelief within each of us, Democrats have backed Republicans into a corner.

They recently passed a $26 billion state aid bill, a significant chunk of which went towards teacher salaries. TheObama administration has been everywhere trying to sell this talking point. Look at all the teachers jobs we saved!Look how much we care about education and about creating a strong foundation for tomorrow! Theyve been like aSnuggie infomercial everywhere.

Consider these tidbits of propaganda from the Organizing for Americas website,Teachers, firefighters, police officers and the communities they serve can breath a little easiertoday, thanks to President Obama signing into law emergency aid for states and preventing layoffsscheduled for this fall.

Or this line from President Obama,

We cant stand by and do nothing wile pink slips are given to the men and women who educate ourchildren.

The question is, how did we get to this point? How did we get to the point where we need to bail out teachers?

Money is often said to be the root of all evil. In Washington the opposite is believed to be true money is the root ofall solutions. For instance, consider that spending per student has increased by 49 percent in inflation-adjusteddollars over the past 20 years. Despite the increases long-term measures of academic achievement have notimproved at anything resembling a comparable level. And although we constantly hear that teachers are chronicallyunderpaid, have we ever stopped to question whether they in fact are?

According to the Bureau of Labor Statistics elementary school teacher salaries increased from $46,990 to $52,240between 2005 and 2008. Or consider that in 2005 the average public school teacher was paid 36% more per hourthan the average non-sales white-collar worker and 11% more than the average professional specialty and technicalworker. Using that same 2005 data we find that the average net monthly income for a United States teacher wasalmost $1,000 more than a UK teacher and about $1,8000 more than a Canadian teacher.

Given these statistics it is little wonder that New Jersey Governor Chris Christie had this to say recently:

This teacher complaining, theyre getting 4 and 5 percent salary increases a year. In a 0 percentinflation world. . . They get free health benefits from the day theyre hired for their entire familyuntil the day they die. They believe they are entitled to this shelter from the recession when thepeople who are paying for that shelter are the people who have been laid off, whove lost theirhomes, had their hours cut back.


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Now, let me clarify what I am, and am not, saying. Im not saying that teachers arent incredibly important cogs inthe social machine. Im not saying that they arent worth every penny theyve earned. And Im certainly not sayingthey shouldnt be a priority in the recovery. What I am saying is that our nation as a whole is going to have to makesacrifices and teachers, whose pay represents an enormous part of state budget expenditures, must be part of thatsacrifice.

Part of that sacrifice is accepting a wage freeze. That is all Chris Christie asked of them. That is all we would need

to ask of teachers nationwide. Accept a wage freeze and I guarantee that we would not be forced into a positionwhere we must lay off teachers to keep the budget in the black. That is the real problem. Weve been presented witha false choice. Obama would have you believe that if we dont give the states another $26 billion then teacherswould be fired. In reality, if state employees were willing to make an initial sacrifice, a sacrifice many private sectorworkers have made without even being presented with a choice, we wouldnt need to spend more federal money thatwe dont have.

I know criticizing teachers is taboo. I know President Obama will likely be praised to high heaven for his bold stepsto protect the undervalued profession. But I also know we are in up to our necks in red ink and I just wishgovernment employees would join us in making sacrifices.

The Social Security Ponzi Scheme is Collapsing

Doomsday has always seemed to be around the corner. If you recall, there was a level of hysteria in 1999 aboutcomputers and the turn of the millennium. People stocked up on water and cans, even if only to humor theirdramatic side, and chuckled at themselves at 12:01 AM on January 1, 2000 when the world as we knew it continuedto go on. 2012 is our next Doomsday test, and with a little under a year and a half left to go. Well see whathappens.

Theres also another doomsday weve been hearing from our ever reliable legislators. While its obvious to anyonewho keeps track of just how bad our spending has gotten and how unbelievably ignorant our government takes itsconstituents for, weve been hearing for years that Social Security would be fine until 2029. So weve been thinkingthat weve got 19 years to get the story straight on one of FDRs cornerstone achievements.

Two problems. First of all, the American people should be smarter than to believe something our government istelling usespecially when it comes to anything financial. As a recent article on RealClearMarkets points out:

So after years of telling us this problem is decades away the fateful day has finally arrived whenCongress has to make good on that giant pile of IOUs. The same Congress that just massivelyexpanded access to healthcare for all Americans regardless of their ability to pay. The sameCongress that bailed out Fannie Mae, Freddie Mac, General Motors, and AIG. The same Congressthat cant resist festooning every spending bill with earmarks for essential programs like butterflygardens.

I dont think the severity of the situation is settling in. Maybe thats because were not able to grasp the scale of ourmoney troublesafter all, who can really fathom what 1.4 trillion means? But when the reality of this situation setsin it will be stark and devastating. After all, as the article gloomily explains, All of the money collected from everyAmericans paycheck throughout all of our careers is now gone.And in its place? IOUs from Harry Reid,Nancy Pelosi, Charlie Rangel, and Barney Frank. $2.5 Trillion dollars worth of IOUs.

This is a point that bears repeating. The Social Security Trust Fund should have $2.5 trillion in it. It has nothing.Instead in the Budget Enforcement Act of 1990, Congress took the Social Security Trust Fund off budget. Thisallowed them to do kill two birds with one stone. They could increase the national debt by borrowing from TrustFund money that would have to be paid out later and yet mask annual deficit spending by borrowing yearlysurpluses from Social Security. Sneaky. Very sneaky.


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Essentially, weve been robbed. Bernie Madoff style. What would be considered felony fraud in the private sector,frittering away other peoples money for a purpose not in line with why they gave it to you, is just business as usualfor the U.S. government. This leads us to two possible scenarios, both of which are crap. First, the Social Securityprogram will go defunct, unable to fulfill the promise it made to millions of retirees who have paid into the systemsince they begun working. Well call that situation unlikely. Second, the program will be forced to get its fiscalhouse in order. This is much worse than it sounds. The governments past wastefulness means that beneficiaries willlikely receive less payouts. Future enrollees will likely have to pay higher payroll taxes and have to wait longer

before receiving benefits. Even then, significant sums of money will have to be brought in through additionalrevenue sources to fund the promises the program has already made.

That or well do what we apparently do best. Well borrow money. Certainly from China. Maybe a little from Japan.But eventually those sources will run dry. Never mind the severe economic and national security consequences thatour continued reliance on China will have, our nation will be pushed to the brink of default.

Social Security is a just a peak into our future when it comes to all of our entitlement promises. In 60 years, longafter the Social Security experiment has been deemed a failure, well be dealing with the explosion in costs of ourother social safety nets. Medicare, Medicaid, and now, Obamacare are anchors pulling our fiscal ship down fromevery side.

Then again it is hard to gain any ideological steam for reform when you have Democratic leaders such as Harry Reidsaying the looming insolvency is nothing but a myth. Or that Social Security crisis exists in only one place: the

minds of Republicans. Or when he announces that Social Security is hardly going broke, but is instead the mostsuccessful social program in the history of the world.

Step one in the long road to fixing this mess is admitting we have a problem. Republicans are willing to do that.Democrats are not. Until we put aside egos and politics the programs finances will continue to spiral downwards.Without fixing Social Security may exist in only one place the minds of the public because it will be gone.

Krugmans Baseless Attack On Paul Ryan Highlights Whats

Wrong With Politics

It is fair to say that Paul Krugman is my arch-enemy. Hes the Joker to my Batman. Hes the Moriarty to mySherlock Holmes. Hes the Elmer Fudd to my Bugs Bunny. Hes the freakin Darth Vader of liberal pundits, exceptthat there is very little chance that hell come to his senses and switch over to the good guys before the end of themovie.

Why do I have such unabashed dislike for the man? Because hes smart. His understanding and knowledge ofeconomics could add an incredible perspective to the troubling financial system that our country currently findsitself in. But no. Hes chosen to use his powers for evil.

Krugman is all to content with making up facts, creating false dichotomies, attacking caricatures at the expense ofnuance, and resorting to childish name calling. I mean, I know the Nobel Peace Prize aint exactly what it used to be(heres looking at you fellow winner Yasser Arafat) but name calling isnt quite fitting behavior.

I dont even have to trek very far back in his column to find these gems of political analysis:

[W]ere facing a coalition of the heartless, the clueless and the confused. . . By the heartless, I meanRepublicans

Right-wing extremism may be the same as it ever was, but it clearly has more adherents now than it did acouple of years ago.

Its a party that sees modest efforts to improve Americans economic and health security not merely asunwise, but as monstrous


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So count me as unsurprised, but still appreciably ticked off with Krugmans latest column entitled The FlimflamMan. The flimflam man would be House Republican Paul Ryan who happens to be one of the more vocal critics ofDemocrats economic policies. He also calls Ryan a charlatan whose plan to reform our nations finances isnothing more than a fraud that is drenched in flimflam sauce. Its the audacity of dopes he quips.

Alright I admit, the phrase flimflam sauce made me chuckle. But really, how intellectually lazy can you be. In oneparagraph he argues that Mr. Ryans plan calls for steep cuts in both spending and taxes then follows that up by

saying that the plan would raise taxes on 95 percent of the population. Even overlooking the fact that the TaxPolicy Center, which Krugman relies heavily on throughout his article, disagrees with this assessment, itsintellectually inconsistent. Suffice it to say that I could go point-by-point and dismiss Krugmans claims as eithermisleading or totally wrong, but fortunately Paul Ryan has already done that for us.

Instead Id like to spend the rest of this post lamenting how childish the national political debate has become.Political commentators are now incapable of making it past the letter beside a politicians name. As if they canautomatically predict the personal policies of the person and write them off as bunk merely because they are fromone party or another.

Surely Paul Ryan couldnt contribute anything to the debate! Hes a Republican. Ya know, one of them politiciansthat only wants tax cuts for the rich, wants to spend a brazilian dollars on national defense, hates immigrants, andwants to chop down every tree in sight. Such ridiculousness is not a one-way street. Republican commentators canbe guilty of the same. (Heres a secret Ill only share with you: Barack Obama isprobably not a Communist. Crazy

right?)

These caricatures are destroying our ability to get anything done. Paul Ryans plan, regardless of your ideologicalperspective, should be given the credit it deserves it is the only plan out there, from either party, to attempt tocomprehensively address the fiscal problems of the United States. Disagree with it on the merits. Fine. But flimflamit is not. Even Krugmans fearless leader, President Barack Obama, has praised Ryan for ma[king] a seriousproposal to rein in the deficit and addressing entitlement spending.

But Paul Krugman is not a serious journalist. Hes uninterested in furthering the debate or using his admittedly deepknowledge of economics to argue while hes right. Instead, he just wants to bash. Which makes it all the moreridiculous, no, hypocritical, when he ends his column by saying, The Ryan plan is a fraud that makes no usefulcontribution to the debate over Americas fiscal future. Replace the Ryan plan with Paul Krugman and I mayactually agree with that sentence.

Dems State Aid Bill Not the Key to Improving Education

Theres an epidemic in Washington. It started slowly, workings its way into the brains of our elected officials. Butnow that it is good and engrained in the legislative process, itll take a massive shift in public thought to eradicate it.

What is this plague that has been spreading through Washington? Spending. And it has grown out of control. RonaldReagan, in one of his famous off-the-cuff jokes he made back when he was president, said we could say[Democrats] spend like drunken sailors, but that would be unfair to drunken sailors. It would be unfair, becausedrunken sailors are spending their own money.

Drunken sailors or not, the Democrats continue to find new ways to mortgage our future. They rationalize theirspending habits with names like stimulus of state aid, although reality shows that these are little more than justclever marketing tricks. Really theyre just throwing money at a problem, claiming legislative victory, and toutinghow much theyve accomplished to voters.

Their latest attempt is a $26 billion package of aid to the states. In essence, it is an extension of multiple stimulusprograms (as if those proved popular the first time around). Democrats tout the bill as necessary to shore upstruggling state finances and like to highlight how much money is being put into education. You see, education isone of the few things that is off limits to critique. After all, who doesnt want to spend more money on children?


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Moreover, dont we need more spending on education? The U.S., unfortunately, has not had one of the strongerpublic educational systems in the world, continually ranking low among industrialized nations. Even the states withthe best system are sub-par in comparison to other countries like Finland and South Korea. For the United States tohave such an unimpressive public education program, which educates around 56 million children from kindergartento 12th grade, youd think it would be somewhere where we could afford to spend a few stimulus dollars.The answer, however, is not to throw money at it. Democrats, take notice weve seen time and time again thatpumping more money into an inefficient program, whether it be healthcare or education, is not what changes the

quality of its product.

Its counterintuitive I know. But its true.

Take Pennsylvania for example. A northeast state governed by Democrat Ed Rendell (but kept in line by aRepublican Senate), Pennsylvania has 1.8 million students enrolled in their public schools. Since 1970, the stateseducation system has experienced a 956% increase in spending going from just a $2.3 billion allocated that year toa blistering $24 billion today. Under Rendell, education spending has soared to a bloated 43% of their total statebudget.

This might be a little more tolerable and easy to swallow if performance measures proved that this money was worthit. But performance measurements have shown that there is hardly enough evidence to justify this kind of increaseor even allow it to continue. 2 out of 10 schools in Pennsylvania did not meet the criteria to be considered asmaking adequate yearly progress, a measurement established by No Child Left Behind. On average,

Pennsylvania students have the 5th lowest scores SAT scores in the country and one in four high school students failsto graduate.

Maryland is another example. The mid-Atlantic state has consistently spent more per pupil than any other state inthe nation$9,000 per student. In 1970, Marylands average was $3,800 per student, and the countrys was aroundthe same. But by recent figures, Maryland outspends the U.S. average by almost $1,000 per student. Thesenumbers are alarmingly high, especially because they are usually the single largest budget item in county budgetsand one of the top spending items in the states budget. And what are the results of such spending? Results werenttoo different from Pennsylvaniasunderachievement and overspending hasnt changed the fact that 70% ofMarylands 8th graders fail to be proficient in either math or reading.

The National Research Council, in a report commissioned by U.S. Department of Education, noted that,

Additional funding for education will not automatically and necessarily generate studentachievement and in the past has not, in fact, generally led to higher achievement.

So in other words, education is no different: throwing money at it, like we did with the stimulus and health care, isnot an effective method.

On the national level, however, weve got an administration thats still pushing it as a politically popular way toappear as if they are doing something to stem unemployment. Obama says that he sees it as the key to oureconomic future. But what kind of a future are you promoting when the money is being poorly directed, misspent,and wasted on frivolities. Is it any wonder then that are students are still struggling with basic concepts?

Money cant buy everythingand it cant solve it, either. Pumping money into an institution as vital and formativeas public school education is dangerous without addressing the real issues at stake. $26 billion is not aninconsequential sum of money. We must ensure the future success of our nation. However, that is achieved not onlythrough a successful and efficient education program, but also through an acknowledgement of the future effect ofour nations debt burden. If Democrats are going to continue to claim success for saving our schools, they should atleast be asked how money is solving the problem.




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Romers Departure Signals Rift in White House Economic

Strategy

Theres a level of irony and contradiction in this current administration. For the past 18 months, weve had a

president that said one thing to get elected, but has done the complete opposite once in office. With everything fromtaxes, health care, and even bringing about a new age of bipartisanship, Obama has failed to follow through.

This contradiction between rhetoric and reality has been recently highlighted in a dispute between the Obamaadministration and his chief economic adviser, Christina Romer. Unfortunately, within Obamas inner circle there isnot a lot of room for dissent. The Romer incident hasnt been the only example.

Remember when Rahm Emmanuel was going to retire after the midterms, apparently tired of the clash between hispragmatism and the administrations idealism. Peter Orsczag, former CBO Director under President Bush and headof the OMB under Obama, also announced he was resigning in the midst of Congress failure to pass a budgetresolution for 2011. Now we have Christina Romer, announcing her resignation following a clash with theadministration over the benefits of tax cuts over government stimulus. With midterms looming ominously on thehorizon and the economy still on the brink of collapse, Obama can ill afford to have his executive staff in disarray.

Amongst all the speculation and rumors, Romers departure is perhaps the most troubling.Christina Romer was the Chair of the Council of Economic Advisors. Last week, she tendered her resignation,effective September 3 on the grounds of exhaustion. So shell go back to teaching at UC Berkeley, thousands ofmiles away from the political lions den of Washington.I understand that any job within the administration is emotionally and mentally exhausting. But lets also look at thefacts: Romer was a key architect in the stimulus package that Obama submitted to Congress back in February of2009. She was one to predict that such a package would keep unemployment to 8%. 18 months later, however,were still trying to tame a stubborn unemployment rate hovering around 9.5%, and the verdict of the stimuluspackage? A big, fat failure.

Romers leaving her mark on the administrationand its a mark that is likely to heavily define Obamas first term.Not only was she lend some economic heft to Obamas stimulus plans, she also majorly messed up the deficitprojections. And it wasnt by just a couple of billion dollarsit was by 2 trillion. Then again, she has a history ofquestionable accuracy whenever she assumes the mantle of prognosticator. After the stimulus was passed, Romer

predicted it would lead to significant jobs gains. We feel strongly that its going to be in the three to four millionrange, she said. Whoops.

Additionally, its been reported that Romers been battling with Larry Summers, the Director of the NationalEconomic Council, to get a word in with President Obama. Romer and Summers have been battling for PresidentObamas ear when it comes to economic policy advice. According to reports Summers looks to have won that battle.AsHotline reported,

She has been frustrated, a source with insight into the WH economics team said. She doesntfeel that she has a direct line to the president. She would be giving different advice than LarrySummers [director of the National Economic Council], who does have a direct line to the president. She is ostensibly the chief economic adviser, but she doesnt seem to be playing thatrole.

While Democrats have painstakingly attempted to keep it out of the news, Obamas tax hikes are set to crank upstarting January 1. Considering were still trying to claw our way out of this recession, these taxes will be anunwelcome addition, since most Americans are still trying to find ways to make ends meet during these hard times.

Romer seems to agree. She co-authored a report back in 2007 that discussed the impact of changes in the level oftaxation on economic activity. In it, she explains that tax increases have a large, rapid, and highly statisticallysignificant negative effect on output. Seems to contradict Obamas planned tax increases. Would this report and itsfindings have anything to do with the supposed exhaustion shes been experiencing?


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So we have Romers acknowledgement that tax hikes are going to be detrimental to economic growth, especiallywhen its so shaky and frail. We have Orszags resignation, when he has his fingerprints all over reports of just howmuch health care reform is going to add to our deficit. And then Emmanuel was rumored to be leaving because hewas fed up with being the only realist on a team of pie-in-the-sky people that are idealistic to a fault. The clashes areall over policy, and the outcomes are all similar.

President Obama has fallen so short of everyones expectations, you almost are tempted to feel sorry for the guy.

But then you remember how hes pushed through highly controversial (and unpopular) bills and reforms at thewrong times, and theyre ones that increase the deficit by staggering numbers.

His cabinet is

Documents

CRNC Debrief - August, 2010