CBO

CBO’s Underwhelming Prediction For The Tax-Code Outcome

Published by Papa Giorgio

I excerpted the very end of a larger post over at POWERLINE and received a challenge of sorts from a friend:

….It’s always nice when these folks let the mask slip and reveal their hatred of individual freedom and capitalism, and the open embrace of a statism that is indistinguishable from fascism. Lukacs’s conclusion is: Jeremy Corbin will save us! You can expect the same impulse to dominate the Democratic Party as it heads toward 2020. Elizabeth Warren or Bernie will save us! Anything less than this will not be tolerated by the increasingly leftist base of the Democratic Party. And this is the best thing Trump has going for him.

Here is the challenge:

  • But it’s not just the left Sean, with a 30% ( being generous ) approval rating, this means a lot of Conservatives aren’t on board either. I personally know a few fiscal conservatives that would’ve voted no strictly due to what it adds to our debt. How do you square this?

Fair question. I respond:

This is how I square it. These fiscal conservatives do not, apparently, believe in a fiscal conservative “gods” edict:

➤ “I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.” — MILTON FRIEDMAN

Also, the press is pushing the CBO’s idea that growth will not be over 1.8% for ten years… um… yeah. So these fiscal conservatives are taking the -under 2% approach when the coming quarter will be 3.8%

Every 1% in growth the deficit is reduced [over ten years] by 3-trillion dollars (Just over 4-minutes):

Another Bailout Around the Corner ~ `The Hammer` Was Right!

Published by Papa Giorgio
Economic Laws

✿ “A fundamental principle of information theory is that you can’t guarantee outcomes… in order for an experiment to yield knowledge, it has to be able to fail. If you have guaranteed experiments, you have zero knowledge”

{Editors note: this is how the USSR ended up with warehouses FULL of “widgets” (things made that it could not use or people did not want) no one needed in the real world. This “insurers won’t be losing a lot of sleep over it” (see below) enforcers George Gilders contention that when government supports a venture from failing, no information is gained in knowing if the program actually works.}

Via Gateway Pundit:

This come via the Weekly Standard, but note that Charles “the Hammer” Krauthammer predicted this at the end of last year:

Bailing Out Health Insurers and Helping Obamacare

Robert Laszewski—a prominent consultant to health insurance companies—recently wrote in a remarkably candid blog post that, while Obamacare is almost certain to cause insurance costs to skyrocket even higher than it already has, “insurers won’t be losing a lot of sleep over it.” How can this be? Because insurance companies won’t bear the cost of their own losses—at least not more than about a quarter of them. The other three-quarters will be borne by American taxpayers.
Obamacare

For some reason, President Obama hasn’t talked about this particular feature of his signature legislation. Indeed, it’s bad enough that Obamacare is projected by the Congressional Budget Office to funnel $1,071,000,000,000.00 (that’s $1.071 trillion) over the next decade (2014 to 2023) from American taxpayers, through Washington, to health insurance companies. It’s even worse that Obamacare is trying to coerce Americans into buying those same insurers’ product (although there are escape routes). It’s almost unbelievable that it will also subsidize those same insurers’ losses.

Here, US-RUSSIA talks about some of the key differences between the Russia of today and the USSR of yesteryear:

…But what Russia does not suffer from is what the Soviet Union suffered from: massive economic distortion through state subsidies and outright fiat. The Soviet Union’s policy to contain inflation was not to raise interest rates or limit bank lending but to make inflation illegal. Inflation was banned and prices on a host of important goods were frozen (consumers, of course, paid the increased cost through ever-more-pervasive shortages). The Soviet treatment of unemployment was similar. The Soviet Union sought to lower unemployment not through tax credits or through loose monetary policy but by making unemployment a crime and forcing enterprises to boost their payrolls. Stories abound of Soviet grocery stores that had  four different ticketing systems and ten different cashiers. This sort of inefficiency wasn’t some mysterious manifestation of eastern barbarism, it was an entirely predictable result of Soviet economic policy…

The question is, what is the healthiest direction/pulse of the nation to go? Making market “realities” a fiction, and artificially insulated from what the public wants… thus increasing the government’s involvement (increasing it’s growth and stripping away freedoms in order to artificially prop-up parts of the market) in our personal lives and restricting of choices? Or a free’er market which increases our freedoms and allows products and reforms to be MOST affected and guided by the people?

One last point, the most important. Unlike big business when it makes mistakes, big government cannot go out of business. Unlike corrupt government, corrupt business cannot print money and thereby devalue a nation’s currency. Businesses cannot coerce you by force (tax liens, garnishing of wages, or armed IRS officials, etc) into an action. So the “greed” of the corporation pales in comparison to the greed of government.[6] Which is why our Founders stated that, “The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government” (Patrick Henry); “Government is not reason; it is not eloquence. It is force. And force, like fire, is a dangerous servant and a fearful master” (George Washington). (Read More)

Obama, the Small Spender? That`s the Newest Claim

Published by Papa Giorgio

I frequent some liberal blogs, and this recent Think Progress graphic/story is popping up, like at Little Green Footballs. So I figured I would wade into this muddy water by posting a response I found over at National Review Online and The College Conservative (CC). Here is the CC’s input:

…The chart appears to be telling us that spending, taxes, and deficits are all lower today than when Obama took office. I applaud the chart’s makers – the goons over at Think Progress with the help of the Center for American Progress – for their crafty figuring.

The chart uses the percentage of GDP from the day Obama took office and the current estimates to fudge the truth and make it look like Obama isn’t everything we evil conservatives say he is, namely fiscally irresponsible. Even an amateur economist – like public school amateur – should see right through this.

Of what use is comparing spending using a percentage of GDP, unless you’re goal is to provide bad analysis? Spending as a percentage of GDP increased from 20.8 to 25.2 between 2008 and 2009 (from government stimulus). Assuming the calculations in the chart are true (in reality, they’re only based on estimations), all it shows is that spending went from one slice of a big pie to a smaller slice of an even bigger pie.

It’s the same dishonest game for their claim on taxes. The percentage of GDP does not at all associate with the increasing tax rates that Obama and the Democrats gave us with ObamaCare. Also, coming from left-wingers, why is low federal revenue a good thing?

Lastly – I assume this is their big hurrah – deficit spending has decreased from 8.3 to 7.6% of GDP. Even if this were true, so what? This is like patting yourself on the back for sticking to your diet by only eating the whole kitchen. Political Math fixed the numbers on the chart using actual data instead of flimsy estimates and found that spending and deficits are higher under Obama (every sane person says “Duh!”). Obama did, however, seem to lower federal revenue without raising taxes. Again, with a barrage of new spending, how is this a good thing?…

…read more…

(Chart above) It is easy to dispense with the argument that the president has been tight with money. Assume that during the year 2009 your already-overweight friend gained forty extra pounds, and since then your friend has continued to overeat such that his body weight has remained roughly constant. Since he hasn’t gained much weight in the past four years, can I conclude that he doesn’t have a weight problem? Of course not. Same goes with the president and his spending; a low rate of spending growth does not imply the absence of an extremely high amount of spending. (FORBES).

An email response to a Rich Lowry question responds to the chart as well. Investors Business Daily’s take is worth posting however:

…But since taking office, Obama’s policies have made everything far worse.

And that’s abundantly clear if you compare the rest of the CBO’s 2009 forecast to Obama’s actual results.

In each and every year, Obama spent far more than the CBO had projected, took in far less in revenues — not because he cut taxes, but because of the lousy recovery — and produced much larger deficits.

Whereas the CBO projected spending in 2012 would be 21% of gross domestic product, for example, Obama now pegs it at 24%. That, mind you, would have been far worse had Republicans not put the brakes on further “stimulus” spending.

Deficits as a share of GDP, meanwhile, have come in almost twice as high as the CBO projected just before Obama took office. And the government has piled on more than $5 trillion in additional debt.

Obama can’t blame the deeper-than-expected recession on these dismal results. The real problem has been the extremely poor recovery he engineered. Whereas the CBO’s January 2009 forecast put GDP growth in 2011 at 4.4%, it came in at a mere 1.7%. This year, GDP growth is running at half the rate the CBO predicted…

…read more…

One last point that is worth mentioning. Since we are dealing with projections, let’s throw this one out into the ether:

…This year, he [Obama] introduced a fiscal 2013 budget that would have reversed the debt deal’s caps on increased spending.

“Over the 2013-2022 period,” CBO concluded in its analysis of Obama’s proposal, “the cumulative deficit that would result from enacting the president’s budget — $6.4 trillion (or 3.2 percent of GDP) — would be $3.5 trillion larger than the cumulative deficit projected under current law.”

When Obama told the people in Waterloo, Iowa, this month that he would make sure government did its part to reduce the debt, it was not a $1 trillion lie. It was a $3.5 trillion lie…

…read more…