Where Two Paths Diverge...

Here is the truth about the future: We are living on borrowed money and borrowed time. These deficits hike interest rates, clobber exports, stunt investment, kill jobs, undermine growth, cheat our kids, and shrink our future. 

- Walter Mondale, Democratic Presidential nominee, July 19, 1984 Democratic National Convention

Today, President Obama acknowledged reality.  Just two months ago, he submitted a 10 year budget that said and did nothing to lower our deficit in the near term.  Unusual as it is for a President to scrap his own plan, Obama was forced to present a new plan due to the reasoned response to Paul Ryan's The Path to Prosperity and it's acceptance as a serious proposal.  His choice was to either allow the Republicans to direct the narrative or attempt to offer a competing vision on how to accomplish the same goals.

 

Despite acknowledging reality today, the President chose to offer a 12 year plan that will do little other than make it seem he is doing something.  Talk of commissions, defense cuts and future year triggers means that he has no intention of changing his current spending plans.  Instead, he offered numerous tax increases as his planned "spending cuts".  His new approach sounds like his old approach and brings to mind another failed liberal politician.  

“If Dukakis is elected, he would act next year as he acted last week: trim here and there, but then take a frequent flyer to the last resort [new taxes]. He would accelerate rather than break the spending urge in Congress.”

- William Safire
New York Times
6/29/88

Americans have come to the realization that the status quo is not sustainable.  In Ryan's plan, the Republicans have offered a real plan that will seek to balance the budget over the long term by overhauling our taxcode to make it fairer and making changes to Medicare and Medicaid now in order to make these programs sustainable.  In responding to the Republicans 2012 budget proposal, Obama has chosen to champion a course that would make Michael Dukakis proud by pledging to tax our way to prosperity. 

For all the faults with the President's plan, the greatest is that he attempts to hijack the narrative with a falsehood.  The only real spending cuts he offers are tax increases.  As I'm sure many of you have heard, we don't have a revenue problem, we have a spending problem.  In using an Orwellian nomenclature of calling a tax increase, a "spending cut", Obama seeks to confuse the issue.

In the 1990's a combination of events led to a few years of budget surpluses.  Following the fall of the Soviet Union, National Defense was downsized to cash in on the Peace Dividend.  After being elected, Bill Clinton raised taxes on an expanding economy and then two years later, a Republican congress began reigning in discretionary spending.  Looking at the chart, we can see spending increased back to 20% of GDP following 9/11 and was held there until Nancy Pelosi and the Democrats regained control of Congress.  From there, spending took an immediate upswing.  Under Obama, this spending has been made worse.

Deficits are expected to increase in a recession as revenues decrease, which did happen in 2008.  But by shifting our spending baseline in such an extreme way, Obama has accelerated our impending demise.  The truth is that with or without our current increases in discretionary spending, our spending will soon drive us into a hole that threatens to swallow us.

The President's response to raise taxes while leaving entitlements untouched will only delay by a few years the inevitable.  Soon our entire revenue stream will be spent on entitlements.

Raising tax revenues from the historic level of 18% of GDP will only offer us, at best, a temporary respite.  Of course, raising tax rates has no guarantee of increasing revenue.   As Larry Kudlow writes at National Review,

Of course, the president’s formula of estimating higher revenues to lower the deficit is completely wrong. The reality is that higher tax rates will slow the economy, inhibit new start-up companies, penalize investors, and may very well lose revenues and increase the deficit.

It is questionable what raising tax rates will do to our economy.  What is not questionable is what will happen to our debt if we do not address the real source of our future troubles.

No amount of tax increases will ever be able to manage debt of this size.  Any plan that does not seek to alter or amend Medicare spending is not a serious plan.  Today, our entitlement spending is 58% of our spending.  Add in interest payments and we're now over 75%.  National defense and discretionary spending are left with only 1/4 of our budget.  In the past, our defense spending was close to half of all spending.  Today it sits at 20% and the President looks to cut if further.

 

While he presents us with cuts from a declining slice of the pie, he makes no offer to deal with the programs that will soon make up the entire pie.  What happens then?  Imagine a government shutdown that never ends.

As I have tried to make clear, we cannot ignore the real driver of our budget deficit.  It's the huge twinkie in the room.  Last week's budget showdown over spending cuts in our non-defense discretionary spending is chump change compared to the real issue - entitlements.

That's a big twinkie and it will continue to grow no matter how high taxes are raised. 

In 2008, a very liberal Senator Barack Obama ran as a centrist, promising to cut the budget, not raise taxes on the middle class and be pragmatic and do what works.  Now, when his leadership has been challenged to a large degree by Rep. Ryan, a very liberal President Obama showed us his true colors - tax and spend.  His proposal will soak the rich while cutting defense in order to keep spending more on "investments".

40 years ago, Medicare, Medicaid & Social Security spending was 4% of GDP.  Today it is 10%.  In another 40 years, it is projected to be at 18% - the historical average for tax revenues.  At that point, we have no other money left for defense, interest payments or running the government.  Then, or even sooner, those programs, along with a whole host of other government spending will be cut or eliminated - unless we make changes now.

In choosing to confront Ryan's Path to Prosperity, the President, instead chose to offer up a European vision for a Path to Austerity.  As the two paths diverge, the choice is clear.

Casual Friday Edition

I got into hot water a couple weeks back when I suggested on Facebook that Stormtroopers could wear their Khaki armor and loafers on Casual Friday.  Yoda in particular, seemed to take offense at the thought.  I tried to give voice to the notion that even clones are people too.  But to some, they are simply cattle to be herded.  Please add your own thoughts in the comment section on this important issue.

>>     I wrote a post, Tell Them About the Twinkie, to highlight that arguing over non-defense discretionary spending is only a tiny battle in a much bigger war on spending.  Jeffrey Anderson at the Weekly Standard blog tells us that mandatory spending has now swallowed the entire Federal Revenue,

We have now gotten to the point — as I noted yesterday — where if national defense, interstate highways, national parks, homeland security, and all other discretionary programs somehow became absolutely free, we’d still have a budget deficit. The White House Office of Management and Budget projects that in the current fiscal year (2011), mandatory spending alone will exceed all federal receipts. So even if we didn’t spend a single cent on discretionary programs, we still wouldn’t be able to balance our budget this year — let alone pay off any of the $14 trillion in debt that we have already accumulated.

Speaker of the House John Boehner has said that he thinks people just don't understand the issue.  “People in Washington assume that Americans understand how big the problem is,” he said. “But most Americans don’t have a clue.”  Cutting a few billion in foreign aid or increasing taxes cannot fix this problem.  Only adjusting the future of entitlement programs can.

Representative Paul Ryan is the point man in the House on tackling this problem.  Ryan told Mike Huckabee on Fox News. “If we do it now, we do it on our terms, meaning we don’t change anything for people in and near retirement. But if we wait, if we keep delaying and kicking the can down the road, then it will look like Europe — bitter austerity. Cuts will happen to current seniors, and that’s what we want to avoid.”

Delaying action is no longer an option.  Well, technically it is an option, but only if you consider retiring with no savings an option.

>>     Over at NRO, Conrad Black covers a lot of ground in his article, On Libya, the US Is a Pitiful Giant.  He compares the heroic Japanese response in their current fight for survival to the horrid response in New Orleans following Hurricane Katrina.  Flaws at the national, state and local level in New Orleans to be sure, but Americans do not come out to well in the comparison.

Black then goes on to blister President Obama's weak response in Libya.

As for Libya, there is room for legitimate debate over what to do there, but I cannot believe that there is a single conscient American who has followed these matters who is not appalled by the grotesquerie of American policy fumbling that has stalked, wreathed, and bedeviled this issue. The president, draped in what is becoming infamous sanctimony, said, of Qaddafi, “He has lost all legitimacy and he must go. . . . The best revolutions are organic. . . . We are not sure.” Weeks pass, thousands are massacred, and the White House has no standing to assess the legitimacy of foreign governments under challenge and portentously to asseverate moral imperatives, and then waffle over the course cried out for by the majority of Libyans and urged by the European Union and the Arab League, representing the entire adjoining regions. This president (of the United States) famously said in Prague in 2009, “Words must mean something” in reference to arms control, which he has pursued in regard to the United States but not to Iran or North Korea. He was correct; they must, when uttered by the holder of his great office, but they don’t, at this sadly disappointing time, in arms control or the assistance of the forces of oppressed legitimacy.

I remember past Presidents agreeing with my father when he told me never to say anything I didn't intend to back up.

"If you're gonna talk the talk, then you better walk the walk"

"Speak softly and carry a big stick"

All over the mid-east people are dying for the cause of liberty, while we continue to talk....to witness....to watch....to do nothing. 

>>     I'm still holding out caution on Japan's nuclear crisis until all the fact are in.  By their design, even a total meltdown should be able to be contained.  A large issue is the lack of water and the particles in the available water.  Clean de-mineralized water will not react with the fuel and thus any steam would carry little radiation.  But saltwater and other impurities in the improvised cooling water will react and release larger quantities of radiation in the steam that is released.  Meltdown or not, the containing vessel should keep the fuel from being directly released into the atmosphere, which is what happened at Chernobyl.  But as I said, I await the facts before making a call on this situation.

>>     Waiting on those facts doesn't mean I can't share a couple of tidbits.

First, it has been noted by a researcher working for the World Health Organization, that the only thing we have to fear is fear itself with regards to radiation.  Gateway Pundit has the story.

a top expert on radiation says that fear of radiation is a bigger health threat than radiation itself.  Technorati.com reported:

A top expert on radiation, doing studies for the World Health Organization, reports that fear of radiation exposure has caused more health problems than the radiation itself. Other experts on psychological effects of radiation agree. In addition to the fear of the effects of the radiation, survivors are stigmatized by their society, increasing stress and feelings of isolation. This stigmatization can interfere with the survivors getting proper health care, jobs, and economic stability. Others turn away from them, fearing that association with those who have been exposed to radiation can be “catching.” Experts who have studied these impacts at Chernobyl, Three Mile Island, Nagasaki, and Hiroshima, say that the fear and stigmatization causes so much stress in the people affected that, overall, the stress is more damaging to health than the radiation itself.

Someone needs to forward this to Shepard Smith on FOX who has been fear-mongering all week.

The other side of the issue is brought to us by Newsbusters,

The dangers of nuclear power, while serious, need to be put in perspective. To that end, here's an interesting fact you won't be hearing from the mainstream press: wind energy has killed more Americans than nuclear energy.

You read that right. According to the Caithness Windfarm Information Forum, there were 35 fatalities associated with wind turbines in the United States from 1970 through 2010. Nuclear energy, by contrast, did not kill a single American in that time.

The meltdown at Three Mile Island in 1979 did not kill or injure anyone, since the power plant's cement containment apparatus did its job - the safety measures put in place were effective. Apparently the safety measures associated with wind energy are not adequate to prevent loss of life.

As I already have stated, this has absolutely nothing to do with the crisis in Japan.  I just found both bits of information interesting.

>>     The House of Representatives voted to defund NPR today.  It has no chance of passing the Senate, so NPR is safe.  But why?  I ask the same question of PBS - why?  What need is there for the government to fund a TV and radio network in America?  Funding the Voice of America abroad I can understand.  Our nation should have a global agenda that will be furthered by a variety of mediums.  But domestically, do we want our federal government promoting an agenda through the media?

I know, I know....NPR and PBS are independent voices that do not receive their orders from the government.  That's fine and I accept that.  So tell me again why we fund them.  What purpose do they serve our government and the taxpayers if they do not take their orders from them?  If they provided a service that no one else in the marketplace wished to provide, this would be more acceptable.  But unlike say the Water Department, NPR and PBS have dozens of competitors doing pretty much exactly what they are doing.

If the Water Department in your town shut down tomorrow, there would be reprecussions to the taxpayers. that would be felt immediately.  But if NPR and PBS had really been defunded today, would you notice if you weren't told.  NPR and PBS are quality products that will not have any trouble finding the funds to continue to operate.  In fact, they might be surprised at just how well they flourish when they are finally dumped into the private sector. 

If Big Bird and Kermit can profit at the toy store and the movie theaters; on DVDs and CDS, I don't think there is any need to put them on the endangered list when they no longer receive my tax dollars.  Now shows like the Delicious Dish may be another matter....

>>     It's time for March Madness.  Sadly, my Mizzou Tigers bowed out about halfway through the second half Thursday night.  I did call the Richmond and Gonzaga upsets, but I had the wrong #13 seed - I picked Princeton over Kentucky.  Morehouse State's upset over Louisville will hurt through the weekend as I had the Cardinals making it to the Sweet 16.

Perhaps I would have made the right selection if I had more time to ponder my choices.  I was off work Monday and Tuesday, but I had a pretty full plate at the house.  I still had a few tax returns to file for some family and friends.  I installed a new gas oven for the beautiful Dawn.  I spent many hours poring over several years of healthcare data and preparing a presentation.  I cooked dinner one night, while my wife did the other.  Somewhere in there I filed the financial aid application for my soon to be collegiate student and prepared some bills for payments.

Suffice it to say, that it wasn't until late on Wednesday before I had any real opportunity to put some thought into my bracket selections before heading off for my job on the overnight shift.  When I arrived home Thursday morning, I quickly jumped on the computer to enter my picks into ESPN's bracket challenge before heading to bed for a few hours sleep before the first games began.

Busy as that may sound, I would gladly follow my routine over and over rather than be in the unenviable position that our President finds himself.  The crisis in Japan, the critical situation in Libya as the UN debated taking military action, the still developing movements in other mid-east nations, the war in Afghanistan, Iran's pursuit of nuclear weapons, global terrorism, the budget battles in Congress along with the still weak economy and raging unemployment would seem to be overwhelming.

Yet, apparently Obama not only had enough time to spend on his bracket - which I can understand (everyone needs a break) - but he had time to go out of his way and record a spot for the networks to cover his picks and analysis.  Look, I can easily see the importance of symbolic sports gestures - throwing out the first pitch at Major League games, phone calls and White House visits for champions.  But surely in the middle of all that is happening at the moment, there is something else the President of the United States should be doing.  After all, this is the man who felt it necessary to fly across the Atlantic to lobby for Chicago's Olympic bid.  Isn't there somewhere else he should be right now?  The UN just approved military action in Libya, but it may be too late for that rebellion.  Maybe Obama could have sped the UN process up in person rather than taping a fluff piece.  Playing golf while the world falls apart just doesn't make for a good picture.  (Or does it?)

I don't really know.  I just know how powerless I feel as I view world events and the one person on earth who has more power at his disposal to affect them, seems distracted. 

Last week Obama said that it would be easier to be President of China because the world doesn't hang on his every word.  Years ago, when the Soviet Union still stood as a world power, President Reagan wanted his every word to be heard - from the halls of the Kremlin to the smallest cells of their gulags.  With his words, he sought to strike fear in the despot and bring hope to the oppressed.  Sadly, this is sorely missing from Obama.

The President needs to stop talking.  He needs to say something and he needs to mean what he says.

NUTS

*  Harry Reid, rejected making any changes to Social Security when questioned by Lawrence O'Donnell on MSNBC.  "Two decades from now, I'm willing to take a look at it," said Reid, 71, in an interview to air Wednesday evening on MSNBC. "But I'm not willing to take a look at it right now."  [h/t The Hill.com]

*  Former Speaker of the House, Nancy Pelosi apparently has had a memory lapse of the past several years as she proclaims that "Democrats have long fought for fiscal responsibility...".  For the record, I would take issue with that statement from a member of either party that has been in office over the past decade.  Ed Morrissey at HOTAIR attempts to remind Mrs. Pelosi,

Not only did Democrats under her Speakership raise discretionary spending 18% in three years, not only did she pass a Pay-Go law and then fail to adhere to it even once, Pelosi became the first Speaker since Watergate to fail to pass a budget resolution for a fiscal year.  In 2010, despite having a 77-seat majority in the House, a Senate which her party held by 18 seats, and a Democrat in the White House, Pelosi failed — or refused — to pass a budget for FY2011.  Instead, she pushed continuing resolutions in order to hide spending until after the midterms, and failed even then to pass a budget.

*  Donald Trump made news during his recent Good Morning America appearance as the Daily Caller recounts,

On Thursday’s “Good Morning America,” Donald Trump questioned whether or not President Obama was born in the United States, and pushed back on the notion that others who question President Obama’s birthplace are idiots.

Regarding questions surrounding Obama’s birth, Trump said:

Everybody that even gives any hint of being a birther…they label them as an idiot.  Let me tell you, I’m a really smart guy.  I was a really good student at the best school in the country.  The reason I have a little doubt — just a little — is because he grew up and nobody knew him.  …Nobody knows who he is until later in his life.  It’s very strange. The whole thing is very strange.

Can we kill two birds with this one?  If not for the entertainment value, I would be happy to be rid of The Donald and I would very much like to be rid of the whole birther issue.  Can this be like matter and anti-matter where both are annhilated as they come into contact?  It's just a question.

*  The largest story not being reported by the mainstream press remains the death threats made against Republicans in Wisconsin.  Read Lee Stranahan's story at the Huffington Post.  Given the press' accusations that the Tea Party people are dangerous and violent extremists,

Ignoring the story of these threats is deeply, fundamentally wrong. It's bad, biased journalism that will lead to no possible good outcome and progressives should be leading the charge against it.

*  In today's edition, I have two bits questioning President Obama's efforts and abilities, so I guess I can be included in the nuts section.  It's just exasperating to see such a failure of leadership.  But don't take my word for it.  This is what is being reported by Joshua Hersh at The Atlantic,

Fed up with a president “who can’t make his mind up” as Libyan rebels are on the brink of defeat, Secretary of State Hillary Clinton is looking to the exits. 

At the tail end of her mission to bolster the Libyan opposition, which has suffered days of losses to Col. Moammar Gadhafi’s forces, Clinton announced that she’s done with Obama after 2012 — even if he wins again.

“Obviously, she’s not happy with dealing with a president who can’t decide if today is Tuesday or Wednesday, who can’t make his mind up,” a Clinton insider told The Daily. “She’s exhausted, tired.”

He went on, “If you take a look at what’s on her plate as compared with what’s on the plates of previous Secretary of States — there’s more going on now at this particular moment, and it’s like playing sports with a bunch of amateurs. And she doesn’t have any power. She’s trying to do what she can to keep things from imploding.”

I'm not often inclined to agree with Secretary Clinton.  If this means I'm nuts, so be it.

Please do your part.  Give a hoot, don't pollute.  Be informed before you argue.  Spend more time listening than talking (two ears, one mouth).  Kids eat free on Tuesday.

God Bless.