Obama to "rich" people: Go to hell.

Obama has released his budget proposal which is basically a soak the rich budget. He is requesting nearly $1 trillion in tax increases over the next 10 years, with 2/3 of that coming from individuals making over $250,000 a year. I must have missed that day in economics class where they discussed the benefits of raising taxes during recessions. Plus, it seems plain that there is no way that simply raising taxes on only those individuals who make more than $250,000 a year will be able to pay for all of this.

Oh ho, you say, those tax increases only start in 2011, giving us 2 years before taxes impact taxpayers. Two points- 1) the stimulus bill is supposed to allow the american worker and investor do what it's supposed to do, create jobs and products. Now, what sort of incentive do you have if you know that in 2 years if you make more than $250,000 a year, your taxes are going to go up? Wouldn't you, instead, just do enough so that you don't break that barrier? And wouldn't that slow down any potential growth that the administration expects over the next two years? Why would someone make a much needed investment today when in two years they may see their taxes go up if the investment is successful?

To that point, 2) the Administration's budget expects growth to occur over the next two years so that they can raise taxes, increase government spending, and cut the deficit. As the AP acknowledges, "if recovery doesn't materialize as quickly as the White House has forecast, Obama will be unable to make good on meeting his spending targets while also keeping a pledge to try to significantly reduce the annual deficit — expected to be a staggering $1.75 trillion for 2009 — to $533 billion by the end of his term." The administration can blame the Bush years all they want- at some point the Administration is going to have to own up to their own misguided attempts on the economy and its so-far disastrous effects.

In total, the administration's budget runs a deficit of $1.75 trillion for FY 2009, with a $1.17 trillion deficit for 2010. This all comes on the heels of Congress passing a $789 billion porkulus bill. Nevertheless, Obama claims that he will cut the deficit in half by the end of his first term, thanks to all of that mis-guided spending. Wouldn't a good starting point have been to not pass a bill that simply adds more debt to the future? Not to mention all of his new spending proposals for mortgage holders and his ill advised march to universal health care? I don't know. It seems to me that if your goal is to cut the deficit, wouldn't not increasing spending in the first place be the logical first step? All this trickeration comes to is that the administration is stealing revenue and growth from the future to pay for their big government spending programs now.

If the american consumer and their spending is the main driver behind the economy, isn't it a good idea to let the consumer keep more of their money, instead of the government taking it away? Why should we think that the government is any more capable at solving this than the people? As John Maynard Keynes once said: "It is a mistake to think businessmen are more immoral than politicians." And the batch of politicians that currently make up the Democratic majorities in Congress more than prove Keynes' point.

In fact, Congressional Democrats don't seem at all inclined to live up to their rhetoric- case in point, "Leading Democrats on Wednesday appeared to brush aside President Obama’s suggestion that they sacrifice earmarks in the federal budget, arguing Congress knows better than “faceless bureaucrats” how to spend taxpayer money." Yes, it would have just been easier to say Roland Burris, Chris Dodd, Charlie Rangel, and John Murtha, to name a few.

Finally- while I'm loathe to generally link to him, Dick Morris makes some very good points in this column in The Hill:

Instead, Obama has been instrumental in purveying fear and spreading doubt. It is his pronouncements, reinforced by the developments they kindle and catalyze, that are destroying good businesses, bankrupting responsible people and wiping out even conservative financial institutions. Every time he speaks, he sends the markets down and stocks crashing. He doesn’t seem to realize that the rest of the world takes its cue from him. He forgets that he stands at the epicenter of power, not on the fringes campaigning for office. This ain’t Iowa.

Why does Obama preach gloom and doom? Because he is so anxious to cram through every last spending bill, tax increase on the so-called rich, new government regulation, and expansion of healthcare entitlement that he must preserve the atmosphere of crisis as a political necessity. Only by keeping us in a state of panic can he induce us to vote for trillion-dollar deficits and spending packages that send our national debt soaring.

....

So, having inherited a recession, his words are creating a depression. He entered office amid a disaster and he is transforming it into a catastrophe, all to pass every last bit of government spending and move us a bit further to the left before his political capital dwindles.

For someone who was elected under a banner of hope and change, he's sure has been doom and gloom ever since he was elected. As Robert Samuelson noted: "Politics cannot be removed from the political process. But here, partisan politics ran roughshod over pragmatic economic policy. Token concessions (including the AMT provision) to some Republicans weakened the package. Obama is gambling that his flawed stimulus will seem to work well enough that he'll receive credit for restarting the economy -- and not be blamed for engineering a colossal waste." There is nothing new or hope-worthy about partisan politics, other than a new politician is moving their lips.

Quick Update

1) State Sen. Abel Maldonado provided the third Republican vote to finally pass the budget, one day after my posting about the budget. As part of the agreement he reached with the Governor and legislative Democrats, there will be a vote on having an open primary system, where the top 2 vote getters face off in the general election, got the elimination of the $.12 increase in the gas tax, which will be offset by an increase in income tax, cutting spending and presumed money coming to the state from the stimulus bill signed earlier this week, amongst other items. Good for him, regardless of whether any of his proposals pass.

2) Wanted to add something that I forgot in my previous post on the union contract. What I forgot to include is that budget did not call for furloughs or layoffs. The only person calling for layoffs was the Governor, who claimed he had authority to force layoffs and furloughs. However, as noted in his Executive Order, where I work is exempted from layoffs and furloughs. In sum, my agency would otherwise not be subject to the Governor's furlough and layoff orders, and the budget did not call for furloughs or layoffs, yet the union negotiated for furloughs, including where I work, which is exempt from Governor-ordered furloughs and layoffs. So, but for this union negotiated contract, I wouldn't have my pay cut by 4.6% (that's the equivalent of having 1 day of pay cut from my salary). How the union expects this contract to be approved by workers is beyond me.

Speaking of dissatisfaction

Today I received the following email from a co-worker:

Subject line- CONTRACT VICTORY! Agreement reached - no furlough this Friday - URGENT: Please read and forward!

Dear Local 1000 members:
Your bargaining team has delivered a major victory, and winning a much better deal than expected. After nine months of hard work a marathon two-day bargaining session, agreement was reached on a new contract which reduces the furlough by half and defeating most of the governors other takeaways.

For the latest update, go to channel 1000 news at:
http://www.channel1000.org/.
More details will be posted soon on the SEIU local 1000
website.

It goes on to explain the various "benefits" from the labor agreement reached between the Governor and the state employee union (SEIU). The Governor had sent out layoff notices and required mandatory furloughing of state government employees. However, where I work is exempted from the Governor's various orders because we are created in the state Constitution. In other words, because we are a creation of the Constitution and not the legislature, and are not funded by the state general fund, we employees are not subject to the Governor's furlough and layoff notices. Indeed, if you read the Governor's executive orders he notes "IT IS FURTHER REQUESTED that other entities of State government not under my direct executive authority ... assist in the implementation of this Order and implement similar mitigation measures that will help to preserve the State's cash supply during this budget impasse." Where I work is one of those "other entities."

So, where I work is specifically exempted from the Governor's order, HOWEVER, since we are represented by the union, we are now subject to the agreement reached by the union. So, even though I am not subject to the Governor's orders on furloughs, the union has, on my behalf, made me subject to those orders.

Which means that, if ratified, I will now be furloughed one day a month, have my pay be reduced by that amount (~4.6% a month), but will be able to use them at a later date as sick leave, whereas before I wasn't being furloughed and I wasn't having my pay cut (I could do it voluntarily, however, as part of a program instituted in response to the Governor's executive order). Great, the union has negotiated away a benefit that people who work at my agency enjoyed.

I accept that for probably over 90% of the people represented by the union, this is better than what the Governor was going to do, no matter that I personally agree with him that the size of government has gotten too big and could use some trimming. But it appears that the union is saying for the other 10%, "Eh, tough luck; Solidarity!" That doesn't help me at all knowing that you've negotiated away a protection that we enjoyed through the state Constitution.

And if you want to know why I think whatever tax increases this state agrees to should be in the form of sales tax and not income tax, well, the union has now negotiated a pay cut that, if the budget is passed as written, will be met with an increase in my income tax. So, my paycheck won't just reflect that 4.6% pay cut, it will also reflect that income tax increase as well. At least I have an extra
$13 to look forward to from the just signed pork/stimulus bill.

All Hoped Up

John Kass lays it out:

But who is responsible for Illinois being represented by a lying weasel in the U.S. Senate?

Though Blagojevich appointed Burris, that was just the beginning of our descent into madness. Like I said, there are two others who deserve credit.

Obama could have demanded a special election to fill his own vacated Senate seat, the one that Blagojevich allegedly tried to sell to the highest bidder. Obama also pressured Senate leaders to seat Burris, in the hopes of ending the fiasco before his inauguration.

And, after Burris tried to fix the lie he told to Durkin in the impeachment hearing—that he had no contact about fundraising with Blagojevich people other than one aide named Lon Monk—Burris sent an affidavit to a Madigan flunky, state Rep. Barbara Flynn Currie (D-Madigan), dated Feb. 4.

Currie held that affidavit in her desk, conveniently, until after Burris voted last week for the near trillion-dollar Obama pork/stimulus package. Now Madigan is demanding an investigation of possible perjury and has sent the documents to a Springfield prosecutor.

Yet the deed has been done. Obama's porkulus was passed. Obama got Burris' vote, and Madigan has an excuse to attack Burris because he doesn't want Burris leading the 2010 Illinois Democratic ticket when Madigan's daughter runs for governor.

See how it works? They get what they want. And we get Tombstone Burris.

They talk about transcending politics, but all we can hear are the flies.

I don't know what else to say about this. . .I mean, what else could possibly come out to make Illinois look like an even bigger joke? A governor that's been impeached and removed from office, an appointee to the U.S. Senate that has apparently lied about his contacts with the impeached Governor, a member for the Illinois legislature conveniently holding onto an affidavit that revises previous remarks regarding those contacts and the former holder of that Senate seat benefiting from all of the above? How convenient is too convenient? Or, as someone once said, "I don't like coincidences."

On the other hand, there's this article:

"President Barack Obama is seeking to assure Canada, the largest U.S. trading partner, that he has no interest in disturbing the two countries' economic relationship. That message, for now, trumps any push by the U.S. to renegotiate a North American trade pact, as Obama has suggested."

It would be a huge mistake, even in the best of times, to force open talks to re-negotiate NAFTA. As much as Congress and Obama may think they have a reason to re-negotiate over the environment and labor, Canada and Mexico a) don't want to re-negotiate (the Canadian PM Stephen Harper is no fan of either the environment or labor to begin with), and b) if they were forced, the U.S. would come out in a far weaker position due to what Canada and Mexico would want taken out of NAFTA (i.e., allowing the U.S. to be the first buyer of their oil). While progressives would probably view that as a success- force other countries to accept our socially "good" programs and take less of that nasty oil- the effect on our economy would be disastrous. By putting these new and expensive requirements on products made in Canada and Mexico would obviously increase the costs of the product itself, making companies less likely to want to sell those products to the U.S. market (since they would be bound by the NAFTA requirements, instead they could ignore NAFTA and just sell them somewhere else). And by not allowing the U.S. to be first buyer of oil, we would be subject to more market fluctuations in the oil market and also be potentially subject to purchasing our oil from less friendly countries.

Finally, I want to say to California legislative Republicans- Quit.

The shenanigans that are going on in the State Senate are ridiculous and are making this party look like a joke. Ousting former Minority Leader Dave Cogdill in the middle of the night is childish and stupid. At some point the party is going to have wrench itself from the grips of the stalwart conservatives and come back to some sort of reasonableness. Do I think that increasing taxes in a state that already has the second highest sales tax in the nation and one of, if not, the highest income tax in the nation during a recession is a good idea? Of course not. And do I think that legislative Democrats are themselves being stubborn in the face of much needed spending cuts- again, of course they are. However, that doesn't change the fact that simply holding up the budgetary process to satisfy the conservative base may be good for talk radio, but is not good for us, the citizens.

I understand that Republicans are against taxes, but that battle is not one that should be fought today. That is a much larger battle that can be set aside for this budget solution. Am I happy with the budget solution, no. Honestly, I think I'd rather see it all show up in sales taxes rather than be split up between sales and income taxes, as long as this is all temporary. (Nevermind a larger belief that once you increase taxes, it becomes harder to bring them back down, however "temporary" they are, especially when the party in charge of the legislature likes nothing more than to spend money frivolously.) Hell, there's a lot of things in this state that I'm not happy with, starting with the state's desire to destroy what manufacturing and agriculture industry we have left in this state under the guise of the environment.

New Minority Leader Dennis Hollingsworth said today that he wants to reopen budget talks with no new taxes. While I generally sympathize with the belief that no new taxes are needed, the fact is some amount of taxes are going to have to be raised- this is what happens when you have balanced budget requirements and can't simply run a deficit, not that I would endorse running a deficit, but it's understandable. Sen. Cogdill believes that he's made the best deal possible considering the Democrats' own intransigence on cutting spending. All this showboating and chest-thumping of Republicans on no new taxes makes the party look foolish and increasingly marginalized. Get over it. Pass the budget and take your case to the voters this summer. Senators Cox and Maldonado- show some backbone and show that you won't be bullied: vote for the budget.

One more for the day

Last night in the car listening to Lou Dobbs (wife likes to listen to CNN on XM) and was amused by my reactions to three consecutive discussions he had-

1) Was talking about all the waste and non-stimulus spending in the stimulus bill, and completely agreed with him on it.

2) Criticized Obama for supposedly caving into foreign companies, Republicans and the U.S. Chamber of Commerce over the "Buy American" provision in the stimulus bill. Completely disagreed with him.

3) Had a report on the SCHIP bill, and the report noted two groups that opposed it- Republicans fearing that it would allow for illegal immigrants to receive medical attention (Democrats had rejected an amendment that would have required identification to receive health care) and a group representing lower income people opposing the $.62 cents increase in cigarette taxes. Of course, I agree with both of those groups.

Weird. Not that I plan to make Lou Dobbs a regular part of my listening habits though.

Thought of the day....

What to do when your a libertarian and you're being subjected to false attacks:

If you’d like a taste of what it feels like to be a libertarian, try telling people that the incoming Obama Administration is advocating precisely those aspects of FDR’s New Deal that prolonged the great depression for a decade; that propping up failed and failing ventures with government money in order to save jobs in the present merely shifts resources from relatively more to relatively less productive uses, impedes the corrective process, undermines the economic growth necessary for recovery, and increases unemployment in the long term; and that any "economic" stimulus package will inexorably be made to serve political rather than economic ends, and see what kind of reaction you get. And trust me, it won’t feel any better five or ten years from now when everything you have just said has been proven true and Obama, like FDR, is nonetheless revered as the savior of the country.

I haven't posted much recently because it feels worthless to go on and on against something that so many people think is needed. . .At my job I have been responsible for providing analysis and recommendations on the Smart Grid language in the stimulus bill and I have found it incredibly difficult to hide my utter disdain for the entire bill and process. We are simply replacing a debt-ridden consumer driving the economy with a debt-ridden government driving the economy- tell me how that's better?

Or, as Tom Coburn pointed out- "As a nation, we got into this mess by spending and investing money that didn't exist. We won't get out of it by doing more of the same. Yet this is precisely what this bill proposes we do. .... The bill's selling point is that three million jobs will be created or saved by this package. What's alarming is that each job will cost $286,000 to create or save. Moreover, one in five will be a government job."

Of course, it's no surprise that, according to Rasmussen, 26% of government employees think the stimulus bill will make things worse. I'm surprised the number is that high.

Maybe I'll start writing about this again. . .

In the meantime, apparently state employees that are being furloughed are eligible for partial unemployment benefits. I'm gonna guess the Governor's office didn't think of that. . .so, shouldn't pay just be cut across the board? Isn't that a more effective and efficient means of reducing government employee spending, instead of forcing 2 days a month furlough, which can then be recovered by the employee through unemployment benefits? Oh wait, silly me. . .the unions run this stuff, and unions don't care about the long-term health of any organization, except themselves.