Obama: Hope and Change

Watch this powerful 9 minute video to learn how Obama's "Hope and Change" has worked out after his first term as president. 

The Hope And The Change

Lying Bastards - Part 3

Isaac Shows Media Bias Of Hurricane Proportions

Posted 08/28/2012
IBD Editorial

School buses that could have evacuated 15,000 people in one trip sat idle in water up to their headlights during Katrina. ASSOCIATED PRESS

Press: As Isaac bore down on New Orleans, the administration's media toadies preferred to talk not about substantive issues, but on how the "shadow of Bush and Katrina" hung over the delayed GOP convention in Tampa.

Those in the press whose legs tingle at every administration utterance apparently share the view that a crisis is a terrible thing to waste. Isaac, barely making it as a hurricane, was seen as yet another chance to blame George W. Bush for something and resurrect media falsehoods about Hurricane Katrina, which hit New Orleans seven years ago.

The Republican National Convention was pushed back a day by Isaac's threat, and NBC's chief White House correspondent, Chuck Todd, accomplished an amazing feat by managing to insert not only Katrina but also the controversy over GOP Missouri Senate candidate Todd Akin into his GOP convention coverage.

On the Sunday broadcast of the NBC Nightly News, Todd noted that GOP presidential candidate Mitt Romney had garnered "a little bit of momentum after the (Paul) Ryan pick, and then he's interrupted by two storms — one a political storm in Todd Akin, which we just brought up, but now an actual storm."

Todd then opined that "as this storm moves closer to Louisiana, the specter, the sort of shadow of Bush and Katrina does hang over this convention." So does the stench of media bias.

Todd, like the media during their original Katrina Bush-bashing, ignore the fact that much of the Katrina snafus should have been laid at the feet of New Orleans Mayor C. Ray Nagin, a Democrat, and the equally clueless Democratic governor of Louisiana, Kathleen Babineaux Blanco.

Fact is, President Bush declared the state of Louisiana a disaster area 48 hours before Katrina made landfall and asked Blanco to order a mandatory evacuation of New Orleans on Aug. 27, a full two days before the hurricane hit.

Neither Blanco nor Nagin ordered city buses to help evacuate those residents who couldn't leave on their own even though the city's own emergency plan mandated it and acknowledged there were at least 100,000 people who couldn't make it out without help.

We ran a photo of New Orleans buses sitting in a lot filled with four feet water, buses that could have evacuated 15,000 people in just one trip. Either Blanco or Nagin could have ordered their deployment, but didn't.

After not evacuating the city, the Louisiana Department of Homeland Security blocked a convoy of Red Cross trucks filled with water, food, blankets and hygiene items from the New Orleans Superdome after Katrina struck. The rationale: It would have encouraged refugees to stay there.

This, of course, was all Bush's fault. This week, NBC's Andrea Mitchell offered that there was "a political challenge here with this approaching storm, especially for the Republicans. No one here can easily forget the iconic picture of President Bush flying on Air Force One ... looking down at New Orleans during Katrina."

Certainly not the media that ABC's Jake Tapper says "tipped the scales" for Obama in the 2008 campaign. "Sometimes I saw with story selection, magazine covers, photos picked, (the) campaign narrative, that it wasn't always the fairest coverage."

Isaac gives them another chance to tip the scales for Obama.

You will not see many, if any, stories about the economic devastation caused by this administration's economic and fiscal policies, of a jobless America waiting to be rescued from the Category 5 creeping socialism and crushing taxation and regulation caused by a hurricane named Barack.

The Federal Budget Solution

"The elementary truth is that the Great Depression was produced by government mismanagement [of money].  It was not produced by the failure of private enterprise." – Milton Friedman

The Ryan Budget: Confronting the Nation’s Spending Crisis

By Alison Acosta Fraser and Patrick Louis Knudsen
March 21, 2012

The Heritage Foundation

In the few months since Washington’s dramatic debt ceiling confrontation, America’s fiscal situation has only worsened. Federal spending is set to soar past previous record-shattering levels, endangering the economic future of the nation. This is a moral issue because younger generations will be forced to bear either staggering levels of debt or crushing taxes, or both. It is also a political challenge to this nation’s democracy as more and more Americans become dependent on government benefits while lawmakers seem unable to take decisive corrective action. The spending-driven debt crises of Greece and Italy are clear and compelling evidence that America must urgently change course. The only way to avoid a similar fate is to make bold, substantive changes in the size, scope, and purpose of the federal government.

Toward that goal, House Budget Committee chairman Paul Ryan (R–WI) has released a proposed federal budget resolution for fiscal year (FY) 2013 entitled The Path to Prosperity: A Blueprint for American Renewal. The plan lays out a comprehensive series of solutions to fix the nation’s twin crises of spending and debt. It rolls back the spending excesses of the past, tackles entitlement programs, makes defense a priority, and undertakes an important growth agenda to unleash America’s free enterprise system and get Americans back to work. This budget is not perfect; few consensus political documents can be. It should be bolder in implementing its entitlement reforms. It should strive for more aggressive spending reductions. It is slow to reach balance, largely the consequence of avoiding changes in Social Security and slowly phasing in health entitlement reforms. Still, this plan, like that passed by the House last year, substantially advances the serious and necessary conversation about securing America’s future and its legacy of freedom, opportunity, and self government.

Benchmarks for the Path to Prosperity

A budget contains many elements. It should provide a broad framework for spending and revenue priorities and for achieving balance. It must also set out at least thematically the fundamental policy reforms needed to achieve the fiscal objectives. A budget should be taken as a whole and measured in a comprehensive way—not by simply checking a series of boxes. Still, certain benchmarks can help guide the evaluation:

• Does it begin decisive entitlement reform? The main sources of spending growth are the major entitlement programs: Medicare, Medicaid, and Social Security. Any serious budget should offer substantive proposals to improve benefits and make these programs sustainable and affordable in both the short term and the long term. This must include the repeal of Obamacare.
• Does it cut spending sharply and quickly? Spending is the root of all other fiscal problems. So any budget should immediately and consistently rein in spending.
• Does it avoid tax hikes? Raising taxes on American families, businesses, and investors is the wrong solution. Higher taxes slow the economy and cost jobs. Higher taxes also mean higher government spending.
• Does it contain pro-growth tax reforms? Fixing the budget mess and ensuring a vibrant economy requires a strong growth agenda. A simpler, pro-growth tax code would result in greater economic freedom and faster growth. Faster growth generates more revenues—without tax hikes—and naturally lowers spending on safety net and anti-poverty programs.
• Does it ensure a strong national defense? Defense is a core constitutional responsibility of the federal government, one that is necessary to preserve America’s liberty and prosperity. It should be fully funded. Cutting defense spending is not a responsible solution to getting spending under control.
• Does it move swiftly to a balanced budget? The federal government should balance its budget by getting spending under control.

The best benchmark for measuring progress in fixing the budget mess is Heritage’s Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity. The Heritage proposal features bold, sweeping changes to transform entitlement programs that guarantee America’s seniors economic security in retirement and reins in their costs to make them affordable. It has major spending reductions in other parts of the budget and ensures full funding for national defense. It also features a bold, new pro-growth tax reform plan.

The Ryan budget does not meet all the goals of Saving the American Dream, but it takes strong steps toward a number of them.

Entitlement Reform

Entitlements constitute nearly 60 percent of total federal spending, and their runaway growth—especially from Medicare, Medicaid, and Social Security—represents the greatest threat to the nation’s fiscal and economic health. The Ryan budget begins to tackle Medicare, Medicaid, and other anti-poverty programs.

The budget calls for immediate entitlement spending reductions of $18 billion in 2012–2013 and $331 billion over 10 years. These changes would be driven by the budget reconciliation process, with firm instructions to committees of jurisdiction to ensure that they really occur. About $70 billion of the reductions would go to partially offset automatic cuts known as “sequestration,” which would devastate national defense. The remaining spending reductions would come from changes to rein in longer-term entitlement spending—especially in the government’s health programs.

Obamacare. On health care, one of the most important policy changes in the Ryan budget is the repeal of Obamacare. Not only does Obamacare add trillions in new spending and billions in tax hikes that the country cannot afford; it expands on a failed price-control model for Medicare, massively broadens a broken Medicaid program, and introduces a new subsidy scheme that is financially unsustainable.

Medicare. The House budget would transition the current Medicare program into premium support beginning in 2023. Premium support provides seniors with defined financial contributions from the government to apply to health care plans that they choose for themselves, in contrast to one-size-fits-all, government-funded, government-regulated, and government-controlled health care. Plan options would include traditional Medicare and would compete alongside private health plans in a market called the “Medicare Exchange.” The government contribution would be based on a competitive bidding process. A senior could choose a more expensive health plan than the government contribution but would have to pay the difference.

The government’s defined contribution in Medicare would be further adjusted by income, geography, and risk. For example, upper-income seniors would pay more than the standard premium, and lower-income recipients would qualify for additional assistance. Additionally, high-risk beneficiaries would secure greater payments to offset their higher costs, and a risk-adjustment mechanism would guarantee sicker Medicare patients access to medical care—and ensure continued plan participation and market stability in the new program. The market-based bidding and requirements that Medicare compete head-to-head with private plans for patients’ dollars closely resembles Heritage’s plan in Saving the American Dream.

Most experts agree that competition in health care would control costs. But to assure budgetary savings, the Ryan budget includes a cap on Medicare spending at the growth of gross domestic product (GDP) plus 0.5 percent. The budget also includes process reforms that disclose long-term unfunded liabilities, forcing Congress to confront their growing costs. It also establishes mechanisms for controlling longer-term costs of entitlement programs, taking them off budgetary autopilot. At the same time, the Ryan budget calls for repealing Obamacare’s rationing panel, the Independent Payment Advisory Board, which is important to do within the full repeal of Obamacare.

Medicaid. The Ryan budget replaces the open-ended financing arrangement with a fixed federal contribution to the states. In addition, the proposal offers states greater flexibility in designing their programs to better help those in need.

Putting Medicaid on a budget is a critical first step to fundamentally reforming Medicaid. The next step should be to help mothers and children out of the poorly performing Medicaid program and give them access and assistance to purchase private health insurance options while working with the states to develop a more patient-centered safety net for the poor elderly and those with disabilities.

Other Health Care. Elsewhere on the issue of health care, the Ryan budget notes the current tax treatment of health insurance, creates a variety of distortions in the marketplace, and recommends steps to address these flaws. Ideally, changes to the tax treatment of health insurance would replace the current tax structure with individual tax relief that helps consumers buy their own policies. This tax change is critical in moving toward a patient-centered, market-driven health care system.

Entitlements: What Is Missing

The Ryan budget’s effort to advance entitlement reform should be stronger. Implementation of Medicare premium support is delayed for 10 years—“grandfathering the grandparents,” as Ryan puts it. This is one of the principal reasons the budget does not balance in the coming 10 years.

In addition, the budget contains no Social Security reforms, resorting instead to a mechanism that would trigger reforms. It does not include basic steps to rein in the cost of Social Security, such as gradually raising the retirement age or using a more realistic measure for cost-of-living increases. Such changes would be important steps to shoring up Social Security’s finances.

Growth-Oriented Tax Reform—Not Tax Hikes

The root of the government’s deficit problem is excess spending, not a lack of revenue. The budget resolution recognizes that the economy cannot withstand the impact of impending tax hikes at the end of this year and stops the mammoth job-killing, anti-growth tax increases coming on January 1, 2013.

Instead, the budget resolution reduces the highest-in-the-world corporate tax rate from 35 percent to 25 percent and reduces the top individual income rate to the same level. The lower corporate tax rate would reverse the flow of jobs to foreign countries, and the lower individual income tax rate would improve incentives for workers and businesses to produce more and for investors and businesses to create new jobs.

Other positive features of the tax plan include abolition of the Alternative Minimum Tax and a move to a territorial business tax in place of our worldwide system. This kind of growth-oriented tax plan would help promote a stronger economy along with more wage and job growth.

The proposed tax reforms would have been far stronger, however, had they eliminated taxes on capital gains, dividends, and the death tax.

Defense

A strong national defense is both a key responsibility of the federal government under the Constitution and essential to protecting Americans’ liberties. As such, Ryan is certainly correct that America needs “a military that keeps America safe by letting national strategic priorities determine spending levels, not the other way around.” However, Ryan’s budget restores only about half the core defense funding cuts proposed by President Obama’s over a 10-year period.

Congress needs to recognize that covering the full cost of the overseas contingency operations, including “resetting” the force drained by a decade of combat, will require funding that extends long beyond the end of the operations themselves.

Ryan’s budget proposal takes some but not enough steps to begin to address the most immediate threat to maintaining the nation’s military capabilities. This is the threat of the “sequestration” provision for defense in last year’s Budget Control Act. President Obama, by contrast, proposes to make defense the lowest budget priority of the federal government by later this decade and threatens to veto bills that defer defense sequestration.

The Numbers

When its collection of policies is boiled down to the numbers, the Ryan plan reduces budget deficits from $1.2 trillion this year (7.6 percent of GDP) to $166 billion (0.8 percent of GDP) in 2018, after which they tick up again to $287 billion (1.2 percent of GDP) in 2022. The budget begins to stabilize debt, reducing debt held by the public from 73.2 percent of GDP now to 62.3 percent in 2022.

The budget also proposes caps on total spending and on major categories of spending and requires periodic reviews of entitlement programs to take them off autopilot spending. The critical point, after all, is to reduce spending, which drives all other fiscal problems. Over the long term, the budget brings spending down from its unsustainably high level of 23.4 percent of GDP this year to 19.3 percent in 2018. Spending then edges back upward as more baby boomers retire—reaching 19.8 percent of GDP in 2022—but remains below 20 percent (the average of the past 50 years). By 2040, spending is down to 18.75 percent of GDP. As noted earlier, “grandfathering the grandparents” and not tackling Social Security makes it much more difficult to reduce spending more and thus balance the budget before the late 2030s.

The budget holds non-war discretionary spending in 2013 to $1.028 trillion, $19 billion below the Budget Control Act ceiling and $15 billion below the 2012 limit—which, if enacted by appropriations bills, would be a real cut from prior year spending.

The Big Picture

Cutting spending is requisite to solving the nation’s budget crisis. But setting numbers alone will not get the job done. Instead, each one of the elements described above is an integral component to a transformative budget. Ryan’s budget, and any other budget, should be evaluated on how well it delivers on all these elements together. Ryan’s budget takes strong strides in the right direction. It cuts spending, in the budget year and into the future—from both discretionary and mandatory accounts—provides substantive entitlement reforms, and avoids tax hikes. It also outlines a tax reform that would strengthen the economy and by implication further strengthen government finances through stronger economic growth.

There is a great deal more work to do, as the Heritage plan Saving the American Dream reflects. Nevertheless, the Ryan budget represents real progress toward tackling the nation’s fiscal and economic challenges. But this progress will become reality only if Congress follows through with legislation that delivers these kinds of strong policy changes.

Alison Acosta Fraser is Director of and Patrick Louis Knudsen is the Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Nina Owcharenko, Curtis Dubay, and Baker Spring also contributed to this report.

Government Policy: Rob Peter To Pay Paul

When you rob Peter to pay Paul (at the point of the IRS gun), you can pretty much count on the support of Paul at the next election.

"In general, the art of government consists in taking as much money as possible from one party of the citizens to give to the other." – Voltaire (1764)

The Rich Don't Pay Enough?

Walter E. Williams

Aug 29, 2012
Townhall.com

If you listen to America's political hacks, mainstream media talking heads and their socialist allies, you can't help but reach the conclusion that the nation's tax burden is borne by the poor and middle-class while the rich get off scot-free.

Stephen Moore, senior economics writer for The Wall Street Journal, and I'm proud to say former GMU economics student, wrote "The U.S. Tax System: Who Really Pays?" in the Manhattan Institute's Issue 2012 (8/12). Let's see whether the rich are paying their "fair" share.

According to IRS 2007 data, the richest 1 percent of Americans earned 22 percent of national personal income but paid 40 percent of all personal income taxes. The top 5 percent earned 37 percent and paid 61 percent of personal income tax. The top 10 percent earned 48 percent and paid 71 percent of all personal income taxes. The bottom 50 percent earned 12 percent of personal income but paid just 3 percent of income tax revenues.

Some argue that these observations are misleading because there are other federal taxes the bottom 50 percenters pay such as Social Security and excise taxes. Moore presents data from the Tax Policy Center, run by the liberal Urban Institute and the Brookings Institution, that takes into account payroll and income taxes paid by different income groups. Because of the earned income tax credit, most of America's poor pay little or nothing. What the Tax Policy Center calls working class pay 3 percent of all federal taxes, middle class 11 percent, upper middle class 19 percent and wealthy 67 percent.

President Obama and the Democratic Party harp about tax fairness. Here's my fairness question to you: What standard of fairness dictates that the top 10 percent of income earners pay 71 percent of the federal income tax burden while 47 percent of Americans pay absolutely nothing?

President Obama and his political allies are fully aware of IRS data that shows who pays what. Their tax demagoguery knowingly exploits American ignorance about taxes. A complicit news media is only happy to assist. We might ask ourselves what's to be said about the decency of people who knowingly mislead the public about taxes. Of course, I might be all wrong, and true tax fairness dictates that the top 10 percent pay all federal income taxes.

Aside from the fairness issue, 47 percent of taxpayers having no federal income tax liability is dangerous for our nation. These people become natural constituents for big-spending, budget-wrecking, debt-creating politicians. After all, if you have no income tax liability, what do you care about either raising or lowering taxes? That might explain why the so-called Bush tax cuts were not more popular. If you're not paying income taxes, why should you be happy about an income tax cut? Instead, you might view tax cuts as a threat to various handout programs that nearly 50 percent of Americans enjoy.

Tax demagoguery is useful for politicians who prey on the politics of envy to get re-elected, but is it good for Americans? We're witnessing the disastrous effects of massive spending in Greece, Italy, Ireland, Portugal and other European countries where a greater number of people live off of government welfare programs than pay taxes. Government debt in Greece is 160 percent of gross domestic product, 120 percent in Italy, 104 in Ireland and 106 in Portugal.

Here's the question for us: Is the U.S. moving toward or away from the troubled EU nations? It turns out that our national debt to GDP ratio in the 1970s was 35 percent; now it's 106 percent of GDP. If you think we're immune from the economic chaos in some of the EU countries, you're whistling Dixie. And when economic chaos comes, whom do you think will be more affected by it: rich people or poor people?

Free Money For All --- FOREVER!

Entitlement Reforms

By Thomas Sowell
8/29/2012
Townhall.com

For those of us who like to believe that human beings are rational, trying to explain what happens in politics can be a real challenge.

For example, that segment of the population that has the least to fear from a reform of Medicare or Social Security is the most fearful -- namely, those already receiving Medicare or Social Security benefits.

It is understandable that people heavily dependent on these programs would fear losing their benefits, especially after a lifetime of paying into these programs. But nobody in his right mind has even proposed taking away the benefits of those who are already receiving them.

Yet opponents of reforming these programs have managed repeatedly to scare the daylights out of seniors with wild claims and television ads such as one showing someone -- who looks somewhat like Paul Ryan -- pushing an elderly lady in a wheelchair toward a cliff and then dumping her over.
There are people who take seriously such statements as those by President Barack Obama that Republicans want to "end Medicare as we know it."

Let's stop and think, if only for the novelty of it. If you make any change in anything, you are ending it "as we know it." Does that mean that everything in the status quo should be considered to be set in concrete forever?

If there were not a single Republican, or none who got elected to any office, arithmetic would still end "Medicare as we know it," for the simple reason that the money in the till is not enough to keep paying for it. The same is true of Social Security.

The same has been true of welfare state programs in European countries that are currently struggling with both financial crises and riots in the streets from people who feel betrayed by their governments. They have in fact been betrayed by their politicians, who have promised them things that there was not enough money to pay for. That is the basic problem in the United States as well.

We are not yet Greece, but we are not exempt from the same rules of arithmetic that eventually caught up with Greece. We just have a little more time. The only question is whether we will use that time to make politically difficult changes or whether we will just kick the can down the road, and keep pretending that "Medicare as we know it" would continue on indefinitely, if it were not for people who just want to be mean to the elderly.

In both Europe and America, there are many people who get angry at those who tell them the truth that the money is just not there to sustain huge welfare state programs indefinitely. But that anger might be better directed at those who lied to them by promising them benefits that were inherently unsustainable.

Neither Social Security nor Medicare has ever had enough assets to cover its liabilities. Very simply, there has never been enough money put aside to do what the government promised to do.

These systems operate on what their advocates like to call a "pay as you go" basis. That is, the younger generation pays in money that is used to cover the cost of benefits for the older generation. This is the kind of financial pyramid scheme that got Charles Ponzi put in prison in the 1920s and got Bernie Madoff put in prison in our times.

A private annuity cannot play these financial games without its executives risking the fate of Ponzi and Madoff. That is why proposed Social Security and Medicare reforms would allow young people to put their money somewhere where the money they pay in would be put aside specifically for them, not used as at present to pay older people's pensions, with anything left over being used for whatever else politicians feel like spending the money on.

It is today's young people who are going to be left holding the bag when they reach retirement age and discover that all the money they paid in is long gone. It is today's young people who are going to be dumped over a cliff when they reach retirement age, if nothing is done to reform entitlements.
Yet the young seem not to be nearly as alarmed as the elderly, who have no real reason to fear. Try reconciling that with the belief that human beings are rational.

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust. 

Current U.S. Monetary Policy Is Devastating the Country

Sound Money Gains a Champion

Paul Ryan, good as gold.

The weelkly Standard

SEP 3, 2012, VOL. 17, NO. 47 • BY JUDY SHELTON

What are the chances that President Barack Obama and his Treasury secretary, Timothy Geithner, will ever have anything meaningful to say about monetary policy​—​beyond continuing to try to coax Federal Reserve chairman Ben Bernanke to print ever more dollars to buy up ever more U.S. government debt? About the same as the interest rate you are receiving on your savings: zero.

NEWSCOM

That’s why it matters so much for the future of the United States​—​indeed, the future of the global economy​—​that Paul Ryan is now on the Republican ticket. Because it’s not just the fiscal fiasco, caused by political cowardice and dithering, that has put our nation on a path to eventual bankruptcy. It’s also the loss of a monetary compass. The value of the dollar has been so compromised through loose Fed policies that it no longer functions as a trustworthy money unit. Instead of providing a reliable tool for measuring what something is worth, or for deciding whether to consume now or save for the future, the dollar has become yet another policy instrument of government.

One notable who’d be a severe critic of our monetary situation today is Thomas Jefferson. In his Notes on the Establishment of a Money Unit and of a Coinage for the United States, written in 1784, Jefferson focused on the need to protect the integrity of the American dollar. A dependable currency would not only unite the former colonies and facilitate commerce throughout the fledgling nation, it would also facilitate individual endeavor and economic opportunity. For the first time, for example, Jefferson argued, a nation’s monetary standard would be based on the decimal system so that business calculations would be simple, honest, and straightforward. For Jefferson, the notion that the value of the U.S. dollar might one day be subordinated to a perceived need in the nation’s capital to accommodate budgetary failures would be a betrayal of the American promise. The money unit of the United States should represent an “unchangeable” standard of value, Jefferson firmly believed, that would remain “accessible to all persons, in all times and places.” A sound dollar underscored America’s commitment to free people and free-markets, to a self-governing nation dedicated to economic freedom and equal rights under the law.

Discussing monetary issues, Paul Ryan sounds Jeffersonian:

Money whose future value is unpredictable cannot serve its most important purpose, to provide a common rule to equate goods, services, and labor. When social transactions are undermined, people lose trust in one another, and the vacuum must be filled with the power of government. Our Founders experienced this firsthand, so they laid their foundations to provide for limited government with a maximum of entrepreneurial freedom and sound money.

You can be sure that detractors of the presumptive Republican nominee for vice president will brand this sort of thinking as “extreme” and “radical”​—​a threat to monetary policy as we know it. Certainly, Ryan’s views represent a different approach from what is currently practiced in Washington, where the dollar’s value is merely a consequence of interest-rate decisions and banking regulatory tweaks made every six weeks or so, entirely at the discretion of unelected officials appointed to the board of governors of the Federal Reserve.

But when Ryan emphasizes the need for sound money in the context of civil society and free markets under limited government, he is not only invoking the ideals of Jefferson. He is also building on the insights of Friedrich Hayek, the great free-market economist whose Constitution of Liberty (1960) carries this ominous warning: “All those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.”

By questioning the boom-and-bust policies of the Fed and challenging its lack of accountability, Ryan is trying to do just that. In his role as House -Budget Committee chairman, he has pointedly asked Bernanke during congressional testimony to acknowledge “the long-term repercussions of .  .  . a weak currency policy” and to explain how the Fed can presume to quash future inflation in the wake of unprecedented monetary stimulus. Ryan is highly skeptical that Fed officials can precisely calibrate the money supply to the needs of the economy through the creation of unwarranted dollars to purchase government debt; he deems it “a fatal conceit.” He would sooner trust in the aggregate wisdom of hundreds of millions of free-market participants​—​buyers and sellers, consumers and savers​—​operating under a stable monetary standard anchored to the real economy.

Ryan is also aware that Americans increasingly sense unfairness​—​unequal treatment​—​in the way monetary policy is conducted. Sophisticated investors and privileged financial institutions seem to be the main beneficiaries of Fed largesse, borrowing at cheap rates while savers earn virtually nothing. Equity markets have become subject to the pronouncements of Bernanke, --- hoping for some hint of further “quantitative easing” to goose stock prices. Meanwhile, the amount of bank holdings of Treasury obligations and government agency debt has more than doubled this year over 2011, reaching an all-time high of $1.84 trillion. If community banks are now going the way of money-center banks, gaming interest rates on Treasury instruments rather than lending to businesses, it’s because the Fed has made that the more lucrative endeavor.

Our discretionary monetary policy has brought about a rupture between financial intermediaries and the actual engines of productive growth, with high finance operating on a different track than the organic economy. This is undermining growth prospects for the United States and the world; it is distorting the natural process of economic recovery by manipulating price signals. After all, the whole point of capital investment is to channel financial “seed corn” into productive economic enterprise that will yield higher future returns​—​meaning improved living standards. But the Fed’s activist policies are guiding those resources into government instead.

Monetary policy should not play favorites. And Ryan’s campaign to restore sound money is as much about reasserting the principles of equal rights and equal treatment as it is about reconnecting the value of the dollar to the real economy. “Our currency should provide a reliable store of value​—​it should be guided by the rule of law, not the rule of men,” Ryan notified Bernanke at a hearing last year. “There is nothing more insidious that a country can do to its citizens than debase its currency.”

It’s an expression of faith in our nation’s founding principles wholly consistent with Jefferson’s own view that the integrity of our currency is a reflection of our commitment to personal freedom under limited government​—​and that a reliable dollar is the only money unit worthy of the American idea.

Judy Shelton, author of Fixing the Dollar Now: Why U.S. Money Lost Its Integrity and How We Can Restore It, is a senior fellow at the Atlas Economic Research Foundation.

Fewer and Smarter Taxes

Happy birthday, America! Time to totally overhaul your tax code!

Both parties are thinking way too small. We don't need higher income taxes, or slightly lower income taxes. We need zero income taxes.

Alan D. Viard, Robert Carroll | The Atlantic

July 04, 2012

• 

Reuters

Anti-tax protesters hold signs during a rally on the National Mall in Washington, April 15, 2010. April 15 is the deadline for U.S. citizens to file their annual income tax paperwork.

• Title:

  Progressive Consumption Taxation

• Paperback Price:

  49.95

• Paperback ISBN:

  978-0-8447-4394-3
• 200 Paperback pages
• Buy the Book

Article Highlights

• Economic growth is impeded by the income tax's penalty on saving and investment.
• Taxing savings properly is critical to America’s future.
• The X tax is a progressive consumption tax that would promote growth and maintain fairness.
• The Bradford X tax is a game-changing idea – an efficient, fair & simple tax that will build a prosperous future for America.
• Economic research suggests that consumption taxation is likely to boost the economy's long-run output by several percent.

Although the need for tax reform has never been greater, today's tax policy debate is trapped in partisan gridlock, as Republicans call for tax cuts to promote economic growth and Democrats counter that the rich must pay their fair share. Many Americans reject the terms of this debate, insisting on a tax system that promotes both growth and fairness. Fortunately, we can achieve this goal by returning to the innovative thinking of the late Princeton economist David Bradford. In 1986, he proposed a progressive consumption tax named the X tax that removes the income tax's impediment to growth while maintaining progressivity.

Economic growth is impeded by the income tax's penalty on saving and investment. Under today's income tax system, people who save to spend later in life may be taxed many times on their saving - first on the income they save and then on the returns to their savings over time. In contrast, those who spend today are taxed only once. The use of consumption taxation would avoid this disparity - everyone would be taxed once, regardless of when they spend. This bias against saving and for current consumption is a fundamental flaw embedded in the income tax.

Taxing saving properly is critical to America's future. Savings are the life-blood of economic growth because they finance investment in plant, equipment, and technological innovation. Economic research suggests that a switch to consumption taxation is likely to boost the economy's long-run output by several percent.

When people hear "consumption tax," they usually think of regressive sales taxes and value added taxes collected at the cash register. In fact, replacing the income tax with those taxes would sacrifice fairness for growth, unacceptably shifting the tax burden to those who are less well off.

The X tax, in contrast, is a progressive consumption tax that would both promote growth and maintain fairness.

The X tax has two components. Individuals file annual tax returns and pay tax on their wages. There are higher tax brackets for workers with higher wages and lower brackets for low-paid workers. Exemptions and credits can be included to add further progressivity or meet other policy objectives. Business firms are taxed on their cash flow at a flat rate equal to the rate on the highest-paid workers. 

At first glance, the X tax looks a lot like an income tax. But, two key features make it a consumption tax.

On the individual side, interest, dividends, capital gains, and other income from saving are tax-exempt, eliminating today's tax penalty on those who save. On the business side, firms immediately write off all of their investment rather than depreciating them over a period of years. This up-front write-off exactly offsets the tax penalty for new investments, although the tax system still pulls in revenue from investments made before the X tax was adopted and those with extra-high returns.

Because the X tax doesn't penalize saving and investment, it is a consumption tax. But, it's definitely not a sales tax, because it doesn't tax all consumers at the same rate. The highest-paid workers pay the top rate. Investors who saved before the X tax was adopted and those who earn extra-high returns are taxed at the same rate through the business tax. Middle-class workers pay lower tax rates and those at the bottom of the economic spectrum pay nothing.

The X tax design also promotes simplicity. Individuals report only the wages listed on their W-2s, not their harder-to-measure income from saving. And, the up-front investment write-off banishes depreciation, inventory accounting, and a host of other complications from business tax returns.

Of course, any tax reform faces some challenges. There are difficult questions about how to transition to the new system and the tax rules that will apply to pensions, housing, international trade, financial institutions, and so on. Reform proposals often gloss over these issues, but no reform will be seriously considered until these concerns are addressed. In our new book about the X tax, we offer concrete answers to these questions, explaining how to make the X tax a reality.

The Bradford X tax is a game-changing idea - an efficient, fair, and simple tax that will help build a prosperous future for the American people.

Alan D. Viard is a resident scholar at the American Enterprise Institute. Robert Carroll is a principal with Ernst &Young LLP's Quantitative Economics and Statistics group. They are the authors of Progressive Consumption Taxation: The X Tax Revisited, just published by AEI Press. 

The Obama High Art of Deceit

Obama's smoke and mirrors

Kevin A. Hassett | National Review

August 24, 2012

White House/Pete Souza

President Barack Obama and Office of Management and Budget Director Peter R. Orszag discuss the federal budget in the Oval Office Monday, Jan. 26, 2009, during the President's first week in office.

Article Highlights

• The assumptions that presidents make in budget proposals are important, they affect all the other calculations.
• If a president assumes growth will be high that will help justify spending increases or tax cuts.
• Most presidents assumed slightly more positive budget outcomes than the Congressional Budget Office.
  
  

This article appears in the September 10, 2012 issue of National Review.

When a Republican is in the White House, the mainstream media pore over every nuance of the economic outlook of the president’s team, and any hint of optimism is ridiculed as voodoo economics or supply-side fantasy. The worst crime a Republican administration can commit is to propose a forecast that is different from that of the “nonpartisan” Congressional Budget Office. When that happens, the Krugmans of the world howl about Republican lies.

Perhaps the most memorable of these moments occurred back in 1981, when Ronald Reagan proposed his budget for fiscal year 1982. Critics decried his optimistic economic forecasts, which called for GNP growth of 5 percent in 1983. These forecasts were, the media reminded us, an average of two points higher than CBO forecasts. Reagan was accused of using his “Rosy Scenario” forecasts to hide the massive deficits that his tax cuts would produce."The assumptions that presidents make in their budget proposals are certainly important. After all, they affect all the other calculations."- Kevin Hassett

The assumptions that presidents make in their budget proposals are certainly important. After all, they affect all the other calculations. If a president assumes growth will be high, that will give him lots of revenue to play with, helping him justify spending increases or tax cuts. So it’s more than a small technicality when a budget calls for much larger or smaller growth than the economy ends up experiencing.

In the case of Reagan, despite all the howling, the Rosy Scenario’s forecasts for 1983 through 1985 turned out to be much closer to actual economic growth than the CBO’s. Reagan’s economic team correctly anticipated growth effects from tax cuts. But today we have witnessed presidential budgets that have been as inconsistent with CBO forecasts as any in history. When one looks at GDP growth forecasts, or those for unemployment, there has never been a president and an economic team with the temerity to mislead as much as Obama and his advisers have done.

The nearby chart shows the average difference between the assumptions in the past five presidents’ budgets and the projections that the CBO made for the same years as those budgets. Since projections can be difficult to make for the more distant future, and we wanted to compare Obama’s record to actual history as well, we looked at predictions in each budget for the subsequent two years, for both GDP growth and unemployment. As the chart shows, most of the presidents, on average, assumed slightly more positive outcomes than the CBO, perhaps because of the desire to understate deficits. President Obama’s budgets, however, differed from the CBO’s projections in a much more dramatic way than those of any of the previous four presidents, and especially those of his two immediate predecessors.

President Obama’s predictions have not proved especially accurate over the past three years either: In 2010, his economic team projected growth this year to reach 4.6 percent; instead, it has been slogging along in the twos. Even when it became clearer in 2010 and 2011 that the recovery from the recession could drag on, his assumptions continued to call for high growth in the near future. When one considers the myriad ways the mainstream media have failed to critically inspect the activities of this president, his economic forecasts take the cake. Obama and his economic team have consistently overstated growth in an attempt to misrepresent the massive deficits their policies will produce. While pitching the propaganda that they will stabilize the debt, they have posted growth forecasts that are shockingly out of sync with the CBO. 

They do this because they know that the mainstream media will let them get away with it. If a Republican disagrees with the CBO, it is malpractice. 

If a Democrat does it, it’s not worth a mention.

Kevin Hassett is the director of economic policy studies at AEI.

Incompetent News Media

Why Is The Press Ignoring The Success Of '2016'?

Posted 08/27/2012
IBD Editorial

Why is the mainstream press always surprised whenever a conservative movie does well? Case in point: the huge early success of the hard-hitting documentary "2016: Obama's America."

The movie, made with almost no money and no major studio backing, by neophyte directors, and with zero attention from the mainstream press, grossed $6.5 million over the weekend, putting in the top 10.

So far, "2016" has taken in more than $9.3 million, which puts it easily within reach of becoming one of the top five highest-grossing political documentaries of all time.

And, if anything, the movie is just getting started. Last weekend, it averaged nearly $6,000 per screen, which is higher than when it was showing in just 62 theaters a couple weeks ago.

But aside from a few grudging news stories about the weekend box office take and a smattering of predictably critical reviews, the media are largely turning a studied blind eye to the film.

No wonder, since the success of "2016" exposes several inconvenient truths about President Obama, as well as the media's dereliction of duty in vetting him four years ago.

Even today, people know little about the president, and what little we think we know is based on distorted self-reporting by Obama in two autobiographies.

We don't even know what grades Obama got in college, since he guards his transcripts more carefully than he does national security secrets. Obama has also downplayed his relationships with radical leftists. Terrorist Bill Ayers? Barely knew the man. America-hating Rev. Jeremiah Wright? Never heard any of his diatribes in the 20 years attending that church.

At the same time, he's kept his ideology, and his intellectual roots, largely hidden behind a smoke screen of cliches — "hope and change," "built to last," "forward," etc.

And the press — always eager to dig, dig, dig into the lives, views and friends of Republican candidates — has acted instead as Obama's bodyguards.

So it shouldn't be surprising to anyone else — even if it is to the mainstream press — that the public is hungry for real answers to some basic questions about the man who's occupied the White House for nearly four years and wants to do so for another four.

What does Obama truly believe? Who were his intellectual influences? Does Obama share his father's rabid anti-colonial views? What does Obama actually want the country to be after he's done "transforming" it?

The "2016" documentary does a good job of getting answers to at least some of those lingering questions. Getting answers to all the rest is more vital now than ever.

Dinesh D'Souza — who authored the book on which the documentary is based, "The Roots of Obama's Rage," and who co-directed the movie — told the Conservative Political Action Conference earlier this year that if Obama wins a second term, he "won't be tethered to public opinion, he won't have to run for re-election again, he will be truly, in a sense, a free man in the White House to do what he wants."

Or as Obama himself assured Russian Prime Minister Dmitry Medvedev, "After my re-election, I'll have more flexibility." Before Americans decide to give Obama that flexibility, they'd do well to watch "2016" first.

Massively Corrupt News Media

Will Powerful Media Re-Elect Obama, Subverting Will Of The People?

Posted 08/27/2012
IBD Editorial

Media Bias: The major media in past elections have veiled their pro-Democrat bias. But in this race they've become so militant there's a real risk the election may be rigged for President Obama.

NBC launched its coverage of the GOP convention by essentially accusing Mitt Romney and the GOP of having a racist agenda to oust a black president.

Sitting in the Tampa arena next to NBC veteran Tom Brokaw, MSNBC host Chris Matthews on Monday came unglued while "interviewing" Republican National Committee Chairman Reince Priebus.

The hateful invective spewing from his lips was shocking. At times he looked as if he would leap out of his chair and grab Priebus by the neck.

Matthews charged that by pointing out that more Americans than ever now have to resort to food stamps under Obamanomics, Romney was "playing the race card." "You can play your games and giggle about it, but the fact is your side is playing that card," Matthews fumed. "When you start talking about work requirements (for welfare), we know what game you're playing, and everybody knows what game you're playing — it's a race card."

Matthews, whose wife, Kathleen, gave $4,600 to Obama's 2008 campaign, then lectured Priebus that it's the Republicans who are "running a negative campaign." He called RNC ads "garbage."

Then he leaned forward and glowered at the GOP official, who was taken aback by the assault: "You can chuckle about it, Mr. Chairman, because you have to flack this issue, but the fact is you know what's going on."

Astoundingly, Brokaw, the veteran "newsman," did not try to restrain his rabid colleague. Clapping could be heard off-camera.

This was not a Democrat venue. NBC dropped this stink bomb on GOP turf during an official GOP celebration. Never before have we witnessed such palpable bias exhibited by a major media personality in such an official setting.

Such advocacy journalism is also on display in the major print media. The departing New York Times ombudsman, writing last week in his final column, admitted Times staffers are so in the tank for Obama and Democrats that their leftist advocacy "bleeds through" into their coverage.

Times public editor Arthur Brisbane called the paper's newsroom "a culture of like minds." The same could be said for the entire old media still controlling campaign coverage.
They say this race is Romney's to lose. Yet the elite are not only rooting for him to lose, they are actively sabotaging his campaign. Big media polls have been caught oversampling Democratic voters. And all three presidential debates will be hosted by like-minded liberals, including known GOP-hater Candy Crowley of CNN. Fox was snubbed.

If the major media won't give a Republican presidential candidate a fair shot, what does that say about our democratic process? Are voters really participating in a free election if the media elite are rigging it for their candidate?