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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: d[-_-]b who wrote (51865)	6/3/2012 5:45:37 PM
From: DuckTapeSunroof	Respond to of 71588

Message 28184953

To: d[-_-]b who wrote (51865)	6/9/2012 2:20:29 AM
From: greatplains_guy	1 Recommendation Respond to of 71588

Obama's Debt Boom The most predictable crisis in history. June 5, 2012, 7:07 p.m. ET. Remember a week or two ago, when President Obama was claiming to be a fiscal skinflint because some online columnist said so? That was fun. On Tuesday the Congressional Budget Office released a view more tethered to reality, and let's just say this will not be showing up in one of the President's campaign ads. The CBO's long-term budget outlook notes that federal debt held by the public—the kind we have to pay back—will surge to 70% of the economy by the end of this year. That's the highest share of GDP in U.S. history except World War II, as the nearby chart indicates, higher than during the Civil War or World War I. It's also way up from 40% in 2008 and from the 40-year average of 38%. And it's rising fast. CBO says that on present trend the national debt will hit 90% of GDP by 2022. It then balloons to 109% by 2026—that would be the all-time WWII peak—and approaches almost 200% of GDP by 2037. We have never been deficit scolds, preferring to focus on the more important policy priorities of economic growth and spending restraint. But the Obama era is taking America to a place it has never been. Inside of a decade the country will have a debt-to-GDP ratio well into the 90% to 100% danger zone where economists say the economy begins to slow and risks mount. CBO notes with its famous dry wit that this level of debt increases "the probability of a sudden fiscal crisis, during which investors would lose confidence in the government's ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates." How bad is it? In the absolute worst-case scenario, CBO says debt would exceed 250% of GDP in 2035. At that point, the CBO's economic model breaks, because so much debt is so far outside "historical experience" and the CBO's "assumptions might no longer be valid." This scenario assumes the Bush-Obama tax rates don't expire as scheduled and that tax collections continue to hold to the post-1972 historical average of 18% of GDP. It also assumes that the phantom cuts to entitlement spending that Congress builds into the budget baseline don't happen in practice, as they never do. Perhaps CBO's most important warning concerns the vagaries of interest rates. Even long-term interest rates are at historic lows, as investors flock to Treasurys as a safe haven in a world of uncertainty. This has dramatically reduced the U.S. government's funding costs, but that will not be true forever. The budget outlook is based on the projection that the real interest rate on public debt will never exceed 2.7%. But if interest rates rose 0.5 percentage points higher each year than CBO projects, CBO says debt would hit 215% of GDP in 2037, rather than 199%. The compounding growth of interest payments would need to make up—people with heart conditions should stop reading here—some 30% of federal spending and 10% of the entire economy. Every 100 basis point rise in the cost of government borrowing results in nearly $1 trillion in new debt. The development that explains why debt is so much higher today than during the great national crises of the past is the entitlement state. Post ObamaCare, CBO explains that federal spending on health care will rise from 5.4% of the economy today to 10.4% over the next quarter-century. Ponder that one: That 93% increase means one out of every 10 dollars spent will flow through one transfer program or another—and that's transfers for health care only. Throw in Social Security and interest on the debt, and by 2025 there's no tax revenue left to do other things government is supposed to do. Forget about building roads and funding scientific research. The entire defense budget would be deficit-financed. The biggest weakness in CBO's analysis is its pessimistic estimate of economic growth. The budget gnomes assume an annual growth rate of 2.2%, which may be the Obama era's new normal but is far below what is possible with the right policies. Even an average growth rate of 3.2% a year, which is close to the rate of the 1980s and 1990s, would reduce deficits and the debt burden substantially. This is where the tax burden comes in, and on that score CBO admits that "to the extent that additional tax revenues were generated by boosting marginal tax rates, those higher rates would discourage people from working and saving, further reducing output and income." So even the Keynesians who dominate CBO admit that there are costs in lower growth to the higher tax rates that Mr. Obama wants to foist on the country next year. As the fiscal adults like Paul Ryan and Tom Coburn often say, this is the most predictable crisis in history. If we wait for the bond vigilantes to strike, as in Europe today, the recourse will be painful spending cuts and destructive tax increases virtually overnight. The longer we extend Mr. Obama's legacy of slow growth and more debt, the greater the economic price to fix it. online.wsj.com

To: d[-_-]b who wrote (51865)	8/12/2012 6:37:09 PM
From: greatplains_guy	3 Recommendations Read Replies (1) \| Respond to of 71588

Why Ryan Is Obama's Nightmare Paul Ryan and the Triumph of Math By Clarice Feldman August 12, 2012 Luftmensh is a delightful Yiddish word to describe an impractical person who concerns himself with airy intellectual matters and not how to make a living or get things to actually work. I had just decided to make this column on Paul Ryan's nomination about how facts, in this case mathematics, will beat the fantastical notions of the luftmensh in the White House. Remember, Obama began his term as the spinner of naïve hopes and dreams and as those proved unworkable, became the purveyor of fear, anxiety and outright lies. Once again, however, the great Iowahawk beat me to it with this twitter: "Paul Ryan represent[s] Obama's most horrifying nightmare: math." Let me remind you how nightmarish Ryan is to Obama. Here's a six-minute take down of Obamacare by Congressman Ryan. breitbart.com Watch the vacant look in Obama's eyes as it becomes clear he has no idea how to respond to the facts Ryan raises, to the math which demonstrates the utter unsustainability of Obama's legislative scheme. And then observe how that look in Obama's eyes turns to rage. Ryan, a man who does know what's he's talking about on the most important issue before us -- rescuing the economy from Obama's mismanagement and getting America back on track -- has to be Obama's worst nightmare. (As for Joe Biden, my guess is he should start packing up to leave his office because Obama cannot afford to have as his running mate this time a man obviously chosen only because he was sure never to intellectually show up his boss.) Fiscal conservatives and libertarians who want to limit the federal government's control of our money and lives are ecstatic. Why shouldn't they be? Here are some of the things Ryan's been heard to say: "...at the end of the day, Mr. Speaker, I think there's a difference in philosophy here. One side likes to think of the idea of everybody sending their money to Washington, then we go to a back room, and we slice up the money and send it out to favored groups, favored constituents, people we want to be as winners versus those who might be losers. We've got to get out of the game of Washington picking winners and losers in the tax code, because what we do is stifle that entrepreneur who has an idea..." "...And we've been talking about how much we agree on different issues, but there really is a difference between us. And it's basically this. We don't think the government should be in control of all of this. We want people to be in control. And that, at the end of the day, is the big difference..." "The facts are very, very clear. The United States is heading for a debt crisis. The only solutions will be truly painful for us all. That doesn't have to be our future. The way we respond to this challenge will ultimately define our generation. We can choose a path to prosperity..." "...The spending bills that you have signed into law, the domestic and discretionary spending has been increased by 84 percent. You now want to freeze spending at this elevated level beginning next year. This means that total spending in your budget would grow at 300ths of 1 percent less than otherwise. I would simply submit that we could do more and start now...So my question is, why not start freezing spending now? And would you support a line-item veto and helping us get a vote on it in the House?" "...America is not just a nationality it's not just a mass of land from Hawaii to Maine, from Wisconsin to Florida. America is an idea. It's the most pro-human idea ever designed by mankind. Our founders got it right, when they wrote in the Declaration of Independence that our rights come from nature and nature's God - - not from government. Should we now subscribe to an ideology where government creates rights, is solely responsible for delivering these artificial rights, and then systematically rations these rights?" In contrast with Ryan's notion of a fiscally sound economy, and a limited government not based on a Chicago style thuggish spoils system we have the Luftmensh in Chief saying fascistic nonsense like "you didn't build that" and this: I said I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back and GM is number one again. (Applause.) So now I want to do the same thing with manufacturing jobs not just in the auto industry, but in every industry. I don't want those jobs taking root in places like China. I want them taking root in places like Pueblo. For those of us who paid attention to what he did to the auto industry: confiscating the pensions of non-union members, destroying the livelihood of Republican GM dealers; managing GM so badly its stock is now valued at 50% of the value it held when we bought it; causing the SP500 and Dow to nosedive as he stood property rights on its head, his words were chilling. americanthinker.com