Tag: President Bush

Obama – The Ego has Landed!

G’Day!

When I started this Blog in February 2011, it was not intended to be political but, after a year of following our President and Congress carefully, I believe I have no choice. My overall assessment is that Obama and the Democrats, what I call the “Obammunists”, are determined to fundamentally change the culture, prosperity, and exceptionalism of America into a huge centrally governed socialist nation where hard work, innovation, achievement, and success are penalized and indolence, obedience, and dependence are rewarded. Obama is actively pursuing a “Race to the Bottom” policy of economic wealth redistribution where the general population and industry (except the chosen “Obammunist” elite) are equally poor and dependent on government for survival. As I have said before, it sounds like communism to me. The Republicans are not perfect but at least they are trying to save our Constitution and our country from becoming Greece or perhaps Russia. If the Obama Administration’s policies are pursued, America is on a path of potential self-destruction that is unnecessary, unwise, and undesirable. I call on all freedom-loving Americans to become politically active, to get out the vote, and to defeat Obama in November.

Obama is acting like a man who would be king and is displaying the ego to believe he can accomplish it. Perhaps the clearest indicator of excessive self-image is someone who blames everyone else for bad decisions and bad results and continues to actively pursue and promote his mistakes. So far he has blamed his failures on former President Bush, the Republicans, Congress, the Tea Party, millionaires and billionaires, Wall Street, Europe, and recently launched an advance attack on The Supreme Court over Obamacare. He has been campaigning with our taxpayer dollars to divide the country by economic class, ethnicity, gender, religion, age, and entitlements. Charles Krauthammer recently predicted this could be “The dirtiest campaign you’ve ever seen.”

Obama’s ego is off the scale. He appears to believe that he is always right and anyone who doesn’t agree with him is wrong. Obama appears to believe that Americans are so naïve and gullible he can continue to be “charming” and successfully blame everyone but himself for the failures and bad policies of his administration. I believe that the American people are smart enough to see through his organized propaganda campaign of blame and misinformation. He is following other self-centered historical European kings and dictators who believed that a distortion of truth repeated often enough and combined with the use of government force will be tolerated by sufficient population to acquire and retain authoritarian power. Do you want to reelect a man who has been so wrong and made so many mistakes and still believes in his infallibility? The “Obammunists” are very dangerous to our Constitution and our culture of free market capitalism, constitutionally protected individual freedoms, entrepreneurship, and limited federal government. These are the foundations that have made America exceptional for over 200 years and, with our help will keep it strong, free, and prosperous for the future.

The “Obammunists” are counting on a silent majority of Americans to be apathetic and to believe the politics of misinformation that is being proclaimed to divide our nation. Obama is expecting freedom-loving Americans to stay at home in November and allow the organized leftwing socialist (communist?) labor unions, those receiving entitlements, and their supporters determine the election outcome. We must not let that happen! We must become passionate about saving our country for our children. The Founding Fathers established the Constitutional principle that government is the servant of the people not vice versa. We have the opportunity in November to correct the course of our country and put it back on the right track of liberty, capitalism, economic growth, and limited government. Study the issues and candidates and vote accordingly.

The Old Guy PhD

Is a Balanced Budget Amendment Necessary?

G’Day!

Yes, the Constitutional Amendment is necessary given the dysfunctional behavior of our government, and No, it is not necessary (even undesirable) in economic theory because it limits the flexibility of our government. So what should we do??

Given the past and current inability of our Congresses and Presidents, both Democrats and Republicans, to act responsibly regarding fiscal budgets and debt policy for our nation, a “Balanced Budget Amendment” to the Constitution appears to be necessary. This amendment should mandate a federally balanced budget including a federal spending “Cap” of no more than 20% of GDP (preferably less), and with “Safety Valve” exceptions granted only for “War” or “National Emergency”. These exceptions should require a “Supermajority Vote” in Congress to authorize and the signature of the President to enact. Unfortunately, short-term personal political motivations appear to be stronger than the long-term fiscal responsibilities to our national economic needs. Therefore, we do need a “Balanced Budget Amendment” to protect the American People from continued irresponsible and dysfunctional fiscal and debt behavior by our federal legislators and Presidents. If we needed any additional indication of the necessity to curb government spending, the recent federal debt downgrade from AAA to AA+ by Standard & Poor’s should suffice.

Forty-nine States have some version of a balanced budget requirement (only Vermont does not). Interestingly, Germany and Switzerland, both strong financial nations, also have a balanced budget requirement. This forces their legislators to behave in a responsible manner that protects the national fiscal and long-term debt interests of the people they were elected to serve. Without such a constitutionally protected provision, including the “Cap” on federal spending above, lawmakers are prone to ignore the long-term fiscal consequences of the laws they pass and focus on their own short-term reelections. The relentless historical increase in our national debt and especially the current deficit and debt crises are clear evidence of irresponsible short-term decisions by our Federal Government.

Prior to the passage of 16th Amendment in 1913, which permits federal income taxes directly on the people, we had governments that were forced to limit their size and spending to a level reasonably consistent with federal revenues. The funds available required adherence to the provisions for limited federal government defined in our Constitution and required the establishment of appropriate priorities for federal programs and services. In other words, our government was reasonably forced to live within its means. What a revolutionary concept!! After the 16th Amendment, our government could (and did) simply increase income taxes or borrow to meet whatever programs or bureaucracy they deemed desirable, not necessarily important or essential. In 1913 federal spending was less than 3% of GDP. In 2008, President Bush’s last year, federal spending was approximately 20% of GDP and this year under Obama, the federal spending is estimated to be 25% of GDP. This is madness and does not serve the American people.

As mentioned above, since 1913 our elected officials have relied on increasing income taxes on the American people or debt to pay the increased costs of the programs and bureaucracy they desired, regardless of the cost, need, or even importance of these programs to the American people. It is easier for politicians to identify a socially “desirable” program than to identify and justify its costs and priority to the taxpaying public and its overall benefits to society. Our government has merely increased taxes to pay for these new or expanded social entitlement programs or added to our National Debt by borrowing the missing funds (increasingly from foreign sources, like China). In 2008 our National Debt was $10.0 trillion, a $4 trillion increase in eight years under President Bush. Currently, under President Obama in only two and one-half years, our National Debt has increased another $4 trillion (a 40% increase) to $14.3 trillion and, even after this week’s debt agreement, is projected to grow another $8 trillion to approximately $22 trillion over the next 10 years. This is more than 100% of projected GDP, is not sustainable, and must be corrected.

In economic theory (especially Keynesian), a balanced budget amendment would limit our government’s flexibility. It would restrict government fiscal actions to correct imbalances in our economy, such as running “deficits” to stimulate the economy during recessions and the use of “surpluses” to retard excessive and unsustainable growth. In theory, this should smooth economic growth by limiting the magnitude of peaks and valleys in the business cycle. This in turn would restrain “booms”, minimize “busts”, stabilize economic growth to reasonably sustainable levels, and avoid excessive fluctuations in job markets. Nearly all economists believe that prudent use of this power is good but excessive use is bad. All good stuff in theory! Unfortunately, the behavior of our governments and the actual results have not followed the theory. “Excessive use” has repeatedly hurt our economy and job growth starting with FDR in the “Great Depression” and currently with the Obama Administration’s “Stimulus”, expansion of government size, and spending to support his big government agenda. Also, when federal surpluses were possible, as with the Kennedy, Reagan, and Bush tax rate reductions (all of which increased economic growth and tax revenues), Congress quickly initiated new spending programs to use the money (Johnson’s “Great Society”, Bush’s wars, and the Democrat Congress’ Prescription Drug Program in Bush’s second term). As I have repeatedly said, socialism and long-term economic growth are not compatible. Most other nations, including many in Europe, and especially Russia, India, and China, have learned this and are increasingly relying on free market economies and prudent fiscal and monetary policies.

Since the founding of our nation, balanced budget legislation has been discussed. Thomas Jefferson was the first President to think seriously about requiring balanced budget legislation to maintain fiscal discipline and he actually wanted to ban federal borrowing power to limit the potential size of federal government. Ultimately, he concluded this would be too restrictive in times of emergencies, especially wars. For over 200 years our nation has relied on the wisdom and responsibility of our elected officials to act appropriately on behalf of the American people. The introduction of the federal income tax amendment above combined with the evolution of our short-term political reelection process has unfortunately undermined the ability of our legislators to perform their fiscal duties to serve the long-term interests of the American people. It is time to renew the effort to force our federal government to behave responsibly. Clearly, history, since 1913 has shown that they cannot be trusted to do it on their own.

So “Yes”, we do need a Constitutional “Balanced Budget Amendment” with federal spending “Caps” and a “Safety valve” for national emergencies to rein in the reckless fiscal behavior of our elected officials. Our governments are increasingly turning our nation into a centrally controlled socialist debtor nation. These policies are not the foundation of freedoms upon which our country was created and which made America great. It’s time to return our country to the individual liberties, free markets, sound fiscal and monetary policy, economic growth, and limited government upon which it was founded.

The Old Guy PhD