Category Archives: Debt

The CBOafs And Tax Cuts

Debt, Economy, Political Economy, Private Property, Reason, Taxation, The State

The prediction of the CBOafs (The Congressional Budget Oafs) with respect to the “cost” of tax cuts is only as good as their premise, which is faulty. That premise is that property stolen by the state from its rightful owners (taxpayers) will be used to pay down the debt and the deficit incurred by the same band of brigands.

And CBOafs will fly. (Apologies, by the way, to bandits for comparing them to government officials. As one libertarian wag once pointed out, highway robbers are fairer and more benevolent than government, because they rob you once, usually, and then leave you be.)

As the Congressional Budget Office warned today, “Last month’s bipartisan tax cut legislation will drive the government’s deficit to a record $1.5 trillion this year.” (http://www.foxnews.com/politics/2011/01/26/federal-deficit-hit-trillion-budget-office-projects/)

In logic, a conclusion can be correct and untrue at once. The debt will go up—not because of tax cuts, but despite of them.

No matter how much these highway robbers take from the creators of wealth, the debts they incur will only go up. The lesson? Money is always safest with those who make it.

UPDATE III: Sinophobia Trumps Common Sense (Hu Vs. Harry)

Barack Obama, China, Debt, Democracy, Foreign Policy, Inflation

Read these interviews on PBS NewsHour with some remarkably astute students of international politics in Beijing, and you’ll conclude that these young Chinese are as patriotic as Americans, and pretty brilliant in their own right: http://www.pbs.org/newshour/bb/asia/jan-june11/chinayouth_01-20.html. Says the one student: “Democracy is an absolute value in U.S., but it might be not that absolute in other countries.”

Then read my new WND.COM column, “Sinophobia Trumps Common Sense” (http://www.wnd.com/index.php?fa=PAGE.view&pageId=253617) in which I conclude, among other things, that President Obama need not be bashed for holding a state dinner in honor of the Chinese President Hu Jintao. “Civility is not a weakness,” said John F. Kennedy in his Inaugural Address fifty years ago. Obama was civil, not weak.

Here’s an excerpt from “Sinophobia Trumps Common Sense” :

“… It so happens that China’s current financial difficulties are a consequence of a self-defeating devotion to the US dollar. America’s monetary policy, aimed at devaluing the dollar, is hurting China, whose currency is pegged to ours. ‘In order to maintain the peg,” explains financier Peter Schiff, ‘China must continually buy dollars on the open market. But the weaker the dollar gets, the more dollars China must buy.'”

So as to keep purchasing greenbacks, China is inflating its own money supply. However, inflation in China and the attendant price hikes — brought about because of the debased dollar — could threaten the stability of a country that has ‘moved more people out of poverty in the shortest amount of time in the history of the planet.'”

Diplomat that he is, China’s head of state refrained from raising this indelicate matter. For that alone, President Hu Jintao deserves dinner.” …

The complete column is “Sinophobia Trumps Common Sense,” now on WND.COM.

UPDATE I (Jan. 22): As an outsider in American society—at least this is the way I’m often treated—I’m more sensitive to the way my fellow Americans treat certain Others, other than browns and blacks. If you are a brown or a black, you have it made. Americans generally feel good about themselves when they patronize needy minorities, into which category the Chinese do not neatly fit.

Our one reader, below, emblematic of most, describes Hu Jintao as the same as our politicians. I see this blanket statement as American chauvinism: an inability to look at other peoples and cultures except through the American prism. It pisses me off as much as that big fat mama pissed me off at the gym, when she spoke slowly at me, as she informed me I had done too many sets on a weight-pushing apparatus. Why did she speak to me as one would to a retarded child? Because I spoke back in a different accent to hers. In other words, if one differs from an American, one might as well be from Deep Space.

Has anyone bothered to read a bit about Hu Jintao? You could indeed argue that he is every bit as bad as our lot; but you’d be wrong to ignore how different are his life experience, work background, and education.

Imagine an American politician that isn’t a slimy lawyer, but a hydraulic engineering from “humble origins,” who excelled at school in singing and dancing? Imagine an American politician whose father “was denounced during the Cultural Revolution?

Why not analyze what these differences portend?

Read about the man before you resort to pat pabulum. Among the Chinese I’ve talked to in the US (American citizens who’ve lived through turmoil back in China), Hu Jintao is viewed as a reformer, slowly shepherding a billion people toward peaceful progress as best possible. Chinese, who tend to be statist, seem to think of Hu Jintao as capitalistic.

As observed in “US In The Red And Getting Redder”: “The picture of China to emerge from behind those pretty Chinese screens is complex. The embodiment of feng shui it is not. The trend, however, is unmistakable: China is becoming freer, America less free. The devil is in this detail”:

China has undergone considerable economic restructuring and market reforms, the consequence of which is a 300 million strong Chinese middle class. Poverty levels have receded from “53 percent in 1981 to 8 percent in 2001. Only about a third of the economy is now directly state-controlled. As of 2005, 70 percent of China’s GDP was in the private sector.” The Chinese financial system is duly being liberalized—banking is diversifying and stock markets are developing. Protections for private property rights are being strengthened as well.

UPDATE II: LOOK WHO’S TALKING. Via LewRockwell.com:

“From TSA feel-ups to ubiquitous surveillance cameras, from email and phone eavesdropping to assassination squads, from torture to secret prisons, from a massive expansion in the police state to bigger government in general, from illegal searches and seizures to illegal wars, President Hu questioned the US human rights record.

Oh, wait a minute. It wasn’t that at all. It was this. (Thanks to Ravindran Kuppusamy.)

UPDATE from Daniel Mahaffey:

Hu didn’t mention the US government’s human rights abuses because either a) he is a gentleman who did not wish to insult his host, b) given his own government’s predilections, he doesn’t see the actions of the US government as abusive, or c) as he said in his prepared remarks, governments should not meddle in the affairs of other governments. I don’t tend to quote Christian scripture often, but among the things Jesus of Nazareth said were these two relevant instructions: 1) Let he who is without sin cast the first stone. John 8:7, and 2) Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother’s eye. Matt 7:5. Perhaps Mr. Obama is unfamiliar with these concepts.

UPDATE III (Jan. 23): Today, The Telegraph’s Ambrose Evans-Pritchard raises the issue I raised here yesterday (see “UPDATE I”):

“Senate Majority Leader Harry Reid called Mr Hu a ‘dictator’. Is this a remotely apposite term for a self-effacing man of Confucian leanings, whose father was a victim of the Cultural Revolution, who fights a daily struggle against his own hotheads at home, and who will hand over power in an orderly transition next year?”

UPDATE II: House Republicans Talking Tactics & Tinkering Around the Edges

Debt, Economy, Elections, Politics, Republicans

No wonder neoconservative kingpin Bill Kristol (http://barelyablog.com/?p=33225) anointed House Budget Chairman Rep. Paul Ryan as heir apparent to the neoconservative project. Ryan is a strategist; he has more plans than principles. You and I do not want to see the debt ceiling raised. But for some reason, Ryan thinks that “tactic isn’t viable.”

Tactic? Come Again? Ryan believes that it has to be lifted (something to do with the neoconservative national-pride dybbuk).

He is, however, prepared to “tack on requirements for deep spending cuts as a condition of passage.” (http://firstread.msnbc.msn.com/_news/2011/01/06/5779097-ryan-hints-at-debt-ceiling-strategy) Why, thank you, Sir.

No sooner do our overlords arrive in DC, than their campaign promises evaporate. (http://www.ilanamercer.com/phprunner/public_article_list_view.php?editid1=579.)

(I’m placing hyperlinks in brackets, for now, because hyperlinks attached distort the blurb that propagates to my Facebook page. Any suggestions?)

UPDATE I (Jan. 14): When it comes to serious spending cuts, Republicans intend to tinker around the edges. John Stossel exposes just how little they will do to beat back the federal behemoth:

New Speaker John Boehner, leader of the Republicans who now control the House, says he wants to cut spending. When he was sworn in last week, he declared: “Our spending has caught up with us. … No longer can we kick the can down the road.”
But when NBC anchorman Brian Williams asked him to name a program “we could do without,” he said, “I don’t think I have one off the top of my head.”
Give me a break! You mean to tell me the Republican leader in the House doesn’t already know what he wants to cut? I don’t know which is worse — that he doesn’t have a list or that he won’t talk about it in public.
The Republicans say they’ll start by cutting $100 billion, but let’s put that in perspective. The budget is close to $4 trillion. So $100 billion is just 2.5 percent. That’s shooting too low. Firms in the private sector make cuts like that all the time. It’s considered good business — pruning away deadwood.
GOP leaders say the source of their short-run cuts will be discretionary non-security spending. They foolishly exclude entitlement spending, which Congress puts on autopilot, and all spending for national and homeland security (whether it’s necessary or not). That leaves only $520 billion.
So even if the Republicans managed to cut all discretionary non-security spending (which is not what they plan), the deficit would still be $747 billion. (The deficit is now projected to be $1.267 trillion.)
This is a revolution? Republicans will have to learn that there is no budget line labeled “waste, fraud, abuse.” If they are serious about cutting government, they will ax entire programs, departments and missions.

UPDATE II (Jan 16.): Rep. Eric Cantor of Virginia, the House Majority Leader, was out and about … lobbying for an increase in the debt ceiling. Why, of course. Give a little, get even less. “Live and let live,” said the one leech to the other.

‘Apocalyptic Pain’ Coming Down The Pike

Debt, Economy, Federal Reserve Bank, Inflation

Another obstetrician who says “no” to spending is Sen. Tom Coburn, R-Okla. The good doctor has warned of “apocalyptic pain’ from an out-of-control debt that could cause 18 percent unemployment and a massive contraction in the economy that would destroy the middle class.” This is what this “leading Republican deficit hawk said in an interview that aired Sunday” on Fox News.

Sen. Coburn, who recently issued a report on government waste, warned that the U.S. only has about three or four years to get its fiscal house in order or it could find itself facing austerity measures seen in Greece, Ireland, Spain, Portugal and earlier in Japan.

For one, we already have that level of unemployment:

The real unemployment rate is 16.3 percent. The discrepancy between the official and the awful numbers has arisen because the former count, conveniently, “only those who have looked for work in the last four weeks.” “Hundreds of thousands of people, some discouraged by their failed job searches, left the labor force. The labor force includes only those who are either employed or are looking for work.”

Coburn is a good man. But hitherto there have been too few good men like him. The band (of fools) has played on for too long. “WE ARE DOOMED.”