Who’s Gonna Grab the Third Rail?

Tuesday, August 10, 2010 \AM\.\Tue\.

That’s a line from a brief but astounding post by Kevin Williamson of NRO, which I’m reproducing in full here:

A little perspective from the debt commission:

“The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. ‘The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans — the whole rest of the discretionary budget is being financed by China and other countries,’ [Alan] Simpson said.”

Three programs — Social Security, Medicare, and Medicaid — consume 100 percent of federal revenue, and everything else is paid for with borrowed money.  This is why we cannot balance the budget by cutting military spending, foreign aid, food stamps, etc. There is not going to be a serious project to address our deficit/debt problem without deep, painful entitlement reform, and the longer we wait to admit that fact and get going on it, the worse it is going to be.

So, who’s gonna grab that third rail? George W. Bush tried and got hammered — an example that few if any in Washington are eager to follow.

Indeed. I think if this is going to happen, it’s going to have to come from the people (tea parties, perhaps?), because it seems suicidal for any politician to take it on without considerable popular support.

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Pope Benedict XVI on Economic Situation- Not for Faint of Heart Libs or Conservatives

Thursday, July 8, 2010 \PM\.\Thu\.

Well- here is a challenge for those Catholics who like to say they are orthodox AND political conservatives- even as the Pope calls us “to liberate ourselves from ideologies, which often oversimplify reality in artificial ways..”.

If you don’t like social security systems, and you don’t like trade union organizations, and you like deregulation of the labour market for the benefit of corporate outsourcing, and you believe that Man should conform to the “free market”- not the economy to Man- well you may need to go to the Vatican and line up for your spanking- or better yet- just repent of your ideological ways, and read the Church social doctrine with an open mind and an open heart- here’s the Pope’s view of things which stands consistently with what the Church has been teaching and advising ever since the first papal social encyclical back in the late 1800’s. From “Caritas in Veritate” the latest papal social encyclical from the Church paragraph #25:

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Value Added Tax Will Not Solve Budgetary Woes

Tuesday, April 20, 2010 \AM\.\Tue\.

There has been a fair amount of useless discussion among pundits and Obama administration officials about a Value Added Tax, a National Sales Tax, the mainstay of the crumbling welfare states in Europe.  I say this discussion is useless, because Congress would never pass it, as the 85-13 vote in the Senate on an anti-Value Added Tax non-binding resolution indicates.

Today in the Washington Post Robert Samuelson explains why a VAT wouldn’t solve our budgetary woes:

The basic budget problem is simple. For decades, the expansion of Social Security, Medicare and Medicaid — programs mostly for the elderly — was financed mainly by shrinking defense spending. In 1970, defense accounted for 42 percent of the federal budget; Social Security, Medicare and Medicaid were 20 percent. By 2008, the shares were reversed: defense, 21 percent; the big retirement programs, 43 percent. But defense stopped falling after Sept. 11, 2001, while aging baby boomers and uncontrolled health costs keep retirement spending rising.

Left alone, government would grow larger. From 1970 to 2009, federal spending averaged 20.7 percent of the economy (gross domestic product). By 2020, it could reach 25.2 percent of GDP and would still be expanding, reckons the Congressional Budget Office’s estimate of President Obama’s budgets. In 2020, the deficit (assuming a healthy economy with 5 percent unemployment) would be 5.6 percent of GDP. To cover that, taxes would have to rise almost 30 percent.

A VAT could not painlessly fill this void. Applied to all consumption spending — about 70 percent of GDP — the required VAT rate would equal about 8 percent. But the actual increase might be closer to 16 percent because there would be huge pressures to exempt groceries, rent and housing, health care, education and charitable groups. Together, they account for nearly half of $10 trillion of consumer spending. There would also be other upward (and more technical) pressures on the VAT rate.

Does anyone believe that Americans wouldn’t notice 16 percent price increases for cars, televisions, airfares, gasoline — and much more — even if phased in? As for a VAT’s claimed benefits (simplicity, promotion of investment), these depend mainly on a VAT replacing the present complex income tax that discriminates against investment. That’s unlikely because it would require implausibly steep VAT rates. Chances are we’d pay both the income tax and the VAT, making the overall tax system more complicated.

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Ronald Reagan Warns Against ObamaCare

Sunday, February 28, 2010 \PM\.\Sun\.

This is a clip of Ronald Reagan warning us of socialized medicine, the very same bill that President Obama and the Democratic Party are trying to ram through congress.

Reagan warns us of how people such as six-time presidential Socialist Party candidate Norman Thomas, and many others, explained how to move their agenda of achieving a socialist state by a Foot-in-the-Door policy of socialized medicine.  Which is eerily similar to what President Obama and the Democrats are doing, against the will of the people with their European socialized health care bill.