Aug 04 2009
The Cascading Failures Of DC’s Liberals
Our young and inexperienced President must have never once seriously contemplated what would happen if he and his liberal colleagues in Congress were wrong about their fantasies that government spending could turn around an ailing economy. They must have been so duped by the liberal myth that government was the all-knowing, all-powerful Wizard of Oz into that they did not even think once about what would happen if the myth proved to be false.
Sadly for the rest of the country, neither did many others think it through. We blindly fell for the flim-flam theory that massive government spending programs would be as quick and powerful as the unbiased and untargeted (and well proven) option of tax breaks. Tax breaks LEAVE money in the economy, in the hands of individuals to purchase things and make payments, and in the hands of businesses to purchase things and hire (or hold onto) employees.
Tax cuts act immediately. Government spending takes a year to plan – minimum. Supposedly the liberals in Congress who have come into power after decades of bloating the federal bureaucracy with endless rules, regulations and processes knows this. But they never seriously considered what would happen to the nation if their hype and lies actually crashed back to Earth.
Obama and the liberals in Congress have admitted openly that the jobs spending under the massive and clearly wasteful stimulus bill will not really kick in for months to come – still. I mentioned back when the stimulus bill passed the political backlash that would arise after a spring of a worsening job market, after a 4th of July of a worsening job market, after a labor day of a worsening job market, of a Thanksgiving with a worsening job market. This is what I wrote about our future on February 22nd:
The man has never had to manage a budget – that is now absolutely clear. You cannot deal with ‘deficits’ without revenues to offset the costs. The problem is the recession is tanking the tax revenues as people lose jobs and businesses tighten up or fail. There have been reports of massive drops in state and federal revenues, which have not even yet begun to really be assessed as to their impact. Raising taxes is not going to replace those revenue losses, losses now made all the worst by the spendulus bill.
When the liberal DC democrats passed that massive spendulus bill, they made the problem even worse. They begin with tax handouts to non tax-payers, which will further deplete the revenue stream, what little is left of it. Then they added massive spending programs that will not produce a single new job for at least a year, digging the hole between revenues and outlays even wider.
This was the first domino in an economic screw up of epic proportions. If the federal government had cut spending and taxes, the economy would have responded and we would be looking a lot better. But what do you do when you flub your chance to turn things around early? What do you do when you spend like a drunken sailor and wake up with the hangover plus the original problem you were pretending to solve?
What we face with the failed stimulus bill is a stalled and sinking economy. There may be some signs for the fat cats on Wall Street and in DC, but average America is still sinking – albeit slower since the bottom is around here somewhere. But the mistake the DC liberals and President Obama made has not yet finished doing its damage. We now are in a cascade of failures emanating out from the one horribly bad decision like dominos falling.
The news is finally coming out of DC on how bad the ripple effect is going to be. We are in for massive deficits for a long time, because deficits happen when government spends more than they have or tax receipts fall. The liberals in DC have created the perfect fiscal nightmare in that they have gone on a never before seen spending binge – as shown in this chart of expected deficit for the government fiscal year ending in September compared to the previous years:
And their delayed ‘stimulus’ spending – which won’t show up until late this year, early next – means we will see historically low tax receipts for some time to come as well:
The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.
The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.
Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.
These numbers are just mind boggling. Is it not amazing the depth and breadth of this teachable moment? Is it not just jaw dropping awesome how badly the DC liberals screwed us up? Not just endless unemployment and underemployment problems, but record breaking deficits and record losses of revenues.
All because they were believed in a naive liberal fairy tale that said tax cuts were bad and targeted government spending programs to promote their idea of proper behavior would suffice.
I like what Ed Morrissey noted about the revenue picture under Bush and Obama – because it really destroys the liberal myth about left and right and business and government:
The big takeaway on this graph is the difference between corporate and individual tax revenues at various points on the economic cycle. Despite the oft-repeated canard that the Bush administration favored big business, the biggest increases in corporate tax revenue in the last generation came during the Reagan and Bush years. During most of the Clinton administration, individual tax revenues rose faster than corporate tax revenues. That is remarkably true during the peaks of economic growth in 1984-5 and 2004-7.
And of course the current crop of DC liberals have crashed the whole system in upon itself. The liberals talk a lot of good platitudes, but the truth is they could no more manage our nation’s economy than win a war with a third world nation without an Air Force and Navy. They are truly just as bad on the economy as they are on national defense. Maybe even worse.
And now they want to take over our health care. I will give them this, they are an arrogant bunch who can dismiss and deny their failures like no one else.
And the stimulus plan was a 40 year wish list. The Democrats must be thinking that this 40 year wish list would get them re-elected.
They don’t understand what this government was meant to be. How many days per year did the founders spend governing us? This wasn’t meant to be their full-time jobs. They should have full-time jobs at home with time off for WDC activities.
My husband firmly believes that B-HO will somehow do away with elections, beginning with the mid-terms in 2010.
I told him “impossible,” to which he said, “Who’s going to stop him,?”
I’m beginning to see his point.
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kittymyers:
I know AJ does not like talk of rebellion on his blog, but if there is a serious risk that Obama will somehow either (1) cancel elections outright or (2) render them impotent (e.g., Dems end up with the highest “strongly disapprove” numbers in U.S. history and yet somehow manage to win in a landslide), then we might just as well start considering the rebellion option, if no other remedy remains to get this monster off our collective backs.
Perhaps the President meaned it when he says the stimulus bill
is “working as intended” ?
News websites from Israel say that the Obama has changed his mind
and let it be known that dialog is out and that military planning for
a soon attack on Iran is now happen.
Now why would the Presidente want to start a new big war in
the Middle East?
I believe we, who used to work on the Left, call it “mis-direction”.
There are other names too.
There are lots of examples, like the fake Kenya certificate. It is all to
get you to look not at what is right in front of you, but at somewhere completely else.
I would highly recommend a look at a set of charts the Heritage Foundation has posted from the Office of Management and the Budget.
They would show the unsustainable problem we are in and also just how bad the current administration has made things worse and in fact since the Dem takeover of Congress.
Federal Spending Is Growing Faster Than Federal Revenue
The drop in Federal Revenue is a surprise? How can that be so? If I look at my personal situation, as an ordinary citizen, and can see that I have lost 22% of my wealth, why can’t the Federal government do the same? This was obvious from before the inauguration. The problem was that Obama refused to change course inspite of the information he had at hand. A prudent response to the melt down of the economy would have been to drastically cut back the Federal Budget, cut out all ear marks, targeted spending, reduce taxes. But instead he expanded everything and added a trillion dollar nationalized health care reform on top of it all.
I find it so mind-boggling that there are still many Obama supporters that fawn over him. They refuse to see the truth about Obama. And they do the Alinksy tactics against the protesters at town hall meetings, protests, tea parties, etc.
Had not heard about Obama planning an attack on Iran. That would certainly turn many left-wings off.
In the meantime, Obama is considering moving all GITMO’s inland. Only because they have court rooms. Why not build one down there?
*Perhaps the President meaned it when he says the stimulus bill is “working as intended†?*
Of course he means it. It’s the Cloward-Piven Strategy, which seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.
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I wish not to offend anyone but some of the comments made today remind me of those who had BDS when Pres. Bush was in office. We may not agree with the idiots in power but let us not sink to their level .
I think AJ has done a admirable job in explaining why the left has shot themselfs in the foot and why it won’t be long before they will be swept into the ashes of history.
*it won’t be long before they will be swept into the ashes of history.*
That reminds me of the ’92 election. Seeing the writing on the wall, some repubs thought, ‘Why not elect Clinton? After all, he’ll do such a horrible job that he’ll never be re-elected.’
Grover Norquist responded with an excellent piece in The American Spectator mag (Nov ’92) called “The Coming Clinton Dynasty”:
“Conservatives who think the Clinton Administration will be a short interregnum are making a disastrous mistake. For since Watergate, Democrats have learned to deal behind the scenes to ensure their re-election … with or without popular support.”
‘Nuff said.
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So it looks like “Turbo” Tim really tore into the various regulators last Friday.
So the administration is getting pushback from the regulatory agencies and Geithner apparently had a fit.
WSJ article link
I remember an interview with Mary Matalin around late ’93 or early ’94 where the host asked her what we needed to do in order to beat Clinton in ’96. Here response was two words – “Show up” How wrong she was. I hope we are not making the same mistake. What happened to Clinton in 94 may happen to 0bama in 2010 – a republican congress gets elected that brings some sanity and stability to our economy and the president gets the credit and the reelection 2 yeas later.
I know one of the factors that contributed to the economy through the 90s was that Clinton moved to the center, something I do not think 0bama will have the humility to do.
A glance at the tax revenues graph tells you something very important. Revenue from individuals does not increase until after corporate revenue begins to increase. As corporate revenues are still headed down, there would be at least two more months of declining individual revenue still “in the pipeline” if that trend holds.
But Geithner is saying this downtrend is expected continue until the second half of NEXT year. Unemployment not expected to peak until then.
So we might well be looking at well over 10% unemployment by the time it peaks.
Actually kittymyers Pres. Clinton won in 92 not because Reps. voted for him, 20% voted for Perot.
Pres. Clinton never received 50% of the vote in either term infact he probably would not have won a second term if it were not for the 1994 turn around in congress. Clinton was smart enough to tack back to the middle even though he had no choice .
Pres. Obama and his minion are to arrogant to see the writing on the wall, 52% of the people may have voted him in, but many now have buyers remorse as he continues to push policies that will push this country to the center-right where poll after poll shows that is what most Americans believe in.
As Pres.L.B. Johnson learned you may be Pres. but that does not mean people listen or care what he saying.
Alert1201 Sorry did not see your comment before I made my response to kittymyers.
ama055131,
No problem. Good to see someone agreeing.
The DNC must be flipping out at today’s polling on the Virginia and New Jersey governor’s races. These are the dominoes that are falling as a result of the missteps made at the Federal level, not only by Obama but in the Congress the Dems own lock, stock and barrel.
Republicans have double digit leads in both states-states carried by Ozero in the general election.
Since we’re speaking of dominoes, and since Democrats are chronic poll watchers, these statehouse races have everything to do with the mindset with which Dem congress-critters face their constituents this summer. They will get weak in the knees because these polls are telling them their jobs are now in jeopardy.
ama055131: I recall the election very well. My point was not how repubs voted (or for whom) but their attitude, that Clinton would shoot himself in the foot and be history by ’96.
Do not make that same mistake.
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Rasmussen is out with this week’s generic congressional ballot numbers. The Democrats are getting hammered. Most interesting are the demographics:
If the elections were held today, the Congress would be out on its ear. Considering that the population is going to have another year to stew in the economic misery being exacerbated by Obama Administration policies, it looks like we might get Republican majorities back in both houses of Congress.
When the Democrats lose the women, they are toast.
crosspatch Love the numbers but I think taking back the senate maybe a stretch we have 3 open seats to defend and then we must pick up 11 more. The house on the otherhand is plenty do able considering all those show ( blue ) dogs that have now shown exactly what they really are, nothing more than mutts.