May '11 Issue Debrief

CRNC Research Compendium May 2011
Editor: Brandon Greife, Political Director
College Republican National Committee
600 Pennsylvania Ave SE, Ste. 215 Washington, DC 20003 www.collegerepublicans.org
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Table of Contents
Lemonade Stand Nostalgia How Government Regulation is Squashing Entrepreneurs! American Exceptionalism Is At a Crossroads! Making Social Security Secure Lessons from Chile! Are you coming to convention?! We Dont Need More Debt, We Need More Jobs!! Obama Administration Takes Aim at Boeing And Free Markets! April Jobs Report is Good, But Dont Celebrate Yet! Disconnect Between Prots and Job Growth Shows Failure of Government Policy! Obamas High Speed Rail Visions are Foolish! If We Want to Redistribute Income Why Not Grades?! Fumbling and Stumbling Foreign Policy of Obama! Train yourself to elect a better future! Debt Dithering Must End To Solve the Problem We Must Act NOW! Fannie and Freddie Continue to Bleed Taxpayers Dry! Connecting the Dots of Democrats Plan Reveals Frightening Picture! Why Ending _____ As We Know It Is Actually a Great Thing! Democrats Wrongheaded War Against Oil Companies!
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States to Federal Government: Learn from us!! New Study: The Stimulus Destroyed 1 Million Jobs! There is Nothing to Fear but Fear Itself! Summer MoviesWashington Style! Gingrich Gaffe Nevertheless Presents Opportunity for Republicans ! Democrats Punt on Budget (Again)! To Fix Medicare, You Have to Be Willing to Break a Few Eggs! Dispelling the One Graph to Rule them All Myth! Democrats Words Coming Back to Bite Them! Clinton on Entitlements: Weve Got to Deal With These Things! Two Can Play at the Medicare Scare Tactics Game! Under the Microscope: Massive Waste Found in Federal Science Funding! The Taxman Cometh And He Brings High Rates! Negative Economic Growth Leaves America With a Hangover! Setting the Stage for a Summer of Heated Negotiations: The First Debt Limit Vote!
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Lemonade Stand Nostalgia How Government Regulation is Squashing Entrepreneurs

The American people deserve a regulatory system that works for them, not against them: a regulatory system that protects and improves their health, safety, environment, and well-being and improves the performance of the economy without imposing unacceptable or unreasonable costs on society; regulatory policies that recognize that the private sector and private markets are the best engine for economic growth; regulatory approaches that respect the role of State, local, and tribal governments; and regulations that are effective, consistent, sensible, and understandable. We do not have such a regulatory system today. Executive Order 12866 issued by President Bill Clinton in 1993.
Are things any better today? No. According to a recent report by the Heritage Foundation, 43 major new regulations were put in place in 2010, with compliance costs topping $26.5 billion far more than any other year. With Obamacares dozens of new regulations being slowly implemented, its a pretty safe bet 2011 will also finish as a banner year for the regulatory state.
President Obama recognized the growing backlash to big government, so he, like his predecessor Bill Clinton issues an Executive Order to deal with the problem. It orders a government wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive, Obama said in an accompanying op-ed. Its a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.
Read in its entirety, Obamas op-ed reads as a rip off of Clintons statement on the regulatory state we need government regulations that strike the right balance. One that preserves the freedom of commerce while also protect[ing] the public against threats to our health and safety. But it is more clear than ever that we do not have such a regulatory system today.
I was drawn to this topic after reading an op-ed in todays Los Angeles Times. It is written by the father of an 8-year-old who has embraced her inner entrepreneur and wants to open a lemonade stand. Surely this brings back memories for a bunch of us. I remember going to the store, buying some vegetable seeds, starting my own garden, and then going door to door to sell fresh tomatoes and other produce. Little did I know that I was a criminal.
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Selling lemonade seems about as innocent a childhood pursuit as one could imagine. And then the government gets involved. The father describes his three-day phone trek through the maze of government agencies that regulate businesses and food sales, after which he watched as his childs All-American plan crumble like fresh-baked cookies.
First, he called the Parks Department, which maintains the pedestrian trail where his daughter wanted to set up her lemonade stand. They said the couldnt allow it because it would be dangerous. He then called the Health Department which told him that no child can legally operate a lemonade stand in their city. The father recalls,
A practical woman as well as a killjoy, she said that near her home, she wouldnt prevent a kid from operating a stand: The neighbors would hate me. But if her department got a complaint about a kid in another neighborhood, the enforcement team would be dis patched. The kid would be instructed to shut down his stand. If he refused to obey, the police would be called to cite the child for violating the health code, which applies to children no less than to adults.
Even if his child could have navigated those mazes of bureaucracy, zoning laws would have prohibited the lemonade stand in residential neighborhoods. Of course, they may have been able to operate it elsewhere, but would have had to pay business and vending licenses.
What no doubt began as a lesson in entrepreneurship and money management ended with a lesson in governmental inefficiency.
The escalating bureaucracy has massive costs. The Small Business Administration estimates the annual cost of federal regulations to be $1.76 trillion. Thats nearly double the amount collected in federal individual income taxes! Hundreds of billions of dollars are being added on to that each year. While the economic drag can be quantified, their true cost, in terms of their impact on things like entrepreneurship is much larger.
Were not just talking 8 year olds and limited stands. Were talking the next Steve Jobs or the next Bill Gates who is sitting in a garage building the next great product. They should be thinking of how to change the world, not whether or not they are in compliance with some unheard of
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government regulation. President Obama has talked a big game on striking the right balance in our regulatory state. For all the eight-year-old lemonade stand entrepreneurs out there, I hope he follows through.
American Exceptionalism Is At a Crossroads

Two roads diverged in a wood, and I I took the one less traveled by, And that has made all the difference Robert Frost
No, youre not back in high school English class. We wont be studying its use of metaphor, breaking down its meter, or even looking studying its deeper meaning. America is faced with a profound choice, a choice of two destinies, and there has been perhaps no more eloquent description of that than in Frosts The Road Not Taken.
America, like the traveler, did not take the one with the better claim. We chose to forge our own path, distinct from the most successful nations on earth at the time. Alexis de Tocqueville marveled at American exceptionalism during his travels throughout our nation in the early 1800s, during which he wrote the seminal Democracy in America. Tocqueville wrote, The position of the Americans is therefore quite exceptional, and it may be believed that no democratic people will ever be placed in a similar one.
What made us exceptional, he found, was our free market ethic, where the individual pursuit of wealth created an egalitarian society where anyone could succeed. Our dignity was tied to our individual success in making our way in the world, not land, titles or even class. There were no such things as commoners or elites except insofar as someone had earned them. Little was given, much was earned, and everyone seemed to be the happier for it.
But are we still exceptional? Recently Paul Ryan asked the same question another way, Do we still want our traditional American free enterprise system, or do we prefer a European-style social democracy?
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Our nation is older. More mature in more ways than one. And perhaps those Europeans had it right after all. A cradle to the grave welfare state that equalizes economic rewards is the best choice after all.
A recent study compiled by USA Today seems to confirm that American exceptionalism is fading into just another big, wealthy, western nation. They find that,
A record 18.3% of the nations total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other pro grams in 2010. . . Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,868 in 1990.
Now dont take any of that as a lecture. This is in no way any individuals fault. Politicians were all too happy to expand existing entitlements, create new programs, and increase benefits in the name of appeasing their constituents, but in reality to gain more votes. Who can blame Americans for now holding Washington to its word?
The question is, is this the society that we want? America is the worlds most powerful nation, its freest democracy, and biggest economy in no small party because past generations would have answered that question in the negative. As investor and economics blogger Jeff Harding wrote recently,
Today it is acceptable to rely on government to solve our problems instead of taking responsibility for solving them ourselves. We borrow more, spend more, save less, and rely on government to bail us out in old age. We want government to take care of us when it comes to medical care. We have become a culture of entitlement. And our rhetoric is more about victimhood and entitlement than initiative and self-reliance.
Maybe that is the society we want. But I hope not. It means the death of an exceptional America. Just as it will equalize economic results in society, it will equalize us among other nations. Unwilling to take the chances provided in an opportunity economy, we will slide into a blissful malaise, where we are all happy to be where we are, if only because we never knew what we could become.
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Two roads diverged in a wood, and we are now at the moment of choosing. One path is well worn and well marked, the other is overgrown and twisting. I hope we take the one less traveled by, for as our own history shows, that makes all the difference.
Making Social Security Secure Lessons from Chile

Earlier this year Senate Majority Leader Harry Reid said Social Security is the most successful social program in the history of the world. Reid has always had a knack for hyperbole. Rather than a statement of fact, it came off as a childish jab at Republicans. It was as if a man-child Reid got into a playground argument, Our program is the greatest in the history of the United States. Oh yea, well ours is the greatest in the history of the world! You almost know that he was just waiting for someone to retort so he could whip out the Well ours is the greatest in the history of the universe, line.
Of course, Social Security is neither the greatest social program in the history of either the universe, world, or country. In fact, it quite honestly sucks. It has a broken benefit formula that inevitably leads to deficits, doesnt require enough contributions to stay fiscally afloat, and earns almost nothing as an investment. This greatest program is in such dire straits that Americans are faced with the choice of having to increase Social Security payroll taxes 50% to maintain existing benefits or cut projected benefits by more than one-third.
Perhaps I wouldnt be so down on Social Security if I werent aware what a success it could be. But I am aware. To see what were missing out on, I glimpse longingly at Chile, who, on May 1 celebrated the 30th anniversary of their becoming the first nation to privatize their social security system. I wanted to buy it a card, to ask if it could please make its way up here so that my generation could enjoy some semblance of a comfortable retirement. But I couldnt, I was ultimately too ashamed by our own program, which we have the audacity to label as security.
Chiles economic history is unique. In the 1940s a bunch of Chileans sat around and realized their economy sucked. They also realized that none of them were smart enough to fix it (if you know politicians you understand what a miracle that self-awareness truly is). So they begun the Chile Project, whose mission was very simple send a bunch of promising young students to study at the best economics school in the best country in the world the University of Chicago.
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Then and now the Chicago school of economics is known for its devotion to free markets, limited government intervention, and a rejection of Keynesianism in favor of a monetarist focus.
One of these bright young scholars was Jose Pinera, who as the Secretary of Labor initiated a wide range of reforms, foremost among them a fundamental rewrite of their Social Security system. Pinera, who now is a fellow at the Cato Institute, wrote of his policies,
Chile allowed every worker to choose whether to stay in the state-run, pay-as-you-go social security system or to put the whole payroll tax into an individual retirement account. For the first time in history we have allowed the common worker to benefit from one of the most powerful forces on earth: compound interest.
They system was brilliant in its simplicity. Chilean workers were allowed to opt out of the government system in favor of paying between 10 to 20 percent toward a choice of carefully monitored and regulated pensions funds. All told, around 93 percent of Chileans chose, as Pinera puts it, to trust the private sector and prefer market risk to political risk.
The privatized system has shown its rewards. While our Social Security system has begun to run permanent deficits and without reform will be forced to reduce its already modest benefit levels within the next 20 years, Chiles has secured a comfortable retirement for its citizens. Since it was first institute thirty years ago, the private accounts have averaged annual returns of 9.23 percent above inflation. The U.S. version of Social Security hopes to pay around 1 percent to 2 percent, but even those modest gains appear to be a pipe dream against the backdrop of our deficit.
To understand just how big of a change that represents, New York Times columnist John Tierney sat down and did the math in 2005. He found Chiles system would offer him three options:
!" #" $"
Retire in 10 years, at age 62, with an annual pension of $55,000. That would be more than triple the $18,000 I can expect from Social Security at that age. Retire at age 65 with an annual pension of $70,000. That would be almost triple the $25,000 pension promised by Social Security starting a year later, at age 66. Retire at age 65 with an annual pension of $53,000 and a one-time cash payment of $223,000.
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Pick your jaw up off the floor. Now go call your Congressman. Or at least call Harry Reid and tell him that youve found the most successful social program in the history of the world, it just so happens its in Chile.
Are you coming to convention?

Hundreds of supporters have registered to attend the 59th Biennial College Republican National Committee Convention being held at the Renaissance Marriott Hotel-Dupont Cirlce in Washington D.C. from July 29-30?
Are you coming too? If you arent sure, let me tell you a little bit about why you should.
The convention is a great place to talk politics, hang out with and get to know College Republicans and young conservatives from across the country. Ask anyone who has attended a College Republican convention in the past and they will tell you that what they remember and liked the most is the good times they had and the friends they made.
But if speakers and an exhibit hall is more your thing, we have that too. The convention will feature some of the biggest names and organizations in Republican politics. Just a few of this years invited speakers and organizations include President George W. Bush, Gov. Chris Christie, Gov. Sarah Palin, Sen. Marco Rubio, Gov. Rick Perry, Gov. Tim Pawlenty, Gov. Mitt Romney, Tucker Carlson, Andrew Breitbart, Conservative Political Action Conference (CPAC), Young Americas Foundation (YAF) and Let Freedom Ring.
Thats not all, though. The convention is the best opportunity for College Republicans and young conservatives to shape the direction of tthe College Republican National Committee, your voice in our nations capital. So come and participate in the process. Together we can continue moving the College Republicans forward!
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You thought that was all, didnt you? But there is one last thing. The convention is a great place for people our age to start a career in politics. Karl Rove, Lee Atwater, Senator Roger Wicker, Congressman Patrick McHenrythey all got their start in College Republicans. Why not you?
The bottom line is this: there is a reason for everybody to come to the College Republican National Committee convention. Come to have fun. Come to listen to speakers. Come to make a difference. Come to start your career. Whatever your reason, be sure to register before May 15 before the price goes up.
Get more details and register at www.crnc.org/convention.
See you in July!
We Dont Need More Debt, We Need More Jobs!

Its Friday. Today, millions of Americans woke up, got dressed and ate breakfast, but instead of going to work they are spending another day looking for it. As Americans, we used to celebrate Friday as the end of the workweek and many of us still do but to millions of unemployed, Friday has sadly become just another day they dont have a job. But there is always a chance for a better future, and this point in history is no exception.
Yesterday, Republicans released a jobs plan that would make Friday mean something again to millions of unemployed Americans. The plan would create jobs and put Americans back to work by:
Cutting government spending to substantially reduce the deficit; Reforming the tax code to lower taxes for businesses and individuals; Freeing the economy from burdensome Washington regulations; Creating a competitive workforce through reforming worker retraining programs; Increasing exports to create more jobs; and Adopting common sense solutions to healthcare, such as allowing small businesses to form risk pools and individuals to purchase health insurance from other states.
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Read more about the Republican jobs plan here. Americans need a plan that will get government off their back and instead put them back to work. What we dont need is more taxes, more spending and more regulation. Unfortunately, however, that is the only thing Democrats in Washington D.C. are offering.
Just a couple of days ago, while Republicans were putting the finishing touches of their plan to put America back to work, Democrats were calling in unison for a TWO TRILLION dollar increase in the limit on the national debt. Dont they understand that we dont need more government debt in America?
We dont need more debt, we need more jobs! The bottom line is: Americans deserve better and Republicans are trying to make sure they get better.
Obama Administration Takes Aim at Boeing And Free Markets

The federal government is now trying to tell a company where it can and cannot locate. The National Labor Relations Board (NLRB) has filed a complaint against Boeing for its decision to build a plant in South Carolina rather than in Washington. The idea that the government could wield such power would be absolutely terrifying if it werent so downright absurd.
The problems started in 2008 when unionized Boeing workers in Washington went on strike over because the union wanted, among other things, a seat on Boeings board. This was not the first time Boeing had to deal with lost production due to worker strikes. In the past 20 years, Boeing union workers have gone on strike four times, the longest being 69 days. As you can imagine, when your workforce doesnt show up, it can really impact your bottom line. Analysts estimated that the 2008 strike cost Boeing as much as $120 million per day and could have soared higher if orders for their popular plane, the 787 Dreamliner, were canceled.
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Unless you worked at Enron or Wall Street you probably recognize that losing billions of dollars is not the soundest of business strategies. The goal of any business is to minimize risk and maximize profits. Of course, the near-constant strikes in Washington were doing the exact opposite. They were forcing Boeing throw money down the drain faster than our spend-happy lawmakers in the nations capitol.
Forced to use every ounce of their college education, business acumen, and God-given wisdom the head-honchos at Boeing had an idea why dont we build a plant somewhere that we dont have to stop work every five years. So they did. After looking into some business friendly locales they decided on South Carolina whose right-to-work laws ensured that their plant could actually operate uninterrupted.
More than one thousand jobs and $2 billion in investment later, the NLRB decided that this simple business decision was in fact a nefarious plot to screw workers and they filed a complaint.
In so doing our government is essentially testing its ability to strong-arm companies into staying in union states. In reality, all theyre doing is making companies decision to move investment and jobs overseas that much easier. The outcomes of such a decision would ripple throughout the economy. Business owners will not only be hostages to the demands of their workforce, theyll be servants of the government. Since their movement will be restricted, businesses ability to vote with their feet will be diminished, giving state and local governments the ability to raise tax rates without fear of companies leaving. Prices will rise, businesses ability to compete in the global economy will be diminished, and companies will no doubt flee to less repressive international regimes.
Not even big labors most vehement proponents can seem to muster the bluster necessary to defend the NLRB. I laughed out loud after reading a New York Times editorial which began,
It may be a difficult case to prove, but the complaint filed last month by the NLRB against Boeing is a welcome effort to defend workers right to collective bargaining.
But then the author begins to actually break down the facts. First, he admits that the company can [legally] decide to locate production in South Carolina because it makes business sense and
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may include production stability as a factor in its decision. Translated, that means, even though we really, really want to bend the law to make companies stay in unionized states, its gonna be hard to get a judge to buy the turd of an argument were trying to sell.
Next, he explains that proving Boeing acted with the necessary retaliatory intent may be hard to prove. Further complicating the NLRBs case, the author writes, Boeing says opening the line in South Carolina will not lead to layoffs in Washington, where it is adding jobs, too. In fact, its adding a lot of jobs. The New York Times reports that Boeing has increased its unionized employment by 2,000 workers since its decision to expand in South Carolina.
Whoa. Back up. Boeing continues to add jobs in the Puget Sound? And the Obama Administration still saw fit to file a complaint? What, are we the United States of the Puget Sound now? Are we going to demand every job created must be created in Washington state. Gimme a break.
In fact, the best argument the proponents of the case can muster is based on a statement made by Boeing officials that supposedly clearly show their decision to locate their new plant in South Carolina was retaliatory. The damning statement We cannot afford to have a work stoppage, you know, every three years, said a Boeing executive.
Thats it! Thats all you got? Thats not retaliation, thats a business official with a pulse and a brain in his head! And frankly, those are two qualities Im not sure apply to the Obama Administration and the NLRB. Obamas appointments were made with a clear intend of transforming the NLRB into a more liberal, pro-union entity, but presumably they would follow the rule of law. Now, not even that appears a certainty.
April Jobs Report is Good, But Dont Celebrate Yet

Celebrate good times, come on! (Lets celebrate) Theres a party goin on right here A celebration to last throughout the years So bring your good times, and your laughter too
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We gonna celebrate your party with you Celebrate
Oh wait, youre still unemployed? So I guess you dont me to keep singing Kool and the Gang? Sorry, I was just reading the analysis following this weeks jobs report and assumed the recession was over.
To be fair to the many know-nothings who cheered that Obamas jobs plan (what plan!?!) was finally showing results or that the stimulus was finally working, there was some good news to cheer about. Fridays jobs report showed that 244,000 jobs had been created over the past month, the biggest job gains in over a year, and if you exclude Census hires, the most encouraging report weve seen since the start of the recession.
But before you pop the champagne, or more likely, since youve been unemployed for months, open that last can of Beanie-Weenies, lets take a deeper look at whats going on. Despite the job gains, the unemployment actually rose to 9 percent. On its face, that seems to be as inexplicable as Rose Huntinton-Whiteley (WHO?!?) topping Maxims annual Hot 100 List.
The problem is that each month the population grows. For the unemployment rate to go down, we cannot just add jobs, we have to add jobs at a faster rate than people are entering the workforce. Even with 244,000 new jobs, we couldnt get over the hump this month. And as CNN astutely argued, most people agree that a 9% unemployment rate is too high. Most people? Pretty sure everyone would tell you that 9% is too high. No wonder more people watch ESPN 37: All Croquet All the Time, than tune in to CNN.
Jokes and inanity aside, the bottom line is that we still have 7 million fewer jobs than we did in 2007. Weve got a long ways to go, and were going to need Washington to stop patting itself on the back and get to work in fixing the problem.
Unfortunately, our two parties have diametrically opposed views of the problem. Democrats believe we must unyieldingly pump money into the economy through government spending, regardless of its impact on the long term. This the future be damned approach is surely to the benefit of todays politicians, who when asked in pre-election town halls what theyve done to create jobs, could point to the innumerable programs theyve created to channel taxpayer funds
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into doing something. Unfortunately, this doesnt work. One would have thought we learned that lesson following the utter failure of the stimulus bill, but alas Washington is full of slow-learners.
On the other hand, Republicans believe that we must immediately begin to address our deficit that is slowing business investment because of the uncertainty created in the long term. Government debt has serious long term consequences. Eventually interest rates will go up, meaning foreign investment goes down and businesses will suffer. Taxes will also likely have to be raised to make up for the spiraling deficits, adding a further dose of uncertainty to businesses bottom lines.
Some, such as Paul Krugman, are attempting to adopt the language of conservatives and use it against them. In a recent article Krugman wrote, D.C. economic discourse is saturated with fear: fear of a debt crisis, of runaway inflation, of disastrous plunge in the dollar. Scare stories are very much on politicians minds.
Hes right, fear, or perhaps more accurately, uncertainty, is dominating the discourse. The thing is its warranted. Imagine if someone had the foresight (and cajones) to get up before the dot-com bubble and say, cant you see, these internet companies are being overvalued, we need a course correction! Or if someone stood up in 2005 and said, Perhaps we shouldnt be encouraging everyone to buy $500,000 homes, after all, what if the market falls? Would those people likely have been labeled fear-mongers and told to just shut-up and enjoy the party?
Well, pardon conservatives if weve learned from the past. Excuse us, while we stand up, unafraid, to say Perhaps we shouldnt spend trillions of dollars we dont have and should instead think about what it will mean for the future.
So while everyone else sings Celebrate good times, come on! well sit back until were assured there is really something worth celebrating. Namely, when our government stops spending more money than it has.
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Disconnect Between Profits and Job Growth Shows Failure of Government Policy
Theyre at it again! Those damn corporations are making money. The nerve! And all at a time when the unemployment rate remains at 9 percent. Have they no heart? Have they no shame?
Well, no and no. Corporations arent people. They dont have a heart and thus arent created to act purely on altruism. Theyre created to make as much money as possible in a legal and socially responsible way. Fortunately, when corporations are profitable, society benefits in innumerable ways, from higher tax receipts to cheaper products. They also have no shame, at least not when it comes to the American voters. Thats simply not who they answer to, theyre responsible to their owners, the people who have invested money in the hopes of a return. Again, it may sound bad, but youd be amazed how often the interests of the owners and the interest of the general public align. In general, a happy, thriving business means great things for just about everyone.
Of course, all of that may still rub you the wrong way, but its the truth. And such as system has done more to bring prosperity to the world than any economic framework otherwise devised by man. Nevertheless, liberals have taken the chance to jump on the bad optics of the situation, pointing to very good profits for businesses while American workers continue to struggle.
And to be quite honest, it does look pretty bad. Blogger Ezra Klein points to an especially telling statistic from the Fortune 500 press release: The combined profits of the Fortune 500 increased by 81% $318 billion this year, the third largest percentage gain in history. High profits at a time of such dramatic unemployment?
Of course, he does leave out some facts that would otherwise take away from the argument hes trying to make businesses are succeeding while people are suffering. For instance, Klein fails to note that the Fortune 100 employers have at least 350 openings each, totaling more than 96,000 jobs, so its not as if theyve stopped hiring. The argument also ignores other economic realities such as the fact that hiring tends to lag behind profit growth and that supposed record corporate profits are in actuality an illusion.
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Nevertheless, even if we buy into the big-bad companies and their dastardly profits storyline, shouldnt we be asking why? It seems a far more productive course to ask, why companies arent hiring given that theyre reeling in big bucks, rather than vilify them for doing so.
I get the feeling liberals arent asking mostly because theyre scared of the answer. But Im more than happy to give it to them: profits are translating into jobs, just not here.
A significant portion of those reported profits are due to what are called rest of world profits money made by U.S. based corporations overseas. Of course, since we have the highest corporate tax rate in the developed world, corporations are none too keen on bringing those foreign profits back onto our shores or back into our economy.
The world economy is becoming increasingly globalized. Technology, most notably the internet, has essentially broken down the barriers which previously stood between nations. Businesses no longer have to be adjacent to the biggest markets, they can make location decisions based on the affordability of labor and the friendliness of their tax code.
And on those points, the United States and other Western nations are falling behind. A lot of that has to do with our growing government. Over the past several decades many traditional economic powers have developed intricate, and expensive, social safety nets. Now the bill for those gaudy purchases is coming due in the form of higher taxes.
Developing nations like India and China arent dealing with those fiscal concerns and are free to attract businesses with low labor costs and low tax burdens.
Its not too late to reverse course. The disconnect between corporate profits and domestic job growth is one of the clearest examples we have of our failing economic policies. That evidence is being ignored. Instead, its being used to further paint corporations as villains who deserve higher taxes. Such wrongheaded rhetoric threatens to further alienate corporations from the United States. Instead of saying damn those corporations are at it again, why dont we say damn, why havent we done anything to fix it?
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Obamas High Speed Rail Visions are Foolish

Most Americans know our debt is $14 trillion. Most Americans know that the government continually spends more money than what comes in. Yet for some reason our politicians do not understand that we are broke. President Obama has plans for a grand high-speed rail train; however, he is forgetting the fact that we do not have the money to build it and the rail services already created are bleeding red.
Government transit programs run up enormous deficits and are not profitable. Urban transit is the most expensive form of transportation in the U.S. The average passenger riding urban transit spends about 80 cents for every mile. While the cost per mile for airlines is around 15 cents and auto is about 24 cents. One example of a failed transit system is Amtrak. This program has been running deficits for years. Amtrak is not the only example of a rail system that runs high deficits and makes no profit. Every long distance route of Amtrak makes no profit and falls in the red. The D.C Metro is another example a deficit-ridden government run program. The Metros 2010 budget had a $154 million dollar deficit. The Chicago Transit Authority which is government operated by no surprise needs $16 billion to keep it from collapsing.
These grand visions of America with high speed-rail are foolish. The government does not have the money to spend on these types of programs. The programs that are already in place produce no profit. What is there to gain from these programs? Many would argue that it would create jobs which is true; but, the burden of finding funds for a high speed rail project fall on the taxpayers. Not every taxpayer uses rail and no one wants to be funneling money into a program that just soaks up money and gives nothing back. Now if the government decided to get out of the way and let the private sector take the lead then the taxpayers could keep some of their money, jobs would be created, and those who depend on urban transit would still have access to it. When will the government learn that all economic growth comes from not them but the private sector? Hopefully soon.
If We Want to Redistribute Income Why Not Grades?

Much of the debate between conservatives and liberals centers around the idea of wealth redistribution. Liberals tend to look at the growing wage gap and say that the government must step in to equalize the results. Conservatives tend to look at the enormous reduction in the inequality of personal well-being which has derived, in large part, because societies producers are incentiv-
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ized to succeed. Economist Greg Mankiw clarifies exactly what I mean by equality of wellbeing,
Bill Gates is much, much richer than I am, yet it is not obvious that he is much happier if, indeed, he is happier at all. I have access to penicillin, air travel, good cheap food, the Internet and virtually all of the technical innovations that Gates does. Like the vast majority of Americans, I have access to some important new pharmaceuticals, such as statins to protect against heart disease. To be sure, Gates receives the very best care from the worlds top doctors, but our health outcomes are in the same ballpark. I dont have a private jet or take luxury vacations, andI think it is fair to saymy house is much smaller than his. I cant meet with the worlds elite on demand. Still, by broad historical standards, what I share with Bill Gates is far more significant than what I dont share with him.
This is as important a debate as exists in our current political discourse. In fact, it is so woven into the fabric of our political ideologies that it colors almost everything. It has become an especially important discussion in the debate over the future of our government. Whether we choose to follow the path President Obama has begun to lead us down; that is, to a redistributive welfare state that, to one degree or another, attempts to equalize results. Or whether we choose to walk the road of Representative Paul Ryan whose plan trims the size of our entitlement programs to ensure we remain an opportunity society.
Each side is vying for the title of fair. Liberals say it is only fair that those who earn more should greatly subsidize everyone else. Conservatives say that there can be nothing fair about taking what someone has earned and giving it to someone else.
Their quest has led them to some interesting theoretical debates. The newest, and perhaps most entertaining, is an attempt to highlight the utter absurdity of redistribution in other settings.
For instance, Robin Hanson, asked the question, if we can redistribute wealth, why not apply the same principle to grades?
First, a little bit about Mr. Hanson. He first received a B.S. in physics from the University of California Irvine, then went on to earn an M.S. in physics and an M.A. in Conceptual Founda-
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tions of Science from the University of Chicago, then a Ph.D. in social science from Caltech, and then a Ph.D in artificial intelligence, Bayesian statistics, and hypertext at Caltech. All that is to saythis guy knows a little bit. Hes also been through the educational ringer enough to understand the parallels between earning grades and earning money.
Hanson argues, Most people believe that redistributing money within a nation is good, but that redistributing GPA within a school is bad, and if asked why these should be treated differently, have little to say. My point isnt to say one cant come up with reasons to treat these differently. One could, for example, argue that we prefer differing school signals to help employers sort people into jobs, to achieve higher productivity so that the pie is bigger when we redistribute money. My point is that most people cant think of such reasons, making it pretty unlikely that such reasons are the cause of their opinions.
Its a pretty powerful point. There are a lot of similarities between grades and income. Presumably they are both reflective of merit, having been earned by labor or intelligence. They serve as important signals, money incentivizes work, grades incentivize study. And they are the product of value judgments on behalf of the earner, that is, we can sacrifice grades or income to pursue other interests.
The comparison also provides a useful tool for college students, who often havent earned wages, to engage in the debate over the desirability of distributive systems on something more than an academic level. And it should come as little surprise that few liked the idea of shaving points off their 4.0 to provide some GPA help to their less academically successful classmates.
This led blogger Megan McCardle to conclude that most of us want to redistribute income because, well, we wannanot because we have any particularly good reason. Shouldnt redistributing someones earned money require a better reason than we wanna?
Fumbling and Stumbling Foreign Policy of Obama

Remember back to 2008 when Barack Obama was just a presidential candidate. Was it not candidate Obama that promised we would not get involved in any more wars? Was it not candidate
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Obama who said President Bush acted unilaterally? Was it not the democrat political pundits who hailed Obama as the one who was going to bring peace and prosperity to the world? Boy did that seem like a long time ago. Fast forward to 2011 where President Obama and his foreign policy has us involved in another war with unilateral action, and peace and prosperity are far from being seen anywhere around the globe.
The Obama administrations foreign policy is incoherent and indecisive. Case study # 1: When the protests were breaking out in Egypt, which was a U.S ally, it took President Obama a couple of days to call for the ousting of Hosni Mubarak. A pro-U.S Middle Eastern ally of the U.S was told to leave his country. Now remember back to the protests occurring in Iran about a year and a half ago, which consisted of young people protesting the fraud in the elections that lead to the re-election of Mahmoud Ahmadinejad. President Obama and his administration were nowhere to be seen. Iran is adamantly anti-U.S, anti-Israel, and anti-peace, and yet President Obama did not try to voice his support of the protestors.
Case study # 2: Today the U.S is involved in a war with Libya. President Obama authorized the use of missile strikes to protect the rebels who are attempting to overthrow Gaddafi. At the beginning of the protests Secretary of State Clinton was saying one thing, while President was saying something else. Everyone in the administration was saying something different. Eventually President Obama authorized the use of force against the Libyan military in order to protect the Libyan protestors. President Obama promised the kinetic military action would not last very long and that he would not escalate the operation. As weve seen time and time again, the President is known to break his promise. Nearly two months later, the U.S. is still launching strikes and now we are calling on forces to kill Gaddafi; another promise the President made at the start of this uprising.
There are many questions that have arisen due to the incoherent foreign policy of the Obama Administration. Why was force used in Libya and not in Syria who is killing just as many, if not more protestors, than Libya? What are the standards in which the U.S will choose to use force? What are the goals of the operation in Libya? How much longer will the U.S be involved? What is the exit strategy? The Obama Administrations foreign policy is one that cant be deciphered and understood. No one understands their thinking and their decision making and from the looks of it, the administration itself does not understand their own thinking.
Train yourself to elect a better future
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Our country is suffering from trillions in national debt, runaway government spending, nine percent unemployment, deteriorating roads, failing public schools and skyrocketing gas prices.
We need to elect Republican candidates in our cities and states that are committed to solving these problems. We know the only way to change the direction of our country is to change those responsible with making it.
To elect Republican candidates, we will need to train hundreds of campaign managers and operatives to do the nuts and bolts work needed to get them elected.
Would you be interested in attending a campaign manager school? We need established leaders like you to manage campaigns on all levels. You could play a huge role in turning our country around by being trained to get Republican candidates elected. You could be the difference between a Republican candidate winning and losing.
Are you interested in being trained to help Republicans win? If you and enough others are interested in being trained to help Republicans win, the College Republican National Committee will team up with other conservative organizations to hold Campaign Manager Schools in Washington D.C. and across the country.
Let us know if you are interested by taking this short survey. With so much on the line for our generation, we must step up and do something. We must elect Republican candidates that will cut government spending, fix our schools and lower the price of gas and we need to train the campaign managers to get them elected. Join with us and together we will train you to elect a better future for you and America.
Debt Dithering Must End To Solve the Problem We Must Act NOW
Winston Churchill famously said You can always count on America to do the right thing, after it has exhausted all the other possibilities.
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Sadly, when it comes to our deficit, we are quickly exhausting the possibilities. And thats despite the only possibility weve really explored is, well, doing nothing. Yes, the Republicans have come up with bill after bill to reduce the size of government and the debt it is producing. But whatever Republicans think up and pass is immediately squashed by the Democratic-led Senate and White House.
The reason, or so Democrats say, is that we must not cut spending in the short run because it would short circuit our recovery. With this flawed principle as their guide, they argue that we must spend now until the economy is fully healed and then, and only then, can we talk about reducing our deficit.
Perhaps my time in Washington, DC has made me cynical, but this seems to be a two-part ploy to protect their political hides. They realize that with the stimulus theyve committed to a strategy of government intervention; wavering now would simply affirm that conservatives had been right all along. Not exactly a concession youd like to be making with the 2012 presidential race potentially hanging in the balance. Secondly, it seems that they are betting on an economic recovery to cover up their profligacy. Deficits have risen to the forefront of our collective political conscious, in no small part because the economy is in the crapper. But rising employment, comfortable GDP growth, and real-wage increases, and youd be amazed at how much fiscal tomfoolery we as voters are willing to overlook.
But push is quickly coming to shove. A debt crisis is quickly approaching and the question of the century iswhat is Congress gonna do about it?
George Mason professor Paul L. Posner, in a paper called Will It Take a Crisis, explores that very question. In doing so he highlights the importance of not only acting, but acting soon.
Herbert Stein long ago suggested that if something is unsustainable, it will stop. Butere there is a corollary how it stops matters. Will these trends be reversed through a gradual process brought about by policy interventions or by a rude shock caused by economic forces over which we will have little control.
Unfortunately, there is little indication that we will act soon. Paul Ryans comprehensive plan has been completely ignored by liberals, but given that hes a Republican, thats almost to be ex-
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pected. The truly scary part is that the report produced by President Obamas own bipartisan deficit commission was deemed to be a nonstarter. The President ignored his own commission!
The problem is the Democrats utter refusal to touch entitlements. Without significant changes to these programs, there is simply no tax burden high enough to meet the ravenously growing costs of Medicare, Medicaid, and Social Security in their current form.
As our debt grows, our problems grow. In his paper Posner points out that to realistically have a chance to solve our debt problem (without suffering a dramatic crisis) we must act now. The reason compounding interest costs.
As deficits and debt grow during years of no action, intrest costs escalate in the budget, prompting even higher deficits and debt in a vicious cycle. In addition, higher deficits over longer periods of time gradually reduce economic growth and push up interest rates, against contributing to a vicious cycle where deficits and slow growth become mutually reinforcing.
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As the chart above shows if we fail to act by 2025 the amount of annual deficit reduction we will need is three times higher than if we acted currently. If we need to cut a trillion this year, wed need to cut three trillion in 2025. Not only would government services have to be dramatically scaled back, our social safety net would have to be cut to shreds, and despite the dramatically reduced role of government, our taxes would still likely have to be raised.
That is the future that lays before us if inaction is our chosen course. So wake up Washington, were quickly exhausting all the possibilities of solving our debt crisis, its time you do the right thing and act.
Fannie and Freddie Continue to Bleed Taxpayers Dry

Most of the sitcoms I grew up with had that annoying character that always showed up at inopportune times and never went away. Kimmy Gibbler on Full House, Screech on Saved by the Bell, Steve Urkel on Family Matters, and Kramer on Seinfeld. They would always run into a generally harmonious scene and wreak havoc for all the characters involved.
Mortgage giants Fannie Mae and Freddie Mac are the Kramers of the Washington sitcom (a more apt genre may be horror). They have no visible means of support, they often rely on the charity of those around them, and they leave a trail of destruction in their path. Funny if youre a sitcom, terrifying if youre a taxpayer.
Thats right, Fannie Mae and Freddie Mac, the government sponsored entities that exist in the ethereal netherworld between the private sector and the federal government are back asking for yet another bailout. These two mortgage giants used their federal guarantee to dominate the market. Their implicit taxpayer backing allowed them to pay fewer taxes, borrow at below market rates, and operate under more lax standards. They gambled on the subprime mortgage market knowing that if they won, their shareholders would reap the rewards, and if they lost, taxpayers would make up the difference.
As it turns out, they lostbig time. But rather than admit any wrongdoing, they threw up their hands, and in their best nasally Urkel voice shouted, Did I do thaaaat? Sadly, theyve popping through the taxpayer door every so often asking for more and more taxpayer cash in order to pay their bills.
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This months quarterly earnings report is no different (is it still called an earnings report if you consistently lose billions of dollars?). Fannie Mae showed losses of $6.5 billion the result of $11 billion in credit losses on their mortgage portfolio. Theyre asking taxpayers for $8.5 billion, the extra $2 billion being owed to the Treasury for past loans.
If this months dramatic fall in housing prices is any indication, Fannie and Freddie will be back next quarter asking for more. According to the Association of Realtors the U.S. median home price fell 4.6 percent from the previous year. In fact, were seeing prices dropping faster than they did in 2010, said analyst Pat Newport of IHS Global Insight. Furthermore, 28.4 percent of homeowners were in negative equity, that is, they owed more on their mortgage than their home was worth.
The doom and gloom carried over to Fannie Maes quarterly report in which they implicitly say the mortgage giant will never be able to pay back its debt.
It will increase to $99.7 billion upon the receipt of funds from Treasury to eliminate the companys first quarter 2011 net worth deficit, which will require an annualized dividend payment of $10.0 billion. This amount exceeds the companys reported annual net in come for each year since its inception.
In other words, the amount theyll owe each year to the Treasury is greater than the amount theyll ever earn. Thats an awful thought when you consider that we, the taxpayers, are the ones ultimately on the hook for the Treasurys promises.
Fannie Mae and Freddie Mac are little more than leeches, bleeding money from the government to pay for its own bad bets. Fortunately, Republicans have taken on the challenge of getting rid of these annoying characters once and for all.
Representative Jeb Hensarling (R-TX) has introduced a comprehensive reform bill that would gradually wind down Fannie and Freddie to ensure that they no longer pose a threat to taxpayers. With the understanding that there is little appetite for comprehensive legislation, House Republicans have also introduced eight bite-size bills which would do everything from eliminate Fan-
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nies fair housing goals that encouraged giving loans to unqualified borrowers, to demanding the mortgage giants steadily decrease the size of their loan portfolio.
Sadly, these bills will likely never see the light of day in the Democrat-held Senate, meaning were likely to see Fannie and Freddie continue to pop-up, with their hands out, wreaking havoc on taxpayers. Im sure the Seinfeld writers could somehow make a funny episode out of all of this, but in reality it seems downright maddening.
Connecting the Dots of Democrats Plan Reveals Frightening Picture

Americans are dot connecters. We like to take disparate elements of any given situation and attempt to round them into a cohesive whole. The reason, I believe is an innate desire to have things make sense. This often allows us to see a larger picture that we would have otherwise missed, but sometimes it can do the opposite, create an image of something where nothing should exist.
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As a very clear example of this tendency toward dot-connecting is steroids in baseball. In an interesting article in yesterdays Sports Illustrated, writer Joe Posnaski takes a look at the amazing statistical drop following the post-steroid era. From 1994-2010 hitters in April batted .264, had an on-base percentage (OBP) of .345, and slugged .421 (total bases divided by at-bats). By comparison, this April players are hitting .249 (down 15 points), have an OBP of .319 (down 26 points), and a slugging percentage of .382 (down nearly 40 points).
Those appear to be huge statistical regressions. Players just arent peeling the cover off the baseball like they did in the late-nineties, early aughts. But this simple comparison doesnt tell the whole story. To get a full picture you have to go back to before the steroid-era, where youll find that todays numbers are almost exactly in line with those prior to 1994. Posnanski lays it out:
To remind you, this years core numbers: .249/.319/.382 From 1981 through 1993: .252/.322/.378
In that context todays players do not look so statistically challenged. As it turns out weve simply regressed back to the comfortable place baseball existed for decades prior to the most pervasive cheating scandal in sports history.
Similar context is needed to provide voters with the entirety of the budget situation. Sadly they are only getting part of the story.
Recently, spending and deficits have been mired in a steroid era. As recently, as 2007 our budget deficit was $160 billion still not balanced, but a figure that we would literally laugh off as insignificant today. From 1982 through 2007 our deficit ranged from a 69.3 billion surplus to a $412 billion deficit and mostly hovered in the mid $200s. As I said, by no means comfortable, or even sustainable, but at least consistent and sane.
By comparison, our 2009 deficit was $1.4 trillion, our 2010 deficit was $1.3 trillion, and our 2011 deficit was $1.6 trillion. All astounding sums. Now, Republicans have introduced plans to make significant cuts to our current budgetary baseline. The reforms they have proposed would reduce spending in the order of trillions, not billions. Democrats have demagogued these reforms as an extreme attempt to cut services and fundamentally change the role of government in our lives.
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This argument works, at least if you begin with the notion that $1.4 trillion deficits or $3.5 trillion in spending is the norm. But as you have hopefully seen through a comparison of the earlier numbers, recent deficits and spending are anything but the norm. They, like statistics in the steroid era, are the outliers, swelled like Barry Bonds head by ego, hubris, and the misbegotten desire to please their constituents.
To fight against the wrong-headed notion that Republicans attempt to cut the budget is in some way, abnormal, we must redraw the picture. We must realize that there is a whole host of dots that we have failed to include. And when you connect the true dots of Democrats plan, I think youll find that the picture is not one of prosperity, but of inevitable decline.
Why Ending _____ As We Know It Is Actually a Great Thing

Ending ______ as we know it. That is quickly becoming the most overused phrase in all of political punditry.
Paul Krugmans Friday column argued that one of the funniest political stories was freshman Republicans sending a letter urging President Obama to stop Democrats from engaging in Mediscare tactics that is, to stop saying that the Republican plan released early last month, which would end Medicare as we know it, is a plan to end Medicare as we know it.
The liberal think-tank, Center for American Progress, recently issued a press-release stating that Paul Ryan (R-WI) would end Medicaid as we know it by converting it into a block grant program.
And Senate Majority Leader Harry Reid held an event in March where he said that Republicans use words like privatize and personalize. But theyre all code words for the same thing: ending Social Security as we know it.
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You get the picture. Ending _____ as we know it, is supposed to be a terribly frightening concept, because the status quo is so hunky dory, you see. In reality (sadly, somewhere liberals rarely seem to inhabit) each of these programs are in dire need of reform.
A new report from the Social Security and Medicare Board of Trustees said, The financial conditions of the Social Security and Medicare programs remain challenging. Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided.
Legislative modifications is a more palatable way to say reform. Of course, since it is the programs Trustees, and not Republicans saying the dirty words, youre not likely to hear any liberals pointing fingers and arguing that the Trustees want to end Medicare and Social Security as we know it.
But that is exactly what they are saying. For the first time in history, the Social Security program ran a deficit in 2010, to the tune of $49 billion. But things are not going to get brighter anytime soon. After 2014, the programs deficits are expected to grow rapidly, until its already-imaginary Trust Fund is exhausted in 25 years.
Medicare and Medicaid fare even worse. The CBO reports that the total outlays for these health programs would roughly double as a share of GDP over the next 25 years. Of course, such increases would lead to catastrophic deficits that would necessarily lead to a fiscal crisis. Thus, the CBO argues that to put us on a sustainable path, lawmakers would have to substantially reduce the growth in outlays for those programs.
You know what that sounds like? Yep, another all-too-nice code word for ending Medicare and Medicaid as we know them.
And that shouldnt be scary! In fact, I would be scared if our government would ignore these problems and continue with our welfare state as we know it. Especially since what we know, is that its an actuarially unsound piece of crap. Our spending is like a speeding car quickly on its way towards veering over a cliff. Democrats will say, the view as nice. Republicans are screaming, Uh. Hello! I think its time to end this trip as we know it.
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So let liberal pundits keep shouting their new favorite phrase, thinking that they are unwittingly lulling people into the comfort of the status quo. Smart voters will know differently. Anyone who is paying attention will know that ending _____ as we know it is the best thing that could happen.
Democrats Wrongheaded War Against Oil Companies

This is doomed to be an unpopular column. Im dispensing with that fact now, in order to both prepare you for what youre about to read and also to help me to soften the blow from what are sure to be some, shall we say, pointed comments. Im going to defend one of the villains in American political discourse. Someone, who, like Big Business, has been wrongfully lumped together and typecast as a bad guy, if for no other reason than it contributes to a highly successful political narrative. Im speaking of oil companies. I could almost hear the audible gasp you just uttered. How could you defend such a greedy industry! Havent you seen the prices at the pump! But follow me to the end brave reader and Ill show you why even oil companies deserve an honest defense.
Take John Adams as the shining example. Following the Boston Massacre, in which British soldiers killed five American colonists, no one would come to the defense of the British. And why would they? This was at the time of the Stamp Act, when patriotic fervor and the desire for independence would soon embroil the colonies in a war with Britain. Well John Adams did. And in his vigorous defense of the British, said, Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence. Six of the soldiers were acquitted, two were convicted of a lesser crime of manslaughter, and Adams went on to become President.
Facts are stubborn things. Unfortunately, the debate over oil companies has been curiously devoid of them.
Instead, Democrats, led by President Obama, have been pushing a bill to eliminate the so-called taxypayer subsidies to oil companies. In his weekly address, Obama said [Oil companies] get $4 billion in taxpayer subsidies each year. Four billion at a time when Americans can barely fill up their tanks. Four billion at a time when were trying to reduce our deficit.
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This guy really understands the oratorical concept of repetition as emphasis. Nevertheless, it admittedly looks bad. Oil companies are making a lot of money, why should they be singled out for preferential tax treatment.
But the fact is, there are no such things as subsidies for oil companies. They receive no preferential treatment. What they do get are tax deductions. The two largest of these are the domestic manufacturers deductions and a tax credit for taxes paid to foreign nations. Well look at these in turn.
First, the domestic manufacturers deduction is an across the board tax credit enjoyed by, as the name may suggest, all domestic manufacturers. Everything from Hollywood studios to theNew York Times, from Coca-Cola to Microsoft, receives the tax credit. In fact, every other industry is eligible for a 9 percent deduction, but because of a prior political smear campaign, oil and natural gas companies only receive a 6 percent deduction.
Second, the foreign tax credit is another broadly available benefit that exists as a vestige of our antiquated tax system. While the rest of the world has transitioned to a territorial system where a nation taxes only what is earned within their borders, we labor under a worldwide system in which any corporation based here must pay taxes on what they earn anywhere in the world. This creates the threat of double taxation, in which companies would be taxed once by the nation where the profit is earned and again by the United States. To alleviate this threat, we allow companies to deduct taxes theyve already paid to foreign nations. Again, there is nothing singular, or unique, about this credit to the oil and gas industry.
What you should begin to see is that the Democrats push to focus on the non-existent oil subsidies is purely driven by political opportunism. Theyve stuck to the Rahm Emanuel playbook in which you never let a good crisis go to waste. Whereas consumers see high gas prices, Democrats see an opportunity to score some political points with voters.
In the narrative Democrats are trying to develop they paint Big Oil as a bunch of wealthy fat cats, lining their pockets with Americans hard-earned money, while paying hardly any taxes to the government. Once again, facts are stubborn things. And the fact is, the oil and natural gas industry pays one of the highest effective tax rate of any in the United States. In fact they labor under a 41.4 percent rate, while the average of other S&P industries is 26.5 percent. For instance,
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Chevron and Exxon have effective tax rates of 43.9 percent and 41.7 percent respectively. By comparison, Microsoft has a rate of 26.7 percent, Bank of America 24.7 percent, and drug-giant Pfizer 18.7 percent!
So dont be suckered into the good versus evil storyline that Democrats are trying to write for you. The reality is, we need fundamental corporate tax reform that cleans out the labyrinth of credits, deductions, and loopholes and replaces it with lower rates for all businesses. But there is no reason to single out oil and gas companies for discriminatory treatment.
So there you have it. I know Ive probably made some people mad, but hopefully Ive made some people think twice. And for those who are angry, remember what Sam Adams said, no matter the dictates of our passion[s], they cannot alter the state of facts and evidence.
States to Federal Government: Learn from us!

Governors across the nation are taking steps to get their states fiscal houses in order and are creating environments friendly to business. States such as Wisconsin, New Jersey, Virginia, Texas, and Ohio are cutting spending and creating a business friendly environment. While these states are improving others fail to grasp the ideas behind their success. West Virginia, New York, and California are fiscally unstable, losing jobs, and have little to no economic production. Governors should look to Governors Walker, Christie, McDonnell, Perry, and Kasich for ideas and solutions to fiscal and economic problems.
In Wisconsin, Governor Walker has created legislation to cut spending because Wisconsin has a $137 million shortfall in the current budget and a $3.6 billion projected shortfall in two years. To fix the problem Governor Walker has proposed spending cuts and has created legislation to make Wisconsin a right to work state. Governor Christie had a $2 billion short fall in the 2010 budget and was able to close the cap by cutting spending and giving spending power in local areas to voters. As well as closing the $2 billion dollar shortfall, Governor Christie was able to pass legislation to close New Jerseys $11 billion dollar deficit by coming up with a budget just under $29 billion.
The reduction of spending and regulation have created an environment in which business find attractive. Governor Rick Perry and the state of Texas has added 165,000 jobs between 2008 to
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2010. E-Bay has said they are going to invest $5.1 million to expand its Austin office. Governor Perry is attracting business by not raising taxes, and having sensible regulations. He has also created the Texas Enterprise Fund which allocates money to business looking to expand or relocate in the state. This program has created more than 58,000 jobs and $14.7 billion in new capital since 2003. Ohios Governor Kasich has started to take steps in order to reverse the anti-business sense that had been fastened in Ohio under former Governor Strickland. According to Governor Kasich four different companies changed their minds about leaving the state. To be able to create wealth and prosperity in these states the Governors are lowering taxes and are creating sound and logical regulations. Governor Kasich got rid of a regulation that prohibited trucking companies from registering online and now the industry in Kasichs own words is very happy.
Many Governors are using common sense and simple solutions to help their states fledgling economies. They realize that government regulation and spending is not the solution. They know the solution lies with having sensible regulation, less taxes and less spending. These Governorss believe that less government not more will lead to prosperity and that idea has been proven to be successful. It is time to learn from these leaders and start changing course.
New Study: The Stimulus Destroyed 1 Million Jobs
It doesnt take a genius to figure out we havent been fans of President Obamas economic stimulus package. Weve long called it a wasteful, inefficient, waste of taxpayer money that did next to nothing to create jobs or put us back on the road to recovery. Well as it turns out we were too nice. New research from economists Timothy Conley and Bill Dupor finds that not only did the stimulus not create jobs, it actively destroyed them.
According to the authors, Our benchmark results suggest that the [stimulus] created/saved approximately 450 thousand state and local government jobs anddestroyed/forestalled roughly one million private sector jobs. . . The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services.
Since the paper largely made its way through the interwebs during the weekend, I can only imagine liberal bloggers are itching to get into the office to eviscerate these findings. I can almost
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imagine Paul Krugman sitting in a leather chair, sipping a glass of red-wine, and laughing maniacally at this new opportunity to talk down to anyone who disagrees with his vision of the world.
And I know just what theyll say. But, but, but, theyll whine, there is just no way that the stimulus could have destroyed jobs! Interest rates remain too low for any crowding out effects to have occurred.
Okay, I may have lost a few of you there with that last sentence, so Ill back up. The debate over the effectiveness of fiscal stimulus generally centers around the concepts of crowding out. That happens when the government borrows money by issuing bonds. Those bonds create a more competitive market for credit, thus putting upward pressure on interest rates. Still with me? When interest rates go up, demand for goods and services go down. In effect, government spending has crowded out the market for private capital
Using this argument, if interest rates are low, crowding out could not have happened. You can almost hear them say, So there! Or if they were in a less childish, and more hob-nobbish mood, Put that in your pipe and smoke it!
The problem is, this is a liberals attempt to eliminate their perception of the world and instead squeeze economics into equations. Its the old, if its not in a textbook, its not worth knowing line of thinking that has so hampered the growth of macroeconomics. Such an elitist view, holds that central policymakers following carefully thought out models know better than the masses and the market. What they once attempted to only measure, they now believe that they can control.
To truly understand, we must look to what John Meynard Keynes labeled animal spirits. One of the more newly discovered of these is patterns of sustainable specialization and trade. Though complicated in name, its a simple enough theory. We essentially do what were good at and like to do. For instance, a brain surgeon may pay someone to mow their lawn or even clean their house, providing them more free time to do what they want. In modern society this has become so vastly intricate with literally millions of different distinct jobs that it has become increasingly impossible for government to align the natural order of things.
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In other words, the government has tried to squeeze a square peg through a round hole, and the more they try, the bigger the peg becomes. The stimulus created much the same effect, attempting to channel money to very specific purposes, which did not especially align with the needs or desires of our complex society. The result was very highly trained people flocking to the public, rather than private sector which could have resulted in more products being created.
Regardless of whether this theory is correct, the bottom line remains the same the stimulus has been an utter failure. In fact, it has been so bad, that merely saying that it was ineffective is incorrect. As Conley and Dupors new study shows, it was actively harmful to our recovery.
There is Nothing to Fear but Fear Itself

The U.S. has hit our $14.29 trillion debt ceiling. This has out us in a dilemma on whether we should or should not raise the debt ceiling. Republicans should not raise the debt ceiling unless massive entitlement reform and massive spending cuts are passed along with raising the debt ceiling. Dont believe the hype: the U.S economy is not going to collapse, Armageddon is not going to occur.
Experts state that not raising the debt ceiling will not lead to any form of economic collapse. The Heritage Foundation has stated that keeping the debt ceiling at its current level would not, in and of itself, risk default on the debt. Last time I checked the treasury is still going to be collecting taxes so that money will theoretically go towards paying off the debt. Michael D. Tanner from the Cato Institute says that not raising the ceiling will not be defaulting on our debt. He goes on to explain that The U.S. Treasury currently takes in more than enough revenue to pay both the interest and the principal on the debts we currently owe. The first priorities of the treasury will be to pay off the interest and principal on the debt. Next in line for fund will be our armed forces and social security pay checks. Even President Obama a couple years ago said the fact that we are here today to debate raising Americas debt limit is a sign of leadership failure? After making that comment then Senator Obama voted not to raise the debt ceiling. Back then the Obama did not go around stating that if the debt ceiling is not raised it will lead to an economic catastrophe. What has changed since then? Nothing has changed except for which party occupies the White house.
Keep in mind too that this is not the first time the debt ceiling has been reached. In 1985 and 2002 Congress delayed to raise the ceiling. It took a couple months until Congress raised the
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ceiling. Nothing earth shattering occurred then but now all of a sudden those in the Obama Administration are saying not raising the ceiling will lead to immediate and catastrophic consequences.
Do not be frightened by those claiming economic Armageddon will occur if the ceiling is not raised. Fear is a powerful motivator and is being used right now so that Democrats on the hill and in the White House get what they want. This is a chance to rein in our out of control spending and this kind of opportunity might not preset itself again.
Summer MoviesWashington Style
Memorial Day is fast approaching, which can only mean one thing were entering the heart of the summer movie season. But what if we substituted some Washington characters into the summers biggest blockbusters? Sure none of these would likely win any Oscars, but they may be worth a Redbox rental:
Thor The real movie has pretty-boy warrior Thor, the god of among other things destruction getting tossed out of Asgard for fighting. Im not sure what else Id expect from the god of destruction, but whatever, I hear those Norse folk were crazy. Anywho, in order to prove himself worthy of taking up his fathers throne, he is cast down to Earth to learn a dose of humility.
Becomes
Mitt For the political remake, Romney would play the role of Thor. Not too much tweaking would need to be done to the plot. Good looking and potentially over-confident uber-politician Mitt is cast out of the Republican Party for passing a version of universal healthcare. He now must prove himself worthy of the presidential nomination by learning to humble himself before the Tea Party. Yeah, I wouldnt see it either.
Pirates of the Caribbean: On Stranger Tides Captain Jack is back, this time searching for the fabled Fountain of Youth. But trouble and adventure await as he discovers Blackbeard is also
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after the prize. By this point in the series do you really care about the plot? Didnt think so, but hey, apparently there are vampire mermaids and zombie pirates. Apparently, the Pirate franchise apparently crossbred with Twilight.
Becomes
Buccaneers of the Beltway: Some Weird Guys Sensing his impending electoral demise, President Obama seeks the metaphorical fountain of youth doing everything he can to once again appeal younger voters. Of course, Newt Gingrich is trying to beat him to the punch, doing his best to appear him by being the first candidate ever to announce theyre running for President via Twitter. Yeawere doomed. While there are no vampire mermaids in this terrible remake, there are creatures just as terrifying, ya know, like Nancy Pelosi.
The Hangover Part II: After the debaucherous bachelor party in Vegas, the four-man wolfpack are on their way to Thailand for yet another wedding. This time they opt for a more subdued prewedding brunch, but these guys cant stay out of trouble. And would you really want them to?
Becomes:
The Economic Hangover Part MCLVII: Drunk with power, Democrats blow through trillions of dollars in taxpayer money only to give the economy a wicked hangover that it has yet to recover from. Nevertheless, theyre back, and this time they say theyve really got a plan to fix everything, except for, ya know, entitlements. Is it any surprise at this point with these guys in office that things will go seriously awry? Okay, this is starting to sound less like a comedy and more like a horror film.
Cowboys and Aliens: A loner cowboy played by Daniel Craig awakens with no memory and a mysterious shackle around his wrist. He soon finds himself an unwanted menace in the town of Absolution. But when aliens show up, the town quickly realizes this strange newcomer is their only hope for survival. Yes, its official, Hollywood is now completely out of worthwhile ideas.
Becomes:
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Donkeys and Elephants: A previously unheard of Midwestern conservative played by Paul Ryan shows up with a bold plan to solve our looming entitlement problem. He is universally decried for attempting to end programs like Medicare and Social Security as we know them. But when it becomes clear a budget crisis is quickly approaching, previous detractors quickly rally around Ryan, hoping he can save us Washingtons profligacy. Sadly, the movie I just described makes a lot more sense than the movie it was meant to parody.
So as the movie season kicks into full gear dont forget to keep your eyes on the Washington plotlines. If nothing else you can be sure theyll involve big budgets, bigger egos, and ubiquitous, if misleading, advertising campaigns. So grab some popcorn and take a seat, it should be an interesting summer.
Gingrich Gaffe Nevertheless Presents Opportunity for Republicans

Newt Gingrich is having a terrible, horrible, no good, very bad week.
The week kicked off with Newt announcing his presidential candidacy via Twitter, violating Rule 1 of the Being Cool Handbook: If you gotta try and be cool, you aint cool. Then, Newt, apparently believing that someone had to take over saying ridiculous things with Trump having bowed out of the race, planted his foot so deep in his mouth that no amount of Listerine could dull the taste of shoe leather. On Sundays Meet the Press, Gingrich referred to Paul Ryans Medicare proposal as right-wing social engineering, prompting a deserved round of jeers from every corner of conservadom.
And seemingly to add insult to injury, he got a much-publicized confetti shower from a kid yelling taste the rainbow. Sometimes, its just not your day.
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That said, were fully confident Newt will bounce back. Hes one of the preeminent conservative thinkers in politics. Hes got ideas, lots of em, and when the furor of an admittedly bad week dies down, Republicans should be eager and excited to hear what hes got to say. As Newts longtime aide Rick Tyler said, Newt will get up to bat again, and hell him a home run. We have no doubt.
Nevertheless, should Newts point about Medicare be taken to heart by conservatives? When you cut through the poor choice of words, the former Speaker of the House was really trying to say that Ryans plan is simply too much too soon.
Is he right? After all, good policy cannot truly do good unless it can establish the political momentum to achieve passage. And there are questions, many legitimate, whether Paul Ryans Medicare plan can actually be passed. It is sad indictment of the Democratic Party, and the deficit deniers, which fill its ranks, but they will demagogue any change to government programs as extreme. They understand the ultimate threat that our debt poses to Americas future, but also understand that arguing vehemently in favor of the status quo is best for their political future. It has already begun with their vicious, and wrongheaded attacks on Ryans Medicare proposal in which they pointedly play up the fears of many seniors. Never mind, the fact that Ryans plan wouldnt effect anyone older than 55. Actually, never mind any of the facts. Democrats simply arent interested in them. No matter how brilliant Republicans deficit cutting plan is, you can be darn sure Democrats will be there to try and tear it down.
And this is a legitimate problem that Republicans must face up to. As Ross Douthat remarked in the New York Times, A policy proposal can deserve praise from wonks and caution from politicians; it can merit support and defense from insiders and intellectuals while remaining a tough, tough sale on the campaign trail.
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Ultimately, I believe that Gingrichs criticism can be a positive turn in the debate over entitlement reform, but only if it actually leads to more dialogue on the part of conservatives. For our part, College Republicans fully backs a defined benefit plan like Representative Ryans. We believe this is the most effective way to ensure that growing government costs do not erode our ability to offer these benefits at all while also introducing market reforms to lower health care costs overall. It may be a dramatic change from our current defined contribution system, but if you havent noticed, our problems are so enormous they demand an ambitious solution.
That said, a defined benefit plan, which gives money directly to Medicare recipients to purchase their own health care, is certainly not the only way to reduce the deficit. In that sense, Gingrichs mild criticism could be the start of a policy renaissance with many different paths all leading to the same goals sustainable entitlements, smaller government, and a balanced budget. If conservatives have plans, we should all be eager to hear them.
Sure, it may have been a bad week for Newt Gingrich, but that doesnt mean positive things cant come from it.
Democrats Punt on Budget (Again)

Aha! Ive nally gured it out. I knew those dastardly Democrats must have known something that the rest of us didnt. Why else would they continually refuse to face up to our nations scal challenges or at the very least offer a budget! Its because they knew the world was ending. Surely youve heard by now, because the media has become utterly fascinated with a small, but vocal sect of Christians who have read and interpreted passages of the Bible to mean that May 21, 2011 is judgment day. Thats right. Hope you didnt have plans for Monday, because this weekend is it folksthe end of the world. But while many simply nd the prophecy amusing, amiably shrugging off the multitude of billboards, ads, and news stories that proliferate by the day, it seems that Democrats have really taken the message to heart. Since the world is apparently ending, theyve decided to let out their inner bon vivant. The decit be damned they say, lets spend like its 2009, well pay it back when were dead.
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Of course, Im only kidding. Although it wouldnt be the craziest thing to ever happen. OK, actually it would be the craziest thing. Im pretty sure not even Charlie Sheen could top!the end of the world!in terms of crazy, although Im not sure Id dare him to try. But I am serious about the Democrats hedonistic behavior in the face of what is certain to be some very dark times for the United States, end of the world or not. Sure, it may not be the rapture, but a sovereign debt crisis, is not going to be much fun either. Yet that is exactly the path we are headed down. No one disputes that our entitlement spending is sustainable. Ever-rising health care costs are pushing Medicaid and Medicare cost growth well beyond the rate of ination. A broken Social Security formula combined with an aging population has already forced the Social Security program into permanent decits. And as for everything else in the bloated Washington budget, well, Congress hasnt exactly been too good at keeping those costs down either. Despite these quickly rising costs Democrats have failed to even present a budget! In fact, it has been 752 days since the Senate Budget Committee, led by Democrats, have introduced a budget document. 752 days! Whats more, theyve recently said that they have no plans to introduce one anytime soon. On Thursday,!!Roll Call!reported, Senate Democrats are punting for now on a budget resolution, citing Budget Chairman Kent Conrads statement that after broad consultation, we have decided to defer a budget mark-up. Producing a budget is not only a!statutory duty, one in which Democrats have consistently ignored, but it is also an opportunity to present a vision for government. Their opportunity to lay out a plan for what America should look like how to x entitlements, the proper size of government, how much to raise taxes, etc. Long ago, Representative Paul Ryan introduced the Republican budget vision. A bold plan that gradually eliminates our decit through free market reforms of our governments biggest and most broken programs. Democrats didnt waste any time trying to rip the plan to pieces, labeling it as extreme and engaging in partisan scare tactics aimed at the elderly and poor. Of course, it is easy to attack someone elses plan when you dont have one of your own. Likewise, its difcult for Republicans to be able to criticize a plan that doesnt even exist. But early details of the Democrats unreleased budget plan show it is going to be worthy of derision.
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The Washington Post reported that the Democrats plan would raise taxes by nearly $2 trillion over the next decade. It also hinted that entitlement reforms were likely to be off the table, meaning that as their costs continue to grow rapidly over the next decade, taxes will likewise continue to grow. With so many taxes it is no wonder Democrats were loathe to introduce the plan. That strategy allows them to ignore tough votes on their own budget, while continuing to lambast Republicans vision from their untouchable ivory tower. How long will the Democrats continue to ignore their statutory and societal duty? How long will they prevent America from engaging in a true debate over competing visions for the role of government? How long will they attempt to hide the fact that their plan is simply to raise taxes? Well that depends. I have a feeling that their waiting to see if Saturday really is the end of the world. If so, it may ultimately come as a relief.
To Fix Medicare, You Have to Be Willing to Break a Few Eggs

Solving the Medicare quandary has transxed Washington for years. Sadly, Democrats have got nothing. No ideas, no plans, no guesses, nada. When asked what their plan was to x the scally broken program, House Minority Leader Nancy Pelosi!said, It is a ag weve planted that we will have to protect and defend. We have a plan. Its called Medicare. Its a very interesting strategy. Democrats plan to x Medicare, is, well, Medicare. Dont worry it doesnt make sense to us either. Such stunning closed-mindedness is reminiscent of an story from ancient Rome. Master craftsman Filippo Brunelleschi was bidding for a commission to build what would have been the largest domed structure in the world the!Duomo of Florence. At a meeting with the other artisans trying for the job, they became furious with his mysterious design that seemed to rely on nothing for support. After continual pestering, Brunelleschi nally pulled out an egg and challenged them all to stand the egg on its end. They looked at him as if he was either insane, or a genius who had gured out how to accomplish the impossible. Each of them tried and failed repeatedly to get the egg to stand up. Finally, in exasperation, Brunelleschi grabbed the egg and tapped it rmly on the table, cracking the bottom, and getting it to stand upright. The others protested saying that had they known thats how he intended to it, they could have easily accomplished the same thing.
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Brunelleschi retorted that they also would know how to create the enormous dome if they were just allowed to view his plans. Republicans, are the Brunelleschi of Medicare. Just as Brunelleschi had meticulously gured out a way to support a ceiling with no visible supports, Republicans have gured out how to x Medicare without raising taxes. Theyve discovered a plan to make it solvent not only for this generation, but for the foreseeable future, without bankrupting the Treasury. This has only made Democrats more incredulous. Like the competing sculptors from the story, obviously piqued that they lacked the creativity to come up with an answer to the problem, Democrats are pointing ngers and claiming that rules were broken. It would end Medicare as we know it, has become the consistent refrain. Yes, and Brunelleschi had to change the egg as he knew it in order to get to stand on its end. There was just no other way to solve the problem. Medicare is much the same quandary. No matter how much you search for little tweaks that would, as if by magic, right the otherwise sinking ship, Medicare continues to drown in its debts. So what it needs is a rm hand and a brilliant mind. It needs to be broken, if only a little, to get it to stand up straight without rolling over. That rm hand is Paul Ryans reform plan. Ryan would transition Medicare into a premium support system that provided generous payments to seniors, allowing them to purchase health care services on their own. To allay any fears about the size of the payments, seniors would receive just as much as todays Medicare beneciaries indexed to ination. Although Democrats are vociferously opposing this much-needed change, the term premium support was actually coined by two Democratic economists. In fact, a similar proposal was the chief recommendation made by the Commission on Medicare reform, chaired by Democratic Senator John Breaux. The liberal think-tank Brookings Institute has even!extolled!the numerous benets of a premium-support system, " " " " " " Why would premium support produce better care for Medicare beneciaries at more sus-" tainable rates of growth? First, with competition among the plans on the Exchange and " improving information about plan outcomes, seniors can be expected to migrate to lower " cost and higher quality plans. Second, capping the subsidys growth at a sustainable rate " would make the governments contribution predictable and incent movement to more ef-" cient health care delivery.
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With their Medicare plan, Republicans are trying to build something momentous and beautiful. Something that will stand the test of time and be rivaled by other nations. Something like the Duomo! Sadly, the other architects have consistently failed to think outside the box. All the while, our Medicare program has begun to crumble to the point where economists have already foretold its inevitable collapse. They just dont understand that sometimes you have to break a few eggs
Dispelling the One Graph to Rule them All Myth

Congressional Democrats and the online Left have found the One Graph to rule them all:
The graph shows that the Bush-era tax cuts and the Iraq and Afghanistan wars account for a hefty chunk of the debt in 2019. Influential liberal blogger Ezra Klein writes, In other words, cut the financial crisis and the major initiatives from the Bush-era out of the picture, and wed be in pretty good shape. In fact, wed be in great shape.
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There are several things wrong with this analysis that Id like to deal with in turn: !" The graph hides the truth of what would have happened if the Bush tax cuts had not have been passed, #" It misleads the reader as to Democrats stance on the Bush-era tax policies $" It provides a favorable snapshot that fails to tell the underlying story of our problems, and %" Just stop with the Bush-era tax cuts name game
Hiding the Truth Since World War II tax revenues have averaged around 18 percent of GDP. The CBO predicts that if the Bush tax cuts are not continued, tax revenues will jump to 23 percent of GDP by 2035. In CBOs words, the tax system would be quite different from what it is today. Households at all points in the income scale would pay a higher share of their income in taxes than similar households pay today. In fact, without tax relieft, taxation would have increased by more than 30 percent as a share of the economy!
By contrast, passing and extending the Bush tax cuts put tax revenues much more in line with their historical norm. In fact, the CBO predicts that even with a permanent extension of the Bush-era tax policies, revenues as a share of GDP after 2020 are roughly 1 percentage point higher under . . . than the average share observed over the past 40 years.
So when the graph hints at the notion that the Bush-era tax policies are a main contributor to our deficit, they are comparing that to a reality in which never-before-seen tax burdens would have been thrust upon Americans.
Democrats Support the Bush Tax Cuts Too The graph points to the Bush-era tax cuts as the main offender in causing our current fiscal woes. If only wed have got rid of them last August wed be on our way towards a balanced budget. Thats pure revisionist history.
Neither party was advocating for getting rid of all of the tax cuts. Sure, Republicans wanted to keep all of them in place, realizing that the more money taxpayers got to keep in their pockets, the better it would be for the economy, but Democrats wanted to keep the vast majority of them in place.
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The problem is that when people hear Bush tax cuts their mind automatically drifts to the wealthy, when in fact, most of the cuts went to the middle class. According to the Treasury, extending the Bush tax cuts for everyone costs the federal government $3.8 trillion over the next 10 years. Only $680 billion of that is for the wealthy, $3.1 trillion of that is for the middle class. The graph touts a supposed cure, but its important to remember that its one Democrats never pushed for.
Misleading Snapshot Lets remember that the graph only looks through 2019. This happens to conveniently be just prior to the explosion in entitlement costs as the Baby Boom quickly falls into retirement. When Ezra Klein says wed be in great shape if we took the Bush-era policies out of the picture, hes completely off-base. A correct statement would be our nations balance sheet may look a little better for a few years, in large part because everyone is paying enormously higher taxes, but soon Medicare and Medicaid costs will push us towards default.
Stop with the Language Tricks As Keith Hennessey has tried his best to hammer home, At some point a policy flips from extending a tax cut to preventing a tax increase. The top marginal income tax rate has been 35% for almost ten years . . . Most DC Democrats try to have it both ways; they talk about preventing tax increases on the middle class but oppose extending tax cuts for the rich. This rhetorical inconsistency masks a parallel situation in law and policy. Either theyre both extending tax cuts, or theyre both preventing tax increases. But why stop with Bush? Liberal icon John Kennedy cut the top tax rates from 91 percent to 70 percent. Why dont we have a graph looking at how much those increased the deficit? Something tells me it has a lot more to do with demonizing a Republican president than serving as a sensible dividing line.
Democrats Words Coming Back to Bite Them

Americans are a forgetful and forgiving people.
Its pretty much built in our DNA. Not too long ago Michael Vick was slaughtering dogs, now people root for him like hes an underdog. Kobe Bryant was once accused of sexually assaulting a hotel employee, now hes one of the most popular sports stars on the planet. Mike Tyson wasnt just accused, but was convicted of rape, then upon release, bit off part of another boxers ear, and yet fans will still anxiously await his cameo in this summers The Hangover 2.
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To say we have short memories is an understatement. We have tweet-length memories. After 140 characters, Ive probably forgotten about it.
But even with our perpetual willingness to forgive and forget, the Democrats latest attempt to pull the wool over our eyes has us saying really?
Take Senate Majority Leader Harry Reid. Just last month, Reid was pushing for a clean vote to raise the debt ceiling, saying We dont have to attach anything. Its a debate. In fact, Reid saidthat he hoped any debt reduction proposals would move as a separate piece of legislation because such measures have nothing to do with attaching it to the debt ceiling.
Republicans realized how irresponsible this was. Americans overwhelmingly want any increase in the debt ceiling to be tied to spending reductions and procedural reforms. So they called Harry Reids bluff.
This week, Senate Republicans announced that they force a clean debt limit vote, free of any spending reductions, programmatic cuts, or reforms. If Democrats wanted to show the people that they were content to spend like usual, then so be it, this would be their chance.
Realizing that many Democrats actually care enough about the deficit (or at least the politics behind it) to not vote for a clean bill, Harry Reid was forced to do a bit of backtracking. Despite his earlier call for a clean vote he now called such a vote irresponsible and said it would send a terrible message to the international community.
Cmon you didnt expect us to forget that, did ya Harry?!?
But Harry Reid wasnt alone in his underestimating the collective memory power of voters. Almost every Senate Democrat has done the same thing. Take a look at some of these statements from Democrats praising President Obamas budget as a wise and responsible proposal:
& Sen. Chuck Schumer (D-NY): This is a responsible proposal . . . I believe this approach should have bipartisan support. & Sen. Tom Carper (D-DE): The Presidents budget is an important step forward
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& Sen. Jeanne Shaheen (D-NH): a responsible framework that balances economic growth and the need to address the deficit & Sen. Bill Nelson: I personally think that the Presidents budget is a step in the right direction & Sen. Kent Conrad: The Presidents budget gets it about right in the first year & Sen. Max Baucus: The Presidents budgetstrengthens our economy
The love fest could go on forever, but I think you get the point Democrats were nearly falling over themselves in the rush to gush over the Presidents budget.
Yea, well that all went down the drain. Last night the Senate voted on President Obamas budget proposal. It went down in flames, being rejected by a vote of 0 to 97. Yes, you read that right. The Presidents budget received zero votes. Nada. Zip. Zilch. Squadoosh.
On both occasions Democrats are hoping you would forget. Forget, that not even they believe the words that are coming out of their own mouths. Its a clever tightrope theyre trying to walk talking a big game on to placate liberal voters, while voting with a dose of moderation to show everyone else their sane. But you can only ride a one-trick pony so far before Americans catch on to the fact that youve let politics supplant any sense of principle.
Sure Americans may be forgetful and forgiving. But it appears Democrats have confused that with stupidity.
Clinton on Entitlements: Weve Got to Deal With These Things

When Bill Clinton talks, Democrats tend to listen. And for good reason. Despite his personal foibles, Clinton still ranks as the most popular political figure in the country. Despite his liberal views on many issues, hes come to enjoy a deep respect across the ideological spectrum, a sage voice of reason in a sea of crazies.
Thus, Clintons words carry a certain currency that has only appreciated in the inflationary political dialogue of our times. Thats what makes his stern words to his fellow Democrats on the issue of Medicare so deeply important.
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At a fiscal summit put together by the Peter G. Peterson foundation Clinton said, I think the Democrats are going to have to be willing to give up, maybe, some short-term political gain by whipping up fears on some of these things if its reasonable Social Security proposal, a reasonable Medicare proposal. Weve got to deal with these things. You cannot have health care devour the economy.
It was a stunning statement that sliced to the very heart of the political problem we face. Washington has spent so long buying votes by adding benefits to Medicare, Social Security, and the like, that theyve become as popular as they are bloated. As Republicans have bet their fortunes on reform, Democrats have made a Faustian bargain. Theyve chosen to defend the status quo, not because they believe it to be a sustainable fiscal course, but because they know it is an easier sell to the voters.
This, Clinton says, is a strategy Democrats must leave behind if America is to truly step back from the debt abyss.
His advice is even more important given Republicans loss in the New York special election. Democrat Kathy Hochul, an early longshot in a solidly conservative district, came from behind to win. Although there were many reasons for the upset, most notably a fake Tea Party candidate, Democrats have seized on the results as a referendum on Paul Ryans Medicare reform plan.
At the fiscal summit, ABC News John Karl overheard a candid conversation in which Ryan expressed his fear to President Clinton that the election results would cause the debate to sink into a paralysis. You know the math, and then almost despondently concluded, we knew we were putting ourselves out there.
Ryan can foresee the tough times ahead. His plan was already on the receiving end of a blunt attack campaign and the election results would only strengthen the oppositions resolve. His bold and brave plan to save Medicare from going bust threatened to wilt under the weathering heat of Democrats hot air.
Hopefully Ryan was heartened by Clintons speech. Clinton told the crowd, that You shouldnt draw the conclusion that the New York race means that nobody can do anything to slow the rate of Medicare costs. . . [B]ut Im afraid that the Democrats will draw the conclusion that . . . we shouldnt do anything and I completely disagree with that.
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Sadly, Clintons sage words have already been proven true. The morning following the election results, Guy Cecil, the executive director of the Democratic Senatorial Campaign Committee issued a statement arguing that Democrats will be able to play offense in Senate races across the country by remaining focused on the Republican effort to end Medicare.
Senate Majority Leader stepped up the rhetoric even further, using his time on the floor to say, The Republican plan to kill Medicare is a plan to make the rich richer and the sick sicker.
Apparently Bill Clintons voice of reason no longer holds sway among Democrats. Theyre become too enamored with the trappings of power to consider ceding a political advantage, even for the good of the nation. Democrats may have tuned him out, but heres hoping Americans are still listening, because his words simply cant be repeated enough Weve got to deal with these things.
Two Can Play at the Medicare Scare Tactics Game

We cant play under two sets of rules . . . I dont think this is healthy. But it is the system we have. And you cant expect one side to operate under one set of rules and the other side to operate under another. David Axelrod, Senior Communications Adviser to the President.
Axelrod was talking about the emergence of Democratic organizations designed to pump millions in anonymous contributions to candidates in the upcoming elections. If Republicans were going to do it and get away with it, then screw the moral high-ground, Democrats were going to do it to.
And that pretty much sums up how Im feeling about the Medicare debate right about now. Republicans have tried to have an adult conversation on how to reform our broken entitlement system. Weve tried to speak honestly and responsibly about the need to get government spending under control.
Where has it gotten us? Nowhere. For Gods sake just this past week Democrats released an ad portraying Paul Ryan as literally throwing an elderly woman out of her wheelchair and off a cliff. How can you expect to have a genuine debate when that is what youre up against?
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So screw it. Im pulling a Tony Montana from Scarface. You wanna play rough? Okay. I play rough. Say hello to my little friend!
Maintaining the status quo wouldnt just push grandma over a cliff, it would pile the entire family, children and all, into the car and jam on the gas. Were going out Thelma and Louise style.
But dont take my word for it. In a Wall Street Journal op-ed, former Medicare Trustee, Thomas Saving, and president of the National Center for Policy Analysis, John Goodman, explain just how Obamacare will kill Medicare.
Almost no one familiar with the numbers thinks that the planned brute-force cuts in Medicare spending are politically feasible . . .
But suppose the law is implemented just as written. In that case, according to Medicare Trustees, Medicares long-term unfunded liability fell by $53 trillion on the day Obamacare was signed.
But at what cost to the elderly? . . . In terms of sheer dollars involved, the laws reduction in future Medicare payments is the equivalent of raising the eligibitliy age for Medicare to age 68 for todays 65 year-olds, to age 71 for 55-year-olds and to age 73 for 45-year olds. But rather than keep the system as is and raise the age of eligibility, the reform law instead tries to achieve equivalent savings by paying less to the providers of care.
Its such an important piece that I urge you to read it in its entirety (HERE), but hopefully that snippet gave you a since of the sheer idiocy that Democrats are attempting to pass off as saving Medicare.
All Obamacare did was wave a magic wand and essentially mandate that costs be lower. Thats not reform, thats madness. For Democrats to achieve any of the savings that they propose, doctors and hospitals would see enormous cuts in the amount of money they receive for accepting Medicare patients. At best, elderly patients would receive reduced quality of care or fewer treatment options; at worst, doctors will refuse to accept Medicare patients at all.
This is the reality that Republicans have been fighting tooth and nail to try and avoid. Weve offered a plan that would fundamentally stabilize Medicares finances, using market forces and the
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freedom of choice to keep health care costs in check. Is it a perfect proposal? No. Is it the only proposal out there? Yes, because Democrats are more happy to demagogue any proposed solution rather than present their own. Is it akin to pushing grandma off a cliff? Hell no.
But maintaining the status quo is. The precious present, which Democrats seem to be fighting to hard to keep will inevitably push America into default. It would make the recent recession look like childs play. Trillions of dollars in wealth would likely be lost, our debt interest payments would skyrocket by untold billions, and millions of people would be unemployed. You wanna talk about scary. Beat that.
Under the Microscope: Massive Waste Found in Federal Science Funding

If youve read this blog long enough (or at all) youve likely come away with the feeling that the government isnt really good at doing much of anything. Well, after some deep searching weve finally come across something that the government is good at; no, spectacular at! Its a field in which they are innovative enough to put Steve Jobs to shame, successful enough to make Mark Zuckerberg blush, and wily enough to make Warren Buffet fall down in praise.
What field is this you may ask? Why, finding incredibly dumb ways to spend our money of course!
Fortunately, if the government has proven itself to be the Moriarty of waste then Senator Tom Coburn has revealed himself to be Sherlock Holmes. Hes issued report after report detailing the ridiculous ways Washington has distributed our tax dollars. Hes found everything from $1 million to build a guardrail around a lake that doesnt even exist, to $144,000 to see how monkeys react to cocaine, to $18 million for a sports complex for the town of Lakewood Village (pop. 3,050).
And now the spending sleuth is back with another damning report. Entitled Under the Microscope, Sen. Coburn takes a deeper look into the National Science Foundation (NSF).
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Now, lets begin by saying that the NSF has a very important mission. With $6.87 billion in funding, the NSF represents approximately 20 percent of all federally funded research conduced in U.S. colleges and universities. Its in large part responsible for the creation of the internet for goodness sakes!
There is also a growing fear that America is falling behind the rest of the world in math and science. That can have dramatic economic impacts as new technologies, innovations, research, and the products that those processes lead to, begin to shift overseas.
That said, our government has become conditioned to the idea that more money is always the best solution to any problem. Unfortunately, history rarely bears that out, especially in the field of education where billions more is spent but academic achievement remains stagnant. So when the President proposes to increase the NSFs budget by 18 percent, its healthy to wonderis that money being spent wisely and effectively? And as Sen. Coburns report shows, its hard to believe the answer is yes.
According to Sen. Coburn, The good news for taxpayers is there is no question NSF has contributed significantly to scientific discovery.
The bad news is a significant percentage of your money is going to what most Americans will consider fraud, waste, and abuse, and there are many areas where NSF could contribute far more with better management and smarter targeting of resources.
Among the $3 billions in waste that Coburn finds (note: thats almost half of their budget):
Mismanagement of Funds: The agency currently has $1.7 billion in undisbursed grant money, calling into question the $1 billion in additional funds under the Presidents budget Lack of Accountability: The Office of Inspector General has found that the NSFs grant management activities have been poor, including monitoring awardees financial accountability, performance, and results. Duplication: The government has 17 different science programs, each with different reporting structures and metrics. As just an example of the problems this creates, one Uni-
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versity of Florida researcher was found to have received funding from three federal agencies for the same exact proposal
Questionable Projects: Among them A $79,998 grant to discover that the best [sports] players will tend to choose winning [college] programs. Brilliant! A $3 million study to determine whether sick shrimp could run on a treadmill as long as healthy shrimp. Genius! And a $315,000 grant to figure out whether playing Farmville helps develop relationships. Eureka!
America must improve its educational foundation in math and science. But after reading this report its clear that spending our money more wisely is the answer, not simply spending more money.
The Taxman Cometh And He Brings High Rates

The Iceman Cometh, the inspiration for our title, is a decidedly depressing play. Its set it an old Greenwich Village saloon populated by lowlifes of every sort. The group of men who serve as the focus of the plot spend their lives attempting to drown their sorrows in the company of a good stiff drink. Their only hope in the world is the anticipation of a visit by a traveling salesman, Theodore Hickman, who often turns up at the saloon after a sales trip and becomes the life of a party.
But when Hickey finally arrives it becomes clear hes a changed man. He has become a convert, finding salvation in places decidedly north of the bottom of a bottle of whiskey.
President Obama is our Hickey. We, the struggling masses, looked on with doe-eyed anticipation that he would lead our nation out of its doldrums and back toward prosperity. Displaying our navet, we expected him to accomplish it through sheer force of will and charisma.
What we received was decidedly not what was advertised. We hoped that Obama would bring change to the way Washington worked. That it would be smaller, more efficient, and spend less of our money. Instead, government continues to grow larger, and the only change that appears imminent is higher taxes.
The taxman cometh. And he cometh with a vengeance.

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As economic writer and policy analyst Stephen Moore wrote in this weeks Wall Street Journal,
If the Democrats millionaire surtax were to happenand were added to other tax increases already enacted last year and other leading tax hike ideas on the table this year this could leave the U.S. with a combined federal and state top tax rate on earnings of 62%. Thats more than double the highest federal marginal rate of 28% when President Reagan left office in 1989. Welcome back to the 1970s.
How does he arrive at that astounding figure?
Well first you take todays top income tax rate of 35 percent, then you:

Remove the Bush-era tax policies which lowered the rates for almost all tax brackets Reinstate the personal exemption phase-out which prevents certain people from taking itemized deductions Add Medicare payroll taxes which contain no wage cap Factor in the new 0.9 percent surtax on anyone with any family earning more $250,000 contained in Obamacare Add in the Presidents proposal to eliminate the income ceiling in the Social Security tax Insert a new 3 percent millionaire surtax that has been proposed by Democrats
Put it all together and you have a tax rate north of 60 percent, and that doesnt even include the White Houses plan to dramatically raise taxes on investment income.
This enormous tax burden poses a real threat to economic growth. People respond to incentives. The higher the marginal tax rate (the tax on the last dollar of income earned) the lower the incentive to increase productivity, raise investment, or engage in entrepreneurial activity.
This has been proven in study after study. Economist Robert Barro found that the worlds twenty fastest growing economies either all had low marginal rates or cut their rates in half prior to 2002. After surveying many studies Karabegovic found that, The evidence from economic research indicates that . . . high and increasing marginal taxes have serious negative consequences
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on economic growth, labor supply and capital formation. Nobel Laureate Robert Lucas found that high marginal tax rates on capital dramatically reduce economic growth by reducing the stock of capital. Theres plenty more, but I think you get the point.
The Taxman Cometh, not to bring us good news or kick off the economic boom needed to get this country back on track, but to tell us the sobering fact that he intends to raise taxes. Like the characters in the famous play, the Taxmans arrival is enough to drive me to the drink.
Negative Economic Growth Leaves America With a Hangover

So I saw Hangover II over the weekend. As with so many summer movies, I go with lowered expectations and yet still leave feeling less than satisfied.
I get it. The summer is not Oscar season. Nobody is gaining or losing tons of weight for a role. There are no plots examining gender identity, drug abuse, or growing up in a broken home. The closest thing you get to a period piece is Pirates of the Caribbean and the only wars you are likely to see will involve robots or aliens. Its pure dumbed-down entertainment, and I know that going in, but I still cant help feeling let down.
It was much the same emotion as when I saw the recently released economic numbers. I knew they were not going to be good, but dang, did they have to be this bad?
According to the Commerce Department, gross domestic product (GDP) grew at an annual rate of 1.8 percent in the first quarter. Not only is that well below the 3.1 percent pace from the last three months of 2010, thats considerably less than the 2.2 percent growth that many experts expected.
Now I learn that even that measly figure, the movie equivalent of say, Transformers 3: Dark Side of the Moon (dont even try and argue with me that this will be good), is actually more like Freddie Got Fingered (possibly the worst movie evah). Business Insider explains the reason for the hearty downgrade:
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The way the government calculates real GDP is to start with nominal GDPthe actual change in the output of the economy as measured by adding up all the actual sales prices (nominal)and then deflating this number by subtracting an estimated inflation rate. Thus, the government backs into the real GDP growth number, starting with nominal prices and then adjusting for inflation.
Well, the GDP deflater the government is using right nowthe estimated rate of inflationis only 1.9%. As anyone who has been to a supermarket of gas station recently can attest, this assumption is preposterously low.
The governments actual estimate of quarter one inflation was 5.7 percent, not 1.9 percent. According to Business Insiders calculations, using this inflation number you see that first quarter GDP growth was actually -1.82 percent.
Negative! This is a recovery for goodness sakes! Were supposed to be seeing economic growth numbers north of 5 percent, certainly nothing less than that, and in the name of all things holy, not negative. That just seems downright impossible. Its like bringing Steven Spielberg, George Lucas, and Harrison Ford back to make Indiana Jones 4 and finding a way to screw it up. Oh wait, thats not impossible, it already happened.
For comparisons sake lets take a look at another director, Ronald Reagan, aka the Scorcese of economic recoveries. After the end of the 1981-82 recession economic growth shot to as high as 9.3 percent, spent the next few quarters hovering around 8 percent, and then settled back into a normal rhythm of around 4 percent annual growth. By contrast Obama aka the Michael Bay of presidents (loud, flashy, often pretty, but always terrible) has eked out one quarter of 5 percent growth, and then averaged around 2.5 percent growth.
Different results are matched by contrasting strategies. Reagan pushed spending restraint, Obama massively increased spending; Reagan deregulated entire industries, Obama has overseen massive regulatory expansions; and Reagan focused on free markets, while Obama continues to sit on three pending free trade agreements.
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Fortunately, the House Republicans just released a jobs plan, including great ideas like lowering the corporate tax rate and reducing government regulations. But it will take the White House and the Senate Democrats to really achieve the policies we need for lasting growth.
Otherwise our economy will be stuck in a disappointing hangover, one that might even overshadow my disappointment in the Hangover.
Setting the Stage for a Summer of Heated Negotiations: The First Debt Limit Vote
When the government hit its debt limit earlier this month, the Treasury Department warned of the desperate need for a vote to increase the debt ceiling by mid-August. Leaders on both sides have speculated that without the vote, the U.S. would likely default on its debts, triggering a massive financial crisis and causing widespread panic among global markets.
Today, the House is expected to reject the administrations request to lift the $14.3 trillion national debt ceiling. The voting will take place well after Wall Street closes for the day, according to Fox News, and will begin no earlier than 4:45 pm ET. This late afternoon/early evening voting is a precautionary measure to avoid impacting the market as the House did in September 2008 when it failed to approve the TARP/bailout bill and more than $1.2 trillion in market capitalization washed away.
The GOP House majority has brought up a clean bill, under which there would be an increase to the limits on government borrowing, without also making large cuts to federal spending. According to CNN, The bill would ensure Washingtons ability to keep paying its bills through the end of 2012. This free-of-spending-cuts proposal seems to be exactly what many Democrats have called for, so why would the Republicans provide them with the opportunity to vote on it? The reality is far more strategic than it appears! According to USA Today:
No Republicans are expected to vote for the clean debt limit increase and Democrats, with 192 members, dont have enough votes to pass the measure by Rep. Dave Camp, RMich. In addition, the GOP leadership has structured the vote so that it would require a two-thirds majority to pass.
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The vote is intended to expose fault lines within the Democratic caucus, and Republicans are depending on a large number of Democrats to vote with them tonight. Despite the fact that House Democratic leaders have long advocated for the conditions presented in the clean debt limit increase, their support of the proposal is expected to fall short in tonights vote. According to CNN:
The vote was scheduled by GOP leaders to show that any attempt to divorce an increase in the debt ceiling from deficit-reduction efforts a move initially favored by the Obama White House is a political non-starter.
GOP leaders believe the failure of the debt limit vote to pass will send a clear message to the White House about the unity of the Republican caucus and just in time for their meeting with President Obama! Tomorrow, Obama plans to speak with Republican House members about the administrations ongoing budget negotiations, which include the debt-ceiling. Perhaps the GOP will successfully demonstrate their unity and determination in dealing with budget crises and impress even Obama himself? If only!
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May '11 Issue Debrief

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CRNC Research Compendium May 2011

Editor: Brandon Greife, Political Director

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Lemonade Stand Nostalgia How Government Regulation is Squashing Entrepreneurs

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American Exceptionalism Is At a Crossroads

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Making Social Security Secure Lessons from Chile

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Are you coming to convention?

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See you in July!

We Dont Need More Debt, We Need More Jobs!

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April Jobs Report is Good, But Dont Celebrate Yet

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We gonna celebrate your party with you Celebrate

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Obamas High Speed Rail Visions are Foolish

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Fumbling and Stumbling Foreign Policy of Obama

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Train yourself to elect a better future

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Fannie and Freddie Continue to Bleed Taxpayers Dry

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Why Ending _____ As We Know It Is Actually a Great Thing

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States to Federal Government: Learn from us!

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New Study: The Stimulus Destroyed 1 Million Jobs

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