“Our practical choice is not between a tax-cut deficit and budgetary surplus. It is between two kinds of deficits: a chronic deficit of inertia, as the unwanted result of inadequate revenues and a restricted economy; or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, increase tax revenues, and achieve . . . a budget surplus.” John F. Kennedy


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Aug 21 2013

Detroit and Blue State America


As a country, we’ve seen the city of Detroit pushed into bankruptcy as a result of over half a century of municipal mismanagement and corruption, the largest municipal bankruptcy in US history, at $18-20 billion. At one time it stood as the richest city, per capita, in the US, as well as the fourth largest in terms of population.

What we’ve seen over the decades since Detroit’s economic and population height is a long, sustained flight of capital. Individuals and businesses have made the rational choice to invest in cities and towns where business growth is encouraged through contractual freedom (right-to-work), low taxation and decreased regulation. When the entrepreneurs and businesses that can easily leave, do, what remains is a static workforce made up of mostly union workers and government employees, or rather taxpayer-subsidized union employees.

From December 2010:

The Census Bureau announced today that eight states will gain at least one Congressional seat. Texas will gain four seats and Florida will gain two. Arizona, Georgia, Nevada, South Carolina, Utah and Washington will gain one seat each. The biggest losers will be New York and Ohio – both will lose two seats – while Illinois, Iowa, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, and Pennsylvania will lose one seat each.

The average top personal income tax rate among gainers is 116 percent lower than among losers. The total state and local tax burden is nearly one-third lower, as is per capita government spending. In eight of ten losers, workers can be forced to join a union as a condition of employment. In 7 of the 8 gainers, workers are given a choice whether to join or contribute financially to a union.

Detroit’s bankruptcy was preceeded by sixty years of rising taxes, generous government pension promises and a shrinking tax base. Additionally, non-government unions forced much of the industry in Detroit into a position where it was advantageous to build plants oversees in order to avoid unsustainable costs.

Most of those who had the means to leave, did. Of those who have chosen to stay, fewer than half (49.8 percent) are either working or looking for work, the lowest rate among major US cities.

Detroit also has far more city employees per resident than do most other similar sized cities and, for those making $50,000 or more, the 4th largest tax burden among the largest US cities. In fact, those taxes are going to pay for things such as $56,000 for a horseshoer in the Detroit Water & Sewer Department, despite the fact that it has been years since horses were used by the city. Not surprisingly, Wayne County has 520,000 citizens receiving food stamps, over 25 percent of its citizenry, presumably with most of those located within the city of just under 707,000.

Dynamism and entrepreneurship have virtually disappeared while government jobs, dying industry and welfare have remained. When those with the imagination and drive to create new jobs and new industries leave in search of more favorable conditions for taking risk, the jobs of the future follow them.

Detroit is left with the jobs and industries of the past, propped up by federal investment and municipal credit that is now wiped out.

Can anyone please explain how the present in Detroit (and Bell, CA and San Bernardino, CA and Stockton, CA and Jefferson County, AL, . . .) is any different from the future of all the cities and states which continue to follow the very policies that destroyed America’s once-great motor city?

Dec 10 2012

“The Age of the Unserious”

C.M. Phippen

Our president claims that he is making an honest effort to negotiate with Republicans to avoid the fiscal cliff. He wants us to believe that they are the ones who simply won’t budge on their positions and won’t allow him to fix the horrific fiscal issues we face.

This is the president whom Tim Geithner claims is willing to go off the fiscal cliff if the Republicans don’t agree to his plan to raise taxes on the richest 2% because, in Geithner’s words, “remember, it’s only the top two percent.” Doesn’t unequal treatment under the law become a civil rights issue at some point!? Anyway . . .

This is the same president who has had his past two budgets shot down in Senate votes of 99-0 and 97-0, one of which looked an awful lot like Obama’s current proposal from which he is negotiating. He apparently expects Republicans to support the plan that his Democrat allies in the Senate refused to support?

In addition to major entitlement spending cuts, the greatest priority our government should have is that of allowing/encouraging/stimulating economic growth, which will in and of itself lead to the President’s desired revenue increases.

In fact, Bill Whittle recently made the point that “if you destroyed the entire government, burned every [public] building, fired every government worker, sank every aircraft carrier, even with no government to pay for – none – we’d still pay the same taxes that we’re paying today and still have to borrow or print money just to pay for entitlements.”

I would argue that if we do indeed have a shortage of money for schools, teachers, police and other government services, it is entitlement spending that is draining those resources, not tax cuts or wars.

Even Austin Goolsbee, former president of Obama’s Council on Economic Advisers, recently stated that any solution to America’s economic ills “cuts on discretionary and entitlement spending.”

In addition, Peter Orszag, former OMB director, recently came out urging his fellow Democrats to support reforming entitlements and putting “crucial programs on a sounder footing.”

I must assume that our president is well aware of the fact that nothing in his rejected budget plans or spending priorities will stimulate growth. And he has made it very clear that, despite his repeated declarations to the contrary, he is never going to cut any real spending.

Thus, his only plan to decrease the rate of growth of our historically unprecedented federal deficit seems to be an increase in revenue coming from the already over-burdened taxpayer. Unfortunately, the proposal on which he is willing to risk our entire economy, that of increased taxes on the top 2%, leads to enough revenue to cover expenses for about eight days! Brilliant!

Even the Obama-touted Buffet Rule, if implemented, would pay for about 28 hours of government spending. If you want to close the deficit through increased taxes on the two highest tax brackets – 33% ($178,650 – $388,350) and 35% (over $388,350) – it would be necessary to hike those rates to 159% and 166% respectively. I’m assuming most liberals would tell us that such rates would have absolutely no impact on economic growth or the willingness of those individuals to work!

AEI economists recently looked at the effect of tax increases v. entitlement reforms on fiscal crises management over the nearly three-decade period of 1970-2007. They found that countries that were able to successfully reform did so mainly with spending cuts; in fact, on average 85% of their budget gaps were closed this way. On the other hand, those with failed reforms were the countries that, on average, relied at least 50% on tax increases.

Just ask Jim Sinegal, co-founder of Costco, if those tax increases will most likely lead to greater or reduced revenue next year. He’s a supporter of Obama who preached the moral imperative of Obama’s tax plan, and of businesses large and small all “following the same set of rules . . .” while risking Costco’s credit rating to take on an additional $3.5 billion in debt in order to pay out dividends this year before Obama’s tax hikes kick in. Oh, and he is apparently the biggest beneficiary of this move.

Or ask Great Britain how a plan of tax increases worked for them last year when they raised rates on those making over £1 million (about $1.6 million) to 50%. The result was that they saw a £7 billion treasury loss as nearly two-thirds of the high earners were suddenly missing from the country or finding ways to shelter income.

Funny though, that even after the manifestation of the result of such policies, political supporters of the increased tax are now calling any reduction a “tax cut for millionaires,” as though resentment toward the wealthy is more important than the amount of money the government actually has for programs which benefit the less well-off.

Yes, Mr. Whittle, I think you’re right; this truly is “The Age of the Unserious.”

Dec 5 2012

Childhood Obesity and Michelle’s Failing Plan to Change It

Reprint of an article I wrote for Smart Girl Nation, third quarter 2012.

C.M. Phippen

The United States has an obesity problem.

Let’s ignore the fact that this problem for women has been linked to food stamp usage and that the longer they remain on food stamps, the more weight they gain; weight which is, to a large degree, lost after ceasing participation in the program.

Let’s forget that almost 45 percent of overweight or obese children, 10-17, are poor and that adolescents in low-income areas are nine times more likely to be overweight than those in well-off neighborhoods.

Let’s not pay attention to the fact that in many localities schools provide breakfast, lunch and dinner for students. These programs are generally in low-income areas where, presumably, many of the parents are already receiving food stamps.

Now, while expanding school food programs and encouraging food stamp participation through slick new advertisements and a further loosening of requirements, our federal government is more concerned than ever about rising obesity rates.

Enter the school cafeteria and Michelle Obama’s plan to slim down America’s children. Changes to the school lunch program were rolled out this year, changes that include more whole grains and a wider choice of fruits and vegetables. The new lunches also have calorie caps of 650 calories for elementary, 700 for middle school and 850 for high school.

Keep in mind that growing teenagers need more calories than adults, and active teens may need substantially more, anywhere from 1,800 – 3,200 calories per day. Since the implementation of the new lunch program, many students are complaining of being hungry by early afternoon and those who can are simply choosing to bring lunch from home in order to have enough to eat.

While students are complaining about not having enough to eat, twice as much food is being thrown away from school lunches this year, according to ABC news. Maybe this is because, as one food service worker put it, “It’s completely flip-flopped in terms of portion size. New federal guidelines require vegetables to comprise the largest portion of a student’s lunch, while the entrée is now being treated as a side dish.”

Agriculture Secretary Tom Vilsack, who worked with Michelle Obama on the new lunch initiative, claims that the answer for these hungry students is to eat a snack; in other words, replace the food they just took out of the school lunches.

The administration is apparently working on creating a new snack program for kids not getting enough to eat at lunch, thanks to the last program they just created.

Meanwhile, children in private schools, like Michelle Obama’s own daughters, are not subject to the same rules public school children are. As one who has had children in both public and private schools, I’ve clearly seen the responsiveness of private schools specifically relating to the lunch issue. If the food isn’t what the kids want, the parents stop buying and the program becomes too expensive to run; consequently, school administrators do all they can to provide healthy, attractive and interesting food options that kids will actually want to eat.

Unfortunately, there are no such incentives, or common sense, in the public system. While a new snack program is being implemented to fill the tummies of hungry students who are eating their federally-limited two ounces of protein while probably throwing away most of their vegetables, students are prohibited from receiving additional helpings even if there is food left over.

The kids are throwing away their vegetables, we’re throwing away the leftover meat and our federal government is implementing a new supplementary snack because everyone’s starving; all while our country is going broke. Huh?

Nov 16 2012

Obama and the “Balanced Approach”

C.M. Phippen

Within days of his razor thin re-election, President Obama chose to inform us that he now has a mandate for his deficit reduction policies that include a “balanced approach.” In this case, balanced means he wants the wealthy to pay for the overspending of politicians in Washington; if the rich will just pay more, then the politicians will find the discipline to reduce their overspending by a tiny fraction.

Never mind that it wasn’t a “balanced approach” of irresponsibility that got us here – it was fully a result of Washington not living within its means. The increase in revenue from those taxpayers would amount to $82.3 billion annually, the equivalent of about eight days of spending.

According to a recent study by Ernst & Young, just allowing tax rates to go up on those making over $250,000 a year could cause a loss over the long-term of 700,000 jobs.

Are we really willing to exchange eight days of spending for 700,000 jobs in an economy that is barely making it? Does this make sense to anyone who’s not a community organizer?

Our economy needs to grow at about a 3 percent annual rate in order to just keep up with new workers entering the work force; under Obama we’ve experienced a GDP growth rate average of about 2 percent.

Even, while denying that these increased tax rates will have any real effect on economic prosperity, has admitted that the US economy would take a .25 percent hit in growth if these taxes increase. Even if that is the worst of the economic consequences from such a policy of anything but “equal protection under the law,” are we really willing to take a 1/4 percent hit year after year just to cover eight days of expenses during each of those years, especially when the record under this president has been growth below what is necessary just to keep the currently high rates of unemployment stable?

Interestingly enough, when looking at the exit polling done on election day, only 33 percent of voters said they think taxes should be raised to deal with the deficit. A full 63 percent of voters responded “No” to the question of whether or not taxes ought to be raised to help cut the budget deficit.

Of course, no surprise that many of the people who probably voted for Obama were completely unaware of his plans. That would be because he didn’t run on his plans. He ran on demonizing Mitt Romney for being successful and rich, as evidenced by his 85.5 percent of negative ads in this campaign; ads that were mainly aimed at Romney personally rather than being aimed at his actions and principles, by the way. Translation – nearly all of his sizeable war chest was spent demonizing the most successful guy in the room.

There’s no better time in America to be a loser – we love the guy whose every promised outcome was a flop and who, at every turn, had an excuse handy as to why he just couldn’t accomplish what he wanted and why it was everyone’s fault but his own. The reason the stimulus didn’t work, according to the Obama administration, was that the recession was much worse than they’d realized; turns out it wasn’t as bad as we thought – 4.7 percent decline rather than 5.7 percent.

He truly is the president of the participation trophy generation. I guess though, that if the successful aren’t responsible for building their own success, it follows that the losers aren’t responsible for their own failures.

Nov 3 2012

Impacts of Global Warming Legislation on Temperature, Again

C.M. Phippen

We’ve been consistently told that manufacturing is dying in the US. While this isn’t true – we’re the world’s manufacturing leader and we produce more than ever (yes, even more than China) – it is true that productivity gains have led to fewer manufacturing jobs here in the US. While the left pushes businesses to keep more of their manufacturing here (rhetorically, that is; they don’t actually do anything that would make businesses want to operate here), they also preach the gospel of significantly decreasing our use of fossil fuels.

Has anyone ever seen an efficient factory that runs on solar and wind power?

Bill Maher just happened to be talking tonight about global warming, and I finally heard someone – Margaret Hoover – present the facts about the real effect of all of the silly CO2 regulations. When confronted with the facts that I wrote about THREE YEARS AGO regarding the minimal impact that global warming legislation would have on actually impeding global warming, Bill reacted in stunned amazement, stating he’d never heard that before. Uhhh, maybe that’s just because you’ve never educated yourself on the issue.

Just as an aside, Rob Reiner, on the same show, stated that we should all be driving electric cars by now. Apparently he is as unaware as Maher that “green” choices don’t necessarily have the impact the “experts” have led us to believe. In fact, a recent study showed that “the electricity generated to power electric cars caused more particulate matter pollution than that caused by an equivalent number of petrol driven vehicles.”

The difference seems to be a matter of where the emissions occur; for regular gas-powered vehicles the emissions occur while driving, whereas for electric vehicles the emissions occur where the electricity is generated. Apparently this leads to confusion for some, who suppose that if they can’t see it, it must not be happening.

Now back to the piece I wrote three years ago that is apparently news to at least Bill Maher. I complained at the time of writing that nobody in the climate alarmist camp was willing to talk about the issue. Maybe, like Maher, none of them had actually studied the issue before opening their mouths about it. I will reprint portions of that piece:

“If we were to reduce US CO2 output to zero, based on the assumptions made by believers in anthropogenic global warming regarding the effect of those emissions on temperature, the resulting decrease in global temperature would be 0.152°C immediately. This is, of course, wildly unrealistic and would return us immediately to the stone age (as opposed to slowly, over time, so we won’t notice quite so much).

“We pretty much all realize by now that if Kyoto were adhered to by all signing countries, the total reduction in temperature increase would amount to .19°C over 50 years, a miniscule amount that would have “no discernable effect on global climate.” We also are all pretty much aware by now that the countries that bound themselves to the Kyoto protocol haven’t done well at actually reducing emissions.

“Environmental scientist Chip Knappenberger writes that reduction of greenhouse gas emissions to over 80% by the year 2050, the goal of the Waxman-Markey climate change bill, would produce global temperature savings over the next 50 years of about 0.05°C. By the year 2100, the decrease in the temperature increase is projected to be between .112°C and .195°C. His projections are determined using the Model for the Assessment of Greenhouse-gas Induced Climate Change, or MAGICC. These projected reductions in temperature would have the grand effect of simply pushing back the “inevitable” by 2 to 5 years.

“I have searched and dug and investigated, and NOWHERE can I find any sort of rebuttal to this analysis. In fact, every analysis I do find says basically the same thing. NOWHERE is the issue even discussed among global warming believers. The argument seems to be that Waxman-Markey is simply needed in order to mitigate global warming. End of story. And that, apparently, is how the debate ended.”

At least until the truth was spoken . . .

Nah, that would be expecting too much from guys who think they know enough to dictate to us the solutions without ever having asked the most basic of questions.

Sep 19 2012

Our Tax Dollars and Receipts

Let me get this straight – the US federal government is spending $20 million of our hard-earned money every year on “Afghan firewood,” and they’re doing it without any receipts or other form of documentation.

According to John F. Sopko, special inspector general for Afghanistan Reconstruction, when the auditors asked for documentation of how much was spent on Afghan firewood, the response was, “We don’t have the records, we just spend the money.”

Just wondering how far that would get you if you tried it on an IRS agent, auditing your finances. Next time you’re sitting down with an IRS auditor in order for him to determine if you paid enough of your portion of that $20 million, just give it a try, something like, “I don’t have the records, I just make some cash and spend some cash . . . I paid you guys exactly what I owe you though. I can feel it.”

Go for it.

Aug 11 2012

Survival or Success

C.M. Phippen

The fundamental difference between liberalism and conservatism today:

Government dependence that drives the life and energy out of living and leads one to the point of being willing to march while demanding from someone else, “survival.”


Development of the human soul and spirit, leading to freedom and success within one’s abilities, interests and motivation, necessitating independence from the whims of government fiat.

Time to choose, America.

Aug 1 2012

Chic-fil-A and Government Power

C.M. Phippen

For many of us, the days of the cold war have been long forgotten and the lessons of the Soviet Union as a precautionary tale have been lost. We don’t quite grasp the machinations of such a government, and we certainly don’t understand how it gains such a hold over the people.

When I lived in Czechoslovakia in the early nineties as a missionary for my church, I spent a lot of time talking to all kinds of people.

I have been struck over this past week as I’ve watched the uproar over the comments of Chick-fil-A president Dan Cathy regarding gay marriage.

We generally tend to think that the power over speech of oppressive government regimes is exercised by throwing citizens in jail when they speak out against such governments. Sometimes that is the case. Other times as in the former Soviet Union, China, and much of the Middle East, the power of the government to control speech is used much more subtly.

The people under such oppressive regimes understand that the initial step is often simply to strip them of their livelihood, their home, or their child’s ability to get an education. In order to quickly shut down speech that violates state dogma, and before taking the more extreme step of imprisonment, an all-powerful government just needs to make it impossible for those whose speech doesn’t conform to the official party line to continue supporting their families. Imprisonment generally doesn’t happen until after they refuse to sit down and shut up with the more run-of-the mill intimidation.

I spoke with mothers who told me that under Communist rule in Czechoslovakia, not only were their children forced into mandated preschool programs by the age of two or three, but there they were taught that government was the answer to all problems. Rather subtle, in fact. They were taught that government was their master and that, as children, it was their duty to inform on family members, including parents, if they spoke or acted against government philosophies.

The result was a forty-year period where children were not taught the beliefs of their parents during their formative years; they were taught, in public schools, the prevailing government dogmas. Religion was virtually done away with because speech was so tightly controlled that parents were afraid to speak truth to their children. Children were also taught in those same government-run schools to never question the authority or “beliefs” of the state, enabling a virtual monopoly of uniform thoughts and ideas.

But how to explain the amazing technological progress and innovative thinking that came out of the Soviet empire?! Oh no, that would be us . . .

Back to the US, 2012, Chick-fil-A. President Dan Cathy offers his opinion regarding gay marriage. I’ve written about the way the free-thinkers and espousers of tolerance among us are quick to steamroll over the rights of individuals to live and speak according to their own beliefs, be they religious or otherwise, whenever they come into conflict with the beliefs of the enforcers of speech code.

Now we have liberals taking this one step further: we have attempts at Communist-dictator/fascist-style oppression. Like it or not, the tactics are the same. In the US today, apparently using the power of government to destroy the livelihood of those whose speech doesn’t conform to the official party dogma is now coming into vogue by the left. After eruptions of alarm across this country, some of these government officials have backed down, for now, while the issue is in the public eye; others have not.

When supporters of religious liberty and free speech refuse to bow to the powers of the almighty state, the next step in a dictatorial regime would be imprisonment. Certainly we’d never go there . . . not unless we could just institute some kind of hate speech statute that would make it illegal to disseminate ideas that don’t agree with the official government dogma . . .

But really, little plebes, you just keep eating your bread and watching those circuses (provided, of course, by benevolent government officials) and it’ll all be just fine.

Jul 26 2012

Obama’s Plan Worked?

C.M. Phippen

What plan was it that “worked”?

The plan where the debt held by the US government increased by an amount greater than the debt accumulated from George Washington’s presidency all the way to Bill Clinton’s?

The plan where US competitiveness fell from 1st to 5th?

The plan where unemployment went up as rapidly as the federal deficit and 700,000 more workers lost their jobs during the Obama recovery (I’d certainly hate to see an Obama recession)?

The plan where already unaffordable worker health insurance costs increased 23 percent?

The plan where the number of Americans in poverty rose by 6.4 million, to the highest level since the start of the war on poverty in 1965; and that is with the safety nets in place that were created by that war?

The plan where the number of Americans on food stamps increased 44%, to the highest rate EVER, all while the government runs ads touting dependence on food stamps to help you “look amazing“?

The results of the plan which lead Henry Waxman to declare this?

Jul 24 2012

Stimulus and Economic Growth?

C.M. Phippen

According to a recent interview with Larry Kudlow, Alan Greenspan admitted that, much to his surprise, the economic stimulus had a negative effect on the economy. The data showed that not only had it not been stimulative, it was actually detrimental to economic growth. Our government spent nearly $1 trillion and it not only did nothing to “stimulate” growth, it actually hindered it.

That makes sense, based on a little statement by Jared Bernstein a couple of years ago. I wrote about it at the time. Bernstein was the chief economic advisor to Vice President Joe Biden and he stated that the consensus among economists was that unemployment would not rise above 8 percent. This consensus ostensibly existed independent of any plans by the administration to pass a stimulus bill that amounted to nearly $1 trillion of borrowed money, as it existed in the fall of 2008 and prior to Obama entering the White House. Apparently the administration was as surprised as Alan Greenspan to find that the stimulus did precisely opposite what our president told us it would do.

One could expect any open-minded, non-idealogical leader to learn from the events of the past few years and change course; reconsider the policies that have stunted economic growth and harmed millions of Americans.

When asked recently by a reporter why President Obama hadn’t met with his jobs council in over six months, Jay Carney’s response was that the President “has a lot on his plate.” Of course, he has attended over 100 fundraisers and is a prolific golfer and entertainer of celebrities.

But back to the economic reality that the rest of the country must face every day, a recent study by Ernst & Young claims that we will experience a loss of over 700,000 jobs if the Bush tax cuts are not extended for upper income earners. If legislation extending those tax cuts for upper earners crosses his desk, Obama apparently will veto it.

On a number of occasions, when confronted with the evidence that raising certain tax rates reduces federal revenue and cutting those rates increases revenue, Obama’s response has been that he would still raise taxes on the rich for reasons of “fairness.” One must assume he just isn’t interested in the effect of such policies on the broader economy.

Then there’s Sen. Patty Murray’s recent comment that if the Republicans won’t cave to the Democrats by helping them to pass legislation that would exempt top earners from an extension of the Bush tax cuts (remember, costing our economy an additional 700,000 jobs) then the Democrats should allow all of the tax cuts to expire. According to Citigroup, if this were to happen we could expect a 4 percent hit to growth in 2013. Even if Congress extends the “middle-class” income tax cuts and allows all others to expire, we can expect a 2.9 percent decline in growth.

This in an economy that has only been growing at around 1.7 percent for the past two years. Either of these options would most likely swiftly throw us back into recession. But of course in this political machination (most likely non-idealogical), I’m sure Pres. Obama and Sen. Murray are only looking out for the middle class and poor, who actually need a job to get by.

Then there’s this remark from Alan Greenspan in the same interview, where he said that the largest problem with our debt (the Peter G. Peterson Foundation has been telling us this for a very long time) is entitlements, specifically Medicare. The solution to the debt problem for this administration was to add to our entitlements, specifically health care, in such a way that anybody who is capable of performing simple mathematical functions is completely aware will cost us multiple trillions of dollars every decade and most likely many times that.

I’m just wondering, after this administration has, through it’s policies of fairness, pushed more working-class Americans out of jobs, decimating the income of the average consumer as well as wiping out much of the tax base, who’s going to be left to pay for it all?