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“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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Sep 20 2010

Tax Cuts for the Rich?

I received this email from Paul Day and felt like it was worth publishing:

Remember how we have heard from the Democrats for the last 8 years that the ‘Bush’ tax cuts were tax cuts for the ‘rich’? Now we have our (Democratic) president proposing to extend the ‘Bush’ tax cuts for people earning less that $250,000. But I thought they were for the ‘rich’. It turns out that extending the tax cuts for those earning over $250,000 will ‘cost’ $700 billion over 10 years while extending them for those earning less than $250,000 will cost $2.3 TRILLION. In other words, more than three quarters of what the Democrats all this time have been calling the ‘Bush tax cuts for the rich’ didn’t go to the rich at all. Oh, and the reason given for not extending the cuts for the upper income earners is that they are concerned about the loss of $700 billion – but apparently not concerned about the loss of the $2.3 trillion! Do you think the Democrats knew the truth all this time?


Sep 14 2010

Unemployment and the Effect of More Benefits

C.M. Phippen

Robert Barro of Harvard University’s business school recently analyzed the impact of the unprecedented extension of unemployment benefits to 99 weeks. In his analysis, he concluded that had unemployment benefits not been extended so drastically, we would probably currently be seeing a rate of unemployment around 7%.

The original estimate by the administration was that unemployment wouldn’t exceed 8%, and they claim that was the high most economists expected even before the passage of the stimulus bill, back in Q4 2008. Seems as though the stimulus has been anything but, and Recovery Summer has been a major bust. The good news out recently is that consumer retail spending increased 0.4% in August, the largest increase in five months. Autos, electronics, and furniture were all down, but apparently back-to-school shopping saved the day and I don’t think the effect will continue into the coming months.

We are currently seeing historically high rates of long-term unemployment, at 46% of all unemployed. This is worsened by the fact that the longer one remains unemployed, the lower the chance of finding work. As discouragement kicks in, many simply give up and stop looking.

In his textbook published last year, Paul Krugman had this to say about generous and long-term benefits, “Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of ‘Eurosclerosis,’ the persistent high unemployment that affects a number of European countries.”

While US benefits are typically 33-50% of worker pay, when adjusted for payroll taxes, child care, transportation, and other expenses of working, it can be economically feasible for many to make the choice to wait a while longer to look for a job. In fact, Mother Jones recently published an article explaining that rates of long-term unemployment among college graduates are substantially lower than among the non-college educated. This is consistent with the idea that when lower income workers adjust their pay for expenses, which eat up a larger percentage of income than for most middle-and upper-class (generally college-educated), staying home a few more months just may make sense.

My husband was recently speaking with an older gentleman who works at a local convenience store. It was late at night, and without any other customers in the store they started talking about their lives. It turns out this man had recently moved from another state after his business of 15 years was destroyed by the recent economic downturn. He sold high-end home furnishings and when people stopped buying and furnishing homes (and started living within their means), his business came to a screeching halt. He lost everything, picked himself up, and moved to a place where he was able to find a job working nights in a convenience store. He’s there most nights, with a better attitude and demeanor than many workers in a whole lot of industries. He’s grateful for a job and for the self-respect that comes from working hard. As the economy turns around, he and people like him will move back up. What of those who don’t work for nearly two years? Many will be left behind permanently.

But hey, the campaign slogans for those politicians who’ve potentially handicapped millions of jobless Americans will be great, won’t they?


Sep 1 2010

Restoring Honor Rally

C.M. Phippen

I recently attended the Restoring Honor event in Washington D.C. and came away spiritually uplifted and inspired by the messages spoken there, and the experiences I shared with fellow travelers. Unfortunately, those messages aren’t being written or shared in much of the media and I can’t help but wonder why (not really).

MSNBC has gone out of its way to stress CBS’s “estimated” crowd size of 85,000 which is so far from being accurate as to make it laughable. Desperate attempts to sideline mainstream America are becoming more and more transparent, especially to those of us who saw with our own eyes. With the exception of the CBS outlier, estimates range from 330,000 to 650,000.

Then there were the falsehoods put out there repeatedly about how hateful and violent this type of crowd is. We have a dear liberal friend who advised us that if trouble were to break out around us, we should simply walk away and not get involved. How many hours a day must one spend reading the Huffington Post and the New York Times, without any rational counterbalance, in order to honestly believe the lies about the violence of the right?

Then there is the issue of the religious leaders who were there. Has anyone thought to mention the 240 leaders of faith, representing 180 million people, who stood with Glenn Beck as he challenged the attendees to turn to God. “Faith, hope, and charity are growing dim. We simply must remember who we were and who we can become, not what we have become.” I didn’t see mention of this support anywhere, nor of this message.

Rather than attempt to sideline those we disagree with by lying about them and misrepresenting what they believe, let’s welcome discussion and debate. Let’s eagerly engage in intelligent conversation with those who disagree with us, and who have a different vision for America. If we speak truth, we have nothing to fear from such discussion.

Unfortunately, my own experience has born out the frequency with which many denigrate, name call, and pick apart the individual rather than discuss the issues (and of course, let’s not forget the often-present crude sexual remark, unfortunately a hallmark of the left). I can only assume that because this is the essence of political debate by many in the media, those who choose to limit themselves to such media types have come to believe that is what makes up intelligent discussion. Let’s not fall into that trap.

The coverage of the 8/28 event focused on everything except for the words spoken there, words spoken over a period of three hours – there was plenty to write. I read about the manufactured controversy surrounding the event, the “un-Christian” religion of Glenn Beck, the large crowds of attendees at the metro who hadn’t been adequately provided for by the organizers of the event. This was contrasted with the way Obama prepurchased metro passes for his followers at the inauguration so they wouldn’t be confused when they had to figure out how to ride the subway themselves (could there be any clearer delineation?!).

Nowhere did I read about Beck’s 40 day challenge, the overarching theme of the gathering, which was based on faith, hope, and charity. This challenge was issued 40 days before 8/28 and was reiterated on that day; it had three parts. The first was for each of us to pray, on our knees, at least once a day for 40 days – faith. The second was to tell the truth, always; to lie to no one, not even ourselves, and to search for truth in all things – hope. “And it only matters when you tell the truth and you know that it’s going to hurt you. You know that it’s not going to help your side. Tell the truth! America is crying out for the truth. Tell the truth in your own life, and then expect it from others.” The third part of the challenge dealt with charity. We were challenged to be charitable, first and foremost, within our own families, and to do something kind for each member of our family each week.

This was the theme of the event, the call to change ourselves as individuals, through faith, hope, and charity. This is the message many in the media don’t want you to know about, or don’t think is important enough to print. Either way, may I say, pity the fool.