Harming The Economy

 The Astounding federal deficit, currently standing at $15,678,869,907,107.48 according to the National Debt Clock, is being cited as a reason to raise taxes.

     The deficit, although growing for decades, has escalated sharply over the past three years, growing from $415.7 in the final year of the Bush administration to an annual average of $1.185 trillion under President Obama.

    Can tax hikes—even those as dramatic as those to take place in January 2013—actually reduce the deficit?  An NPR study indicates that it could, at best, reduce it by 17.7%.  But even that figure is misleading.  Tax increases tend to slow economic activity, which in turn decreases revenue, offsetting any deficit-reducing benefit.

According to Harvard Economics Professor Martin Feldstein’s Wall Street Journal article,

“Historians and economists who've studied the 1930s conclude that the tax increases passed during that decade derailed the recovery and slowed the decline in unemployment. That was true of the 1935 tax on corporate earnings and of the 1937 introduction of the payroll tax. Japan did the same destructive thing by raising its value-added tax rate in 1997.”

Heritage examined the effects of tax hikes and cuts during the 1990s. 

“The 1993 Clinton tax hikes slowed economic growth during that decade, despite the common assumption that it was a period of rapid expansion.  It was not until a tax cut later in the decade that growth took off.  Lower rates paved the way for faster growth.  The 2003 Bush tax cuts helped the economy recover from a recession and put it on a stronger footing in the face of growing headwinds.”

     During the past three years, spending as a share of the national economy rose from a historical average of 20.7% to 24% under the current administration.”  This includes a 6.2% increase in civilian federal employees, and the ineffective $787 billion “stimulus.” 

The impact of higher taxes on the prolonged employment downturn is particularly worrisome, particularly in light of historical analysis.  Under the current administration, the latest (April) unemployment rate is 8.1%, continuing the trend of high unemployment rates which have seen, in April of their respective years,  8.9% (2009), 9.9% (2010), and 9.0 (2011).  These are dramatically higher than the rates experienced during the prior Administration, which ranged from a low of 4.5% to a high of 6.0%.  But these statistics reveal only part of the ominous trend.  Long term unemployment (27 weeks or longer), at 5.1 million, represents 41.3% of all those unemployed, and there are 7.9 million “forced part timers” as well.  Civilian labor force participation has declined to 63.6%, a sharp drop from 2000 (67.1) and even from 2010 (64.7).  The severe, detrimental effects of the past several years of high unemployment will continue even after jobs rebound.  As noted by Christine Dugas in a USA Today article, many families who lost jobs used savings to pay current bills and went into debt.  Even after securing new jobs, they are not going to spend at normal levels until those debts are paid. 

This must be contrasted with the policy of the prior administration.  Faced with an economic downturn, President Bush lowered taxes, which produced significantly lower unemployment rates.  The Tax Foundation notes that these followed historical precedent.  When President Kennedy cut taxes, and when President Reagan did the same, the economy accelerated. 

Bluntly stated, giving more taxes to Washington—addicted to overspending for decades, and far more so over the past three years—is the equivalent of giving an alcoholic an open bar.  It has not worked in the past, and there are no indications it will work now.

FIRST AMENDMENT UNDER ATTACK

      Our First Amendment rights are under unprecedented attack.  Increasingly, the previously sacrosanct status of  freedom of speech that has been the hallmark of American life since the founding our nation is jeopardized by a variety of legislative, treaty, and political pressures. 

        Let's start by examining the international threat.  As noted by L. Gordon Crovitz in today's Wall Street Journal, representatives from 193 nations will meet in December to regulate the internet, under the auspices of the United Nations' International Telecommunications Union.   China, Russia and Iran get a vote.  Russia's Vladimir Putin has bluntly stated that his goal in this process is to impose "international control over the internet." The process leading up to the December meeting has been extremely secretive.  

       As Conservatives, our response to this disaster in the making should be loud and clear:  Washington does NOT have the right to limit our First Amendment rights through this or any other treaty. And make no mistake about it:  in the 21st Century, limitations on the Internet, the primary method modern Americans use to communicate political thought, is a direct assault on the First Amendment.   

       The next threat is home grown.  Rep. Jim McGovern has introduced (last November) a bill to amend the First Amendment, in an effort to overturn the U.S. Supreme Court's decision in Citizens United v. FEC.  Ignoring centuries of American legal precedent, the bill would open up a new concept wherein certain classes of political speech would be restricted. McGovern claims it would limit only corporations, but it would establish a slippery slope that would threaten the entire concept of free speech. 

      The third threat comes, ironically, from old-line media moguls themselves.  For years, the hard left media has been increasingly angry over competition from both the internet & talk radio, and has supported various moves, without success, to impose schemes to regulate the competition out of existence.  Fortunately, their despicable attempts have failed, so far.

      However, they are engaging in new tactics, symbolized by what happened last weekend on Saturday Night Live.  The popular comedy show had scheduled a skit mocking Barack Obama's trip to Afghanistan.  Inexplicably, the skit was pulled from the show--perhaps censored would be a better word.  In its place, a segment poking fun at Fox News was imposed.  This heavy handed domination by the left wing media leadership over their own creative talent is a most potent expression of hypocrisy and disdain for the truth, and it is rarely discussed. 

     The left wing, pro-censorship crowd will be more active than ever this year, in their desperate attempt to keep Barack Obama in power.  By any objective standard, his record is so dismal that any honest discussion of his administration cannot be anything but critical.  They must prevent those free discussions from occurring,  and they will resort to a frontal assault on the First Amendment to do so.  

      Our task as Conservatives has never been more critical.  This year, we stand at the front lines of the battle to preserve freedom itself. 

      

      

       

          

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WHERE WORLD WAR III COULD BEGIN

     As America’s navy continues its’ increasingly dilapidated condition and faces even worse times under the pending sequestration cuts, the threat of war at sea looms larger than ever.  

   The South China Sea is the passageway through which over 50% of the world’s merchant fleet tonnage passes.  Fully one third of all seagoing traffic sails in it.  In excess of six times the amount of oil that is transported through the Suez Canal and seventeen times that which goes through the Panama Canal traverses this vital body of water. It is a sea that is on the brink of exploding.

    The People’s Republic of China claims that is has sovereignty over almost all of the South China Sea, ignoring the claims of other regional lands and in defiance of the United Nations Law of The Sea. The rise of China’s navy has transformed the issue from a debate among diplomats to a confrontation between warships. Beijing’s General Luo Yuan, in a statement issued in late April, declared that China should prepare for “war at all costs” to take control of the strategic waterway.

    Negotiated attempts to address the dispute, which primarily involves currently uninhabited but strategically located islands, have largely failed.  Beijing has refused appeals to allow the International Tribunal on the Law of the Sea to consider the matter.  Similar pleas to negotiate the crisis before the Association of Southeast Asian Nations have also been rejected. China’s response to criticisms of its refusal to negotiate before international bodies has been that it prefers to deal individually with each local nation separately.  This is a pragmatic approach that allows Beijing to intimidate each opponent, one at a time.

    The most inflammatory point of contention, and the one that most directly involves America, concerns two relatively deserted outcroppings of land, the Spratly Islands and the Scarborough Shoal. Although the areas are particularly close to the Philippines, a longstanding U.S. ally, China, Vietnam, Taiwan, Malaysia and Brunei allege claims to some degree to them.

     The claims are not merely about national pride.  According to numerous published analyses, at least seven billion barrels of oil (representing about 80% the capacity of Saudi Arabia) and as much as 900 trillion cubic feet of natural gas are up for grabs for whoever controls these isolated spots.  A Congressional Research Service report released in April notes that these vast riches are largely within the Philippines 200 mile Exclusive Economic Zone, but China claims them for itself. Since the Philippine armed forces are exceptionally weak (the CIA ranks it as 140^th in capability among the nations of the world) it is expected that the U.S. Navy will be called upon to defend both its ally and the interests of the world community in this most prized portion of the South China Sea.

    Experts have described this area as the principal flashpoint that could lead to a major war.  Any conflict within the region would have devastating consequences for a world economy already reeling from a downward spiral of national debt and the worst economic climate since the Great Depression. 

OBAMA VS. THE CONSTITUTION

     The latest installment of the battle between President Obama and the Constitution, and every other branch of the federal government (as well as state governments) takes place today at the Supreme Court.  

      The Arizona statute in question merely requires the state's authorities to check the immigration status of individuals stopped for other reasons.  It also makes it illegal for immigrants lacking a work permit to seek employment.  A variety of states have enacted their own measures, mostly acting out of frustration with the federal government’s refusal to adequately address the issue, as well as concerns over the cost of educating and providing medical care to illegals, related national security risks, the communicable disease threat, and the crime that accompanies unauthorized border crossings.

     But there is an even larger issue looming in this fight.  The President has made it clear that he has no tolerance for the exercise by Congress or the Supreme Court of their rights and duties.  His administration even coined a slogan--"We Can't Wait," to popularize his impatience with the Constitution and the Bill of Rights.  

      His disdain for the Constitution is manifest in numerous ways, including his "recess appointments,"  provisions of his health care law, his choice of  a Supreme Court Justice who doesn't believe Americans have unalienable rights, his attempt to stifle free speech, and his utter disregard of the 2nd, 9th and 10th amendments.  Add to this his attempt to incite racial and class warfare, his mass diversion of tax dollars to reward his campaign contributors, and his attempts at unilateral disarmament, and you get a Chief Executive who poses the greatest threat to America since the British burned Washington.   

       We are not just dealing with a president, like Bill Clinton or even Jimmy Carter, that we merely disagree with on policy issues.  We are faced with a Chief Executive who seeks to alter the very fabric of our nation.  Our forefathers came together, pledging "Our lives, our fortunes, and our sacred honor" to give birth to freedom.  We must not let their dream and their sacrifice die. 

YOUR TRANSPORTATION TAX DOLLARS AT WORK-- TO RE-ELECT PRESIDENT OBAMA

        The White House has decided it is more important to use your tax dollars to repay public service unions and other campaign contributors, rather than improve your commute. To mask his true intent, the President uses a variety of myths that big-government advocates have perpetuated for decades. Randall O’Toole describes the “ten myths” that afflict transportation planning:

1. Myth: Transportation subsidies are biased towards autos.  Reality: at least since 1975, transit subsidies have been tens to hundreds of times greater than highway subsidies, and a quarter of transit subsidies have been paid directly by motorists.

2.  Myth:  urban transit has been declining.  Reality: transit funding has steadily increasing for decades.

3.  Myth:  More cash for transit will increase usage.  Reality:  there has been no relationship between transit funding and transit ridership.

4.  Myth: Federal funding of urban freeways must be balanced by federal funding of urban mass transit.  Reality:  The federal share of the Interstate Highway System was completely paid for out of highway user fees; Washington collects no transit user fees.

5. Myth: congestion can be mitigated by diverting money away from highways and towards transit.  Reality:  Transit’s effect on congestion is insignificant in most American cities.

6. Myth: Transit should focus on 19^th century fixed-route transit lines radiating from downtown hubs.  Reality:  American cities have evolved.  New Types of transit are needed.

7.  Myth: Public monopolies are essential.  Reality:  Competition works better.

8. Myth:  old fashioned transit offered greater mobility.  Reality: automobiles have made Americans the most mobile people on earth.

9. Myth:  Cities should be rebuilt to serve transit.  Reality:  Transit should be built to serve cities, not vice-versa.

10.  Myth:  Public transit is morally superior to private cars.   Reality: This is based on elitist sentiments not shared by the majority.

     The American Dream Coalition has updated the list with several additional myths:

1. Myth:  one rail line can carry as many people as a twelve-lane freeway.  Reality:  With the exception of NYC subways, no transit line in the nation carries as many people as even one freeway lane.

2. Myth:  Rail transit promotes local investment and redevelopment.  Reality:  development along rail lines usually requires additional subsidies.

3. Myth:  The auto industry conspired to destroy transit systems.  Reality: Buses are so superior to rail transit that almost every transit company in America converted streetcars to buses as fast as the street cars wore out.

    Some observers make exceptions for New York City, due to the unique level of density—20 times the national average.