Monday, August 15, 2011

Zakaria & Krugman Demonstrate Economic Illiteracy

In the following 1-minute clip, ruling class favorites, Fareed Zakaria and Paul Krugman demonstrate their economic illiteracy, Nobel prizes and Ivy league degrees notwithstanding.  Zakaria cites leftist hero Keynes as justification for any government spending.
"Wouldn’t John Maynard Keynes say that if you can employ people to dig a ditch and then fill it up again,  that’s fine—they’re being productively employed, they pay taxes, so maybe Boston’s ‘Big Dig’ was just fine after all."

So, according to Fareed Zakaria, digging holes and filling them is ‘productive’ work.

Rather than correct Zakaria false claim, Krugman actually ups the idiocy ante by saying that during WWII, we had ‘negative social product spending’ which nonetheless brought us out of recession.

Note to Fareed and Krugman: Digging and filling holes, is not ‘productive’ work. It may appear productive relative to the ‘work’ done by public unions and Federal Bureaucracies. But productive work requires creation of a product that others are willing to pay for.

Monday, August 1, 2011

Rush Explains the Deception of Baseline Budgeting

On their road to economic destruction, politicians have built automatic increases into their already inflated levels of public spending. The Congressional Budget Offfice (CBO) refers to these automatic increases as the BASELINE. There is a presumption built into the baseline that every single budget item, from Social Security, to Food Stamps, to Ethanol or ACORN subsidies, will increase every single year between 3 and 7 percent. So, if we increase one of the many forms of redistribution by say, 6% instead of 7%, the CBO deceitfully scores this as a decrease of 1% instead of an actual dollar increase of 6%. Such political sleight of hand, blessed, of course, by the media, is how we move closer to Greece on a daily basis, despite all of the trillions of dollars in ‘spending cuts’ we hear about.

Rush provides this case-in-point to explain the sham of baseline budgeting: If we actually froze all federal spending at current levels, the CBO would score this as a $9.5 trillion cut. That’s because there is $9.5 trillion of increases already baked in our baseline over the next 10 years. What Obama and the Democrats (and the media and some Republicans) call a 'freeze' is actually a $9.5 trillion increase.

What they call 'deep cuts' of $2.5 trillion is actually piling on another $7 trillion to our already sky-high debt burden.

Marco Rubio Sets the Record Straight About Obama’s 'Absurd' Budget

Marco Rubio provides a rare bit of straight talk from the Senate. From noting the outright negligence of Senate Democrats for not producing a budget in over two years, to the Obama’s ridiculous and embarrassing budget that failed in an unprecedented 97-0 vote against a sitting President, Senator Rubio sets the record straight about the absurdity of the Democratic position on the debt ceiling and the budget.

“So I think it’s important to remind people what we’re debating because although it is a difficult and important issue, it is not a complicated one to understand. It’s pretty straight forward. And here’s the way I would describe it the United States of America more or less — these are rough numbers but they’re accurate – spends about $300 billion a month. It has $180 billion a month that comes to the federal government through taxes and other sources of revenue and that means that in order to meet its bills at the end of every month it needs to borrow $120 billion.

Now, for much of the history of this country, there have been increases in the debt limit and the ability to borrow money. But what has happened over the last few years is that it’s no longer a routine vote because the people who give us our credit rating are saying too much of the money that you spend every month is borrowed and we want you to show us how over the next ten years you are going to borrow less as a percentage of what you spend.

And so that’s why, for years, where the debt limit was routine vote, it no longer can be. It’s not something that was made up in some conservative think tank. But the reality that we cannot continue to borrow 40% to 41% of every penny that the government spends has brought us to this point.”