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Obamacare Implodes
May 15, 2013 | 41 comments
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Obama’s Rising Inequality
May 8, 2013 | 101 comments
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Downsize the Liberals
May 1, 2013 | 53 comments
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Fight Back! Privatize the FAA!
April 24, 2013 | 65 comments
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Fallacies and Charades
April 17, 2013 | 14 comments
The Public Policy
Restoring the American Dream
How the economy can be booming before next Christmas.
(Page 2 of 3)
Left of center think tanks have argued that this tax plan could not be revenue neutral without a tax increase on the middle class. But Harvard economics Professor Martin Feldstein, the founding chairman of the National Bureau of Economic Research, demonstrated in the Wall Street Journal on August 30 that there were more than enough deductions and loopholes that could be closed to make the plan revenue neutral without a tax increase on the middle class. That leaves Romney’s tax plan as involving the largest middle class tax cut overall in world history.
Not telling you their plan? That claim is just more sweeping dishonesty from Obama. The truth is that the Romney campaign has provided more detailed than the Obama campaign can handle.
Federal Spending, Deficits and Debt
Even
more detailed are the views of the Romney campaign on federal
spending, deficits and debt, because VP nominee Paul Ryan has
already proposed two fully detailed federal budgets, which were
both adopted by the full House.
That budget proposes to cut federal spending by $6.8 trillion over the next 10 years. For all the weeping and wailing and gnashing of teeth regarding that budget, all that it would do is return federal spending to its long-term, postwar historical average of 20% of GDP by 2015.
Obama’s all time record trillion dollar budget deficits would be cut by 86% after just 5 years, by 2017, as scored by CBO. And that is with old-fashioned, CBO, static scoring. With the long overdue booming economic growth generated by the Romney tax plan and other economic recovery proposals discussed below, the federal budget would most likely be entirely balanced by then.
Ryan’s budget would serve to get federal debt under control, reducing federal debt held by the public from 77 percent of GDP in 2013 to 62 percent by 2022, again as scored by CBO. That debt continues on a sharp decline thereafter, as the long-term effects of Ryan’s structural entitlement reforms phase in. Debt held by the public would be reduced to 53 percent of GDP by 2030, 38 percent by 2040, and 10 percent by 2050. That means the national debt is all but paid off by 2050, and, indeed, would be under dynamic scoring.
Of course, President Obama has his own proposed federal budgets. As I show in a forthcoming Policy Analysis from the Heartland Institute, his budget would do exactly the opposite of everything that the Ryan budget would do.
Regulation Liberation
A third component of
Romney’s economic plan would be to reduce regulatory costs and
barriers to economic growth. That reduction would be focused on the
massive overregulation erected under President Obama.
The most important component of that, among several economically critical reforms, would be the liberation of America’s energy industry. America now has the resources to be the world’s number one oil producer, the world’s number one natural gas producer, the world’s number one coal producer, and the world’s number one nuclear power producer. Under Romney’s energy plan, that is quite likely.
Romney would in particular retire the EPA’s administrative implementation of the cap and trade tax in the name of the global warming fantasy, without congressional approval. (Note: Before there can be global warming, the world has to be warming.) He would also terminate the EPA’s jihad against the coal industry. He would restore the permit process for nuclear power plants, and would not threaten the natural gas boom that has cratered natural gas prices for consumers with regulations against the fracking breakthrough.
He would also reverse the Dodd-Frank hyper-regulation, with hundreds of new regulatory mandates still in the pipeline, threatening the business and consumer credit essential to economic recovery, and the extinction of hundreds of small banks and financial institutions.
Of course, he would also reverse the Obamacare regulatory takeover of health care, terminating both the individual mandate and the employer mandate. These regulatory reforms would slash unnecessary costs holding down investment and job growth, and liberate the private sector to produce jobs again.
Strong Dollar Monetary Reform
The Fed’s
monetary policy has gone completely haywire. The Fed is now buying
77% of all the bonds sold to finance Obama’s all-time record
trillion dollar plus deficits. It has maintained negative real
interest rates for years now, when that same policy was a central
cause of the financial crisis. See, John B. Taylor, Getting Off
Track (Palo Alto: The Hoover Institution, 2010). The Fed’s
balance sheet of asset holdings has tripled, while bank reserve
balances have increased by 200 times during Obama’s term.
All that monetary tinder is now out there waiting to be set aflame, to burst into the double digit inflation of the 1970s, if not worse. Fed Chairman Ben Bernanke says not to worry, he will withdraw all that excess money before it explodes into inflation. But doing so will be contractionary, sending interest rates soaring, and throwing the economy back into recession. With $16 trillion in national debt and more, a contractionary approach will explode federal spending, deficits, and debt. But ultimately the Fed will have no choice but to take that course, or completely trash the dollar with runaway inflation.
Consequently, the Fed has already laid the foundation for the return of double-digit inflation, and for the next recession, before we have even recovered from the last one. Perpetually rising gold is only signaling the ultimate collapse of the dollar. If that happens, with all of our experience since the 1970s, it should be considered treason.
About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.
Aristocat| 10.5.12 @ 6:56AM
The economy is going to take off like a rocket if Romney is elected.
Joellen| 10.5.12 @ 7:35AM
Allow me this once to do a Joe Biden: Three words folks, "three words" - "Drill & Frack Baby".
Petronius| 10.5.12 @ 9:35AM
The weenies only care about how their betters Live high while they don't. Income taxes must be restructured so the bottom feeders understand it all, and be a demonstrable vehicle concerning the accumulation of wealth. Tax should be 1% up to 10K, 5% to 20K, 10% to 50K, 15% to100K, 20% t0 200K, 25% to 1 million, and 31% above that; no deductions. Actuaries should set new exemptions. Restructure FICA and Medicare allowing all to access Federal TSP plans on which taxes are deferred. Cap gains should be nil for portfolios under 500K, 5% on dividends over 10K per year, and 10% of net gains on liquidation for all others.
The real problem is the attitudes of the economically illiterate. A person who would force them to realize government isn't their mommy doesn't stand a chance. Facing the vicissitudes of our new knowledge economy requires a higher level of maturity the entire country eschews with a vengeance. Ned Ludd hanged for it. We must all adapt. And there must be new requirements to the full rights of Citizenship. Linguistic and economic literacy plus working knowledge of U.S. and state constitutions are a given to vote. And chronic welfare recipients should be stricken from the rolls after adjudication by a Magistrate Judge and election boards without proof of disability or infirmities. Only then would entitlement reform occur as it must, or else we sink like Greece. I'd like to be around when prosperity obviates the Community Reinvestment Act.
Von Mises Jr| 10.5.12 @ 10:05AM
The key to a booming recovery can be summarized in the lesson from Hayek's "Road to Serfdom." Central Planning, as Mitt correctly pointed out, mandates that government MUST pick winners and losers.
We do not only have massive central planning out of DC and liberal states, but we have kleptocrats such as Obama, Pelosi, Reid, Schumer, Geithner and others who as Mitt rightly pointed out with Barry, he doesn't pick winners and losers, he just picks losers.
It was an artful way of saying Solyndra and others were simply a theft of the American people's money and wealth.
Once economic decisions are returned to the private sector, then people create and exchange WEALTH. With government, little if any wealth is created, but existing wealth simply redistributed for power and to the cronies and them.
John2| 10.5.12 @ 5:13PM
You are kinder than necessary. Much of this redistribution is really destruction of wealth.
Of course, it is impossible to net out the destructive effects and determine exactly what might have been. That is one reason the body politic has not completely rejected lefty "economics."
But this is wanton destruction in large part.
Von Mises Jr| 10.6.12 @ 8:17AM
You are correct John2. It is why supply-side creates jobs when investors and small business keep their money and invest in production of wealth. Demand-side Keynesian economics consumes wealth by taking it from those who would fuel capital investment and give it to ObamaPhone and Rappers with EBT cards so they do not have to be productive to eat.
It is the equivalent of eating your seed corn.
fmm| 10.5.12 @ 10:45AM
This article and the above comments are a beautiful summary of the rational apporach to governing the economy.
Return to Reason: Romney/Ryan.
Ray| 10.5.12 @ 10:58AM
I would agree with you Peter, but the market jumped immediately after Obamacare was codified by the Court. Why? It eliminated uncertainty and if there's one thing the market hates is uncertainty. I'm a major Romney supporter (and donor), but will tell you if Romney wins, the market will drop 20%-30% rather quickly because it will take him at his word that he'll ask Bernanke to resign. Romney will appoint a new Fed governor who will end all of this QE nonsense and raise rates. The markets will throw a conniption fit and sell off violently. Long-term this will be very beneficial for the economy and markets, but short term disastrous. Watch the market, if it continues to rally, Obama will win, if it starts to weaken and sell off, Romney will win.
Bill8472| 10.5.12 @ 11:25AM
When Obama tells us we elected him to tell us the truth, that's a lie.
He ran on a platform of Hope and Change, neither of which have anything to do with telling the truth.
JD| 10.5.12 @ 11:39AM
Telling the truth would be a change, and would give us hope. That's why it's a lie that he promised us hope or change.
Bill8472| 10.5.12 @ 12:17PM
It should be "neither of which HAS anything to do with telling the truth."
JD| 10.5.12 @ 11:40AM
So long as Democrats do not believe the empirically proven truth that lowering rates often increases federal revenue, they cannot believe that Romney could make revenue-neutral changes. They will accuse him of lying even if he's elected and proven right.
JD| 10.5.12 @ 11:41AM
The measure of the merit of tax changes should not be how they affect the government's bottom line. The measure of the merit of tax changes should be how they affect the people's bottom line!
Von Mises Jr| 10.5.12 @ 11:55AM
The tax debate is intended to deflect the real issue of SPENDING and socialist ownership of our oil, natural gas, and moving towards farmland, fisheries and water. Then we are slaves while arguing over 25 v 28% marginal rate for the two income family.
JD| 10.5.12 @ 12:31PM
Marginal rates have become even more meaningless numbers than "income".
There is little correlation between marginal rate and what a person actually pays, owing to the variance in deductions and credits from person to person.
More and more, the correlation between "income" and what a person actually has spent on his well-being is disappearing as well, as tax expenditures and social welfare combine to frequently leave lower "income" people with more wealth than higher "income" people.
In a "from each according to his ability, to each according to his need" society, there is definitionally no correlation between what a person produces (according to his ability) and what he ends up with (according to his need). The whole point of the saying is that there should be no correlation!
Leftists continue to dishonestly justify themselves by using relative income to measure the "need" for more redistribution, even though redistribution doesn't directly affect income numbers.
Von Mises Jr| 10.5.12 @ 1:33PM
Big Corporations with Lobbying Money pay an effective rate of 10%. It is the SMB that hire about 25% of the work force that pay at the Marginal Rate. So if you are running a small business, you are paying 35% ranges compared to crony capitalist that pay less than one-third of their rate. That is the problem Mitt was explaining in the debate. If the rates go even higher then these people have to cut more jobs.
Ronsch| 10.5.12 @ 12:27PM
But, just today, the BLS said that unemployment has decreased to 7.8%....So NerObama and his cast of idiots are claiming his tax and spend works...If this is the big "October Surprise" it seems like a dud...
Kwan| 10.5.12 @ 4:34PM
Romney's Plan is not as innovative as Obama's Plan which consists of reducing the freedoms of the citizenry to zero, and increasing the Totalitarian control of the population by the central government. We could then just define the Hope and Change Plan as "The 1984 Plan" after George Orwell's nightmarish novel about a society under the authoritarian control of an all-powerful central government.
aware| 10.5.12 @ 5:29PM
Only 1/3 of us have a problem with 30 thousand police drones in our skies in the next 10 years.
http://www.cbsnews.com/8301-20.....u.s.-poll/
A majority now wants, even welcomes, the Eye in the Sky. The grip will continue to tighten no matter the election's outcome. Only the speed is in question.
HBowen| 10.7.12 @ 7:33PM
Take Manhattan Island. Look back to the American Dream of 1776, when all the dreamers picked up their shovels and hammers and saws and began to dig, pound and cut. Who was there to stop them? Now, in 2012, take essentially the very same shovels, hammers and saws and distribute them to the inhabitants of Manhattan Island and tell them to rise up from their dreams in front of them on TV and start to dig, pound and cut.