Do not believe that he who seeks to comfort you lives untroubled among the simple and quiet words that sometimes do you good. His life has much difficulty... Were it otherwise he would never have been able to find those words.
Rainer Maria Rilke
Nick Gillepsie on the Payroll Tax Gimmick: Thumbs UP!
Just about everything Gillespie (reason.com) says here, I've previously written in this blog... I will add here that I think that Barack Obama, with his millionaire tax for paying for his extended payroll tax holiday, is consciously attempting to convert FDR's lockbox concept into a mixed-mode concept like Medicare, which draws from general revenues. This, of course, is a long-sought-for beachhead for a de facto permanent payroll tax cut, but, of course, Obama has no intention of lessening commensurate social security benefits. All he is doing is buying time: a 10-year class warfare tax hike to pay for an expanded one-year payroll tax benefit? What's that to a spendthrift President whom runs the government like a head of household whom has maxed out his credit cards, barely able to make the minimum payment? Obama figures he has the Republicans boxed in: how can they vote against a middle-class tax cut? He's not worried about how to pay for the following year's tax cut; he may not even be President then. What he does know is that AARP and other special-interest groups are bitterly opposed to even a hint of austerity in the 20% of the federal budget that pays out checks to seniors.
The answer? First, the GOP should turn aside ANY variation of the payroll tax holiday. You wonder how many times we've been down this road before--we've had something like 4 stimulus measures over the past dozen years, and basically most of these checks or reduced withholding--whether one-time events (Bush) or stretched-out stimulus measures under Obama--have hardly boosted the economy; most Americans banked some or most of their tax savings; recall that under the permanent income hypothesis, we expand our spending based on our security in that ongoing higher income. If Obama gets away with it--even makes it bigger--what Washington politician has the testicular fortitude to tell American workers they are going to have a 3.1 point tax hike a year from now? This is NOT about economic policy: this is all about politics.
How do the Republicans combat the progressive demagogues? Simple. The 6.2% OASDI tax was never the Republicans' idea in the first place. Now the Democrats, knowing there's $46T in underfunded retirement programs for senior citizens, are running away from paying for their own legacy programs. Fresh off the last session in Congress where Democrats double-counted future Medicare payment cuts in order to provide the kaleidoscope accounting showing ObamaCare "reduces" the deficit. (And what did they have to say about the last Congressional attempt to "control" Medicare costs by automatically cutting doctor fees--only every year since then having to pass "doc fixes"? You think those 50 million older Americans are going to allow phantom Medicare cost cuts to jeopardize their health care? The Democrats know those cost cuts are never going to happen.
But the point to those 50 million old Americans is this: you think your real enemy is the Republicans, looking to make the programs sustainable? What about the Democrats whom, instead of investing OASDI contributions in income-producing assets, like utilities, oil and gas production and delivery systems, real estate properties, water, timber, and blue chip companies, mandated that the social security trust fund be a captive investor in Treasury notes, i.e., Congressional wasteful superspending? The fact of the matter is, the average joe wouldn't have to pay as much into the system if the government had invested in assets versus mere paper IOU's. [There are several good reasons why we wouldn't want the government directly investing in private sector companies--think of Obama's meddling in the affairs of the bailed out entities, for instance. But there are mechanisms for spinning off management of the funds or providing government-sanctioned retirement vehicles.] The untold story, of course, is that lower-income people are disproportionately dependent on a Ponzi-like pay as you go retirement scheme with trust funds earning a minimal return vs. the generally multiple-times higher return of equities.
But what do we have here? We have the social security system already in the red from its pay as you go scheme, already bleeding red ink as many older Americans, facing unemployment, decide to take early retirement at 62 and workers, several million below the 2007 peak, contribute less. And then Obama and the Congress decide to give a payroll tax holiday--something that, at best, makes the day of reckoning ever closer when the federal government will have to make up the difference, something unthinkable with a massive national debt already reaching its natural credit limit, the size of the economy; the federal government will be faced with Draconian choices between regular operational expenses (including national defense and social net programs for younger, poor people) and funds to senior citizens. It is better to do so earlier than later because of compounding effects.
So, in sum, what the Republicans should say to voters is: who do you think is best acting in the long-term interests of taxpayers? Rather than shore up social security when Bush initially revealed that he was willing to make a deal in 2005, the Democrats have not lifted a finger to resolve solvency issues with social security and Medicare during the four years (2007-2010) when both chambers of Congress were controlled by Democrats. In fact, they have squandered proposed Medicare savings on a new federal entitlement program, and now they are trying to extend and enlarge an ineffectual stimulus payroll tax holiday, at the expense of the health of the social security trust fund.
Speaker Boehner and Senate Minority Leader McConnell: I'm holding you responsible for aiding and abetting the Democrats' fiscal reckless policies by allowing them to pull this penny-wise, pound-foolish nonsense. The payroll tax holiday has done little, if anything to bolster the economy, and it won't do it in the future, either. If people wonder what happened to GOP fiscal responsibility after 2000, this is part of the answer: the GOP, just like the Democrats, engaged in posturing for the next election where spending got votes and cutting cost votes. It's time we see Republicans, especially Tea Party Republicans, stand up and say, "It's time to stop throwing good money after bad on ineffectual stimulus legislation."
Who do you think the voters will believe next fall--a desperate stab, once again, of ineffectual spending initiatives by the most spendthrift President in American history, whom is willing to throw the long-term solvency of social security and Medicare under the bus to win a second term? The same Barack Obama who failed to nail down entitlement reform despite the strongest hand the Democrats have held in years, whom thought it was more important to work on megalomaniac health care and financial "reform" and climate change than on pro-growth economic policies? The same Barack Obama whose own budget was rejected unanimously by the Senate and whom refused to back the findings of his own bipartisan deficit reduction committee (which won the votes of all but one committee senator--a Democrat), Senate Democrats whom haven't produced a budget as required by law for years, while the GOP-controlled House passed the Ryan budget bill, which does look at entitlements? Does the GOP really think it's going to lose votes in telling the nation, "We have to learn to live in our means!" It's time to stop pandering for votes; every American family knows that it has to make ends on the income it has; unlike the government, it can't print money to cover its debts. Voters will not punish the GOP for standing up to a morally corrupt, feckless President.
To make things even more patently absurd, Obama has promised to veto a payroll tax cut extension that includes a provision to enable a compromise rerouting of the Keystone pipeline project from Canada through Nebraska. What better example to show Obama's utterly toxic political philosophy? Never mind the fact that Canada has already expressed a willingness to sell the crude to China that would otherwise go to our Gulf Coast refineries, never mind the fact that we would have to find other sources to replace the Canadian oil, including Venezuela and the volatile Middle East, never mind the fact that we already have a vast network of pipelines across the United States with minimal environmental impact, never mind the fact that pipeline work REALLY IS shovel-ready and will fund legitimate, well-paying jobs.
Yeah, of course, Obama wants to explain to his potential middle-class supporters why he vetoed a tax cut in order to pay off political obligations to radical environmentalists. I unconditionally oppose the payroll tax extension as bad economic policy, but if I was a betting man, I would call that bluff.
Gingrich vs Romney: More Comments
I am utterly astonished at GOP voters being polled. Gingrich is now showing a double-digit lead over Romney in most national polls There seems to be a death wish to vote for someone simply because the candidate says what they like to hear, they hold the right points of view, etc. Have these people learned anything in life from having to deal with high-pressure salesmen, people whom will tell you exactly what you want to hear just to earn that commission on the sale. Quite frankly, what happens off the lot is not their problem. (True story: I bought a used GM car from a rental car company back while I was teaching at UTEP. I let myself be talked into one of those extended warranty policies. Literally within days (maybe hours) of purchasing the car, I was sitting at an intersection, and I see smoke seeping out from the hood. Take my word for it--you don't want a car without a functioning air conditioner in El Paso. It was an expensive repair that wasn't covered under my purchase agreement but was covered by the additional policy terms. The cost of the warranty was all but covered by that very first repair. But the point is--I believe that the rental car place must have been aware of the problem but never fixed it.)
If you want red meat politics, vote for a Rush Limbaugh or a Sean Hannity; if you want an inspirational speaker, I'm sure there are a lot of retired athletes and coaches or actors whom can read passionately from a teleprompter. I mean, really, folks: after 3 years of all hat and no cattle, do you really want the conservative version of a Barack Obama? Maybe we can take a tip from major league baseball (the American League): maybe we can have a designated speaker (pun intended) in Newt Gingrich for President Mitt Romney.
Facts of life: Mitt Romney has proven business and public sector administrative experience; Gingrich doesn't. Romney does much better than Gingrich in head-to-head matches against Obama in battleground states. Gingrich has a post-Congressional lobbyist record (with Freddie Mac!) which is tailor-made for an Obama attack.
But if you were a recruiter trying to hire a President, what sorts of things would you ask for? Maybe you would want to get an idea of the type of person he is from the people whom worked with him and experienced his leadership first-hand. Case #1. The podcast for Sunday's Fox News Sunday is probably still up. Review what Sen. Coburn (R-OK) had to say about Gingrich (Coburn was a Congressman whom served under Gingrich as Speaker); Chris Wallace did his best to get Coburn to go into specifics. Obviously Coburn did not want to say something that could be quoted in an Obama attack ad next fall; he did not rule out supporting Gingrich if Gingrich got the nomination, but made it very clear that he would find it very difficult to support Gingrich.
A second anecdotal incident came in a recent newsmax report:
Some party veterans urge Romney to be cautious. Bitter quarrels between politicians are "what people are sick and tired of," said Rep. Steve LaTourette, R-Ohio...LaTourette said he is backing Romney, partly because he has a "hangover" from Gingrich's tumultuous days as House speaker in the mid-1990s. "Everything always seemed to be on fire," he said.Gingrich beating up on moderators may be lovable as a candidate, but the last thing we need is a 4-year battle between President Gingrich and the press. The 1994 recapture of the House after spending more than 40 years in the wilderness was inspiring; there's no doubt Gingrich was a brilliant political strategist. Gingrich is good at talking and campaigning; Obama is the same way. Presidential leadership is based not on campaigning but performance, including the ability to fashion bipartisan legislation.
There are very few people whom enjoyed serving under Gingrich in the House; if he can't even get along with members of his own party, how can he lead a divided country? This reminds me a bit about Sarah Palin as governor. Palin had very testy relationships with Republican leaders in the Alaska legislature. After the 2008 election, Palin found that her Democratic allies largely deserted her and the GOP leaders were emboldened to resist given Palin's rapidly dropping approval ratings in the aftermath of the economic tsunami.
So, my lesson to fellow conservatives: be careful of what you wish for--you may very well regret it. I'll give it to Gingrich: he is articulate and he won't have a Cain-like Libya moment. But after the votes are counted, you have to have a manager in the White House whom knows how to get things done. In my judgment, that's Romney.
Musical Interlude: Nostalgic/Instrumental Christmas
Bing Crosby, "I'll Be Home For Christmas"
