From the diaries by Erick

In a recent post on Cato-at-Liberty, I suggested that advocates of limited government should not attack Obama for the record FY2009 deficit. My argument was based on two points. First, the real problem is government spending, so that is where we should focus on energies. Fixating on deficits can be helpful, to be sure, but it also can unwittingly aid the other side since it enables them to offer a “solution” in the form of higher taxes. My second point was that Obama is largely not responsible for the FY2009 budget, which began on October 1, 2008.

This second point has led to some spirited - and conflicting - responses, with Bruce Bartlett attacking me from the left and Mustango attacking me from the right.

Let’s deal with Mustango’s criticisms. He argues that budgets are passed by Congress, presumably implying that Nancy Pelosi, et al, should be blamed. The Speaker of the House is a complete statist, so I’m a big fan of anybody who points out her flaws, but since President Bush supported all of the wasteful spending adopted in the last year (as well as the first seven years) of his presidency, he also must bear responsibility for the results.

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With everyone focused on the health care debate, Democrats are hoping we’ll all forget about another of their many boondoggles thus far in the Obama Presidency; Cap and Trade (lovingly known as H.R. 2454 - “American Clean Energy and Security Act of 2009″). This bill, like the Health Care bill(s) being bandied about just now on the Left, promises to deepen the deficit, increase taxes, eliminate jobs, and cost the taxpayers billions upon billions of dollars. Cap and Trade passed the House in late June by a slim margin (219-212), and (via Ed Morrissey over at Hot Air) is slated to be taken up in the Senate in September. The good news here is that passage is not YET a foregone conclusion.

As Erick pointed out a little while back, this bill is in trouble…in large part because the Democrats can’t seem to agree even amongst themselves. It’s also in trouble because, on the merits, it’s just a bad piece of legislation and people are starting to figure out why:

The hit to GDP is the real threat in this bill. The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars. Consumers will cut back on spending, which in turn will cut back on production, which results in fewer jobs created or higher unemployment. Some companies will instead move their operations overseas, with the same result.

What is it about Democrats that make them choose to rule us by punishing us where it hurts us most in order to make us do what they think is “good for us”? We’re already 9 TRILLION dollars in the hole with 10 percent of us sitting this fiasco out, what MORE do they want from us?

Groups (similar to the Tea Parties and the “mobs”) are starting to form hoping they, too, can have their voices heard. Rallies are starting to be held across the country trying to get the message out about all the things wrong with this bill and its longer-term impact on America. As expected, however, counter-protesters (our fuzzy little friends, the global warming alarmists) are catching on that their brainchild might be in trouble, and are starting to fight back.

One can’t help but wonder how long it will take for someone ELSE to take abeating for exercising their free speech rights.

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Heritage’s Brian Riedl crunches some of the still-staggering numbers on the Democrats’ spending spree, including the fact that the projected 2009 budget deficit is larger than the Bush budget deficits for FY 2002-2007 (the six years when Bush had a Republican Congress to work with) combined. A worthwhile fact to recall when dealing with liberals who cannot comprehend how one could be more concerned about Obama’s deficits than Bush’s (of course, as always my concern is with spending, not deficits - deficits are just a symptom of overspending - but even then, Reidl’s point that 43 cents of every federal dollar spent at present is deficit spending is pushing into worrisome territory, especially with important sources of funding drying up).

This year, President Obama will spend a peacetime-record 26 percent of GDP….The 22 percent spending increase projected for 2009 represents the largest government expansion since the 1952 height of the Korean War (adjusted for inflation).

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At some point this August (or later), you might hear somebody ask you - probably with at least a sniff in their voice; possibly with an outright sneer - why it is that all of a sudden conservatives/Republicans now are worried about deficits. What were we, asleep?

Not particularly, of course - nonetheless, I think that this (alas, anonymous) comment about the Columbus Tea Party (H/T: Instapundit) pretty much covers the specific objection:

They might have been asleep for the last 8 years, but when you triple the national debt in 6 months with political handouts, calling it stimulus, it tends to wake people up.

Use of this Heritage graphic optional, but probably satisfying:

Moe Lane

Crossposted to Moe Lane.

You’ll note that President Obama has all but dropped “health insurance for the 45 million without coverage” from his health overhaul stump speech.

Why? Because recent polling shows Americans don’t care nearly as much about the “universal” availability of health coverage when they have to pay extra to provide it, and, as the Congressional Budget Office noted, the health overhaul plans currently making their way through Congress will provide coverage for just over a third of the uninsured at most.

You’ll note that President Obama’s newfound emphasis on cost reduction as the chief feature of his health overhaul is accompanied at every stop by an attempt to smear and shut up those who point out that the bill he is demanding be passed will increase costs, not decrease them.

Why? Because with recent polls showing that high cost is far and away the number one concern among Americans about health care, and because 60% of Americans believe real health care reform can be accomplished without costing them any more money, Obama needs to be able to say that costs will come down as a result of his legislation — and, as everybody from Blue Dog Democrats to the director of the Congressional Budget Office (who was appointed jointly by Rep. Nancy Pelosi and Sen. Robert Byrd) have noted, the bills being considered by Congress and demanded by Obama will cause health care costs to skyrocket and cause the deficit — already a record, thanks to Obama’s demand for one spending bill after another — to continue its unprecedented growth unabated.

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It’s obvious why he’s lying, of course: if Carnahan admitted how costly the House Democrat health bill will be, he would get a far worse reception.

Congressman Carnahan tells his constituents that the CBO has scored the House Democrat health bill and concluded that it produces a $6 billion surplus. That’s an out-and-out lie. You can find the CBO score here. If you look at the top of page 2, you see that according to CBO’s calculations, the health care bill will increase the deficit by $239 billion between 2010 and 2019.

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What was it that touched off today’s market rally? According to the UK Telegraph, it was due to analyst Meredith Whitney’s urge to buy Goldman Sachs. Why is Whitney so confident about Goldman Sach’s future performance?

Our more bullish outlook on Goldman Sachs shares is deeply rooted in our sustained bearish stance on the U.S. economy and the state of U.S. financials at large. Specifically, we expect a tsunami of debt issuance from federal/sovereign, state, and local governments ramping up debt issuance to fund woefully underfunded budget gaps. In addition, we expect corporate debt issuance to be at least 60% as strong as peak cycle levels, reflecting sizable debt maturity rolls. What’s more, given fewer players in the market, not only is GS benefiting from market share gains on these products but more widely in the derivatives products.

It’s an ill wind that blows no good. This is one case where GS investors are going to make out like bandits because of a continuing bad economy and an unprecedented level of borrowing. Good news, huh?

This may be the right time to buy shares of Goldman Sachs - provided you haven’t lost your job or exhausted your savings.

And you can thank Barack Obama

Why am I taking the time to show an attack ad by the Democratic Senatorial Campaign Committee?  Because I think it is far from damaging and I think it highlights a number of things.

First of all, the Ds must be worried about Portman because why else would they offer an attack ad this early? They know Portman is raising serious money and that his numbers are improving.  So why not take swipe at him and try and slow his momentum.

Second, how lame is this ad? Put aside the debate about trade - and the claim that Portman sent jobs overseas - are they actually accusing Portman of increasing the debt?!?  Do we have a chart?  Chart after the fold:

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Those being the four states that are not running a deficit right now. The relative sizes of the rest can be seen via this handy visual tool:

Via @MelissaTweets

I’d make more commentary on this, except that I can sum it up as stop spending money you don’t have, you idiots. And that is one of those binary things: people either already get that, or they don’t. Either way, there’s not much point for follow-up material. I will note, though, that the ‘top’ five deficit-ridden states (who make up 52% of the total deficit, interestingly enough) have one thing in common: their state legislatures are all dominated by Democratic politicians*.

Yes. Shocking.

Moe Lane

*With the sort-of exception of New York’s; their State Assembly is run by Democrats, and their Senate is currently being run by nobody at all…

Crossposted to Moe Lane.

Schizophrenia:  A form of psychosis marked by a strong tendency to dissociate oneself from reality. Schizophrenia is often characterized by hallucinations, delusions, and inappropriate reactions to situations. The word schizophrenia is often used informally as well as scientifically to indicate a split personality. (from The American Heritage® New Dictionary of Cultural Literacy, Third Edition)

One thing I’ve always agreed with was the title of Michael Savage’s book “Liberalism is a Mental Disorder,” as it seemed to be such an obvious explanation for why the left is so devoid of logic.  And perhaps it’s also an explanation for the results of the latest polls on Obama, the economy, deficits, etc.  I can think of no other excuse than mass public schizophrenia.

A couple of things stand out.  First, the mere fact that Obama was elected in the first place when it was so patently obvious what the man was planning for the nation.  ”Joe the Plumber” came to the fore when he persuaded Obama to admit that he was planning to “spread the wealth around” - aka. socialism.  Yet the schizophrenic American public ignored it.  Now what?  Almost 70% of Americans disagree with the administration’s government takeover of the auto industry.  (Were you people blind?)  Obama admitted before the election that this would happen.  Sarah Palin was right - Obama is a socialist.  This should not be a surprise.

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Today is a big day for the Blue Dog Democrats. They’ve spent the first 6 months of this administration supine, voting for whatever spending Barack Obama and Nancy Pelosi told them to. As a result, the federal deficit is approaching $2 trillion - with nothing to show for it. All along, Barack Obama has paid lip service to the Congressional budget rule known as PayGo. Today, with much fanfare, Obama called for PayGo to be enshrined into law. You might cynically point out that it has been a rule in the House since the Democrats retook Congress in 2006, and ask why you should expect it to lead to smaller deficits once it is a law.

You would be right to ask the question. But beyond that, you ought to note that PayGo doesn’t even apply to one major category of spending: discretionary spending. It applies only to direct spending (ie, entitlements such as Social Security and Medicare). And Obama has also specifically asked for 4 exceptions to the rule. As a result, the new ‘PayGo’ has more holes in it than swiss cheese.

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The Spectator’s Phil Klein alerts us to the release of the Annual Report of the Social Security and Medicare Boards of Trustees. The Trustees have found that due to the recession, benefits paid out are overtaking revenues brought in even faster than projected. The trust funds for these programs will be bankrupt sooner than expected but more importantly, the programs will become a serious drain on the federal budget far sooner than that. That’s because long before the trust funds are exhausted, Uncle Sam will need to take money from general revenues to ‘repay’ the trust funds.

For years we heard that the trust funds masked the true size of federal deficits; that’s because the government borrowed from the those funds to cover current federal expenditures. Sooner than expected, the flow of funds will reverse, and we’ll be forced to spend hundreds of billions in general revenue to pay for entitlements.

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Congressman Paul Ryan, the senior Republican on the House Budget Committe, today laid out the problems with the House Democrat Budget Resolution:

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Gee, there seem to be lots of Blue Dogs going home and telling their constituents:

1. The stimulus was too partisan;
2. Republicans got shut out of the process; and,
3. The Blue Dogs are so influential that Congressional leaders can’t ignore them anymore.

It begs the question: if the Blue Dogs are so influential, then why are they now apologizing and declaiming responsibility for how it turned out? Either they are not all that influential, or they used that influence in support of Nancy Pelosi’s agenda.

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Via RS’s sister site Human Events, it turns out that Speaker Pelosi’s office is working hard to react to yesterday’s strong, principled, and unanimous opposition to the Obama/Pelosi/Reid debt bill. The only problem is, knowledge of political history seems pretty limited in Pelosi’s circles, which is pretty bad since she was in office when the relevant events happened!

In other words, she’s wrong, and she’s not even predicting the kind of events that I think she wants to predict here.

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