Oh How the Left Loves to Hide Anti-Rich Propaganda...

You know why (well, one of the many reasons) the left teams up against the rich? It isn't just the jealousy, or the pure envy, but a mixture of those emotions and the fact that there are so few rich to compared to the amount of non-rich that exist.

Frankly, there is a bullying element in it.

But regardless, the left will stop at nothing to incorporate the "we hate the evil, stinking, filthy rich" feeling into everything they do. It feels too good not to. Those who pride themselves on "social" everything love banding together in groups (hello unions) in order to facilitate a change.

Why did I bring this up? Well, it's because I wanted to discuss the article titled, "After Your Job is Gone." - (http://techcrunch.com/2013/06/01/after-your-job-is-gone/)

Obama says "There is no Immediate Debt Crisis"

And then claims, "in fact, for the next 10 years, it's gonna be in a sustainable place."

Wait, WHAT?!

I just had to post this. It seemed so "out of whack" that I figured it would be something worth talking about: http://abcnews.go.com/blogs/politics/2013/03/president-obama-there-is-no-debt-crisis/

Take a look at The President's interview, and share your thoughts. I will say, upon looking at some of the comments in the article, these sum it up the best:

 - "The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government's reckless fiscal policies... Increasing America's debt weakens us domestically and internationally. Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem, and a failure of leadership. America deserves better." - Senator Barack Obama, March 16, 2006

- "The problem is, is that the way Bush has done in the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt form $5 trillion for the first 42 presidents - #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back - $30,000 for every man, woman, and child. That's irresponsible. It's unpatriotic." - Candidate Barack Obama, July 3, 2008

What do YOU think?

The Fiscal Cliff Deal: Country-Helping Compromise or Crap Sandwich?

You've now undoubtedly heard that the House of Representatives has voted in favor of the Senate's version of the Fiscal Cliff bill (officially titled the American Taxpayer Relief Act of 2012). President Obama is expected to sign it soon. To see the pdf of the bill, go here: http://i2.cdn.turner.com/cnn/2013/images/01/01/american.taxpayer.relief.act.pdf

So what do you think? Is this good for the country? Did one side win? Did one side lose? What about the process?

My opinion:

First, I want to address the process. This might sound odd to some, but in my opinion, the process is the biggest winner here... to some extent. Our bicameral legislature was established to do exactly what the Congress just did: Debate, delegate, argue, and move slowly towards a compromise. While the Fiscal Cliff negotiation process was "oversensationalized" by the media, (albeit, a heavily-slanted media that used this opportunity to push an agenda), it went precisely as our Forefathers envisioned. Our legislative body, the Congress, was designed to be slow. It was designed this way to ensure tyrannical, quick, dictator-like laws were difficult to enact. Our Forefathers believed that if laws were passed quickly, they would not be passed properly. If it was possible for a bill to become law in quick fashion, without debate (which is a representation of the people spread around this country), why not just have one man or woman, namely, a king or queen, simply implement laws? I addressed this previously, and I do believe wholeheartedly in the concept of legislative compromise:

A "Quick and Dirty" Look at Obama's Tax The Rich Plan

I couldn't resist. I saw the following article and I just had to write about it: http://money.cnn.com/2012/11/14/news/economy/obama-taxes-deficit/index.html?hpt=hp_t3

Yes, I know that in the post-2012 election era, this blog will naturally pivot to more philosophical writings, but some economic analyses will come up here and there. This is an example of one of these economic analyses.

As many readers of this blog know, rarely would I conduct an analysis on a simple article such as the one listed above. Usually, as seen in this previous analysis, I prefer digging deeper and analyzing primary-source data... usually involving IRS data tables, OMB information, or anything of the like. Since this is a simple analysis of the second-hand information discussed in an article, it is officially a "quick and dirty" look. :-)

Where Do Republicans Go From Here? - A Message From the Blog

Good morning,

As all of you have undoubtedly realized, November 6th, 2012 was not a good day for the GOP. If elections and politics were a matter of winning and losing, we lost big time. In the presidential election and in most senate races, the republican party did not perform strongly. 

Fortunately for republicans, and for the nation, elections and politics are not about winning and losing; they're about ideas, proposals, and problem solving. While the pangs of Tuesday night will surely resound for weeks to come, this isn't a time to sulk, bicker, and blame. Reassessing the past and licking our wounds will do us little good. It's time to work together as a party, a coalition, and a cause to bring us together for not only the sake of our institution, but for the greater good of our country.

What is this about? Teamwork. It's as simple as that. It has been observed and reported that the democrats and Team Obama have a great "ground game" and that's what propelled the President to victory. I believe this is very accurate. There is something to learn from our losses, however. Since this isn't a game to be won or lost... since this isn't a battle by which we must hurt the other side in order for us to succeed, the best way to move forward is to work together, not only improving our "ground game," but our message, plans, and platform overall.

CNN Shamelessly Misleads On Economic Report

Last Friday, the Commerce Department released a report claiming the economy grew at a dismal 2.0% annualized rate. By most economists' standards, an economy whose output exceeds last year's output by 2.0% is not growing quickly or strongly by any stretch of the imagination. But that didn't stop CNN from claiming it was a different story. See the article here: http://money.cnn.com/2012/10/26/news/economy/gdp-report/index.html?hpt=hp_t3

Here is the front page headline from CNN.com:

Click Image for Expanded View

Obama's Second Term Plan Diagnosis: Déjà Vu

Okay, I'll admit it... all the good titles for this post were used already. What I wanted to use was "does the math add up," but that was taken already. I'll get to that in a second. Moving on, here is the official second term plan from President Barack Obama titled, "A Plan for Jobs and Middle Class Security - The New Economic Patriotism"

See Obama's second term plan here: https://secure.assets.bostatic.com/pdfs/Jobs_Plan_Booklet.pdf

The first surprising thing to me is that CNN's Jessica Yellin said, "it's not anything significantly new." - Check it out: http://newsbusters.org/blogs/noel-sheppard/2012/10/23/cnns-jessica-yellin-not-anything-significantly-new-obamas-just-releas

"I'm Barack Obama, and I'm Going to Deceive You in This Message"

Harsh, huh? Maybe. But true? Absolutely.

If you watch his most recent ad, President Obama is using the same old lie: http://www.huffingtonpost.com/2012/10/12/obama-mitt-romney-tax-rate_n_1962187.html (the video is near the bottom).

Why is this deception? Well, I've written about that before... many times: http://loudmouthelephant.blogspot.com/2012/08/obama-continues-to-lie-about-taxes.html

Who Should Get Credit for "Saving" the Auto Industry?

First, before I start, I need to get this out there: I was/am firmly against the auto industry "bailouts." I don't care who did it; I do not believe the government should have rewarded poor business decisions. It's quite simple in my book. If you make good business decisions, you survive. If you don't, you fail. By bailing out GM and Chrysler, the government ultimately mitigated risk away from a company and ensured that they would be preserved no matter how badly they performed. The cost of setting this precedent outweighs the short-term benefit of saving these companies. I wrote about this in one of my first ever blog posts: http://loudmouthelephant.blogspot.com/2011/11/too-big-to-fail-dangerous-precedent.html

But why am I writing about this now? For one, Vice President Joe Biden and Vice Presidential nominee Paul Ryan are set to debate tomorrow, and I'm sure this will come up. Joe Biden is often heard at campaign rallies touting the "Bin Laden is dead and GM is alive" line. Take a look: http://www.detroitnews.com/article/20120903/POLITICS01/209030369. He even said it in his DNC speech in Charlotte, North Carolina earlier this year: http://www.youtube.com/watch?v=bKCwQnIygcw

Quantitative Easing 3 (QE3) - Another Bad Move by The Fed

I'm sure by now you've heard the about the announcement by the Federal Reserve to start what it calls Quantitative Easing - Round 3. If you haven't, here is the an article from Bloomberg online that sums it up: http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html. Ron Paul supporters should be up in arms about this, and quite frankly, I am, too.

For my take, I will try my best to keep my thoughts simple. But first, I will attempt to explain this (who knows how this will go) with an analogy:

Have you ever had an issue with drafty windows in your house? It's a pain in the rear, isn't it? Have you ever tried to fix the issue by simply starting fires in your living room? Probably not. If you started a fire in the living room, sure, you'd be warm, but the draft would still exist, and most importantly, you'd have a new problem to worry about. As rough as this analogy is, it applies to QE3. The US has a problem (well, we have many problems). The economy is not recovering quickly enough, and too many Americans are out of work. So what does the Fed do? It creates another problem! It starts another fire for what it thinks will be a fix to the "drafty window" problem. It's bad policy, bad economics, and its potential benefit is certainly not worth the potential drawbacks. Let's get to some "technicals."

Obama Continues to Lie about Taxes

As I have previously written, it seems that President Obama is taking the "throw it at the wall and see what sticks" approach to his campaign ads. This means that he is making claims, regardless of how false they are, while hoping they get enough viewership without the average American even checking on the validity of these claims for themselves. If repeated often enough, the electorate will simply believe these claims, without question, ultimately voting for a president based on lies and misinformation. For additional examples, see this post: http://loudmouthelephant.blogspot.com/2012/06/fill-in-blank-obama-campaign-is-based.html. In fact, I highlighted the "science" behind the President's campaign strategy here: http://loudmouthelephant.blogspot.com/2012/06/obama-campaign-deceit-machine-rolls-on.html

In Obama's newest campaign ad, he goes right after Mitt Romney and his tax rate. First,... why??? What in the world does this have to do with anything? Does Obama really think the American people are that stupid? Let's get some things straight:

A Quick Thought About the CBO's $1.1 Trillion Budget Deficit Prediction

Yes, you read the headline correctly. The Congressional Budget Office has predicted that the final budget deficit, the amount by which the government spends more than it takes in for a year, will close the 2012 fiscal year at about $1.1 trillion (see it here: http://www.cbo.gov/publication/43539). The government will have spent $3.8 trillion while taking in revenues of $2.7 trillion. And yes, I must through this out there, taxing the rich more will not change the $1.1 trillion deficit. See those numbers here: http://loudmouthelephant.blogspot.com/2012/03/tax-rich-obama-class-warfarecampaign.html

This post isn't scientific; it's just some thoughts about these numbers. Think about this:

A Well-Written Article About the Fallacies of Socialist Policies

I saw this article on www.realclearpolitics.com while browsing the web on my phone this weekend, and I couldn't let it go. It explains, in simple terms, why socialist economic policies ultimately fail the population and leave the country saddled in debt with little hope of pulling itself out of a powerful downward economic spiral. See this great piece by representative John Campbell here: http://m.ocregister.com/opinion/europe-363669-free-people.html

On Unemployment, Don't Write Off Barack Obama's Broken Promises

I have been reading (and sometimes corresponding with) the left-leaning blog "The Moderate Left." It also operates www.mormondems.com. I respect the blog; it doesn't simply rant or chant on fringe subjects like #RomneySwissBankAccount. It tends to stick to real economic debate, and I visit it for that purpose. I think, in the spirit of civil debate (something this country is certainly lacking and the main purpose of The Elephant in the Room), it's good to know what the "other side" thinks and feels.

Today, I read the The Moderate Left's post titled "What's Driving Unemployment?" See it here: http://www.modleft.com/?p=212. For the first time in The Elephant in the Room's existence, I felt compelled to write a rebuttal to this post. It is more of an analysis of the ideas presented in the post rather than a counter-analysis of it. In short, here it goes:

What if Barack Obama Was The Head Coach of a Football Team?

He'd be fired at the end of this season...

Okay, that's the "quick and dirty" answer. Let me start by saying that this isn't terribly scientific. It's not deep like my examination of the "Buffett Rule" (http://loudmouthelephant.blogspot.com/2012/03/tax-rich-obama-class-warfarecampaign.html), or my rebuttal of the myth that teachers pay greater tax rates than Mitt Romney (http://loudmouthelephant.blogspot.com/2012/01/stopping-lefts-propaganda-with-truth.html), but instead it's a near-satirical, wholeheartedly relatable discussion involving the upcoming election (something we're all starting to hate), and football (something many of us love).

Talking Point Friday

Well, it's Friday, and since I'm a "numbers" guy I know this is The Elephant in the Room's lowest traffic/visitor day. It's not ideal, but what are you going to do? People have better things to do on their Fridays. :-)

I thought I'd have a little fun and see if people wanted to share their favorite talking points or "gotcha" phrases. Now truth be known, I'm personally not that big on talking points. They're pretty shallow (even if they're true), and rarely offer the backing needed to solidify one's position. I'd much rather delve deeply in to something, and create, back, and defend a position using sound (preferably economic) analysis. For example, when someone messages me on Twitter with "well, you know, Mitt Romney only paid 14% in taxes while the average American who makes $57k pays 28%," I'd prefer to say, "okay, well, let's take a look and see if you know what you're talking about or just blowing smoke." It turns out, with that exact example, the person who made that claim was just blowing smoke. Check it out: http://loudmouthelephant.blogspot.com/2012/02/exploring-tax-myth-what-tax-rates-do.html

Why The U.S. Shouldn't Have a Progressive Tax-Rate System: An Issue of Equality

April is tax month, and the deadline to file your income tax returns has already passed. If you have read through this blog, you probably realized taxation is something I am passionate about. If I had to place a percentage on it, I'd say 75-85% of all posts I write are about taxation. I'm a flat-tax proponent, and I don't hide it. To me, America was built on equality, and it should stay that way. We follow the principle of equality for nearly all things... except taxation.

Our country has laws, rules, and regulations to make sure things stay fair. These laws were created to ensure our government and our citizens are on the "up-and-up." We simply can't ignore our principles just to solve problems. I've said this before, but I will repeat this little example:

Someone Please Explain How Increasing Taxes Will Create Jobs - Part 2

Link to Part 1: http://loudmouthelephant.blogspot.com/2012/02/someone-please-explain-how-increasing.html

Okay, on to Part 2.

Let's set up some ground rules. First, this, like the previous post, is not scientific. I always believe in backing what I say, or at least giving the reasons behind the opinions. That is what I'm doing with these two posts. My belief: raising taxes on millionaires is not good for creating jobs... my reasons: yesterday's and today's post. All dissenting opinions are always welcomed.

Secondly, as economics has taught me, using models, hypothetic situation analysis, heck, anecdotes, etc. in their simplest forms can help us look at a complicated situation in a simple way.

What is this about? This is the "how" behind what I believe. This is a small, simplistic, hypothetic micro-economic example. I certainly hope that it does not become a macro-level epidemic, but many macros make a micro.

Someone Please Explain How Increasing Taxes Will Create Jobs - Part 1

Yes, as the headline says... someone please explain this to me. I'm an economist by nature. I'm conservative. I make about $53k per year. I do NOT want the rich to pay more in taxes, and I do NOT see how taxing the rich more will improve the economy or create jobs. 

President Obama released his $3.8 TRILLION budget today, and, in no surprise, it contained an increase in taxes on the rich. Most of these increases fall under the "Buffett Rule." Perhaps the notion of "taxing the rich" is a nice talking point for Obama. Maybe he understands that middle-class families outnumber millionaires 275-to-1. Maybe he knows that if he keeps making the case that millionaires are these evil, stinking, sneaky people that skirt paying taxes, he can gather enough votes from the middle class to get reelected. Heck, there are approximately 104,000,000 middle-income families and 378,000 millionaires in the U.S. If you had to target a voting bloc, wouldn't you want the middle class on your side? Who cares if millionaires hate you? At 104-million strong, the middle-class voter is whom you should court by turning them against the wealthy.

Revenues vs. Spending: Our Take

As we have said since the beginning of this blog, we take positions (albeit, conservative ones), and we tend to back them. This is what we stand for. We stand by opposing views that are backed over agreeing views that are not.

Allow us to try to shed some light on the revenues vs. spending issue we continually see discussed on various blogs and mainstream media news sites. Again, these are our views and our interpretations of the data. As always, the comments section is open for civil debate.

First, we believe that the current financial crisis (skyrocketing federal deficits and the increase in the national debt, and yes, we know the difference between deficits and debts) is the result of out of control government spending as opposed to those that think it's the result of lagging revenues. Secondly, we also believe that, in spite of what the mainstream media tries to brainwash readers with, the Bush-era tax cuts were a boon to government revenues. We must note that this is not an analysis of who or what party or president caused the problems; it is merely a review of which part of the federal budget, in our view, contributes most to deficits and debt. Our primary source of data is the Office of Management and Budget Summary of Receipts, Outlays and Surpluses or Deficits Table located here: http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/hist01z1.xls

This report can be found on the OMB website located here: http://www.whitehouse.gov/omb/budget/Historicals/ 

First, the data. We have selected federal budgets from 2001-2010, and the projected budgets for 2011 and 2012:

We are going to highlight selected years in the data:

1. 2004-2007 - We chose this set because 2004 was the first full year of the "Bush-era" tax cuts. It is also the first 4-year period in which these tax cuts were "seasoned," and their effects had made their way through the economy. We close the set at 2007 because this is the beginning of the recession and revenues tail off (though not to pre-recession levels) due to various circumstances which are not considered "normal" economic conditions (high unemployment, reduced corporate profits, etc.). The recession was not caused by the Bush-era tax cuts, and the economy was side-swiped by other exogenous forces. 

2. 2008-2011 - We chose this set because this was the era of increased government spending. Expenditures during these 4 years skyrocketed and, in our opinion, have contributed most to the mammoth yearly deficits our country is now experiencing. Unlike revenues, which are the result of economic conditions, expenditures are outlays that are the direct result of government officials' decisions and are made independent of economic circumstances. This is why we tend to discount revenues during this period while we take a look at government expenditures. To us, the story told by revenues during this period is not as significant as the story told by expenditures.

Notice the time period from 2004-2007. The yearly increase in government revenue was at its highest rate, and the change relative to base year 2001 was extraordinary.  Now take a look at expenditures in 2008. From 2001 to 2007, government expenditures increased by only 60%. From 2008 until 2011, in less than half the time, they went from 60% to 100% of 2001 levels. Prior to 2008, the greatest increase in yearly government expenditures was 7.95%. In 2008, it was 9.3%. In 2009, it was 17.94% year over year.

These figures might be easier to understand on a simple graph.

During the green period (the period highlighting the Bush-era tax cuts), revenues increased at a rate greater than the increase in government spending. The gap between the two was actually shrinking. The Bush-era tax cuts, as you can see on the graph, yielded the greatest increase in government revenues during the entire 12 year study period. 

During the red period (the period of increased government spending, ignoring revenues), government spending skyrocketed. When compared to revenues during this period, expenditures increased at a rate that exceeded the deceleration in revenues. Outlays increased 29% from 2007 to 2009 alone. Notice the gap between revenues and spending in 2010 and 2011. This is the yearly deficit, which, if left unbalanced (which it is) then gets rolled into the national debt. 

Let's look at another graph.

This graph supports the information presented in the previous graph. During the era of Bush-era tax cuts (yes, we know they are still in effect, but government revenues are greatly affected during recessions and therefore looking at revenues under these conditions would not be statistically sound), government revenues had its greatest year-over-year increase. As stated in the analysis of the previous graph, the rate of increase in revenues exceeded the rate of increase in government expenditures. During the red period, government spending increase at astounding levels year-over-year. 

This final graph is the most telling.

The first thing we noticed: Government revenues, since the first full year of the Bush-era tax cuts, never dipped below pre-tax cut levels. The tax cuts have always maintained a net positive revenue stream relative to the time before they were enacted.

The second thing we noticed: Government spending, especially since 2008, has been, in our opinion, out of control. In 10 years, the government has doubled its outlays. Perhaps, if the recession did not hit, looking at the rate of increase in revenues from 2004 to 2007, revenues might have kept pace (after all, as previously stated, revenues were growing faster than expenditures since the Bush-era tax cuts).

What does this all mean to us? Simply: the government spends too much. If a regular citizen started earning less money, he or she would naturally start to spend less. If not, they would certainly fall into bankruptcy. Adjusting its spending is not a corrective action our government seems to take in a similar situation. When the government started to earn less (no, the government does not have as much control over its revenues via taxes as people like to think), it should have started to spend less. Unfortunately, as the data shows, it actually did the opposite and started to spend more.

What should the government do? Duh, spend less! The government can easily cut trillions of dollars in unnecessary spending. There is no amount of tax increases that can keep up with this out of control spending anyway, and the only way for the government to bring its budget into balance is by living within its means. Empires fall because they go bankrupt, and, if the United States doesn't take heed, it will end up going down that long road to ruin as well.

Looking forward to your comments. Thank you.

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