Tag Archives: Deficit

What causes Colombia’s economy to grow? What causes Venezuela’s economy to shrink?

Political Map of South America
Political Map of South America

Would you like to have a growing economy? Then follow the lessons of Colombia.

Excerpt:

Colombia expects lower fiscal deficits in 2013 than in 2012, while economic growth is projected at 4.8 percent for both years, Finance Minister Juan Carlos Echeverry said on Thursday.

Latin America’s No. 4 oil producer has seen a strong recovery from the global economic crisis, recouping three investment-grade credit ratings and continuing to reap strong inflows in the mining and oil sectors.

Presenting the latest fiscal plan, Echeverry said the government had revised down the 2012 central government fiscal deficit target to 2.4 percent of gross domestic product from 2.8 percent previously, and the consolidated deficit to 1.2 percent of GDP from 1.8 percent. The consolidated deficit includes the central and regional governments.

The central government deficit target is seen at 2.2 percent of GDP in 2013, with the consolidated deficit at 1 percent.

“This fiscal plan is serious, reasonable, we’re not extracting liquidity from the economy, but injecting liquidity into the economy,” Echeverry told reporters.

The government expects the economy to grow 4.8 percent this year and next. Economic expansion was 5.9 percent in 2011, the fastest growth rate in four years, helped by high foreign investment and strong consumer spending growth.

Colombia has attracted billions of dollars in foreign direct investment over the past decade, mostly into the oil and mining sectors after U.S. military aid helped security forces deal crippling blows to leftist guerrillas and cocaine cartels.

Consumer prices have remained at steady levels in recent months, and economists expect 2012 annual inflation to fall within the central bank’s target of 2 percent to 4 percent.

The fiscal plan forecasts full-year inflation at 3 percent this year and next.

Under Obama, the United States has been running deficits of between 8-10% GDP. Revenue is the same as usual, but spending to reward reckless, irresponsible behavior has skyrocketed.

Would you like to avoid a shrinking economy? Then avoid the policies of Venezuela.

Excerpt:

Venezuela has devalued its currency, joining Iran, Argentina and others whose wars on math brought the same result. Some call this a “restorative.” It’s not. It’s what happens when big government hits a wall.

Venezuela’s monster 47% devaluation from 4.3 to 6.3 bolivars to the dollar, reportedly ordered by President Hugo Chavez from his hospital bed in Cuba, marks the reckoning for his regime’s big-spending ways in Venezuela’s low-growth economy.

[…]This devaluation is characteristic of all tyrannies, which benefit by effectively expropriating the savings of the private sector through monetary means rather than the more common thuggery.

Chavez’s meltdown is coming for the same reason devaluations are also shaking Argentina, which is undergoing a new fiscal disaster of its own, Egypt, which is going through a slo-mo devaluation that’s pushing up the price of food and prompted its Islamofascist rulers to actually urge people to eat less food, and Iran, whose madhouse economics has triggered hyperinflation.

It’s how dictators do business. This is Chavez’s sixth devaluation in the last decade of his big-spending power, following devaluations in 2002, 2003, 2004, 2005, 2010 and 2011. Every one of these devaluations inflates away some of his debts — but at the expense of the country’s savings and investment, which are snapped away through inflation.

What’s more, this devaluation, which was done to plug his deficit spending and prop up the state oil company, will only cover 60% of the country’s deficit, meaning more devaluations ahead this year, likely to take the bolivar to 8 by year end.

Venezuelan officials, predictably, claimed it was “good” as well as an “improvement” that protects the middle class against “speculators,” echoing the party line of establishment economists such as Joseph Stiglitz, former Bill Clinton adviser and chief economist of the International Monetary Fund, who in the past has called devaluations an economic ” restorative.”

Tell that to the panic buyers across Venezuela. There, terrified consumers who are buying goods ahead of expectations of soaring prices, while the poor have seen their life savings wiped out.

When Obama took office, a US dollar was worth over 1.20 Canadian. Today it’s worth about 98 cents. He has been devaluing the currency in order to pay for massive government spending. Private savings of individuals have been devalued, as a result. Inflation is a hidden tax on those who earn and save.

In the United States, we are doing the exact opposite of Colombia. We are embracing Venezuela policies, and expecting Colombia results. Why are we stupid enough to believe words instead of results? Socialism doesn’t work. Capitalism does work. We should choose what works.

Dr. Ben Carson’s story, and hour-long appearance Friday on Hannity

Two articles from the American Spectator about Ben Carson to provide background for his hour-long appearance on Hannity’s TV show Friday night on Fox News Channel.

First article from the American Spectator introduces Ben Carson.

Excerpt:

Dr. Ben Carson is fast becoming America’s Doctor.

And he will make an hour-long house call with Sean Hannity in a Hannity Special on Fox News Friday night.

Along with a handful of guests in an on-set audience, of which I will be privileged to be one.

Dr. Carson, of course, has been in the news lately for this speech at the National Prayer Breakfast. In which, with a surgeon’s precision, the good doctor deftly dissected both Obamanomics and Obamacare — with President Obama seated two seats away.

If you aren’t yet familiar with Dr. Carson you should make the time.

Here is a man whose single mother, one of 24 children — you read that right — married at 13, had two children (Ben and his brother Curtis), eventually finding out that her husband had an entirely different wife and family. Which is to say, he was a bigamist and soon departed from Ben’s family when the discovery was made by Ben’s mother. He was as well a man with an alcohol problem. Mom had a third grade education.

Not exactly an auspicious start for a young African-American kid in Detroit.

But Mom — that would be Sonya Carson — presented with her share of life lessons that every human being walking must face, was paying attention to her two boys. First, she set the example herself. Determined to avoid the welfare system, she worked “constantly,” Carson tells us. Her faith in God having her insist to her son, “Bennie, we’re going to be fine.”

No. she said, you cannot watch television all the time. She laid down a rule — one of many. Young Ben would not be allowed more than two or three TV programs a week. What he must do instead is read two books from the Detroit public library — and write book reports on each.

So began Ben Carson’s lifelong love affair with education — with reading. Dutifully, he would make the trek to the library, read the two books of his choice, write up book reports — and get them back from his mother with a check mark to acknowledge his work.

Did I mention that Sonya Carson couldn’t read? No matter — only much later would young Ben figure this out. In the meantime Ben Carson went from being called “dummy” by his fifth grade friends to a top student at Yale University not to mention the top of his class at the University of Michigan Medical School. And now one of the world’s most accomplished (not to mention famous) physicians, presented with the Presidential Medal of Freedom by President George W. Bush.

Second article from the American Spectator talks about why the left-wing media hates him. This one is by Dr. Paul Kengor of Grove City College. (H/T Ram)

Excerpt:

Liberals continue their hysteria over remarks made by Dr. Ben Carson at the National Prayer Breakfast last week. Carson, a prominent pediatric surgeon from Johns Hopkins University, dared to weigh in on healthcare — something he knows something about, and certainly knows better than Barack Obama. In the liberal mind, Carson committed a grave transgression; he had dared to disagree with Obama, and in Obama’s presence.

In a discussion of Carson’s moral effrontery, Candy Crowley, host of CNN’s State of the Union, asked her panelists whether they were offended by Carson’s comments. “He [Carson] was talking about the idea of, you know, weaving the Bible into some objections he appears to have with the president’s approach,” said Crowley, as if the president would never likewise do anything so outrageous. Count Democratic Congresswoman Jan Schakowsky among the offended. She told Crowley: “I think it’s… not really an appropriate place to make this kind of political speech and to invoke God as his [Carson’s] support for that kind of point of view.”

In truth, what the likes of Crowley and Schakowsky object to is the mere fact that someone publicly disagreed with Obama on healthcare, and especially in the context of faith. This was sheer blasphemy. For liberal Democrats, conservative Republicans are never permitted to use their faith to disagree; no, only liberal Democrats enjoy such freedoms. I could give a thousand examples illustrating the point; I’ve written entire books doing so. For now, however, here are some particularly salient examples involving Obama, liberals, and healthcare reform:

From the very first year of Obama’s presidency, the Religious Left (Obama included) incessantly claimed God’s support for their vision of healthcare reform. This was no surprise whatsoever, just as it was no surprise that the liberal press was not only not outraged but silently supportive. There was nary a whimper of protest from liberal journalists, let alone their usual howls (when a Republican cites his faith) of “separation of church and state!”

For instance, in August 2009, Obama addressed a “virtual gathering” of 140,000 Religious Left individuals. It was a huge conference call to liberal Christians, Jews, and other people of faith. Obama told them that he was “going to need your help” in passing healthcare reform. Christ-like, Obama penitently invoked a period of “40 Days,” a trial of deliverance from conservative evildoers. He lifted up the brethren, assuring them, “We are God’s partner in matters of life and death.”

Like a great commissioning, in the 40 Days that followed the Religious Left was filled with the spirit, confidently spreading the word, pushing for — among other things — abortion funding as part of an eternally widening “social justice” agenda. A group called the Religious Institute, which represented 4,800 clergy, urged Congress to include abortion funding in “healthcare” reform. To not help poor women secure their reproductive rights was unjust, declared the progressive pastors. As the Rev. Debra Hafner, executive director of the Religious Institute, complained, federal policy already “unfairly prevents low-income women and federal employees from receiving subsidized” abortions.

Watch him Friday night for the full hour of Hannity.

My previous articles on Dr. Carson: 1) his opposition to Darwinism and his persecution by Emory University, and 2) the National Prayer Breakfast speech that rocketed him to national fame.

Food stamp president: nearly 16 million more people getting food stamps since Obama’s election

From CNS News.

Excerpt:

 Since taking office in 2009, food stamp rolls under President Barack Obama have risen to more than 47 million people in America, exceeding the population of Spain.

“Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity,” said Obama during his first joint session address to Congress on Feb. 24, 2009.

Since then, the number of participants enrolled in food stamps, known as the Supplemental Assistance Nutrition Program (SNAP), has risen substantially.

When Obama entered office in January 2009 there were 31,939,110 Americans receiving food stamps.  As of November 2012—the most recent data available—there were 47,692,896Americans enrolled, an increase of 49.3 percent.

Not only are we borrowing trillions of dollars to pay for all these handouts, but being dependent on government is not good for people.

Arthur Brooks explains in the Wall Street Journal.

Excerpt:

Earned success means defining your future as you see fit and achieving that success on the basis of merit and hard work. It allows you to measure your life’s “profit” however you want, be it in money, making beautiful music, or helping people learn English. Earned success is at the root of American exceptionalism.

The link between earned success and life satisfaction is well established by researchers. The University of Chicago’s General Social Survey, for example, reveals that people who say they feel “very successful” or “completely successful” in their work lives are twice as likely to say they are very happy than people who feel “somewhat successful.” It doesn’t matter if they earn more or less income; the differences persist.

The opposite of earned success is “learned helplessness,” a term coined by Martin Seligman, the eminent psychologist at the University of Pennsylvania. It refers to what happens if rewards and punishments are not tied to merit: People simply give up and stop trying to succeed.

During experiments, Mr. Seligman observed that when people realized they were powerless to influence their circumstances, they would become depressed and had difficulty performing even ordinary tasks. In an interview in the New York Times, Mr. Seligman said: “We found that even when good things occurred that weren’t earned, like nickels coming out of slot machines, it did not increase people’s well-being. It produced helplessness. People gave up and became passive.”

Learned helplessness was what my wife and I observed then, and still do today, in social-democratic Spain. The recession, rigid labor markets, and excessive welfare spending have pushed unemployment to 24.4%, with youth joblessness over 50%. Nearly half of adults under 35 live with their parents. Unable to earn their success, Spaniards fight to keep unearned government benefits.

Meanwhile, their collective happiness—already relatively low—has withered. According to the nonprofit World Values Survey, 20% of Spaniards said they were “very happy” about their lives in 1981. This fell to 14% by 2007, even before the economic downturn.

If we really cared about people, we would give incentives to job creators (“the rich”) to create jobs for them. Earned success makes people happy.