Tag Archives: Economy

Millennials who elected Obama will face high taxes, poverty and unemployment

We can't raise taxes enough to fix this overspending
We can’t raise taxes high enough to fix this much overspending

My regular readers have probably noticed that I have stopped blogging about day-to-day politics, ever since the Republican primary candidates with conservative records (Cruz, Jindal, Walker) were eliminated from the GOP primary. I have heard though that the mainstream media is going all in to elect Hillary Clinton. My concern is that many people rely on television news and will never think about two really important issues. First, Obama has been the worst President in the history of the country and has destroyed the economy for decades to come. Second, his disregard for national security and weak foreign policy has emboldened the enemies of Western democracies, e.g.  Russia, Iran, etc. We will see the consequences of this (wars and terrorism) for years to come. Those are the real challenges we face as a nation.

This Hoover Institute article by Victor Davis Hanson explains the big picture that the mainstream media doesn’t care about.


Consider the $20-trillion national debt. Most Americans accept that current annual $500 billion budget deficits are not sustainable—but they also see them as less extreme than the recently more normal $1 trillion in annual red ink. Americans also accept that the Obama administration doubled the national debt on the expectation of permanent near-zero interest rates, which cannot continue. When interest rates return to more normal historical levels of 4-5% per annum, the costs of servicing the debt—along with unsustainable Social Security and Medicare entitlement costs—will begin to undermine the entire budget.

Count up current local, state and federal income taxes, payroll taxes, property and sales taxes, and new health care taxes, and it will be hard to find the necessary additional revenue from a strapped and overtaxed middle class, much less from the forty-seven percent of Americans who currently pay no federal income taxes. The Obama administration has tried to reduce the budget by issuing defense cuts and tax hikes—but it has refused to touch entitlement spending, where the real gains could be made. The result is more debt, even as, paradoxically, our military was weakened, taxes rose, revenue increased, and economic growth remained anemic at well below 2% per annum.

The national debt is one ticking time bomb, but there are others. Illegal immigration and Muslim refugees create additional financial problems for the next generation of entrepreneurs and workers:

Illegal immigration poses a similar dilemma. No nation can remain stable when 10-20 million foreign nationals have crashed through what has become an open border and reside unlawfully in the United States—any more than a homeowner can have neighbors traipsing through and camping in his unfenced yard.

Likewise, there are few multiracial societies of the past that have avoided descending into destructive ethnic chauvinism and tribalism once assimilation and integration were replaced by salad-bowl identity politics. Common words and phrases such as “illegal alien” or “deportation” are now considered taboo, while “sanctuary city” is a euphemism for a neo-Confederate nullification of federal immigration laws by renegade states and municipalities.

Illegal immigration, like the deficits, must cease, but stopping it would be too politically incorrect and painful even to ponder. The mess in Europe—millions of indigent and illegal immigrants who have fled their own failed states to become dependent on the largess of their generous adopted countries, but without any desire to embrace their hosts’ culture—is apparently America’s future.

Progressive Christians and  left-leaning Republicans join Democrats in imposing costs on the next generation of taxpayers with open borders immigration policies. The bill for importing people who take more in welfare than they pay in taxes has to be paid by someone. Not only will taxes on individuals go up, but taxes on businesses will cause them to create fewer jobs, or move their production to countries that have lower taxes on business.

The rest of the article talks about more ticking time bombs created by young leftist voters. Obama’s anti-police rhetoric has created a crime crisis that will require more police, more incarceration and higher insurance premiums. Obama’s anti-school-choice policies have made it harder for the next generation to get the education they will need to offer value to employers. Without skills, you won’t have a job, and you will be poor – poorer than your parents’ generation.

Although most young leftists are ignorant about foreign policy, that did not stop them from voting to cause crises that will harm our economy, and may also draw us into war. Territorial disputes involving strong countries like Russia and China could easily lead to war. Sponsors of terrorism like North Korea and Iran have gained strength during Obama’s reign of stupidity. Wars that impact trading partners or allies will cost taxpayers money. And millennials are the ones who are going to get the bill for a failed foreign policy.

The article doesn’t mention other crises like the trillion dollar student loan bubble, or the next mortgage lending crisis, or the unfunded pension programs crisis, or Medicare going bankrupt, and then Social Security shortly after, etc. No one in the mainstream media mentions these things, and the millennials aren’t aware of these problems. It’s not in their culture to put financial concerns above having a good time. But closing your eyes doesn’t make a threat disappear. Millennials can’t study English in college, rack up student loans, spend all their money on alcohol, work minimum wage jobs, then travel to Europe in their 20s, and expect everything to work out when they get serious about career and savings at age 30. These crises – which millennials voted for – are going to make their lives harder than their parents’ lives ever were.

New study: incomes of the poorest 20% of households are much lower than in 2007

Is Barack Obama focused on protecting the American people?
Does Barack Obama’s knowledge of policy match his confidence?

Now, many American voters like to think that if the President expresses concern about things like poverty and income inequality, then that means that whatever he does to “fix” it will automatically work to benefit the poor. Is it true?

Here is an article from Investors Business Daily, which talks about a study from the respected, leftist Brookings Institute.


President Obama’s upbeat assessment of the economy is not likely to sit well with low-income families living in major urban or metro areas. For them, economic decline is a harsh reality, not “fiction.”

In his State of the Union speech, Obama declared that “anyone claiming that America’s economy is in decline is peddling a fiction.”

But a new report from the liberal-leaning Brookings Institution finds that incomes among the poorest fifth of households was significantly lower than it was in 2007. Of the 100 cities it examined, incomes fell an overall average of 12%, according to the report’s data. In some, the drop was huge — 34% in Stockton, Calif., 31% in New Haven, Conn., and 30% in Lakeland, Fla.

At the other end of the spectrum, the top 5% of households saw incomes climb, but not by much. The average income for this group was basically unchanged over those years.

As a result, income inequality has increased, but not — as Obama, Bernie Sanders and the chorus of liberal Democrats would have you believe — because the rich are getting richer.

“It’s really about the poor losing ground rather than these upper-class households pulling away,” Brookings senior fellow Alan Berube told AP.

[…]Added to this, many of the cities that saw the biggest increases in income inequality — like Boston; New Orleans; Providence, R.I.; New Haven, Conn.; San Francisco, Washington, D.C. — have been bastions of “spread the wealth around” liberalism.

Another example of this would be Obamacare. Obama got up in front of his teleprompters and told everyone that he was going to make changes to health care policy. He promised that it would not add one dime to the deficit, that we could keep our doctors, that we could keep our health plans and that our health insurance premiums would go down. Every single one of those promises were lies.

We don’t know if Obama knows that he is lying when he says these things. I prefer to think that he is just too stupid to know what he is talking about. He says things that make him feel good. Things that would have pleased his professors in college. But since he has no practical experience of achieving results in any of these areas, he fails again and again. He is confident because he assumes a knowledge of how to obtain results that he does not actually have, owing to his lack of experience. And yet we elected him, then re-elected him.

He is in his own little world, where the people around him carefully insulate him from a reality where all his confident prescriptions have failed to produce what he intended.

Could it be that the free enterprise system of economics that was “built in” to America at the founding actually works better than the failed systems of socialism and communism that Obama was taught in college? Could it be that if we just stuck with the free enterprise system that made us the most powerful economy in the world, that things would be better for the poor than in places where capitalism is rejected for socialism?

We don’t have to guess at what the economic policies of the left produce. You can see it with your own eyes in socialist countries like Venezuela, Cuba, North Korea, Argentina, and so on.

Good news: Venezuela and Argentina eject socialist governments

Political Map of South America
Political Map of South America

Investors Business Daily has some good news for us. The Democrat Party of Venezuela has been CRUSHED in a recent election.


Venezuela’s voters delivered a sledgehammer blow to the country’s ruling Chavista socialists Sunday, winning a likely supermajority in the National Assembly. It’s a great awakening from a 17-year nightmare.

Given the past two decades of near-victories, electoral fraud, chicanery and fractious political opposition mistakes, many Venezuelans are still in disbelief at the scale of the victory in the nation’s legislative elections, which have decisively handed one of Venezuela’s leading governing bodies over to the democratic, pro-free-market opposition.

As this was written, the opposition, known by its Spanish initials MUD, had declared a 112-seat, or two-thirds, supermajority in the National Assembly as a result of Sunday’s vote. The Chavistas won just 46 seats.

It’s total victory in legislative terms and will enable the legislature to throw out politicized Supreme Court justices and appoint honest ones.

The new Congress can also boot corrupt election officials and appoint fair ones. And they will even be able to declare President Nicolas Maduro — the late dictator Hugo Chavez’s hand-picked successor — mentally unstable and unfit for office, or remove him for incompetence. They can also stop his executive orders dead.

The Congress also will have the power to free the 71 or so political prisoners now rotting in Chavista dungeons without trial, including top opposition leader Leopoldo Lopez. And Venezuela’s central bank will stop destroying the country’s money, now nearly worthless.

[…]Most important, the leftist government’s mismanagement of the economy — through currency controls that prevented imports of spare parts, created shortages of basics such as toilet paper and devastated the health care system — and the central bank’s infamous money-printing spree, which has pushed Venezuelan inflation to near 700%, made ordinary life for Venezuelans hellish. There also was corruption, with as much as 1 trillion dollars in oil earnings stolen or misappropriated over the years by high-living Chavista elites, whose lavish lifestyles mocked ordinary, poor Venezuelans.

Top it with the monstrous infiltration of the country by the drug lords, and the likelihood of an electoral housecleaning was perfectly clear.

Still, an element of disbelief remains, given how dirty the Chavista rulers have played their democracy game.

They have broken election rules, violated ballot secrecy, shut voters out and banned popular candidates from running. Many of those dirty tricks were evident in this election, too — the Chavistas illegally extended voting hours and campaigned at polling stations, to cite just a couple of examples.

But the opposition won anyway — with turnout so high, at 74.5%, and margins of victory so wide that the election was impossible to steal.

It helped that the the opposition had the wind at its back with the disastrous result of socialism. But it also helped that MUD had improved its electoral game over the years, learning from each near-miss election.

It also helped that MUD had strong leaders such as Maria Corina Machado and put out strong candidates with a clear, unified message — often summed up as “Down with the left.” And with all the pain of 17 years, it helped most of all that they never lost heart.

There is literally no different between the socialists of Venezuela and the Democrat Party in the United States. They are in lock step on every issue. Should the Democrat Party continue to hold power in America, we can look forward to a reckoning like this one in the future.

Two socialists shake hands: Barack Obama and Hugo Chavez
Two socialists shake hands: Barack Obama and Hugo Chavez

The Wall Street Journal says that the whole country is basically in the grip of ignorant socialists at every level, so there is lots to do.


Pulling out of that death spiral, economists say, will require a series of painful and unpopular adjustments, rolling back more than a decade of populist and statist policies. Among the measures needed is raising the price of the world’s cheapest gasoline—which goes for less than one U.S. penny a gallon—overhauling a cumbersome and inefficient foreign-exchange system, and cutting generous social programs on which Venezuela’s poor depend.

[…]The government still controls more than 20 governorships, hundreds of mayors, the judiciary, much of the press and all auditing agencies. It will be up to Mr. Maduro whether to take steps to stabilize the economy, like loosening currency or price controls.

It’s not just Venezuela that has hit bottom under socialism. Recently, the people of Argentina also threw out their socialists after years and years of disastrous leftist policies.

The Chicago Tribune reports on last month’s election in Argentina.


Under the current president, Cristina Fernandez, Argentina has become an international financial pariah. The country defaulted on debt last year in a long-running feud with hedge funds — remarkably, that was the eighth default in Argentina’s history.

Fernandez refused to settle. That’s left the country to squeak by in isolation, using protectionism and capital controls in a quixotic battle with globalism. The economy is stagnant, foreign currency reserves are dwindling and the inflation rate is around 30 percent. Last week, American Airlines said it stopped accepting pesos for ticket sales because it was tired of collecting revenue it couldn’t convert to dollars.

At times Argentina has embraced trade and economic openness, only to slip back into bad habits thanks to populist Peronistas like Fernandez. Macri, a conservative, wants to re-establish free market principles, but there are a lot of details he didn’t fully explain before his November victory because they will require some short-term pain, and he wanted to win the election.

Everything Macri is talking about makes sense. He says he will lift the capital controls that have wrecked the peso’s credibility. Like other backwaters it shouldn’t resemble, Argentina has a thriving black market because the government insists the peso is worth a lot more than its actual value. Freeing the currency would devalue it, a first step toward making Argentina more competitive.

The next big step would be to negotiate a settlement with the hedge funds that bought up Argentina’s debt after its previous default in 2002 and demand repayment. Fernandez got political mileage from attacking the “vultures,” but Macri seems to understand Argentina can’t get unstuck when it’s essentially shut out of international capital markets. He sounds like he wants to do a deal.

Macri’s got a tremendous balancing act to pull off: He’ll need to cut spending and reduce taxes without destroying the country’s big social safety net, while walking the country through a devaluation.

This is how countries that are ruled for a prolonged period by the political left eventually end up. I know so many of you lose heart and think that there is no hope, but there is hope. Even in countries where the left is running everything from the universities, to the judiciaries, to the mainstream media, there is hope.

Over the last 7 years, Obama added $10 trillion to the national debt. And although few of his Democrat low-information voters know about that, they will be able to tell the difference between prosperity and poverty when the United States reaches the Venezuela / Argentina tipping point. There comes a time when there are no more bailouts for the economics deniers. Reality wins in the end.

Eight years of socialism: more debt, more regulation, fewer Americans working:

Has the economy been doing well lately? When I ask Democrats that question, they often point me to the stock market. I know that the stock market has done very well in the last 8 years. But I really question which Democrat policies have been responsible for this winfall.

Certainly, policies like Obamacare, Dodd-Frank, green energy subsidies, blocking Keystone XL, creating a student loan bubble, and even loosening mortgage lending again to create another housing bubble, cannot cause any economics growth. My personal opinion is that all the growth came from adding over $10 trillion dollars to the debt – a process that started with the election of Nancy Pelosi and Harry Reid to the House and Senate majorities, respectively, in 2007.

Look at the national debt:

Gross public debt, Democrats control spending in 2007
Gross public debt, Democrats control spending starting in 2007

If you add $10 trillion to the national debt in 8 years then OF COURSE the stock prices will go up. You would look richer too if you took your credit card balance from $8,500 to $18,500. But what is behind all this consumer spending and government spending? Just trillions of dollars of new debt.

I think a better measure of how the economy is doing is to ask job creators how it is doing. For example, we can ask small businesses, since they are responsible for so much of the job creation in this economy.

Here’s an article from the Daily Signal about that.

It says:

More than five years after the end of the “Great Recession,” only 21 percent of small businesses* say they have fully recovered. During the recession, lack of sales ranked as the top problem small business faced. Taxes placed second, and “government regulations and red tape” placed third. And since 2012, at least one in five small business owners identify government regulations as their most important problem.

The reason for this is simple—small business owners directly feel the impact of federal regulation in the daily life of their businesses. The small business owner is often the main person in a business who bears the burden of complying with regulations and paperwork requirements. According to a 2010 study, small businesses spend $10,585 per employee on regulation, which amounts to 36 percent more per employee than larger companies spend.

With that as a backdrop, it is easy to see how small business owners continue to wonder why Washington just does not get it when it comes to regulation. For decades, Congress has sought to solve societal problems through mandates on business. Too many Americans without health insurance? Congress tries to solve that by requiring businesses to provide health insurance to their employees (regardless of whether or not they can afford it) or pay hefty penalties. Too many Americans unable to care for a sick relative? Congress seeks to address that by mandating that a business keep a position open three months out of every year for qualified employees, using a cumbersome reporting system.

Always entrepreneurial, with a keen focus on the bottom line, the American small business owner looks for ways to minimize the time and money spent on things other than running his or her business. Since many of these regulations wisely exempt the smallest of small businesses, some employers purposefully do not increase hiring because they do not want to have to comply with the regulatory regimes that await businesses that expand to 10, 15, and 50 or more employees.

This might be why the labor force participation rate is at a 38-year low.

CNS News explains:

A record 94,031,000 Americans were not in the American labor force last month — 261,000 more than July — and the labor force participation rate stayed stuck at 62.6 percent, a 38-year low, for a third straight month in August, the Labor Department reported on Friday, as the nation heads into the Labor Day weekend.

[…]In August, according to BLS, the nation’s civilian noninstitutional population, consisting of all people 16 or older who were not in the military or an institution, reached 251,096,000. Of those, 157,065,000 participated in the labor force by either holding a job or actively seeking one.

The 157,065,000 who participated in the labor force equaled only 62.6 percent of the 251,096,000 civilian noninstitutional population — the same as it was in July and June. Not since October 1977, when the participation rate dropped to 62.4, has the percentage been this low.

So… do you still think that the economy is in good shape? Any economy is going to look better if you take an $8.5 trillion debt and run it up to $18.5 trillion. But if you look a little closer, you see that small businesses are hard-pressed, and it’s affected the real unemployment rate.

What happened to the economy of North Carolina when Republicans cut taxes?

This story is from The Wall Street Journal.


Four years ago, North Carolina’s unemployment rate was above 10 percent and the state still bore the effects of its battering in the recession. Many rural towns faced jobless rates of more than 20 percent.

But in 2013, a combination of the biggest tax rate reductions in the state’s history and a gutsy but controversial unemployment insurance reform supercharged the state’s economy and has even helped finance budget surpluses.

As Wells Fargo’s Economics Group recently put it: “North Carolina’s economy has shifted into high gear. Hiring has picked up across nearly every industry.”

The tax cut slashed the state’s top personal income tax rate to 5.75 percent, near the regional average, from 7.75 percent, which had been the highest in the South. The corporate tax rate was cut to 5 percent from 6.9 percent. The estate tax was eliminated.

Next came the novel tough-love unemployment insurance reforms. The state became the first in the nation to reject “free” federal payments for extended unemployment benefits and reduce the weeks of benefits to 20 from 26. The maximum weekly dollar amount of payments, $535, which had been among the highest in the nation, was trimmed to a maximum of $350 a week. As a result, tens of thousands of Carolinians left the unemployment rolls.

[…]After a few months, the unemployment rate started to decline rapidly and job growth climbed. Not just a little. Nearly 200,000 jobs have been added since 2013 and the unemployment rate has fallen to 5.5 percent from 7.9 percent.

[…]Even with lower rates, tax revenues are up about 6 percent this year according to the state budget office. On May 6, Gov. McCrory announced that the state has a budget surplus of $400 million while many other states are scrambling to fill gaps.

[…]Because North Carolina built in a trigger mechanism that applies excess revenues to corporate rate cuts, the business tax has fallen to 5 percent from 6.9 percent, and next year it drops to 4 percent.

Although North Carolina is too liberal for me, it is nice to see them turning their economy around with tax cuts on job creators, and benefit cuts to those who choose not to work.

At the end of the day, the only real security that any of us has comes from the skills we have developed by working and the work experience we put on our resumes. The economy is in for some harsh conditions going forward. The more we can get Americans working, the better they will be able to weather the coming storm. A little kick in the ass might hurt, but in the long-term, it’s for the best.