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Why should an independent voter vote Republican in the mid-terms?

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After Trump tax cuts, real GDP growth far exceeds Obama years
After Trump tax cuts, real GDP growth far exceeds Obama years

I have a friend in Canada who asks me about American politics. For some reason, the first things out of my mouth are always the latest scandals about Democrats. I am just getting started when she says “no, no, no… don’t tell me why I shouldn’t vote Democrat. Tell me why I should vote Republican.” Well, there are three good reasons to vote Republican. Job creation, law and order, national security.

Let’s look at the first one. The latest economic numbers came in last week, and they were very good for the country, and for the Republicans.

The Washington Post reported on the numbers:

Hiring surged and wages grew more than they have in almost a decade, the government said Friday in a report seized on by Republicans just before the midterm elections as evidence their policies are delivering for American workers.

In a key economic snapshot before Tuesday’s vote, the Labor Department’s monthly jobs report showed that the typical worker’s earnings rose by 3.1 percent in the past year — the biggest such leap since 2009.

Federal economists reported 250,000 new jobs in October, the 97th straight month of gains, and the unemployment rate remained at a nearly half-century low of 3.7 percent, underlining the strong fundamentals of the economy, despite stock market jitters.

[…]The strong jobs creation last month defied expectations, even by Trump’s top economist, Kevin Hassett, who said he had been bracing for a dip in hiring after Hurricane Michael pummeled the Florida panhandle and Georgia.

“We were expecting a number way below this, so it was a big surprise,” Hassett said. “We’ve got extraordinary job growth even in the face of literal head winds from a hurricane.”

[…]Every major sector added employees, including manufacturing, where there has been evidence that the tariffs are starting to bite. Hispanic unemployment hit a new low of 4.4 percent.

“This is the best labor environment in over a decade,” said Joseph Brusuelas, chief economist at RSM U.S., an international consulting firm.

African American unemployment, at 6.2 percent, is close to an all-time low, although it still remains nearly double the white unemployment rate.

Investors Business Daily, a national newspaper focused on the stock market, recalls what things were like during 8 years of socialism under Barack Obama:

During the Obama years, labor force growth slowed to well below 1% a year, while productivity grew at just 1%. Wage growth was exceedingly slow. These alone explain why the economy never managed 3% growth in any year during Obama’s time in office.

“Under President Obama, the growth in the labor force … slowed dramatically to less than half the rate of the previous four presidencies,” as Real Clear Markets described the Obama record in early 2017, as his second term ended. “The labor-force participation rate has dropped to its lowest level in decades, 62.8% compared to a peak of 67.1% in the late 1990s.”

Why did this happen? High taxes, excessive regulation, ObamaCare, Dodd-Frank, wasteful “stimulus,” and a host of other misbegotten policies that sped up departures from the labor force and curbed business investment.

The declining labor participation rate, in particular, hurt. Labor force growth during the Obama era was a meager 0.4% a year. At the same time, productivity grew less than 1% a year. Meanwhile, as the New York Times recently admitted, an “invisible” recession in business investment hit the economy in 2014 and lasted until 2016.

But what changed? What did Trump do differently?

[…][A]t the same time the wage data came out, another equally telling report emerged: Productivity. It showed that productivity grew 2.2% in the third quarter, after jumping 3% in the second quarter. That was the fastest burst of productivity growth in four years.

By comparison, since World War II, productivity has grown by an average of about 2% a year. It was why the American economy performed so well during that time. But since the end of the Internet boom in 2000, productivity has slowed to about 1% or so.

[…]Productivity typically begins rising when businesses invest in new equipment and training for their workers, in pursuit of new products, new markets, new innovations. Productivity, as the cliche goes, is the secret sauce of all successful economies.

And productivity is the real reason why workers are getting wage hikes. Trained workers are worth more in our new, fast-growth economy.

But beyond even that, as economists will tell you, the rate of growth of productivity, the rate of growth of business investment and the rate of growth of your labor force essentially define the speed limit of your economy. All three are rising right now.

Trump’s plan was to cut the corporate tax rate, cut individual tax rates, cut small business tax rates, and de-regulate the economy.  That worked. Workers learned more, earned more, and kept more of what they earned. Trump bet everything on America’s risk-taking entrepreneurs, and he won. Bigly.

What would Democrats do if they win the House on Tuesday (which is likely)? They want to make workers more expensive to hire, by raising the minimum wage. Their plan is to take money away from job creators, in order to bribe young, low-information voters to vote Democrat.

Investors Business Daily explains:

In California, New York, and other states where the $15 minimum wage has been adopted, we’ve seen dozens of businesses — many of them small businesses — close because a wage hike is simply unaffordable. Others have raised their prices or laid off employees to cope with the higher wage floor. Take Reaching Beyond Care, a child-care provider in Oakland, which was converted to a part-time after-school program. Or consider Long Island’s Tropical Smoothie Cafe, which “now schedules one less person per hour and expects employees to work faster.”

We’re talking jobs, jobs, and more lost jobs. In California, a $15 minimum wage is expected to cost the state as many as 400,000 jobs. It’s a similar story in cities like Seattle, and Flagstaff, Ariz. Are unemployed workers truly better off when hourly wages increase?

Independent voters tend to be more practical and numbers-driven than members of either party. Their demand? Show us the money. Well, we had lots of time to observe how the policies of Democrats worked under Obama, and where the Democrats in Democrat-run cities want to take us. And we also know what works, because Trump has done it for all to see. If you want to have job security, more productivity, higher wages, and keep more of what you earn, then vote Republican. Vote for what works. Not for what feels good.

News

Alexandria Ocasio-Cortez explains how she will pay for $40 trillion in new spending

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Young people seem to think that implementing socialism in the United States won’t cost them a thing. The truth is, the rich don’t have enough money to cover all the spending that socialists want to do. It’s going to be young people who are stuck with the bill, and they’ll have to scale their lives down to third world levels to pay for what they voted for.

Here’s a socialist (former bartender) to explain how she would pay for $40 trillion in new spending, over 10 years:

The Daily Wire reports:

TAPPER: “Right. I get that. But the price tag for everything that you laid out in your campaign is $40 trillion over the next 10 years. I understand that Medicare for all would cost more to some wealthier people and to the government and to taxpayers, while also reducing individual health care expenditures. But I am talking about the overall package. You say it’s not pie in the sky but $40 trillion is quite a bit of money. And the taxes that you talked about raising to pay for this, to pay for your agenda, only count for two [trillion dollars]. We’re going by left-leaning analysts.”

OCASIO-CORTEZ: “Right. When you look again at how our health care works, currently we pay — much of these costs go into the private sector. So, what we see, for example, is, you know, a year ago I was working downtown in a restaurant. I went around and I asked how many of you folks have health insurance? Not a single person did. They’re paying — they would have had to pay $200 a month for a payment for insurance that had an $8,000 deductible. What these represent are lower cost overall for these programs. Additionally, what this is, it’s a broader agenda. We do know and acknowledge that there are political realities. They don’t always happen with just a wave of a wand but we can work to make these things happen. In fact, when you look at the economic activity that it spurs — for example, if you look at my generation, millennials, the amount of economic activity that we do not engage in. The fact that we delay purchasing homes, that we don’t participate in the economy as purchasing cars as fully as fully as possible is a cost. It is an externality, if you will, of unprecedented amount of student loan debt.”

TAPPER: “I am assuming I won’t get an answer for the other $38 trillion. We’ll have you back and go over that.”

Some people are going to vote for her just because she’s young, female, and sounds so passionate. But let’s take a look at some numbers so we can understand how feasible her plans are.

First, the rich don’t earn enough money to be able to pay for trillions of dollars in spending.

In 2012, John Stossel wrote this in Forbes:

If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion.

In 2011, the Tax Foundation explained that even if you taxed ALL THE DISPOSABLE INCOME from all the people who make $200,000 or more, you would only raise $1.53 trillion dollars:

There’s simply not enough wealth in the community of the rich to erase this country’s problems by waving some magic tax wand.

[…]After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left. Such an act would raise approximately $1.53 trillion. It may be economically ruinous, but at least this proposal would actually solve the problem.

Socialists want to spend $40 trillion more over 10 years, or about $4 trillion per year. Taking most of what the wealthy earn would make up less than half of that spending.

Anyway, we’re not in a position to be doing any spending, because the costs of our existing socialist programs will be increasing going forward.

Pretty soon, our mandatory expenses will consume all of our tax revenues
Pretty soon, our mandatory expenses will consume all of our tax revenues

USA Today explains:

After averaging 35 percent of national income from the mid-1950s through 2008, the national debt has surged to 78 percent today and is projected to reach 100 percent within a decade, and 200 percent by 2050. Even these scary estimates rest on rosy assumptions — no new military or economic crises and creditors willing to accept record-low interest rates from a government heading towards a debt crisis.

Just to be clear, he’s talking about the debt-to-gdp ratio. When ours gets too high, interest on the debt will rise, be ause lenders aren’t sure they’ll be getting their money back. This will put us into a debt death spiral.

More:

The cause of this coming debt deluge is no mystery: Social Security and Medicare are projected to run a staggering $82 trillion cash deficit over the next 30 years. We are adding 74 million retiring baby boomers to a system that provides Medicare recipients with benefits three times as large as their lifetime contributions and pays Social Security benefits typically exceeding lifetime contributions (even accounting for inflation and interest on the contributions).

We can’t afford the spending we’re already committed to right now:

Politicians promise changes to avoid cuts in Social Security and Medicare, but their alternatives are plainly insufficient. Democrats favor tax hikes on the rich, but even doubling the highest two tax brackets to 70 and 74 percent would close just one-fifth of these programs’ shortfalls — and even that assumes people keep working at 90 percent tax rates when including state and payroll taxes. Slashing defense spending to European levels would close just one-seventh of the gap. Single-payer healthcare proposals are projected by even liberal economists to increase the debt. Republicans favor cuts in antipoverty and social spending, but even the unimaginable elimination of all anti-poverty spending would close barely half of the shortfall.

So, who’s going to pay for all this? It will be the people who have to work and pay income taxes for the next 30 years. The very same young Americans who are voting for socialists today. They’re the ones who are going to have to survive on a fraction of what their parents earned.

But there’s more. The truth is that raising taxes on the wealthy will cause enormous damage to job creators. If you look at socialist countries, the unemployment rate among young people is astronomical compared to the USA today. Why? Because these other countries have taxed and regulated businesses so much that they simply don’t have money to hire people, and if they do hire people, they pay them less than what they can earn for the same work in America.

Reuters explains:

Last December, the most recent full figures available, 25 million of the EU’s workforce of 240 million were unemployed and actively looking for jobs, producing an unemployment rate of 11 percent.

An additional 11 million were unemployed but had stopped looking or were not immediately available to start work, and were therefore not classified as unemployed. Adding them to the total would bump the jobless rate up to 15 percent.

Then there were more than 9 million part-time workers who wanted to work more hours but had no opportunity to do so – they were counted as employed but felt underemployed.

And finally there were those who were overqualified for their jobs and might well have been making more money elsewhere if they had found the right match for their skills.

European socialism is a kind of hybrid of socialism and capitalism, so it’s not too bad.  In places like Cuba, and Venezuela, you get the real thing. I doubt that most young people really understand what is going on right now on the streets of Cuba and Venezuela. If they did, maybe they wouldn’t be voting for socialism here.

News

Young workers are paying Social Security taxes but will they ever collect benefits?

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What if we had no money for anything except entitlement spending?
What if we had no money for anything except interest and entitlements?

The way Social Security taxes work is that you pay 12.4% of your salary, and another 2.9% for Medicare. That’s 15.3%, before any federal, state and local taxes. So, what are you getting for this 12.4% contribution to the Social Security welfare program? You’re supposed to be able to withdraw that money when you retire, but that money isn’t being stored in an account with your name on it. It’s being spent right now on people who are already retired. Will there be money available for you to withdraw when you retire?

If you’re a young person who retires in 2035 or later, the answer is absolutely not.

The Daily Signal has the numbers:

The American people need to know the state of finances of the Social Security program so they can better understand why reform is not only necessary, but absolutely essential. Here are five takeaways from the most recent financial report:

  • $66 Billion Cash-Flow Deficit in 2016

Social Security is still considered solvent and able to pay full benefits because it has accumulated a $2.8 trillion trust fund, but since the entirety of its trust fund consists of IOUs, cash-flow deficits must be financed by general revenue taxes or new public borrowing.

Since 2010, the Old-Age and Survivors Insurance program has taken in less money from payroll tax revenues and the taxation of benefits than it pays out in benefits, generating cash-flow deficits.

  • $14.3 Trillion in Unfunded Obligations

However, this figure assumes that the $2.8 trillion in trust fund reserves are available to be spent. The problem is that these reserves represent liabilities for the U.S. taxpayer. The payroll revenues have been spent and the trust fund was credited with U.S. bonds, which represent claims on the American taxpayer. This is why the actual unfunded obligation is $14.3 trillion.

The trustees report that Social Security’s unfunded obligation has reached $11.5 trillion. That is the difference between what the program is expected to receive in income and what is expected to spend over the 75-year horizon the program’s actuaries consider for projections.

  • Insolvent by 2035

Based on current projections, the Social Security Old-Age and Survivors Insurance trust fund will be depleted by 2035, reducing Social Security’s expenditures automatically to what the program will receive in revenues, regardless of benefits due at that time.

Social Security is only legally permitted to spend funds in excess of its revenues until its trust fund is depleted.

  • 25 Percent Automatic Benefit Cut

What this means for beneficiaries is that in the absence of congressional action, benefits could be delayed or indiscriminately reduced across the board by 25 percent.

Once the Social Security trust fund is depleted, the program will only be able to pay 75 percent of scheduled benefits, based on payroll and other Social Security tax revenues projected at that time.

  • High Costs to Delaying Reform

The trustees highlight that if Congress waits until the trust funds become exhausted, the cost of making the program solvent will be as much as 40 percent higher, meaning significantly greater benefit cuts and/or tax increases for workers and beneficiaries.

There are several key reforms Congress could pursue to preserve benefits for the most vulnerable beneficiaries without increasing the tax or debt burden on younger generations. However, the longer Congress waits the act, the larger the changes that will be necessary to address Social Security’s combined financing shortfall.

Young people working today who retire in 2035 or later will never see a dime of their Social Security contributions. What’s more likely is that the taxes on their income will go even higher. Take a good look at your paycheck, and you will see money being deducted for this entitlement program. This is money you will never see again. It is being used now, to buy the votes of elderly people who vote against reform when they vote Democrat.

The only person to try to do something about these Social Security problems was George W. Bush – a Republican. But his effort to set up private savings accounts was stopped by Democrats, who depend on the votes of the people who collect from Social Security.

These problems are even worse when you realize that Social Security is only one of the entitlement programs that is going bankrupt. There are others – as well as interest on the $20 trillion debt. ($10 trillion of which was added by Obama in his 8 years as Welfare President). Young people: you are paying taxes for programs that will not be there for you when you need them. Stop voting Democrat, because money matters!