Tag Archives: Government Spending

Commentary

Thomas Sowell urges us to reflect on economic trade-offs and incentives

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Thomas Sowell

Article here on Creators.

Excerpt:

With all the laments in the media about skyrocketing unemployment among young people, and especially minority young people, few media pundits even try to connect the dots to explain why unemployment hits some groups much harder than others.

Yet unusually high unemployment rates among young people is not something new or even something peculiar to the United States. Even before the current worldwide recession, unemployment rates were 20 percent or more among workers under 25 years of age in a number of Western European countries.

The young have less experience to offer and are therefore less in demand. Before politicians stepped in, that just meant that younger workers were paid less. But this is not a permanent situation because youth itself is not permanent, and pay rises with experience.

Enter politicians. By mandating a minimum wage that sounds reasonable for most workers, they put a price on inexperienced and unskilled labor that often exceeds what it is worth.

Mandated pay rates, like mandated insurance coverage, impose on buyers and sellers alike things that they would not choose to do otherwise.

Workers of course prefer higher wage rates. But the very fact that the government has to impose those wage rates means that workers were unwilling to risk not having a job by refusing to work for less than the wage rate that has been mandated. Now that choice has been taken out of their hands, with the hidden cost in this case being higher unemployment rates.

The law of unintended consequences – hurting the very people they intended to help, because of their economic ignorance. They priced the youngest and most vulnerable workers out of a job, by mandating a minimum wage that no employer will pay to an inexperienced worker. During a recession, you LOWER minimum wage in order to make sure that those most in need can find a job rather than depend on the government.

When people have jobs, they have confidence to spend more money. Making sure that no policy harms job creation is a primary responsibility of government. Jobs, jobs, jobs. No one (especially Christians) should be dependent on the government for money – because the one who pays the piper calls the tune. And no Christian should dance to the tune of a secular leftist government.

If you are a Christian, but not yet a solid small-government fiscal conservative, then read the WHOLE thing. Christians need to understand that the free market is the best guarantor of our freedom of conscience.

Thomas Sowell is my favorite living economist. Walter Williams is number 2. If you click this link, you can read something from Walter Williams about the economic problems that are created by forcing insurance companies to cover people with pre-existing conditions.

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Videos

Paul Ryan confronts Tim Geithner on Obama’s 1.56 trillion budget deficit

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Rep. Paul Ryan

Seriously. I’m never seen such reckless directness from a politician since Michele Bachmann’s passionate speeches.

CANDOR. AUTHENTICITY. PASSION. KNOWLEDGE.

Contrast Obama’s flowery hopenchange speeches with this straight talk:

Next time, let’s elect someone with substance. Paul Ryan.

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News

Paul Ryan declares war on Obama’s record 1.56 trillion dollar budget deficit

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Rep. Paul Ryan

Conservative Republican Paul Ryan’s response to Obama’s new 2010 budget.

Excerpt:

“For the duration of the Administration’s 10-year budget, the deficit never falls below $700 billion, and never falls below 3.6 percent of GDP – a level the Administration’s own budget director has called ‘unsustainable.’ Debt held by the public doubles over 5 years, triples over 10,   and exceeds 60 percent of GDP as a share of the economy this year – surpassing last year’s 50-year high. Debt continues to rise to consume 77.2 percent of our economy by the end of the budget window. Even the countries of the European Union, hardly exemplars of fiscal rectitude, are required to keep their debt levels below 60 percent of GDP.

“The Administration will attempt to focus attention on a handful of proposals supposedly aimed at tempering the Federal Government’s explosive growth. But these have far more to do with calming Americans’ concerns than with doing anything to address them. His pay-as-you-go proposal has been waived or circumvented and only locks in deficits at their current high levels. His non-binding commission simply punts on the critical budget decisions that Members of Congress got elected to make. Finally, his so-called ‘freeze’ on some discretionary spending follows an 84-percent increase – and has no clear means of enforcement.

These charts accompany Paul Ryan’s statement. (H/T Michelle Malkin)

First, government spending:

Second, debt held by public as % of GDP:

The problems started when the Democrats got control of Congress in late 2006. (The House controls spending) Talking about “spending freezes” on tiny amounts of the budget now has no effect because we are losing a trillion dollars-and-a-half dollars a year now. It’s just politics meant to deceive the people who still believe Obama’s honeyed words.

More details about Obama’s budget are here on the Republican House Budget Committee web site.

What is Paul Ryan’s alternative?

Neil Simpson posted a link to an overview of Paul Ryan’s plan.

Excerpt:

Health Care
•    Provides a refundable tax credit — $2,300 for individuals and $5,700 for families — to purchase coverage in any state, and keep it with them if they move or change jobs.
•    Allows Medicaid recipients to take part in the same variety of options by using the tax credit to purchase high-quality care.

Medicare
•    Establishes and fully funds Medical Savings Accounts for low-income beneficiaries to cover out-of-pocket costs, while continuing to allow all beneficiaries, regardless of income, to set up tax-free MSAs.

Social Security
•    Offers workers under 55 the option of investing over one third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to federal employees.

Tax Reform
•    Provides taxpayers a choice of how to pay their income taxes – through existing law, or through a highly simplified income tax system that fits on a postcard with just two rates and virtually no special tax deductions, credits or exclusions (except the health care tax credit).
•    Promotes saving by eliminating taxes on interest, capital gains and dividends and eliminates the death tax.

Read the rest, and see if these ideas that promote saving and investing, instead of borrowing and spending, make more sense to you than Obama’s spending millions of taxpayer dollars on turtle tunnels.