The Ryan Plan vs. the President’s Budget

Via-The Corner


By Veronique de Rugy

Paul Ryan’s new budget offers a path to prosperity and solvency

Via-AEI

By James Pethokoukis

...But the latest version of Ryan’s Path to Prosperity, released today, does far more than defeat a rival who’s decided to forfeit the field. It presents a bold and sweeping solution to America’s twin problems: too much debt and too little economic growth...

He's Made It Worse

Via-Republican Senate Conference

For kicks and giggles ?

Consider this short story from AP today 10-22-2009 :

Romer: Impact of stimulus will level off

WASHINGTON — A top White House economist says spending from the $787 billion economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year.

Christina Romer, the chair of President Barack Obama's Council of Economic Advisers, said Thursday that the $194 billion already spent gave a jolt to the economy that contributed to growth in the second and third quarters of the year. She told a congressional panel that by the middle of next year, the impact of the stimulus will level off. Romer said spending so far has saved or created 600,000 to 1.5 million jobs but warned that unemployment will remain high, above 9.5 percent, through the end of 2010.

Now consider this released yesterday:

7 Months After Stimulus 49 of 50 States Have Lost Jobs

America Now Over 6 Million Jobs Shy of Administration's
Projections

The table below compares the White House's February 2009 projection of the number of jobs that would be created by the 2009 stimulus law (through the end of 2010) with the actual change in state payroll employment through September 2009 (the latest figures available). According to the data, 49 States and the District of Columbia have lost jobs since stimulus was enacted. Only North Dakota has seen net job creation following the February 2009 stimulus. While President Obama claimed the result of his stimulus bill would be the creation of 3.5 million jobs, the Nation has already lost a total of 2.7 million – a difference of 6.2 million jobs. To see how stimulus has failed your state, see the table below.

Click on article to see chart for the individual states.

Although I do believe that the stimulus has "saved" jobs primarily teachers, police, fireman and other public sector jobs, that is not what a stimulus is supposed to do. Saving jobs is really not rel event at all. A recession is a slow down in the economy which causes unemployment. The purpose of a stimulus is to "stimulate" the economy which will increase employment.

Saving jobs does not stimulate the economy, at best it can help stem the recession because more people will have more money to spend than if they were unemployed-obviously. The same is true with unemployment benefits, giving unemployment to the unemployed does not stimulate anything, in fact it inhibits people from actively seeking employment, why work when those that are working pay for you not to work? which is exactly what happens when someone collects unemployment. Not that we should do away with unemployment benefits but the idea that it is somehow stimulative is ridiculous.

Now consider this graph:

Now looking at the above graph it appears like the more of the stimulus they have spent the more unemployment rises. Is there a correlation? Perhaps slightly since unlike government businesses live in a reality based world, not a hypothetical one. All that spending which sucks money from the private sector along with all the bailouts, health care reform plans, regulatory reform plans,cap and trade and all the other uncertainty thrown into the business world has frozen prudent business planning and everyone is waiting to see what will happen. When businesses are hunkering down, they are not employing, they are laying off.

The other important item on the graph is that black dotted line. That Projected Unemployment Without Stimulus. As you can see we have blown right by that with stimulus. The 8.8% projection which was to happen if we did nothing is now 9.8% so we have spent or are on the way to spending 787 billion dollars to be worse off than we would have been had we done nothing. Who came up with that worse case if we do nothing number? Christina Romer, the same Christina Romer who is now telling us (see story 1) that all that debt we incured to keep ourselves from reaching that terrible 8.8% unemployment "has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year" and that "unemployment will remain high, above 9.5 percent, through the end of 2010"

It would be bad enough if we had spent our children's future away to keep unemployment just one percent above what we would have, based on the projections of the "smartest people in the world", but that doesn't even show how far off they are .

As you can see our 787 billion was spent in order to keep us at a maximum of 8% unemployment and by now we should have begun to gain jobs. But the facts are that we are still losing jobs and the very same people who said that spending that tremendous sum to "stimulate" the economy would stop the recession and the job losses are now telling us that not only will it not do what they told us, we are stuck with the current conditions (minimum) for another year (minimum).

Why isn't this administration being excoriated in the media? Why does anyone have any faith in their ability to manage an economy, which isn't their job anyway but we Americans seem to to have abdicated that right to a bunch of academics to do so.

This isn't a small thing, this is a very big thing. Ask yourself this, what if they had not spent any money to stimulate the economy, what would have happened?

Well Christine Romer the architect of this disaster says that spending all this money "has saved or created 600,000 to 1.5 million jobs", which of course is nonsense and totally unprovable and something no other Administration would get away with. Now we are being told "well that's about it don't expect much more stimulus from all that money". That means that since there is still more than a half a trillion to spend it basically is not going to do much of anything at all! "[the] economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year" So why are we going to spend it? For kicks and giggles? Or so that we can make the graph below look worse than it already does and totally impoverish my grand kids.

As remarkable and patheticly inacurate as these predictions and projections are. The ineptitude the waste and outright stupidity of all this debt is. There are elitist nincompoops who say we need to spend more money. The reason , they reason in their little minds that the stimulus is not working is because it is not big enough. We must create more debt, more waste, more corruption and then the economy will be sufficiently stimulated to recover. Insanity.

The Bottom Falling Out

From WAPO Article
Record-High Deficit May Dash Big Plans

All I can say is that I should hope so

When it Comes to Small Business, Obama Just Doesn’t Get It

from Pajama Media


Just when I thought President Obama couldn’t be any more out of touch with small business, his weekly radio address last weekend made me wish Ronald Reagan was around to say “there you go again” with a chuckle. The president’s misunderstanding of America’s entrepreneurs, from what makes them tick to what would really work for them on health care, is laughably profound.

It’s hard to laugh, however, at something so serious. Small businesses do need help when it comes to health insurance, and they are the most important job-creating sector of our economy. And the president paid lip service to these facts in his recent radio address, but his ideas about how his proposals might help small business and the economy are like public policy on acid — from mildly distorted to downright hallucinogenic.

President Obama says he hears from would-be entrepreneurs that losing the health insurance they get through their current jobs is a significant disincentive for them when they think about starting a business. And that some kind of guarantee on health care would encourage all of these people to start companies and create jobs! As a self-employed person who grew up in a small business family, this theory had me literally spit out my coffee. Although obtaining my own health insurance was a serious matter, it was about number 99 on my list of pros and cons surrounding my decision to leave my job and start my own enterprise. I called my father, another entrepreneur, for his reaction to the president’s claim. Dad started his land-surveying business 25 years ago when he was laid off from his job (a fairly common story among real small-business owners). He and his partners all took out second mortgages on their homes to start their business. Was it a struggle to start a business and buy health insurance for themselves and their families? Sure. Was it enough to sway their decision? No.

My father and I both had the same one-word reaction to the president’s perception of entrepreneurial motivation: bull.

If someone wants to be an entrepreneur, if they have that hunger for being their own boss and a passion for doing things their way, they will do it. If the issue of giving up their cushy employer-provided health insurance holds an individual back, then I’m sorry — that person is not entrepreneur material.

The president also mentioned other “small business owners” who apparently tell him that the cost of health insurance is an impediment to growth and to their “research and development” budgets. In the same breath, he said, “these businesses are the mom and pop stores and restaurants, beauty shops, and construction companies that support families and sustain communities.” Adding to the confusion, he said that these business owners are “the small startups with big ideas, hoping to be the next Google, or Apple, or HP.”

Come again?

Research and development is the stuff of high-tech firms, and only five percent of the nearly 30 million small businesses in the country fall into that category. Maybe some of these firms are hoping to be the next Google, Apple, or HP, but they only represent a few threads in the small business quilt. Retail shops, restaurants, and beauty shops — these types of business certainly do not conduct research and development, and they rarely are able to provide health benefits because their cash flow goes toward giving people jobs, period.

American entrepreneurs are nearly fearless risk-takers. They have big hearts, callused hands, and dark circles under their eyes — and that’s the way they like it. They are realists who almost never dream of being “the next Google.” That statement would make them laugh. Would American entrepreneurs like to be able to get health insurance at a more affordable price? You bet, but health insurance didn’t have a darned thing to do with why they stand where they are today.

Please, Mr. President. Go out and meet some real small business owners.

Screwed

As bad as unemployment is read this from Don Surber:


Early retirements mean it is worse than 9.8% unemployment

and in an earlier post he makes this observation;

Doing nothing vs. Obamanomics



Any other President who had put out that projection and so drastically failed on their own projection would have been excoriated by the media and rightfully so. Based on his own projections had we done nothing we would have been better off and a trillion dollars less in debt!

Awhile back I explained how their excuse that the economy was worse than they expected when they made the projections in order to pass the stimulus was nonsense.

It is long past the point where Obama owns this economy and the unemployment. I would not say that had he not pushed the idiotic stimulus package through and sold it on the above projections, but he did. There is no doubt in my mind that doing that has greatly hurt the economy and is going to continue to hurt us for a long time. If they try to help by extending unemployment benefits instead of stimulating the private sector to create real jobs we are screwed. If they pass health care reform that adds an extreme burden on the private sector-we are screwed. If they pass Cap and trade legislation which will greatly increase the price of energy-we are screwed. Basically if Obama gets anything he wants and continues down this path-we are screwed

Enjoy it.

institutionalized depression

Rather than adopting policies that would create jobs they concern themselves with policies that will incentivize unemployment. Rather than help companies, especially small businesses, they make being unemployed less burdensome. The stupidity of this approach was proven over and over again in the 20Th century and yet liberals still can not get it through their heads how destructive this is. This supposed compassion is both destructive and debilitating to not only the economy but the human spirit. They talk about being forward thinking and agents of "Change", they are in fact old and tired agents of human suffering. Nothing so destroys the human spirit than the lack of productive enterprise and a sense of dependency, yet they seek to institutionalize it.


from- WSJ

Democrats Weigh Extending Key Parts of Stimulus

WASHINGTON -- White House officials and Democratic leaders in Congress on Friday said they were weighing extending key elements of the economic-stimulus program as the nation grapples with a deteriorating job market.

Obama administration economists said they would like the enhanced unemployment-insurance program to extend beyond its Dec. 31 expiration date. They also want to maintain a program that offers tax credits to pay 65% of the cost of health insurance policies under the COBRA program, which allows laid-off workers to purchase the health plans they had through their previous employer.


White House officials said they also are examining whether to extend a soon-to-expire tax credit for first-time homebuyers, but that provision faces a stiffer headwind.

"The question is, does it need to be extended or would fiscal considerations lead us to not do so," one administration official said. "We've got a budget deficit to think about, too."

Administration officials are reluctant to call these possible moves a second stimulus package because about 60% of the initial $787 billion stimulus package remains unspent and not contractually obligated to projects. They are focused on what they call the "safety net" parts of the original package, which expire Dec. 31.

But since the extensions would require congressional action, they would likely reopen a debate about the fast-rising federal deficit and the effectiveness to date of the stimulus package.

For the fiscal year that ended Wednesday, the government is expected to post a record $1.56 trillion budget deficit. That rise is feeding criticism of the administration's spending, and sowing some worry among officials about spending.

Indeed, Republicans jumped on Friday's gloomy jobs report, calling it proof that the original stimulus plan hadn't worked. Employers eliminated more jobs than expected in September and the unemployment rate climbed to 9.8%, another sign that a rapid recovery in the labor market is unlikely.

"Today's troubling report underscores the need for Democrats in Washington to scrap their job-killing agenda and act in a bipartisan way to put Americans back to work," said House Minority Leader John Boehner (R., Ohio).

The administration countered that unemployment would be worse without the stimulus program.

Nonfarm payrolls declined by 263,000 in September, the Labor Department said Friday, noting that the largest job losses were in construction, manufacturing, retail trade and government. Economists surveyed by Dow Jones Newswires had expected a 175,000 decrease.

National Economic Council Director Lawrence Summers, in an Internet interview for Atlantic magazine, said he wouldn't be caught using a loaded phrase such as "Stimulus 2." But he hinted at the legislative discussion.

"We certainly need to continue to support people in need, whether through unemployment insurance or COBRA, which for the first time provides that people who get laid off get supported," he said.

"The administration will consider ways of making unemployment insurance be there as a safety net to the extent practical," said Alan Krueger, assistant Treasury secretary for economic policy.

Extending unemployment benefits through 2010 would cost about $100 billion, according to the Center on Budget and Policy Priorities, a liberal think tank.

The cost of the original stimulus plan is likely to shoot higher than the $787 billion estimate, as payrolls continue to be cut.

Under the stimulus program, workers who lose their jobs up to Dec. 31 would get the full, expanded 79 weeks of unemployment benefits, including the $25-a-week expansion in the program.

Those laid-off workers also would get nine months of COBRA support. So programs that nominally terminate at the end of the year would extend much of the way through 2010 for tens of thousands of Americans.

Some people close to the administration believe that when likely extensions of jobless benefits are added in, the total cost of the original stimulus program could exceed $900 billion.

Burned by Obama

from NY POST

Wall St. execs feel betrayed

By CHARLES GASPARINO


In the depths of the financial crisis last year, people like Morgan Stanley's John Mack, BlackRock's Larry Fink, Greg Fleming (then of Merrill Lynch), JP Morgan's Jamie Dimon and Goldman Sachs' Lloyd Blankfein were telling everyone that candidate Barack Obama was a "moderate," and moderation was what this country needed.

What a difference a year makes. They won't admit it in public -- but in private conversations, the top guys on Wall Street are feeling burned.

The guy who seemed like such a steady voice -- vowing to curb runaway spending and restoring order to the banking system and the economy as a whole -- is instead so driven to achieve his big-government policy goals that he and his policy people are ignoring their own economic advisers on the severe economic costs that his agenda will cause.

I'm told that Treasury Secretary Tim Geithner and chief economic adviser Lawrence Summers have both complained to senior Wall Street execs that they have almost no say in major policy decisions. Obama economic counselor Paul Volcker, the former Fed chairman, is barely consulted at all on just about anything -- not even issues involving the banking system, of which he is among the world's leading authorities.

At most, the economic people and their staffs get asked to do cost analyses of Obama's initiatives for the White House political people -- who then ignore their advice.

It's almost the opposite approach, the Wall Street crowd complains, from the last Democratic president, Bill Clinton, whose main first-term achieve- ment -- deficit reduction -- was crafted by his chief economic adviser, Robert Rubin.

Like Obama, Clinton and Rubin promised to raise taxes on the "rich," and they did. But Clinton didn't raise taxes to embark on a wild-eyed redistribution of wealth and massive programs. In the early Clinton years, Rubin convinced the president that he needed to avoid the grim consequences of runaway spending -- and after the Republicans took Congress in '94, it was no longer an option.

Of course, the Clinton tax hikes came at a cost -- before the tech boom ignited the economy in 1995, growth was mediocre at best. But government spending remained under control, and lower interest rates followed, as did an economic recovery.

Obama, according to Wall Street people who regularly deal with his economic and budget officials, is acting as if he has a blank check to do what he wants, while ignoring the longterm costs of his policies.

As one CEO of a major financial firm told me: "The economic guys say that when they explain the costs of programs, the policy guys simply thank them for their time and then ignore what they say."

In other words, the economic people feel that they have almost no say in this administration's policy decisions.

Wall Street should have seen it coming. Obama was among the most liberal politicians in the country, despite his campaign rhetoric -- and his record in Illinois and the Senate showed it. He has spoken glowingly over the years of the need to redistribute wealth, a measure that always leads to taxes on small businesses, the economy's main economic engine.

The execs who had such hopes for the president are now wondering fearfully just how radical he really is.

It's almost comical watching the Street's top players squirm when they hear "class warfare" rhetoric coming from the White House, and it forces them to act in ways they'd never imagined. In addition to recently giving phony speeches about the sins of large compensation packages that they had no problem taking just a few years ago, many Wall Street CEOs are so terrified of being outed as greedy capitalists that they no longer use the corporate credit cards to charge business lunches at their favorite New York restaurants.

The funniest story I've heard lately came from a former Wall Street executive and longtime Democrat who anxiously recounted a recent conversation with Obama.

The executive said he told the president that he's at a disadvantage because he's relatively inexperienced in economic matters during a time of economic crisis. "That's why I have Valerie," came Obama's reply.

"Valerie" is senior adviser Valerie Jarrett -- a Chicago real-estate attorney and one of Obama's closest friends, who has deep ties to the Windy City's Democratic political machine.

Now you know why Wall Street is so nervous.