Obama's recipe for change not my cup of tea
Excerpt from Ann Coulter
I had no idea how important this week's nationwide anti-tax tea parties were until hearing liberals denounce them with such ferocity. The New York Times' Paul Krugman wrote a column attacking the tea parties, apologizing for making fun of "crazy people." It's OK, Paul, you're allowed to do that for the same reason Jews can make fun of Jews.
The point of the tea parties is to note the fact that the Democrats' modus operandi is to lead voters to believe they are no more likely to raise taxes than Republicans, get elected and immediately raise taxes. Apparently, the people who actually pay taxes consider this a bad idea.
Obama's biggest shortcoming is that he believes the things believed by all Democrats, which have had devastating consequences every time they are put into effect. Among these is the Democrats' admiration for raising taxes on the productive. All Democrats for the last 30 years have tried to stimulate the economy by giving "tax cuts" to people who don't pay taxes. Evidently, offering to expand welfare payments isn't a big vote-getter.
Even Bush had a "stimulus" bill that sent government checks to lots of people last year. Guess what happened? It didn't stimulate the economy. Obama's stimulus bill is the mother of all pork bills for friends of O and of Congressional Democrats. ("O" stands for Obama, not Oprah, but there's probably a lot of overlap.)
The lie at the heart of liberals' mantra on taxes – "tax increases only for the rich" – is the ineluctable fact that unless taxes are raised across the board, the government won't get its money to fund layers and layers of useless government bureaucrats, none of whom can possibly be laid off.
How much would you have to raise taxes before any of Obama's constituents noticed? They don't pay taxes, they engage in "tax-reduction" strategies, they work for the government, or they're too rich to care. (Or they have offshore tax shelters, like George Soros.)
California tried the Obama soak-the-productive "stimulus" plan years ago and was hailed as the perfect exemplar of Democratic governance. In June 2002, the liberal American Prospect magazine called California a "laboratory" for Democratic policies, noting that "California is the only one of the nation's 10 largest states that is uniformly under Democratic control." They said this, mind you, as if it were a good thing. In California, the article proclaimed, "the next new deal is in tryouts." As they say in show biz: "Thanks, we'll call you. Next!"
In just a few years, Democrats had turned California into a state – or as it's now known, a "job-free zone" – with a $41 billion deficit, a credit rating that was slashed to junk-bond status and a middle class now located in Arizona.
Democrats governed California the way Democrats always govern. They bought the votes of government workers with taxpayer-funded jobs, salaries and benefits – and then turned around and accused the productive class of "greed" for wanting not to have their taxes raised through the roof.
Huge flood of newly-created "bailout" money undermines democracy
The wise men of Washington keep finding more core beliefs that we have to give up. First it was free markets. Now it’s democracy. The financial rescue may be the least popular big-ticket government program in history. If the U.S. Treasury decides it needs more money to keep the bailout going, it is anybody’s guess whether Congress would provide it. As a result, Treasury and the Federal Reserve have been running what feels to this lifelong student of fiscal policy like a scam.
Many economists believe that helping financial institutions turn their less liquid assets into hard cash is a key step toward returning them to good footing. The best way to achieve that in a democracy would be for Congress to appropriate the funds to acquire the assets and for Treasury to borrow the money that it needs. But Congress is unwilling to appropriate enough money, so Treasury and the Fed have cooked up a work-around: the Fed buys the assets instead. Since the Fed exists outside of the normal budget process, no permission from elected officials is required.
Here’s a sketch of how it works. Many financial institutions have reserve accounts with the Fed. If one of them shows up with an asset it wants to ditch, the Fed takes it and ratchets up the balance in the reserve account. This means that the Fed is effectively summoning cash out of thin air to purchase the assets. In isolation, such a move might be inconsequential. But the scale of this end-around is enormous. The Fed’s balance sheet is closing in on $2 trillion and stands ready to skyrocket above that. Last month, for example, the Fed committed to buy more than $1 trillion in mortgage-backed securities.
This means that the Fed is printing cash at a rate that, while not threatening historic records set in Weimar Germany, promises to create substantial inflationary pressures once the economy revives. Therein lies the problem. At some point, when the economy begins to pick up again, the Fed will have to withdraw some of those reserves from the system before they ignite an inflation bonfire.
Traditionally, the Fed might withdraw reserves by selling some of the Treasuries it owns. But the scale of the money creation is so grand this time that the Fed might not be able to sell enough Treasuries to meaningfully affect inflation without running up against the debt limit that Congress sets when it gives Treasury the authority to borrow money. The Fed could, in principle, sell some of the assets it has been buying -- but if these assets were liquid, the Fed wouldn’t have been buying them in the first place. Which means it may be extremely difficult to get the cash out of the economy before it is too late.
The Fed has cooked up a solution, though. Vice Chairman Donald Kohn, told an audience at the College of Wooster in Ohio that a possible solution would be for the Fed to issue its own securities, which might be called “Fed bills.” Kohn argued that a key attraction of these bills is that they wouldn’t be subject to the debt ceiling set by Congress. In other words, the Fed wants to have unbounded authority to borrow money and buy assets without the inconvenience of having to explain itself on Capitol Hill.
The actions that have been taken already may indeed necessitate granting the Fed that authority. The cash is out the door, and at some point, the Fed will have to rake it back in. Congress may have to choose between giving the Fed the authority it wants, or having the mother of all inflation episodes.
While fully legal, the steps that have been taken by Treasury and the Fed have clearly been designed to insulate those institutions from the will of Americans’ elected representatives. In that regard, the damage from these actions probably exceeds the benefits. If we accept the view that we can be democratic in some areas but not others, then democracy will wither and die.
French navy capture Somali pirate 'mother ship', US just talks: "The French navy on Wednesday intercepted a pirate "mother ship" in the Gulf of Aden and detained 11 fighters, officials said as the United States called for tougher global action against sea bandits. After Somali pirates attacked an American freighter with rocket grenades, US Secretary of State Hillary Clinton unveiled a four-point plan that targets pirate assets and more prosecutions in countries that have been the victims of sea hijackings. A French warship caught a "mother ship" 500 nautical miles (925 kilometres) off the Kenyan coast after tracking them from a failed attack on a Liberian-registered vessel, a French Defence Ministry spokesman said. The 10-metre (33-foot) mother ship was carrying two assault skiffs for attacks, the spokesman said, adding that the captives were being held on the warship, the Nivose. "The frigate spotted the pirates on the evening of April 14 when its helicopter intervened to thwart an attack on the merchant ship Safmarine Asia. It followed their boats overnight and intervened at dawn,'' he said. The Nivose is part of an eight-ship anti-piracy task force from France, Germany, Spain and Italy sailing under the EU banner." [Shameful to be shown up by the French. Who are the cheese-eating surrender monkeys now?]
Sarko disses the hot-air man: "France has been cooing along with everyone else over the arrival of Bo Obama at the White House, but the master of America's new First Dog is no longer in good odour with President Sarkozy. Mr Sarkozy is pouring cold water on President Obama's efforts to recast American leadership on the world stage, depicting them as unoriginal, unsubstantial and overrated. Behind leaks and briefings from the Elysée Palace lies Mr Sarkozy's irritation at the rock-star welcome that Europe gave Mr Obama on his Europan tour earlier this month. The American President's call "to free the world of the menace of a nuclear nightmare" was hot air, Mr Sarkozy's diplomatic staff told him in a report. "It was rhetoric – not a speech on American security policy but an export model aimed at improving the image of the United States," they said. Most of Mr Obama's proposals had already been made by the Bush administration and Washington was dragging its feet on disarmament and treaties against nuclear proliferation, the leaked report said".
America’s red sea : “America is diving into a Marianas Trench of red ink. There is barely a digit of black anywhere on the balance sheet, and spendthrift lawmakers are closing off numerous sources of positive revenue. On the spending side of the ledger, the White House and Congress enacted a $700-billion financial bailout, followed by an earmark-laden $787-billion ’stimulus’ law and plans to ladle out $1.6 billion in federal government bonuses in 2009. Then came a $3.5 trillion ‘red sea’ FY 2010 budget, and the prospect of $9.3 trillion in total indebtedness over the coming decade. A March 31 Bloomberg study found that the Treasury Department, Federal Reserve, FDIC and HUD have thus far obligated generations of Americans to $12.8 TRILLION in debt.”
Batty Britain: Teachers told to use TV show tactics in class : “Teachers should liven up their lessons by bringing game shows like Who Wants To Be A Millionaire? into the classroom to stop children being disruptive, according to the Government’s behaviour ‘tsar.’ Games based on shows like ITV’s Blockbuster and the Radio 4 panel game Just A Minute could be used to make learning more interesting, Sir Alan Steer says in the final report of a four-year government inquiry into behaviour. Other suggestions include introducing bingo sessions, where pupils mark their cards when the teacher speaks a particular word, and Taboo, which involves describing a word or concept without mentioning certain forbidden words.”
Bishop: Demonstrate but don't disrupt: "Bishop John D'Arcy of Fort Wayne-South Bend, whose diocese includes the University of Notre Dame, has issued a statement urging pro-life protesters to host only peaceful and respectful demonstrations against the school's honoring of President Obama. Obama is scheduled to give the university's commencement address and receive an honorary doctorate of law May 17. A spokesman from the diocese told LifeSiteNews that, contrary to news reports that misinterpreted the bishop's statement by saying that the bishop was discouraging all public protests, the bishop has no problem with peaceful and prayerful protests against the Notre Dame scandal. "I urge all Catholics and others of good will to stay away from unseemly and unhelpful demonstrations against our nation's president or Notre Dame or Father John I. Jenkins, CSC," said the bishop in the April 10 statement. Bishop D'Arcy has repeatedly condemned the honor, saying that Notre Dame "has alienated itself from the Catholic community." He has said that he will boycott the ceremony."
Drunken Nation: Russia’s Depopulation Bomb: "A specter is haunting Russia today. It is not the specter of Communism—that ghost has been chained in the attic of the past—but rather of depopulation—a relentless, unremitting, and perhaps unstoppable depopulation. The mass deaths associated with the Communist era may be history, but another sort of mass death may have only just begun, as Russians practice what amounts to an ethnic self-cleansing. Since 1992, Russia’s human numbers have been progressively dwindling.... The current Russian depopulation—which began in 1992 and shows no signs of abating—was, like the previous episodes, also precipitated by events of momentous political significance: the final dissolution of the Soviet Union and the end of Communist Party rule... Unlike drinking patterns prevalent in, say, Mediterranean regions—where wine is regarded as an elixir for enhancing conversation over meals and other social gatherings, and where public drunkenness carries an embarrassing stigma—mind-numbing, stupefying binge drinking of hard spirits is an accepted norm in Russia and greatly increases the danger of fatal injury through falls, traffic accidents, violent confrontations, homicide, suicide, and so on. Further, extreme binge drinking (especially of hard spirits) is associated with stress on the cardiovascular system and heightened risk of CVD [heart disease] mortality".
For more postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena
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