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Obama set for first visit to Europe
Mar 6, 2009, 6:02 GMT
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Leave it to the traitorous demonrats, and their treacherous friends in the anti-American MSM, to want 'bilateral' talks with those bisexual commies and socialists in europe. We don't need to talk to no dirty krauts, and frogs, or mics, and spics, or russkies or nips, or chinks for that matter. We don't need no stinking UN, or NATO, or WTO. To hell with the commie infiltrated NAFTA, GRAFTA, and PASTA. We got the biggest guns and we can take care of ourselves, our way, so bugger off with your treasonous talk of surrender to the enemy and a premature withdrawl from Iraq. The whole world, except those effeminate, unpratiotic leftists, is very grateful that we 'unilaterally' took out the massively insane Obama Hussein bin laden, and brought freedom to everyone.
SPfart: But that does not make me right! ///??.... er?
It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.
Martin KozlowskiThe illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents -- John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance -- President Obama is returning to Jimmy Carter's higher taxes and Mr. Clinton's draconian defense drawdown.
Mr. Obama's $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents -- from George Washington to George W. Bush -- combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.
To be fair, specific parts of the president's budget are admirable and deserve support: increased means-testing in agriculture and medical payments; permanent indexing of the alternative minimum tax and other tax reductions; recognizing the need for further financial rescue and likely losses thereon; and bringing spending into the budget that was previously in supplemental appropriations, such as funding for the wars in Iraq and Afghanistan.
The specific problems, however, far outweigh the positives. First are the quite optimistic forecasts, despite the higher taxes and government micromanagement that will harm the economy. The budget projects a much shallower recession and stronger recovery than private forecasters or the nonpartisan Congressional Budget Office are projecting. It implies a vast amount of additional spending and higher taxes, above and beyond even these record levels. For example, it calls for a down payment on universal health care, with the additional 'resources' needed 'TBD' (to be determined).
Mr. Obama has bravely said he will deal with the projected deficits in Medicare and Social Security. While reform of these programs is vital, the president has shown little interest in reining in the growth of real spending per beneficiary, and he has rejected increasing the retirement age. Instead, he's proposed additional taxes on earnings above the current payroll tax cap of $106,800 -- a bad policy that would raise marginal tax rates still further and barely dent the long-run deficit.
Increasing the top tax rates on earnings to 39.6% and on capital gains and dividends to 20% will reduce incentives for our most productive citizens and small businesses to work, save and invest -- with effective rates higher still because of restrictions on itemized deductions and raising the Social Security cap. As every economics student learns, high marginal rates distort economic decisions, the damage from which rises with the square of the rates (doubling the rates quadruples the harm). The president claims he is only hitting 2% of the population, but many more will at some point be in these brackets.
As for energy policy, the president's cap-and-trade plan for CO2 would ensnare a vast network of covered sources, opening up countless opportunities for political manipulation, bureaucracy, or worse. It would likely exacerbate volatility in energy prices, as permit prices soar in booms and collapse in busts. The European emissions trading system has been a dismal failure. A direct, transparent carbon tax would be far better.
Moreover, the president's energy proposals radically underestimate the time frame for bringing alternatives plausibly to scale. His own Energy Department estimates we will need a lot more oil and gas in the meantime, necessitating $11 trillion in capital investment to avoid permanently higher prices.
The president proposes a large defense drawdown to pay for exploding nondefense outlays -- similar to those of Presidents Carter and Clinton -- which were widely perceived by both Republicans and Democrats as having gone too far, leaving large holes in our military. We paid a high price for those mistakes and should not repeat them.
The president's proposed limitations on the value of itemized deductions for those in the top tax brackets would clobber itemized charitable contributions, half of which are by those at the top. This change effectively increases the cost to the donor by roughly 20% (to just over 72 cents from 60 cents per dollar donated). Estimates of the responsiveness of giving to after-tax prices range from a bit above to a little below proportionate, so reductions in giving will be large and permanent, even after the recession ends and the financial markets rebound.
A similar effect will exacerbate tax flight from states like California and New York, which rely on steeply progressive income taxes collecting a large fraction of revenue from a small fraction of their residents. This attack on decentralization permeates the budget -- e.g., killing the private fee-for-service Medicare option -- and will curtail the experimentation, innovation and competition that provide a road map to greater effectiveness.
The pervasive government subsidies and mandates -- in health, pharmaceuticals, energy and the like -- will do a poor job of picking winners and losers (ask the Japanese or Europeans) and will be difficult to unwind as recipients lobby for continuation and expansion. Expanding the scale and scope of government largess means that more and more of our best entrepreneurs, managers and workers will spend their time and talent chasing handouts subject to bureaucratic diktats, not the marketplace needs and wants of consumers.
Our competitors have lower corporate tax rates and tax only domestic earnings, yet the budget seeks to restrict deferral of taxes on overseas earnings, arguing it drives jobs overseas. But the academic research (most notably by Mihir Desai, C. Fritz Foley and James Hines Jr.) reveals the opposite: American firms' overseas investments strengthen their domestic operations and employee compensation.
New and expanded refundable tax credits would raise the fraction of taxpayers paying no income taxes to almost 50% from 38%. This is potentially the most pernicious feature of the president's budget, because it would cement a permanent voting majority with no stake in controlling the cost of general government.
From the poorly designed stimulus bill and vague new financial rescue plan, to the enormous expansion of government spending, taxes and debt somehow permanently strengthening economic growth, the assumptions underlying the president's economic program seem bereft of rigorous analysis and a careful reading of history.
Unfortunately, our history suggests new government programs, however noble the intent, more often wind up delivering less, more slowly, at far higher cost than projected, with potentially damaging unintended consequences. The most recent case, of course, was the government's meddling in the housing market to bring home ownership to low-income families, which became a prime cause of the current economic and financial disaster.
On the growth effects of a large expansion of government, the European social welfare states present a window on our potential future: standards of living permanently 30% lower than ours. Rounding off perceived rough edges of our economic system may well be called for, but a major, perhaps irreversible, step toward a European-style social welfare state with its concomitant long-run economic stagnation is not.
There will always be a neocon nutcase posting about the terrible dangers faced by the USA if it stops spending 50 percent of the world total buget on armamaents .It seems that for them 'freedom' is at that price And of course invariably they will tell you that those wimpy europeans ,who seem to think that this completely absurd budget is leading you all into poverty,are nothing but leeches ant parasytes profiting from the umbrella provided by the most powerful nation on this earth.
Does spending 50 percent of the total world's budget on armamant seem such a necessity ?Against whom ?Iran,North Korea?Venezuela ?Those paranoid neocons are not serious I guess,they are nothing but the political proxies of a much more rational interest group;the armament lobby which used to have a blanco check on anything they cared to produce .Oddly enough the first important politician that warned against this lobby was Eisenhower,who knew the strings of power well enough ;he called it 'the military industrial complex' a self serving power combining economical ,political and media groups .Career officers travel freelyfrom army to industry ,creating a powerful lobby with very strong connections to the GOP.
Once the fall of the USSR achieved they needed a new ennemy in order to justify their existence and hefty profits .And so the axis of evil came into existence,a so called powerful alliance of evil countries with only one goal in in mind:destroy the USA, hating freedom ,and other blah blah .
This completely ridiculous scenarion,too stupid to be credible anywhere else but the White House,the Pentagon and B-movies from Stallone and Chuk Norris seems so have percolated into the minds of the most simple subjects of your beautifull country .
50 percent of all the money spent in the entire world on weapons and 'dense'is done by the USA .It remains completely absurd,as if yourcountry was at war against the world .
Rality should tell you something less simplistic in order to stabilize the world .A fight against such undefined and vague notion as terror is to be achieved by police acions,not such absurd scenarion involving stealth fighters,drones,cruise missiles and other silly gadgets .The use of those is only implemented because they provide a hefty profit for the military industrial complex.
Allow the rest of the world to believe an efficient police action has to bbe run by police forces,not the military industrial complex .Again those guys have different interests.They'd love to keep that war going on for ever and ever ,always presenting them with new opportunities to make more profit.
They'll sell you anti missile systems against trumped up iranaian of north korean doom scenarion.The, they will seel you anti anti missile defense system against the response,then they will sell you satelites against those,then satelites against the satelites against those .Wil you ever liberate yourselves from these absurd expenses .You can ot derive any consumer pleasure from any of these,oblmy spend more trillions feeding the bank accounts of Lockheed,Raytheon,Haliburton,Blackwater,forver and ever and ever ....untill cured fromthe nocon paranoia.
Obama is smarter than Bush,he understood the past policy was leading your country into the abys.One of the signs of that is inviting Iran to the table for talks .Iran is not a monolytical structure .Just like in your country there are differentpolitical currents .A refined politician is able to strenghten these streams that can lead to durable solutions ;that is a new road that needs to be travelled .It has never been done because the military industrial complex and your media such as FOx have opposed it constanantly .
Tonny,
The previous post was not submitted by some brainless neo-con. It encapsulates a cogent center-right economic stance which has much to offer to economic debate. In Europe we have accepted, sometimes too unqestioningly, the supposedly innate virtues of our 'mixed' market models. The position outlined above merits close study and a considered response.
I've read it carefully ,I was only referring to the military spending part,not to the rest.I disagree with most of the rest too but that doesn't really matter,it has the merit of clarity and as such honors the person who wrote it.I might have said that in order to be a bit more polite .Now let us have some dribble from SP4,I'm getting bored again....
Well I hope Obama is better briefed (educated) than Hillary Clinton who has just informed a meeting in Europe that America has been a democracy longer than any European country !
This is typical of so many americans who haven't a clue about the rest of the World
Whoops - judging from the posts on this site, I realise that, just like Hillary Clinton, many americans readers won't have a clue what I am talking about in the above - so here is a summary from the news media -
'Members of the European Parliament in Brussels were shaking their heads today after Secretary of State Hillary Clinton incorrectly said U.S. democracy is older than Europe's. Clinton compared Europe's multi-party political system to our two-party version: 'It is hard enough with two parties to come to any resolution, and I say this very respectfully, because I feel the same way about our own democracy, which has been around a lot longer than European democracy.'
Europeans trace their Democratic tradition back thousands of years to the days of classical Greece. Later Secretary Clinton raised eyebrows again when she mispronounced the names of two of her EU counterparts.'
In all fairness to the US, and leaving aside Classical Greece and the Roman Republic (on which many US institutions appear to have been modelled by her age-of-enlightenment founding fathers), modern American representative democracy does pre-date most European systems, and has proved to be far less friable. My own country has had a parliamentary system for centuries and identifiably distinct political parties emerged nearly four hundred years back, but universal adult male suffrage was only achieved much later than in the US.
The only European examples that come to mind immediately, which pre-date American democracy are those of Iceland and the Isle of Man. Of course many English speaking countries, all former Dominions of the British Empire, have long and proud democratic traditions. I may be wrong, but was not New Zealand one of the first countries to establish universal adult suffrage over thirty years before women were granted the right to vote in most of the developed world?
In any case, it hardly becomes anyone who lives under the rule of the EU to criticise US democracy!
A discussion that leads nowhere this is .Before discussing the merits and roots of democracy a definition is needed.Some say universal voting rights is the key,others will claim the diversity of political parys is the key,others will say pathe separation of powers is the key .
Democracy is not achieved anywhere as long as poverty exists should be added to all definitions for what is liberty when your stomach is empty,etc,etc.
i heard impeachment has been stared on Obama
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