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If you Voted for Barack Obama and the Democratic Party, Here’s What You Gave Us


Understanding the US Budget Crisis and Sequestration

Diane Richardson, a former Democrat, with research by Laura Cambria, a chronic Conservative

Bill Still’s Speech at Bromsgrove 2010

Speaker explains the root cause of America’s
debt problems in easy to understand language

A guide to America’s Federal Debt Made Easy

As of November 4, 2011
( Source credit )

"Paul: Sequester is a 5% Cut on a 17% Increase"

Democrats/Progressives/Liberals/Socialists/Communists*, in general, claim that there is no spending or debt crisis and that cutting back on entitlements is wrong because it would hurt the needy. Several are even telling alarming stories of cuts to programs and people that represent a wanton disregard for the survival needs of the poor. (1) How they rationalize that there is no government spending problem or growing national debt issue is not explained. Disturbingly, no one asks.

*President Obama is a Socialist according to these sources (2)(3), and has a large number of Socialists and Communists on his staff. (4)(5)(6) However, on Jihad W H, we prove that he is most likely a Communist.

Republicans/Conservatives/Libertarians, in general, claim that if we don't stop overspending these problems will cause a financial crisis ending in a stock market crash and a major depression far worse than what we have experienced so far, with much higher unemployment, and much greater inflation. Should this happen, reduced revenue from taxation would cause the need to reduce payments to those on Social Security (because the government has already spent all the money in the so-called trust fund lockbox), and this would force the need to make substantial reductions in all welfare programs.

While a deep market correction is very likely, it will more likely be because of Federal Reserve policies:

"Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty. ... It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.

“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.

“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”" (24)

Regardless of what happens, we are not likely to default on our debt, because tax revenue would still be available to pay its interest — which would be in the range of $400-$600 billion per year — because even during a depression the industries that service our most basic needs would still function to provide the necessities of life.

If, however, Democrats and Republicans cannot agree on a budget and we are automatically forced into Sequestration, even with projected spending of about $3,700 billion this year, automatic budget cuts of just $85 billion will need to be made based on the 2011 Budget Control Act:

"You see, the 2011 budget act didn't simply mandate $85 billion in cuts this year — $46 billion from the Pentagon, $39 billion in discretionary spending. The law also required that the cuts be administered under an across-the-board formula that imposes cuts, as one White House aide put it, "at a granular level." The Department of Agriculture cannot decide to balance its books simply by cutting farm subsidies or other forms of corporate welfare. No, the cuts have to shave every agency account.

Citizens Against Government Waste has compiled 691 recommendations to save taxpayers $391.9 billion in one year alone. The Budget Control Act deliberately ignores such recommendations. "How insane is that," asked the group's Leslie Paige, "that they can't even agree to getting rid of duplicative programs?"

In effect, the 2011 law was written to protect waste — so that if the sequester cuts happened, only the dumbest cuts would follow." (21)

Is this really a budget crisis?

But more prudent cuts are possible if President Obama takes the offer from Congress to allow him to make the cuts selectively. Or his administration is not charged with the responsibility to inflict the most pain to make the biggest impression possible, just to prove what Obama said would happen is happening.

For example, Congress is always forcing the military to make planes and engines they don't even want. And frequent program changes add costs. They also have 800,000 civilian employees that will not all be needed after cuts are made. (16) President Obama might start by stopping a gift of over $2 billion to Egypt, that includes 20 F-16 fighter jets and 200 Abrams tanks, which could only be used against Israel, because there are no other enemies on their continent. He might also cancel the free cellphone program that now costs over $2 billion per year. But what makes the budget cut issue truly bizarre is that, with baseline budgeting, all federal government departments get automatic budget increases every year of about 8%, which means that if they just commit to not spend some of these increases the budget dilemma would be resolved!. "Even with the sequester," government spending will rise $7-$8 trillion "over the next 10 years," (15) because of automatic increases due to baseline budgeting. Alternately, President Obama wants to burden those who work by raising their taxes.

"On Tuesday, President Obama held an almost comical sky-is-falling press event in the White House warning that houses will burn, terrorists will invade, planes will fall out of the sky, and schools will collapse if the federal government cuts spending by a mere 2 percent. The proper response would have been to mock Obama as crazy 21st century Mayan profit of doom, but instead Speaker John Boehner, R-Ohio, played right into Obama’s hands writing in The Wall Street Journal yesterday, that the sequester “threatens U.S. national security, thousands of jobs and more.”

The Washington Examiner‘s Byron York outlined why this is such a terrible message: “Why would Republicans support a measure that threatens national security and thousands of jobs? … Why would Boehner adopt the Democratic description of the cuts as “deep” when they would touch such a relatively small part of federal spending? The effect of Boehner’s argument is to make Obama seem reasonable in comparison.”" (20)

My belief is, while Democrats believe that they can tell their low information voters anything, and they will believe it -- because there is a level of trust that is unshakable, because they lie about their intentions so convincingly and about Republicans so boldly -- but never show proof of anything -- they fail to truly understand how the economy works and human behavior -- they fail to understand that all money must first be earned in the private sector and taxed, before it can be used anywhere else. And they fail to understand the limit at which those who work in the private sector are no longer willing to absorb higher taxes to keep the economy going, especially when things go bad.

Reasoning: Beyond the need to earn a living, the degree to which people participate in our economy depends on many personal characteristics, primary to which is satisfaction. Personal satisfaction can come from power and or influence alone, money alone, pride in accomplishment alone, helping others alone, or any numbers of personal behavioral 'drivers.' Everyone also has a limit to how much they are willing to participate in anything, and if that limit is reached they will stop. With regard to money earned, they will find ways to avoid paying taxes when the level of taxes become higher than they are willing to pay. How does this manifest itself when government raises taxes in a bad economy instead of lowering expenses? It has been shown a number of times that, no matter how high the taxes are raised, at a certain level of taxation, no more tax revenue is received. This tells us that taxpayers always find various ways to stop paying taxes when they become higher than taxpayers are willing to pay. Brings to mind the expression, whipping a dead plow horse is a waste of time. This means that Democrats either don't understand human behavior, or they really don't care about people who work or the size of our debt. Either way, in their never-ending quest for equality of the masses (which they would never agree to participate in), they seem determined to risk causing the country to fail in order to reach their goal, which actually is total control of everything.

Back to the real world, and what's best for us all. The only sensible course of action, for Democrats, is to find a level of taxation that is reasonable for all taxpayers and never exceed it. Republicans would have a different approach -- they would (in my preferred world) create a government only large enough to meet our basic needs and lower taxes accordingly, because they believe that free-markets work best when left alone. The difference between the two parties is in the range of 100% -- Democrats will spend about twice as much as Republicans. A bipartisan approach would be a Republican budget, based only on what the government actually needs, plus 50%.

As I've said many times, our free-market economy is nothing more than people as companies making and selling, and all of us buying what we want and can afford. And only the government can slow it down by creating more regulations than it can absorb. Surely, we need some rules and regulations to keep us safe and healthy, and to prevent unfair advantage and greed, but hundreds of thousands of rules and regulations throughout the economy (8) are not the answer to a society based on freedom.

Obviously, getting the economy moving again should be President Obama's first order of business, but it is not, because he is allowing his government to create more rules and regulations than it can absorb -- thousands of them (9)(10) on top of the tens of thousands that we already have. (11)(12) So, both Democrats and Republicans must ask him to pull back as many rules and regulations as is necessary to get the economy moving again, then they must ask him to stop creating rules and regulations. They must then ask him to layoff everyone writing rules and regulations (thousands of workers) because they are no longer needed.

Read what Mark Steyn has to say about all this in his article "Sequestageddon." (23) (Link has been removed at the source.)

The next order of business is for Congress to make needed cuts in entitlements, like means testing, raising the age at which people can collect Social Security, tightening disability requirements, etc. Preventing fraud in entitlement programs is another big cost saver because the GAO reports that the government made "$44 Billion in Improper Medicare Payments in 2012." (19)

With regard to the federal government and President Obama and Democrats, if they insist on their present course of action, which is to forcibly impose Socialism through an overabundance of rules and regulations -- empowered primarily by votes from Wards of the State, people who I believe deserve no moral or ethical right to vote (13) -- at the risk of my own safety -- I suggest that Industries and companies consider shutting down for weeks at a time in protest. Aka going Galt. (18)

Lastly, with regard to President Obama and his Socialist leaning administration, I would be remiss if I didn't mention the fact that Democrats before Obama have held hearing twice to consider ways to absorb all 401(K)s and IRAs, worth a current estimated value of $19 trillion. They say that they should do this in order to insure that everyone gets a (wealth redistribution) retirement check, regardless of if or how much these individuals have saved. This is wholly consistent with their desires to control everything and the Socialists goal to place as much personal property of citizens in the hands of government as they can. (Money is personal property) The second reason to take the money is to use it to support government spending. I bring this up now because it has surfaced again, this time through a provision in Dodd-Frank that allows the head of the Consumer Financial Protection Bureau (CFPB) — who has an illegal appointment from President Obama — to act without congressional oversight. (14) Should the government take all 401(K)s and IRAs, their owners would no longer be able to pass the unspent funds in inheritance, because the government would own all their money.

Comments about, when the president says… (paraphrasing)

When the president says, 'My administration has had the lowest rate of new taxes (or new spending growth) in ..,' what he is doing is trying to fool low information voters into thinking that he is frugal (in the face of running over a trillion in additional debt in each year of his presidency). Explanation: The federal government uses Baseline Budgeting (BB). BB includes all previous government spending in the next year's 'budget allocations,'* including all overspending. Which means that his budget* is huge every year because it never goes down because it includes allocations left over from wars no longer fought, and stimulus funds no longer needed. And he finds ways to spend it all. So he doesn't really need new taxes or spending.

*President Obama has not had a real budget during his presidency because he has not agreed to control his spending. The House of Representatives, controlled by Republicans, has proposed two budgets in order to control the president's spending, but Senator Reid, the Democrat majority leader of the Senate, supports the president by refusing to allow a vote on any budget submitted by the House.

When the president says, 'And it won't cost a dime in new taxes.' Or, 'nothing I'm proposing will increase the deficit a single dime,' what he is really saying is, and it won't cost a dime in additional taxes. But to him, removing allowable deductions to raise government revenue is not raising taxes. And that's what he wants to do because he is determined to punish high income earners because he doesn't believe that they should be able to earn so much money.

When the president says, 'We should raise the minimum wage,' he is in fact attempting to prevent millions from getting their first job because the higher the minimum wage the longer employers will wait to hire the most skilled. Minimum wage jobs are not expected to be jobs to raise a family -- they are expected to be filled by those just entering the workforce. He and Democrats knows this, but the argument fools low information voters into thinking that they care about those seeking low paying jobs.

When the president says, 'I've reduced the national debt by x trillion,' what he is really saying is that he and Democrats have agreed not spend as much in the distant future as bloated BB budgets would allow them to spend. It's never a real reduction in spending - it's always just a promise not to spend some future money that no one can identify.



Notes

1) No link needed - I'm sure that the left leaning news media has 'whipped their viewers into a lather' over grossly exaggerated forecasts if the sequester takes place.

2) Paul Roderick Gregory, Is President Obama Truly A Socialist?, Forbes.com, January, 22, 2012.

3) John Perazzo, Barack Obama, the Socialist , frontpagemag.com, September 6, 2012.

4) Michael Snyder, 22 Signs That Barack Obama Is Transforming America Into A Larger Version Of North Korea (Link has been removed at the source.)

5) Exposing Socialists and Communists in the Obama Administration, commisblaster.com.

6) You might like to know a little about the kind of people President Obama surrounds himself with: John Hawkins, "Seven Of The Most Disturbing Quotes From Members Of The Obama Administration," April 27, 2012, twonhall.com.

7) Kelsey Osterman, "Nancy Pelosi says it’s “almost a false argument” to say the U.S. has a spending problem," redalertpolitics.com, February 10, 2013, February 10, 2013.

Special Note: Please keep in mind that whenever politicians at the national level speak of budgets and savings they are always speaking of 'over ten years' because federal budgets are always presented in this way.

8) Federal, State, County, City and Town.

9) Ben Lieberman, "The jobs O hates: New regs = more pink slips: Obama's job-killing regulations," nypost.com, December 6, 2010.

10) Brian Kelly,"Excessive regulations are killing the economy and the prospects for jobs," conservativeactionalerts.com, June 5, 2012. (Link removed at the source.)

"[It] costs small businesses $10,000 per employee to comply with all the federal regulations." "“Each federal regulator destroys an average of 98 private sector jobs per year.” “Each federal regulator wipes out about $6.2 million in economic output each year.”"

11) What is the Federal Register?

12) Federal Register

13) Arguments to be presented in another article.

14) Phil Kerpen, "Is your retirement account safe from our government?" foxnews.com, February 11, 2013.

15) Susan Jones, "Sen. Rand Paul: 'The Sequester Is a Pittance'," cnsnews.com, February 11, 2013.

(16) "Three ways the Pentagon can help Congress stop the sequestration madness."

17) John Boehner: "The President Is Raging Against a Budget Crisis He Created - Obama invented the 'sequester' in the summer of 2011 to avoid facing up to America's spending problem," wsj.com, February 19, 2013.

18) "From Ayn Rand's famous novel Atlas Shrugged," comes the phrase "Who Is John Galt". Galt is the character who epitomizes the productive entrepreneur so fed up with the restrictions of the bureaucrats and corporatists that he decides to start a revolt of society's creators. In our current financial dilemma, Rand's theme has lead to the suggestion that productive citizens may only be able to survive by "Going Galt" and dropping out," futurnamics.com.

19) Eric Scheiner, "GAO: $44 Billion in Improper Medicare Payments in 2012," CNSNews.com, February 19, 2013.

20) Conn Carroll, "Morning Examiner: Republicans winning sequester fight despite themselves," Washington Examiner, February 21, 2013, http://washingtonexaminer.com/morning-examiner-republicans-winning-sequester-fight-despite-themselves/article/2522150

21) Debra J. Saunders, "If You're a Taxpayer, You're With Stupid," Creators.com, February 24, 2013, http://www.creators.com/opinion/debra-saunders/if-you-re-a-taxpayer-you-re-with-stupid.html

22) Ashton Ellis, "Paul: Sequester is a 5% Cut on a 17% Increase," cfif.org, March 1st, 2013 at 2:10 pm, http://cfif.org/v/freedom_line_blog/#sthash.umMepOtf.dpuf

23) Mark Steyn, "Sequestageddon," Nation Review Online, March 1, 2013 5:00 PM, http://www.nationalreview.com/articles/342014/sequestageddon-mark-steyn

24) "Billionaires Dumping Stocks, Economist Knows Why," Newmax Wires, February 6, 2013 01:59 PM, http://www.moneynews.com/MKTNews/billionaires-dump-economist-stock/2012/08/29/id/450265?

25) "Legal Analyst: Dept Of Agriculture Emails Prove 'Impeachable Offense'," breitbart.com, March 6, 2013, http://www.breitbart.com/Breitbart-TV/2013/03/06/Judge-Napolitano-Department-Of-Agriculture-Emails-Prove-Impeachable-Offense


Posted February 11, 2013; updated March 8, 2013 at 12:25 PM.



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Understanding the US Budget Crisis and Sequestration

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