DJH: You may have heard that the US posted a whopping $82. 7 billion deficit in April. Eighty Two Extra Large is serious money, but that is not the story. The real story isn’t the size of this deficit, it’s when it happened — FREAKING APRIL! You remember April, as in April 15th, as in when we all send our hard earned money to Washington DC so they can squander it for another year.
April is traditionally the month of the year with the greatest SURPLUS, but not for Obama. In fact, the US has only posted deficits in 3 of the last 30 Aprils and those deficits were puny compared to this Pig.
We Are All Pigs
When it comes to government spending, the United States is the King Pig of the World. Sure, it starts with Obama, who hands out billions like cotton candy, but the truth is, we’re all to blame. The liberals want more social programs, loyal Patriots like new weapon systems that create jobs in places like Wichita — even if the Pentagon doesn’t need them, and everyone wants a tax break, especially Libertarians. It’s little wonder that in November of 2008, we elected the guy who stood at the end of the trough and said “vote for me and I’ll give 95% of you more slop than the other guy.”
As an American, I’m very proud when our country launches a new space craft to boldly go where no man has gone before. By the same token, when I commuted to work in Silicon Valley, nothing made me happier than when a new lane was added to Interstate 680 or 880. My sister-in-law works for a small city in Massachusetts and hands out government grants all day — talk about pennies from heaven!
That said, the problem is Government spending is no different than your spending or mine. For me, spending is the end result of two great habits — hard work and saving money. I remember buying my first BMW with cash and while I don’t consider myself “materialistic,” it had to be the greatest pleasure I’ve even received from a man-made object.
On the other hand, how many of us know someone who impulsively used credit to buy a car they couldn’t afford or some other adult toy and sent their finances into the tank? It is the classic contemporary example of “act in haste and repent in leisure.” In most cases, the glow wears off after the second or third loan payment.
But that’s what Obama’s doing and it ain’t feeding the pig.
How to Feed Our Pig
The way we feed the pig is ridiculously simple — we collect taxes and hopefully spend it as wisely as possible. The spending wisely part is really, really important. Obama and most of the democrats believe that tax rates have no impact on economic growth, but as I wrote wast week, “Hauser’s Law,” proves that once the total tax burden in the US gets above 20% of the Gross National Product, it hurts the economy, causes a recession, and thus results in less taxes being collected — regardless of the rates. That’s why tax collections have plummeted under Obama and no matter how many new taxes he passes “on the rich,” the pig will continue to starve.
That Guy Bush Knew How to Feed a Pig!
I was no fan of George W. Bush’s liberal spending habits. The sad part is, if he’d shown a little constraint, he might have actually balanced the 2007 budget. As it was, he did shrink the deficit after 9/11 from $450 billion down to $170 billion (the crash of 2008 notwithstanding).
This chart from The Heritage Group is absolutely mind boggling — look at how effective the Bush tax cuts were at turning around the US economy:
And for all of those liberals who say “we can’t afford the Bush tax cuts for the rich,” look at the actually tax collection data. According to the CBO, total federal revenues grew by about $625 billion, or 35 percent, between fiscal year 2003 and fiscal year 2006. That’s freaking huge. To put that in perspective, that’s enough to cover the the entire cost of Obamacare for the next 6 years!
The point is, just like regular people, nations can work hard and save to do good things, or they can choose to behave like that self-indulgent loser down he street who just bought the Ultimate Escalade with “no money down” for 60 months.
The way nations work hard and save is to grow their PRIVATE SECTOR economy, which means more jobs, less unemployment, more retail sales and guess what? More tax revenue flowing into government coffers to FEED THE PIG!
A growing private sector economy pays taxes in multiple ways. Profitable businesses pay business tax, successful investors pay capital gains tax, and all those employed private sector workers pay income tax!
Pork is Not Stimulus — Obama is Starving the Pig
Yep, you can say a lot of derogatory things about George W. Bush, but one thing you can’t say is that he didn’t know how to turn around a bad economy and Feed the Pig.
Now, let’s contract that to Barrack Obama’s approach:
1. Virtually 100% of the jobs he’s “saved or created” are employed by the government. Yes, the workers pay some income taxes, but their employer pays nothing. Also, none of Obama’s massive stimulus spending has found it’s way into venture capital; so no new businesses and no capital gains tax revenue.
2. Much like that Ultimate Escalade that was financed over 60 months, the true cost of hiring a new government worker lingers forever. Well, not forever, but at least 30-40 years. Remember NJ Chris Christie’s February 11, 2010 speech when he spoke the words no elected official had ever uttered before:
“One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life and nearly $500,000 for health care benefits — a total of $3.8m on a $120,000 investment. Is that fair?”
Not only did that government worker fail to feed the pig, he cleaned out the food bin for the rest of the hungry oinkers!
3. 100% of all of Obama’s so-called jobs/stimulus spending is borrowed from someone else. This massive debt competes for access to the precious capital all of those starving little private sector start-ups desperately need to get off the ground and become the next Google.
Sugar High or Pigs on Crack?
I’ve heard the term “sugar high” used by financial analysts to describe the mild recovery we’ve seen on Wall Street over the past year — meaning it was artificially induced and temporary. However, once a sugar high is over, you go back to feeling the way you did before. That will not be case with Obama’s economic policies. The ill effects of this reckless spending has already begun to attack the nation’s vital organs. Our Health Care, Automotive, and Financial Services industries will never be the same again. And the health of our small businesses — the job engine for our economy — is very poor.
The United States will only survive if we get back to feeding the pig healthy food that we pay for ourselves, but the diet Obama’s doling out is not that, in fact it’s quite hazardous to our national health — let’s hope it’s not fatal!
Dave
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