Friday, October 21, 2011

My View

Random ruminations from your resident curmudgeon...

Remember when the Republicans took control of the House after the mid-term elections and vowed to cut spending? In April, Republicans in Congress succeeded in getting a bill passed that ostensibly cut a meager $38 billion dollars from the federal budget. Additionally, some legislators in Washington have proposed cutting $2.4 trillion from federal spending over the next decade. Makes one feel good that perhaps Washington is making the first steps toward fiscal sanity, doesn't it? Well, not so fast, friends. According to the U.S. Department of the Treasury, there have been NO spending cuts at all. Zero. Zip. Nada. As a matter of fact, again according to the Treasury Department, there has been $120 billion dollars more in federal spending through the first nine months of 2011 than there was in 2010.. That is an increase of 5% in spending over the same period a year ago. "But wait", you say, "weren't the Republicans going to cut spending and restore fiscal discipline?" In the bizarro world of Washington, a cut in the rate of growth of a federal program is considered a cut, even though real dollar spending has increased. The problem that we face in this country is that we have no leaders on either side of the aisle- or not enough of them- that will truly commit to limiting the spending of the federal government. A balanced budget amendment would go a long way to injecting some fiscal discipline into the process, but until that happens, we as voters and taxpayers are going to have to involve ourselves and demand that Washington enact REAL cuts to the budget.

I always cry at weddings because I know what it is like to be married.

Armed with the facts that I presented above, you should be aware that the liberal left and their accomplices in the media are claiming that these so called budget "cuts" are responsible for the slowdown in our economy, and if the government would just spend more money, everything would get back to normal. The figures don't back up this claim. If government spending at the federal level is 5% higher than last year, doesn't it make sense, if the lefts claims are valid, that we should be seeing economic growth? Some will say that the growth in federal spending was offset by declines in state government spending, and this has contributed to the economic slowdown. Not so, according to the Treasury Department. In the same survey, overall spending at the state government level in this country grew sharply. Spending at the state level in 2010 was 10% higher than it was in 2008 when our economy toppled over into the recession in which we now find ourselves. Part of the increase in spending at the state level was the injection of federal stimulus dollars, and those dollars are now gone, so it is going to be interesting to see if the states will do a better job of reining in spending than have their counterparts at the federal level. Here is what you should know: the burden to productive individuals and businesses from state and federal government has grown to unprecedented levels. Until this stops and is truly reversed, our economy is not going to grow and produce the jobs we need.

We have enough youth. How about a fountain of smart?

It's no secret that our economy is struggling and that jobs are not being created at a rate that will start to get people back to work. There are a number of reasons for this, but here is one of the most important. According the "2011 Structural Costs of Manufacturing in the United States" report by the Manufacturing Alliance and the Manufacturing Institute, U.S. manufacturers face a 20% structural cost disadvantage in the global market as compared to our nine largest trading partners. Structural costs are the costs a business incurs just to "do business", and in a era of global trade, a high structural cost gap is extremely detrimental. This simply means that the widget produced in the U.S.- all things being equal- is going to have a higher cost than the widget produced in a lower structural cost country. According to the report, the five key components of structural costs are: corporate tax burden; tort costs; pollution and environmental regulatory cost; employee benefit costs; and energy costs. The report identified two critical areas where U.S. manufacturers are at a distinct competitive disadvantage: health care costs and corporate tax rates. While U.S. manufacturers face stiff competition from overseas competitors, we as a nation and Congress in particular should be aware of the self inflicted burdens that we place on our companies and how it impacts job creation. Until we make the domestic environment more favorable for our manufacturers- and all businesses- we will struggle to create much needed jobs.

We had a tragedy at my house this week. I spilled spot remover on my dog and now he is gone.

And that, my friends, is my view.

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