Friday, March 1, 2013
The political theater that is going on in Washington regarding sequestration borders on the absurd. President Obama, who has chosen to play politics rather than lead, has decried the $85 billion in cuts that he put in place if a budget isn't completed, and has threatened cutting essential services and making the sequestration as painful on the American people as possible. If you had to cut your family budget, as many of us have had to do, where would you start? Would you start starving your children? Refuse to pay for their medical care? Yet keep going to the movies or eating out? Common sense says that a family would cut on the fringes or the extras, not the essentials. Yet the "leadership" in Washington has decided that essentials should be cut rather than frills. Obama has said that teachers, firefighters, and emergency responders will be cut. Friends, this is pure politics. $85 billion out the federal budget is the proverbial spit in the ocean when it comes to trimming the gargantuan federal spending and waste that occurs every year, and represents just 2.4% of the total. We all know that there is enormous waste and fat in the federal budget, and to make these threats in an attempt to raise taxes and all the while damaging the economy for political ends is a horrible disservice to the American people.
My wife said the spark had gone out of our marriage, so I tasered her. I will see what she thinks after she wakes up.
Economists tell us that the economy is recovering, but it doesn't feel that way for many of us. The job recovery from the latest recession is the weakest since World War II, but the recovery in wages is even worse. Wages are still lower than they were when the recession began in 2007, and this lower wage level has far eclipsed the previous longest downturn that began in 2001 and ended 2 1/2 years later. In past recessions, wages began to recover as companies paid workers more due to growth in their business. Eventually, wage growth led to more hiring as business improved. Today, real unemployment is running around 14%, and many workers feel fortunate to have a job. These conditions have limited the growth of wages, which in turn continues to limit the growth of the economy. As the economy has struggled to emerge from the recession, the type of jobs that are being added are mostly lower wage jobs, which contributes to this problem. Compared to the recovery from the 2001 recession, there are 3.5 million fewer construction and manufacturing jobs today, jobs that typically pay a higher wage. The National Employment Law Project estimates that of the 1.7 million new jobs added over the past two years, 43% have been in low or minimum wage categories. With the administration foisting the high cost of Obamacare on employers and seeking to further increase taxes, this dire situation doesn't look to improve any time soon.
I wish my caller ID would provide more detail. Not just who is calling, but information such as "wants help moving" or "calling to complain".
Want empirical proof that higher taxes hurt the economy and taxpayers? Wal-Mart has called their February sales results "disastrous" and has placed the blame squarely on the 2% payroll tax hike. We get to watch in real time what happens when people have less money to spend and how it affects the economy. Democrats in Congress insisted that payroll taxes had to go up to pump more money into Social Security and were willing to sacrifice the economy to protect their sacred cow. It is an idiotic position, because taxes alone will not make Social Security solvent. Social Security is a program that was designed 75 years ago and has not been substantially modified since its inception. The assumptions on which the program were established in the 1930's are no longer valid today. Life expectancies are longer; the ratio of workers to beneficiaries has fallen by 70% and is going to get worse; and if the program is not modified, payroll taxes are going to have to increase dramatically. As the Wal-Mart results demonstrate, further increases in taxes will cripple the economy and especially will hurt lower wage workers the most. If it is our desire to keep Social Security intact, serious reforms are going to have to occur. Taxes alone will not save the program.
My motto is "Never say never", which makes it difficult to tell people my motto.
And that, my friends, is my view.