Saturday, October 25, 2008

I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money.

We're well into the crazy season of Prez Politics...

...but a good press release by Grassley asking questions we won't get any answers too.

2498 words

22 October 2008

Government Press Releases by CQ Transcriptions


(C) 2008 CQ Transcriptions, Inc. All Rights Reserved.

For Immediate Release

Statement of Senator Chuck Grassley on Chairman Frank's Explanation of the Democratic Stimulus Plan, Spending, and Future Tax Increases

October 22, 2008

House Financial Services Committee Chairman Barney Frank is a leading architect of bicameral Democratic fiscal policy. Chairman Frank, who led the negotiations for House Democrats in the recently-enacted financial sector rescue legislation, appeared on CNBC's "Closing Bell" show Monday afternoon. Chairman Frank summed up the relationship between the additional spending, perhaps as much as $300 billion, the deficit impact of the spending, and future tax increases to restrain the deficit.

Chairman Frank stated: "I think at this point, there needs to be a focus on an immediate increase in spending and I think this is a time when deficit fear has to take a second seat.... I believe later on there should be tax increases. Speaking personally, I think there are a lot of very rich people out there whom we can tax at a point down the road and recover some of this money."

Chairman Frank may be giving us an honest assessment of what the grand fiscal plan is. Notice how spending is attached only to the word "increase"; nowhere is the word "cut" or "reduction" attached to the word "spending". The word "deficit" is used. Only the words "tax" and "increase" are connected.

The Senate Finance Committee conducted four hearings on tax reform this year. At each hearing, I asked a basic question about revenue neutrality, meaning that a new tax system brings in the same level of revenue as the current system. There are two ways to measure revenue neutrality. One way is to measure it against current law. The other way is to measure it against current policy. If current law is used, then a revenue-neutral plan means that we have to increase taxes. The tax increase is equal to the current-year levels of bipartisan tax relief, which is set to expire in 2011. That would mean tax reform would carry with it an automatic tax increase of between 20 percent and 30 percent, to be allocated across all individual taxpayers. If we measure revenue neutrality against current policy, then a tax reform exercise doesn't include a built-in tax increase of at least 20 percent to 30 percent. I'm very interested in pursuing tax reform in a bipartisan manner, but it is important to get this ground rule straight before we start the exercise. No one from the other side has answered this key question, but we're beginning to get some clues.

On August 14, 2008, Austan Goolsbee and Jason Furman, senior economic advisors to Sen. Obama, wrote an op-ed in the Wall Street Journal. In the op-ed, Goolsbee and Furman adopted the current policy baseline. The only exception would be tax increases for single taxpayers above $200,000 of AGI and married taxpayers above $250,000 of AGI. They stated that Sen. Obama, if elected President, would aim for a tax system that kept federal revenues at their post-WW II historic average of 18.2 percent of GDP.

In recent days, leading opinion makers on the left have revised their positions on deficits. Now, with an Obama presidency a probability in their eyes, the fiscal effects of the government intervention in the financial system, and Sen. Obama's desire to significantly deficit spend for new social welfare programs, the leading opinion makers now seek to legitimize near-term outsize deficits (see the following New York Times article and the attached chart comparing the deficit impacts of the McCain and Obama plans).

Chairman Frank may have connected the dots on the whole plan. A President Obama will significantly deficit spend and then plan a tax increase "at a point down the road."

As we all know, the only serious revenue available under current law is in revoking the tax benefits of the bipartisan tax relief of 2001 and 2003 for the next two years - 2009 and 2010. So, if, by "down the road" Chairman Frank means two years from now, there is no revenue against the current law baseline. So, to what is he referring? Perhaps Democrats on the Hill, who have refused to rule out revisiting the current policy baseline in a tax reform environment, are considering tapping that source for the additional 20 percent to 30 percent in revenue it will bring in.

The leading Democratic fiscal policy makers, including Sen. Obama and his team, should be asked to reconcile these positions:

1. Does Sen. Obama stick by the August 14th Goolsbee/Furman op-ed which states that Sen. Obama's goal is to leave the federal tax take at historical levels of the economy?

2. If elected, is Sen. Obama going to insist on this position regardless of what is apparently a contrary position of leading Hill fiscal policy makers, like Chairman Frank?

3. If the answer is yes, then is Sen. Obama willing to disavow Chairman Frank's plans for a future tax hike?

4. Does Sen. Obama agree that a tax reform exercise doesn't change his stated goal of leaving the current level of taxation, 18.2 percent of GDP, in place?

5. If, as the combined analyses of the Tax Policy Center and the National Taxpayers Union Foundation show, Sen. Obama's tax and spend plans impact the deficit by at least $100 billion per year more than Sen. McCain's plans, and Sen. Obama wants to leave the federal tax take at 18.2 percent of GDP, how does Sen. Obama plan to reduce spending to reduce deficits?

If Congress drafts another economic stimulus package in November, it should include tax relief. I want to do what does the most good, and I think one of the best economic stimulus packages we can have would be some reductions of taxes because that encourages investment. I think we do need a stimulus package. It isn't so much if we need one or not. It's how it's structured. If we structure it in such a way that we're setting ourselves up for tax increases later, I would oppose it.

The New York Times

October 20, 2008

Deficit Rises, and Consensus Is to Let It Grow


Like water rushing over a river's banks, the federal government's rapidly mounting expenses are overwhelming the federal budget and increasing an already swollen deficit.

The bank bailout, in the latest big outlay, could cost $250 billion in just the next few weeks, and a newly proposed stimulus package would have $150 billion or more flowing from Washington before the next president takes office in January.

Adding to the damage is that tax revenues fall as the economy weakens; this is likely just as the government needs hundreds of billions of dollars to repair the financial system. The nation's wars are growing more costly, as fighting spreads in Afghanistan. And a declining economy swells outlays for unemployment insurance, food stamps and other federal aid.

But the extra spending, a sore point in normal times, has been widely accepted on both sides of the political aisle as necessary to salvage the banking system and avert another Great Depression.

"Right now would not be the time to balance the budget," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan Washington group that normally pushes the opposite message.

Confronted with a hugely expensive economic crisis, Democratic and Republican lawmakers alike have elected to pay the bill mainly by borrowing money rather than cutting spending or raising taxes. But while the borrowing is relatively inexpensive for the government in a weak economy, the cost will become a bigger burden as growth returns and interest rates rise.

In addition, outlays for Medicare and Social Security are expected to balloon as the first baby boomers reach full retirement age in the next three years.

"The next president will inherit a fiscal and economic mess of historic proportions," said Senator Kent Conrad, Democrat of North Dakota and chairman of the Senate Budget Committee. "It will take years to dig our way out."

The Congressional Budget Office estimates that the deficit in the current fiscal year, which started this month, will reach roughly $700 billion, up more than 50 percent from the previous year. Measured as a percentage of all the nation's economic activity, the deficit, at 5 percent, would rival those of the early 1980s, when a severe recession combined with stepped-up federal spending and Reagan-era tax cuts resulted in huge budget shortfalls.

Resorting to credit has long been the American solution for dealing with expensive crises - as long as the solution has wide public support. Fighting World War II certainly had that support. Even now many Americans tolerate running up the deficit to pay for the wars in Iraq and Afghanistan, which cost $11 billion a month combined. And so far there is wide support for an initial outlay of at least $250 billion for a rescue of the financial system, if that will stabilize banks and prevent a calamitous recession.

"There are extreme circumstances when a larger national debt is accepted as the lesser of two evils," said Robert J. Barbera, chief economist at the Investment Technology Group, a research and trading firm.

There are also assumptions that help to make America's deficits tolerable, even logical.

One is that people all over the world are willing, even eager, to lend to the United States, confident that the world's most powerful nation will always repay on time, whatever its current difficulties.

"So far the market is showing that it is quite willing to finance our needs," said Stephen S. McMillin, deputy director of the White House Office of Management and Budget.

Lenders are accepting interest rates of 4 percent or less, often much less, to buy what they consider super-safe American debt in the form of Treasury securities. The 4 percent rate means that the annual cost of borrowing an extra $1 trillion is $40 billion, a modest sum in a nearly $14 trillion economy, helping to explain why the current growing deficit has encountered little political resistance so far.

But if recent history repeats itself, the deficit is likely to be an issue again when the economy recovers.

Interest rates typically rise during a recovery, so the low cost of servicing the nation's debt will not last - unless a recession set off by the banking crisis endures, repeating the Japanese experience in the 1990s and perhaps even stripping the United States and the dollar of their pre-eminent status.

The assumption is that will not happen, and as the economy recovers, the private sector will step up its demand for credit, making interest rates rise.

Higher rates in turn would increase the cost of financing the deficit, and there would probably be more pressure to reduce it through cuts in spending. That happened in the late 1980s, as Congress and the White House coped with the swollen Reagan deficits. The Gramm-Rudman-Hollings Act, with its attempt to put a ceiling on deficits, came out of this period.

Another assumption, also based on 60 years of post-World War II experience, is that although the economy is sliding into recession, in a year or two that recession will end and the national income (also known as the gross domestic product) will expand once again.

When that happens, the national debt - the accumulated borrowing to finance all the annual deficits - will shrink in relation to the income available to pay off the debt.

The nation's debt as a percentage of all economic activity, while growing alarmingly now, is not at historic highs. The portion held outside the American government, here and abroad, in the form of Treasury securities was $5.8 trillion at the end of last month.

That is a relatively modest 40.8 percent of the nation's annual income, far below the 109 percent coming out of World War II or the nearly 50 percent in much of the 1990s.

Put another way, if the entire national income were dedicated to debt repayment, the debt would be paid off in less than five months. For most of the years since 1940, paying down the debt would have taken longer, putting a greater strain on income.

Still, these are not ordinary times. The banking system is broken, and the national economy, in response, is plunging toward recession in a manner that evokes comparisons with the Great Depression. To soften the blow, the administration and Congress ran up a record $455 billion deficit in the just-ended 2008 fiscal year, and they are en route to a shortfall of $700 billion or more this year.

"I do think we need to be ready for a very significant increase in the budget deficit," said Peter Orszag, director of the Congressional Budget Office.

Apart from the war spending, outlays for unemployment insurance have risen by one-third and spending on food stamps has increased 13 percent over the last 12 months. Congress has agreed to expand education benefits for veterans of the current wars, and last spring it authorized $168 billion for a stimulus package, most of it in the form of tax rebate checks. Now the Democratic Congressional leadership is pushing for another stimulus of at least that much.

All of this is happening as tax revenues are falling, particularly corporate tax receipts, which were down $66 billion, or 18 percent, in the fiscal year that just ended. The decline accelerated in September.

Many Republicans would probably go along with two elements in the stimulus package proposed by the Democrats - a tax cut of some sort and extended unemployment benefits. But they resist stepped- up spending on public works projects and a temporary increase in federal aid to the states.

Representative Roy Blunt of Missouri, the House Republican whip, said the stimulus bill should not be used to finance "a huge public works plan" or to bail out "states that spent a lot more money than they should have on Medicaid and other social programs."

To pay for the surge in spending - and the shortfall in taxes - the federal government increased the national debt by $768 billion over the last year, to the present $5.8 trillion, with $300 billion of that amount going to the Federal Reserve for a variety of rescue initiatives for the financial system.

The outlays swell as each day brings fresh reports of a financial system that is costly to repair and a rapidly sinking economy in need of a leg up.

"The deficit is a burden in a long-term sense," Mr. Barbera, the economist, said, "but it is small beer compared to the concerns of the moment."

Monday, October 13, 2008

Scrubbing the Smears

Gateway pundit on Obama' Smear site scrubbing itself of false statements that Obama never worked for ACORN.

RNC's latest Bill Ayer's ad

Friday, October 10, 2008

Col Morgenthaler and Campanion Security

The odd thing about the Morgenthaler chat with Campansion Security is did Morgenthaler really thing any Iraqi's brought to Illinois for training on AK-47s would stay put? That they wouldn't skip out for the good life in the US?

When I worked in Baghdad the young guys I worked with all wanted to go to California. They had watched the OC on TV and they all wanted to go to Orange County. They all wanted to know if I had ever been there.

There's plenty Morgenthaler isn't remembering on this deal

via Illinois Review
Transcript of Morgenthaler’s Denial of Meeting with Ayham al-Samarrai 49:50

TEB: “What Iraqi official did you meet with in June.”

JM: “I didn’t… I didn’t meet with any Iraqi officials.”

TEB: “Um… the Iraq Minister of Electricity.”

JM: “There was supposed to be a meeting, he wasn’t there. I just met with the retired police officers.”

TEB: “You claimed travel for it.”

JM: “I traveled to meet with him, he wha… he did not arrive.”

TEB: “He did not arrive.”

JM: “He was not there.”

TEB: “So the meeting didn’t take place.”

JM: “It just took place with the representatives of the company. The meeting took place but the Iraqi… I don’t know if he went back that morning, or what happened, but he wasn’t there.”

TEB: “Who exactly was it that you are supposed to meet with? Who was that Iraqi minister of electricity.”

JM: “I don’t remember his name.”

TEB: “Was it the current one?”

JM: “It was supposed… it was supposed… it was supposed to be the current one.”

TEB: “Not Al Sammarie?”

JM: “No it was supposed to be the current one, who came after him.”

هو فعل أي شيء حقا Morgenthaler العراقيين الى إلينوي للتدريب على بنادق 47s سيبقون؟ أنها لن القفز خارج لحياة جيدة في الولايات المتحدة؟

عندما كنت أعمل في بغداد اللاعبين الشباب عملت مع جميع يريد الذهاب الى كاليفورنيا. وكانت اللجنة التنظيمية وشاهد على التلفزيون وأنهم جميعا كانوا يريدون الذهاب الى مقاطعة أورانج. بل كان الجميع يريدون معرفة ما إذا كان هناك أي وقت مضى.

هناك الكثير Morgenthaler لا تذكر على هذه الصفقة

من خلال استعراض إلينوي

نسخة من Morgenthaler رفض الاجتماع مع ايهم السامرائي 49:50

TEB : "ما المسؤول العراقي هل التقيتم مع في حزيران / يونيو".

JM : "لم أكن أنا... لم يجتمع مع أي مسؤولين في الحكومة العراقية."

TEB : "... العراق ام وزير الكهرباء".

JM : "كان هناك من المفترض أن يكون الاجتماع ، انه لم يكن هناك. أنا فقط اجتمع مع ضباط الشرطة المتقاعدين. "

TEB : "أنت المطالب به للسفر".

JM : "سافرت للاجتماع معه ، وها انه... انه لم يصل".

TEB : "انه لم تصل".

JM : "وقال إنه ليس هناك".

TEB : "لذا فإن اللقاء لم يتم."

JM : "انه مجرد جرت مع ممثلي الشركة. وقد عقد الاجتماع العراقي... ولكن لا أعرف ما اذا كان عاد في صباح ذلك اليوم ، أو ما حدث ، لكنه لم يكن موجودا. "

TEB : "من بالضبط كان لكم أن المفترض أن يجتمع مع؟ وكان أن وزير الكهرباء العراقي ".

JM : "لا اتذكر اسمه."

TEB : "هل كانت الحالية واحدة؟"

JM : "كان من المفترض أنه كان من المفترض...... كان من المفترض ان يكون واحد الحالية."

TEB : "ليس Al Sammarie؟"

JM : "لا أنه كان من المفترض ان يكون واحد الحالي ، الذي جاء من بعده".

Casey Mulligan: An Economy you can Bank On

U of C Economist Casey Mulligan in today's NYT:
It turns out that John McCain, who was widely mocked for saying that “the fundamentals of our economy are strong,” was actually right. We’re in a financial crisis, not an economic crisis. We’re not entering a second Great Depression.

How do we know? Well, the economy outside the financial sector is healthier than it seems.
Problem is Gov can take a financial crisis and turn it into an economic crisis if they don't think straight.

Thursday, October 09, 2008

John Murtagh on Bill Ayers

I have a hard time understanding how anyone could have been involved with the left even just socially in Chicago and New York in the 80s and not know who Bill Ayers was.

Obama, Ayers, Radical Education and Chicago Schools still can't teach kids to read

Millions spent on radical education projects wouldn't have been half bad if the kids could at least read Marx, Lenin, and Mao. Heck someone of them would become neo-cons in a decade. But the Chicago Annenberg Challanged flopped on that even.

The new McCain ad on Ayers. Alsammare, Rezko and the Chamchamal power plant deal ought to be next.

Wednesday, October 08, 2008

Rasmussen on Illinois Con Con: 60% for it

I'm voting for it. I want to get back to three Reps per Senate District with three votes I can cast as a block for a single Rep.

Jordan Lystad
Consitutional Convention Coalition


CHICAGO-A new statewide poll shows that nearly 60 percent of Illinois voters favor a constitutional convention giving citizens the opportunity to reform state government directly.

Rasmussen Reports recently conducted a survey of 1,000 likely voters throughout Illinois. Over 82 percent believe that state government is headed in the wrong direction, and nearly 70 percent disapprove of the way the legislature conducts business. Further, 70 percent of voters want the ability to recall their elected officials. Overall, the results show that citizens are looking for real change in state government. Results have a 4 percent margin of error.

"People have lost faith in their state government and want the tools to reform it," said State Rep. Jack Franks (D-Woodstock). "As elected officials it is our duty to restore people's trust and help provide these tools. The best way for people to reclaim their government is by voting for a Constitutional Convention."

Available to voters every 20 years, a constitutional convention will give people influence in decision-making and force accountability in Springfield. No longer will politicians be able to undermine the democratic process and run unopposed. Nor would they be able to cherry pick their constituents through redistricting. A convention would also give people the opportunity to make education and health care funding priorities in the budget.

"It has been four decades since there has been any significant change in Illinois," Franks said. "The opportunity to hold a Constitutional Convention comes around once every generation. For those 82 percent of citizens frustrated with the direction of government, voting for a convention will give them the tools necessary to change directions. Barack Obama says, ‘Change will not come if we wait for some other person or some other time. We are the ones we've been waiting for. We are the change that we seek.' This same statement applies to the voters in Illinois."

"It is important for people dissatisfied with their government to understand that they themselves hold the power in deciding what, if anything, needs to be changed in our constitution," said Judy Baar Topinka, former Republican Treasurer and member of the ConCon Yes committee said, "The best part is that any suggested changes made to the constitution will come back to the voters before they are enacted. The people have the final word."

John Murtagh on Bill Ayers

From John Murtagh on the Weathermen's attack on his home when he was a kid.
Murtagh believes the relationship between the Obamas, Ayers and Dohrn goes back 30 years, to Michelle Obama's time at Sidley Austin, a law firm that also employed Dohrn.

Murtagh doesn't blame Obama for what Ayers and his friends did. He blames Obama for picking a man like Ayers as a friend and mentor - and then covering up the friendship.

In politics, things get complicated. Truth becomes hard to find. But not this.

"The night they attacked our home, they also firebombed an army recruiting station out in Brooklyn and police patrol cars outside of Greenwich Village," notes Murtagh. "Three weeks later, they accidentally blew themselves up. They intended to attack the officer's club at Fort Dix."

Lay your cards on the table, says Murtagh. "Obama's free to associate with Dohrn and Ayers; that's his right," he tells me. "But don't hide the relationship, and be forthcoming and let people decide the significance of it for themselves."

Rezko says: neither Sen. Obama nor I did anything wrong

Clout Street has the video here. He repeats this stuff on Rezko's letter five times,
And I would point out he sent a letter, Tony Rezko sent a letter to a federal judge where he expressly said that neither Sen. Obama nor I did anything wrong and now we've got to respect the process as we've been consistently doing and just let it all unfold…"
What a guy to have your side our Gov.

Tuesday, October 07, 2008

More Rezko Tunes

Feds confirm Rezko's chatting per today's ST,
Federal prosecutors asked a judge Monday to indefinitely postpone Tony Rezko's scheduled Oct. 28 sentencing on corruption charges, acknowledging they are engaged in talks with the former top political fund-raiser for Sen. Barack Obama, Gov. Blagojevich and others "that could affect . . . sentencing."
....and ST's Korecki concludes,
If a judge agrees to delay Rezko's sentencing, it could be good news for Democratic presidential nominee Obama because the former Obama friend and fund-raiser was set to be sentenced just days before the Nov. 4 election.
Some good news...


Saturday, October 04, 2008

Blagojevich should have moved to Springfield

How weird if the Gov (and his wife) end up imprisoned over home improvements when they could have lived on the Taxpayer's dime in a mansion in Springfield. From today's Sun Times.
Federal investigators are zeroing in on whether Tony Rezko paid for all or part of a $90,000 rehab of Gov. Blagojevich's Northwest Side bungalow as the corruption probe of the state's first family accelerates.

Palin unleashed

About time! Gov Palin on Obama...
She then slammed Barack Obama calling him disqualified to be President of the United States, “Some of his comments that he has made about the war that I think may — in my world– disqualifies someone from consideration as the next commander in chief.” Palin said, “Some of his comments about Afghanistan and what we are doing there supposedly– just air raiding villages and killing civilians. That’s reckless. So I wanted to talk about things like that. So I guess I have to apologize about being a little annoyed, but that is also an indication of being outside that Washington elite and being outside the media elite also and just wanting to talk and just wanting to talk to Americans without the filter and let them know what we stand for.” my world too Sarah.