Why Blame Obama?

American Thinker

Let  me count the ways.

Before  inauguration.  Senator Obama voted for the budgets he would later  blame on Bush, and for the TARP bailout.  After just two months of TARP,  the Bush administration said it was done — crisis averted.

In fact,  President Bush was done after using about $270 billion of the $350 B that was  authorized by Congress.  But as a courtesy to the incoming president, Bush  would request the second $350B from Congress if President-Elect Obama  asked for it.

President-Elect  Obama asked for it, and he got it.  Tim Geithner, who could not do his own taxes and  who, as a regulator, did nothing about the Libor  scandal, would have all $700B to play with.

We  usually call TARP a “bank bailout,” but the banks are paying back every cent  lent to them.  In fact, the part of TARP that went to banks is expected to return $3B to taxpayers.  And most of that was paid back  quickly.  The “cost” of the “bank bailout” was less than  zero!

The  real bailouts.  When the dust clears, the CBO  expects TARP to cost taxpayers $32B.  Who got that money if banks  didn’t?  General Motors, Chrysler, and “mortgage programs.”  But GM  and Chrysler went bankrupt anyway.

The  U.S. auto industry was not “saved.”  Going bankrupt does not have to mean  going out of business.  See, for example, Delta  Airlines.  It went bankrupt in the usual, lawful way and is operating  today.  On the other hand, GM could be heading  into bankruptcy again, post-bailout.  Oh, and since the  bailout, “GM has increased its manufacturing capacity in  China by 55 percent.”

The  government auto takeovers did not prevent bankruptcies.  What they prevented was the usual rule  of bankruptcy law.  Instead of  paying back creditors in a predictable and lawful way, the federal government  simply robbed bondholders and non-UAW workers and retirees (especially at Delphi) and delivered  sweet, sweet payback to the union bosses of the UAW.

The  effect goes beyond the direct costs to taxpayers and specific investors and  employees.  Who would make investments or long-term decisions with this  kind of rule-of-man uncertainty and ascendant cronyism?

The  Stimulus.  Obama sold the stimulus this way: it would keep the unemployment  rate from going above 8%, the jobs were shovel-ready, and it would cost  $787B.

Since  the Stimulus was passed three and half years ago, the unemployment  rate has not gone below 8%.  President Obama  himself said, “Shovel-ready was not as shovel-ready as we expected.”   And the Congressional Budget  Office “estimates that the legislation will increase budget deficits by  about $831 billion over the 2009-2019 period.”  The stimulus stimulated  nothing but our debt problem.

Spending  overall.  Obama requested $350B of TARP before his  inauguration.  Within weeks of inauguration, his $831-B “Stimulus” was  passed.  And within days of that, he signed a $410-B Omnibus spending  bill.

The  Omnibus bill and much of the Stimulus and TARP spending occurred in FY 2009, a  year that Democrats always try to pin on Bush.  Every dime spent in both FY  2008 and FY 2009 was due to budgets written by a Democrat-led Congress.   And President Obama reigned for the majority of FY 2009.  Democrats own FY  2009.

The  result was that federal government  spending shot up like a rocket in 2009, to levels unprecedented in  peacetime, and stayed there.  In every year of Obama’s  four years in office, federal spending was above 24% of GDP.  Prior to  Obama, it had not reached that level in even one year since World War  II.

Compare  federal spending in Obama’s first four years to the four years that just  preceded them: Obama’s 24.4% of GDP compared to Bush’s 20.1% of GDP.  In  today’s dollars, that is almost $700B — every year.

Mitt  Romney gets grief from Democrats for having the goal of limiting federal  spending to 20% of GDP.  That simply means going back to the pre-Obama  years, not the pre-FDR years.  Bill Clinton spent less than 20% of  GDP.  George W. Bush spent less than 20% of GDP.  (Eight-year  averages.)  Why is it considered some kind of impossible  dream?

Obama  did not let the financial crisis go to waste.  He permanently grew the  federal government under the guise of addressing a short-term  problem.

Taxing.   Obama gets a bit of a bad rap on taxes.  Outside ObamaCare (discussed  below), he hasn’t really raised taxes.  OK, he raised the cigarette tax his  first month in office.  And he’s always wanting to raise taxes on  “the rich,” but he hasn’t pulled that off just yet.  In fact, he’s  generally cut taxes.  But look at the way he does that.

Remember  the big tax fight at the end of 2010, when Republicans simply wanted to keep the  Bush tax rates in place?  The Republican plan was scored as adding $544B to  the 10-year deficit since those rates were scheduled to increase.   Democrats, being so concerned about deficits suddenly, argued that that was too  much.  They wanted to let tax rates increase on higher  incomes.

So  here’s how they all compromised: they kept all those tax rates in place  and added yet more tax cuts to make the total bill $858B.  The  “compromise” was bigger deficits than either party originally proposed.   Here were the tax cuts and credits added by Democrats.  (By the way, a  “credit” is considered a “tax cut” even if you had no taxes to cut and the  government sent you a check.)

  •   Unemployment insurance,
  • Earned income tax  credit,
  •   American opportunity tax credit,
  •   Child tax credit,
  •   Payroll tax,
  •   Investment incentives,
  •   Ethanol and alternative fuels credits.

Let  me tell you all the ways that was bad.

(1)  These extra cuts and credits increased the deficit — even more than  simply doing what the Republicans had asked for, 60% more.

(2)  When the goal should be to simplify the tax code, these made it incredibly more  complex.

(3)  When the goal should be to reduce the progressivity of the most  progressive tax system in the developed world, these made it more  progressive.

(4)  These cuts and credits were “targeted” rather than broad-based.   Politicians picked who the winners and losers were.

(5)  The U.S. tax code became a temporary, two-years-at-a-time,  made-up-as-we-go-along system.  No one can make long-term financial  decisions (investing, buying a house, hiring) based on the U.S. tax  system.

(6)  The changes did absolutely nothing to address the fact that the U.S. has the highest  corporate tax in the developed world, which incentivizes U.S. businesses to  move and hire overseas.

(7)  The payroll tax cuts put the already  shaky entitlements of Social Security and Medicare in even more precarious  positions.

In  2007, the Bush tax rates managed to raise 18.5% of GDP, above the 1960-2000  average of 18.2%.  With all the tax-tinkering in the last four years,  federal revenues have stayed below 16% of GDP — the lowest levels since  1950.  (That might be a good thing, if we weren’t spending at the highest levels since 1946.)

More  complex, more progressive, more anti-growth, more fiscally irresponsible, and  less predictable.  Everything you want in a tax system,  right?

Debt.   All you need to know about the federal debt and Obama’s plan to deal with it is  contained in this chart from his own FY  2013 budget.

Look  at that chart in parts. The left part is through 2007. Once we paid down our  World War II debt, it never exceeded 50% of GDP.  And when Republicans took  over the House of Representatives in 1994, for the first time in 40 years, they  brought that debt down from 49% of GDP to 36% of GDP in 2007.

Then  Democrats won both the House and Senate.  Democrats wrote the budgets for  FY 2008 and ’09, and then maintained those gains with continuing resolutions  ever since (not real budgets).  From 2007 to 2012, federal debt held by the  public more than doubled as a fraction of GDP!  See that sharp  rise up in the chart in those years?

In  those few years under Obama, we blasted through the 50% threshold we had kept  for over half a century.  Then, only one year later, we blasted through the Maastricht  threshold of 60%.  Our public debt is now over 70% of  GDP.

Over  half a century of reasonably responsible fiscal policy was wiped out in one  president’s term.

Now  look at the chart and see what comes after 2012.  First is a little  one-decade flat period manufactured by Timothy Geithner’s outlandish assumptions  like real GDP growth over 4% from 2014 through 2017.  After Geithner’s  make-believe 10-year window, we’re off to the races.  Our public debt goes  through all levels seen by Spain, Greece, etc. and, in fact, off to  infinity.  It never even levels off, much less declines.

And  this is Obama’s plan.  This chart is the best his guys could come  up with, even making all the bogus assumptions they could possibly invent.   His “plan” is little more than running up the most expensive restaurant bill in  history and then skipping out on the check.

ObamaCare.   The CBO  now estimates the gross cost of ObamaCare over the next 11 years (2012-2022)  as $1,683B.  That is offset by various penalties and taxes of $515B, for a  “net cost” of $1,168B.

So  why does the CBO say that ObamaCare would reduce the deficit and repealing  it would increase the deficit?  Because Obamacare also cuts $711B from  Medicare and raises yet more taxes by $569B over the ten years of  2013-2022.

In  round numbers (because the time periods don’t match exactly), ObamaCare really  costs about $1.7 trillion, but it also raises taxes by about $1.1 trillion  (oops, I guess Obama did raise taxes), and it cuts Medicare over $700  billion.  The CBO says.

Even  if you believe the numbers, it is a massive increase in spending, a massive  increase in taxes, and a massive cut to Medicare.  But I don’t believe the  numbers.  Costs will go up, the revenues won’t show up, and Medicare will  hobble through with various accounting gimmicks and IPAB  dictates.  It expands entitlements at the very time we can’t afford the  entitlements we already have.

Energy  and regulation.  You might think the above litany would be  enough.  But Obama wasn’t finished.

  • He  killed the Keystone      pipeline.  The U.S.      Chamber of Commerce put that at “more than 250,000 permanent jobs in      the long run” that were killed.
  • He  put a moratorium on      drilling in the Gulf (19,000      jobs), restricted Gulf drilling overall, and outright banned drilling      in the eastern      Gulf for 7 years (230,000      jobs).
  • And  of course, no      drilling in ANWR or offshore on the east or west coasts.  But  Obama is      not against offshore drilling everywhere;      he  provided $2B in loans      to Brazil to drill offshore there.
  • The Government Accountability       Office estimates that new EPA regulations will result in two to twelve       percent of coal plants being closed.
  • Obama  is not against all energy companies — just those      that actually  produce energy.  You might have heard of Solyndra, a      solar-panel  company that received over $500 million in government funding,      then went  bankrupt.  Other government-funded “green” companies that      went bankrupt: Evergreen Solar, SpectraWatt, Mountain Plaza, and       Olsen’s Mills.  Obama has the reverse-Midas touch when it comes to green      energy.  (Or maybe it has to do with his “green      jobs czar” being a self-described communist.)
  • If  your child was having      an asthma attack and you found yourself without an  inhaler (they’re not      called breathalyzers),      you could have made a quick trip to the local drug store and got one       over-the-counter.  Not      anymore.  Now you will need a prescription, and it might not work  as      well.
  • And  of course,      “pro-choice” Democrats are not so pro-choice when it comes to light      bulbs.
  • Business      regulations too numerous to mention: the EPA’s climate change       regulations, OSHA’s “occupational noise” regulation, the EPA’s new ozone       regulations, Dodd-Frank, the EPA’s training requirements for renovation       projects, etc.

Question  for the reader: if you were to pivot and focus on jobs like a laser, would you  flood the country with new job-killing regulations as fast as your czars could  create them?

I  close with a quote.

“If  the president loses in 2012, we will lose too, and the country will once again  be in the hands of rightwing extremism. There is no option to the left of  President Obama.” –Sam Webb, chair  of the Communist Party USA, addressing the party in  2010.

Read more: http://www.americanthinker.com/2012/09/why_blame_obama.html#ixzz25YfgidZh

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