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A Wimpy Budget

From DirectorBlue comes this analysis of Obama and the current budget:

J. Wellington Wimpy — better known simply as “Wimpy” — was Popeye’s recurring sidekick in the long-running cartoon series.

And Wimpy had a motto that could just as well be President Obama’s: “I’ll gladly pay you Tuesday for a hamburger today”
As Cato explains, Obama’s budgets consist of tax hikes now, with spending cuts and accounting gimmicks sometime… in… teh… future.

We’ve become so used to these unfathomable levels of deficits and debt—and to the once-rare concept of trillions of dollars—that we forget how new all this debt is. In 1981, after 190 years of federal spending, the national debt was “only” $1 trillion. Now, just 30 years later, it’s past $15 trillion…

As ATR points out, the “Obama Plan Uses Budget Gimmickry To Mask Explosive Spending“:

• The budget continues to call for spending at historic levels: the request sets spending forRead More »A Wimpy Budget

A Recap of ObamaCare

Avik Roy has produced a superb summary of the first year of ObamaCare and projections for the second and subsequent years:

Year One of the Obamacare Era

A look back, and a look forward

One year ago this week — March 23, 2010 — President Obama signed the Patient Protection and Affordable Care Act into law. Joe Biden called it a “big [flipping] deal.” Enthusiasts of the law predicted that Obamacare would reduce the deficit, save hundreds of thousands of lives, significantly improve national life expectancy, dramatically reduce medical bankruptcies, and massively improve infant mortality. I even recall a New Republiceditorial arguing that the passage of PPACA would mean no one would ever again have to die of cancer.

Democrats confidently proclaimed that the law would become more popular over time as Americans became more aware of its benefits. In Nancy Pelosi’s felicitous phrase, “We have to pass the bill so that you can find out what is in it.”

Indeed, over the last twelve months, the law’s unpopularity has remained remarkably consistent, and we’ve only begun to find out what’s in it. The health-care system in Massachusetts upon which Obamacare was modeled has continued to deteriorate. Officials within the Obama administration have regularly pointed out Obamacare’s financial instability. Insurers have exited the market. HHS Secretary Kathleen Sebelius has handed out waivers to labor unions and other favored special interests, and to companies that would have otherwise been forced to drop coverage for their workers, bringing damaging headlines in their wake. The constitutionality of the individual mandate, to which liberals had not given a serious thought, was called into question by two federal judges, one of whom overturned the law in its entirety (the ruling was stayed pending an appeal).

Indeed, there has been so much bad news about Obamacare over the last twelve months, it’s easy to forget how many things have gone wrong. Here is a month-by-month recount.Read More »A Recap of ObamaCare

ObamaCare Again

A reader commented on the prior email on ObamaCare that was posted as the pre-implementation effects of ObamaCare.   There is nothing in this subsequent email to disagree with as far as my understanding of the bill goes. It is simple economics. Price controls always cause quality and quantity to deteriorate. When constraints are particularly severe, supply completely disappears.

Better have your daughter or son marry a doctor who can help you when he or she gets off their day job which is likely to be outside the medical profession.

Here is the email:

This email is absolutely on the money and similar to what I am seeing in Houston, TX, even though Texas has weathered this economic storm pretty well.

Most people do not understand what the end-game of Obamacare truely is: it is the complete destruction of the private side of the private-public enterprise that is the American medical model.

Here is how it will go down, as I read the tea leaves.

Obamacare will destroy the private medical insurance industry, not that I have any love in my heart for them, they have behaved atrociously and will now reap what they have sown. The problem with thisRead More »ObamaCare Again

The New 1776

A year ago, I wrote a rather long piece entitled  People vs. The State – The Coming Battle. Upon re-reading it, I thought it more pertinent now than it was then. As we advance toward November 2, the issues then discussed have galvanized into voter fury unlike anything that any of us have experienced.

Here is the piece in its entirety. It is unchanged except for some formatting and the addition of some images:

People vs. The State – The Coming Battle.

In a democratic system, the majority expresses itself through the ballot box. When representatives become unresponsive to the citizenry, they are voted out of office. But what if the replacements are no better than their predecessors? What happens when the “vote-the-bums-out” strategy fails, because the replacements are worse reprobates than the old ones? When the system is perceived to be so corrupt that the ballot box is no longer believed to be a vehicle for reform, then what?

Answers to these questions are uncertain, usually unique to the vagaries of  the situation, time and place. Nowhere in history has a people been more ingrained with the spirit of liberty and individualism, suggesting that the answers provided by the US may be especially unique.

Americans have always had an inherent distrust in government. The country was founded on the belief that government was necessary, but also a threat to freedom. As Thomas Jefferson said:

“History, in general, only informs us what bad government is.”

Others were just as adamant. As expressed by Patrick Henry:

“The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government – lest it come to dominate our lives and interests.”

From the beginning, government was recognized as a potential evil. Per George Washington:Read More »The New 1776

Obamacare on Life Support

by  Maggie Piggot

Obamacare is turning out to be a series of broken promises. It’s been the law of the land for less than two months, and already the President and Congress have reneged on vows made to the American people. For example, the nonpartisan Congressional Budget Office recently presented new evidence showing Obamacare will increase the deficit and harm small businesses. That wasn’t among the bill’s selling points.

The latest CBO numbers indicate Obamacare will cost $115 billion more than originally projected. That would make Obamacare a $1 trillion-plus law. Unsurprisingly, the original CBO score was so rushed that the administrative costs of implementing the bill weren’t calculated into the final product. No wonder Americans objected when Washington rushed to finish work on healthcare reform and failed to obtain a final cost figure.

Read More »Obamacare on Life Support

Why you are getting poorer

The US has been in a secular decline since the late 1970s. By that, I mean our economy has been under performing in terms of incomes and growth rates.

People have been slow to recognize the change. One reason is because there have been economic cycles within the bigger trend. Another reason is because, for most of our lifetimes, we assumed that the future would always be better. If this year was not so good, don’t worry, next will be better. We have now reached a point where that fallacious belief is held by many fewer people.

In addition to the natural optimism inherent in most Americans, the following three reasons are why it took so long to recognize the that things do not always get better.

  1. Inflation. People often confuse more money with being better off. If you define “better off” in terms of purchasing power, then you must adjust from nominal to real dollars. Since the formation of the Federal Reserve in 1913, the purchasing power of the dollar has decreased by 96%. Most of that decline (80% points) has occurred since 1971. People are generally making much more than they did years ago, but it buys less. The real weekly wage, for example, is below where it was in 1964.
  2. Two-earner Families. Fifty years ago it was common to have one-income families. Now it is common to have both spouses working to attain a proper standard of living. The initial impetus probably was fueled by the inability to keep up. For a while it worked, but now it appears a three-earner family is going to be required.
  3. Debt. The standard of living appears to have started declining in the late 1970s. It showed up in declining real wages and slower real economic growth. Most of the country responded by becoming two-earner families and by using increasing amounts of debt. The latter made it possible to maintain a living standard that was beyond earning capacity. The result is the economic crisis we now face. We have too much debt, and it is likely much of this debt will be defaulted upon. It is impossible to envision a scenario (even an inflationary one) that will enable it to be repaid.

The impact of debt and inflation cannot be understated.

The following table shows the deterioration in purchasing power for major purchase. The S&P rise reflects both productivity increases and inflation so is not a particularly good statistic.

The table clearly shows, for major items, that our ability to purchase major items has deteriorated over time. An example many senior citizens can readily recognize is more mundane. I can remember when a Coca Cola used to cost 5 or 10 cents. Last week, while playing golf, I purchased a Pepsi for $3.21 (taxes included).

Ludwig von Mises, amongst others, recognized that economies and societies are fragile. They are not immune to laws and regulations. There is no guarantee that things will always get better. Mises recognized the possibility that we and other societies could regress, using the descriptive phrase: “Time will run back.” Henry Hazlitt used that phrase for a title of a fictional novel.

Damien Hoffman has written an article detailing 8 reasons why we cannot get ahead. Other than the export of jobs, they all can be subsumed under one of the three points made above. In comparing wages and median incomes, he uses nominal data instead of real. The use of real data would make his comparison look quite a bit worse.

8 Reasons the US has Become a Nation of Slaves

By Damien Hoffman

Posted on April 05 2010. ShareThis

These days, the idea of retirement seems like either a bad joke or a utopian fantasy. I’ve already covered some main reasons the US economy is screwed, but here are 8 reasons why the US has become a nation of indentured servants:

1) Stagnant wages

Are you partying like it’s 1999? That’s because you’re earning money like it’s 1999. Over the past 11 years, the median household income has been flat as a corpse’s pulse.

Read More »Why you are getting poorer