Fanning the populist flames

Hopefully anyone who is paying any attention at all can see right through the hypocrisy spewing forth from Washington over AIG. The single most fiscally irresponsible bunch of people in America (aka the United States Congress) being outraged over a couple hundred million in bonuses? Ridiculous. The overheated rhetoric is mostly from Democrats but more than a few Republicans (apparently intent on destroying the Grand Old Party once and for all) have joined the fray. Republican Senator Chuck Grassley of Iowa, only half in jest, suggested ritualistic suicide for AIG executives. That is responsible rhetoric and leadership from a United States Senator!

Now amidst the revelations of AIG bonuses, it turns out that Senator Christopher Dodd, champion of the people (never you mind that he got a sweet deal from now defunct Countrywide mortgage. No bias here!) suddenly remembers that he DID stick language in the bailout bill that exempted these very bonuses, a provision that in that fine Washington tradition he forget about and only “remembered” when he got called on it. These are the people safeguarding our financial system. A tax cheat as Treasury Secretary. A Senate banking Committee chairman writing loopholes in bailout deals and getting “favorable” mortgages from mortgage companies he is regulating. The House Ways and Means committee chairman who oversees tax policy neglecting to pay taxes on his vacation home. What is that old saying about the fox in the hen house?

The liberals might just find that in whipping up the flames of populist fury they may have started out with a controlled burn and ended up with a wildfire. The problem with wildfires of course is that you can’t control them and often what gets burned is not what you intended. Populist fury can be a useful tool for politicians, but it can get out of hand in a hurry. Just ask the French aristocracy.

Evan Newmark of the Wall Street Journal made this astute comment:

But the Washington populists ought to tread carefully. It’s one thing to stir up the mob, it’s another to control it. Eventually, the public will tire of the old outrages and look for new ones. And suddenly some of the things down in Washington will start to look pretty outrageous, too.

As I mentioned before, at some point when people start to settle down from this media induced panic about the financial crisis and start to look around, they might just realize that they were sold a bill of goods and saddled with a ton of debt during this whole debacle. The last few months may have been some of the most damaging to our long-term economic stability we have seen in a long time. When that time comes and the Congress runs out of fall guys to demagogue, all eyes will turn to Capitol Hill and maybe Americans will remember the freedoms this country was founded on and that have slowly been eroded by our public “servants” over the last century. When that day comes, there may be a lot of lifelong politicians who find themselves needing real jobs. That may be a false hope because I am not sure how many people actually know what freedoms this country was founded on in the first place. Decades of “education reform” have led to an ignorant population that thinks America was founded on repression and racism, not on freedom and liberty. An ignorant population is the bane of a free society.

God forbid we should ever be twenty years without such a rebellion. The people cannot be all, and always, well informed. The part which is wrong will be discontented, in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions, it is lethargy, the forerunner of death to the public liberty. ... What country before ever existed a century and half without a rebellion? And what country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure. Thomas Jefferson, Nov 13, 1787

More on the budgetary smoke and mirrors

It is pretty easy to put forth a budget and explain how you are going to pay for it when reality has no bearing on those numbers. In a masterful job of talking out of both sides of your mouth and getting away with it, President Obama is signing hundreds of billions in new pork barrel spending one day, calling for fiscal restraint and a reduction of the deficit on the next day and then proposing a massive budget with hundreds of billions in new spending on health insurance above and beyond what is already in place in an era of declining revenue. He claims that he can find savings in wasteful spending and by letting tax cuts expire on “the rich” and only impact the top 2% of taxpayers.

One word for you: Baloney!

In a piece titled “The 2% Illusion”, the Wall Street Journal lays to rest the notion that we can have an enormous increase in spending and only those rich fat cats are going to have to pay for it.

One of the most grotesque aspects of the modern Democrat Party is their faux populism. When you see filthy rich white liberals proclaiming the need for the rich to pay their fair share while riding in limos and flying first class, alarm bells should be going off. Although the Left doesn’t like facts, they are troublesome to set aside and these are the facts when it comes to the rich paying “their fair share”:

Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.

Even taking the neo-socialist agenda of Obama and company to its logical extreme and taking every taxable dime of the “rich” is not going to get it done…

But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

Ah those facts, so troubling and inconvenient!

A 2010 Federal budget of almost four trillion dollars (that is $4,000,000,000,000) means that given the approximately 300 million people in America, the Federal government is spending (and taxing and borrowing) on your behalf around $13,000+ for every man, woman and child. With a median household income in 2007 of $50,233 nationally, and presuming an average household size of four people (two adults and two kids) that means that we have approximately 75 million households in America. Thus the Federal government in 2010 is spending the equivalent of $52,000 per household, which is more than the media household income nationally. These statistics may be a little off, I am not using a scientific metholodgy here but the point remains that the Federal government in 2010 is proposing to spend more per household than the median household makes in a year. Does anyone else see a problem with that?