ObamaNomics Year Seven: Economy Sputters to a Standstill

We’re in the seventh year of the most audacious and reckless experiment with progressive economic theories in our nation’s history.

In the first quarter of 2015 the US economy grew 0.2%.

As the chart shows the American people continue to endure the worst post-recession economy or “recovery” since the Commerce Department began issuing quarterly economic reports in 1947.

GDP-2009-2015-Q1When asked about the dismal economy the President’s supporters offer the excuse that he “inherited the worst recession since the great depression,” and that his record shattering spending and aggressive new regulations “lifted us out of recession.”  Apparently they want us to believe that without government intervention the recession would not have ended. But this argument contradicts history:

  • Every recession ends, with or without government intervention.  Historians have identified 33 recessions from 1854, through 2007They all ended, most without any government intervention at all.  Yet Obama’s supporters hope we’ll believe the recession of 2008-09 would be the first to go on forever, without end, unless politicians intervened with a tsunami of new spending and regulation.
  • There is no historical data to validate the theory that a spike in government spending during the first two years of a recession will bring on a stronger post-recession recovery.

When allowed to operate without excessive government interference the American economy has been a spectacular prosperity machine, unequaled in all of human history.  But under President Obama and the so-called “progressives” he leads, government has finally grown powerful enough to throw sand in the private sector gears.

It doesn’t have to be this way.  Based on the lessons of history we know what government can do to help stimulates economic growth.

Like President Obama, President Reagan inherited a severe recession. The 1981-82 recession was caused by a series of financial and monetary crises and was in some ways worse than the 2008-09 recession.  Unemployment spiked higher, interest rates soared into double digits and home and stock prices crashed.  Yet as the chart shows the economy grew more than twice as rapidly as our current “recovery.”

Reagan’s economic program, based on his commitment to liberty, was the opposite of Obama’s:

  • Sweeping tax cuts that left wealth in the hands of those who had created it and were best equipped to reinvest in the American economy;
  • Release the creative and productive energies of The People by eliminating the restraints of excessive government regulation.

Unfortunately, President Obama and the Democrats simply ignore history, adhering to the seductive, “progressive” promise of prosperity through expanded central government power over, and intervention in the economy.  Obama’s program includes:

  • Record high deficits;
  • A government take-over of health insurance;
  • tax increases, especially on small businesses the primary job creators;
  • An aggressive regulatory agenda.

The good news is that though it’s economic record is far from perfect the Republican Party does seem to be grooming an emerging generation of realists who are not seduced by progressive promises of miracles delivered by a more activist and powerful federal government putting limits on the private economy.  The Post-Obama era may well become known for a restoration of liberty and economic opportunity.

Pamela Geller and the Heroes of the Garland Jihadist Attack

Pamela Geller deserves our gratitude for standing defiantly, against violent Islamic radicals and their supporters in the media who would force us to submit to curtailment of our First Amendment rights to freedom of speech, press and religion.

On Sunday evening, May 4 two gunmen opened fire outside a complex in Garland Texas where The American Freedom Defense Initiative (AFDI) was hosting an art exhibit featuring cartoons of the Prophet Muhammad.  Both gunmen were killed by one heroic Garland police officer who was moonlighting as security for the event.

One of the gunmen was immediately identified.  He was known to the FBI for supporting Jihad.  His social media postings prior to the attack leave no doubt he intended to kill participants in the event, in retaliation for the cartoons that he called blasphemous.

On Monday night ISIS, the barbaric, Political Islam army raging through the middle east killing thousands of innocents claimed to have directed the attack.

Pamela Geller, flamboyant blogger and campaigner against political Islam is founder and leader of AFDI.  She has been widely criticized for “hate speech” against Islam but insists she is “anti-jihad, not anti-Muslim.” In an email she told The Washington Post:

We decided to have a cartoon contest to show we would not kowtow to violent intimidation and allow the freedom of speech to be overwhelmed by thugs and bullies.

Media commentary included more criticism of Ms. Geller, than of the gunmen. Some even blamed her for the attack.

Donald Trump took to the airways accusing Ms. Geller of starting the trouble!

Our country has a lot of problems at every level…the last thing we need is an obnoxious blowhard like Geller to go out and start trouble when there’s no reason for it…This has nothing to do with free speech. This is taunting and it just causes trouble…what’s the purpose of her doing this…All she’s a provocateur and this country has enough problems right now.”

A CNN opinion piece instructs us that:

“Democracy requires freedom of speech, but…there are other American values, too, which deserve mentioning: Exercising your freedoms with responsibility. Yes, we have the right to say things, even offensive things. But should we? Should we act with no consideration of the consequences? Should Geller have hosted an event she knew would draw a violent reaction?”

On Fox News Bill O’Reilly bellowed his disgust with Ms. Geller for insulting the religion of countries that are fighting fighting ISIS.

But we at Liberty Works side with Ms. Geller and thank her for a valuable, heroic service to the Constitution and to all Americans.

The authors of our Constitution and Bill of Rights were wise observers of history who understood that for millennia autocratic governments and kingdoms had imposed religious beliefs, by force upon their citizens.  Wars were fought to determine which religious doctrines The People would be required to comply with.

Our Founders enacted the First Amendment that brilliantly prevents violent confrontations over religion by repositioning government from dictator of religious beliefs to protector of each individual’s right to believe as he/she chooses.

The First Amendment also prevents violent confrontation over political ideas, which are often influenced by religious beliefs, by repositioning government not as the decider of what ideas are allowed or forbidden, but as the protector of the individual right to believe and express any idea, no matter who disagrees or is offended.

We are blessed to live in a place where we can say or believe or publish whatever we wish without fear of reprisal by the government or by factions trying to enforce their beliefs upon us.  The only price we pay for this blessing is that we can’t use government to stop others from beliefs or expression we dislike.

Ominously, these freedoms are being diminished a little at a time. President Obama and many of his supporters seek to shrink our freedom to live according to our beliefs by deliberately misquoting the first amendment as “freedom of worship” instead of freedom of religion. Thus, in Oregon a Christian, mom and pop bakery was forced to close down for practicing freedom of religion when they politely declined to provide a cake to a gay wedding – and this was before same-sex marriage was legal in Oregon! Last week, six years after they were forced to shut down the same couple was hauled before an unaccountable, administrative law judge and hit with a judgment of $135,000 because practicing their religion caused alleged “emotional distress.”

We must treat first amendment freedoms of religion, speech and press as non-negotiable, just as we treat the accused man’s presumption of innocence and right to a trial. Even though we know the guilty sometimes go unpunished we never hear calls for suspension of these rights.

Pamela Geller and her group put themselves a risk on Sunday, so the rest of us didn’t have to.  When our elites criticize her and demand that she stand down and shut up they embolden the violent radicals, making the rest of us less safe.  Be assured, if she and her group disappear the Jihadists will not bury their bombs and melt down their AK47s.  They will experience the intoxication of victory and will be emboldened to identify less overt resistance to their cause for violent attack.  Indeed, the ISIS army in the Iraq and Syria, kills thousands of Muslim men, women and children, not for perceived blasphemy agisnt the Prophet Muhammad, but merely for believing in a less militant form of Islam!

We must not surrender our liberty  just because these radicals threaten violence when they are offended.  By enduring Nazis, white supremacists, pornographers, and Islamic radicals calling for the death of our culture we are already paying the price for freedom of speech and religion.  We must not submit to demands that we refrain from any criticism of Political Islam because it’s most radical followers threaten violence. 

There may be tough times ahead but we owe it to our children and grandchildren to be strong and resolute until freedom prevails.

How to Engage Baltimore’s Youth for Good

Special guest post from my captivating wife, and proprietor of TweetingGodsLove.com Cheri Douglas

I have been involved in youth ministry much of my adult life and I know they can be engaged to give their lives for GOOD and for GOD.

Teens-in-Prayer

These are  TEENS in prayer! They respond powerfully to the Love of Jesus & the Holy Spirit!

If we Christians are to be relevant today, we must be talking about Baltimore and the YOUTH REBELLION taking place there! I have listened nonstop to press conferences about all the police being called out to put down the riots they expect again tonight.  Not ONE public official is considering an approach that might change that dynamic.

I have a vision for a YOUTH Fair of Christian Worship Teams covering the streets of Baltimore to minister to the young people. I devoted my morning to on #GodsLoveChats to that ministry approach. I have seen lives transformed miraculously when inspired by the Word of God. That was where Dr. Martin Luther King derived his power! But somehow, today, his message seems so yesterday to so many.

But God’s Word is not yesterday, it is relevant for Baltimore and anywhere else today. No I am not stupid enough to think that prayer alone will transform a community in chaos. But that community needs to come together, talk together, plan together,  forgive one another together, and heal together. This is the only way they will involve everyone, even the youth, in planning for tomorrow. That is how God’s Word will get a community doing loving things together for each other.

The only bright spot Monday night was when a group of spiritual leaders marched the streets of Baltimore singing gospel songs. Unfortunately, led by politicians, they seemed to be there more for the cameras than for solving problems. Things visibly calmed down as these leaders did their half hour march. But everything erupted as they left!

Christians dedicated to being disciples of Christ, need to go into these angry streets and stay there to minister to the people and love them into better versions of themselves.

Just when I was losing hope for Baltimore, a bright light came shining through. Over a thousand citizens stepped up and began cleaning up the mess and helping devastated business owners. Then came my new HERO, Pastor Donte Hickman.  He is pastor of SouthernBaptistChurch.org.  His church was building a senior citizen housing center, but it was torched by the rioters and burned to the ground Monday night.

Admitting that he was disheartened Monday night.  But on Tuesday he said he faces the new day with new resolve to help Baltimore transform. HALLELUJAH! He also said he had called the leaders of his church to meet him and go to the streets to minister…”out of the view of the cameras’. YAY!!! May God bless this strong Christian leader and send more to support him!

Baltimore’s problems are spiritual problems that take spiritual solutions.  The people must work together to identify and solve the pressing problems of poverty, joblessness, education barriers, and racial tensions. If church leaders  come out of their buildings to the real church, God’s people, and lead them, cities and countries will be transformed.

If my people will humble themselves and pray and turn from their wicked ways, then will I hear from Heaven, I will forgive their sins, and I will heal their land. 2Chronicles14:7

Labor Market Decline Continues

The labor force participation rate is percentage of working age adults who “participate” in the labor force, either by holding a job or by actively searching for a job nearly every week.  As the chart shows, the rate has declined dramatically since the end of the recession, during the so-called “recovery.” 

The Obama Administration reported an unemployment rate of 5.5% in March.  But, if the participation rate were the same as it was in 2009 when the recession ended the March unemployment rate would have been 9.7%

Arc of participation December 14.xls

He’s Alive! Hallelujah, He’s ALIVE!

The resurrection of Jesus is the most significant event in human history.

The Following excerpt is from the Gospel of Matthew.  It’s Friday, the day before the Jewish Sabbath.  Jesus has been hung on the cross to die.

We begin quoting at Chapter 27, verse 45:

At noon, darkness fell across the whole land until three o’clock. 46 At about three o’clock, Jesus called out with a loud voice, “Eli, Eli, lema sabachthani?” which means “My God, my God, why have you abandoned me?”

47 Some of the bystanders misunderstood and thought he was calling for the prophet Elijah. 48 One of them ran and filled a sponge with sour wine, holding it up to him on a reed stick so he could drink. 49 But the rest said, “Wait! Let’s see whether Elijah comes to save him.”

50 Then Jesus shouted out again, and he released his spirit. 51 At that moment the curtain in the sanctuary of the Temple was torn in two,  from top to bottom. The earth shook, rocks split apart, 52 and tombs opened. The bodies of many godly men and women who had died were raised from the dead. 53 They left the cemetery after Jesus’ resurrection, went into the holy city of Jerusalem, and appeared to many people.

Read more »

Debate Over. ObamaNomics Failed.

Update:

When the Labor Department published statistics for February 2014 last week, Administration defenders immediately rushed to the cameras to boast that the unemployment rate had dropped to 5.5%, from 5.7% in January.  But how did that happen? 

The unemployment rate went down because 354,000 jobless men and women were reclassified, from in the labor force and unemployed to “not in the labor force,” so they did not count in computing the February unemployment rate. 

If they were still in the labor force and unemployed the unemployment rate would have gone UP, from 5.7% to 5.8%.  The chart below is updated to reflect February results.

Memo to the establishment media: The jobs crisis is not over.

After six dispiriting years the political-media establishment is campaigning furiously to improve public perception of President Obama’s progressive, big government economic theories.  The President even invented a new slogan, “middle class economics.”  The campaign assertions are that the economy in general and employment specifically have come back, proving that the President’s progressive theories, re-branded as middle class economics “worked.” 

Arc of participation December 14.xlsOur previous article used the government’s own GDP statistics to debunk the economy part of the ObamaNomics-worked myth.  Today, we look at the unemployment rate, down from a peak of 10% to 5.7%, and continuously offered up as proof of Obama and Democrat party success. 

Each month the Labor Department compiles and publishes six statistics:

  1. Total working age population
  2. Total employed
  3. Total unemployed.  Jobless people are not classified as “unemployed” unless they are actively searching for jobs.
  4. Labor Force: the sum of employed and unemployed.  Jobless people who have not actively sought employment in recent weeks are not counted as unemployed and thus not included in the labor force total.
  5. Unemployment rate: Percentage of the labor force that is unemployed
  6. Labor force participation rate: percentage of the working age population that is counted as in the labor force.

In every previous post-recession recovery of the past 70 years the unemployment rate has declined when when people who had lost jobs due to recession became reemployed.  But the Obama post-recession recovery is radically different.  For the first time since government began publishing the above statistics:

  • The labor force participation rate has declined continuously for four years, and
  • The unemployment rate has declined not because unemployed people found jobs, but because millions who are discouraged and don’t look for work very often have been reclassified from unemployed to “out of the labor force.”

President Obama roared into office in 2009 with commanding Democratic majorities in both the House and Senate.  The first order of business was a record shattering increase in government borrowing and spending called “stimulus.” 

The promises made to gain public support for the stimulus were clear and extravagant.  By funding “shovel ready jobs” the government would, in the President’s words, “immediately jumpstart job creation and long term growth.”  That “jumpstart” was to happen immediately, not six years later.  President Bush and the Republicans would be blamed for the recession, President Obama would get the credit for a bounce back to full employment, and Democrats would reign for a thousand years.

Since all recessions end, with or without government intervention, predicting an end to “the Bush recession” didn’t require any particular economic insight.  June 2009 turned out to be the last month of the recession.  The labor force participation rate was 65.7% and the unemployment rate was 9.5%. 

But the predicted resurgence of prosperity and full employment did not happen.  Since June 2009 the working age population has grown by just over 14 million.  But the labor force has grown by only 2.5 million or 17.5%.

If today’s labor force participation rate were still the same as when the recession ended 67 months ago the February 2015 unemployment rate would have been 9.7%.  The jobs crisis is not over.  It has only been masked by deceptive statistics.

 

Progressive Pitchmen Hawk Imaginary Recovery

President Obama, the Democrats and their faithful, media cheer leaders have recently begun a virtual victory parade, claiming that the American economy has come back, and therefore their economic theories, implemented by the Administration, have been validated and vindicated. They hope to rehabilitate what has been the decaying reputation ObamaNomics.  But an objective review of the results finds ObamaNomics a spectacular failure.

Most Americans remember when the President  roared into office in 2009 with commanding majorities in both the Senate and the House.  We remember that he used that power to enact a massive spending increase called the “stimulus” – on top of a more modest spending increase already begun under President Bush – that he promised would “jumpstart job creation and economic growth.” 

The media excoriated Republicans as “wrong on the economy” for not joining the Democrat majority in voting for the stimulus.  The chart below compares the spending surge during the first two years of the 2008-09 recession with spending increases and decreases during each previous recession since World War II.  Spending-increases-10-recessions

The second chart shows what this record shattering surge in spending – entirely with borrowed money – bought, besides a stunning increase in government debt.GDP-to-2014-Q4

In 2009 the President and his supporters insisted that they “KNEW” that a spending surge would bring immediate results, that there were thousands of “shovel ready projects,” that America would quickly rebound from the recession into a new era of prosperity. 

They did not tell us to expect the weakest recovery ever recorded since the government began issuing quarterly GDP reports at the end of World War II.   The charts above show there is absolutely no correlation between an increase in government spending and subsequent economic growth.  If anything there is a negative correlation, evidence that increased spending retards growth.

Yet Democrats and media now claim the marginal improvement of the past few months is the big “comeback” we were promised.  This PR drive coincides with a modest upswing in Presidential opinion polls, probably due to increased oil production and the resulting drop in gasoline prices that he campaigned against and tried to prevent.

But Polls also show most Americans believe the economy is still unacceptably weak even though the recession ended sixty six months ago.  The Commerce Department just released it’s “advance estimate” of economic growth during the fourth quarter, ended December 31.  It confirms once again that Americans are justified in being skeptical.

Gross Domestic Product (GDP) grew at an annualized rate of 2.6% in the fourth quarter, about average for the past five years and not nearly enough to restore pre-recession employment and prosperity.

The American economy, while the most resilient in human history, struggles under the weight of decades of accumulated government intervention in the form of excessive regulation, taxation, and bureaucratic mandates, the most recent being Obamacare and the massive, Dodd-Frank financial regulation law.  These government intrusions into the private sector and the generally anti-business, anti-investment inclination of the Obama Administration discourage and deter entrepreneurs and investors, resulting in fewer of the business start-ups and expansions that create jobs and grow the economy.

America’s corporate tax code, the most confiscatory in the world, drives investment capital, the source of jobs and economic growth overseas.   Indeed, some American companies have had to “invert” or turn themselves into foreign corporations in order to facilitate investment in America!

Defenders of big government economic intervention say the current recovery is the weakest on record because the 2008-09 recession was deepest/worst on record.  But that isn’t consistent with the historical data.  The last time we suffered an exceptionally severe recession was 1981 when, like President Obama, President Reagan inherited an economy in crisis due primarily to huge losses and retrenchment in the financial sector.

Depending on which statistics one considers most important 1981 was either the worst or second worst recession on record.  Unlike Obama, Reagan faced historically high interest rates.  In 1982 Mortgage interest hit 15% compared to about 4.5% today. The prime rate, paid by the most credit worthy corporations was also in the teens, compared to about 3% today.  The unemployment rate spiked up to an even higher level in 1981 than in 2009.

Reagan’s approach was directly opposite Obama’s.  Instead of raising taxes and intensifying government interference in the private sector, Reagan deregulated and cut taxes. The chart above shows that at month 66 the Reagan economy had grown 30% vs 13% for the Obama economy.

Why Mitt Romney Never Quite Gets It Right

Apparently, Mitt Romney is testing the Presidential waters, considering a third run for the White House.  The media herd has stampeded to speculate on his chances and are largely supportive. The media always support so-called “moderate” Republicans – but only until they win the nomination.

Mitt Romney is a decent, generous human being and a successful investor and executive who built businesses and created thousands of jobs. 

But as a politician and especially as a candidate, his history is mixed at best. 

Romney ran for President in 2012 and suffered a humiliating loss of what should have been a winnable election.  President Obama’s much trumpeted “stimulus” and other economic interventions had utterly failed to keep his promise to “jumpstart job creation,” and had made the economy worse

  • The unemployment rate on election day was 7.7%, very high by historical standards;
  • Quarterly GDP reports marked the weakest post-recession recovery ever recorded;
  • Failure was expensive!  Eight days before the election the final report for the government’s 2012 fiscal year showed the Obama Administration’s fourth trillion dollar deficit.
  • The President’s major accomplishment, Obamacare, was (and still is) deeply unpopular.

How did Mitt Romney lose this election?  Two ways:

  • Lack of ideological clarity
  • Stupid campaign strategies that failed to inspire potential voters.

Consider his speech at CPAC six months before he won the GOP nomination, where he unveiled talking points he would repeat over and over on the campaign trail.  He began well enough, with stirring references to the Constitution and Declaration of Independence.  Here’s a sample:

Now is the time to reaffirm what it means to be Conservative.  The very heart of American Conservatism is the conviction that the principles embodied in the Constitution and the Declaration of Independence are uniquely powerful foundational and defining…

Good start.  Public education has abandoned serious instruction in the Constitution and Declaration of Independence, but millions of Americans have recently become familiar with them and are shocked by the gulf separating the government of limited powers chartered by the Constitution and the government of nearly unlimited power wielded by Barack Obama.

Eighteen minutes into a 26 minute speech Mr. Romney finally began to talk about his policy goals:

Today we borrow 40¢ of every dollar we spend.  This is unconscionable, immoral, and it will end in my Presidency.  I will approach every spending decision, every budget item with these questions: Can we afford it and if not is it really worth borrowing money from China to pay for it.

Romney hoped for emotional appeal with what seemed like bold and decisive criteria for sorting worthy from unworthy spending.   Unfortunately it was a trick.  It’s the same trick President Obama used in 2008 to win the support of millions of voters who are now appalled by his Presidency.

In the prologue to his second book Barack Obama wrote what would become the conceptual foundation of his Presidential campaign:

“…I am new enough on the national political scene that I serve as a blank screen on which people of vastly different political stripes project their own views.”

Candidate Obama went on to exploit his blank screen concept with promises of unspecified “change!”  Thus, Millions projected their own views onto his blank screen and then voted for those views without realizing Obama had not disclosed his views or his plans for controlling our lives from Washington.

The Romney version of the trick was intended to pick up votes from people who didn’t realize their list of government spending programs to cut came not from Romney, but from inside their own heads.

Romney’s criteria, if actually applied, was meaningless and would have maintained the spending status quo.  Each of the hundreds of federal programs has a lobbyist, a constituency of dependents, and friends in Congress who will summon up compelling, emotion-driven reasons why it’s critical to our nation’s future.

Since he began his speech referring to the The Founders vision, as expressed in the Declaration of Independence and the Constitution, he could have proposed a fundamental shift from continuously growing government to continuously shrinking government.  His spending criteria should have been, “is this authorized by the Constitution?”

The campaign strategy deficit was revealed by a surreptitiously recorded video of Mitt Romney addressing a private dinner meeting of high-end donors that was made public 45 days before the election.  It was big news for a couple of weeks, with segments getting millions of hits on YouTube and played over and over on TV news.  Our commentary starts at a portion of the video where Mr. Romney sought to assure the donors that his campaign was competent:

I can tell you I have a very good team of extraordinarily experienced, highly successful consultants. A couple of people in particular who’ve done races around the world…So they do his races and see which ads work and which processes work best and, uh, we have ideas about what well do over the course of the campaign.

Campaign consultants with similar qualifications also worked for every GOP candidate who lost in recent years, including John McCain in 2008 and Bob Dole in 1996.

The troubling reality, supported by this video, has always been that Mitt Romney sees himself not as a reformer, with fire in his belly, on a mission to shrink government and expand liberty but as the CEO of a company of campaign technicians.

The section of the video that was most replayed in the media begins with this question from one of the donors:

For the last three years, all everybody’s been told is, “Don’t worry, we’ll take care of you.” How are you going to do it, in two months before the elections, to convince everybody you’ve got to take care of yourself?

Romney’s answer:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.

And they will vote for this president no matter what.  And this President starts off with 48 – 49, he starts off with a huge number.  These are people who pay no income tax.  47% of Americans pay no income tax.

Predictably, sanctimonious indignation thundered from the Obama campaign and the establishment media, accusing Romney of arrogant contempt for half the population.  And for once they seemed to be right!  Apparently, Romney’s brilliant consultants had convinced him that 47% of voters were non-taxpaying freeloaders who would vote only for the candidate who promised more government goodies.

But Romney’s assertions were preposterous!  Consider exit polling results from the 2008, Obama Vs McCain election:

  • 52% of voters who earned more than $200,000 and thus paid substantial income tax had voted for Obama;
  • 32% of voters who earned less than $30,000 and thus paid very little or no income tax had voted for McCain;
  • 53% of seniors, the largest group receiving government subsidies, had voted for McCain.

Income tax obligation is the dumbest of all the dumb ways campaign consultants slice and dice the electorate into identity groups.  Abandoning millions of voters who don’t currently have an income tax obligation is a campaign strategy guaranteed to fail.  Consider two hypothetical, female voters, both with the same income:

  1. An unmarried woman with no children, earning $75,000, living in Los Angeles, who does not attend church.  Polling data indicated Obama was almost certain to get her vote.  She would pay approximately $12,000 in income tax.
  2. A married woman with four children.  She and her husband earn $75,000, live in a home with a mortgage and tithe to their church.  According to polling data her profile was that of a solid GOP loyalist, virtually certain to pull the lever for Romney if she voted.  She and her husband would pay zero income tax.

Less than two minutes before his 47% rant Romney had said:

And then I quote Marco Rubio in my speeches…Senator Rubio says that when he grew up poor, that they looked at people that had a lot of wealth, and his parents never said, “We need some of what they have, they should give us some.” Instead they said that you work hard and go to school, someday we might be able to have enough.

One wonders then, what did Romney actually believe?  If he believed there are more people like Rubio’s parents why would he pursue a campaign strategy that intentionally ignores and insults them?

Romney concluded the 47% rant:

So our message of low taxes doesn’t connect and [Obama will] be out there talking about tax cuts for the rich. That’s what they sell every four years.   And so my job is is not to worry about those peopleI’ll never convince them that they should take personal responsibility and care for their lives.

This is just astounding!  A candidate who says his job is to START by writing off 47% of voters!  Successful Republican candidates, Ronald Reagan for example, unite voters of all ethnic and socioeconomic groups, behind one powerful message of liberty and free enterprise. 

Democrats try to win by segmenting the population into identity groups based on ethnicity, income or perceived social class.  Then they “target” some of those groups with customized, not necessarily sincere messages that seem to confirm whatever perceptions the groups already hold. 

Romney’s dismissal of 47% as deadbeats is not only offensive, it contradicts what should be the fundamental premise of a Republican campaign, especially in 2016, that tens of millions of diligent Americans are held back by a faltering economy that results from too much government, to much cronyism and too little liberty.  These folks are aching for an opportunity to work and be responsible.

The Bottom Line

The 2016 election is too important to lose due to the same failed campaign.

President’s Amnesty Program Includes a Generous Cash Bonus

President Obama recently announced a new program granting amnesty in the form of “deferred deportation” status, including work permits, to millions of illegal immigrants who are parents.

Some of the President’s remarks seemed to be directed at the illegal immigrant population, including:

If you register, pass a criminal background check and you’re willing to pay your fair share of taxes, you’ll be able to apply to stay in this country… [emphasis added]

cash-bonus-table-2

The part about taxes was probably intended to mislead the rest of us.  For most of the people eligible for deferred deportation, “fair share of taxes” is misleading.  In reality they’ll receive FROM the IRS a lump sum of cash, provided by the American taxpayers. 

In selling this scheme Obama emphasized the hope that illegal immigrants will “emerge from the shadows” of the underground economy, “pay taxes” and file tax returns. 

To this end they’ll be issued Social Security numbers, enabling them to work on the books for legitimate employers, and making them eligible to receive two substantial cash subsidies, delivered to them by the IRS.

To millions of low to moderate income people the IRS is not the scary tax collector, nor is our annual tax season a time of anxiety and stress.  Instead, the IRS is a benefactor, distributing cash every spring via a system of misleadingly named, “refundable tax credits.”

Several  mechanisms reduce one’s income tax bill: exemptions, deductions, credits and refundable credits.

  • Exemptions  of $3,950 for each taxpayer and each dependent, and deductions such as charitable donations, lower one’s tax bill by reducing the portion of income that is taxed.
  • Tax credits are more valuable because they directly reduce the amount of tax that would otherwise be owed after taxable  income is reduced by exemptions and deductions.
  • Refundable tax credits, are the most valuable of all.  They are, in effect, reverse taxation.  Refundable credits are payments from the IRS to the “taxpayer” that exceed his/her tax obligation. People who meet IRS eligibility criteria receive these payments even if they have no tax obligation at all, even if no income tax withholding was deducted from their paychecks.  If income tax was withheld from their paychecks and their tax obligation turns out to be zero that withheld money is refunded back to them along with the refundable tax credits.

Low to moderate income people who are parents with children are eligible for the two largest refundable credits, the earned income credit or EIC and the child tax credit.

Under IRS rules parents of dependent children, either single or married are eligible for the EIC and the child tax credit.  These can add up to thousands each year.  In 2012, the latest year for which IRS has published statistics, $28 billion in child tax credits was distributed and $62 billion in EIC payments went to 21 million parents with children.  (These statistics do not include taxpayers without dependent children, who may qualify for a much smaller version of the EIC, at most $496.)

President Obama’s deferred deportation program promises millions of illegal immigrants that they will not be deported for three years.  His eligibility criteria is the same as for the EIC and child tax credit: they must be parents.

There is no citizenship requirement for refundable tax credits.  To qualify, parents who are not citizens must:

  1. have a Social Security number.  Numbers will be provided to all of those who are granted Obama’s deferred deportation status;
  2. be “resident aliens.” Anyone who has been “physically present” in the US for all or most of the past 3-4 years qualifies, by IRS regulation, as a resident alien;
  3. earn some income.

So, how much are these tax credits worth to the millions of people who will be granted Obama’s “deferred deportation” status?  It depends on how much they earn and how many children they have.  The table above shows some examples.

Obamacare Could Still Crash in Supreme Court

The Supreme Court announced that it would review and determine the legality of a key Obamacare regulation, written by the IRS. 

Through this regulation the IRS empowered itself to give subsidies in the form of tax credits to people who buy ObamaCare health insurance policies from healthcare.gov, the federal government’s health insurance exchange.ObamaCare4

Back in July a three judge panel of the D.C. Court of Appeals ruled, in Halbig Vs Burwell, that the regulation from the IRS violates the letter of the law.   The court found that Obamacare or the Affordable Care Act (ACA) authorizes those tax credit subsidies to be issued only to customers of exchanges that are built and operated by states.

The Halbig ruling was an earthquake.  If upheld by the Supreme Court it means that roughly two-thirds of Americans, who live in the 36 states that did not set up their own exchanges, will be ineligible for subsidies. 

The law states that the individual mandate, the requirement that every person have health insurance is enforceable only if insurance is “affordable,” a word that is defined by the law.  But insurance that meets all the requirements of ACA is expensive and for most individuals it’s not “affordable” without the subsidies. Therefore if the Halbig ruling stands it renders the individual mandate unenforceable in 36 states.

Employer Mandate will also fall

ACA also imposes an employer mandate that is partially to blame for America’s continuing job market weakness.  Companies are required to provide pricey insurance if they have fifty or more full time employees.  The fine for not providing insurance is $2,000 per year per employee.  The event that triggers the fine is one or more of a company’s employees receiving a subsidy.  But if employees are not eligible for a subsidy because their state didn’t set up an exchange there is no trigger and the employer can not be fined.

Thus, if the Supreme Court agrees with the lower court, that subsidies can not be given through the federal exchange, BOTH the individual and employer mandates will become unenforceable in 36 states.

Obamacare defenders immediately attacked the Halbig ruling.  Typical was Vox.com’s Ezra Klein who  declared the Halbig decision “plainly ridiculous,” adding that “the point of Obamacare is to subsidize insurance…”  The New Republic pronounced it “absurd.”  On MSNBC’s Hard Ball with Chris Matthews,” Jonathan Gruber, MIT Professor, White House adviser and one of the principle architects of the ACA legislation bellowed:gruber

Chris, it is unambiguous this is a typo. Literally every single person involved in the crafting of this law has said that it’s a typo, that they had no intention of excluding the federal states.  And why would they?

Professor Gruber burst into the headlines recently when recordings of him surfaced.  He calls voters stupid and explains some of the deceptions in the law.  Stay with us to find out why Professor Gruber was forced to admit the “typo” story is absurd.

Most of the media went along with the typo story, without bothering to read, comprehend or explain the Court’s reasoning.  Once again Liberty Works steps in where the establishment media have failed.  Here’s how the court reached it’s conclusion

The court identified three relevant sections in the massive, 2,500 page Affordable Care Act (ACA):

  • ACA Section 1311 grants authority to the states to set up exchanges.  But the law does not require state exchanges.  Such a requirement would be Unconstitutional.
  • ACA Section 1321 grants the federal Department of Health and Human Services (HHS) the authority to set up a federal exchange for the residents of states that do not set up their own.
  • ACA section 1401 authorizes the IRS to grant subsidies called “Premium Assistance Coverage” in the form of tax credits to individuals of low to medium income.  Under the heading “Premium Assistance Coverage Amount”  section 1401 says:
The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of (A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer and which were enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act
The biased media quoted only the words “established by the state,” planting the perception that it’s the only relevant phrase in the entire 2,500 page law, that it appears only once, and therefore, that it could be a typo.  But that perception is wrong.  The underlined text above establishes TWO requirements an exchange must meet for its customers to be eligible for tax credit subsidies:
  1. It must established by the State – not federal government and,
  2. Must be established under section 1311, which authorizes only state exchanges.  Again, a separate section, 1321, authorizes the federal exchange.

The same two requirements appear again several paragraphs later under the definition of “coverage month:”

The term “coverage month” means…any month…the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act

Later on, the dual requirements are emphasized twice more in paragraphs that set forth ways to compute the tax credit subsidy.

Obviously, four deliberate repetitions of two requirements would rule out any possibility of a “typo.”

With the typo idea discredited the more sophisticated (or imaginative) ACA supporters have indicated they will shift to a different tactic.  They will ask that the court to disregard the text of the law and instead conjure “Congressional intent,” which they claim was to issue tax credits in the federal exchange. 

But seeking to discern “Congressional intent” is like chasing the wind and tends to make one even more cynical about Congress.  As courts have noted in previous rulings, passing a law requires the votes of hundreds of individual Representatives and Senators.  Individual Senators and Representatives who vote in favor of a bill have a wide range of intentions.  A YES vote can mean that the representative:

  • approves of a bill in its entirety, including in this case, restricting tax credits to customers in states that set up their own exchanges;
  • approves of only parts of a bill but is willing to compromise and accept other parts he/she doesn’t necessarily like. (Did she like or dislike restricting the subsidies to state exchanges?)
  • intends his vote only to please a lobbyist or pressure group whose support he values;
  • intends to exchange his vote for a promise from his party’s leadership, perhaps a desirable committee assignment or campaign finance help;
  • intends to exchange his vote for a subsidy or special consideration for an unrelated project or business interest back home.  This is usually a side deal, with the inducement tucked into a different bill.

In the case of Obamacare/ACA there was yet another reality because almost no Senator or Representative who voted YES had read or understood the bill:

  • intent to demonstrate loyalty to the President and the Democratic party by voting yes without reading the bill, based on utopian promises from the President. (Such as “If you like your insurance you can keep it, period,” or “the typical family will save $2,500 a year.”)

The Halbig transcript reveals that the government’s lawyers were unable to show the court a single word in the Congressional Record to support their claim that “Congressional intent” contradicts the plain language of the law.

ACA was written largely by Senate staffers and outside consultants including Professor Gruber (mentioned above).  It became law only after extraordinarily intense political arm-twisting and horse trading for votes.  Provisions were added hastily without due diligence.  Only through strenuous parliamentary maneuvering and rule bending by Democratic leaders was a Senate vote that would have killed the law avoided.  ACA passed the House by only seven votes, 219-212 with all Republicans and 35 Democrats voting NO.

Thus, “Congressional intent” is so elusive and intangible that to  mention it is an insult to the court.

Why does the law include the language quoted above that denies subsidies to customers of the federal exchange? 

The answer is found in the context of the Progressive ideology that drives President Obama and Congressional Democrats.

Because concentrations of political power are always abused by the elite, to the detriment of The People, the authors of the US Constitution brilliantly dispersed governing authority among the states while limiting the federal government to a few, specified, or “enumerated” powers.  Under the Constitution Congress may not require state legislatures to pass laws or create programs, such as an online health insurance exchange.

But the ideology and schemes of the leftis,t progressive movement cannot be implemented without concentrating power in the central government.  So progressives contrived a way around Constitutional checks and balances: Offering state governments financial incentives to comply with federal government programs.

The financial incentives are sometimes indirect but always a variation on the same idea: If a state submits to the will of Washington’s elite, the federal government will provide “free money” to the state and/or it’s citizens.

Tax credit subsidies to customers who buy insurance from a state exchange are the free money in ObamaCare that was supposed to ensure that all states obeyed and set up exchanges.  In fact the authors of Obamacare were so sure this financial incentive would coerce each and every state into setting up an exchange, they budgeted no funds to build a federal web site.  Thus, healthcare.gov got a late start, contributing to its disastrous rollout, because funds had to be scrounged from other programs.

Obamacare is a horrendously complex scheme with hundreds of interrelated functions, all made operational by regulations written by hordes of bureaucrats.  Complicated government schemes never turn out as promised and always generate undesirable results, usually called “unintended consequences” to deflect blame away from accountable politicians.

When IRS bureaucrats realized that most of the states would not build their own exchanges, even though subsidies would be denied, they wrote a regulation to grant subsidies through the federal exchange, contradicting the plain language of the law.  But in the Halbig case their regulation lost a court challenge. Now, the Supreme Court will rule.

Back to Professor Gruber’s claim quoted above, that the state exchange requirement is a typo.  A few days after the Halbig ruling, some enterprising reporters and bloggers  turned up YouTube recordings of remarks by Professor Gruber in 2012.  In those recordings here and here he states, unequivocally, that the intent of the law to deny tax credits to citizens of states that do not set up their own exchanges.

Only by contriving absurdly tortured arguments could the Supreme Court overcome what is actually written in the law, four times, and allow the IRS to empower itself to give tax credit subsidies to Healthcare.gov customers.

 

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