The private sector’s ability and willingness to generate income and profits for government to seize through taxation is rapidly diminishing due to the increase in federal power and intervention.

The drop in individual income tax revenue in fiscal 2009 was the steepest since 1939.  As the chart shows revenue continues to plummet in fiscal 2010

Virtually all individual income tax is paid by the top half of income earners, those with the resources to invest in business enterprises that create jobs.  Half the taxpayers earning over $200,000, the group targeted by President Obama for punitive tax increases,  are small business owners, who directly invest their own after-tax profits in business expansion. Investment of after tax profits is especially critical in 2010 as bank credit is still restricted.

Thus, a drop in individual income tax revenue signals declining small business profits and declining resources available to invest in businesses and create jobs. Not only is current tax revenue down, but without current investment, future tax revenue will decline even more.

Corporate income tax is a direct tax on corporate profits.  Obama and the Democrats make no secret of their contempt for corporate profits.  But it is those profits that fund job creation and provide tax revenue to government.

The drop in corporate income tax revenue in fiscal 2009 was the greatest since 1932, the depths of the Great Depression.  As the chart shows, revenue continues to crash in fiscal 2010.

When the media finally confronts the Democrats  with this ominous data, they will, of course, dismiss it all as the result of “Bush policies.”  But it has been three years since the Democrats won a controlling majority in Congress.  Obama continued and expanded the TARP program begun at the end of the Bush Administration.  He seized control of AIG, GM and Chrysler.  He discouraged risk-taking and investment by promising to burden businesses with new taxes, health care mandates, forced unionization and an artificial energy shortage created by government.  Obama owns the “policies” driving this downward spiral.

The Bottom Line

The “policy” America desperately needs is smaller government, restricted to the few legitimate functions permitted under the Constitution.

Greater liberty, and much less government intervention will leave companies, investors and entrepreneurs free to create wealth, produce profits and provide jobs.

The path to prosperity is liberty, not larger, more powerful, more authoritarian government. Ironically, greater liberty also generates more tax revenue.

On February 4 President Obama submitted his proposed budget to Congress, including the most spending and largest single year deficit in the history of America.

On February 18 he announced the formation of a yet another Washington “commission,” this one to study government deficits and recommend ways to reduce them, as if there were some mystery about how they occur.

He blamed Congress for the red ink, saying that “politics” kept them from making the decisions necessary to enact a balanced budget.

Obama created the deficit commission with a stroke of his pen, via an Executive Order, an act that violates the Constitution in as much  as Congress defeated Legislation that would have created the same commission just last week.    The government will lease office space, hire staff, purchase computers and equipment, and pay fees to outside “experts,” all without the Constitutionally required spending authority from Congress.  But nobody in the establishment media seems to have noticed or cared.

Obama has had a love-hate relationship with deficits since he took office.  The 19 second video below is from a speech to Congressional Democrats during the second week of his Presidency, when he and they were still intoxicated by their sweeping election victories.  They were eagerly planning to deploy their commanding majorities in the House and Senate to enact a radical, authoritarian agenda of government supervision of every aspect of American life.   They were about to pass the $787 Billion “stimulus” and had swept aside deficit warnings from Conservatives.

One year and another Trillion in debt later the President is trying to reinvent his image.  Now he wants is to believe he has the soul of a budget balancer, but is a victim of “politics.”

We’re told the deficit commission will last only until December of this year, a ridiculous promise considering the ways Washington works.  The government has run deficits in 67 of the past 78 years.  The notion that a commission can “solve” this problem and go out of business in ten months is preposterous.

Since the deficit commission is likely become a textbook example of a permanent bureaucracy, adding to the long term deficit, we thought this would be an ideal moment to repeat this presentation on how bureaucracies grow and evolve.  This phenomenon is as much a cause of deficits as anything else in Washington.

UPDATE: This week President Obama began a campaign style tour to hype the “success” of the Recovery Act or “stimulus.”  He said without it there would heave been “a catastrophe.” But he did not provide any details as to the nature of the catastrophe.  Considering the data below it’s pretty difficult to characterize employment as anything other than a catastrophe.

This week marks one year since the “stimulus” or Recovery Act, $787 Billion of extra borrowing and spending, was enacted by Congress.  The President continues to make the preposterous claim that “every economist” agrees the stimulus created millions of jobs.

It’s time for an objective progress report.

A year ago President Obama orchestrated weeks of political-media hype leading up the the Congressional vote, and promised:

I have moved quickly with my economic team and leaders of both parties on an American Recovery Act that will immediately jumpstart job creation and long term growth.

The headline from the January jobs report was that all employers, including both government and private sector, shed 20,000 jobs in January.  What didn’t make the headlines was that the federal government added 19,000 jobs.  So the real economy, that the government loots to gain the resources to provide government jobs, actually lost 39,000 jobs.

Since the recovery act was enacted:

• the private sector has lost 3.8 million jobs,
• the federal government has added 113,000 jobs.

The political-media establishment is now promoting a second round of stimulus borrowing and spending, this time calling it a “jobs bill,” while continuing to threaten small business employers with:

• Punitive tax increases,
• An artificial energy shortage imposed by government in order to increase energy costs
• New taxes on energy production,
• New health care mandates,
• A new federal law that would force unionization upon employers and employees who don’t want union.

The overall evaluation of the stimulus is simple: A bigger, more expensive, more powerful, more interfering government, funded by fewer, poorer taxpayers.

The Obama Administration’s economic team sent a report to Congress Thursday projecting 96 Thousand new jobs per month for the remaining eleven months of 2010.

Just two weeks ago, in his State of the Union message President Obama sneered:

We can’t afford another so-called economic “expansion” like the one from the last decade –- what some call the “lost decade” -– where jobs grew more slowly than during any prior expansion…

We would like to quietly remind the President that the “lost decade” expansion, from August, 2003 to December, 2007 averaged 153,358 new jobs per month.

The President should also be reminded of the report called “The Job Impact of The American Recovery And Investment Plan” (JIARIP), published in January of last year by the same economic team.

Citing JIARIP, Obama confidently predicted that with passage of the recovery act there would be 3,675,000 more jobs at the end of 2010 than at the beginning of 2009. Based on this prediction, and assurances it would “jumpstart job creation” Congress passed the Recovery Act one year ago this week.

But, as of last month there were 4,022,000 fewer jobs than in January, 2009.

Thus, to make good on last year’s projection by the Obama economic team, American businesses would have to create a jaw-dropping 698 thousand jobs every month for the rest of 2010.  Never have that many jobs been created in a single month.

This latest projection, which will likely turn out to be too optimistic, would not restore even a third of the jobs lost since the recovery act became law a year ago.

Vice President Biden appeared on the Larry King program Wednesday.  When King asked him about Iraq he said:

I am very optimistic about — about Iraq. I mean, this could be one of the great achievements of this administration. You’re going to see 90,000 American troops come marching home by the end of the summer. You’re going to see a stable government in Iraq that is actually moving toward a representative government…I’ve been impressed how they have been deciding to use the political process rather than guns to settle their differences.

Greatest achievements of this administration?  Astounding!

Most of the communication from the Obama White House is deception, targeting people who don’t have the time or interest to dig into every issue and root out the truth.  But this creates a disingenuous category of it’s own.  The truth is that in 2007 and 2008 Then Senator Obama used his office to try to cause the Iraq operation to end in failure.

When the surge strategies that ultimately succeeded were beginning Senator Obama could have seized the opportunity to be an idealistic, visionary leader in the cause of liberty for the Iraqi people, and victory for America.  Instead, he deferred to the defeatist dogma of those in his party who desperately wanted failure in Iraq, to vindicate their position, that “Bush’s war” was an irreversible disaster. In a TV interview Candidate Obama fell back on the simplistic chants of the anti-war Left:

We cannot impose a military solution on what has effectively become a civil war. And until we acknowledge that reality — we can send 15,000 more troops, 20,000 more troops, 30,000 more troops, I don’t know any expert on the region or any military officer that I’ve spoken to privately that believes that that is going to make a substantial difference on the situation on the ground.

In July, 2007 as the intense combat phase of the surge strategies and initiatives was in full force, and the troops deserved unqualified support from the home front, Senator Obama appeared on The Today Show and said:

My assessment is that the surge has not worked and we will not see a different report eight weeks from now.

Obama repeatedly tried his best prevent success in Iraq, first by introducing legislation that would have aborted the surge just as it began, and by twice voting to withdraw funds for the Iraq operation, even as US troops were engaged in daily combat.

As for Joe Biden, let’s not forget his idea, to Divide Iraq into three or four countries, one for each ethnic sub-group.  Thankfully our troops were never ordered to facilitate that train wreck.

Is there a word strong enough to properly characterize Biden’s chutzpa in now the success of the Iraq operation for Obama?

At the National Prayer Breakfast President Obama spoke of work being done by the military in Haiti.  Unfortunately, his praise was compromised when he inadvertently disclosed his lack of military experience, or even interest, by mispronouncing “corpsman.”  Twice.

55 second video

By the way, the establishment media that relentlessly lampooned Bush lingo was silent.

One wonders how does Obama pronounce the favorite “corps” of the left?

• Americorps
  
• Peace Corps
  

UPDATE: N.O.W. President Terry O’Neill claims the ad is a “celebration of violence against women.”  Here’s the quote:

I am blown away at the celebration of the violence against women in it.  That’s what comes across to me even more strongly than the anti-abortion message.

Well, they did it.  CBS ran the dreaded Tim Tibow Super Bowl commercial, produced by Focus on the Family.  It’s so light, so utterly non-controversial it would not have been noticed by nearly as many viewers were it not for weeks of bellowing from pro-abortion groups

By not allowing anyone to preview the ad, Focus on the Family misdirected the perpetually outraged left.  They all ran the wrong way and made fools of themselves with hysterical warnings of dire consequences if football fans were not shielded from such a dangerous message.

Here are some brief excerpts from a very long, angry letter to CBS from Women’s Media Center (WMC.)

Focus on the Family has waged war on non-traditional families…and is now attempting to use the Super Bowl to further ramp up the vitriolic rhetoric surrounding reproductive rights…CBS is aligning itself with a political stance that will alienate viewers and discourage consumers from supporting its shows and advertisers. The decision to air this ad would be ethically, economically and politically disastrous for CBS.

The content of this ad endangers women’s health, uses sports to divide rather than to unite, and promotes an organization that opposes the equality of Americans.

So, what happened?  Nothing.  The game continued as scheduled.  Football fans didn’t run, screaming into the streets.  CBS will suffer no disaster.  But thanks to shrewd strategy by Focus on the Family, the pro-abortion left has ensured that millions more people noticed and remembered the ad and will go to the Focus website to watch the Tebow video.

On President Reagan’s birthday, consider the closing paragraphs from his Farewell Address:

In the past few days I’ve thought a bit of the “shining city upon a hill.”

I’ve spoken of the shining city all my political life, but I don’t know if I ever quite communicated what I saw when I said it. But in my mind it was a tall proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace, a city with free ports that hummed with commerce and creativity, and if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That’s how I saw it, and see it still.

And how stand the city on this winter night? More prosperous, more secure, and happier than it was eight years ago. But more than that; after two hundred years, two centuries, she still stands strong and true on the granite ridge, and her glow has held steady no matter what storm. And she’s still a beacon, still a magnet for all who must have freedom, for all the pilgrims from all the lost places who are hurtling through the darkness, toward home.

We’ve done our part. And as I walk off into the city streets, a final word to the men and women of the Reagan revolution, the men and women across America who for eight years did the work that brought America back. My friends: We did it. We weren’t just marking time. We made a difference. We made the city stronger. We made the city freer, and we left her in good hands. All in all, not bad, not bad at all.

And so, good-bye, God bless you, and God bless the United States of America.

Video of the entire farewell address

On Ronald Reagan’s 99th birthday, lets remember why he was re-elected in a 49 state landslide, winning the most Electoral College votes in American history.

Compare the results of Reagan’s principled, liberty-based policies with the results of the current chaos in Washington

Yet another disappointing employment report was released Friday – 20,000 jobs lost in January.  The political-media establishment is in full spin mode, assuring us Congress will deliver us from misery with yet another, politically contrived, “jobs bill.”

These charts compare the two worst recessions since the 1930s, and the results of the two, directly opposite responses from Washington.

President Obama inherited a deep recession.  His response has been to:

• Expand the bailout program begun under the Bush administration;
• Enshrine as explicit government policy the theory that some companies are deemed too-big-to-fail and will always be rescued from the consequences of their own failures, especially if their workforce is unionized;
• Enact the stimulus, $787 Billion of extra borrowing and spending, sold with the promise that it would, in Obama’s words “immediately jumpstart job creation;”
• Subsidize blue-sky energy schemes that are too expensive and unreliable to survive in the competitive marketplace;
• Threaten employers with tax increases, hyper-regulation, new health care mandates, and an artificial energy shortage imposed by government.

Like President Obama, President Reagan inherited a deep recession. By some measures it was worse than the current downturn.  Reagan’s economic program, based on his commitment to liberty, was to:

• Reduce regulation and government intervention in the economy;
  
• cut taxes to leave capital in the hands of those who had earned it and were best prepared to invest in job creating enterprises;
• Release the creative and productive energies of The People from the yoke of imperial government.
  

The results, in the second chart, speak for themselves.  After 15 months of job losses Reagan’s policies turned the job market around, passing the previous all-time high in only ten months.

Explosive economic growth continued for a total of 90 months, creating more than 21 million new jobs, a 24% increase in employment.

As we celebrate Ronald Reagan’s birthday let’s remember why he was the most popular President in 70 years.

We begin a second post with this Obama quote from the State of the Union message:

We can’t afford another so-called economic “expansion” like the one from the last decade –- what some call the “lost decade” -– where jobs grew more slowly than during any prior expansion…

After presiding over rapidly shrinking employment for the entire first year of his Presidency, Barack Obama is hardly in a position to sneer at the ten million new jobs that were created from 2002 – 2007.

All the data, comparing the previous recession with the current recession is in the post before this one.

But, it’s true that employment grew faster during previous expansions, especially during the Reagan Administration. Like President Obama, President Reagan inherited a deep recession.  But after his first four years, voters were so impressed they reelected Reagan in the largest Electoral College landslide in American history.  President Obama does not appear to be on track for such an outcome.

Perhaps Obama should consider changing his strategy and adopt the successful policies of the Reagan Administration.