I don’t mean to dismiss concerns about the long-run U.S. budget picture. If you look at fiscal prospects over, say, the next 20 years, they are indeed deeply worrying, largely because of rising health-care costs.

Krugman doesn’t say when he thinks we should shift gears and stop running gargantuan deficits.

But presumably 2012 would be the first of “the next 20 years” Krugman finds “worrying.” With the government borrowing 41¢ of every dollar it spends it’s hard to imagine how spending could be cut and/or revenue could increased enough to run a surplus and begin paying down the debt in 2012 or 2013 or whenever Mr. Krugman would finally be agreeable.  We should note that Paul Krugman has never complained about government spending too much, even in boom times when unemployment was at historic lows.  Perhaps he just doesn’t concern himself with paying off the debt.

Krugman continued…

But the experience of the past two years has overwhelmingly confirmed what some of us tried to argue from the beginning: The deficits we’re running right now — deficits we should be running, because deficit spending helps support a depressed economy — are no threat at all.

How can current deficits be “no threat at all” if they’re adding to the future debt that he finds “worrying?”   Has Krugman seen the data in the chart above?  The only time debt as a percentage of GDP has been higher was during World War II.  But that huge increase in debt was to pay for tens of millions of soldiers and all their guns, tanks, aircraft and supplies.  As soon as the war ended Congress cut spending by more than two thirds.

But only 7% of today’s deficits pay for the wars in Afghanistan and Iraq.  The Obama Administration and the Democrats in Congress have done their best to bake more than a trillion in additional annual spending into the permanent budgets of non-military departments and agencies.  One wonders, at what point would Krugman acknowledge a debt problem?

More from Krugman:

…the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity.

Slashing?  Austerity?  Has Krugman looked at the data in the chart below?  in 2011 the government will spend MORE, not less than was spent in 2010 – more than any previous year in US history, even after adjusting for inflation.

What has actually happened this past year is a test of the theory that spending MORE creates jobs.  And based on actual results, the answer would seem to be an emphatic no.

One more baseless assertion from Krugman:

State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers.

Again, Krugman seems to be completely ignorant of the actual data which is easily accessible at the Bureau of Labor Statistics website.  In the past 12 months state and local governments have cut 345,000 employees or 5% of the 7.5 million who were on their payrolls a year ago.  About 14,000 of those layoffs were from “local government education.”  Presumably, some of those were and some were not classroom teachers.  So fewer than 4% of all the state and local layoffs were teachers.

If Krugman had bothered to look at the data he would also have discovered that at the same time those teachers were laid off, an additional 10,000 education bureaucrats were added to state government payrolls.  Perhaps the real problem he should look into is misallocation of resources away from classroom teachers, rather than making the manifestly false assertion that someone has “slashed” federal spending.

What if we had been able to interact with the President, turning the speech into a conversation?

The President:

For the last decade, we have spent more money than we take in… kkkkkkkkkkkkkkkkkkkkkkk

Mr. President, Did you say “the last decade” hoping we’ll blame Bush instead of you? It’s certainly true that Bush ran unnecessary deficits.  But as the chart shows they averaged less than a quarter the size of Your deficits.

If we were still running Bush-sized deficits we would not hear the rating agencies threatening to downgrade US government debt.  We would not be at risk of the world’s investors abandoning Treasury debt out of fear that we’ll soon have no other option but to either default or inflate the currency.  The total debt would be several trillion less than it is today.

…In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt…

Yes, Mr. President, there was a surplus in 2000.  It was $236 billion, including $131 billion of surplus Social Security revenue over Social Security benefit payments, which we were told was to be “set aside” for the baby boomers retirement.  How could the remaining $105 billion have paid off the debt that was $2.2 Trillion in 2000?

…the money was spent on trillions of dollars in new tax cuts… kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk

So $131 billion was “spent” on trillions in tax cuts?   That sounds like a miracle, like when Jesus fed thousands of people with five loaves of barley bread and two fish.  If you could do something like that now you’d be reelected for sure!

But seriously, Mr. President, perhaps you haven’t seen the data in this chart. It shows that income tax revenue had declined before the current tax rates were enacted in 2003 and then went UP afterwards.  In fact, revenue reached an all time record high in 2007 before it was driven down by the recession.  But this year revenue is back up again and may equal that all time high of 2007.

…while two wars and an expensive prescription drug program were simply added to our nation’s credit card.

The government spends on thousands of programs, subsidies, entitlements, etc.  Yet the only two you mentioned were Bush initiatives, again hoping we’d blame him for this crisis.

You’re probably becoming impatient with our charts Mr. President, but here’s another one we have to show you.  It shows that the wars and the Medicare Prescription Drug program were tiny, compared to the massive increases in spending over the past decade, and especially during your first three years.  Yes, Bush deserves a share of the blame but aren’t your huge spending programs the biggest the problem?

Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy.

Really sir? That’s not what you were saying in 2009 and 2010 when you and the Democratic Congress proudly launched your colossal new borrowing and spending initiatives.  You promised that those borrowed Trillions would “rescue” the economy from eight years of terrible Bush policies.  But after trillions in deficit spending there are 2.5 million fewer jobs than when you were sworn in and the unemployment rate has risen from 7.8% to 9.2%

I won’t bore you with the details of every plan or proposal… kkkkkkkkkkkkkkkkkkkkkkkkkkkkk

Oh please, let us see the details.  You’ve been making speeches and holding press conferences for weeks without releasing any details.  We’re ready now.  Why don’t you put your whole plan on line, like you promised during your campaign?

This balanced approach asks everyone to give a little without requiring anyone to sacrifice too much.

You’ve nearly worn out that clever phrase “balanced approach.”  You used it seven times in fifteen minutes.  Most of us now understand  it means tax increases.  we wonder why you don’t just say “tax increases?”

It would reduce the deficit by around $4 trillion and put us on a path to pay down our debt. kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk

Just so everyone understands what you’re saying here, let’s clarify.  In March you submitted a ten year budget plan with a breathtaking total of $45 trillion in spending.  That’s an average of $4.5 trillion per year, or a stunning 25% more than you’re spending this year, which is 40% more than the government spent in 2007!  You also projected $10 Trillion more in deficits.

Now you assure us your “balanced approach” will reduce the 10 year deficit by $4 trillion.  Even if you’re correct -  we can’t tell because you haven’t put your mysterious “plan” in writing -  we’d still run $6 trillion in deficits.  So how can your plan, whatever it is, “put us on a path to pay down our debt” if intend to keep borrowing every year?

Keep in mind that under a balanced approach the 98% of Americans who make under $250,000 would see no tax increases at all…What were talking about under a balanced approach is asking Americans whose incomes have gone up the most over the last decade – millionaires and billionaires – to share the sacrifice.

We’ve wondered about this for months.  When you say “millionaires and billionaires” do you mean everyone who earns over $250,000?

Now, what makes today’s stalemate so dangerous is that it has been tied to something known as the debt ceiling – a term that most people outside of Washington have probably never heard of before.

As the numbers demonstrate, the Obama Administration believes the most urgent national problem is too-little government and Republican efforts to apply the breaks have not moved beyond rhetorical.

The government’s fiscal crisis is, quite simply, a spending crisis.

Key Facts:

• The Administration’s Office of Management and Budget projects a full year 2011 deficit of $1.65 Trillion.

• Congress could have cut that deficit in half without any tax hikes by spending the same amount they spent in 2008.

• Spending the same amount they spent in 2007 it would have cut the 2011 deficit by two-thirds.

On the Presidential campaign trail in the summer of 2008, the last time gas prices spiked over $4.00, then Senator Obama criticized President Bush who had called on Congress to repeal bans on domestic oil drilling.  Obama, who opposed any increase in domestic oil production announced that more drilling was unnecessary!

There are things you can do individually to save energy – simple things like making sure your tires are properly inflated.  Simple things but we could save all the oil they’re talking about gettin’ out of drilling if everybody was just inflating their tires, and getting regular tune ups, you’d actually save just as much.

In one of its few clever responses the McCain campaign began passing out Obama-Energy-Plan tire gauges.

Fast forward to 2011.  President Obama now says:

Whenever gas prices shoot up, like clockwork, you see politicians racing to the cameras, waving three-point plans for two dollar gas.  You see people trying to grab headlines or score a few points.  The truth is, there’s no silver bullet that can bring down gas prices right away.

One of Obama’s favorite rhetorical devices is the straw man, or rebutting an argument nobody had made.  As anyone who is even casually familiar with the news from Washington knows, there are no politicians with “three-point plans for two dollar gas.”   As always, communication from this President is designed to influence the uninformed.

After sneering at imaginary political adversaries for imaginary three point plans Obama presented…a three point plan!

Point 1:

…safe and responsible production of oil at home, which we are pursuing.  In fact, last year, American oil production reached its highest level since 2003.

This chart puts Obama’s claim in perspective:

It’s true there was a slight uptick in production in 2009 and 2010, after government restrictions caused a 45% decline over the previous 23 years.  But Obama can’t take credit for the increase.  As the anti-drilling voices often remind us, there is a long lead time from the the beginning of exploration to the actual production of oil.  The increases in 2009 and 2010 resulted from exploration and drilling permitted during the Bush Administration.

Obama is not “pursuing” more oil production at home.  Everything he has done in the past two years has had the effect of curtailing domestic drilling and production.  As the chart shows the same agency that reported the recent increases projects decreases for this year and next year due to the restrictions put in place by the Obama Administration.

Point 2

On Thursday, my Attorney General also launched a task force with just one job: rooting out cases of fraud or manipulation in the oil markets that might affect gas prices, including any illegal activity by traders and speculators.

We’ve seen politicians “race to the cameras” with this one so many times even the left-leaning media are yawning.  As always, and as Obama knows, it will turn out – after two or three years of “investigation” – that nobody broke the law.

Point 3

We need to invest in clean, renewable energy. In the long term, that’s the answer. That’s the key to helping families at the pump and reducing our dependence on foreign oil…That’s why I disagree so strongly with a proposal in Congress that cuts our investments in clean energy by 70 percent.

But Obama’s “we,” the government, has been “investing” or granting subsidies and tax credits to alternative energy companies for decades.  The real “we,” meaning The People, have no way to know if the schemes the bureaucracy picks to hurl our money at will ever turn out to be viable and cost effective, and neither do Senators or Congressmen and neither does Obama.

Politicians deliberately introduce ambiguity, confusion, and deception, when they use we-ours-us terms to describe government decisions that, in a society built on the principles of individual liberty, should be made in the private sector.

The misplaced use of we-ours-us leads, over time, to a sort of numbed acceptance of the notion that nothing can happen unless government authorities first do the thinking, then provide official blessings, and then release funds.

Obama Continued:

But we need to do more.  We need to harness the potential I’ve seen at promising start-ups and innovative clean energy companies across America.  And that’s at the heart of a debate we’re having right now in Washington about the budget.

There is no reason for the big WE – government – to decide which “promising start-ups”  should or should not be funded or to use the power of government to force a false choice against producing domestic oil and “investment” in alternatives.   Politicians and regulators have no track record that would demonstrate them qualified to pick winners and losers in advance, before all research and development has been completed.

If permitted to drill, the oil companies will invest their own, not “our” or government’s resources into growing their own business – and create tens of thousands of new American jobs along the way.

At the same time other companies are investing and will continue to invest their own resources in research and development of new forms of energy and fuel saving technologies.

The best thing for government to do is allow liberty to work. Let individuals and companies decide which ideas are most promising, and worthy of investment of their own resources, outside the political process.

On March 10 the Treasury Department published it’s monthly statement, including year-to-date figures as of the end of February, the fifth month of the 2011 fiscal year.

In the face of the most urgent fiscal and debt crisis in American history the government still managed to spend $58 billion or 4% more in the first five months of 2011 than the first five months of 2010.

The deficit for the month of February was $222.5 billion, equal to the annual profits of the top 14 most profitable corporations in the world.  The full year 2011 deficit will be about three times the annual profits of the top fifty corporations in the world.

Some of the increases were:

• Farm Security Rural Investment Programs: Up 65%
• Grants to States For Medicaid: Up 4.2%.  Weren’t we promised ObamaCare would save money?
• Environmental Protection Agency: Up 37%
• Federal Student Aid: Up 20.2%.  Didn’t the President promise that the government take-over would save money which would be channeled into health care?
• Agriculture Marketing Service: Up 54%
• Corps of Engineers: Up 18.5%
• National Science Foundation: Up 9.7%
• Agricultural Research Service: Up 4.4%
  
• Transportation Security Administration (TSA): Up 25%
• Agriculture research and education: Up 15.7%
  
• Interest on the federal debt: Up 5.5%
• Social Security Benefits: Up 3.4%
• Department of Defense Up 2.7%

CBO’s projections are based on, quoting from the report:

…the assumption that current laws governing taxes and spending will remain unchanged.

The government’s fiscal year began on October 1, so the first quarter of fiscal 2011 is already behind us. Astoundingly, even in the face of an unprecedented debt crisis the government spent 3% MORE than in the first quarter of fiscal 2010! (Source: Monthly Treasury Statement: December, 2010)

The new Republican majority in the House of Representatives was was sworn in January 5 but so far has not held a vote on spending cuts.   The GOP should adopt the same sense of urgency that drove the Democrats’ in 2009 when both houses of Congress passed Obama’s trillion dollar stimulus act on his 24th day in office.

In his State of the Union address President Obama proposed not to cut spending but to “freeze” spending at the current level, the highest in US history, which would ensure that the CBO estimates become reality.

• The government is borrowing 40¢ of every dollar it spends.
• The government is borrowing $4.1 billion dollars every day, seven days a week.
• Because of compound interest the debt is growing at the rate of $5.3 billion every day.
• To put that in perspective, the IRS collects an average of $3 billion per day in individual and corporate income tax combined.

The political-media establishment predicts a major, budget “fight” in Congress in the coming weeks over spending.  We The People must participate with a deluge of emails, phone calls, and faxes demanding swift, deep spending cuts.

• It took 51 weeks to grow from $12 trillion to $13 trillion.
• It took only 27 weeks to grow from $13 trillion to $14 Trillion
  

The government’s fiscal year began on October 1, so the first quarter of fiscal 2011 is already behind us.  Astoundingly, even in the face of an unprecedented debt crisis the government spent 3% more than in the first quarter of fiscal 2010! (Source: Monthly Treasury Statement: December, 2010)

The political-media establishment blames taxpayers for this debt crisis.  But The data show spending is the real cause.

Whenever they’re confronted with their profligate spending Democrats blame “wars that were not paid for.”

Fortunately, we can check this claim because the Congressional research service has provided a meticulously detailed report of the cost of the wars in Iraq and Afghanistan. In the report they tabulate Defense Department expenditures plus expenditures by other departments (Veterans Affairs for example) that were made necessary by the wars.   It turns out that over the nine years since the 9-11 terrorist attacks the entire cost of both Iraq and Afghanistan has been just over $1 trillion.   During the same nine years the government spent a total of $26.7 trillion.

So, the notion that there would be no debt crisis if there had been no military operations in Iraq or Afghanistan turns out to be bunkum.

President Obama and the Democrats want us to believe the current tax rates, known as “Bush tax cuts,” that were enacted in 2003 caused tax revenue from “the rich” to decline.  Again the data contradict them.

The 112th Congress faces an unprecedented crisis.  Today, government Debt is about 95% of GDP.  The only time it was ever higher than today was during World War II when it touched 120% of GDP.  But unlike today 90% of the war time budget was for military expenses.  When the war ended most of the cost of government ended with it.  Debt was reduced to 60% of GDP within a decade.

This time, the cost of overseas combat operations is only about 4% of total spending.  There would be no significant decrease in government borrowing even if the President were to simply abandon Iraq and Afghanistan and bring all troops home immediately.

As always Democrats and so-called progressives insist that all would be well if only the rich paid a little more.  But even if the IRS increased the tax rate on all income over $500,000 from 35% to 90% it would not generate enough to balance the budget.

If it were possible to enact sweeping tax hikes and increase income tax revenue by 50%,  this year’s deficit would still be over $1 Trillion.

There is only one way out of this crisis: deep cuts in spending.

We suggest Congress enact a scheduled phase-out all programs not explicitly authorized by the US Constitution.

As the chart shows tax revenue is growing again, as the private sector claws back from recession.

President Obama and the Democrats blame their massive deficits on the Bush tax cuts, especially for “the rich.”  The political-media establishment rarely reports that:

• Individual income tax revenue increased four years in a row, to an all time high after the current tax rates, called the Bush Tax Cuts, were enacted in 2003.
• Under the current tax rates individual income tax revenue increased 47% from 2003 to 2008
• Tax revenue from “the rich” earning over $200,000 grew 71% from 2003 to 2008
  

Senator McConnell called it “one last spending binge.”  It’s 1,924 pages of emergency spending authority totaling about $1.1 trillion that must be passed this week to prevent a government shut down.

Politicians love a budget crisis because it gives them an opportunity to sneak some home state pork and special interest subsidies into a bill nobody will have time to read.

According to media reports there are more than 8 thousand earmarks, inserted into the bill by both Republicans and Democrats.  Some of the Republicans whose sanctimonious indignation is now heard in dramatic soundbites were the authors of some of the earmarks.

The obvious question is, of course: Why is there an emergency?

Incompetence and malfeasance in Congress created this emergency.  The circumstances require some sort of “stop-gap” spending legislation because Congress failed to accomplish its most basic, Constitutional responsibilities:

• Pass a budget for fiscal year 2011, which began October 1, 2010.
• Pass 12 appropriations bills that break the budget down to more manageable pieces and grant each department and agency the budget authority to continue operations.

Without appropriation bills the government’s various departments and agencies lack permission from Congress to do anything, resulting in a government “shut down.”  Perhaps the most famous shut-downs were in the 90s when the new Republican majority in Congress could not reach a compromise with Democratic President Clinton.

Of course there is no such disagreement this year as the President’s own party has super-majorities in both houses.  Yet somehow, the Democrats could not find time for their Constitutional duty until this last moment.  So now they gleefully load up the earmarks and special deals for politically connected constituencies even as they act as if they are heroically rescuing us from yet another crisis.

Much of the communication from the political establishment targets people who are not inclined to spend hours verifying “information” in the media.  After the Bush tax cuts were enacted in 2003 the continuous deceptive message was that they were only for “the wealthy” or “the top 2%.”  

But now the Bush tax cuts are about to expire.  If Congress does not act there will be a substantial increase on every income tax payer, from top to bottom.

So now it’s time for a revised message.

The new message is that  President Obama and the Democrats want to extend the Bush tax rates for you, if you’re in the middle class but not for the hated wealthy.

Obama and the Democrats have controlled all three branches of government for  22 months.  Back in 2009, while they were still basking in the after-glow of their election triumph they could easily have passed legislation that would make the lower bracket Bush tax rates permanent while raising the upper bracket rates.  But apparently they wanted to keep their options open – including the option to let the all Bush tax rates expire, reaping a windfall for government.

After they decided not to deal with looming tax increases before the election, The Big Three, Obama, Reid and Pelosi solemnly promised they would enact appropriate legislation in the lame duck session.

But now the lame duck session is half over, House and Senate are on extended Thanksgiving vacation, and there has been only talk – no action.

Apparently, there are not enough Democratic votes to enact the upper bracket tax increase, even though all the Democrats who lost their seats in the election are still in place until the end of the year.

Apparently, the Big Three would rather let all the Bush tax rates expire than allow a vote on a bill that would extend them all because they know that bill would pass.

As always in Washington, the debate includes a lot of false assertions. On Fox News Sunday White House Adviser David Axelrod dodged a question with one of the most often repeated Obama/Democrat talking points:

We can’t afford…tax cuts that will go almost entirely to millionaires and billionaires.

The goal of this assertion is to plant in the mind of the audience a vision of the idle rich, whose investments generate income in the millions or even billions each year, sipping champagne on enormous yachts.  But that vision is a deception.  Most upper bracket taxpayers earn less than $1 million, and half of them are owners of small businesses, not idle yachtsmen.

If the Democrats really wanted to a tax increase only on Millionaires they would propose one.  But it would not generate a significant amount of revenue because, as the chart above shows, it would hit too few taxpayers.

So instead they talk about millionaires and billionaires but demand tax hikes on people with lower incomes.

The charts display IRS data from 2008, the latest year available.  Half the taxpayers earning over $200,000 were actually small business owners who are required by the tax code to report the incomes of their businesses on their personal tax returns.

As the lower chart shows, most small business income was reported by taxpayers in the over $200,000 bracket.  These are the most successful of small businesses, the ones that are or soon will be in a position to expand and hire additional employees.  They’re also the small businesses targeted for tax increases.

President Obama and Democrat leaders in Congress have decided that income tax rates for “the rich,” those earning more than $200,000, must be increased.

One of their justifications is the claim that at current rates these taxpayers are paying “less than their fair share.” But they always assert “the wealthy” aren’t paying their fair share.  When asked how much the wealthy should pay their answer is always the same:

More!

.

Obviously, “fair” has no definition. But we thought it would be interesting to see just what portion of the total those being targeted for a tax hike actually do pay.

The above-$200,000 group includes only 3.1% of all taxpayers.  In 2007 they paid 54.6% of all income tax revenue collected by the government, the highest in history.  The 2007 percentage was almost ten points higher than the highest of the Clinton years.

As we reported here most of the taxpayers in the over-$200,000 bracket are small business, the employers who usually create most of the new jobs that lead America out of  recessions.  Obama and the Democrats should have to explain how they think a tax increase on these businesses would help create more jobs.

Thirty Second Video

Vice President Biden blames lack of public approval on lack of public comprehension due to the size and complexity of Obama legislative packages.

As is his wont the Vice President makes an inadvertent admission.  “The people really involved” are the Senators and Congressmen who voted to enact these “gigantic packages.”  We, The People will have to suffer the consequences over many years as we, The President, The Vice President and the Senators and Congressmen who enacted “gigantic packages” learn by living through them what the consequences will be.

Most Americans know that most of the Senators and Congressmen who voted to enact thousand of pages of new law and changes to existing law in the ObamaCare bill, the energy bill, the recently enacted financial regulation bill and the $800 Billion Recovery Act (AKA “stimulus”) did not read them, and could not comprehend them if they did.

These bills are so “gigantic” and complex that it’s simply not possible to even consider all the consequences, even if one read every page.  Consider this one paragraph example from the Stimulus/Recovery Act about Transit Assistance.

To figure out what this means one would have to:

• read section 5302 of title 49, US Code to learn what kinds of grants are authorized, and
• Read section 5307 of Title 49, US Code to learn what types of grants 80% of the money is to be spent on, and
• Read subsections i, l,  and j to see what kinds of grants are prohibited, and
• Read section 5340 to learn how 10% of the funds are to be spent, and
• Read section 5311 to learn how the last 10% of funds are to be spent.

To be careful and thorough a Congressman should look into the historical performance of each of these grant programs to determine if they have been efficient and cost effective in the past.  Conscientious due diligence on just this one-half of one page could take a Senator and his staff a week to complete.

Each of Biden’s “gigantic packages” includes thousands of amendments to other laws and programs.

• Nobody in the Administration or Congress could possibly imagine all the potential consequences, intended, or unintended that could result.
• Nobody could possibly imagine all the ways changes in different, disparate programs could combine with changes in other programs to produce unanticipated consequences in the broader economy.
  

The Bottom Line

The best word to characterize enacting these “gigantic packages” without any way to understand the consequences is:

Negligence.

Although sizable deficits are unavoidable in the near term, maintaining the confidence of the public and financial markets requires that policymakers move decisively to set the federal budget on a trajectory toward sustainable fiscal balance.

In the context of the subdued language Federal Reserve Chairmen always use, a statement like this should be taken as a stern warning.  This is as close as a Fed Chairman will ever come to ringing an alarm bell.

As the chart shows the current situation is indeed alarming.

The government has borrowed four of every ten dollars spent so far this fiscal year.

The standard excuse from Congressional leaders is that “the rich,” defined by President Obama as earning more than $200,000 per year, aren’t paying enough in taxes.  But based on IRS statistics,

• “The rich” are 2% of all taxpayers, approximately 4 million.
• “The rich” already pay 55% of all income tax dollars.
  
• To make up this deficit their federal income tax rate would have to be 86%.  A family earning $200,000 would have to pay $172,000 in federal income tax, plus state income tax, plus payroll or self-employment tax.  In other words, “the rich” would have to pay more than they earn in taxes.
  

In reality, this budget gap cannot be closed by jacking up taxes on “the rich” who are also owners of the small businesses that employ most Americans.  They create jobs by investing their after tax profits back into their businesses.  Increasing their taxes will prevent job creation.  Increasing their taxes a lot will kill jobs.

The Bottom Line

Congress must make deep spending cuts, beginning almost immediately.

Today, the stage is being set for performance #29, tonight’s hastily scheduled joint session of Congress, a blatantly arrogant and cynical stunt, a desperate attempt to energize weary voters and wring the last ounce of support from politicians who have not yet turned against ObamaCare.

The first 28 Presidential health care performances were all based on the same formula:

• Insist that 47 million Americans have no health insurance, and imply that they are denied medical services, regardless of facts to the contrary;
• Denounce the growing cost of health insurance.  But don’t mention government imposed mandates, restrictions on competition, and lawsuit lotteries that cause costs to rise.
  
• Review all the complaints anyone has ever expressed against health insurance;
• Focus on one or two tragic, individual, health care nightmares;
  
• Promise phenomenal results from the government take-over:  all complaints resolved, everyone covered, everyone saves money, insurance companies transformed into benevolent benefactors;
• Avoid quoting or discussing any written language from any of several health care bills pending in Congress.  Details ruin the performance and turn voters against ObamaCare.

How can tonight’s performance be any more persuasive than the first 28?   What more can Obama promise than medical Utopia at lower cost? Maybe he can promise every child who visits a medical office a free sucker, handed out by a smiling nurse.