The so-called stimulus package passed by the Democratic Congress and signed by President Obama in 2009 was not the first such attempt by Washington to stimulate economic growth by spending money the government did not have. It was merely the most obscene, and the clearest evidence yet that such “stimuli” is akin to the kind people often put into their bodies.
Figuring that a $100 billion stimulus package like the kind that saw the Bush Administration send taxpayers $1,000 checks in 2008 was for small-timers, Obama convinced an all-too-willing Congress to go even bigger and balloon the deficit by $862 billion to supposedly spur economic growth.
The economy was in big trouble, so we needed to think big! Translation, spend big! If we didn’t, the president warned, unemployment would exceed 8 percent.
As we all know, the unemployment rate exceeded 10 percent after the impotent stimulus. Even now it has not been below 8 percent since it first exceeded that level, and it is currently hovering around 8.5 percent.
In 2011, unable to pretend the economy was getting better, Obama asked the new Congress that now included a Republican House to give him another $400 billion stimulus. This time, he was told Congress had cut up his stimulus credit card.
Why doesn’t economic stimulus work? When it comes in the form of federal spending, it doesn’t work because it’s based on a completely wrong notion of what spurs prosperity. In that respect, it's much like a drug.
Consider the effects that a stimulant like caffeine has on your body, or even a stronger stimulant like amphetamines. These stimulants merely provide a very temporary boost to your energy – keeping you awake when you should probably be sleeping, or keeping you operating at a high level when you need rest. They make the body act in an unnatural way, and that doesn’t come without consequences.
Some artificial stimulants, such as cocaine, can really give you a short-term kick, but can also accelerate your heart rate so intensely that they can kill you. None of these stimulants have any nutritional value. They just give you energy that your body wouldn’t produce if left to its own devices, then they wear off and you either crash or take more. It’s a vicious cycle and its long-term effects are usually very bad.
When the government tries to stimulate the economy with deficit spending, it is essentially doing the same thing. Healthy sustained economic growth comes from value-added production that serves markets that want the goods and are able to pay for them. When not enough of that is happening, economic growth slows or sometimes goes backwards for a short period of time. No one likes it when that happens, but it is often a necessary correction to something that has skewed the market.
What the government then tries to do is replace the value-added, market-serving production that generates real economic growth with the gratuitous spreading-around of borrowed money.
That doesn’t work.
The economy is way past the point where the federal government can “stimulate” it back to health. That’s why Obama’s $862 billion boondoggle did not work. Real economic growth will not return unless we unleash the productive sector of the economy (which is the business sector), get out of the way of energy production, cut taxes on businesses and individuals, and stop treating everyone who makes money like a criminal.
The only thing stimulus is getting us is annual deficits of $1 trillion or more, and a federal debt that’s now bigger than the size of our entire economy.
The economy on stimulus is like your brain on drugs. It’s killing us.
February 27, 2012
February 20, 2012
Obama’s Report Card: We’ve Got a Few Problems Here
February 20, 2012
by Herman Cain
Based on President Obama's latest State of the Union address and speeches, he would probably grade his performance in the first three years of his presidency as an A or no less than a B. Let's examine the facts and see what the facts say about promised results versus actual results.
STIMULUS BILL ($862 billion): The Congressional Budget Office reported in November 2011 that 700,000 jobs may have been sustained as a result of this massive spending measure. The administration projected 3.5 million jobs would be created. (That’s more than $1.2 million per job, assuming it’s true.) The administration then concocted a definition for "saved" jobs to boost the results. Only liberals bought the phony definition and the result was still way short of projection.
The president also said the spending would keep the unemployment rate below 8 percent. It has not been below 8 percent since he made the prediction, which is a post-World War II record of 35 straight months above 8 percent. The administration (specifically the Bureau of Labor Statistics) has now changed who gets counted in the work force and who gets counted as unemployed to make the rate appear to be lower than it actually is.
Hush! The real number is over 15 percent, but don't tell anybody.
OBAMACARE: We were supposed to be able to keep our current insurance if we liked it. Insurance premiums were supposed to come down and more people would be covered. None of that happened. Even worse, a majority of the public did not even want ObamaCare.
NATIONAL SECURITY: The world is not safer. Defense spending is on a downward trajectory. Our military is being stretched. Terrorist attempts continue. Our southern border is not secure. The START treaty was a mistake because the president gave away too much, and now he wants to voluntarily reduce our nuclear arsenal. I don't feel secure.
ENERGY INDEPENDENCE: An extended moratorium on oil drilling in the Gulf of Mexico, refusal to approve the Keystone Pipeline, mandatory reporting of "greenhouse gases" and a regulatory onslaught on the coal industry are not the path to energy independence. Energy dependence, which is what these policies produce, is a threat to our national security.
INVESTMENT IN SO-CALLED “GREEN JOBS”: More than a half a billion dollars of taxpayer money has been wasted on companies like Solyndra and Fister Automotive, which have filed for bankruptcy. Government should not be in the business of trying to pick winners and losers, and this administration has only picked losers. So-called “green jobs” will not save this economy.
FANNIE and FREDDIE: These giant mortgage holding companies were the catalyst for the financial meltdown of 2008 and 2009. They are still at the heart of the housing crisis and are still being heavily subsidized by the taxpayers. The administration has just allowed business as usual to continue at these entities at our expense, and received no new oversight in the big-banks-biased Dodd-Frank financial deform legislation. Speaking of which . . .
DODD-FRANK: This bill was supposed to help prevent another financial meltdown, which we are very close to again because this legislation did not solve the problem. This bill has also had the consequence of forcing a lot of perfectly healthy smaller community banks out of business due to increased regulatory requirements. In a rush to pass the bill, many of these requirements were not properly vetted by the entire banking community.
I have listened to many small banks’ horror stories about how they were unfairly shut down by the regulators due to the impact of Dodd-Frank. Where’s that report?
NATIONAL DEBT: Insane! During the Obama Administration, the national debt has increased more than 50 percent in three years to more than $16 trillion. For that spending, the federal government is bigger, the economy is still stalled, the real unemployment rate is not decreasing, gasoline prices are headed back to $4 a gallon and our national debt is now bigger than our Gross Domestic Product. None of these are good outcomes.
SPACE PROGRAM: The administration cancelled the development of our next generation of space vehicles. We will now have to "thumb a ride" with Russia or other countries. That's not leadership. That’s allowing an American strength to become a weakness.
CASH for CLUNKERS: That failed program needs no further explanation.
President Obama did give the OK to complete the mission to take out our enemy Osama bin Laden. Kudos! The administration also bailed out General Motors and Chrysler, but the taxpayers will not recoup nearly $25 billion of the $85 billion bailout.
Based on the facts above, this presidency has been a failure. But consistently, about 45 percent of the American people have the perception that President Obama is doing a good job. That's the power of carefully crafted rhetoric, selective statistics and a pro-Obama mainstream media.
Let’s not reward President Obama’s failed report card with a second term.
by Herman Cain
Based on President Obama's latest State of the Union address and speeches, he would probably grade his performance in the first three years of his presidency as an A or no less than a B. Let's examine the facts and see what the facts say about promised results versus actual results.
STIMULUS BILL ($862 billion): The Congressional Budget Office reported in November 2011 that 700,000 jobs may have been sustained as a result of this massive spending measure. The administration projected 3.5 million jobs would be created. (That’s more than $1.2 million per job, assuming it’s true.) The administration then concocted a definition for "saved" jobs to boost the results. Only liberals bought the phony definition and the result was still way short of projection.
The president also said the spending would keep the unemployment rate below 8 percent. It has not been below 8 percent since he made the prediction, which is a post-World War II record of 35 straight months above 8 percent. The administration (specifically the Bureau of Labor Statistics) has now changed who gets counted in the work force and who gets counted as unemployed to make the rate appear to be lower than it actually is.
Hush! The real number is over 15 percent, but don't tell anybody.
OBAMACARE: We were supposed to be able to keep our current insurance if we liked it. Insurance premiums were supposed to come down and more people would be covered. None of that happened. Even worse, a majority of the public did not even want ObamaCare.
NATIONAL SECURITY: The world is not safer. Defense spending is on a downward trajectory. Our military is being stretched. Terrorist attempts continue. Our southern border is not secure. The START treaty was a mistake because the president gave away too much, and now he wants to voluntarily reduce our nuclear arsenal. I don't feel secure.
ENERGY INDEPENDENCE: An extended moratorium on oil drilling in the Gulf of Mexico, refusal to approve the Keystone Pipeline, mandatory reporting of "greenhouse gases" and a regulatory onslaught on the coal industry are not the path to energy independence. Energy dependence, which is what these policies produce, is a threat to our national security.
INVESTMENT IN SO-CALLED “GREEN JOBS”: More than a half a billion dollars of taxpayer money has been wasted on companies like Solyndra and Fister Automotive, which have filed for bankruptcy. Government should not be in the business of trying to pick winners and losers, and this administration has only picked losers. So-called “green jobs” will not save this economy.
FANNIE and FREDDIE: These giant mortgage holding companies were the catalyst for the financial meltdown of 2008 and 2009. They are still at the heart of the housing crisis and are still being heavily subsidized by the taxpayers. The administration has just allowed business as usual to continue at these entities at our expense, and received no new oversight in the big-banks-biased Dodd-Frank financial deform legislation. Speaking of which . . .
DODD-FRANK: This bill was supposed to help prevent another financial meltdown, which we are very close to again because this legislation did not solve the problem. This bill has also had the consequence of forcing a lot of perfectly healthy smaller community banks out of business due to increased regulatory requirements. In a rush to pass the bill, many of these requirements were not properly vetted by the entire banking community.
I have listened to many small banks’ horror stories about how they were unfairly shut down by the regulators due to the impact of Dodd-Frank. Where’s that report?
NATIONAL DEBT: Insane! During the Obama Administration, the national debt has increased more than 50 percent in three years to more than $16 trillion. For that spending, the federal government is bigger, the economy is still stalled, the real unemployment rate is not decreasing, gasoline prices are headed back to $4 a gallon and our national debt is now bigger than our Gross Domestic Product. None of these are good outcomes.
SPACE PROGRAM: The administration cancelled the development of our next generation of space vehicles. We will now have to "thumb a ride" with Russia or other countries. That's not leadership. That’s allowing an American strength to become a weakness.
CASH for CLUNKERS: That failed program needs no further explanation.
President Obama did give the OK to complete the mission to take out our enemy Osama bin Laden. Kudos! The administration also bailed out General Motors and Chrysler, but the taxpayers will not recoup nearly $25 billion of the $85 billion bailout.
Based on the facts above, this presidency has been a failure. But consistently, about 45 percent of the American people have the perception that President Obama is doing a good job. That's the power of carefully crafted rhetoric, selective statistics and a pro-Obama mainstream media.
Let’s not reward President Obama’s failed report card with a second term.
February 13, 2012
Time for Clarity: Russia and China are not our friends
By Herman Cain
February 12, 2012
There are many theories about why Russia and China last week vetoed a United Nations resolution endorsing an Arab League plan to transfer power from Syrian dictator Bashar Assad. Some say Vladimir Putin doesn’t want to go against a fellow strongman because a lot of them have been losing power lately, and he doesn’t want to be next.
China has tended to follow Russia’s lead on this issue – also joining in a two-party veto in September of a UN resolution condemning Assad’s autocratic behavior and the violence it is engendering.
They won’t even condemn the violence?
But there is one thing that should be abundantly clear from this action and many others that have occurred in recent years: Russia and China are not friends of the United States. Recognizing clear facts like this is what I mean when I talk, as I did during my presidential campaign, about peace through strength with clarity.
There are reasons that Russia and China pursue interests that diverge from our own – not that we justify these reasons, but we certainly must understand them and account for them as we develop strategies to counter the challenges these nations pose.
Russia and China have different cultures, different political traditions and different geo-political realities of their own to face. Russia and China may also have a different definition of peace than we do, and they certainly want our strength. That’s clear. A foreign policy that would ignore all of this would be a mistake.
But a wise foreign policy recognizes simple facts, which start with the fact that certain countries are rivals of the United States. We don’t attempt to deny the obvious when it comes to hostile regimes like those in Iran and North Korea. Indeed, the leaders of these nations do a fine job all their own of expressing their hostility toward us.
But for various reasons – many of them foolishly of our own making – we are reluctant to be clear about the nature of regimes like China and Russia.
We owe China a lot of money, of course, because we have refused for generations to be fiscally responsible in federal budgeting. They are also a major trading partner, and while there is no hard and fast rule that you can’t be a trading partner with a hostile nation, the compromised nature of our economic relationship with China makes it harder for us to see or speak clearly about the fact that their interests are not the same as ours.
In the case of Russia, the U.S. was justifiably excited after the fall of communism about the opportunity to develop a different kind of relationship with a free Russia – on everything from economic and trade relations to issues concerning nuclear proliferation. But as the one-promising Yeltsin government became mired in corruption, and it gave way to the increasingly autocratic leadership of Putin, the U.S. became unwilling to face facts. One of the worst examples was the Obama Administration’s decision to welch on the U.S. commitment to install missile defense systems in Eastern Europe – all because the Russians didn’t like it.
A nation with clarity in foreign policy matters would have understood that its first responsibility is to its own security and that of its allies. A nation that fears clarity would do what Obama did.
On the matter of Assad and Syria, Secretary of State Hillary Clinton has said the Russians were unwilling to work with the U.S. on a solution, even after the U.S. unconditionally took the option of military intervention off the table as a concession to the Russians. A nation with clarity in foreign policy matters would not make such concessions in the fruitless pursuit of support from a nation that can perhaps be worked with in certain situations, but is fundamentally not our friend.
Nations who prop up unfriendly dictators in opposition to U.S. goals are not confused about their interests. They want things that are not good for America or for our allies, and that’s because they are not our allies.
It’s OK for us to say that, and it’s essential for us to know it, because if we don’t then we’re going to keep getting played for fools. That’s not strength. That’s a sign of weakness.
February 12, 2012
There are many theories about why Russia and China last week vetoed a United Nations resolution endorsing an Arab League plan to transfer power from Syrian dictator Bashar Assad. Some say Vladimir Putin doesn’t want to go against a fellow strongman because a lot of them have been losing power lately, and he doesn’t want to be next.
China has tended to follow Russia’s lead on this issue – also joining in a two-party veto in September of a UN resolution condemning Assad’s autocratic behavior and the violence it is engendering.
They won’t even condemn the violence?
But there is one thing that should be abundantly clear from this action and many others that have occurred in recent years: Russia and China are not friends of the United States. Recognizing clear facts like this is what I mean when I talk, as I did during my presidential campaign, about peace through strength with clarity.
There are reasons that Russia and China pursue interests that diverge from our own – not that we justify these reasons, but we certainly must understand them and account for them as we develop strategies to counter the challenges these nations pose.
Russia and China have different cultures, different political traditions and different geo-political realities of their own to face. Russia and China may also have a different definition of peace than we do, and they certainly want our strength. That’s clear. A foreign policy that would ignore all of this would be a mistake.
But a wise foreign policy recognizes simple facts, which start with the fact that certain countries are rivals of the United States. We don’t attempt to deny the obvious when it comes to hostile regimes like those in Iran and North Korea. Indeed, the leaders of these nations do a fine job all their own of expressing their hostility toward us.
But for various reasons – many of them foolishly of our own making – we are reluctant to be clear about the nature of regimes like China and Russia.
We owe China a lot of money, of course, because we have refused for generations to be fiscally responsible in federal budgeting. They are also a major trading partner, and while there is no hard and fast rule that you can’t be a trading partner with a hostile nation, the compromised nature of our economic relationship with China makes it harder for us to see or speak clearly about the fact that their interests are not the same as ours.
In the case of Russia, the U.S. was justifiably excited after the fall of communism about the opportunity to develop a different kind of relationship with a free Russia – on everything from economic and trade relations to issues concerning nuclear proliferation. But as the one-promising Yeltsin government became mired in corruption, and it gave way to the increasingly autocratic leadership of Putin, the U.S. became unwilling to face facts. One of the worst examples was the Obama Administration’s decision to welch on the U.S. commitment to install missile defense systems in Eastern Europe – all because the Russians didn’t like it.
A nation with clarity in foreign policy matters would have understood that its first responsibility is to its own security and that of its allies. A nation that fears clarity would do what Obama did.
On the matter of Assad and Syria, Secretary of State Hillary Clinton has said the Russians were unwilling to work with the U.S. on a solution, even after the U.S. unconditionally took the option of military intervention off the table as a concession to the Russians. A nation with clarity in foreign policy matters would not make such concessions in the fruitless pursuit of support from a nation that can perhaps be worked with in certain situations, but is fundamentally not our friend.
Nations who prop up unfriendly dictators in opposition to U.S. goals are not confused about their interests. They want things that are not good for America or for our allies, and that’s because they are not our allies.
It’s OK for us to say that, and it’s essential for us to know it, because if we don’t then we’re going to keep getting played for fools. That’s not strength. That’s a sign of weakness.
February 8, 2012
Obama has a curious definition of fairness
February 6, 2012
by Herman Cain
As President Obama continues his class warfare rhetoric, insisting that the rich should pay more in taxes, he continues to show that he has a different definition of fairness than most of us. In addition to his so-called “Buffet Rule” and saying that it is not fair that Buffet’s secretary pays more in taxes than her billionaire boss, Warren Buffet, he recently invoked the words of Jesus to try to intimidate or shame people out of opposing his desire to raise taxes on the rich.
By the way, who defines rich? Is there a Department of Definitions that has been secretly established in Washington, D. C. that we don’t know about? Maybe it is next door to the Department of Happy, since President Obama, his administration and the Democrats believe they can make people happy by continuing to tax, spend and give away other people’s money.
The lame example of Buffet’s secretary is comparing apples and oranges. Warren Buffet’s accountants have mastered the complex and unfair tax code to shelter as much of Buffet’s income from taxation as is legally possible. By contrast, Buffet’s secretary pays income and payroll taxes on her $100,000-a-year salary.
As a result, President Obama shows once again he is not interested in fixing the real problem, which is the tax code. He wants to add the words of Jesus Christ to his inventory of class warfare rhetoric. But making people envious of other people’s money or property was not a teaching of Jesus.
By the way, Obama completely misunderstands the passage he was quoting, which was Luke 12:48. In fact, the passage was part of a parable Jesus told about money managers who had been entrusted with different levels of their master’s wealth – and those who did well with the man’s wealth were rewarded, while those who did not were beaten.
The meaning of the parable was that when God gives people gifts, He expects them to be fruitful with them – not that people who “have been given” wealth (as if wealthy people just had their money given to them) are supposed to turn it over to the government. The real meaning of the passage could not be more different from what Obama wants it to mean.
So instead of rhetoric and bad Bible teaching, let’s look at some hard income tax facts from the latest available Internal Revenue Service data. For 2008, the top 10 percent of taxpayers paid 70 percent of all income taxes. The top 50 percent of taxpayers paid 97 percent of all income taxes, which means the bottom 50 percent paid 3 percent of all income taxes.
That’s not fair enough for Obama!
Some of us know that this is not about fairness at all. It’s about total redistribution of income to punish those who work hard and take risks, and to make those who do not more dependent on Big Brother government.
The class warfare rhetoric is also not about helping the needy. Churches and community-based organizations do a much better job of helping the needy than any government program. And where do those community organizations get most of their funding from? They get it from those greedy evil “rich” people, plus a lot of people who are not rich but have big giving hearts.
If President Obama was really interested in helping more people move into the top 50 percent of taxpayers, or maybe even become a millionaire or billionaire, he and Congress would replace the current tax code and stop adding more and more regulatory requirements on businesses. The burden of both taxes and senseless regulations also make starting a new business far more difficult than it used to be.
Instead, we are going to hear another debate about extending the payroll tax cut, which most people could not even notice in their paychecks when they got it, and more about once again extending unemployment benefits with money the government does not have.
Raising taxes on the rich, or anybody, is only going to make things worse for families, businesses, the unemployed and the underemployed. That’s a fact the president and the Democrats refuse to acknowledge.
All of the president’s fairness rhetoric is just that – rhetoric. It can’t help people find jobs, buy food or gasoline, nor can it give this economy the boost it needs.
That’s unfair to all of us.
by Herman Cain
As President Obama continues his class warfare rhetoric, insisting that the rich should pay more in taxes, he continues to show that he has a different definition of fairness than most of us. In addition to his so-called “Buffet Rule” and saying that it is not fair that Buffet’s secretary pays more in taxes than her billionaire boss, Warren Buffet, he recently invoked the words of Jesus to try to intimidate or shame people out of opposing his desire to raise taxes on the rich.
By the way, who defines rich? Is there a Department of Definitions that has been secretly established in Washington, D. C. that we don’t know about? Maybe it is next door to the Department of Happy, since President Obama, his administration and the Democrats believe they can make people happy by continuing to tax, spend and give away other people’s money.
The lame example of Buffet’s secretary is comparing apples and oranges. Warren Buffet’s accountants have mastered the complex and unfair tax code to shelter as much of Buffet’s income from taxation as is legally possible. By contrast, Buffet’s secretary pays income and payroll taxes on her $100,000-a-year salary.
As a result, President Obama shows once again he is not interested in fixing the real problem, which is the tax code. He wants to add the words of Jesus Christ to his inventory of class warfare rhetoric. But making people envious of other people’s money or property was not a teaching of Jesus.
By the way, Obama completely misunderstands the passage he was quoting, which was Luke 12:48. In fact, the passage was part of a parable Jesus told about money managers who had been entrusted with different levels of their master’s wealth – and those who did well with the man’s wealth were rewarded, while those who did not were beaten.
The meaning of the parable was that when God gives people gifts, He expects them to be fruitful with them – not that people who “have been given” wealth (as if wealthy people just had their money given to them) are supposed to turn it over to the government. The real meaning of the passage could not be more different from what Obama wants it to mean.
So instead of rhetoric and bad Bible teaching, let’s look at some hard income tax facts from the latest available Internal Revenue Service data. For 2008, the top 10 percent of taxpayers paid 70 percent of all income taxes. The top 50 percent of taxpayers paid 97 percent of all income taxes, which means the bottom 50 percent paid 3 percent of all income taxes.
That’s not fair enough for Obama!
Some of us know that this is not about fairness at all. It’s about total redistribution of income to punish those who work hard and take risks, and to make those who do not more dependent on Big Brother government.
The class warfare rhetoric is also not about helping the needy. Churches and community-based organizations do a much better job of helping the needy than any government program. And where do those community organizations get most of their funding from? They get it from those greedy evil “rich” people, plus a lot of people who are not rich but have big giving hearts.
If President Obama was really interested in helping more people move into the top 50 percent of taxpayers, or maybe even become a millionaire or billionaire, he and Congress would replace the current tax code and stop adding more and more regulatory requirements on businesses. The burden of both taxes and senseless regulations also make starting a new business far more difficult than it used to be.
Instead, we are going to hear another debate about extending the payroll tax cut, which most people could not even notice in their paychecks when they got it, and more about once again extending unemployment benefits with money the government does not have.
Raising taxes on the rich, or anybody, is only going to make things worse for families, businesses, the unemployed and the underemployed. That’s a fact the president and the Democrats refuse to acknowledge.
All of the president’s fairness rhetoric is just that – rhetoric. It can’t help people find jobs, buy food or gasoline, nor can it give this economy the boost it needs.
That’s unfair to all of us.
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