This week marks the deadline for the so-called congressional Super Committee to meet its goal of cutting a laughably small amount of federal spending over the next decade. In fact the Committee merely needs to cut about $120 billion annually from the federal budget over the next 10 years to meet its modest goals, but even this paltry amount has produced hand-wringing and hysteria on Capitol Hill. This is only cutting proposed increases. It has nothing to do with actually cutting anything. This shows how unserious politicians are about our very serious debt problems.
To be fair, however, in one sense members of the Super Committee face an impossible task. They must, in effect, cut government spending without first addressing the role of government in our society. They must continue to insist the federal government can provide Social Security, Medicare, and Medicaid benefits in the future as promised, while maintaining our wildly interventionist foreign policy. Yet everyone knows this is a lie.
Keep in mind that the 2011 federal deficit alone was about $1.3 trillion, which means the Super Committee needs to cut that much PER YEAR rather than over a 10 year period. If Congress ever hopes to address its debt problem, it must first stop accumulating any new debt immediately, in 2012.
Federal revenue likely will be about $2.3 trillion in fiscal 2012. The 2004 federal budget was about $2.3 trillion. So Congress simply needs to adopt the 2004 budget next year and the federal government will balance outlays and revenue. That’s all it would take to produce a balanced budget right now. Was the federal government really too small just 7 years ago, in 2004? Of course not. Only Washington hysteria would have us believe otherwise.
Yet our Republican and Democrat friends on the Super Committee want to take 10 years, or even 30 years, to produce a balanced budget.
Government spending isn’t just wasteful; it is often actively harmful to stated goals. The Super Committee could simply apply 2004 spending levels across the board and a tremendous victory for fiscal sanity would be accomplished.
What seems more likely, however, is a rearrangement of the tax code in an attempt to bring in more revenue. Deductions and credits will be taken away, and the Bush tax cuts will be allowed to expire. As a result, less money will remain in the private sector to create jobs and produce economic growth. The Super Committee has an opportunity to take a small baby step in the right direction. Instead, they no doubt will take this opportunity to raise taxes and make everything worse. But increasing taxes will only diminish freedom and deepen the recession. Instead of looking for ways to hike taxes under the guise of “raising revenue,” the Super Committee should put forth a plan of real spending cuts to put America back on the path to liberty and prosperity.
Mitt Romney holds a commanding [but fluid] lead in the New Hampshire Republican presidential primary, more than double the support for his nearest rival, Texas congressman Ron Paul.
Romney, 64, is the preferred choice of 40 percent of likely New Hampshire primary voters in a Bloomberg News poll conducted Nov. 10-12. Paul places second at 17 percent, while former House Speaker Newt Gingrich is at 11 percent. All the other candidates are below 10 percent.
Ann & Kirby tell us why phone banking is the best thing (outside of donating money) we can do to help Ron Paul win the early primaries needed to secure the Republican nomination.
This is a rush transcript. If you notice any errors please report them using the “Help improve this post” link at the bottom of this post.
Judge Napolitano: It’s a new low, Republicans have now joined Democrats in beating up on the most productive people in our society. Yes, you heard me correctly, Republicans are attacking millionaires; Jon Bon Jovi, Bruce Springsteen, Quincy Jones, Ted Turner, not for their political views, but for the way they get tax breaks. This, as super-committee Republicans waver on their fiscal conservative stance in favor of a tax hike. Here with insights is a man who will never compromise his fiscal conservatism, a quality that has him surging in polls. In a recent poll, Texan Republican Congressman Ron Paul is tied for first place with Mitt Romney, Newt Gingrich and Herman Cain. Will his hoards of devotes in the great state of Iowa propel him to victory in those caucuses in less than two months. Congressman Paul, it’s always a pleasure, welcome back to Freedom Watch.
Ron Paul: Thank you, Judge.
Judge Napolitano: Are you surprised that Republican senators are saying what they’re saying? I don’t expect you to jump on a particular senator, but Senator Coburn says, “We got to stop these rich people from taking advantage of loopholes that we have written”. And Senator Pat Toomey, who once had a reputation for being as faithful to the free market as you have when he was the President of the Club for Growth, now saying, “Well, on the super-committee we might accept $1.5 in cuts for every dollar in tax hikes”. Tax hikes? Where does he come up with that?
Ron Paul: It’s never worked before and it won’t work again. And the real confusion comes from the fact that there are some rich people who get benefits from government, they work with the Federal Reserve and they get their bailouts; that’s one thing. But if you’re productive, taxing people who are productive is the worst thing that we could do. One of the reasons that they get confused on this is they don’t understand that all capital comes from savings; work effort and production, and then savings. We’ve been taught for the past 4 years that capital comes out of a printing press and out of a computer, so that’s where the confusion comes from. But we should not tax success, there’s no way that’s going to be helpful.
Herman Cain, Ron Paul, Mitt Romney and Newt Gingrich are in a dead heat as the top choices for Iowans likely to attend the Jan. 3 Republican presidential caucuses.
A Bloomberg News poll shows Cain at 20 percent, Paul at 19 percent, Romney at 18 percent and Gingrich at 17 percent among the likely attendees with the caucuses that start the nominating contests seven weeks away.
This is a rush transcript. If you notice any errors please report them using the “Help improve this post” link at the bottom of this post.
Eric: We’re less than 7 weeks from the first in the nation caucus, and Iowa Republicans have yet to settle on a single candidate. At this moment, a Bloomberg poll finds it a 4-way tie for the lead position. Our own Hans Nichols is in Washington, and he has the latest on the Republican race. Hans?
Hans Nichols: Thanks Eric, and good morning. No one has made the sale in Iowa, it’s a dead heat. Former leader of the pack, Rick Perry, has practically slid off the map. Let’s look at the numbers: Herman Cain is at 20%, Ron Paul is at 19%, Mitt Romney is at 18%, and then New Gingrich, also in that top-tier, is at 17%. But, Eric, the race is still fluid, 60% of likely caucus goers say that they could back someone else if they decide to, this is still very, very fluid. Eric?
Eric: So what is driving the race, Hans, that’s the question everybody is trying to answer? The Iowans top choice may ultimately not be their final choice, right?
Hans Nichols: Right, and it’s economic issues. According to our poll, it finds that these Iowa voters care more about jobs, taxes and government spending, than they do about the social issues. And that’s even though Iowa is doing pretty well economically; unemployment is at 6%, commodity and land prices are rising. This is poll is really a validation of Romney’s low-key Iowa strategy. His embarrassing loss to Mike Huckabee in Iowa 4 years ago still stings. Romney, at that time, sprinkled some 10 million dollars throughout the state for the win. This time around, it’s former state agricultural commissioner, Rick Perry; he’s the big spender to prepare that Iowa. Political reports say that he’s pumping $400,000 a week on to the airways to make up for some of those past debate performances. And the former leader of the pack, well, he’s now fallen to 7%. And another earlier leader, Iowa straw poll winner, Congresswoman Michele Bachmann, has dropped to 5%, Rock Santorum and Jon Huntsman are bringing up the rear. But it’s still very fluid, anyone can break this race open in the next 6 weeks.
Eric: Hans, thanks very much for a look at the Republican presidential race.
Transcript
This is a rush transcript. If you notice any errors please report them using the “Help improve this post” link at the bottom of this post.
Larry Kudlow: New tonight, an Iowa poll shows Ron Paul has vaulted to the lead. Actually, it’s a four-way top between Herman Cain, Ron Paul, Mitt Romney, and Newt Gingrich. Here now is Congressman Ron Paul.
Congressman Paul, welcome back, you are among the four dead heat front runners in Iowa. Do you have a quick thought on that, you are surging there?
Ron Paul: Well, actually I’m very pleased and the campaign is very pleased with what’s happening, but I think I’m very cautious also, we have a lot of work to do and we’ll keep plugging away. One thing I feel good about is when we do get supporters, they’re pretty solid and they don’t come and go, they’re pretty solid and they’ll stick with me. So that, to me, is very encouraging.
Larry Kudlow: Congressman, what’s your key message right now to the Republican voters in Iowa that will caucus?
Ron Paul: The main thing is, which I’ve talked about for years, that we need to dramatically change our approach to government. Not so much that you get rid of waste and fraud, which I think we should, but it’s bigger than that. I think it’s the role of government. I want to talk about our foreign policy. And, of course, you know I talk a lot about monetary policy and how monetizing debt is an encouragement for spending, but we also have to address the spending here at home, and for that reason I say you have to cut spending. That, to me, is at the top of the list, and I have proposed and I have gotten good reception on it, that we ought to cut a trillion dollars out of the first year’s budget in order to tell the world and the financial markets that we’re serious and we’re not going to just drive ourselves into this sovereign debt crisis that the rest of the world is involved in already.
The global economic situation is becoming more dire every day. Approximately half of all US banks have significant exposure to the debt crisis in Europe. Much more dangerous for the US taxpayer is the dollar’s status as reserve currency for the world, and the US Federal Reserve’s status as the lender of last resort. As we’ve learned in recent disclosures, this has not only benefited companies like AIG, the auto industry and various US banks, but multiple foreign central banks as they have run into trouble. Nothing has been solved, however, by offering up the productivity of Americans as a sacrificial lamb. Greece is set to be the first domino to fall in the string of European economies at risk. Rather than learning from Greece’s terrible example of an over-consuming public sector and drowning private sector, what is more likely from our politicians is an eventual bailout of European investors.
The US has a relatively small exposure to overwhelmed Greek banks, but much larger economies in Europe are set to follow and that will have serious implications for US banks. Greece is technically small enough to bail out. Italy is not. Germany is not. France is not. It is estimated that US banks have over a trillion dollars tied up in at-risk German and French banks. Because the urge to paper over the debt with more credit is so strong, the collapse of the Euro is imminent. Will the Fed be held responsible if the Euro brings the US dollar down with it?
The most disingenuous aspect of the narrative about the European sovereign debt crisis is that entire economies will collapse if more resources are not bilked from productive people around the world. This is untrue. Tough times are coming for the banks, to be sure, but free people always find a way back to prosperity if the politicians leave them alone. Communities within Greece are coming together and forming barter systems because they know the Euro is becoming unstable. Greeks are learning how to engage in commerce with each other, without the use of fiat currency controlled by central banks. In other words, they are rediscovering what money really is, and they are trading with each other in ways that cannot be controlled, manipulated, squandered, inflated away and generally ruined by corrupt bankers and the politicians that enable them. Farmers will still grow food, mechanics will still fix cars, people will still make things and exchange them with each other. No banker, no politician can stop that by destroying one medium of exchange. People will find or create another medium of exchange.
Unfortunately when politicians try to monopolize currency with legal tender laws, the people find it harder and harder to survive the inflation and taxation to which they are subjected. Bankers should take their dreaded haircut rather than making innocent people pay for their mistakes. The losses should be limited and liquidated, rather than perpetuated and rewarded. This is the only way we can recover.
Government debt is often considered rock solid because it is backed by a government’s ability to forcibly extract interest payments out of the public. The public is increasingly unwilling to be bilked to make bankers whole. The riots and the violence in Greece should tell us something about the sustainability of this system.
If we continue to bail out banks and bankers so they can continue to lose money, if we cavalierly put this burden on the taxpayer, it is all too predictable what will happen here.
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