Progressivism is Collapsing in on Itself, and it ain't Pretty

Why the irresponsible, angry and hateful rhetoric from the left? Because we are winning! 

Why is the poisonous progressive vituperation aimed primarily at the tea party? Because it is The Threat, the biggest gun in the pro-liberty arsenal, steadily pounding away at the walls of the statist citadels.

Gallup confirms that conservatives are consolidating gains, with an incredible 41% of Americans now self-identifying as conservative, and even greater number than the 36% who call themselves moderate. The ragged, saggy ranks of liberals continues to droop, now at 21%.

We're Killing The Beast

I still can’t believe it, but I think we are actually killing the progressive beast. It’s a long way from its final death throes, but we are slowly choking it, and it is now writhing violently, horned head, spiky tail and taloned limbs flailing mindlessly, lashing out at its tormenters. A wounded animal is dangerous. These are perilous times.

The Washington Examiner reports that as a result of the debt ceiling deal, real discretionary spending will decrease for the first time since the Korean War:

There are many reasons for conservatives to be unhappy with the increase in the debt ceiling, but they ought not overlook the very real possibility that it is a milestone in the recognition of the liberal welfare state's unsustainability. (Washington Examiner)

The editors go on to point out that entitlement programs are the real problem, and more and more Americans are waking up to the fact:

The American people understand that these welfare programs are unaffordable. According to Gallup, two out of three Americans believe Social Security and Medicare costs are either already creating a crisis for the federal government (34 percent) or will do so within 10 years (33 percent) (Washington Examiner)

Liberal Blogger Kevin Drum laments that progressive are losing, badly:

But no matter how many times we try to kid ourselves with one poll result or another, liberals just don't have that advantage.

The public is mostly in favor of raising taxes on the rich — though I suspect its support is pretty soft — but on the bigger issues they mostly aren't on our side. They think deficits are bad, they don't trust Keynesian economics, they don't want a higher IRS bill (who does, after all?), and they believe the federal government is spending too much on stuff they don't really understand.

Conservatives have just flat out won this debate in recent decades, and until that changes we're not going to be able to make much progress. (Kevin Drum – Mother Jones)

Liberal WaPo columnist Greg Sargent agrees, and provides as evidence this polling factoid about the agreed-upon cuts in the debt ceiling deal:

only 15 percent think the cuts go too far. (Greg Sargent-The Plumb Line)

He goes on to cite a fellow liberal blogger:

“We will only find success when a majority of Americans agrees with us that government is something worth fighting for,” wrote Jared Bernstein.

These smart and honest liberals have identified the crux of the progressives' problem:

A majority of Americans now agree that government is Not something worth fighting for, but rather something worth fighting Against. 

Keynesian welfare states worldwide are now exposed as wealth-sucking failures teetering on the brink of collapse. We’re not going to support more debt to pay for them. Instead we demand a move away from the dark clouds of soviet-style centrally-planned economies, and towards the light of personal liberty and free market capitalism. Here’s a crumb for the anti-war left: We’re done funding costly wars and global community organizing as well.

Bad Politics Kills Good Ideas

Reason without Passion is heartless.  Passion without Reason is brainless

I greatly respect George Will and Charles Krauthammer.  Some hotheads on the right get upset with these men from time to time, but they provide the intellectual wellspring of modern American conservatism (although Krauthammer is not a conservative, strictly speaking, he is a brilliant tactician for our side).

Patience is a Virtue

George Will reminds us how much ground the tea party has won in only a few short years, and he cheers these gains.  The Democrats have gone from the billowy expansiveness of Obama's Hope and Change ever expanding government, to now arguing over what and how much to cut.  Thanks to the tea party, we have reframed the debate and moved it onto our turf.

Having said that, Will issues a caution:

Will, a student of Burke, went on to say, “It really is fanciful to believe that the regulatory welfare state that has been built over 80 years can be substantially deconstructed in August over a debt ceiling vote. It’s going to take a little longer than that.”

“We ought to pocket these gains and prepare for the next fight – and to understand, nothing fundamentally will be changed until we change the president who is determined to veto fundamental change,” Will added. (Wehner - Tea Party Should Listen to George Will)

If that doesn't convince you, please continue reading.  Dr. Krauthammer has some words of wisdom as well:

I have every sympathy with the conservative counterrevolutionaries. Their containment of the Obama experiment has been remarkable. But reversal — rollback, in Cold War parlance — is simply not achievable until conservatives receive a mandate to govern from the White House.

  [...]they don’t have the Senate, they don’t have the White House. And under our constitutional system, you cannot govern from one house alone.(NRO-Krauthammer)

Do the Math:  We Can't Fix it all in one Bite

Aside from the political realities, we also hit a wall of math.  Obama is running annual deficits of $1.5 trillion, and the debt is over $14 trillion.  Cut all federal spending, everything, and fire every government worker and shutter every department, zeroing out these $3.7 trillion annual budgets, and it would still take over a decade to wipe out the debt. 

Another factor:  A present congresses cannot tie the hands of future ones.  Harry Reid can promise to cut one million bajillion over the next ten year all he wants, but spending is voted on year to year.  The new congress elected in 2012 will thumb its nose at such promises, since it is legally under no obligation whatsoever to fulfill them.

Add to this the fact that real people are dependent on government programs, hooked like junkies thanks to years of progressive predations that stripped them of the will and the means to care for themselves.  This cannot be fixed overnight.

"Don't fire until you see the whites of their eyes"

The GOP and tea partiers need to realize this debt ceiling fight is DC Kabuki.  It won't solve anything.  Indeed, raising the debt ceiling hastens our shambolic stagger into the pit of financial penury.  Ever known anyone or any nation to spend itself to prosperity?

The GOP need to avoid immediate draconian cuts that will be sensationalized by the Democratic party propagandists in the news media.  Smile, care, look intelligent and grown-up, and get this damned thing over with so we can shine the spotlight on the disaster scene that Obamanomics has wrought.  Ask Obama every day where the jobs are, and continue explaining to the American people how we cannot continue spending like this.

This opens a path to 2012 victory, and a GOP senate and GOP president can join with a GOP house to finally tame the government beast.  If they don't, I will be joining the passionate millions of tea partiers storming the capitol with torches and pitchforks.

National Debt: A Simple Solution

The debt limit issue is not a crisis, and resolving it still leaves us increasing the national debt by $15 trillion over the next decade.  We have problems, but the debt ceiling is the least of them.



A little snarky perspective is in order...

Was 2007 the Dark Ages? Was Grandma forced to make soup out of dewdrops and moss? Were our soldiers sent into battle with spitballs and slingshots? Were scientists and researchers shaking tin cups in doorways? Were our 18-year-olds unable to scrape together enough loans to attend our finest universities so they could prepare for a dynamic global job market by sharpening their Beer Pong and sexting skills? (Forbes - Kyle Smith)

He goes on to explain how what we are facing is nothing compared to Greece's calamity.  They are spending 50% of GDP.  Here in America...

Federal spending has averaged 20.2% over the past half-century. As recently as 2007, the last year before the (permanent?) state of emergency began, federal spending was 20% of GDP. And that takes into account the huge increases in spending on homeland security, not to mention Iraqland and Afghanistanland security. In 2011, spending is suddenly 24% of GDP. In a quarter of a century, that figure will be 33.9% of GDP if something isn’t done to alter the trend line.

So compared to Greece, our travails are a piffle.  Trim annual spending to 18% of GDP and our financial situation is stabilized.  Cut an extra 1-2 % off and we're now starting to fill in that deep hole we've been digging for over 180 years now.

The solutions are so obvious even a politician can see it...

Indeed, they are so obvious even the politicians are aware of what they are: turn Medicaid into block grants for states, reorganize Medicare as a subsidy for well-regulated private insurers along the lines of the Paul Ryan plan, raise the qualifying age for Medicare and Social Security and means-test the latter to return it to its roots as a cure for elderly poverty instead of a checkbook-abusing free-for-all.

 As a bonus, stop giving money to fetid foreign sewers full of bug-eyed screamers who hate us, and declare a moratorium on foreign military adventures and global community organizing.

Teach Government to Live on 18% of GDP

History suggests that Americans have a settled notion of what the federal government is worth: about 18% of GDP. Why should shopping for public services be any different than shopping for groceries? We Americans know what we can afford.

People like Ducky perform the useful task of reminding us it's not just income tax.  There's also payroll taxes, state, city, county and local taxes, not to mention business taxes.  Who can calculate the final horrible total that is sucked into the voracious bureaucratic beast's insatiable maw?

And I don't trust the bond market people either.  The US goose is laying golden eggs for them and these rent-seekers need that goose to stay healthy, and in debt.  If the US cleaned up it's debt and only engaged in current account-type borrowing, that would be a huge blow to the global debt markets.

Once the curtain descends on the latest DC kabuki, a good reporter would ask the president how long he thinks the US can continue to borrow $1.5 trillion per annum.  Don't hold your breath.

Kyle Smith - Debt Ceiling Panic Button 
Heritage Foundation - Balanced Budget Amendment
Mark Zandi - How to Cut the Deficit

We Are Busted

“We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.” (NY Times)

This is the new normal

Reenflating the bubble will only guarantee that we go through all this again. The massive use of credit created money out of thin air and pumped up an artificial economy that was sure to come crashing down. We were all irresponsible for spending money we didn’t have, and the bankers were irresponsible for keeping the liquor flowing even after the noisy debauch has swung wildly out of control.

Big banks win, everybody else loses

Follow the money. Everybody is selling something. International banking gets fat on sovereign debt, buying and selling it and making money on the exchange. International banks want governments to be in debt, but not dangerously so, which explains why they are for the US abolishing the debt ceiling, cheering on more government bailouts, and cautioning against austerity. They want to milk the cow, not slaughter it. Every new bailout of Greece or other irresponsible entities safeguards their investments and creates a new moneymaking opportunity for the bankers, at the expense of taxpayers.

What if everybody in the world just stood up and gave the banks a big FU? 

We are struggling to repay money that was never there in the first place. The banks did not literally give these broke nations money from their own personal stash, the banks created it out of thin air, with the help of central banks and their fictional funny money factories.

Of course, the markets shudder at such talk. Here’s the party line solution:

“What is required is a grand bargain on private, corporate and national debt, beginning with a general restructuring of debt. Short-term debt at extortionate interest rates needs to be converted into longer-term maturity with affordable interest payments. Default doesn't pay, as it causes losses to already under-capitalised banks and shuts governments out of international money markets. It also exacerbates the falling value of assets on which investment and consumption depend.” (The National)

No. Debt restructuring safeguards the rent streams for the banks by a long-term bleeding of the borrower, extracting even more interest over a longer period of time.

What’s required is a big reset where the entire world tells the banks to go screw themselves, we’re zeroing the accounts and starting over. Would international banking collapse? Probably, but a new system would emerge from the ashes. As for the threat that banks would never again loan to government, puhleeez! Does any sane person really think international finance houses would forgo the billions in annual interest payments?

I know I sound like I’m defending big government, but I’m not. I’m defending the ordinary folks who must bear these government-incurred burdens. It is we the people who ultimately must pay these grossly irresponsible debts, since government has no money of its own.

The Ravenous Beast Will Demand More Taxes Until We're Bled Dry

Even when this debt ceiling "crisis" is over, we're still in crisis. Spending will continue to be a blazing rocket, driving us all further in debt.

Scattered estimates of how much revenue the federal government "loses" allowing money to frivolously remain in the pockets of those that earned it are insufficient.

Even then, why be satisfied with mere hundreds of billions when the President is calling for bold action? Bring out the big guns and calculate the cost of not adopting the greatest tax ever invented, the Value Added Tax (VAT)! Wise Eurocrats know that the goose can be plucked naked with nary a squawk by slathering a tax on every stage of a product's life. VAT-less Washington is annually "losing" trillions!

And while we're thinking big enough to cover a fourteen trillion dollar hole, why limit calculations of "lost" tax revenue to income and transaction taxes? How much revenue is the government "losing" by not collecting a wealth tax? (Bill Frezza)

Those are just a few snippets of Bill Frezza's excellent article.  Go read the whole thing and you'll find yourself nodding your head in violent agreement.  His conclusion is brilliant, explaining what really scares the socialists of all parties in the District of Criminals:

If the chaos in Washington continues people might desperately return to the outmoded belief that our country functions best when we all think for ourselves, have the liberty to dispense our own money, and enjoy the freedom to pursue our own happiness. And we know what happened last time that radical idea caught on.

At some point we’ve got to stand up and declare that government is not worth more than 18 cents out of every dollar we earn.

A Deficit of Leadership

While Democrats and Republicans argue over how to rearrange the deck chairs, the Titanic continues to sink.  I've included links to three articles that put the debate in perspective.

Keynesianism has Failed. The Monetarists are Proven Wrong

The Fed has extended the banks trillions of dollars in easy money, but this hasn't produced a commensurate expansion of lending. Why not?

The Great Recession demonstrates that the money supply is not the ultimate driver of the economy. The ultimate driver is very simple: has the government created a safe climate for investment? (RCM - Tracinski)

Dodd-Frank: Creating Chaos out of Order

The federal government has sown chaos and uncertainty in the markets. Nobody understands Dodd-Frank.  Not the congressional dimbulbs who voted for it, not the regulators, nor the regulated. It is a blank check for government caprice and regulatory whimsy, creating a regulatory free-fire zone where bureaucrats run rampant.  Would you put your money in a game where the rules were murky and subject to reinterpretation?

The Obama administration and the Democratic Congress have [...] created a hostile climate for investment, and they have done so through one measure that is directly smothering the economic recovery: the Dodd-Frank financial reform bill. Dodd-Frank has injected a lethal dose of uncertainty into the very heart of the financial sector--and we're only halfway through the worst of this effect. (RCM - Tracinski)

Tracinski explains how this flies in the face of the concept of the rule of law, which is a cornerstone of successful markets: Making clear laws understood by all and applicable to all.

Washington, We Have a Spending Problem

Ed Morrisy explains (text and chart are from Hot Air):

... look what happened to federal revenue after the much-maligned Bush tax cuts took full effect in 2003.  Economic activity expanded rapidly — and so did federal revenues.  In fact, the economy during that period boomed, and receipts from both personal and corporate taxes peaked as a result.  The Bush tax rates, as they are properly called today, did not create a revenue vacuum; they helped produce an expansion that enhanced rather than lost revenue.

While revenues have tripled during this period, federal spending has more than quintupled.  

It’s Later than We Think

And as if you didn't have enough to worry about, James Pethokoukis explains why the debt crisis is actually much scarier than we realize. Current projections are based upon rosy government scenarios.  Those of us who live in the real world know life is more thorns than roses.  As interest rates rise (and this is inevitable), interest payments will consume us. Go read it all here: Pethokoukis – Debt Crisis Fast Track