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Who Will Mediscare the Dems? A Sluggish Recovery for President Obama

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Do the Math, Mr President

by Christopher Chantrill
May 07, 2011 at 12:59 pm

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PRESIDENT Obama is currently touring the United States selling his FY12 Budget 2.0 that isn’t a budget that emerged from his April 13 speech. His budget isn’t really a budget because he hasn’t actually got any numbers to back up his rhetoric.

So let’s do the numbers for him. President Obama says that he wants the rich to pay “a little more” in federal income taxes. According to the IRS, using the latest numbers, for 2008, the total income tax collection was $1,031 billion. The richest one percent paid $392 billion in federal income tax, and the richest 5 percent paid $606 billion. Wow. The richest one percent are paying almost 38 percent of the income tax and the top 5 percent are already paying about 60 percent of all federal income taxes. Let’s show the situation in class warrior terms.

The richest one percent paying a mere 38 percent of federal income taxes is a violation of the president’s principle of shared sacrifice. These rich should pay a “little more.”

What did you have in mind for “a little more” Mr. President? Five percent? That will raise about $30 billion a year on the richest five percent, and will hardly make a dent in the $1,100 billion deficit. So maybe we’d better raise the ante, and make the rich sacrifice a bit more. Heck, let’s hike their taxes by 25 percent. That will get us $150 billion a year from the richest five percent. That still knocks only ten percent of the deficit.

But wait a minute. According to usgovernmentrevenue.com, the entire haul from the individual income tax in FY2012 is budgeted at $1,140 billion. So there is no way in the world that you can close the deficit, at $1,101 billion in 2012, by asking the rich to “pay a little more.”

Mr. President. I think that maybe you need to work on your math. Because I am sure that you have no intention of taxing the worthy middle class to get that money. Here is a link to usgovernmentrevenue.com’s briefing on the Federal Income Tax to get you started.

And of course, all this math assumes that the rich will just sit there and take it. More likely, they will put their lawyers to work and figure out how to avoid paying. Too bad about the jobs that the rich don’t create for the unemployed when they are spending money on lawyers’ fees.

In the end, as we know, it is Medicare that will end America as we know it. The president’s plan is to save us from a Republican fate worse than death with a death panel of doctors and nurses diligently winkling out price gouging in the health care industry. No doubt they will be just as effective as the administration’s latest wheeze, an oil price-gouging panel at the Justice Department.

But before that, we’ll probably have a debt crisis. Naturally, at usgovernmentspending.com we have a crack team working on this.

Here’s a question for the crack team at usgovernmentspending.com: What would happen to the government’s interest payments if interest rates went up more than the administration estimates? Thank you Mr. President. I’m glad you asked. Here is an analysis of interest payments for the FY12 budget (the first one) from now through 2016. Underneath your estimates of interest rates is an input section that allows users of usgovernmentspending.com to make their own estimates.

Really Mr. President? You reckon that the average interest rate on the federal debt will only go up to 2.7 percent by 2016? Has anyone in your administration looked at the possibility that the sun won’t come out tomorrow? Suppose interest rates cranked up to 3 or 4 percent pretty soon. Then we’d have a trillion dollar deficit each year out through 2016, ending up with an average interest rate on the debt of 4.7 percent in 2016. And historically, 4.7 percent ain’t that high.

Let’s try a less extreme case, and assume that interest rates will start up in mid 2012 in order to stop a run on the dollar. Let’s assume that the average interest on the debt rises about the same as in the late 1970s, when the average interest rate on the debt went from 4.6 percent in 1978, to 5.1 percent in 1979, 5.8 percent in 1980, and then stuck at around 7 percent for most of the Reagan administration. Here’s an analysis assuming that the Fed has to start fighting inflation mid way through next year.

It gets us to trillion dollar deficits each year in the last two years of your second term, Mr. President.

Say, Mr. President, I’ve got an idea. Take a weekend out from your busy town hall schedule and spend a few hours doing the brackets at usgovernmentspending.com. You might learn enough to save our nation from sovereign default. And that would save a lot of ordinary Americans from a lot of unnecessary suffering.

Christopher Chantrill blogs at www.roadtothemiddleclass.com.

Buy his Road to the Middle Class.

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Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action


Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.”  —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison


China and Christianity

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing


Churches

[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm


Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust


Class War

In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status... Then came the triumph of Margaret Thatcher... The academics lost their power and prestige and... have been gloomy ever since.
Freeman Dyson, “The Scientist as Rebel”


Conservatism

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity


Conservatism's Holy Grail

What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph


Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh


Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism


Drang nach Osten

There was nothing new about the Frankish drive to the east... [let] us recall that the continuance of their rule depended upon regular, successful, predatory warfare.
Richard Fletcher, The Barbarian Conversion


Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State


presented by Christopher Chantrill

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