James Pethokoukis

Politics and policy from inside Washington

Obama’s dangerous debt dodge

Feb 22, 2011 22:04 UTC

Americans need to fully grasp just how scary dangerous the nation’s debt problem really is. Washington sure won’t deal it unless given a firm shove by voters. The tea party needs to get a lot bigger.

So President Barack Obama does them no favor by downplaying debt interest costs to make his budget look better. While his focus on the “primary deficit” — the budget shortfall not counting debt payments — can provide a helpful fiscal snapshot, it ultimately misleads as to the true scope of the challenge.

Obama certainly isn’t the first president to try and put a favorable spin on some unpleasant financial numbers. George W. Bush, for instance, consistently neglected to include the cost of the Iraq and Afghanistan wars when submitting annual defense budgets to Congress. And recall that Bill Clinton loved to crow about putting Uncle Sam back into the black. But his surpluses would have mostly vanished if he, as continues to be the custom, hadn’t been quietly borrowing excess funding from the Social Security trust fund.

In his new conference last week, Obama stated that by the middle of the decade, his just-released budget would “not be adding more to the national debt. …  We’re not going to be running up the credit card anymore.” Yet from 2015 through 2021, the Obama budget would add $4.7 trillion to the national debt. And public debt as a share of the overall economy would rise to 77.0 percent from 76.1 percent.

But the president tossed in a qualifier: “Our annual spending will match our annual revenues.” Well, that clears things up. If you don’t count $3.7 trillion in interest payments as part of spending, the budget is balanced in 2017 and then slowly builds a tiny surplus.

The technocrats at the IMF would surely applaud. They view elimination of primary deficits —  by balancing revenue and regular spending — as a key first step to restoring fiscal health for heavily indebted nations.

But America needs to take many more steps. Obama’s primary surpluses will quickly disappear in coming decades as government healthcare spending explodes.  And if the economy grows a bit more slowly than what White House economists now forecast – say, more like the predictions from the Congressional Budget Office – Obama’s primary deficits would never disappear at all.

It also seems risky to downplay interest costs when America’s finances are more vulnerable to interest rates than those of many nations because it has to refinance its debt relatively frequently. Through September, according to the IMF, the typical maturity on U.S. debt was 4.7 years against an average of 7.1 years for advanced economies. The UK’s average was 13.3 years, with Germany and France at about half that. Even troubled Greece and Portugal borrow for longer, on average, than the United States.

Meanwhile, total federal debt net of what’s held in government accounts is currently running at 62 percent of GDP and is forecast in the budget to reach 77 percent of GDP in 2021. Mr. Market, in the form of bond investors, isn’t yet making big enough waves to force politicians to act.

Obscuring the difference between fully balancing the budget and a somewhat less disciplined approach may help ensure voters won’t, either. Unfortunately, Obama’s new attentiveness to the primary deficit looks like a political dodge.

COMMENT

Well of course you can ignore interest payments in your budget, just ask any banker or loan officer!

Posted by zotdoc | Report as abusive

Obama’s centrist shift evaporates

Feb 18, 2011 19:45 UTC

President Barack Obama’s much-trumpeted move to the center? Apparently, it doesn’t go much beyond using buzzwords such as “innovation” and employing CEOs as stage props. His 2012 budget introduction and Wisconsin incursion make that clear.

This was the week for the president to show that he had really learned the lessons of both the 2010 midterms and the shortfalls of his own economic policies. Instead, it was the American public that learned something. It learned that Obama pretty much is who he is – and he’s probably not going to change.

He’s the guy who was the U.S. Senate’s most extreme liberal. He’s the guy who told Joe the Plumber that he wanted to “spread the wealth around.” He’s the guy who tried to use the Great Recession to greatly expand the welfare state.

He’s that guy.

Obama’s 2012 budget was the first revelatory moment of the week. Even with rosy economic projections, it would still add another $9 trillion to the national debt from 2011 through 2021. And it did nothing to address entitlements, the key drivers of America’s long-term fiscal problems, even though his own debt commission gave him a plan with bipartisan support.

Even worse, Obama attempted to hide the budget’s alarming profligacy. In his news conference, Obama stated that by the middle of the decade, his just-released budget would “not be adding more to the national debt. …  We’re not going to be running up the credit card anymore.” Yet from 2015 through 2021, the Obama budget would add $4.7 trillion to the national debt. And public debt as a share of the overall economy would rise to 77.0 percent from 76.1 percent.

But the president tossed in a qualifier: “Our annual spending will match our annual revenues.” Well, that clears things up. If you don’t count $3.7 trillion in interest payments as part of spending, the budget is balanced in 2017 and then slowly builds a tiny surplus.

Yet Obama’s narrowly define surpluses will quickly disappear in coming decades as government healthcare spending explodes. And if the economy grows a bit more slowly than what White House economists now forecast — say, more like the predictions from the Congressional Budget Office — Obama’s primary deficits would never disappear at all.

But just as entitlements are the root problems of the federal budget, at the state level it’s the fat pension and healthcare benefits — unfunded to the tune of $3.5 trillion — awarded to government unions by the politicians they elected.

The result is the Battle of Madison as Gov. Scott Walker of Wisconsin tries to get a handle on a budget shortfall of $3.6 billion, as well as longer-term fiscal problems. He probably didn’t expect an encouraging word for the White House, and he was not disappointed.

As Obama told a Milwaukee television reporter: “Some of what I’ve heard coming out of Wisconsin, where they’re just making it harder for public employees to collectively bargain generally, seems like more of an assault on unions.”

Entitlements and government unions are both products of the heyday of American liberalism from the 1930s through the 1970s. Just like when Mikhail Gorbachev ascended to power in the old Soviet Union with the goal of modernizing and preserving that system, Obama hopes to do the same with America’s union-backed welfare state by making it — and funding it — more like Europe’s.

If Scott Walker in Wisconsin and Chris Christie of New Jersey are successful at the state level and Rep. Paul Ryan at the national, Obama may instead preside over its collapse.

COMMENT

Obama is clearly and without doubt a MARXIST. Just review his past and present associations.

COMMUNISM is alive and well in the U.S.A.

Americans need to wake up and see that liberals have bankrupted the country with entitlement programs that are too costly for American taxpayers, rich and poor alike.

It’s time to cut government spending by 50% STARTING AT THE EXECUTIVE AND LEGISLATIVE BRANCHES OF GOVERNMENT.

A TAXPAYER REVOLT IS COMING!

Posted by hhps | Report as abusive

No ‘substantial effect’ on long-term budget woes

Feb 14, 2011 19:50 UTC

Hey, it’s not just me pointing out the many flaws in the Obama budget. This from the Committee for a Responsible Federal Budget:

Unfortunately, the Administration does not achieve either of the fiscal goals it established for
its own Fiscal Commission. For one, the budget does  not reach primary balance in 2015.
Instead, at just over $600 billion, the deficit remains more than $100 billion away from
primary balance. Secondly, the budget does not make meaningful improvements to the longterm fiscal outlook. Few of the policies in the budget would have a substantial effect on the
trajectory of spending or revenues outside of the ten-year window.
As noted above, the level at which the budget stabilizes the debt – 77 percent of GDP – is
way too high. It is well above historical levels (about 40 percent of GDP) and the traditional
target of 60 percent of GDP – and could threaten the government’s ability to borrow in case
of a real emergency down the road. It also begins to creep up again at the end of the ten-year
window, and likely will grow substantially beyond this window.
Unfortunately, the budget doesn’t make any meaningful improvements to the largest
problem areas of the budget. The budget does keep defense costs from increasing, trim
Medicare and Medicaid spending a bit, and limit tax expenditures for high earners. But these
measures only scratch the surface when the Administration should be calling for real
defense cuts, serious changes in federal health spending, and fundamental tax reform – as
well as Social Security reform designed to achieve 75-year sustainable solvency.

Unfortunately, the Administration does not achieve either of the fiscal goals it established for  its own Fiscal Commission. For one, the budget does  not reach primary balance in 2015.  Instead, at just over $600 billion, the deficit remains more than $100 billion away from  primary balance. Secondly, the budget does not make meaningful improvements to the longterm fiscal outlook. Few of the policies in the budget would have a substantial effect on the  trajectory of spending or revenues outside of the ten-year window.

As noted above, the level at which the budget stabilizes the debt – 77 percent of GDP – is  way too high. It is well above historical levels (about 40 percent of GDP) and the traditional  target of 60 percent of GDP – and could threaten the government’s ability to borrow in case  of a real emergency down the road. It also begins to creep up again at the end of the ten-year  window, and likely will grow substantially beyond this window.

Unfortunately, the budget doesn’t make any meaningful improvements to the largest  problem areas of the budget. The budget does keep defense costs from increasing, trim  Medicare and Medicaid spending a bit, and limit tax expenditures for high earners. But these  measures only scratch the surface when the Administration should be calling for real  defense cuts, serious changes in federal health spending, and fundamental tax reform – as  well as Social Security reform designed to achieve 75-year sustainable solvency.

COMMENT

perhaps it would help us all understand if someone would put in plain english the effects of having a high and prolonged defecit. I’m conservative, but so far, I don’t see how the defecit has done much to the average joe in america. Certainly hasn’t hurt the stock market lately.

Posted by zotdoc | Report as abusive

Obama budget reveals Obama’s core

Feb 14, 2011 18:54 UTC

Here’s what President Barack Obama’s new budget tells me: He hasn’t shifted to the center, he’s shifted into 2012 campaign mode, one that let’s him be who is really is.

The budget is a political document that bets voters really don’t care much about deficits. (Over the next decade from 2012-2021, it would add another $8 trillion dollars to the national debt and take the national debt as a share of the overall economy to 77 percent from 62 percent in 2010). As such, Obama will portray himself as the jobs-first, going-for-growth candidate who does a bit of fiscal gardening on the side — just a few prudent budgetary snips here and there.

And on the other side (at least as painted by Team Obama): the fiscally austere Ryan-Rand Republicans who would savage Social Security and Medicare and recklessly slash critical investments necessary to win the future. No wonder his budget calls for cutting expected deficits over the next decade by just $1.1 trillion vs. the $3.9 trillion (including $556 billion in entitlement cuts) advocated by his own debt panel. To support his commission would mean going off message and losing a valuable campaign issue.

Any slight chance that Obama might chart a bold path on debt reduction probably died when the UK recently reported an unexpected economic decline, a drop some economists incorrectly blame on Prime Minister David Cameron’s tough-love budget. No way is Obama going to risk a renewed economic slowdown and his potential reelection. As it is, his budget forecasts average 2012 unemployment of 8.6 percent. That means Obama expects to try and win a second term in the most hostile employment climate since the Great Depression.

Oh, and tax cuts? Not there. This budget adds little to Obama’s vague State of the Union talk of cutting U.S. corporate tax rates, soon to be the highest among advanced economies. Obama only calls only for “beginning the process of corporate tax reform. Overall, he wants to raise a variety of taxes, including $700 billion in income and capital gains tax rates on wealthier Americans.

Of course, that merely circles us back to the driving force (besides ambition) behind the Obama presidency: to redistribute wealth after decades of growing income inequality and to finish weaving the social safety by creating universal healthcare. He certainly didn’t run to become an Eisenhower Republican — as Bill Clinton once referred to his administration — and comfort jittery bond markets. But markets will eventually have their say — and maybe sooner rather than later.

COMMENT

But the GOP is NEVER in campaign mode, right? This article reveals James Pethokoukis’ core more than anything else.
So let’s talk honestly about the budget. Republicans don’t care if their agenda puts hundreds of thousands of Americans out of work, by design. THey don’tcare if their cuts undermine education, law enforcement, infrastructure, and public safety. They don’t care if their budget plan undermines economic growth, competitiveness, and innovation.
But if the Obama administration wants to cut wasteful spending on military projects the Pentagon doesn’t want, all of a sudden, the GOP not only cares, but they are demanding unnecessary spending that looks, feels, and smells very much like earmarks and “make work projects” that benefit certain Republican districts.
And you have the gall to accuse Obama of being in campaign mode?

Posted by GetpIaning | Report as abusive

Obama budget skips pain for now, chooses growth

Feb 14, 2011 18:42 UTC

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By James Pethokoukis
U.S. President Barack Obama’s new budget is no Valentine’s Day love note to deficit hawks. The blueprint ignores the cost-cutting ideas of the president’s own deficit panel and will add $2.7 trillion in new debt over the next two years. It’s an economic and political bet that invites a fight with congressional Republicans.

The budget would cut cumulative projected deficits by $1.1 trillion over the next decade. That’s a bit more than 10 percent of the debt likely to be added during that span, according to Congressional Budget Office forecasts. Some two-thirds of the reduction would be achieved by spending cuts — including a five-year freeze on some domestic spending — and one-third by higher taxes.

Those proportions may not be so far away from what Obama’s deficit commission proposed in December. But the scale of debt reduction falls way short. The budget also skips the panel’s recommendations for reforming Social Security and Medicare spending, the biggest drivers of long-term deficits.

To be fair, most Republicans haven’t shown any serious inclination to address those giant problems, either. But the new budget does suggest the White House sees no mileage — economic or political — in austerity for now. After all, the U.S. economy is still generating relatively few new jobs and interest rates remain low, making government borrowing cheap and suggesting bond investors aren’t yet worried about inflation.

Obama’s team might also be keeping an eye on the UK, where big budget cuts are being blamed for a decline in GDP in the fourth quarter of 2010. The economics aside, the president next year is faced with trying to win a second term with unemployment still uncomfortably high. The new budget allows Obama to paint himself as a prudent budget trimmer and hawkish Republicans as reckless hatchet men.

But the GOP’s Tea Party faction has already forced party leaders to advocate deeper cuts in still-evolving 2011 spending. If that pattern continues and Republicans push harder for austerity, the new budget certainly hints that they will face opposition, not cooperation, from the White House. It will take more than flowers and candy to bring the two sides closer.

Why Fannie and Freddie are sticking around

Feb 11, 2011 16:21 UTC

The Obama White House finally has a kinda-sorta housing plan. But here is the thing: Fannie Mae and Freddie Mac, seized by the U.S. government back in 2008, don’t possess the political clout they used to. But the two mortgage finance giants still have a network with shared interests. That lingering influence is a big reason why they — or possibly similar-looking replacements — will be around for a while longer.

The White House and congressional Republicans agree that housing finance, a big contributor to the recent financial crisis, needs a sweeping overhaul. That includes dramatically reducing or eliminating the role of Fannie and Freddie, which have soaked up more than $150 billion in taxpayer aid since the federal takeover. But it looks like President Barack Obama’s team can’t decide on a single plan and will instead offer a menu of options for reducing government’s role in housing. And while the GOP is adamant it wants to wind down Fannie and Freddie as soon as possible, it doesn’t seem ready to start quite yet.

Rash moves are unwise when U.S. housing remains mired in a deep downturn. But all the Washington waffling isn’t a sign of prudence. A reform roadmap is way overdue. Unfortunately, inaction is tempting when pain is near and benefits distant. Democrats and Republicans are also up against an onslaught from the potential losers if the government ends or sharply reduces its support of the residential mortgage market — currently channeled through Fannie and Freddie.

And there are plenty of those folks. Real estate agents and homebuilders, of course, want housing credit to be as widely available as possible. The very existence of mortgage insurers depends on Fannie and Freddie’s requirements. Big banks are used to offloading mortgages via the securitization market which, though currently in the dumps, was formerly greased by the safety and uniformity of the government backstop. Small banks, meanwhile, worry that big banks would dominate a private-sector mortgage market. And mortgage bond investors are fearful of even a gradual removal of government support.

Overall, the real estate industry gave nearly $70 million to candidates in the most recent congressional election cycle, according to the Center for Responsive Politics. Together with the other constituencies, there’s considerable juice to stymie legislation. Sadly, the biggest hole in financial reform may continue to gape at least until the next Congress takes office in 2013.

COMMENT

“Everyone wants to get to heaven, but no one wants to die”

Funny how when it comes to embracing risk the ones who exalt the private sector seem to find a role for government.

Posted by ARJTurgot2 | Report as abusive

Geithner’s odd attack on Toomey debt ceiling bill

Feb 8, 2011 18:53 UTC

All kinds of economic policy ideas are floating around Capitol Hill at any given moment. Very few of their congressional authors receive a direct rebuke from Team Geithner over at the Treasury Department.

So how did Sen. Pat Toomey get so lucky? Well, the Pennsylvania Republican proposed a simple legislative idea: If Congress is unable to quickly agree on a plan to raise the national debt ceiling, Treasury should prioritize U.S. debt payments so America doesn’t slip into default. (Treasury estimates that the limit will be reached between April  5 and May 31. It has already taken steps to avoid a breach and is reducing the amount of money it holds in a special account at the Federal Reserve. As of Jan. 31, the total public U.S. debt stood at $14.1 trillion, or $215 billion below the limit.) Spending would have to be sharply reduced elsewhere until an agreement was reached, one that would hopefully also include deep short-term and long-term spending cuts.

As Toomey puts it:

Certainly, no one should damage the full faith and credit of the United States. In fact, Democrats and Republicans should all agree on at least one thing: Under no circumstances is it acceptable for the U.S. government to default on its debt. Not only are we morally obligaed to honor our debts, but we benefit greatly from the nearly universal conviction that those who lend to us will always be repaid, on time and in full. We should never undermine that conviction.

Timothy Geithner is having none of it, calling the Toomey plan “unworkable” in a letter to Toomey:

In fact, the legislation would be quite harmful if enacted. A simple analogy may help illustrate the problem. A homeowner could decide to “prioritize” and continue paying monthly mortgage payments, while opting to cease paying other obligations, such as car payments, insurance premiums, student loan and credit card payments, utilities, and so forth. Although the mortgage would be paid, the damage to that homeowner’s creditworthiness would be severe.

Geithner’s right hand man, Neal Wolin, also goes after Toomey’s idea on the department’s blog:

While well-intentioned, this idea is unworkable.  It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment.  Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the U.S. to stand behind its commitments.  It would therefore bring about the same catastrophic economic consequences Secretary Geithner has warned against.

Here’s the problem: Geithner and Wolin are mistaken in assigning all U.S. obligations equal weight and importance. Take Social Security benefits, for instance. They’re an obligation to be sure, but the Supreme Court has ruled recipients have no legal right to receive them. And federal budget scorekeepers don’t even include money borrowed from the Social Security trust fund in their debt-to-GDP calculations. Also, back in the winter of 1995-96, a federal shutdown meant government vendors didn’t get paid. But long-term Treasury yields actually declined during that period. It borders on the ridiculous to think international investors would flee Treasury bonds because a government contractor in Virginia was not paid in a timely matter.

Treasury’s analysis, it seems, is at heart a political one — not a financial one. The Obama administration doesn’t want the debt ceiling to be used by Republicans as an effective lever to get large spending cuts. And anything which makes the perceived risk of default less likely — such as Toomey’s bill — undercuts the White House’s scary messaging.

Bondholders may actually favor Toomey’s idea, just like California bondholders are keen on how the Golden State’s constitution makes paying general obligation debt a top priority. The best option is for Republicans and Democrats to quickly agree on spending cuts as a part of a deal to raise the ceiling. And instead of having the limit be an absolute figure in the future, total debt should instead be calculated as a share of the total economy — preferably far less than the 60 percent level recommended by the IMF. That way it would be a fiscal feature rather than a budgetary bug.

Obama tells business to share the wealth

Feb 8, 2011 03:38 UTC

A few thoughts on President Obama’s speech to the U.S. Chamber of Commerce:

1. Would it be too much trouble for him to be more specific about how deeply he wants to cut corporate tax rates? I hope he doesn’t see the OECD average of 25 percent as a floor. Canada’s rate will be dropped to just 15 percent next year. And if he really wants more of company profits to be “shared” with workers, then he ought to propose abolishing corporate taxes altogether since 70 percent of the tax burden is passed along to workers.

2. Would it be too much trouble for him to be a bit more specific about what regulations he wants to cut? The Heritage Foundation has 20 great ones for his consideration. The think tank also has this helpful piece of advice:

Rather than require agencies to identify harmful regulations during the next 120 days, or even to eliminate unwarranted rules, the order [on reviewing federal regulations] merely requires agencies to submit a “preliminary plan” for reviewing regulations sometime in the future, with the goal of making their regulatory program either less burdensome or “more effective.” And despite promises of transparency elsewhere in the order, the results of any regulatory reviews conducted are required to be released online only “whenever possible.”

3. Not surprising that the execs in attendance clapped when Obama talked about “investing” in America. That partly means transferring taxpayer money to Big Business.  And that stuff about a new social contract between government and business? Time for a Milton Friedman break:

But the doctrine of “social responsibility” taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

COMMENT

If it wasn’t apparent before the 08 elections, it should be painfully clear now that Pres. Obama views business as something that should be tolerated and controlled. He does not believe ENOUGH in the free-market system to let it work. Our economy has been resilient in the past, but Mr. Obama has created incredible uncertainty among businesspeople. He PERSONALLY is probably the number-one factor holding back business investment and hiring. Businesspeople are “people” and they rely not just on financial analyses and market studies to make decisions. They also use their intuition. Intuitively I do not have confidence in Mr. Obama that he will do right by business and he never really does anything to change that feeling. Above all, he is a master (or at least he THINKS he’s a master) at careful selection of words so that an inattentive listener will believe he is making concessions or changing his tune. In reality, he’s the same semi-socialist whom some of you elected. In that (and other) regards, I greatly prefer Mr. Bush.

Posted by mheld45 | Report as abusive

When states go bust

Feb 7, 2011 16:54 UTC

That is the headline for my piece in the latest Weekly Standard about letting US states declare bankruptcy. Here’s a taste:

It’s a solution of apparent Alexandrian elegance and simplicity: Empower America’s cash-strapped states to slice cleanly through a strangling knot of debilitating debt and government union cronyism by letting them file for bankruptcy. Long-term liabilities could be restructured, unaffordable labor contracts rewritten, fiscal health restored. No federal bailouts necessary. … Kevin Drum of Mother Jones put it this way: State bankruptcy “promises to become a pretty serious battle. For Republicans it’s got everything: The tea parties will love it, it provides an alternative to raising taxes, and .  .  . it helps defund a key Democratic interest group. What’s not to like?”

Surprisingly, quite a bit—at least among some Republicans and conservatives. In a January 24 session with reporters, House majority leader Eric Cantor brushed off the idea. … A more pointed critique was offered by members of the highly respected free-market Manhattan Institute, Nicole Gelinas and E. J. McMahon, in the op-ed pages of the Wall Street Journal and other papers. Among their many objections to state bankruptcy: It would violate the constitutions of many states; it would damage the balance sheets of banks holding a quarter of a trillion dollars in state and municipal bonds; it might even cause such investor panic as to risk repeating the 2008 financial meltdown. “Bond-market brinkmanship and bankruptcy threats can’t save the states from themselves,” Gelinas wrote in the Boston Globe on January 23.

COMMENT

The states do not need bankruptcy. They can simply default. They can outlaw public sector unions and freeze their pension liabilities. And if they modify their constitutions and their laws the states creditors will have no recourse.

As long as this is done in a roughly even handed way the creditors would not be able to challenge these actions in federal courts.

Posted by cwillia11 | Report as abusive

Obama’s big shift?

Feb 7, 2011 15:53 UTC

The president told Fox’s Bill O’Reilly that he hasn’t shifted to the center. “I’m the same guy,” Obama says.  Right, he’s the same guy — a guy who will try and push through as much of his left-of-center agenda as he can.  If he had the votes,  for instance,  Obama would certainly be pushing a cap-and-trade energy plan or higher income taxes. But he doesn’t, so it’s time for Plan B.

And at the heart of that plan is winning reelection, a goal Obama apparently believes will be much easier if America’s CEOs aren’t railing against him. Conflicts with Corporate America cuts against the post-partisan mantle is his trying to reclaim.Thus his speech today to some 200 executives at the US Chamber of Commerce.  But here is the thing:

1) Obama should try and make these folks, at least some of them, angry by taking away tax breaks and subsidies in exchange for a lower corporate tax rate.

2) Fundamentally, Obama is skeptical  of markets which is why his way of embracing the private sector is via a grand, corporatist partnership with Big Business who will rent seek with the best of them. Established giants don’t want new competitors. They don’t want a constantly churning, entrepreneurial economy. The status quo is just fine for them, especially regulations that help preserve their advantage. Innovation can be a threat.

3)  When Obama decides to rely on markets rather than government for allocating healthcare resources, then I will acknowledge a shift to the center.

COMMENT

This from the author who thinks Reagan was a conservative. Obama has cut taxes for billioniares, signed a stimulus bill that was over 30% tax cuts, increased defense spending, expanded the War on Terror, surged in Afghanistan, signed a Republican health care bill, made the Too Big to Fail banks whole, proposed off-shore oil drilling, proposed cutting entitlements, frozen government pay, and just hired the CEO of General Electric and a Chief of Staff from JP Morgan Chase. You think he’s “left of center”? Well, perhaps. You think Paul Ryan is moderate.

Posted by GetpIaning | Report as abusive
  •