492.) The 2011 State of The Union Address

During the state of the Union Address one of the big focuses was on the massive debt that has been created over the last two years. This portion of the speech was started by passing the blame onto someone else, a common Obama trick.  President Obama said and I quote “We are living with a legacy of deficit-spending that began almost a decade ago” That is a straight face lie, yet another attempt to blame FORMER President Bush for the current administrations reckless actions. It is a vain attempt to keep the former president’s name in the mud so President Obama can use him as a step to keep his feet clean.  The dreaded truth that stems from historical fact (two evil worlds fact and truth), deficit spending was begun during the glory days of the progressive movement, President FDR believed in deficit spending. He said that we would spend our way out of debt.  The same policy that President Obama has openly endorsed.   President Bush did spend more money than he should have, this is true but President Obama’s spending has dwarfed it.

President Obama is proposing a five year domestic spending freeze, which he claims will save the country 400 billion dollars over the next decade.  While I agree with the President that we need to reign in Government spending, a freeze in government spending is not going to save the country any money. If we are currently running a deficit with the spending that we have now, how is freezing the current spending going to save any money? The answer is it won’t. The government spends more money than we give it a year. That is why we have a debt and a deficit.  The government has to cut spending to be less than the allowance that we give it.  Until then the deficit will remain and the debt will grow.  Spending has to be cut, not frozen.  We need to find trillions not billions. 

The President said in his speech “if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break. It’s not a matter of punishing their success. It’s about promoting America’s success”. Raising taxes is about promoting America’s success?  That is hard to believe sense he has said he favors raising taxes in the issue of fairness.  He believes in spreading the wealth around, that is what he wants to use taxes for.   Taxes have been used as punishments to try and nudge the American people wherever the progressives want us to go.  They don’t want us to smoke anymore so they hiked taxes on tobacco farmers and tobacco products; they created the “gas guzzler” tax so that we would buy more Toyota priuses and fewer Ford Broncos. At the start of the great depression they placed a tax on imported goods to encourage us to buy American made goods, punishing people who bought foreign goods.  Taxes are used by progressives as a method to artificially direct the market to fit their own political goals. In President Obama’s case he likes to use them to spread the wealth around, as I have pointed out before he has said that he supports raising taxes for fairness. When you raise taxes increasing taxes does not mean just a magic flow of money into the government, what that means is the government takes money from entities that create jobs, and bring money into the country.  A tax increase is an increase in the cost of business. Unlike government, business can’t just take more money or print it when they spend more money than they bring in. They have to offset increases in costs, by making cuts somewhere else.  See I know progressives have a hard time understanding this but corporations like oil companies are in the business of making money, so they have to have a profit.  How do they cut the costs, well they could cut the work force, which would increase unemployment, which means fewer people paying taxes, which means less money is being brought into the government thus lessening the effect of raising taxes on the evil rich. They cut wages, which again cuts taxes brought in by the government.  Or here is the final option, they shut down and move to a country that it is cheaper to operate in. That increases unemployment, cuts off the income the government can tax from the company’s operations in the country. A company might also raise the cost to the consumer, which reduces consumer’s purchasing power.  Most likely the result will be a combination of all of those methods mentioned above.  The job creators of the country (the wealthy), do not absorb tax increases they pass them down the line. President Obama continues to lie about tax cuts. We cannot afford spending.  We can’t not afford tax cuts because they don’t have a cost associated with them.  If tax cuts cost something that means that tax cuts would cause the government to spend money.  Tax cuts do not, let me say that again do not, underlined this time do not cost the government a dime.  To claim that tax cuts cost money means that you think the government gives us money to live on, that the money is the governments, and it just lets us have some to live on. The truth, the way it actually works, is that WE give the government money so as it can perform its duties as they are laid out in the Constitution. The money is not the governments, it is ours.  It is impossible for tax cuts to cost the government anything, because you can’t spend what is not yours. You can spend money you don’t have, that is what caused the economic crisis, and the current debt crisis. Your neighbor having 20 dollars and you have 10 does not mean you lost 10 dollars, it means you have to learn how to live with 10 dollars not 20.  The current tax rates have been on the books for ten years, and all the progressives have done is complain about how unfair they are and lie about them costing the government money rather than learn how to live within the allowance we give them.  The problem is not how much money the government is given, the problem is how they have been spending it.  The only thing that causes a debt and a deficit is irresponsible spending.  The only thing that causes the government, you, or your business to have a debt and a deficit is spending more money than they bring in.  President Obama’s complaining about the tax rate is just a way to try to hide how irresponsible he has allowed the government to spend the money we trusted it with.  He either won’t admit it, lacks the intelligence to understand that concept, or he is intentionally spending more money than the government has.  He is trying to cover his tracks and paint the rich as evil, and continually mislead the American People in one step.  

  I believe that before they should be allowed to raise any taxes they should have to prove fiscal responsibility.  They should have to do what they did to GM. No more private jets for Nancy Pelosi to fly back and forth to California on our dime, no more tax payer funded vacations for President Obama and his family, they should have to cut every law makers salary in half, cut all pensions, and cut all federal law makers benefits before they can bring a tax hike upon the American people. They are the evil CEO’s of the government corporation and they have come to the tax payers for a bail out just like GM did.  It is the same situation they want tax payer dollars, they have to earn them. I doubt they will do that though because they hold the false belief that the government is above the law.

President Obama made some mentions about social security and Medicare and Medicaid in the speech, but hardly emphases how it is entitlement spending that makes up the majority of the federal deficit. He talks about having to cut federal spending, yet he is taking a scalpel to butcher a bison. It’s a start, but he has to be willing to end things like three year unemployment welfare.  His use of code words in this speech makes me doubt his resolve.  He says invest, well invest means spend money.  Money we don’t have money they have wasted and now they want more.

President Obama wants to increase federal spending on infrastructure. Which in its self is not a bad idea; good high ways and roads are crucial to a productive country.  The problem is that one, he said that he wanted to do the same thing last year and instead of working on the infrastructure he focused on health care.  That and we have no money to invest. We have to make major cuts somewhere else before we can justify spending on anything.  I take issue with where he wants to invest money in infrastructure; one of his dream projects is to have the United States have a high speed rail system like Europe, china, and Japan.  It won’t work in the United States, not how President Obama dreams it. He wants to have the government invest billions into developing them. Now correct me if I am wrong but we have tried government run rail systems before, Amtrak comes to mind. Over the last 10 years Amtrak has lost $13,000,000,000 (13 billion dollars).  The high speed rail will cost billions to develop and if it is run anything like Amtrak it will be yet another drag on the deficit.  They wanted to put a high speed rail in Ohio that would link the Three C’s, Cincinnati, Columbus, and Cleveland.  When all was said and done the average speed of the high speed trains would have been 45 miles an hour, making it slower than driving in your car.  Let us go through the insanity of the system shall we?  Lets say you live in Columbus and want to go see a Cleveland Browns game so you drive to the station in Columbus, find a place to park (most likely have to pay for parking), and then would have to buy a ticket to go to Cleveland, wait for the train to show up.  Once you got on the train, fought for a decent seat you have to travel from Columbus to Cleveland a 125 mile trip at an average speed of 45 miles an hour. Once you finally got there you had to get a cab, rent a car to get anywhere, it was not cost effective and by this time most people’s blood would have begun to boil. The people did not want it so the new Governor John Kasich shut it down.  There is not a market for high speed passenger trains in America.  We had (relatively) high speed rail at one point in time, but we traded trains for cars.  The car represents personal freedom. You can drive where ever you want, stop when you want get out when you want.  A train is the absence of personal freedom, you get on where you are told, get off when you are told, you have to leave when you are told, and you can only go where that individual train goes.  That is why trains have never taken off in America. They don’t fit with the American spirit.  It is a progressive dream; it cuts down on the freedom the car represents. It makes everyone the same.   If the market existed for high speed rail the private American dreamer would have jumped on it by now.  

            I would like to point out that the infrastructure issue would not have come up if it was not for irresponsible government spending. You see we pay taxes every time we fill up our tank to maintain the road system. In 1980 the highway fund was raided to balance the budget. If the government had been responsible with their spending they would not have had to misuse other federal funds and our infrastructure would not have fallen behind. This is the same problem that has lead to the issue with social security the money was spent somewhere else and now that we need it its nowhere to be seen.

            President Obama also renewed his call for green energy. Green energy, this seems to be his new health care bill.  In the speech he said the nation would invest in “especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.” He harps on this notion that green energy is the way of the future and it will somehow solve all our ills. Here is the problem. Green energy as it stands right now is a joke in the industry. The private industry, the innovators of America have not yet seen any profitability of those technologies yet. The market is not there. You cannot operate solar, wind, and hydro electric power plants for what you can a coal plant.  The most viable option to replace coal power is nuclear power, but President Obama shut down Yuka Mountain the storage site nuclear waste. New reactors are extremely efficient and hardly put out any nuclear bi-products, but they still have to have somewhere to put it and President Obama insured that the facility would not exist.  He claims that green energy will save the planet, this is a drastic claim sense most of the scientific community is moving away from the concept to of manmade climate change, as the data does not support the claim.  He says that Green Energy will create jobs, Spain made that same gamble and if I recall it has not worked out well for them record high unemployment which is not good for the economy or deficit.  When market forces call for green energy green energy will develop. President Obama plans on forcing the market prematurely through taxes. Cap and Trade was his dream plan that would have taxed based on carbon emissions and caused all of our energy prices to sky rocket.  Green energy is a progressive pipe dream, and will not save the economy.

This state of the union although better than the last has left me confused. The President is calling for a freeze of federal spending, yet he wants to invest more in green energy, infrastructure, biomedical development and information technology.  The word invest means spend, to invest that means you are spending money to develop something. You can’t freeze spending yet increase it.  He is trying to use special words to mislead the public into thinking he is fiscally conservative.

President Obama has proven once again that he doesn’t understand the America. He has no faith in you; he has no faith in me. He does not believe that Americans can do great things.  He thinks that the federal government is what drives this country. He actually said it “Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need” Apparently President Obama has forgotten about men like Thomas Edison who brought us the phonograph, the telephone, and the light bulb. How about the Wright Brothers who invented modern flight in a bike shop.  What about men like Henry Ford, he built his first car in his shed. He built the car one piece at a time in the shed but once it was done he realized that it couldn’t fit through the door. The man made that kind of mistake yet went on to found the only one of the American auto makers to not be sold off to the Italians, or owned by the government. He brought the automobile to the masses, without the help of the government.    None of them took government aid to create inventions that changed the world. Need and want drive innovation, creativity and individuality fuel it.  The government is not needed.  Now many will say that was a century ago, that it could not happen today.   How about the guys who started facebook, how about the Google, how about Microsoft, or Apple? All of these people started the world changing companies. One brought computers to the masses, one brought us music at our finger tips, and one brought us the best way to find information quickly on the web.  They say the government created the internet, but private industry created the computer that made internet surfing possible.  The government tries to drive industry through taxes and regulations, all they end up doing is making it harder for people to innovate and create.  It is the American Citizen that will save our nation. To borrow the words from the late Michel Crichton, We require government absence not its help, if they can just step aside and trust in Americans, we will find a way.

*disclaimer* I am not calling for anarchy or a violent overthrow of the government.

  1. mcbery said:

    When the government calls for more taxes that means all of us will be paying a lot more for everything, eventually, even the poor who vote for taxing the rich.

  2. @mcbery – exactly progressives do not understand the free world. All they can understand is government control and government acting as a nanny state. For the progressives among u  in the free market businesses are in the business of making money. They create jobs in order to produce a product or provide a service to trade to comsumers for money.  What they seek from this trade is a profit. To earn a profit you sell your good or service for more than it cost you to produce it.  The cost of production goes up, that means the profit goes down, so the company has to change something to maintain profit.    They either raise prices or they cut production costs. To cut production costs they have several options, they can either cut wages, fire workers, or move somewhere where you can find your a cheaper place to do business.   Now I know by now progressives are probably thinking I am a jerk, and  are wondering where i am going with this, now that the basics in economics is over i can get to it.  President Obama and the rest of the progressives want to raise taxes on the evil rich who just sit around all day smoking on cigars made of 20’s and drinking stolen wine. The problem with this is that these people they want to raise taxes on are the people who run industry, which creates jobs.  What they hope that we don’t understand is that a tax hike is not a magic stream of money that just flows into government coffers with no negative impact. What a tax hike is, is a way for the government to hide that they have been irresponsible with the allowance that we give them, and in the case of the progressives it is a way to punish those who are wealthy by taking their money and giving it to people who didn’t earn it, this is something that President Obama has said in public that he believes in.  These tax hikes, that the progressives have been dreaming of for the last ten years, are taking money from the people who create jobs.  This is an increase in the cost of production. This hurts profits. Now if this was the government, costs go up a company could just print money, or just spend it anyways. But that is not an option for the world of business. They have to adhear to the methodes mentioned above raise prices, or cut costs to off set the increase in production costs. They raise prices, this lowers the buying power of the general public, as they cannot afford to buy as much. Fewer items sold, a decrease in profit same problem left before them.   So they lower wages, which lowers the buying power of the general public which leads to an economic slow down. Sense these people are not making as much money they are not paying as much in income taxes, which offsets the increase in funds the progressives claim the increase would cause. Or they cut the number of employees which adds unemployment which is really bad especially sense we are now facing an unemployment rate of almost 10%. If the unemployment rate goes up, the federal deficit goes up because government spending would go up because they would have to pay these people three years of unemployement welfair benfits.  Plus these people would no longer be paying income tax once again cutting the benfit the progressives claim would come from raising taxes.   Then of course once all of this is said and done, there is always the final option of the company shuts down and moves somewhere where they can find a better business climate.   This results in a greater loss in jobs, and a great increase in federal spending.  Now I am not saying that a tax hike will cause the terrifying end to the world. What I am saying is that the rich don’t pay taxes, we pay their taxes for them.  If their taxes go up we lose in the end.   That is why the government needs to stop listening to irresponsible progressives and get its spending in order, and cut taxes for everyone.  Cut taxes on the rich it cost less to do business here. Cut it for the poor and they have more money to buy things, which increases the profit for the rich, who can hire more people, who can spend more money, the cycle goes up instead of down.   This worked in the 1920’s, the progressive high taxes and government aid failed in the 1930’s.  I don’t want to sound like I am rambling (probably a little late for that), but i have to point this out. President Obama is only using the deficit and debt crisis as an excuse to hike taxes.  He wants to hike taxes on the rich because it is not fair that they took a risk, invested, created, invovated and got ahead. He hates that these people worked hard and got ahead. He wants to take their money and give it to someone else as an issue of fairness.  Not to punish me for my success but to reward someone else for their lack of success. Now progressives will say that government can’t cut spending because that will hurt the poor.  To that I have to say, there is nothing stopping them from spending the money that would have gone to taxes and donating it to the poor.  Progressivism, liberalism= lazyism. They want someone else to do things for them.

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