January 13, 2011

AP’s Crutsinger Fails to Explain Why U.S. Spending Continues to Increase

Two paragraphs don’t seem to belong together in Martin Crutsinger’s Associated Press dispatch on the government’s Monthly Treasury Statement for December. But there they are.

Here’s the first paragraph of interest in Martin’s missive (“Federal budget deficit narrows to $80B in December”):

Government spending during this period totaled $902.6 billion, an increase of 3.1 percent over the same period a year ago.

Now watch Crutsinger tell readers why spending should be down, perhaps without even realizing it (bold is mine):

The 2010 deficit was $1.29 trillion and followed an all-time high of $1.41 trillion in 2009. The government spent billions of dollars in that period to stabilize the financial system and try to jump-start the economy after the recession hit.

The operative numerical descriptor isn’t “billions of dollars,” it’s “hundreds of billions of dollars.”

In any event, if the described spending is no longer occurring during fiscal 2011, why is spending still up by roughly $28 billion? Inquiring minds want to know, but apparently Marty Crutsinger either doesn’t want to know, or doesn’t want us to know.

Here are a few, by no means all-inclusive reasons totally unrelated to stimulus explaining why spending has continued to sprout:

  • Department of Defense, up $11.4 billion — This may be necessary in the circumstances, but the irony of ironies is that Crutsinger spent much of fiscal 2009 obsessed with how “the wars in Iraq and Afghanistan” were causing the deficit, when increases in spending on those wars couldn’t possibly have explained more than 5% of the reason why the reported deficit went from $455 billion in fiscal 2008 to 1.4 trillion in fiscal 2009. In fiscal 2011, a 6.5% DOD increase making up over one-third of this year’s increase in spending is somehow unimportant.
  • Health and Human Services, up $14.9 billion (7%)
  • Veteran’s Affairs, up $3.2 billion (10%)
  • EPA, up $1.0 billion (53%, not a typo)

Crutsinger could have addressed these or several other spending increases (or decreases, for that matter) in the Monthly Treasury Statement. Instead, we got nothing but misdirection. We certainly didn’t get good journalism.

Cross-posted at NewsBusters.org.

Poor Illinois: Per AP, Neighboring States Are ‘Gleefully Plotting’ to Take Business, Jobs in Wake of Tax Increases

It’s not too difficult to determine where the sympathy of the Associated Press’s Christopher Wills resides in the aftermath of the Democrat-controlled legislature’s passage in Illinois of steep, “temporary” four-year income and corporate tax increases.

Wills cited neighboring states as “gleefully plot(ting)” to take business away from Illinois, claimed that the Illinois move “resolve(d)” its budget crisis (that remains to be seen), and asserted that “economic experts scoffed” at the idea that significant out-of-state business migration might occur. Oh, and he found one business threatening to leave not Illinois, but Wisconsin, because the Badger State’s governor wouldn’t accept deficit-generating light-rail money from Uncle Sam.

Here are the relevant paragraphs from Wills’s report (“Neighboring states gleeful over Ill. tax increase”; bolds are mine):

While many states consider boosting their economies with tax cuts, Illinois officials are betting on the opposite tactic: dramatically raising taxes [1] to resolve a budget crisis that threatened to cripple state government.

Neighboring states gleefully plotted Wednesday to take advantage of what they consider a major economic blunder and lure business away from Illinois. [2]

But economic experts scoffed at images of highways packed with moving vans as businesses leave Illinois. [3] Income taxes are just one piece of the puzzle when businesses decide where to locate or expand, they said, and states should be cooperating instead trying to poach jobs from one another.

“The idea of competing on state tax rates is . . . hopelessly out of date,” said Ed Morrison, economic policy advisor at the Purdue Center for Regional Development. [3] “It demonstrates that political leadership is really out of step with what the global competitive realities are.”

By going where no other state dares to tread, Illinois could prove itself to be a policy pacesetter or the opposite – a place so dysfunctional that officials created a jaw-dropping budget crisis and then tried to fix it by knee-capping the economy.

the Democrat-controlled General Assembly voted to temporarily raise personal income taxes 66 percent, from 3 percent to 5 percent. Corporate rates will rise, too – from 4.8 percent to 7 percent [4] - when Democratic Gov. Pat Quinn signs the measure.

The increase is expected to produce $6.8 billion a year for the four years it’s in full effect. [4] That should be enough to balance Illinois’ annual budget [5] and begin chipping away at a backlog of roughly $8 billion in old bills.

… Chicago Mayor Richard Daley predicted jobs will start trickling out of Illinois with little fanfare.

Notes:

  • [1] — The relevant definition of “dramatic” is “highly effective; striking.” You’re kidding, right Chris?
  • [2] — As a verb, “plot” means “to plan secretly, esp. something hostile or evil.” So trying to get business for your state is now hostile, or even evil?
  • [3] — The “experts” who “scoffed” at the idea of competition between the states probably don’t have much to say about NCR’s move out of Ohio to Georgia that was announced in June of last year. Now that Illinois has negatively altered its tax structure, it will still compete, but now it will have to do so by increasing its dependence on special tax abatements and exemptions to lure new business and to keep existing businesses in the state (Rose, a co-blogger at my home site, noted the irony last year: “Democrats constantly stomp their feet about tax cuts/incentives not working and yet that is their first line of action” when a company threatens to leave). Crony capitalism will become even more prevalent in a state that already has far too much of it.
  • [4] — “Temporary”? We’ll see. Also, Wills’s language seems to imply that that the taxes will remain partially in effect (i.e., not “in full effect”) after the fourth year. Maybe someone from Illinois could take a break from packing their bags and let me know if my suspicion is correct. Update: As suspected, and even worse than suspected — “The tax hikes, which will be retroactive to January 1, are suppose to be temporary for four years then slowly reduced until 2025.” More detail is at the link.
  • [5] — “Should” balance the budget? Again, we’ll see. The list of states failing to raise receipts by as much as originally thought by raising taxes is long. Two recent ones: Oregon and Maryland.

Wills went on to compare the top income tax rate in other states, but that misses the point. What’s important are the overall comprehensive tax burdens on individuals and businesses compared to other states — and not just neighboring ones

As to businesses, Illinois had (emphasis “had”) the 23rd-best state tax business climate for fiscal year 2011, according to the Tax Foundation. That ranking will surely fall. In the same survey, Indiana was 10th, Wisconsin 40th, and Missouri 16th. Wisconsin new Republican governor Scott Walker appears determined to undo the damage done by the his Democratic Party predecessor. But in today’s economy, why wouldn’t an Illinois company also consider any one of the other states, as formerly Ohio-based NCR did with Georgia?

For individuals, this graphic at JSOnline (click on Illinois in the U.S. map to see description) says that Illinois “has high property tax offset by low income tax.” Uh, not any more.

But the AP’s Wills did find a business that was thinking about moving:

Train-maker Talgo Inc. is threatening to leave Milwaukee because Wisconsin rejected federal funds for high-speed rail. Talgo still considers Illinois a strong possibility for its new the company’s new home, despite the tax increase, said spokeswoman Nora Friend.

Congrats to Governor Walker for rejecting the high-speed rail funds, as did new GOP Governor John Kasich in Ohio. High-speed rail is such a deficit-generating loser that accepting the money would have cost far more long-term than rejecting it. A Kasich spokesman called Ohio’s project “a train that will cost taxpayers $17 million a year that will be slow and that very few people will ride.” Given the cost overrun history of such projects, the $17 million estimate was surely a low-ball number.

The AP’s Wills could at least have tried to be objective. Instead, his report describing neighboring state governors and governments as hostile and evil (he used the word “plotting,” not me) is an uncalled-for gratuitous dig at people who are only trying to make life better for their states’ citizens. There’s legitimate reason to question whether Illinois Governor Pat Quinn and his tax-happy band of Democrat legislators have similar wishes for their own state’s residents, or if their primary goal isn’t really to maintain business as usual in Springfield at any cost.

Cross-posted at NewsBusters.org.

Latest Pajamas Media Column (‘Reaganomics vs. Obamanomics: It’s Reagan in a Rout’) Is Up

Filed under: Economy,Taxes & Government — Tom @ 8:44 am

It’s here.

It will appear here at BizzyBlog on Saturday morning (link won’t work until then) after the blackout expires.

____________________________________________________

Make sure to see the column’s key graphic.

The jobs scoreboard through 18 post-recession months (Reagan: October 1982 through March 1984; Obama: July 2009 through December 2010) reads as follows:

  • Total non-farm jobs: Reagan – 4.240 million; Obama – 72,000 (seriously)
  • Private-sector jobs: Reagan – 4.133 million; Obama – 378,000

This is even before considering today’s much larger potential workforce, and it glosses over the National Bureau of Economic Research’s contention that the country was still in a recession during October and November of 1982.

As I wrote yesterday in the pre-column tease about what this should mean to Keynesian clingers: “It’s embarrassing — no, make that humiliating.”

What follows are a couple of preemptive rebuttals.

One commenter yesterday tried to claim that the POR (Pelosi-Obama-Reid) Economy’s recession (he didn’t refer to it that way, but they own the recession, as I have demonstrated time and again during the past 30 months) was worse and/or presented more of a recovery challenge than the early 1980s recession.

Hardly. Reagan faced:

By contrast, under Obama, core inflation remains tame (though Ben Bernanke’s “quantitative easing” is running a huge risk of ruining that), and interest rates are almost at the “free money” level. Businesses and consumers aren’t reacting to these low rates because of pervasive administration-induced uncertainty, regulatory hostility, and, more recently, high oil prices, which are also an administration-induced phenomenon. The poor job growth in the first 18 months after the POR Recession ended, despite a supposedly stimulating debt buildup of more than $3 trillion that as of today is jeopardizing USA’s credit rating, is directly traceable to Obama administration policy choices.

The severity of the housing mess is the other attempted rebuttal. Putting aside that it’s really the Democratic-driven mortgage loan crisis resulting from frauds by design Fannie Mae and Freddie Mac, the whole thing could have worked itself out during the first half of 2009 if the administration had chosen the right policy prescriptions. It didn’t. Because it didn’t, we have a mediocre economic growth and a still-pathetic job market. It’s on them.

No wonder our current president (assuming it’s not a faux-triangulating pose) is reading up on Reagan. Although I suppose there’s always hope that a hardened leftist like Obama can somehow comprehend what made the Gipper so great, especially in this case his economic policies, I’m not optimistic.

Positivity: Abby Johnson reveals details of pro-life turnaround and Catholic conversion

Filed under: Life-Based News,Positivity — Tom @ 7:31 am

ppunplannedcna100111From College Station, Texas (bolds are mine; dictionary and book links — #30 on Amazon at the time of this post — added by me):

Jan 13, 2011 / 06:05 am

Despite legal challenges and personal attacks from Planned Parenthood, Abby Johnson has published a new memoir explaining why she left the abortion industry to join the ranks of the pro-life movement. Going even further, she’s also rejected contraception, and decided to enter the Catholic Church.

Johnson’s new book, “UnPlanned,” hit stores on Jan. 11, 2011, one day after the Texas-based activist addressed more than 20,000 listeners in an online broadcast. The Catholic publisher Ignatius Press has released a special edition of the book, with extra material including a foreword by Fr. Frank Pavone of Priests For Life.

In the webcast, Johnson explained how she became involved in the abortion industry, despite her strongly Christian upbringing. She found Planned Parenthood’s booth at a job fair, she said, and embraced the group’s rhetoric about reducing the rate of abortion while making it available as an matter of “personal choice.”

But through her experiences at Planned Parenthood, first as a volunteer and eventually as a clinic director, Johnson came to see the organization quite differently. As a business, Johnson said, Planned Parenthood was primarily focused on providing its most profitable service –abortion– as often as possible.

Prior to the birth of her own first child, Johnson also had two abortions herself– something she had not discussed openly until the Jan. 10 webcast, although her former friend and Planned Parenthood colleague Laura Kaminczak had disclosed it to a reporter in January 2010 without her permission.

As Johnson secretly bore this grief, she also became disillusioned with pressure to meet rising monthly abortion quotas at her clinic. Neither of these factors, however, drove her to reject Planned Parenthood’s core ideology about abortion “rights.”

What finally did, was the experience of seeing an unborn child die before her eyes on an ultrasound monitor. Due to a personnel shortage, she was called in to assist in an ultrasound-guided abortion for the first time in September 2009. She was initially disconcerted to note how much the unborn child, after 13 weeks, looked like the image she had seen of her own living daughter while pregnant with her.

The next few minutes changed Johnson’s life irrevocably, as she watched the baby –whom she had believed to be incapable of feeling anything– squirming and twisting to avoid the tube into which it would be vacuumed.

“For the briefest moment,” she writes in her memoir, “the baby looked as if it were being wrung like a dishcloth, twirled and squeezed. And then it crumpled and began disappearing into the cannula before my eyes.”

“The last thing I saw was the tiny, perfectly formed backbone sucked into the tube, and then it was gone.”

Although Planned Parenthood has denied that this abortion ever took place, their assertion conflicts with other comments from Laura Kaminczak, who said she spoke with Johnson shortly after it occurred.

Shocked by what she had seen, Johnson still initially continued her work running the clinic and promoting its work. Just a few weeks later, however, she was in the nearby office of the Coalition For Life, telling its director Shawn Carney –with whom she was well-acquainted, from his years of opposition to Planned Parenthood– that she could no longer continue helping women have abortions.

In an interview with CNA on Jan. 11, Johnson said she joined the pro-life movement to help women understand the truth about abortion, not to become a public figure. She explained that it was Planned Parenthood, not the Coalition For Life, that turned her departure into a public battle.

The organization preemptively sought a court order that would have prevented Johnson from discussing her past work. Because of the legal battle that ensued, she was not previously able to speak about many aspects of Planned Parenthood’s business model and its treatment of women. Much of the information in “UnPlanned” is reaching the public only because Planned Parenthood’s lawsuit failed.

Go here for the rest of the story.