August 1, 2011

Bottle This: ‘Small spending cuts to have little economic impact’

Filed under: Economy,Taxes & Government — Tom @ 2:01 pm

Save this for later when the blame game for the ongoing economic misery tries to shift it all to John Boehner and Republicans who, regardless of whether you think they did or didn’t fight hard enough, definitely ended up with something that doesn’t cut enough — and in terms of how normal people think, didn’t cut anything at all.

From Christopher Rugaber at the Associated Press, posted as a graphic (current link) in case he or his editors water it down later:

APonDebtDealSpendingImpact080111

Well, “big spending cuts” wouldn’t have more than a slight initial impact on growth either, while increasing it after a possibly rough quarter or two. Those who believe that statement lacks in compassion need to remind themselves that the so-called Party of Compassion (my *ass) has dragged us through 12 quarters of  Keynesian hell since the POR (Pelosi-Obama-Reid) Economy aka the Fear-Based Economy began.

As seen in the CBO’s report (final page), outlays will be $21 billion and $42 billion lower in fiscal 2012 and 2013, respectively, than the March 2011 baseline.

At the end, in reference to the possible “repeal of the Bush tax cuts” (really a tax increase compared to the tax system everyone has been used to for almost nine years), Rugaber quotes a Chase economist claiming that “cuts in federal spending and the end of the tax cut could reduce growth by about 1.5 percentage points in 2012.” Would that be enough to intimidate the revenue-raisers from ruling the day?

You would think not, but I just have one question:

Why are we allowing even a chance that it will happen?

ISM Manufacturing: Barely Expanding

Filed under: Economy — Tom @ 11:25 am

From the Institute for Supply Management:

Economic activity in the manufacturing sector expanded in July for the 24th consecutive month, and the overall economy grew for the 26th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

“The PMI registered 50.9 percent, a decrease of 4.4 percentage points, indicating expansion in the manufacturing sector for the 24th consecutive month, although at a slower rate of growth than in June. (A reading above 50 indicates expansion — Ed.) Production and employment also showed continued growth in July, but at slower rates than in June. The New Orders Index registered 49.2 percent, indicating contraction for the first time since June of 2009, when it registered 48.9 percent.

This result should have been so expected that if it didn’t happen, it would have been time to revisit this key survey’s credibility. Yet according to Reuters, “Economists had expected a reading of 54.9,” or a tiny drop, and my Business Insider email had a consensus prediction of 54.3. These people need to get out more.

Three months ago, the index was at 60.4. The 9.5-point drop is the worst three-month plunge since the final five months of 2008, when three-month drops of over 10 points happened three times in a row as a result of the onset of the POR (Pelosi-Obama-Reid) Economy aka the Fear-Based Economy.

Are we heading towards Fear-Based Recession v. 2.0?

Debt Deal Reax

Filed under: Economy,Taxes & Government — Tom @ 10:54 am

My overall reax is: Do we really 17 months or more to wait to do something more substantive? I don’t understand how everyone can be so sure.

I’m going to give that thought a workout while looking at the details in my next column, which won’t go up until later in the week.

I’m also not going to be totally convinced that it will get through … until it gets through. Remember who’s president.

Assuming for the moment that it does, let’s look at others’ reactions.

The Wall Street Journal, which ripped into Tea Partiers last week for wanting too much, wants the sensible conservative who populate the movement to feel satisfaction in the outcome, while at the same time getting in a few final digs accusing them of making the deal worse. Also note the bolded condescension:

If a good political compromise is one that has something for everyone to hate, then last night’s bipartisan debt-ceiling deal is a triumph. The bargain is nonetheless better than what seemed achievable in recent days, especially given the revolt of some GOP conservatives that gave the White House and Democrats more political leverage.

The big picture is that the deal is a victory for the cause of smaller government, arguably the biggest since welfare reform in 1996. …

… [L]iberals are howling (because) they have come to believe in the upward spending ratchet, under which all spending increases are permanent. Not any more.

Mr. Obama’s biggest gain in the deal is that he gets his highest priority of not having to repeat this debt-limit fight again before the 2012 election.

Given how much the current debate has damaged the public perception of Mr. Obama’s leadership, this will be a relief at the White House. This is part of the negotiating price that Mr. Boehner had to pay because of the back-bench revolt that showed he couldn’t guarantee a debt-limit increase with only GOP votes. This gave Democrats more leverage.

The same supposedly conservative Republicans and their talk radio minders may denounce this deal as a sellout, but we’ll be charitable and assume they’ve climbed so far out on the political ledge they don’t know how to climb back without admitting they were wrong. They’re right that this deal doesn’t “solve” our fiscal crisis, but no such deal is possible as long as liberals run the Senate and White House.

The tea partiers pride themselves on adhering to the Constitution, which was intended to make political change difficult. Yet in this deal they’ve forced both parties to make the biggest spending cuts in 15 years, with more cuts likely next year. The U.S. is engaged in an epic debate over the size and scope of government that will play out over several years, and the most important battle comes in the election of 2012.

Tea partiers will do more for their cause by applauding this victory and working toward the next, rather than diminishing what they’ve accomplished because it didn’t solve every fiscal problem in one impossible swoop.

The takeaway is the these guys are not presumptively on the Tea Party’s side, which is a significant disappointment.

Erick Ericksen at RedState doesn’t like the deal, but concedes that we’re stuck with it:

Here’s the deal — I think we should hold out till after August 3rd because I think August 2nd is an imaginary deadline.

I likewise think the super committee is going to raise taxes — and raise them in a big way.

Also, I’m convinced the GOP is lying to itself on this plan.

All that said, we’re not going to get a better deal now. The GOP is scared of its own shadow. At least, however, at least . . . at least we may get some real entitlement reform.

Lastly, the tears of the left on this are delicious. For that alone, I want to support this deal. But because of the foregoing reasons, I can’t support this deal. However, it could be worse.

Were I in Congress, I’d vote against it. All that said, I think this is it, so we might as well get used to it. Just keep track of who on the right votes against it. They’ll be the real heroes.

Ericksen’s delicious delight is typified with the reaction over at the New York Times, apoplexy rules (bolds are mine):

There is little to like about the tentative agreement between Congressional leaders and the White House except that it happened at all. The deal would avert a catastrophic government default, immediately and probably through the end of 2012. The rest of it is a nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt programs for the middle class and poor, and hinder an economic recovery. (in the real world, only because it doesn’t do enough to control spending — Ed.)

… For weeks, ever since House Republicans said they would not raise the nation’s debt ceiling without huge spending cuts, Democrats have held out for a few basic principles. There must be new tax revenues in the mix so that the wealthy bear a share of the burden and Medicare cannot be affected.

Those principles were discarded to get a deal that cuts about $2.5 trillion from the deficit over a decade.

… Negotiators have tried to make … (automatic cut mechanisms which could take effect in 2013) as unpalatable as possible to provide an incentive for the supercommittee and Congress to avert it. For Democrats, the penalty would include cuts to Medicare providers. The penalty for Republicans should have been new tax revenues, but of course they refused to consider that and got their way. Instead, their incentive will be trying to avoid large cuts in the military budget.

There will be no second hostage-taking on the debt ceiling in a few months, as Speaker John Boehner and his band of radicals originally demanded.

… President Obama could have been more adamant in dealing with Republicans, perhaps threatening to use constitutional powers to ignore the debt ceiling if Congress abrogated its responsibility to raise it. But this episode demonstrates the effectiveness of extortion. Reasonable people are forced to give in to those willing to endanger the national interest.

Why the Times is considered a legitimate participant in the national discussion is beyond me. But remember, it’s President “Let’s Be Civil” Obama who popularized the hostage-taking meme during the post-2010 elections tax discussions. He shouldn’t be a legitimate participant in the national discussion either — and ensuring that he’s not beginning in 2013 could not be more important.

____________________________________________

UPDATE, Aug. 1, 1:30 p.m.: Rush believes that tax increases will be an inevitable result of the deal. The increase would be referred to as “repealing the Bush tax cuts,” but would in reality be increases in the tax rates everyone has been used to for almost nine years. Oh, and they’ll be repealed completely, not just for high-earners (known to Democrats as “the wealthy”).

Fox 19 Cincinnati’s Sherrod Brown Interview Typifies Weak Media Coverage, Dems’ False Talking Points

(originally posted early in the morning and carried forward)

Saturday night in Cincinnati, Fox 19′s Kimberly Holmes Wiggins interviewed Ohio Democratic Senator Sherrod Brown from Washington about the state of the debt-ceiling debate. A full transcript follows.

Contained therein readers will see the untruthful establishment press memes which have dominated their coverage, and all too typical disgraceful and predictable demagoguery by Brown. Similar reports involving other Democrats likely played on stations across the nation this past weekend.

Strap on the duct tape. Here goes (bolds and numbered tags are mine; link is to the station’s video home page):

Wiggins: Hi, in Washington now, there are just three days until the U.S. defaults on its debt [1], and still no compromise.

The President and GOP leaders [2] are expressing confidence that lawmakers will reach a deal to avoid default [1] and end the spectacle in Congress. [3] This as plans from both sides of the aisle have been rejected. Still, even one of Ohio’s senators agreed the deal can be reached.

And joining me now is Senator Sherrod Brown in Washington. Now Senator, we are three days away from D-Day when we could default [1], and the House just rejected Senator Reid’s debt bill. Now earlier today, you seemed optimistic that we could come up with a compromise. Now, uh, how (laughing incredulously — Ed.) are you still optimistic that this could happen? How, because a lot of Americans don’t believe that? [4]

(more…)

Positivity: Dawn Eden recalls Archbishop Sambi’s love for the Jewish people

Filed under: Positivity — Tom @ 5:55 am

From Washington:

Jul 31, 2011 / 05:43 pm

Author and Catholic convert from Judaism Dawn Eden remembers Archbishop Pietro Sambi as a pastoral leader with a “fatherly” heart, who shared a special connection with her over his deep affection for the Jewish faith.

Archbishop Sambi, the Pope’s diplomatic representative to the U.S., died on Wednesday, July 27 at Johns Hopkins Hospital in Baltimore after lung surgery complications.

Eden, known for her 2006 bestseller “The Thrill of the Chaste,” remembers a unique and surprising series of events with the late archbishop that are forever branded in her memory.

In a July 29 interview with CNA, she recalled meeting Archbishop Sambi for the first time in 2007 at a dinner in Washington, D.C.

Eden remembered a friend introducing her to the archbishop as a Jewish convert, since the nuncio had “a special affection for the Jewish people,” having served as the papal representative to the Holy Land.

“Before I could get any words out, Archbishop Sambi looked me in the eyes with a big smile and took both my hands in his and held them tight,” Eden said.

“You must come and have tea with me at the nunciature,” Archbishop Sambi told her, “and I will show you pictures of my late friend Cardinal Lustiger and I will tell you a story about him.”

Cardinal Jean-Marie Lustiger, a renowned French archbishop who converted to Catholicism from the Jewish faith and died in 2007 just weeks earlier, was “a great friend” of Archbishop Sambi, Eden said.

“I was quite stunned,” she added, “to be immediately welcomed” by the archbishop in such an intimate, friendly way. …

Go here for the rest of the story.