When big-spending politicians in Washington pontificate about “deficit reduction,” taxpayers should be very wary. Crocodile tears about red ink almost always are a tactic that the political class uses to make tax increases more palatable. The way it works is that the crowd in DC increases spending, which leads to more red ink, which allows them to say we have a deficit crisis, which gives them an excuse to raise taxes, which then gives them more money to spend. This additional spending then leads to more debt, which provides a rationale for higher taxes, and the pattern continues – sort of a lather-rinse-repeat cycle of big government.

Fortunately, it looks like the American people have figured out this scam. By a 57-34 margin, they say that reducing federal spending should be the number-one goal of fiscal policy rather than deficit reduction. And since red ink is just a symptom of the real problem of too much spending, this data is very encouraging.

Here are some of the details from a new Rasmussen poll, which Mark Tapscott labels, “evidence of a yawning divide between the nation’s Political Class and the rest of the country on what to do about the federal government’s fiscal crisis.”

A new Rasmussen Reports national telephone survey finds that 57% of Likely U.S. Voters think reducing federal government spending is more important than reducing the deficit. Thirty-four percent (34%) put reducing the deficit first.  It’s telling to note that while 65% of Mainstream voters believe cutting spending is more important, 72% of the Political Class say the primary emphasis should be on deficit reduction. …Seventy-four percent (74%) of Republicans and 50% of voters not affiliated with either of the major parties say cutting spending is more important than reducing the deficit. Democrats are more narrowly divided on the question. Most conservatives and moderates say spending cuts should come first, but most liberals say deficit reduction is paramount. Voters have consistently said in surveys for years that increased government spending hurts the economy, while decreased spending has a positive effect on the economy.

I wouldn’t read too much into the comparative data, since the “political class” in Rasmussen’s polls apparently refers to respondents with a certain set of establishment preferences rather than those living in the DC area and/or those mooching off the federal government, but the overall results are very encouraging.

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The U.S. economy grew incredibly from 1983 to 2008. And then it all collapsed. What happened?

Nobel Prize winning economist and University of Chicago professor Gary Becker weighs in on the state of the US economy.  He gives the Bush Administration mixed reviews, but finds the current response of the U.S. Federal Reserve to the crisis troubling.

He argues that ObamaCare is a bad bill – it will increase costs and not address the real problems in the system (being that health care is employer based and out-of-pocket expenses are too low).   Now, small businesses will be taxed if they don’t provide health care, forcing many businesses to take the tax to avoid the liability and cost of employer-provided care.

Lastly, Becker, like many Americans, is optimistic about the future not because of the power of government, but because of his faith in the American people.  He says, “What I trust with the American people is that they have always had a lot of common sense. … And I think most Americans believe, and I think they are correct in that belief, that the private sector has shown that it performs better overall, not 100 percent, but…a lot better overall than the public sector does.”

Here is the full episode:

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The woman known as the “Queen of Labor” is living up to her promise to focus on “building a sustaining progressive infrastructure.”  Anna Burger, former SEIU Secretary-Treasurer, has just joined the board of directors at the Center for American Progress Action Fund (CAP Action).

CAP Action is a sister organization to the liberal think tank, Center for American Progress.  While the Center for American Progress focuses on developing new policy ideas and on “critiquing the policy that stems from conservative values,”  CAP Action focuses on how to put those policies into action – by organizing liberal grassroots groups, labor unions and other progressive partners as advocates.

John Podesta, Chairman of the Board of Directors for CAP Action, offered the following statement in the organization’s December 9th press release:

“The Center for American Progress Action Fund is pleased to welcome Anna Burger to our Board of Directors. She has been a longtime friend of the Center for American Progress and CAP Action and we’re very happy that she has agreed to help us advance our mission by serving in this new capacity.

Anna Burger has been fighting hard for progressive ideas and policies for nearly 40 years, including the visionary leadership she has provided for the progressive movement over the past decade. We face numerous opportunities and many challenges over the next two years and look forward to Anna’s help in charting our course. As we continue to push for an economy built on a strong middle class that works for all Americans, Anna’s continued leadership and experience could not come at a more important time.”

In addition to her previous post at SEIU, Burger has held many prominent positions that have played significant roles in advancing the progressive movement, including:

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From Atlanta Journal Constitution:

Two African-American Democrats on Thursday announced that they were joining the Republican Party.

Hall County Commissioner Ashley Bell and former state executive committee member Andre Walker said the Democratic Party had grown too liberal and they are finding a new home with the Republicans.

The state GOP touted Bell as the first black elected official in modern times in Georgia to leave the Democrats for the GOP. But that distinction belongs to former state Sen. Roy Allen of Savannah, who joined the Republican Party in 1994.

Bell was introduced as a Republican at a news conference Thursday at party headquarters.

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There are plenty of reason to like and dislike the tax deal between President Obama and congressional leaders. On the plus side, we dodge a big tax increase for the next two years. We also replace a goofy and ineffective “make work pay” tax credit with a supply-side oriented reduction in the payroll tax rate (albeit only for one year, so there probably won’t be much economic benefit).

On the negative side, the deal extends unemployment benefits, which has the perverse effect of subsidizing unemployment. The deal is also filled with all sorts of corrupt provisions for various interest groups such as ethanol producers.

Then there are provisions such as the 35 percent death tax. Is this bad news, because it is an increase from zero percent this year? Or is it good news because it is much lower than the 55 percent rate that was scheduled to take effect beginning next year? That’s hard to answer, though I know the right rate is zero.

But here’s one bit of good news that has not received much attention. The tax deal ends the “Build America Bonds” tax preference, which was one of the most destructive provisions of Obama’s so-called stimulus. Here’s an excerpt from a Bloomberg report.

Senate Democrats backing the subsidy, which has helped finance bridges, roads and other public works, fell short in a bid to get the program added to a bill extending the 2001 and 2003 income-tax cuts. That failure was the latest in efforts to keep the Build America program alive beyond its scheduled end on Dec. 31. …While Obama and Democrats have supported prolonging the program, they have run into opposition from Republicans critical of the stimulus package. Extensions have twice passed the Democratic-controlled House only to stall in the Senate, where the Republican minority has sufficient power to block legislation. The U.S. government pays 35 of the interest costs on Build America bonds. …State and local governments, the U.S. Chamber of Commerce and representatives of the construction industry are among the program’s advocates.

Build America Bonds are a back-door handout for profligate state and local governments, allowing them to borrow more money while shifting some of the resulting interest costs to the federal government.

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Last week I was down in Cancun, Mexico reporting on the U.N. Climate Change Summit (officially called COP16/CMP6) with Americans for Prosperity and Andrew Breitbart. It was several days of sun, surf, and U.N. conmen. I am back in the saddle here at home, traveling from the warm white sands of Cancun back to the cold white snow of Chicago. Where’s all that global warming when you need it?

At least I have the modern conveniences of natural gas to keep my house warm and coal and nuclear-fired electric to power my electronic entertainment and work devices. Unfortunately, if the con in Cancun is successful we may no longer have such luxuries.

One of the last places I visited in Cancun was the Villa de Cambio Climatico — or in English the climate change village. The exhibit was sponsored by the Mexican federal government and was set up in order to indoctrinate Mexico’s school children in the ways of environmental hokum.

At the exhibit we found what was presented as the ideal eco-friendly house. Of course, it was suitably small as the enviro-Nazis most certainly don’t want anyone enjoying a bit of elbowroom in their homes though it did have space for a few modern niceties. It had a tiny computer area, an actual flush toilet, and a four-foot-tall refrigerator that looks like it might be able to store enough food for two or three days.

But it was the laundry-room that took the cake.

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Congressman John Kline [R-MN] has been one of the House of Representatives’ most vocal opponent of SEIU’s labor board appointee, Craig Becker, as well as a vocal defender of workers’ right to choose by secret-ballot whether or not to become unionized. In that role, he has stood strong against union bosses as they have worked to strip workers right to a secret-ballot through passage of the job-destroying (and delusionally dubbed) Employee Free Anti-Choice Act.

On Wednesday, showing the change in leadership that will begin in January, Republican named Kline to be the Chairman of the House Education & Labor Committee. The HEL committee is the House committee that must approve issues affecting union elections (like EFCA). Upon being stated for the committee, Kline stated:

“Job creation and American competitiveness are vital national priorities. As Chairman, I will ensure they are at the forefront of the Education and Labor Committee agenda.”

Given the five year push by union bosses to rid employees of their right to vote by secret-ballot, as well as this week’s NLRB decision institutionalizing card-check by collusion, Kline and his fellow Republicans are well suited to re-introduce the Secret Ballot Protection Act. (more…)

You would never know, would you?  In all of the fury and progressive passion to soak the rich, no one is chattering about the expiration of unemployment benefits–except for the unemployed.  With rising gas and food prices and the holidays quickly approaching, the Democrats zeal for taxing the rich has eclipsed the need to stimulate the economy and create jobs with unemployment compensation.  As Pelosi states, it is “cruel” not to extend the benefits and typically the Republicans are blamed for this cruelty.  But, now it is the Democrats holding up the unemployment benefit extension.  And no one seems to even notice.

The agreement reached by the White House and GOP called for an extension of unemployment benefits, which now seems to be DOA according to House Dems.

The fact that the Democrats are blocking the tax cut deal between the White House and GOP begs the question of whether the Democrats are capable of governing according to the will of the American people and in a bipartisan manner.  Clearly, the Democrats are squandering this opportunity based on their Keynesian and progressive taxation ideology as exemplified here by Rep. Barney Frank.

The baseless notion that the wealthy do not pay their fair share has been argued, but facts are facts, and the rich do pay the most taxes already:

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Today, in 1941, Germany and Italy declared war on the United States. It wasn’t one of their better decisions.

Rep. Keith Ellison (D-MN) is upset that Obama’s compromise to win an extension of unemployment benefits also means that no Americans will face a tax increase next year.

He appeared on Minnesota public radio and suggested that Democrats should create a ‘crisis’ around the holidays so the GOP will extend the benefits and allow taxes to increase next year. Or, something like that.

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There’s a weird thing happening in public education.  Hardcore unions are attempting to rebrand themselves as “professional organizations.”  In fact, the American Federation of Teachers bills itself as “A union of professionals.”

Both the AFT and the larger National Education Association attempt to portray themselves as associations yet negotiate collective bargaining agreements and oftentimes act like their brethren in the industrial unions – hardly white-collar professionals.

So with the increasing call for more professionalism in the teaching ranks – and less of a collectivist mindset – conflict arises.

Consider these two recent statements by New Jersey Gov. Chris Christie and Chicago Teachers Union President Karen Lewis.

Conventional wisdom would tell us that Lewis would be demanding that teachers be treated like professionals.  Think again.

It’s clear that Gov. Christie supports the professionalism of teachers more than the teachers’ elected leader does.  That doesn’t speak well for those wishing to increase the professionalism of the career.

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Super-fan President Barack Obama makes a guest appearance on a very special episode of Mythbusters this week.

But will he still like Jamie and Adam after they bust his first two years in office?

Check out this super-secret Reason.tv trailer for this Wednesday’s show.

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In my fiscal policy speeches, I sometimes try to get a laugh out of audiences by including a Powerpoint slide with this image. Leading up to this slide, I talk about the Armey/Forbes flat tax and explain that it would eliminate the corrupt internal revenue code and replace it with a simple 10-line postcard. But I then warn that simplicity is not the same as low taxes and show the Obama slide.

But maybe jokes about Obama tax reform were a bit premature. According to the New York Times, the White House is giving serious consideration to a sweeping plan to streamline the tax system.

While administration officials cautioned on Thursday that no decisions have been made and that any debate in Congress could take years, Mr. Obama has directed his economic team and Treasury Department analysts to review options for closing loopholes and simplifying income taxes for corporations and individuals, though the study of the corporate tax system is farther along, officials said. The objective is to rid the code of its complex buildup of deductions, credits and exemptions, thereby broadening the base of taxes collected and allowing for lower rates — much like a bipartisan majority on Mr. Obama’s debt-reduction commission recommended last week in its final blueprint for reducing the debt through 2020. Doing so would offer not only an opportunity to begin confronting the growth in the national debt but also a way to address warnings by American business that corporate tax rates and the costs of complying with the tax code are cutting into their global competitiveness.

There’s actually much to like in the Administration’s potential plan. Lower tax rates will help the economy by improving incentives for productive behavior. And getting rid of distortions will further enhance growth since people no longer would have an incentive to make inefficient decisions just for tax purposes. And simplification could have a profound impact on cleaning up the horrible mess at the IRS. Moreover, a plan that trades lower tax rates for fewer tax distortions would be a welcome change from the poisonous soak-the-rich tax policy the White House has been pursuing.

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On today’s edition of Coffee and Markets, Brad Jackson is joined by Francis Cianfrocca to discuss the market reaction to Democrats potential killing of Obama’s tax cut deal, Francis will respond to Pej, and today’s Nobel Peace Prize winner, Liu Xiaobo.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Profanity, Anger Spill Over in House Democratic Caucus Meeting
Wednesday’s Show with Pej: The Liberal Outcry Over Obama’s Tax Cut Deal
Pelosi Attends Nobel Ceremony for Jailed Chinese Peace Price Winner
At Peace Prize Ceremony, Winner’s Chair Stays Empty
Liu Xiaobo: Words a Cell Can’t Hold

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Back in September, we noted that the Environmental Protection Agency (EPA) and Department of Transportation (DOT) were pushing a new scheme under which new cars sold in the U.S. would be given a letter grade assessing their “greenness,” prominently displayed on the window sticker that purchasers see when they visit their local auto dealer.  At that time, the scheme had attracted criticism from car dealers, the Alliance of Automobile Manufacturers, a majority of consumers polled by Edmunds.com and even some green types.

Now, it is taking fire from 53 Congressmen on both sides of the aisle.

On Wednesday, a letter bashing the proposal was sent to EPA Administrator Lisa Jackson and Transportation secretary Ray LaHood.  In it, the Congressmen point out that the letter-grade label downplays the number of miles per gallon a car gets– a metric the letter’s authors assert consumers are “very familiar” with and which they rely upon– in favor of the letter grade.  That letter grade, they argue, is biased in favor of certain kinds of vehicles, and favors electric cars and plug-in hybrids over all other cars– even some that are demonstrably very green, like VW and Audi TDI models, which have recently won “Green Car of the Year” awards.

“The ‘A’ and ‘A+’ categories are reserved for a very narrow range of vehicles, i.e., battery electric vehicles and plug-in hybrids. However, a fuel efficient, clean diesel vehicle would be penalized with a low or mediocre grade. Similarly, most fuel efficient SUVs and pickup trucks would rate no higher than a ‘C+’,” the letter notes.

Some critics of the labeling scheme charge that it may serve as an inadvertent boost to General Motors, since Chevrolet produces the Volt, one of the only cars that would receive one of the highest grades under the proposal.

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Will the real hostage taker please stand up.

Democratic Representative Dan Boren (D-OK) blamed democrats, and Speaker Nancy Pelosi by name, for holding the tax cuts hostage and not bringing the bipartisan package to the House floor for a vote.

That was gutsy. Speaker Pelosi won’t like to hear that. She won’t like it one bit.
Boren better bring a bodyguard to the next caucus meeting.

Via On the Record:

Greta Van Susteren: Why isn’t it being brought to the floor? Who’s not bringing it to the floor?

Rep. Boren: The Speaker.

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European Progressives are rioting over tuition hikes again, simultaneously proving to be the most in need and least deserving of an education.

Contrast the Progressive rioting mob against the politicians who are facing reality:

Wake up, America. To Progressive revolutionaries, this social breakdown is not a bug, it’s a feature of their long-term vision for overthrowing the entire system. What you are seeing on the streets of London is exactly what America’s most radical Progressive leaders want to see here in the United States.

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The experts charged with determining when recessions begin and end tell us that the latest of these unpleasant events ended a while ago. Technically, they are no doubt right. But that does not mean that the economic crisis we have been facing is over. I suspect that we have thus far only seen its first act. The drama to come may be far, far worse. To see why, one must recognize that economic downturns come in two different forms.

The economists who study recessions tend to think about them in turns of the business cycle – and rightly so, for in most cases it is the business cycle that produces the downturn. In the course of such a cycle, boom builds upon boom and bust upon bust. It is a bit like a game of crack the whip. Downturns occasioned by the business cycle are caused by overproduction. When businesses have more stock than they can sell, they stop producing and lay off workers. The workers laid off and no longer getting paychecks cut back on their consumption, and this in turn reduces the demand for goods and services and causes other businesses, which find their products and services no longer as much in demand, to curtail their efforts and lay off another set of workers. And so the recession grows, building on itself, until some businesses find that they have underproduced or underprovided for the services in demand. Then, the same process takes place in reverse with stepped-up production and a stepped-up provision of services requiring stepped-up employment, which occasions more consumption requiring another round of stepped-up production and provision of services and a further increase in employment and so forth – until production and provision once more overshoot demand. In the absence of perfect knowledge, human beings living in commercial societies are fated to suffer from an oscillation of this sort – between boom and bust.

When Barack Obama became President, his economic advisors appear to have been on automatic pilot and to have taken it for granted that this was the sort of recession that they were up against. And so they opted for a remedy that – if applied in the proper fashion, at the proper time, and  in the proper amount – might serve to hasten an economy’s recovery from a recession occasioned by the business cycle. That is, they sought to prime the pump – to increase consumption by artificial means, to borrow money from the future, put it in the pockets of certain citizens, and hope that they would spend it right away and thereby put others back to work.

Such was, at least, their pretense. In practice, of course, the so-called “stimulus bill” was a targeted measure – a massive pay-off designed to reward the public-sector employees and unionized workers involved in infrastructure construction who make up core constituencies within the Democratic Party and to do so at the expense of those whose taxes the Democrats intended in the future to raise. Obama’s advisors did not worry much about the manner in which the “stimulus” was to be applied, its timing, and amount, however. For they took it for granted that the expenditures would do no immediate damage to anyone and that the economy would bounce back quickly in any case, as it always does when the downturn is caused solely (or at least primarily) by the business cycle.

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