Everybody worried about the economy needs to chill, Valerie Jarrett’s got this…

White House Senior Advisor Valerie Jarrett spoke at the Student Summit at North Carolina Central University and claimed unemployment stimulates the economy.

Her reasoning behind this is people take their unemployment checks and “go out and spend it” which “help(s) stimulate the economy.”

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Sometimes, something is so obvious even the left has to admit it. US companies have long suffered under one the highest corporate income tax rates in the world. In April the disparity will get worse, as Japan is set to lower its corporate tax rate to below the U.S.

Even Barack Obama recognizes this is a problem and today announced a plan to lower the corporate tax rate.

Treasury Secretary Timothy Geithner said Wednesday the current business tax system is bad for business and for job-creation and argued that President Barack Obama’s plan to reduce corporate tax rates to 28 percent would make the tax system more globally competitive.

So, even a leftist administration is admitting that high tax rates hurt competitiveness and dampen job creation. Can someone send some smelling salts to Paul Krugman and the palace guard at MSNBC?

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He’s been there, done that.

Slugging it out with Mitt Romney, having millions of dollars of negative ads thrown at him.

Now, with Rick Santorum going toe to toe with Mitt, and social issues taking center stage, Newt Gingrich is focusing on kitchen table topics, like the price of gasoline, and making sure young people understand the danger this country will be in if President Obama is re-elected.

Though some have left Newt for dead, Rush Limbaugh said on Monday, “I think there’s a possibility of something happening nobody’s talking about — and that’s the reemergence of Newt. Keep a sharp eye. Anything’s still possible.”

In Tulsa on Sunday, the former House Speaker accused the White House of allowing political correctness to trump national security by refusing to acknowledge the threat of Islamic extremism. Mr. Gingrich told a crowd of 4,000 students and supporters at Oral Roberts University:

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In his weekly address this past weekend, President Obama spoke specifically about corporate taxes on manufacturing and on outsourcing jobs, echoing his words from his State of the Union address last month:

No company should get a tax break for outsourcing jobs. Instead, tax breaks should go to manufacturers who set up shop here at home. Bigger tax breaks should go to high-tech manufacturers who create the jobs of the future. And if you relocate your company to a struggling community, you should get help financing that new plant, that new equipment, or training for new workers. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding businesses that create jobs here in America. And Congress should send me that kind of tax reform right away.

What President Obama calls a “tax break for outsourcing” is really no tax break at all. America has the highest corporate tax in the world. America’s corporate tax rate is nearly three times that of  the financially flailing  Greece. Companies are not given a tax credit or subsidy specifically for outsourcing, but by outsourcing, their costs become lower as often the regulatory burden is smaller as are other costs.  Additionally, American companies who have foreign subsidiaries pay taxes both to that foreign country and the US, and these companies pay taxes if those profits are repatriated.

As the Cato Institute notes “corporate income taxes are the most distortive, and hence the most harmful for economic growth.” Making America’s corporate tax rates competitive with the rest of the world will help drive jobs back to America, but the Obama administration has it backwards by suggesting the corporate tax reduction should follow companies “insourcing” jobs. Even in spite of the fact that President Obama’s deficit reduction commission proposed corporate tax reductions and that he himself discussed reductions in his 2011 State of the Union address, he has not made any concerted effort to reduce the corporate tax. In fact, his administration has even recently spoken of levying a “global minimum tax” to prevent American companies from “escaping doing their fair share” by outsourcing.

One only needs to look to President Obama’s home state of Illinois to find how dead wrong President Obama is on this issue.

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Taking a break from His busy schedule as the world’s savior and redeemer, Jesus Christ found time two weeks ago to immerse himself in United States Presidential politics, endorsing Obama’s tax plan on wealthy earners. Or at least the President believes he did. At the National Prayer Breakfast, he invoked the Christian savior in order to sell his tax reform plan to a more religious audience, saying, “For me as a Christian, it also coincides with Jesus’ teaching that for unto whom much is given, much shall be required.”

More recently, this week, in line with his increasingly partisan rhetoric, President Obama unveiled his annual budget proposal, calling for over a trillion dollars in tax increases on America’s most successful citizens. Indeed after taxing capital gains and dividends as real income, repealing the Bush tax cuts, and factoring in a 4% surtax for Obamacare, President Obama’s budget proposal would triple the tax burdens of many wealthy and middle income earners. Although President Obama now claims to be a representative of Jesus’ teachings, his new tax plans would probably make the Christian Savior quite disappointed.

President Obama contends that since Jesus Christ placed significant emphasis on charity, the Savior would favor a tax policy that institutionalizes such philanthropy by forcibly redistributing wealth from the rich to the poor. Through taxation, the President seeks to enforce mandatory charity and make wealthy Americans relinquish larger portions their income to the government regardless of their will or intention. However Jesus taught in Corinthians 9:7, “Every man according as he purposeth in his heart, so let him give; not grudgingly, or of necessity: for God loveth a cheerful giver.” When paying taxes, one determines their donation based on the mandatory payments established by the government rather than the generosity of their own being. Thus Jesus Christ would not view increased taxation as being in line with his teachings, which judge believers based on the voluntary sacrifices that they impose upon themselves for the benefit of others.

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Imagine a five year moratorium on all enforcement of gun laws. What would happen?

Would the fears and apprehensions of gun control activists come true? Or, would we see a re-awakening of the electorate’s supervision of our public servants and a much greater excitement about self-rule?

I think the re-awakening would transpire. Heritage of sovereignty would come alive and the government/governed rapport would improve immensely. You see, Americans do not hate their government; we prefer our roads to be safe, our meat inspection to be reliable, and our votes to be righteous (and counted). What we also prefer is respect for the Sovereign.

What would happen if the United States enjoyed a moratorium on restrictions on equipment for rifles, a moratorium on the enforcement of types of guns, acoustic suppressors, length of a rifle, magazine capacity or where and when one can concealed carry? What would change?

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Progressive loon Nancy Pelosi (D-CA) has argued time and again that unemployment benefits are a great way to create jobs. As Big Government readers know, Pelosi isn’t the only congressional Democrat to build a career coaxing the masses into Washington’s crushing embrace.

Where there’s a Progressive economic fallacy, Senator Sherrod Brown (D-OH) is never far away. Sherrod seems to think the U.S. economy performs best with bureaucrats working all the levers. This is his 20th year in Congress, so maybe we should forgive his ignorance of how a free market works!

During the 2010 debate over extending the Bush tax cuts, Sherrod made one of his frequent MSNBC appearances to share his rendition of the broken window fallacy:

As an Ohioan, Chris Matthews fawning “you’re the best there is on this argument” is not what I hope for from my senator.

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Here we go again.  Asking the question: Should we raise tax rates or lower rates to close the deficit?

The President and many a Democrat think raising tax rates is the way to go.  They stand behind their belief that government funding can drive the economy and cite John Maynard Keynes as their patron saint.  They want to raise taxes to pay for economic “stimulation.”

But what if Keynes agreed with Republican on lower taxes?

President Obama has used Big Government to its fullest extent to turn the economy around.  Economic and job recovery was promised if we passed the “Stimulus” bill, Obamacare and support such policies as funding Solyndra.  Despite a lack luster economy and record long 8+% unemployment, the President and his supporters continue to tout a government led economy in their modern version of Keynsian economics.

But is that really what Keynes believed?  In a word: No.

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All things good and bad come to an end, and that is true of the long recession, which, according to the economic statisticians, we are in no longer.  When the jobs numbers for last month came in President Obama was quick to proclaim that the recovery is on track, and let us hope he is correct.  But the story can’t end there if the country is truly to be restored to economic health.

There are lessons to be learned about government policy actions, which have been adversely affecting the private sector where jobs are created. While employers are beginning to hire again, real and sustained growth historically has been stimulated by new business start-ups, especially among small businesses. While there has been an encouraging uptick in job creation, net of jobs lost, the level of new business start-ups still lags well behind pre-recession levels.  And while, as we stated in our last essay, the job creation numbers for the last couple of months have certainly been encouraging, we cannot lose sight of the reality that the share of working-age people in the labor force (the so-called participation rate) has declined to the lowest level in 29 years.

Fed Chairman Bernanke correctly stated last week that the technical improvement in the unemployment rate obscures the vulnerabilities in the job market. “It is very important to look not just at the unemployment rate, which reflects only people who are actively seeking work,” Bernanke said in response to a lawmaker’s question during testimony last week, “There are also a lot of people who are either out of the labor force because they don’t think they can find work” or who have taken part-time jobs.

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Capitol Alert

Gov. Jerry Brown wants to hit California’s highest-income taxpayers with billions of dollars in new taxes, and is jousting with other groups with their own tax-the-rich measures over which, if any, will win voter approval.

But the number of Californians with $500,000-plus annual incomes declined dramatically from 2007 to 2009 as the state’s economy stagnated, leaving fewer to tax, the California Taxpayers Association points out in a compilation of data from the Franchise Tax Board.

The latest FTB statistical report covers the 2009 tax year, and Cal-Tax points out that it listed just 98,610 California tax returns with adjusted gross income of $500,000 or more, down nearly a third from the 146,221 in 2007. Data for 2010 are not yet available.

Those 98,610 tax returns were just over a half-percent of the 14.6 million returns filed for 2009, but they accounted for 18.8 percent of the taxable income and 32 percent of the income taxes paid that year.

Economists believe that most of the decline reflects lower incomes, rather than an exodus of high-income taxpayers from the state, but there are no hard data on that point.

Oh but there is plenty of hard data on that point. In fact, this is nothing new. Over the last few years, we have been witnessing more than $100 billion in combined state deficits and the governors of these states such as California, New York, and Illinois to only name a few, are trying the Obama-style soak the rich policies.

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The city of Harrisburg is Ground Zero for America’s municipal debt crisis.

Pennsylvania’s capital city has liabilities estimated at $610 million, which is nearly 10 times its annual budget. The city is so deep in the red that last year it attempted to file for bankruptcy. Reckless spending did more than ruin Harrisburg’s balance sheet; it crowded out private industry and distracted from the city’s core functions. Today, Harrisburg is a dangerous, poverty-stricken city, with failing schools and a shrinking population.

Harrisburg’s fiscal nightmare may be a harbinger of things to come for American cities. In the mid-’90s, local governments embarked on a spending binge, bringing total municipal debt in the United States to more than $2.8 trillion. Along with Harrisburg, Jefferson County, Alabama, Vallejo, California, and Central Falls, Rhode Island have filed for bankruptcy in the past few years. Several more cities are on the brink of default, largely thanks to taxpayer-financed stadiums, museums, housing, commercial complexes, other misconceived economic development projects, and runaway public sector salaries, pensions, and benefit packages.

Few cities can top Harrisburg’s recklessness when it comes to spending and borrowing.

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Early last year, the Center for Freedom and Prosperity released this video, narrated by yours truly, making the case that the United States and other nations should shift from a tax-and-transfer entitlement scheme to a system of personal retirement accounts.

Some left wingers criticized the idea, saying the big drop in the stock market in 2008-2009 is proof that personal retirement accounts were too risky.

You won’t be surprised to learn, though, that they are wrong. It is true that retirement income fluctuates with a system of personal accounts, but that simply means that it is difficult to predict how much more income one would enjoy when compared to being stuck with Social Security.

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As discussed earlier this week, the most important number in Obama’s budget is that the burden of government spending will be at least $2 trillion higher in 10 years if the President’s plan is enacted.

But there are also some very unsightly warts in the revenue portion of the President’s budget. Americans for Tax Reform has a good summary of the various tax hikes, most of which are based on punitive, class-warfare ideology.

In this post, I want to focus on the President’s proposals to increase both the capital gains tax rate and the tax rate on dividends.

Most of the discussion is focusing on the big increase in tax rates for 2013, particularly when you include the 3.8 tax on investment income that was part of Obamacare. If the President is successful, the tax on capital gains will climb from 15 percent this year to 23.8 percent next year, and the tax on dividends will skyrocket from 15 percent to 43.4 percent.

But these numbers understate the true burden because they don’t include the impact of double taxation, which exists when the government cycles some income through the tax code more than one time. As this chart illustrates, this means a much higher tax burden on income that is saved and invested.

The accounting firm of Ernst and Young just produced a report looking at actual tax rates on capital gains and dividends, once other layers of tax are included. The results are very sobering. The United States already has one of the most punitive tax regimes for saving and investment.

Looking at this first chart (click to enlarge), it seems quite certain that we would have the worst system for dividends if Obama’s budget is enacted.

The good news, so to speak, is that we probably wouldn’t have the worst capital gains tax system if the President’s plan is enacted. I’m just guessing, but, based on an examination of this chart (click to enlarge), it looks like Italy (gee, what a role model) would still be higher.

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Now that the Occupy movement has been coat-tailed and co-opted by big labor and big government forces that should by definition be their targets of dissent, the shuffled miscellany of loose-cannoned conniptions that’s become the movement is conspicuous even to ultra-left-wing social critics.

The protests of last week from Oakland to Portland to the Super Bowl to CPAC were testament to this, but perhaps a rally planned today in Beverly Hills will signal a healthy shift.

During the Ohio fight over Issue 2, which would have curbed collective bargaining “rights” of public sector industries including Ohio police forces, Occupy Columbus protesters took to the streets in defense of cops. Meanwhile in Oakland, Portland, and Washington, D.C., Occupiers last week took to the streets to chant “Fuck the police!” “All cops are bastards!” “No pigs!” and to throw bricks in cops’ faces.

The #OccupyOakland rally dubbed their march the “Fuck the Police Rally,” noting to its attendees: “If you identify as peaceful and are likely to interfere with the actions of your fellow protestors in any way…you may not want to attend this march. It is a militant action. It attracts anti-capitalists, anti-fascists and other comrades of a revolutionary bent. It is not a march intended for people who are not fully comfortable with diversity of tactics.” So apparently Occupy protesters have cops’ backs, that is until they’re reminded that cops are hired by the public specifically to stop people just like them.

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On Monday, the Ranking Member of the Senate Budget Committee Sen. Jeff Sessions blasted President Barack Obama’s $3.8 trillion 2012 budget plan as being a fiscal charade of breathtaking proportions and “one of the most spectacular fiscal cover-ups in American history.”

According to Sen. Sessions, President Obama’s claim that his plan will achieve $4 trillion in deficit reduction over ten years is utter nonsense and that the actual figure, once stripped of accounting gimmicks, is actually a paltry $273 billion.

Under this plan, we will accumulate $11 trillion in new gross debt—the $4 trillion reduction in deficit is nowhere to be found.When the gimmicks are removed, spending even rises $1.5 trillion above current projections—$47 trillion in total. Annual spending will rise by 62 percent between 2011 and 2022. There are no real reforms and the new taxes are used to fund more wasteful Washington spending. So even with almost $2 trillion in job-crushing tax hikes, the president remains incapable of reducing the deficit—he just can’t resist the temptation to spend the money.

Sen. Session’s outrage at President Obama’s disingenuous budget, which would add $1.9 trillion in new taxes, comes on the heels of Obama Chief of Staff Jack Lew’s misleading assertion that the reason the Senate has failed to pass a budget resolution is because of Republican opposition.  The Washington Post Fact-Checker gave that claim four Pinocchios for dishonesty and said Mr. Lew’s statement was comprised of “highly misleading language that blamed Republicans for the failure of the Democratic leadership.”

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On Monday, White House National Economic Council Director Gene Sperling called for a “global minimum tax” to ensure that “nobody is escaping doing their fair share.”

In his comments, Mr. Sperling added: “we will say more, perhaps not in gory detail, but in more detail, before the end of the month. And in terms of the revenues, the president is looking for shared sacrifice.”

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According to President Obama’s budget proposal today, his budget would continue “investment in program integrity by providing $1 billion to ensure benefits are paid to the right person and in the right amount.”  Yes, you read that correctly: we are supposed to spend one thousand million dollars in order to achieve what American Express does correctly every single day (or, come to mention it, what the Dewey Decimal System did for books 100 years ago).

Social Security fraud and waste, of course, is a very real problem.  In 2008, the Social Security Administration was so negligent in keeping its information up-to-date that it paid up to $11 billion to people who weren’t disabled anymore (Social Security pays for many disabled folks, as well as the elderly).  And there were still nearly 800,000 people who were trying to get access to the agency’s judges to secure the benefits they were allegedly owed.  So the Obama Administration stands on solid ground when it suggests that for every dollar it spends on system maintenance, many dollars in waste and fraud may be saved.

Or they may not be.

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As Talking Points Memo points out this morning, President Obama’s proposed budget forecasts an average unemployment rate of 8.9% for the entire year.  It also forecasts a GDP growth of 3% next year, which is a rosy figure considering the fact that Obama’s tax increases will kick in January 2013.

The question, of course, is why Obama would forecast such an extraordinarily high unemployment rate.  There are two answers.  First, it allows him to project similarly extraordinarily high economic growth if his plans are implemented – after all, if you keep the baseline down, that makes the upside a good deal higher.  Second, it allows him to “surpass expectations” when unemployment decreases thanks to artificial means like inflation.

That strategy may backfire now.  Obama’s aides say that these budget numbers are “already out of date.”  That means that expectations will be higher than Obama wants them to be for the coming year.

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Are You Now (or Will You Become) One of the 28 Million Unemployed the Administration Missed?

The table below displays unemployment rate projections in (1) President Obama’s first budget in February 2009, and (2) President Obama’s current budget, released today.

Significantly, as the Administration’s budget documents in 2009 noted, their projections then incorporated the effects of the Administration’s trillion-dollar February 2009 stimulus plan, which the President said will “save or create at least three and a half million jobs, and help to revive our economy.”  As the Administration’s current figures confirm, however, that stimulus plan has been a colossal failure, with 4.5 million more people unemployed this year than they projected in 2009.

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President Obama’s budget proposal was unveiled today, generating all sorts of conflicting statements from both parties.

Some of the assertions wrongly focus on red ink rather than the size of government. Others rely on dishonest Washington budget math, which means spending increases magically become budget cuts simply because outlays are growing at a slower rate than previously planned.

When you strip away all the misleading and inaccurate rhetoric, here’s the one set of numbers that really matters. If we believe the President’s forecasts (which may be a best-case scenario), the burden of federal spending will grow by $2 trillion between this year and 2022.

In all likelihood, the actual numbers will be worse than this forecast.

The President’s budget, for instance, projects that the burden of federal spending will expand by less than 1 percent next year. That sounds like good news since it would satisfy Mitchell’s Golden Rule.

But don’t believe it.

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