The 2013 budget being released Monday will propose public works spending while seeking tax increases on the wealthy and corporations to claim progress on the federal deficit in his upcoming budget. The spending plan projects a deficit for this year of $1.3 trillion, the fourth straight year of $1 trillion-plus deficits, and $901 billion next year.

Jacob Lew, the president’s chief of staff, said the new budget would put the country on track to achieve $4 trillion in deficit reductions over the next 10 years, achieved by raising taxes on the wealthy and trimming government spending. Lew said the president’s budget would cut spending by $2.50 for every $1 it raises in new taxes.

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In a time when America’s immigration system is swamped – when illegal immigrants are routinely caught and released, many of whom are dangerous – it seems that one of ICE’s top priorities is public relations with illegal immigration advocates.  Yesterday, Andrew Lorenzen-Strait announced via the Department of Homeland Security website that he had been named ICE’s “first-ever public advocate.”

Lorenzen-Strait

His job will be to “serve as a point of contact for individuals, including those in immigration proceedings, NGOs, and other community and advocacy groups, who have concerns, questions, recommendations or important issues they would like to raise.” This new role, says Lorenzen-Strait, will help ICE “focus the agency’s immigration enforcement resources on sensible priorities” – code for doing less, since the Obama Administration consistently makes a big deal out of the notion that most illegal immigrants aren’t dangerous and therefore should be left to their own devices – and “implement policies and processes that priorities the health and safety of detainees in our custody.” And he has one more job, according to ICE Enforcement Director John Morton: he’ll have to explain to all of us why ICE lets illegal immigrants off the hook.

What did Lorenzen-Strait used to do? He’s been with ICE since 2008. Before that, he was a pro bono attorney in Maryland, doing child advocacy and divorce work via Community Legal Services. How does that qualify you for working in immigration, exactly? And then there’s the question of money spent. It’s more and more obvious these days that working for the government is the quickest road to a healthy paycheck – and Lorenzen-Strait’s salary proves it. In 2010, he was paid $112,224 by the feds. We can only imagine that the salary has risen since then. Not bad for being a public relations officer who does nothing to actually enforce immigration law.

We’re constantly hearing that the government has trouble finding places to cut spending. This seems like a good place to start.

Maryland Gov. Martin O’Malley last week proposed a budget that would raise taxes by $311 million.

From the Washington Post:

The Democrat outlined a $15.3 billion general fund budget plan that includes about $311 million in new revenue. About $182 million will come from capping income tax deductions and phasing out exemptions.

[...]

The governor’s plan would cap income tax deductions at 90 percent for incomes above $100,000 and 80 percent for incomes above $200,000.

It also would reduce exemptions from $2,400 to $1,200 per person for singles who make between $100,000 and $125,000 and couples who make between $150,000 and $175,000. Exemptions would be eliminated for singles who make more than $125,000 and couples with incomes above $175,000.

[...]

About $19 million will come from aligning the state’s cigarette tax with other tobacco products. Tax on cigars and smokeless tobacco is 15 percent of wholesale, which was comparable to the 36 cents per pack cigarette tax in 1999. The governor’s proposal would make it 66 percent of wholesale, which would make it comparable to the present $2 per pack cigarette tax.

The proposal also would require online sellers to begin collecting sales tax, which the governor projects would raise about $19 million, but there are questions about enforcement.

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In politics, as in life, there can be an overwhelming temptation to go along to get along; to be a team player; to do the easy thing even when it’s not the right thing.

For far too long, insiders from both parties have played these games. Talk up fiscal responsibility, but spend big. Talk about a federal government that fulfills its basic responsibilities, but then vote to expand it beyond all recognition so that it cannot possibly do so. Talk about doing what’s right, but then do what the establishment wants instead.

Americans deserve better—and they deserve to get to choose something better this year. In 2012, Americans have the opportunity to decisively move away from big government, built up over years and years by both parties in Washington, D.C.

As I said in Sunday’s NBC/Facebook debate, President Obama has thrown gasoline on the fire, but let’s be honest: The bonfire was raging well before Obama ever left Chicago.

Policies and spending served up by Washington, D.C. insiders, in several notable instances designed and written by Wall Street insiders to suit their needs, not ours, caused and then exacerbated this situation. In too many cases, these advocates of big spending and bad policy have used their positions of power to enrich themselves, both while in office and once outside of it. Republicans have been complicit in this scheme, just as Democrats have.

It is time for it to end.

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The fact that Paul Krugman received the Nobel Prize in economics makes sense given that both Al Gore and Obama received the Nobel Peace Prize. But that is the only way that it makes sense.

In his December 29^th column in the New York Times, Keynes Was Right, he continues to make the case that the only reason we haven’t come roaring out of the Great Recession is because we spent too little.

Krugman cites the downturn of 1937 when FDR’s government programs were curtailed and unemployment rose. He says that unlike in that fateful year we should instead redouble our efforts and spend more to prime the economic pump. Austerity is insanity he says. We must spend more as Keynes would have advised, deficits (and inflation) be damned.

Build pyramids as Keynes said we should. So what if the they do not contribute, and probably detract, from the quality of the economy. It is the quantity of economic activity that we are interested in not quality. Get people employed doing whatever. This is the road to prosperity!

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The United States is at a fork in the road regarding which way we will go as a people. The 2012 election could be the most important in our lifetime, and conservative leaders have reached a consensus on how to channel the energy and concerns of the American people to realize historic change this year.

The status quo will not survive the year. Our debt and spending have reached catastrophic proportions in the context of global financial difficulties and political upheaval. Consequently, by the end of 2012, America will either have taken a decisive step toward socialistic collectivism in the name of “equality” and “social justice,” where businesses and owners are punitively taxed to “pay their fair share,” or America will take a major step in the direction of returning to our Founders’ constitutional government, restoring the rule of law, federalism, free enterprise, and individual initiative and responsibility.

The American people will decide which path to take in the 2012 elections, not only in the general election on November 6 but also in the nominating process in primaries over the next several months for all major offices, including the presidency. Conservatives must act in a concerted and informed fashion in all of these contests to shape the public dialogue and thoroughly vet the candidates.

To achieve these ends, top conservative leaders acting under the umbrella of the Conservative Action Project have released “A Conservative Consensus for 2012” announcing agreement on major policies. These issues span all three wings of the conservative movement: economic, social, and national security.

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As we enter 2012, the presidential candidates would do well to wrap their minds and messages around these seven mathematical facts:

1. Every day, the U.S. government takes in $6 billion and spends $10 billion.  This means that every day the federal government spends $4 billion more dollars than it has.
2. The real unemployment rate is a jaw-dropping 11 percent.
3. Every fifth man you pass on your way to work is now out of work.
4. College graduates are now 34% less likely to find a job under Obama than they were under President George W. Bush.
5. Every seventh person you pass on the sidewalk now relies on food stamps.
6. The ravages of the Obama economy now mean that more Americans live under the federal poverty line than at any time in U.S. history since records have been kept.
7. Under President Barack Obama, every fifth child in America now lives in poverty.

These are not partisan jabs, manufactured statistics, or ideological swipes.  These are mathematical facts.  And the presidential candidate who can most clearly and credibly articulate them—and their concomitant solutions—is bound to win.

Why?  Because these facts point toward the solutions America must implement to avert the kinds of economic and social upheaval seen in Europe and elsewhere.

Start with mathematical fact number one—deficit spending.  No person, family, business, or nation can spend more than it takes in and remain sustainable; it defies the simple laws of math and reason.  And yet even as Washington hemorrhages $4 billion more than it has each day, citizens have watched as the farce that is “Super Committee” has proven it cannot even shave $1.2 trillion from America’s $15 trillion debt.

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This is the second installment of a multi-part series on suggested economic policies for the next government to consider.  These are meant to be long-term solutions.  Our current economic downturn has some short-term causes but a large part of the explanation lies in the worldview that governments of both parties have adopted, in small ways since maybe Abraham Lincoln but in significant ways since Franklin Roosevelt and in exaggerated extremes since Lyndon Johnson.  The federal deficit, the mess we call a tax code and so forth were created over a long time and while the solutions can be implemented with greater haste it will take some time for the transition and full effects to be felt and the returns to be realized.  The political class has seldom shown signs of long term thinking and the greater population seems less so, we can only pray and hope the message gets through.  My second installment is on federal spending.

The brilliant and humorous French politician and economics writer, Frederic Bastiat may have summed up how government works as well as anyone:

The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.

In line with Bastiat, the three largest expenditure categories in the federal budget are programs that transfer wealth from some people to other people. Federal expenditures (since there is no enacted budget) totals approximately $3.6 trillion.  Over half of that goes to the big three; Social Security, Medicaid/Medicare and income stability (welfare) programs.  Eliminate these three and the budget is in surplus, which is a fascinating statement since these three programs have parallels in the private sector that are profitable.

However, it is not reasonable to make extreme changes to programs people have on which people have counted and planned.  But, that reasoning cannot prevent the sort of long term changes that are needed.  There is no denying the budget math:

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From the Associated Press:

A deal on the $1 trillion-plus spending bill was reached after Republicans agreed to drop language that would have blocked President Barack Obama’s liberalized rules on people who visit and send money to relatives in Cuba. But a GOP provision will stay in the bill thwarting an Obama administration rule on energy efficiency standards that critics argued would make it hard for people to purchase inexpensive incandescent light bulbs.

A senior White House official said the administration supported the two-month plan.

Bargainers were considering the two-month extension of this year’s payroll tax cut and unemployment benefits bill because so far, they haven’t agreed how a yearlong extension would be paid for, said a Democratic aide who spoke on condition of anonymity to discuss the private talks.

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WASHINGTON (AP) – Democrats are abandoning their demand for a surtax on millionaires to help finance payroll tax cuts in a sign that lawmakers are trying to broker a compromise on Congress’ highest-profile year-end dispute.

Even so, there is no clear path to quick bipartisan agreement on the legislation, which would prevent an automatic Social Security tax increase on 160 million workers and the expiration of jobless benefits for people out of work the longest. Both would occur Jan. 1 without congressional action.

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From The Hill:

The Senate on Wednesday defeated each party’s version of a constitutional amendment that would have required a balanced federal budget.

The rival proposals would have prohibited Congress from spending more each year than it receives in revenue.

But each one fell well short of the two-thirds majority needed to send them to the states for ratification.

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WASHINGTON (AP) – Weary after a year of partisan bickering, lawmakers tried Monday to wrap up a sprawling $1 trillion-plus spending bill that chips away at military and environmental spending but denies conservatives many of the policy changes they wanted on social issues, government regulations and health care.

The measure implements this summer’s hard-fought budget pact between President Barack Obama and Republican leaders. That deal essentially freezes agency budgets, on average, at levels for the recently-completed budget year that were approved back in April.

Drafted behind closed doors, the proposed bill would pay for the war in Afghanistan but give the Pentagon just a 1 percent boost in annual spending, while the Environmental Protection Agency’s budget would be cut by 3.5 percent.

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Former Illinois Gov. Rod Blagojevich was sentenced this week to 14 years in prison, but the real sentence is the one taxpayers will serve many years after. He mastered the art of pairing populist rhetoric with expensive new programs directed toward his core constituencies.

To pursue his highly visible programs and agendas, Blagojevich needed money. He found it by diverting billions from the state’s pension system. By taking “holidays” from required pension system contributions and by nearly doubling Illinois’s debt, he burdened future generations to support favored groups in the present.

Perhaps worst of all, as CEO of Illinois, Blagojevich institutionalized a culture of deficit spending. He accomplished this so effectively that Blagojevich’s successor, Gov. Pat Quinn, and today’s lawmakers feel comfortable perpetuating the ruinous habits of spending and borrowing more than the state can afford. Fiscal ineptitude is the new norm.

The Illinois Policy Institute has a new report out that details Blagojevich’s lasting effect on Illinois’ fiscal condition. Read it at www.illinoispolicy.org/blago. Here’s the “top ten” list:

No. 1: Disregarded obligations to state pensioners

Policy: Blagojevich diverted billions of dollars from the pension funds of future government retirees to pay for his own spending priorities.
Problem: Blagojevich ballooned existing spending programs, ignoring his responsibility to ensure the health of the state’s pension systems. Retirees and taxpayers are on the hook for his political expediency.
Program cost: Excess of $3 billion for future taxpayers

No. 2: A culture of deficits

Policy: Grow spending to appease Blagojevich’s core constituencies.
Problem: While Blagojevich was creating and expanding unaffordable programs, the state’s financial position deteriorated year after year.
Program cost: Worst rating of net assets in the nation.

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The Congressional “Super Committee” tasked with cutting the debt has failed. Good. Embrace the joy of failure. Sometimes failure works out for the best. Because in this case “failure” leads to the Holy Grail: $1.2 Trillion in forced spending cuts. That’s the best thing that could have ever come out of this unconstitutional “Super Committee.”

Congress is now forced to accept automatic across the board cuts to spending- including defense spending. This is what the GOP should have been aiming for from day one. Play out the clock and force $1.2 Trillion in spending cuts.

But our GOP friends never miss an opportunity to miss an opportunity. They are scared, spineless weaklings. They are actually panicking because there wasn’t a compromise that raised taxes. Could they possibly be this dumb?

The GOP had the perfect campaign message tailor-made for a 2012 landslide. “The GOP stands for smaller government, lower taxes, less spending. Obama is for bigger government, higher taxes, more spending.” The same simple clear contrast that led to a historic Tea Party landslide in 2010. All they had to do was play out the clock and let the spending cuts take effect.

Instead the GOP “super committee” members were so scared of actually forcing real, honest-to-goodness, spending cuts that they desperately tried all last week to compromise with Democrats. They practically begged Democrats to increase taxes on the wealthy (by taking away deductions). The GOP was anxious to sell out every small business owner, homeowner, and GOP contributor in America. Listen carefully- it was the GOP who offered a deal based on Obama’s philosophy to punish successful Americans for their hard work, sacrifice, and financial risk-taking.

Republicans offered a deal to Democrats that included only slightly larger spending cuts versus tax increases. And guess where all the tax increases were aimed- at wealthy taxpayers. Even as GOP Presidential contenders lied to our faces during televised debates, all agreeing they would not even accept a deal of 10-to-1 spending cuts versus tax increases, the GOP Super Committee members attempted to sell out the entire conservative base for close to 1-to-1.

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We last week passed the $15 trillion national debt mark.  It continues hurtling upward, almost completely unabated.

We the People did our job and then some in the historic 2010 election, delivering more than 70 new Republicans to the Congress – on their promises to rein in out-of-control Washington spending.

We sent these folks to D.C. in large part to prohibit President Barack Obama and his Democrats from continuing to explode the budget – and the deficits and debt along with it – the way they had when exclusively in the Majority in 2009 and 2010.

So when President Obama campaigns asking for reelection and more D.C. Democrats – to undo this “do nothing” Congress – remember that stopping Obama and his Party colleagues was what We the People elected these “do-nothings” to do.

Serving as an impediment (modest though it may be) to the Democrat fiscal train wreck is, in fact, doing something.

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It would be a great tragedy if a super tax hike came out of a supercommittee compromise deal. It would do great harm to the economy — just as much harm as President Obama’s various tax-hike threats. And on the Republican side, a super tax hike would irreparably split the GOP.

Okay. Here’s the good news. In a CNBC interview this week, I asked supercommittee co-chair Jeb Hensarling about an idea of the Democrats to raise taxes by $600 billion to $800 billion. About $300 billion of that might be up-front, with $500 billion later from some tax-reform overhaul. This would be an unmitigated economic disaster.

But Hensarling was blunt: “Not going to happen, Larry.” He said no such deal has been presented to him. And if it were, he and other Republicans on the supercommittee would not support it.

Hensarling then added, “We put $250 billion of what is known as static revenue on the table, but only if we can bring down rates. We believe we can bring the top individual rate down to 28, 29, maybe at most 30 percent, and bring the corporate rate down to the median of the EU, 25 percent.” For emphasis, he said, “We have gone as far as we feel we can go.”

The Texan was referring to the Sen. Pat Toomey plan, which would lower the personal tax rate to 28 percent and head down from there, while at the same time putting limits on personal deductions (such as mortgage interest) for upper-income taxpayers. In other words, flatten the rates and broaden the base.

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Yes, THAT Gene Simmons, from The Sun (UK):

This mess is our fault — corporations have no responsibility.

Capitalism is the best thing that ever happened to human beings. The welfare state sounds wonderful but it doesn’t work.

Governments hand out more money than they have to support welfare and they land in debt.

Then they have to borrow money — and then there’s interest on top of that.

That’s bad business. And it has created a culture of entitlement.

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From #OccupyWallSt:

On November 23rd, the Congressional Deficit Reduction Super-Committee will meet to decide on whether or not to keep Obama’s extension to the Bush tax-cuts – which only benefit the richest 1% of Americans in any kind of significant way. Luckily, a group of OWS’ers are embarking on a two-week march from Liberty Plaza to the Whitehouse to let the committee know what the 99% think about these cuts. Join the march to make sure these tax cuts for the richest 1% of Americans are allowed to die!

More information:

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If you haven’t already, take a gander at a column authored by former Treasury Secretary and Clinton economic adviser Larry Summers in yesterday’s Washington Post.

In it, Summers contends that to truly turn around the nation’s housing market – a key economic indicator and driver – one must, in effect, double down on the sector, spending more in both public and private dollars.

“The central irony of a financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending,” argues Summers, “it can be resolved only with more confidence, borrowing and lending, and spending. This is true, above all, of housing policies.”

That’s just dandy. True to the dogma of his former boss, Summers apparently believes we haven’t done enough damage to the housing market through Freddie Mac and Fannie Mae, and Uncle Sam needs to be more involved in driving home construction and sales.

That is best carried out through financing, he posits. “[C]redit standards for those seeking to buy homes are too high and too rigorous,” Summers argues. Uhh, can someone quickly get him a history book and turn to the chapters from a few years ago where the housing market began to collapse? The reason wasn’t tightened credit but the exact opposite. Our lending institutions sponsored by the feds such as Freddie and Fannie were practically giving loans to anyone who asked for them – senseless amounts of money with little-to-no credit backing to vouch for the security of the loans. (more…)

From the Associated Press:

President Barack Obama and his allies in the Senate promise to press ahead with separate votes on pieces of his failed $447 billion jobs measure despite unanimous opposition from Republicans. But there also are signs of slippage among Democrats and evidence the strategy isn’t working with voters.

Future votes on individual pieces of the measure, however, aren’t likely to fare better than a pared-back jobs measure designed to boost hiring of teachers and first responders that Republicans and a handful of Democrats scuttled on Thursday.

Obama’s revised plan failed on a 50-50 test vote that fell well short of the 60 needed to break a filibuster. Three Democrats abandoned Obama on the vote and two more who voted with the president said they couldn’t support the underlying Obama plan unless it’s changed.

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