Rebuttal to Eichenwald

Preface:

The entire piece below was developed at a friend’s request. On FaceBook, she forwarded a blog, calling it thoughtful, intelligent, and thorough, while I found it unthoughtful, inflammatory, and one-sided. She asked me to elaborate…..I offered up a dialogue (call me, I said) because typing it up seemed so tedious (and it was), but she wanted me to respond in writing, to put it “out there” to her like-minded friends on FaceBook (basically asking me to be the sacrificial lamb).

As much as I like my friend, I wouldn’t ordinarily delve into this large of a task, so why did I invest this kind of time? As Alan Simpson (of  Simpson-Bowles) said “an attack unanswered is an attack believed” (see CNBC SquawkBox link close to the end of this blog). When someone writes what I consider to be essentially a smear campaign, and I see a friend embrace it in a style that I consider to be inconsistent with her intelligence, then I become concerned enough that I speak up. My blog presumes you the reader have actually read Eichenwald’s blog.  My thread follows his outline, so at times it may appear I am jumping around, but in reality, I am following his outline.  It would be helpful for you to have his blog in hand as you read mine.

My friend already knows this, but you should know that I am not a writer (so please excuse various ramblings), nor a political pundit – I am an average citizen just like everybody else. My blog below has this caveat: Buyer beware. Do your own research; come to your own conclusions.

If you find I have made an error, please be respectful in pointing it out. I will gladly research it, and either make the correction in my blog, or clarify my point. If there is an obvious typo, just make the leap and figure out the intent.  As I will be updating this blog,  if you have a contribution you think should be included, please let me know (contact info is posted on my website).

There are several links embedded in the comments for your reference. I tried to be as complete as I could when searching out references. I would consider it a courtesy for you to look at these links as they are a part of the basis of my rebuttal. If you have difficulty with the links, let me know.

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The author, Eichenwald, tries to persuade you in his opening statement that he is neutral, and not a “partisan bomber”. Then he goes on to state that in “the last four years, the GOP has transmogrified into something ugly and vicious, and more important, something wedded to the politics of fantasy and ignorance…. the precipice of self-destruction.” His rhetoric at times is bitter and spiteful (particularly on the piece about demagogues and threat to America and American democracy) So much for not being a partisan bomber….

Here, for my friend, are my thoughts.

The entire GOP campaign is based on lies. Really? The entire campaign? Does this one really need to be vetted out for anyone? If so, I suggest you stop reading now, because anyone who would believe such a ridiculous all-inclusive statement cannot possibly have an open mind.

The racists of GOP. Come on, both parties have their bigots and racists. No sense getting in the gutter of name-calling when writing a blog that is supposed to be neutral. This author tries to disarm people of their senses by claiming he is neutral, then gets into the gutter and invites you to join him.

Obama and welfare. The rhetoric on this is high; I suggest you look at this press release from the US Senate Committee on Finance. For me, the Obama move is a wink-wink-nod-nod waiver of the 1996 work requirement. I have read the sections 407 and 402 – it does not appear to me that HHS can waive the work requirement.

See attached Obama and welfare reform article to understand my concerns. Note, it is from Washington Post, not the WSJ. I don’t think I could be more succinct than this writer. For comparative purposes, look at this huffington post article.

While both make their point, and I think we all can agree reform is needed, I agree with the first author’s position, and I don’t agree with the conclusion of the second author.

And while we are dissecting articles, if I had time, I would delve into the second author’s comment that Romney when governor tried to restrict education and training for parents receiving TANF.  On the surface it may be true, but if so, what exactly did he cut out? Or did he try to restrict it by requiring more accountability? vWho knows? (fyi, my research was to no avail) These kinds of statements appear to be partial truths at best. For example, what if Romney cut out programs that were proven to be unsuccessful? What if he tried to restrict programs by requiring a certain level of accountability – for example, that you must attend 85% of all classes? All of us citizens must be careful about partial truths, and I daresay all politicians present us with partial truths designed to make them/their interests look good. That is, in a large part, why there is so much mis-information, and hand-wringing.  (A small side story here – the reason we raise our right hand and swear to “tell the truth, the whole truth, and nothing but the truth” is EXACTLY to avoid these kind of scenarios. Partial truths can be as damaging as untruths).

Finally, here is a fairly neutral piece from the Chicago Tribune’s Steve Chapman. I think this piece best debunks the half-truth of Eichenwald’s position.

Draw your own conclusions. I would have expected a “thoughtful” journalist’s blog to take a more analytical approach. Not the name-calling and inflammatory rhetoric that Eichenwald invokes.

Obama robbed Medicare
First of all, there’s this: The Democratic Congressional Campaign Committee called Ryan “the architect of the Republican plan to kill Medicare” in a fundraising message sent by DCCC Executive Director Robby Mook. A false charge that the left-leaning Politifact called the 2011 “lie of the year.”

And this: “A complicated and wonky subject with life-or-death consequences, health care is fertile ground for falsehoods,” the fact checker said. “The Democratic attack about ‘ending Medicare’ was a pervasive line in 2011 that preyed on seniors’ worries about whether they could afford health care.” (WA Examiner)

Axelrod said the Romney-Ryan plan would put Medicare into a death spiral.

Consider this observation from the Congressional Budget Office: “ObamaCare will reduce Medicare spending by more than $700 billion between 2013 and 2022, relative to prior law. These cuts directly affect current retirees. By contrast, both the Romney-Ryan plans only affect retirees younger than 55.”

Buyers beware – hyperbole abounds.

Now, for my viewpoint. First, let’s see if we can agree that there is tremendous waste and fraud in the system, and that is what is most likely killing the program. Can we move forward or does that need debating? If we can move forward, we can then agree that cuts can be made, correct?

Again, there are always two sides of the story. So let’s just look at that $700 figure (or $500, either way, argument is the same). It is true that Obama takes the money out of Medicare and funnels it to Obamacare. Eichenwald has stated that, so that point is moot.

But wait – the cuts aren’t really cuts – they are savings. Eichenwald’s analogy is for us to look at shoe purchases; if they are buying shoes on sale, that doesn’t mean they are cutting back on their shoe purchases, it just means they are just using their money wisely.

I can’t buy into this one, because of lack of evidence. Using the shoe analogy, they actually COULD be cutting back on their shoe expenses. For example, where they used to spend $100 annually, now they budget $75/year. It is, for me, another one of those partial truths. What are they doing with the money saved? Does it go back into buying more shoes, or does it get consumed elsewhere – perhaps on school supplies, an ice cream cone, or a donation to their church? Or perhaps they simply don’t have that money, so they aren’t “saving” anything. His analogy makes no sense to me without him completing the thought. Both Ryan’s plan and Obama’s plan assume same dollar “savings” but the devil is in the details. 

Both ObamaCare and Ryan’s plan make changes to Medicare spending: ObamaCare via government rationing, and Ryan via direction of privatization. The ObamaCare law creates a new panel, called the Independent Payment Advisory Board (IPAB), which will be composed of 15 unelected government officials (now there’s a scary thought). They will be charged with rationing care to seniors, reportedly by underpaying doctors and hospitals (dear reader – do realize many doctors – in the interest of self-preservation –will quit or will jettison their current practice in favor of setting up their own “concierge doctor” business, which will further exacerbate health care problems. They simply cannot remain in a business model that pays them less than it costs them practice medicine.  Nor will the youth pursue this profession as a means of improving their lives – creating a future shortage of available services). This IPAB is (most likely) the infamous “death panel” that Sarah Palin was referring to. The approach advocated by Romney-Ryan gives seniors control over their money, meaning they allow the seniors to choose plans that give them the best value for their money.

Here is a good link to an article on IPAB, from Forbes. And here is another good link which leads to video clips for discussions on Medicare and IPAB. And finally, this article gives you Medicare’sdirty little secret”.

The big difference is that the funds Obama “saves” from reduced Medicare costs gets spent to fund Obamacare. So are those truly savings? The funds Ryan “saves” from Medicare costs gets put back into the hands of the consumers of the Medicare program. As a capitalist, I think the creation of competition in letting consumers determine the best value for their dollar is one of the best incentives to drive down costs. It allows them to vote with their wallet and apply their consumer-driven common sense as they do in so many other sectors of their lives. I believe to drive down costs we have to eliminate the state barriers, build in healthy lifestyle incentives, and allow tax credits for the insured.

So did Obama “rob” medicare?  My answer would be yes, because the money “saved” was not put back into the hands of the consumer.

Again, I think we all can find common ground that the health care system needs to be reformed in order for it to be salvaged. And there are good aspects to the ObamaCare –such as the pre-existing conditions, and age limit for children.  

For my money, I do not want an independent agency deciding my fate. IF you have ever had a serious run-in with a government agency, you might understand my perspective. They have too much power already, too little accountability, they are complex to the point that the right hand doesn’t know what the left hand is doing (nor does it care), and I for one do not want to give them power over my health decisions, my eating habits, my sleep habits, my exercise routine, or any of it. I want the government to stay out my personal decisions that I make for myself. And that includes purchasing a 16 oz soda.

Now, if they want to help me make my decisions by providing me with factual information, such as nutritional information, that would be most welcome.

GM Plant closure reference by Ryan. Think of the Obama quip “You didn’t build this” rally cry, or the Romney quip “I like to fire people” fodder, and you will get the picture. But lest I be accused of not being thorough, let’s go further into it.

The words Ryan used were categorizing the plant as “it was a plant we were about to lose”. The point Ryan was making was to caution us of vague promises made on campaign trails. His reference to the GM Plant in Janesville goes back to the fact that Obama visited it during the 2008 campaign at a time when the plant was already scheduled to be closed.

What was galling to me was what Obama said during that visit.   Obama made the statement that “I believe that if our government is there to support you….this plant will be here for another 100 years”.

Okay, if I were in that audience, and I knew my plant was scheduled to shutdown, I would make the leap of faith that if I got this guy elected, he would see the value in keeping the plant open. Never mind that we all know it is not the President’s decision as to which plants stay open and which ones close – it is the desperate clawing to keep my job, my undying hope that someone somewhere will make this bad dream go away – and Obama’s statement is (to me) simply pandering to that desperation, and is what makes it so disdainful. That was the point (I believe) Ryan was making.

You didn’t build that. Ahhh, just in time….Of course I know that Obama did not mean to say that we did not build our businesses. And I agree with the 4 Pinocchios that Romney team got for repeating a truncated version over and over (which could have been avoided if Romney team used the entire wording – effect would have been the same, probably even better).

But where I take issue with Obama’s point in this speech is his implication that the GOVERNMENT played a central role in helping us. For me, it is one more example of Obama trying to insert Government into our lives as the central solution to everything. Reader beware: control your government, or it will control you – I advocate for limited government and unlimited individual opportunity.

Fact of the matter is the local businesses in our communities built a lot of the businesses in that community, through their own taxes, and through the domino effect of paying wages. (As a manufacturer, I pay employees and I buy from suppliers. Those employees and suppliers spend their earned dollars in their communities, which creates demand for jobs).

So I see Obama making yet another effort to crowd out the private sector by placing the government as a significant contributor – if not the significant contributor, thus my view is in agreement that  Obama trying move us to a socialist agenda – his ideology is that it is the collective success of the whole society that somehow builds enterprises like the ones we have here in the States….so let’s collectively share the wealth…make everyone pay their “fair” share. (I would personally love it if everyone – and I mean everyone including our senators, representatives and politicians – paid their fair share via a flat tax and we got rid of the personal and corporate loopholes … but that’s another topic).

Granted, Obama said he regrets his “syntax” (to which Michelle Malkin tweeted “the only tax he regrets”. LOL!) As for Eichenwald’s observation that the Republican hype around You Didn’t Build That speaks to the shallow dishonesty of the modern GOP... — err, can we go back to the “I like to fire people” hype (when Romney was specifically talking about how he likes the fact that you can fire your health insurance provider when you are not satisfied with them) that the Dems took to like catnip, and see how that was spun out-of-context? Or the time Romney referenced “not being worried about the very poor” (when he was talking about the fact there already were mechanisms in place to help the very poor deal with the crisis, therefore he was more worried about the middle-class) — see how that was bantered about by his fellow Democrats. To decry a behavior on one side of the aisle while not giving an equally indignant voice to the same behavior on the other side of the aisle is being a hypocrite – a classic case of the pot calling the kettle black.

Come’on, we all know both sides hype, and the media heralds every “sound bite”. Every thinking adult knows that. Is it right? No. Does it make things better? No. Which is why I worry about the voters who don’t think for themselves, but just parrot everything they are spoon-fed. For many politicians, this is “like taking candy from a baby.” How is our society going to deal these voters in the future?  (BTW, Sept 2012 newsflash:  60% of Cal State incoming freshmen need remedial classes in Reading and Math. And that SAT scores have fallen to the worse ever in 40 years.). It will be interesting to watch all of this unfold – we have major cracks in our foundation.

Obama wants to prevent the military from voting. In the research I did, I found references to “Obama undermining the voting privilege of the military”, but nowhere did I find a claim that “Obama wants to prevent the military from voting”. I went to all the sites I could reasonably find, including Rachel Maddow (who makes me gag from her vitriolic hyperbole), but didn’t find any direct reference validating Eichenwald’s claim.

Nevertheless, here is the background on it. Military personnel were enjoying an extended voting right that was under threat by the Obama lawsuit. Ohio had allowed its citizens a 3 day voting period, which had been waived as too costly and too conducive to fraud. However, military personnel were the only citizens allowed to continue enjoying this privilege. Obama was suing to knock this exception down and open the extended voting to everyone. Yes it makes a good sound bite that Obama wants everything equal, but let’s be practical about the costs of this.    

I have yet to see either side pencil this out, but logically thinking, it seems more costly to extend voting to everyone over a three day period, than having citizens vote on a designated day.  Ohio was trying to rein in costs, having its people vote on a designated day (as so many states do), but that was something Obama’s administration found fault with, and sued.  Did this make good sense of taxpayer’s dollars, of the court and justice’s time?  Not in my book.

I disagree with the Obama lawsuit, and agree with the Republicans that such an extended service unnecessarily burdens the state. If Obama lawsuit succeeds, which I believe it has, then the military no longer gets special considerations – as everyone will have the same consideration.

This point is the very point the military was protesting, the loss of their privilege, their “special perk”. And Romney agreed with them. The perk was theirs, and was not to be re-distributed to the masses.  And I agree with that.

Obama is on a spending spree. Eichenwald gets this half-right when he points out that 2009 was the year of the last budget of Bush Administration. I thought we all knew that, but maybe not. What is not made readily available to you is the devil-in-the-details bit of information.

I found references that Obama spending is actually lower that that of the previous president, and Obama himself touted this as true. But the person who came to this conclusion conveniently omitted the first year of Obama’s presidency. Eichenwald does defends this omission by stating that the first year of every presidential terms starts with a budget approved by the previous administration, which is keeping with historical analysis, but when we look at the devil in the details, perhaps we have another pesky partial truth here:

The fiscal year runs from October 1 2008 through September 30 2009. For fiscal year 2009, Bush proposed a 3% spending increase. Congress, controlled by Democrats led by Pelosi, provided for a 17.9% spending increase (so the spending increase was designed and implemented by a Democratic Congress). Since the Democrats provided the 2009 budget, it seems reasonable that that budget be included in this fellow’s calculations. However, further then consider this: when Bush came to office, he reversed the budget he inherited. If Obama was not on a spending spree, since the 2009 budget had jumped wildly to 17.9%, Obama could have reversed it, as Bush did when he came to office. But Obama failed to take action. Silence is a form of acceptance…so in my mind, it is his budget.

Furthermore, the Democrat Congress in 2008 passed 3 of the 2009 fiscal appropriation bills, and passed the rest of them in 2009 – so Obama definitely had something to do with the spending explosion of 2009. If spending cuts were truly an objective of Obama’s, then he could have/should have introduced budget cuts to the 2009 fiscal budget, especially since his party controlled Congress.

And there is more. Pelosi’s Congress passed another $410 billion for more fiscal 2009 spending (Bush had rejected this additional spending). Then, again in 2009, there was the $40 B expansion to SCHIP (State Children’s Health Insurance Program).

Finally, keep in mind that the bailout ballooned in 2009, just before Obama took office. But the $150 M paid back came in Obama’s watch, and was promptly put in the category as spending cuts(1)…

There is no escaping that spending spiked in 2009, from $2.9 billion in 2008 to $3.5 billion in 2009. But what Obama did in the following years was to stick to this inflated level of spending. My complaint is he did nothing to dial it back.

2010 spending was just short of $3.5 billion, while 2011 raised it to $3.6 billion. The prior years’ growth trends don’t support this kind of spending growth. So if you recognize the anomaly in the 2009 spike, Obama, as our leader, is at fault for not bringing spending back in line with the trajectory of earlier years. Only by setting 2009 as a baseline does Obama spending come off looking good. This is what the moaning and groaning is all about. Check it out.

Pre-Obama, no deficit had been at $1,000,000,00. In 2008, it was at about $500 B, or half a trillion. 2009 = $1.4 T, 2010 = $1.29T, 2011 = $1.3 T, and 2012 = $1.33 T.  This is the deficit we’re talking about, not the debt burden – we are talking about the difference between incoming revenue and outbound expenses!  Could you run your household this way, year after year?  Your business?  

Finally, there is ObamaCare, which is largely being ignored because it mostly goes into effect in 2014. The CBO cites it as increasing federal spending by $1.6 trillion in the first 10 years, with more increases expected in future years.  Ane the auto bailout.  I don’t see what is wrong with Romney’s idea of letting them file bankruptcy as any other entity would.  By bailing them out, the government cheated the creditors and shareholders, and taxpayers.

But let’s not just look at dollars, because percentages are equally, if not more so, important. After one year of Obama, the federal spending was 25.2% of GDP – the highest in our history, with the exception of WWII. 2008 had federal spending as a percentage of GDP at 20.8%, and Bush’s two terms saw it at 19.6%.

Finally, I offer you these three analyses from the Washington Postanother blogger who debunks Nutting’s logic (and for a real treat to this blogger’s creative skills with communicating the real numbers, don’t miss his Budget Cuts Visualization youtube video), and another Washington Post about the reality of the spending binge. So yeah, I think there has been a spending spree, not all of it bad, some of it needed, but a spending spree.  

The stimulus failed. Here is a link to counter Eichenwald’s stimulus claim. It lays it out on 4 levels – Government Contracts, Infrastructure, the Green jobs fiasco, and Shovel-Ready jobs.

One more comment on the subject of “lies”, a favorite term of Eichenwald’s – even the term “middle-class” is up for grabs by both parties. When you start digging down into the demographics of it all, you will find politicians can – and will – spin the numbers so that it suits their needs. Again, as educated citizens, it is important we ferret out the details. I am truly concerned about the uneducated masses we shoulder today – it is almost impossible for them to sort this out on their own, which means they have to trust others. As I said earlier, for many politicians, this is “like taking candy from a baby.”

Finally many news agencies and journalists are editing out details in order to make their point. News agencies, journalists, should present their cases without hateful and mean rhetoric, and without collusion.  I recall MSNBC edited a clip when trying to insinuate that the gun-toting people outside an Obama rally (back in 2009) were racists (click here) , and now watch what was later revealed… about this clip…. (added 9/28/12: MSNBC did it again!  They doctored a clip!  See Romney chant – apologize in advance for sarcasm at end of clip))

It is important we watch the speeches and debates ourselves, so we do not have to rely on journalists or media interpretation. At the very least watch the speeches of your party, so when the other party throws the partisan bombs, you can answer with knowledge of the full context.

Obama raised taxes. Oh great, according to Eichenwald, another “lie”…

Regarding the “never raised taxes” battlecry, I agree with the Supreme Court’s recognition that the ObamaCare penalty is a tax, ergo, taxes are being raised. You can’t call it a penalty – as the Supreme Court pointed out. It is a tax. And let’s not forget the cigarette tax that was signed into law shortly after he took office. How many middle-class people did that hit?

Here is a review of the two candidates, it is the most thoughtful piece I could find, and it contains a small paragraph that recognized Romney’s true intent (or target) when referring to Obama raising taxes is, in fact, the ObamaCare tax. So again, Eichenwald presents us with a partial truth here. The article is well worth a read, as it calls both parties on the carpet for misleading information.

If we keep talking about the economy, we’re going to lose. I had no idea what this is in reference to, but after researching it, I see Republicans took things out of context too much, and shame on them for that. But I also offer you up this: both parties are being childish and petty when it comes to taking things out of context. The worse, I believe, is the ad insinuating Romney had something to do with the Bain Capitol woman who died of cancer. And Eichenwald perpetuates this behavior with this blog. Since we are discussing the economy, let me insert a Democrats (Baucus) speech on tax reform and how we can rally the economy. Now that was a constructive piece. Seems we can agree on some things.

They are demagogues. huh? The diatribe that follows is a case of the pot calling the kettle black. Eichenwald needs to go look in the mirror. Each party has its outliers – we all know better than to believe everything we hear. Who are these Republicans who tell him they are fearful their parents are going to be euthanized ? Actually, now that I think about it, I hear some people say they wish they could be euthanized when faced with the alternative of a slow and painful death. Especially if a panel might deny them treatment.

This entire diatribe from him is scary enough, but even scarier is that apparently people believe this, as evidenced by my friend circulating his blog. He brings up the birther thing, conveniently avoids the college transcript thing, and intones a “war of the worlds” warning on the level of mass hysteria.

When it comes to ObamaCare, what I DO hear concerns about is a panel being able to determine your health care options. THAT really does scare me. Ever have a run-in with the IRS – ever tried to reason with them? Bureaucrats do not make good businessmen …… Am I a demagogue because I believe that? Fellow reader, you tell me.

My concern is that if, at age 80, it is discovered I have cancer, this panel will disqualify me for treatment because of my age. This is not far-fetched, as the panel will have to consider ROI, and since they will be looking at it from a black-and-white cost-effectiveness perspective, they will have to disregard any other benefits of treatment – the ones that are difficult to quantify, and should be my decision – and my decision alone. For an example of outrageous rationing of healthcare, see this article where UK’s NICE rationed it for eye care.  If you still don’t believe it can happen here, then I’ve got a bridge to sell you.

And let’s look at the “gay” thing Eichenwald refers to in his rant. For my part, I support gay “marriage”. I put the word “marriage” (along with a link o the definition of marriage) in quotes because I think the Republican party is hung up on terminology – specifically the word “marriage”. In other words I am presuming the Republicans are against acknowledging gay marriages not because they are same-sex unions, but because marriage is defined as a union between a man and a woman.  They stand on the principle that all laws should be upheld as written, and the intent kept intact. (now there’s a radical thought!).  The term “marriage” has always been between male and female, hence, to modify this is to change the original intent of any laws.  To simplify this: if the light is red, you stop. If the light is green, you go. If you don’t like the law, change it. But you can’t change “stop” to now mean a “rolling stop”.  Stop is stop.  And here is a good article on Obama’s flip-flop on gay unions.

Romney’s website states he is not against gay unions such that the partners have equal status as a man and wife have in our society and they receive the benefits of a such union, such as health benefits and the rights of survivorship. Call it something else, and insert word that into appropriate legislation and let’s get on with life. At least, that is my interpretation of it.

Regardless, I am not going to vote on social issues in this election. While I have done that in the past, this election is too critical to the overall health and well-being of our country for me vote on anything other than the economic health of our country, and the integrity of the Constitution. (I liken my stance to the airplane safety instructions to put your oxygen mask on first before helping others. We have to be economically stable and sustainable before we can give priority attention to the social programs).

They are economic arsonists.
The Glory of Tax cuts
It is important to keep in mind that the Reagan and Obama scenarios are not apple-to-apples, and perhaps not even apples-to-oranges. It has been noted that the 1982 recession with staggering inflation and the 2008 financial crisis are very different scenarios, and I believe it is a disservice by Eichenwald to write his blog without recognizing this and outlining it for his readers.

But let’s at least spend some time on the language and what is said. Eichenwald recognizes the Reagan wisdom that taxes needed to be cut. He shows his true colors when he calls Arthur Laffer (EMBA students recall the Laffer curve) a carnival-barker. But at least Eichenwald admits that the Reagan tax cuts helped the economy recover.

If you want to understand TEFRA (the Tax Equity and Fiscal Responsibility Act of 1982) click on the link. Here is a small quote from it to give you an idea of its talking points:

In 1988, libertarian political writer Sheldon Richman described TEFRA as “the largest tax increase in American history.” In 2003, former Reagan adviser Bruce Bartlett wrote in National Review that “TEFRA raised taxes by $37.5 billion per year”, elaborating, “according to a recent Treasury Department study, TEFRA alone raised taxes by almost 1 percent of the gross domestic product, making it the largest peacetime tax increase in American history.”[8] However, this “increase” was achieved primarily through the cancellation of future tax cuts scheduled by ERTA the year before that had yet to take effect at the time of TEFRA’s passage.[9] Taxpayers still receive $375 billion in tax cuts in the 3 years following TEFRA.[9]

Now, let’s look at the transcript for the Leslie Stahl – Eric Cantor interview Eichenwald references, to see if we can find the devil-in-the-details. Since it is impossible to deny the Reagan tax policies, those are part of history, I find it difficult to believe Cantor was trying to say Reagan did not sign in tax increases. Rather, it sounds like Eichenwald (and Stahl) got hung up on terminology. Very early in the dialogue, Cantor clearly defines the difference between the words “compromise” and “cooperate” (compromise meaning comprising one’s principles – “their core being”). So later, when Cantor says Reagan did not compromise, he was referring back to his definition of “compromise”. Stahl, no friendly journalist to Republicans, presses him with those words. Cantor dug in that Reagan did not compromise; Stahl and Eichenwald gleefully point out Cantor’s “lie” because Reagan used the term “compromise” in his speech.

This whole discussion is like a trick question. It is like discussing if the glass is half full or half empty. Cantor could have used better judgment in picking his battles, and I think Stahl baited him (and he fell for it).

While we are discussing Reagan, it is thought that another devil in the details is the inflation at the time, which impacted how the Reagan spending cuts were viewed. And there is the defense spending versus non-defense spending. Non-defense discretionary spending actually declined. And with Reagan’s defense spending (to wear down the Soviets in the final years of the Cold WAR), total GDP declined from 1983’s 23.5% GDP to 1989’s 21.2% GDP. Tax revenues over his two terms was at 18.2% GDP (wikipedia). The net effect of all Reagan-era tax bills was a 1% decrease in government revenues when compared to Treasury Department revenue estimates from the Administration’s first post-enactment January budgets. However, federal Income Tax receipts increased from 1980 to 1989, rising from $308.7 billion to $549 billion.(wikipedia).

Eichenwald continues with his personal insults – Michelle Bachman has a certainty to knowledge ratio that exceeds 100 percent. Glad to know Mr. Eichenwald is impartial, otherwise such an extreme statement might be interpreted as being biased. (against women? LOL) Oh, and she is dangerous, too.

The CBO confirms that it is true the tax rates are lower now than they were under Reagan, starting when Obama took office. No issue with that point. However, keep in mind that the tax cuts were triggered by George W Bush after federal taxes hit their highest rate in 2000 as a result of Clinton’s tax policy.

Laffer Curve.
Eichenwald concedes the Laffer Curve is true, but finds fault with the “no-numbers”. I don’t take much issue with his observations, but wish he would spend more time on his own point: “There is some point – even if you want to assume that Laffer is right – where tax cuts decrease the amount of federal revenue. Since 1981, there has been a direct correlation between tax cuts and increases in the deficit.” This is where I would appreciate a discussion along the lines of spending cuts when revenues are down. But for your own edification – click here for a brief narrative on Laffer Curve.

Lucky Duckies who pay no taxes.
Nothing gripes me more than people not paying their taxes, and I am talking about both ends of the spectrum. The rest of us – caught in what is left of the middle class – keep our noses to grindstones, paying our *&^% taxes knowing that so many people – again on both ends of the spectrum – have “gamed” the system. By gaming, I mean people like Warren Buffet bragging about how little they have to pay due to loopholes, and at the other end, people gaming the entitlement system to avoid having to work and having to pay taxes.

My belief with Romney is that because he is a businessman, he will tighten those loopholes. My fear with Obama is he doesn’t know how to tighten them, so his answer is to raise the tax levels. Make no mistake; he will come after the middle class after the election. Because he wants to redistribute everyone’s “wealth”, and while you might not think you are wealthy, you may be wealthy when compared to the lower income families.

Eichenwald makes the case of income disparity versus tax fairness. I disagree that because one is successful financially, they should pay a higher percentage of their income to the government. I believe in the flat tax approach, and I believe in the sales tax. Those two taxes will extract the appropriate monies from those who have it. And I believe the death tax (estate tax) should be not be a death threat to a family continuing their family business (that has already been paying taxes).

Job Creators.
Hmmm should we talk about Solyndra now, or leave it for later? Or look at Trade Reform? Perhaps just Tort Reform is needed to get business back in business.

There has not been much research into how to count job creation in the private sector, so there is no standard approach to this.  Here is a WSJ discussion on that, and Romney’s numbers.  The sites I visited that support Obama call foul at Romney’s number because he includes numbers that were created after he left – I find this hypocritical given these supporters want to hold him responsible for the death (from cancer) of the wife of an ex-employee who died years after Romney left.

Jobs have been created under Obama, but do you know the net effect?  Half a million.  See next link about skewing the Jobs numbers.  Let’s get that out on the table. However, there are mechanisms, (productivity growth, out sourcing) which has cost us millions of manufacturing jobs along with the closing of 45,000 manufacturing facilities. Until we get money into the economy we will not see any significant job growth. Romney is a private sector guy, and that is where I want to see the emphasis, and I think he is best equipped for that.  Businesses thrive when people work, make money, and then spend that money back into the system.  If people don’t have jobs, they can’t get the spending ability that is necessary for our economy.

And again there is that nasty little business about selective data – see  this for an eye-opener on skewing the Jobs numbers, a review of Obama and his Jobs Numbers. (and I am sure everyone is guilty of this – another reason for “buyer beware”)

While we are here, let’s look at Eichenwald’s example. A millionaire gets $340,000 tax cut (I didn’t verify that number is accurate, but will go along with it). Eichenwald makes the assumption that money will be put into savings. He does not make it clear why he believes this, but I question it….A millionaire is going to sock the money in a savings account? Where the ROI is so low? A highly doubtful premise, as there is a point of diminishing return on liquidity. I believe a millionaire will spend the money; some of it spent foolishly, some of it spent wisely, but either way, spent into our economy creating demand for products and services. But I also believe the bulk of it will be put to work to make more money. I believe that is the name of the game for these small-business men and women (ie millionaires) – to put the money to work. Take risks and invest in enterprises, capital equipment, and so forth. That is the world I think they live in – who can find the next big “edge” – who can do it better faster cheaper than the other guy, who can figure out what the consumers really want, who can figure out how to build something people want – whether it’s a better education system, a better mousetrap, a better way of life.

Where do you think their money is going now? First of all, if anyone has any money that IS going into a savings account, I’d venture to say it is because they are fearful the government will demand it in the form of new taxes. That could be why few are investing in their businesses (their alter egos) – because they believe it is quite possible the government will be demanding money from them, and they want to be ready to pay it. (I repeat, if you have ever had a run-in with the IRS, you will find these to be rational fears).

Be sure you understand that I understand that there is no tax on the corporate profits invested back into the company – but keep in mind that many of our small businesses just break even. The owners re-invest their own money  or secure a loan, to invest in the growth of their business (again, their alter-ego).

I believe that the investment will yield far superior results for all when done in the private sector rather than done under the guidance of a bloated government (remember the $1000 toilets?). Robert Mundell (Nobel Prize-winning Canadian Economist) said “Fiscal discipline is a learned behavior”.  How true.

I do agree we need more tax cuts for the middle class, but do not agree we supplement that with higher taxes for the 1%-ers. Indeed, I propose we lower all taxes and scale back on our spending. I think the recent GSA and VA  fiascos are enough to “paint the picture”. Our own “Bell Cityscandal here in CA is further evidence of the massive waste and fraud that is occurring because no one is minding the store – government has too much cronyism at all levels. There are several non-partisan websites available that highlight the waste in government; a little research on it will just turn your stomach. Literally. It is nauseating. (Update October 17, 2012: Tom Coburn just published his Summary on Wasteful Spending

The argument is that if we raise taxes, there will be less money to create new jobs.  The money that would have remained in the private sector that would have been invested in growth would instead be routed to the government.  But there is another consequence – many of these “costs” will be passed on to the consumer. Consider this: Are athletes paid too much? What about celebrities? I don’t have these answers, but I can answer you this – if taxes go up on these 1%-ers, your price of admission is going up. It’s a vicious circle.

What about CEOs? The bonus system? Who is responsible for establishing their pay and bonuses? The Board! The Board is responsible for protecting the interests of its shareholders. Sure, there are examples of out-of-whack bonuses, so let’s set the extreme cases aside and be grateful the light is being shined in these corners. Let’s talk about scenarios where the bonus is a couple of million. I believe it’s true that if you don’t offer these packages, you won’t get your guy/gal. At the same time, I think it is healthy for shareholders to start being a lot more vocal about these pay scales and bonuses. I can tell you this – I wouldn’t take those CEO jobs for all the money in the world. Too much stress, it’s cut-throat competitive, and it is not a lifestyle I would want for myself.

Flat out, I don’t trust bureaucrats to spend wisely, or efficiently. I don’t believe they have mechanisms in place to get the “best price” and the most efficient operations, and I think in part because they have their own entitlement mentality (they are spending other people’s money). Private sector has its challenges too, but in Washington DC it’s a double-whammy with lobbyits playing the game all too well with big dollars, and politician’s needing dollars for campaign war-chests.

Eichenwald asks “where are all the jobs?”, as if the earlier tax cuts that are still in effect should be creating the 125,000 monthly new jobs that are needed. I think his question is mis-guided, and should be re-directed to the architect of the stimulus plan. And it’s not just jobs he should be screaming about – a record 15% of Americans are on food stamps, with enrollment rising 400,000 per month over the last 4 years.

This speaks to the bullet point above – if you take away money from the small-business millionaires in the form of taxes, do you really believe the government will spend it for your own benefit? I do not believe it, based on the track records I have seen. Too much self-interest, at all levels of the government. It is a fair rebuttal to say the same about millionaires, however, at least millionaires money goes directly into our economy when they spend it, or when the mega-millionaires buy their toys or throw their parties or whatever it is they do. Do I want them to earn those dollars by “gaming” the tax system? Absolutely not. Nor do I want to gouge them to pay the way of people who game the system or able-bodied  people who want hand-outs. (This is distinctively different from the people who need a helping hand).

(a side story here – recently, an ex-employee came to apply for his job back. He had left the company 5 years earlier to go work for a competitor. Hoping to gain some competitive intelligence, I asked why he was leaving the competitor. His reply? He had left the competitor a few years back, and now his unemployment had run out…!)

Back to jobs. I have read that we are still short 5.000,000 jobs when compared to 4 or 5 years ago.

So how do we fix it? We find the money to spur the economy, including job training and making money available to small businesses (ie, work on our banking system). The approach circles back to this: who do you trust? The Richard Branson, Steve Jobs, Bill Gates of America? Or the Richard Nixons, Ronald Reagan’s, Jimmy Carters, Bill Clintons, George Bushs of America? My money is on the private sector. While it is far from perfect, I believe the cronyism is a lot less perverse, and the trickle down effect is more beneficial.

Strategic businessmen know how to make money, how others can make money, the VALUE of having others making money, the necessity of delivering good product for the money. They strive to attract your dollars by providing you with value. Does the government try to attract your dollars by providing efficient organizations that care about your needs?  The private sector needs people to have jobs, earn money that these people can save, invest,  and spend.

I like to vote with my wallet – if your product or service is no good (in the form of quality, price-point, or convenience), I simply go to your competitor. No private enterprise could survive treating their customers the way DMV, IRS, or EPA does.

One more point – outsourcing jobs. As a businessman, Romney’s job was to create value for shareholders, which is true of all CEOs. He did that rather well, not 100% of the time, but in general, and yes, this involved outsourcing. The point is, he fulfilled his responsibility to his “boss” – his shareholders. By doing so, he demonstrated that he knows how to create value. As President, he will be tasked with creating value for us, the citizens. I can only conclude that since he knows how to create value in the private sector, he will do the same in the public sector. How he does it will be different, but it is the same strategy – to create value. (Another digression: I have worked with strategic CEOs – they are a different breed. They live and breathe numbers in ways most of us do not. This is one reason I think Romney doesn’t resonate with the public as well as Obama – Obama is a salesman – charasmatic, charming, warm. Romney is a numbers guy – serious, focused, strategic. Different personalities altogether. Get past that, look at the business side of it all, and I think Romney-Ryan team is best positioned to move us forward.)

The GOP is the party of tax cuts
Guilty as charged. But before I respond further, let me remind of on thing – Eichenwald cannot be “on a path of contempt for a party I once supported” AND be non-partisan (“I am not a partisan-bomb thrower”). His contempt will cloud his judgment.

Here is a clip of  Dick Morris analyzing Obama’s proposed taxes for his second term. If you want to understand Obama’s tax plans, take the 4 minutes to view this.

I support lowering the taxes for everyone, and lowering government spending (as opposed to borrowing to make up the difference in the revenue base). The heart of Romney’s plan, as laid out in a recent article is a 20% decrease for anyone who pays income taxes. This means the 10% rate would fall to 8% (20% of 10% = 2%; 10%-2%=8%), the 35% rate would fall to 28%, etc. The corporate tax rate would fall from 35% to 25%. Talk about freeing up money! There is so much pent-up demand, I believe that that money would fly in to the economy.

And before you jump all over me to point to the fact that it ranges from a 2% decrease to a 7% decrease, let me remind you it is the same decrease (20%) for all.

Third, let’s revisit that Kardashin-should-pay-more-taxes argument that was bantered about a while ago, as those points can be illustrative here. See Smart Money article that looks at those numbers, and explains the difference between tax rate and taxes paid. Good demonstration on the numbers. How would you feel if you were able to create an income of $12 M, and half of it went to the government? Before anyone boo-hoos me to death, consider the costs of what it takes for someone like her to create that revenue. My guess is that these people actually don’t make as much as it appears they do – in other words, they don’t get the full benefit, because of the costs associated with the image they have to project. My guess is that the Hollywood media machine keeps the perception going (with freebies and media hype), but if we were able to peek behind the curtain, we’d see the costs these folks bear to keep the image up are quite taxing (tongue-in-cheek intended) on their income. Admittedly, I could be all wet here, but it’s my sneaking suspicion.

Side-story:
I saw a program recently where a journalist was walking through an extremely expensive home in the UK – I have forgotten the details – with the British realtor marketing it. And the journalist said “I bet you have a lot of celebrities come through looking at this” and the realtor (in all seriousness) replied in hushed tones with his thick English accent – “Oh no, they don’t have this kind of money.”

Sure there is ungodly wealth and waste, in both the private and public sectors. Again, I think the self-interest of a tycoon (Richard Branson or Larry Ellis) benefits society better than the cronyism of a bloated government. In a perfect world, we would have neither. But we are not in a perfect world, are we?

The debt.
Americans understand it, however, Eichenwald is missing the bigger question. But first, here are three charts that graph the debt for you. Pay attention to the fact that 2001 projections were wrong – accounting for about a quarter of the deterioration. And they sum it up nicely for me – it isn’t who caused the debt (because we already know that), but who will RETIRE it. My bet is on the businessman with the turn-around record, not the politician who in 2009 said “…having not been there and not seeing all the facts….it is clear the police acted stupidly”. (Just one small example of his leadership that didn’t resonate with me).  And certainly not the President claiming 4.5 million jobs created by conveniently skewing the data

The amount of debt is escalating, rapidly.  But worse, the burden of the interest payments is frightening.  For a historical visual on debt, click here.  And for a discussion on these interest paymentss, click here.   One more point on the interest – as I understand it, a good potion of the Treasury’s debt is in the form of short-term loans.  This means, the Treasury must constantly be refinancing its debt, making it more vulnerable to rising interest rates.  This burden should scare each and everyone of us, and it is one of the things that keeps me focused on spending cuts.  You can’t just tax your way out of this.  As Margaret Thatcher famously once said “The problem is … you eventually run out of other people’s money”. And with regard to raising taxes to balance the budget, here is further evidence in a report by AAF.

Bear in mind, we haven’t even turned our attention to how efficiently we are spending what we are borrowing.  What is our ROI?  There was quite  a heady read on this mess we are in, but for a short take on it, click here.

The debt ceiling “debate”
True, the debt ceiling is nothing more that the legal limit on borrowing. And we should blindly increase it? Because tax cuts have to be paid with borrowings? So stream-lining the organization for efficiency and cost effectiveness is second to incurring more debt? Again, go back to the recent GSA and VA incidences, or better yet, this story on how yet another city official embezzled – $53,000,000 over the years from her town of 15,700 people!! Holy cow! errrr horses! With the caveat that I don’t like tax loopholes and “gaming” our system – at least those are legal!!! (and hopefully those loopholes will be soon unavailable).

And yes, raising the debt ceiling is nothing new, but what is new and different is the amount of debt we have. And there is no end in sight for our lavish spending; Eichenwald continues to miss the point about the spending. I don’t disagree with the Republican’s request/demand for substantial spending cuts to be attached in order to bring the spending-to-revenue ratio down. Someone once said that you can lecture you children about spending wisely, but they won’t embrace that behavior until you cut their allowance.

Eichenwald appears to be trying to credentialize himself by throwing in a few phrases here and there — “diminishing the risk portfolio” “flight to safety”, but then throws up all over himself with “economic illiterates known as the Tea Partiers”. Pity.

Let’s revisit how we went from a small surplus to a large deficit. In part from Bush’s tax cuts in 2001 and 2003, along with the initiatives to launch two wars in the Middle East, create an (unfunded) Medicare prescription plan and introduce a bailout program for troubled financial institutions. As for Obama, add in his $800 billion stimulus package, the extension of the tax cuts (yes, those tax cuts), and unemployment so high it substantially reduced the tax revenues.

And keep in mind that just like ordinary citizens, the government must pay interest on its debt – making the cost of its debt continue to spiral out of control. It is this concern that cause many to “just say no” to the request of raising the debt ceiling, and instead insist on a strategy to get rid of our bloat.

On same subject, CNBC reports the direction Republicans want to take: “He (Graham) also thinks a Simpson-Bowles type deal makes sense. Republicans would generate new revenue not by raising taxes, but by limiting deductions and exemptions, and Democrats would agree to entitlement reform and we all agree to discretionary spending caps,” Graham said. “That’s the magic formula.”

CNBC Squawk Box has a good little video that sums up the debateIt features Buffet, Simpson and Bowles. Pretty good. I haven’t found the second half of it yet, but if I find it before I launch this, I’ll include it.

I see little sense in debating Eichenwald’s interpretation of whose fault this debt ceiling “debate” is, but do want to point out that it is continuing under Obama’s administration. Reagan and Clinton both knew how to bring both sides to the table to work together, Obama simply doesn’t get it. He is and continues to be divisive in his tone and rhetoric, which ultimately works against him. He, like Eichenwald, wants to distract you by engaging in a blame game. It was under his leadership that the “political brinksmanship” occurred, and he was unable to lead our way out of it, resulting in the economic downgrade. I have seen good leaders in action – they lead. Obama is too inexperienced (even more so today) to lead. He can bully. He can heckle. He can speech-ify you to death. But unify? Not in my opinion.

The buck stops at his desk. (“only to some degree”, according to his recent statement)

They are threatening American democracy.
He starts with Sean Hannity and the 2008 Norm Coleman Senate election, and offers us up a diatribe basically complaining about Republicans and sour grapes. But he doesn’t offer up equal time to similar Democratic “sour grapes” over Bush vs Gore in Florida votes, or other sour grapes. A website is still up that proclaims Bush “stole” the presidency. So why not equal criticism? How can a reader believe that this really a neutral, non-partisan author when Eichenwald is so selective in the data he presents? Why the rant when both sides are equally vocal in the sour grapes category?

There is plenty of evidence of voter fraud, and I think people basically know it. I don’t think it even requires evidence, it is so intuitive. But if it is evidence you want, here it is: RNLA, ACORN. While Eichenwald wants to make the case that “registering” voters is different from “voting” (hence he claims a “no harm no foul” claim for ACORN), I believe common sense can interpret the intent. Again, we have a terminology issue and partial truths.

Here is a good article from CNN Opinion on Voter ID, that discusses the challenge in proving voter fraud impacts election results.

Let me say I support voter id, and it appears to me Eichenwald does too, as long as it is inclusionary, and not exclusionary (which I agree with, as long as it isn’t something as passively generated as a library card). I can’t imagine that something like voting for our government is something that can be done without an ID. People are able to get food to their table, get checks cashed, manage day to day functions. Surely they can get an ID.

As for the republicans wanting everyone to vote like them – duhh. Who doesn’t want that?

As for who cheats more, we all have our own gut feel on that, and there is plenty of guilt on both sides. So I am not concerned about who is doing it (because I believe both parties have their bad apples), but I am more concerned about who is going to stop it. Not highly confidant that the Chicago machine is the ticket to stop it.

They are threatening America.
He opens by referring to Republicans as “amoral executioners of this strategy of deceit…slithering their way..pack of lies and demonization” Good one, Eichenwald. Way to be non-partisan. And all in one sentence, too.

In that first rant, Eichenwald conveniently forgets about George Soros, Bill Maher, Jeffrey Katzenberg, the SEIU and others…they all fit the bill. So both sides have their millionaires and gazillionaires broadcasting their messages. So they both have their outliers, so what?

And he talks about Republicans obscenely using Citizens United, but no mention of (tax-payer-funded) MediaMatters (and now of course we have evidence MediaMatter coordinated messaging with the WH administration).

Eichenwald wants you to think Republicans are the anti-Christ and Democrats are the Virgin Mary. He doesn’t offer much up, but sure gets in the gutter with the name-calling and accusations. I think Eichenwald, by the very nature of this blog, is a fear-monger.

I want to take a moment and look at Obama’s goal to “figure out” how to redistribute the wealth so everyone gets a fair shot.  What does that mean? Romney’s dad was poor; Obama grew up poor (based on Michelle Obama’s speech at the convention).  Yet they “made it”.  Apparently, there were mechanisms in place that allowed for this to happen. I believe those same mechanisms – and many more, are still in place.  That’s why we are flooded with people who want to come here.   Our Constitution is rooted in our right to freely pursue life, liberty and happiness.  Yes, it took hard work on each of those families, but they did it.  There are many many more success stories of people coming to this country not speaking the language and with only a few dollars in their pocket, who  succeed.  Have we stopped to ask oourselves, “if they can do it, why not others?”

So now let’s look at Eichenwald’s reference to policy – his implication that Republicans don’t address this (instead thye create massive lies).   I think the Republicans have addressed policy issues – and we can use the recent work requirements for welfare recipients – after reading the documents it does appear to me that the Obama administration violated the law; time will tell. Let’s look at ObamaCare – he wanted to claim a “penalty” but Supreme Court called a spade a spade: it’s a tax. And how many employees have received waivers for ObamaCare? Documents released in January show approximately 543,812 union employees will benefit from waivers and approximately 69,813 private sector employees will benefit from waivers. Not to mention Congress. OR shall we look at Fast and Furious, Solyndra, Massachusetts-based A123 for new batteries that filed Chapter 11, the job-creating pipeline, or the lack of votes for his own budget, his promise of transparency, which never materialized. And the auto bailout ( creditors lose out when years of bankruptcy proceedings are tossed aside). Or Foreign Policy – I disagree with his treatment of Israel, his naïveté about “just talking” (“America needs to practice restraint and co-operation”) with rogue countries, his handling of Arab Spring (lots of info available on this with the recent murder of our ambassador in Benghazi), his failure to derail the Iranian nuclear project (and now Russia has unilaterally pulled out of a two-decade old partnership with the US to safeguard nuclear and chemical weapons), Moscow’s veto of three UN resolutions on Syria while arming A Damascus regime that has killed 30,000 in 19 months, and on the lighter side, his return of the Churchill bust (there were two, and he returned the more prominent one), and his numerous gaffes in the UK (he gave dvds to the Gordon Brown, which didn’t even play on their devices, didn’t give The Queen the usual bow, attempted to speak over their own national anthem when toasting the Queen, and so on). Incidentally, I am one of those who are offended that he bowed deeply before a Muslim king but gave a simple nod to the Queen of England after shaking her hand, and I am regretful for his language when he treats Egypt so casually when it comes to considering them an ally.

Obama said if he doesn’t fix the problem in three years, he should be a one-term president. What happened to that?

Finally, here is a  CBS blog (and I don’t consider CBS Republican-friendly) on the new movie 2016, written as an observation on what Americans are focused…and after reading this blog, I will go see the movie for myself, and draw my own conclusions. As for you, fellow reader, I suggest you check it out, and then separate fiction from fact.  But the worse thing anyone can do is turn their nose up to it because it might shake their belief in Obama.

The biggest gripe I have is that Eichenwald’s own rage (his word) has driven him to write a piece that is so unthoughtful, so one-sided, so hollow, – he too is caught up in the blame game.

There is a theory that what you hate about others is most likely what you hate most about yourself. It’s called projection bias, and I believe Eichenwald suffers from it.

One thing I am sure we all CAN agree on – this is wayyyyy too long!

1 – http://en.wikipedia.org/wiki/Supply-side_economics