Recently in Congressional Shenanigans Category

I caught the end of tonight's World News on ABC. Since it was Friday their usual last feature is Person of the Week.

This week it was the three mayors of Los Angeles, Philadelphia, and Mesa, Arizona. What is it that moved ABC to select them as Persons of the Week? They want the federal government (specifically Congress) to stop dickering around and do something about America's crumbling roads. After all, the US used to be number one when it came to the quality of our highways and byways. But no longer. We now rate 20^th in the world behind Malaysia and Cypus.

"If they pass the surface transportation bill and America Fast Forward, it will allow us to accelerate the building of that 30-year project in a 10-year period of time, creating 166,000 jobs," Villaraigosa said. "These are the kinds of innovative things that the Congress has an opportunity to do that they haven't done up to now. ... Their failure to address the No. 1 issue in America, the jobs issue, is akin to the captain of the Concordia jumping off the ship before the passengers had been rescued. This Congress needs to get back on that ship and do their job."

I have to admit that I agree with these mayors that our highway system has been seriously neglected over the past few decades. Some states do an admirable job keeping their roads in good shape but they have to struggle to do it, sometimes sacrificing other infrastructure programs to keep the roads open.

But there's something I must point out that the mayors have conveniently forgotten: the ~$800 billion stimulus package put forth by President Obama in 2009. If every penny of that money had gone to fixing roads and other infrastructure they wouldn't have had to try to cajole Congress into dealing with the issue now. We would be almost 3 years into the 10 year rebuilding effort and plenty of people presently unemployed would be working. But no one mentions that out of the entire stimulus package less than 10% went to infrastructure, and not just roads. The rest of the stimulus went to expanding government and lining the pockets of Obama supporters.

Do we really want Congress to drop another trillion dollars on projects that won't do anything but waste taxpayer dollars we don't really have? If we're going to drop a bundle of tax money on roads, then the appropriations will need to be specifically targeted to each state and limited to use on roads only. No "bridges to nowhere", no side projects that have nothing to do with improving roads, and provisions to do away with the Bacon-Davis Act restrictions (saving tons of money in the process).

I saw this ad on TV for the first time the other night. It's to the point and describes our fiscal problems in language even Congress and Obama can understand.


Our government is addicted to spending money we don't have, the same disease that has been such a big affliction in the EU.

It is said the truly smart will learn from the harsh lessons of others' failures. I can say that one member of the WP clan is that smart, that being the youngest of the WP sisters. (As she says, she made her own mistakes while growing up that our parents never found out about.)

It would be great if the political class presently ruling the US was as smart as my youngest sister. Unfortunately they are not.

They see the economic meltdown occurring in the Euro-zone, yet refuse to learn the lessons countries like Portugal, Ireland, Italy, Greece, and Spain are teaching us, the primary one being that eventually you will run out of other people's money to fund all the wonderful social programs that have been used to bribe the electorate.

Italy is the latest to teeter on the brink of insolvency, and should it go over the edge it is quite likely it will pull the rest of the Euro-zone with it. Greece's default damaged the European economy yet it has only a fraction of the GDP of Italy. Should Italy default Europe will take an additional $2 trillion hit it cannot afford. Is it any wonder Germany is considering abandoning the Euro and going back to the mark? Can anyone deny that this problem has been driving the British public to demand a referendum about whether or not to remain in the EU? At least those two countries see the problem and realize they'll have to bankrupt themselves in a doomed effort to prop up economic policies from Brussels.

But too many of our own politicians at the state and federal level, regardless of party, seem oblivious to the fact that unless we make some drastic changes in how our federal government taxes and spends we will be headed down the same path. Labor leaders ignore the fact that neither businesses or taxpayers are a bottomless source of funds, shortchanging their own members by making promises no one can keep.

Should the US fail to put its financial/economic house in order, and right quick, it will pull the world economy down with it into a depression unlike any we've seen before.

It seems yet another attempt to do away with the dollar bill is in the works, something I have advocated since the Sacagawea dollar coin made its appearance.

Proponents of keeping the dollar bill cite the unpopularity of the coin because no one is using them. But the reason they don't use them is because the dollar bill is still being printed. It also wastes billions of taxpayer dollars to keep printing bills that wear out in 18 to 24 months. Coins last at least 20 years.

Two of those working against doing away with the dollar bill? Senators Scott Brown (R-MA) and John Kerry (D-MA). This doesn't surprise me because the sole company that makes the paper used to print all of our paper currency is located in Massachusetts. Without the dollar bill they won't make nearly as much income as they have been, meaning they'll probably have to lay off some employees. So the two senators from Massachusetts are working to protect a small number of jobs in the Pay State at the cost to the taxpayers of $183 million per year.

This rant by a small business CEO tells it like it is, something the folks inside the Beltway no longer seem to understand. Do they really think "incentives" to hire will induce business to hire anyone? Businesses hire only when they need more people, not because the government provides some kind of lame incentive to do so.


If the government really wants to give businesses an incentive to hire, then maybe it should get the hell out of the way. Maybe government should stop sucking so much money out of the economy that there's less available to invest or to buy goods and services that create the demand for more jobs. Maybe rogue government agencies should be reined in before they do irreparable damage to the businesses that actually create the jobs.

After all the dire predictions 'they' made about what would happen if Congress didn't raise the debt limit, it turns out they were wrong.

The President got his debt limit increase, but the stock market and at least one financial institution - Standard & Poor's - apparently didn't see it as a solution, and rightfully so. The stock market headed downwards, wiping out a year's worth of gains. Standard & Poor's is still threatening to drop the government's credit rating from AAA to AA or AA+ because of the government's continuing spendthrift ways.

The increase in the debt limit didn't solve the problem we're facing. It merely delayed the inevitable. Former Arkansas Governor Mike Huckabee offered an analogy that illustrated the problem perfectly.

Raising the debt limit solves the government's spending problem like raising the maximum legal blood alcohol content will solve the drunk driving problem.

I'd say he nailed it.

Over the past year and a half I've listened to a large number of people disparaging the Tea party movement. Most of them have been card-carrying Democrats (or at least those with the belief they know how to spend my money better than I do). Others have been RINOs or part of the so-called "Establishment" Republicans.

The Tea party has been excoriated in the press, with the New York Times, the Washington Post, and a number of other media organs of the Left leading the way. Washington politicians and other Beltway insiders have derided the Tea party as "hobbits", "terrorists", "Nazis", "racists", "jack-booted thugs", and a whole host of other derogatory labels.

As the volume of hateful rhetoric aimed at the Tea party and its supporters has increased, it has made me and others realize that the groups making these accusations must be really getting nervous. As one commenter to this piece wrote, "If you're getting a lot of [flak], you must be over the target." And so it must be as the Tea party gains supporters throughout the country at a local, state, and national level because they're tired of being ignored by the Coastal elite and the Beltway intellectuals.

My most memorable run in with an unabashed Tea party hater took place at our business when one of our customers went on a rant about "those goddamn Tea partiers wanting to take everything away from us!" There was no way I could not respond, so I asked her where she'd gotten that idea. Apparently she'd read it in the paper, in this case the Boston Globe. (One must remember, the Globe is owned by the NYT and has the same editorial policies as its parent corporation.) I calmly informed her that if her opinion was based solely on what she'd read in the Globe, then she'd been misinformed and lied to. She saw the Tea party as a bunch of religious fundamentalists bent on depriving the poor, doing away with Social Security and Medicare, and undoing decades of civil rights advances. I had to remind her that many of the civil rights advances came from the GOP, not her sainted Democrats. I reminded her the KKK were primarily Southern Democrats, not Republicans. I reminded her it was the Democrats who started us down this path of unsustainable spending going all the way back to FDR. I reminded her that it was LBJ who decided his Great Society was the answer to all of our society's problems, that it had failed miserably, and that it was funded by stealing from the Social Security trust fund.. I reminder her it was the Democrat majorities in Congress going back to 2007 that multiplied the annual deficits to many times that of all of Dubya's deficits combined.

I gave her the URL for the Contract From America website which explains the Tea party platform, none of which deals with social issues she claims the Tea party is involved with. She wasn't interested. Instead she chose willful ignorance and adherence to libelous propaganda from those who do not have her best interests at heart.

Maybe she will care when the country is unable to pay its bills and all of the government support she is 'owed' ends because there's no money left to pay for it all. Maybe she will care when all "the rich" she's constantly complaining about are either driven into bankruptcy or flee with their wealth to friendly climes and no one is left to pay for everything she is owed.

But I'm not holding my breath.

UPDATE:It appears Senator John Kerry has decided to add fuel to the fire by expressing his opinion that the media should not give equal time to those "absolutely absurd notions" voiced by the Tea Party because their opinions "are not factual."

What a putz.

It's no secret I'm a fan of Ayn Rand's Fountainhead and Atlas Shrugged. In both I've seen far too many parallels to what's been happening in our country, particularly since 2007.

The seeds for our self-destruction were laid a long time ago and now, in some places, are bearing fruit. All one needs to do is look at the state of Illinois and the city of Detroit. Both illustrate exactly what Rand wrote about over 50 years ago.

As Dan Mitchell explains, plans for a number of Detroit neighborhoods outlined in a CNBC report sounded familiar.

But there was also something about this story that rang a bell. It took a few minutes, since I'm getting old and decrepit, but then I realized that "blighted areas" was an eerily familiar term. Didn't Ayn Rand use that term in one of her books?

Indeed, she did. Thanks to the miracle of Google Books, here is one of several passages in Atlas Shrugged that references Detroit--oops, I mean "blighted areas":

No railroad was mentioned by name in the speeches that preceded the voting. The speeches dealt only with the public welfare. It was said that while the public welfare was threatened by shortages of transportation, railroads were destroying each other through vicious competition, on "the brutal policy of dog-eat-dog." While there existed blighted areas where rail service had been discontinued, there existed at the same time large regions where two or more railroads were competing for a traffic barely sufficient for one. It was said that there were great opportunities for younger railroads in the blighted areas. While it was true that such areas offered little economic incentive at present, a public-spirited railroad, it was said, would undertake to provide transportation for the struggling inhabitants, since the prime purpose of a railroad was public service, not profit.

Fifty years ago, the book was viewed as a dystopian fantasy. Today, Greece, Illinois, and Detroit are making Ayn Rand seem like a prophet.

When I reread Atlas Shrugged a couple of years ago, the hairs on the back of my neck rose. Everything Rand had created in her novel was happening at that moment. (I have to admit I had little appreciation for the book when I read it the first time over 35 years ago. I guess history gives one a little more perspective.) Many of our present day "betters" are characters right out of the novel. What makes matters worse is that their ignorance of how the economy works is not so much a lack of exposure to it so much as willful ignorance on their part. They don't want to know how things work in the real world because they know better how to remake things into their version of utopia. Too bad they're wrong because their version of utopia is hell on earth for everyone else.

As mentioned earlier, all we have to do is look to Detroit to see how well that's all worked out. There are plenty of other examples of this just in the US alone, like Newark and Jersey City in New Jersey, and Gary, Indiana. If you need larger examples then states like Illinois, Michigan, New Jersey, and California should suffice. All are suffering under decades of enlightened rule by our betters (though New Jersey has a glimmer of hope in the form of Governor Chris Christie). If that isn't enough for you then look to Greece and Portugal to see how things have worked out there.

We see example after example after example of how our supposed "betters" are no such thing, being no better than what Rand called "looters" in Atlas Shrugged, for that's what they are.

The pols in Washington are still going at it hammer and thongs, and after weeks of debate and rhetoric they have been unable to come up with a workable compromise about the debt ceiling, out of control government spending, and a push to raise taxes.

But a group of five ordinary citizens were able to work out how to solve the problem in only an hour.


It seems to me we've been looking in the wrong place to find the answers needed to fix this problem. Some will claim their solutions are overly simplistic and overlook the nuances and complexities of the problem. But that is the problem. Those 'nuances and complexities' are what make it seem impossible to solve the problems. The folks in Washington tend to forget that no matter what they do, someone somewhere is going to be inconvenienced or hurt. The trick is that maybe we have to ignore that situation or any solution will be impossible. And then everyone will be hurt, possibly to a level not seen since the Great Depression. That is no solution.

What say you?

If we want to save billions of taxpayer dollars, stop the negative effects of government interfering with market forces, and let food prices seek their own level, then maybe it's time to get farmers off the federal dole.

While some may decry such an action as being against the interests of small family farms, those same folks speaking out against such cuts don't understand that it isn't the small family farms receiving the benefits of the government subsidies and tax breaks, but the large agribusiness corporations. They don't need those subsidies and shouldn't be receiving them because in the long run all they do is raise food prices (and the taxes keeping them there) to the detriment of everyone else, including the small farmers.

Government subsidies obviously aren't necessary for food production: people have fed themselves and traded their surpluses for thousands of years. The system doesn't help consumers. Reducing supplies and imposing price floors obviously are bad deals for the hungry. Paying off farmers might lower some prices, but steals back through taxes any benefits received by consumers. Agricultural subsidies are designed by farmers for farmers.

But which farmers? Not the idyllic family farmer. The majority of payments go to farms with average annual revenue exceeding $200,000 and net worth around $2 million.

Many of the subsidies date back to the Depression and the reasons for them no longer exist, but here we are seventy years later and we're still paying for them.

Before anyone gets on their high horse about saving the American farm, we should look at what happened when another country eliminated farm subsidies, in this case, New Zealand.

In 1984, New Zealand's Labor government ended all farm subsidies, which then consisted of 30 separate production payments and export incentives -- a striking action given that New Zealand was five times more dependent on farming than the U.S. economy.

A report from [2001] from the country's main farmers' group, the Federated Farmers of New Zealand, documents what happened:

While land prices initially fell after reform, by 1994 they had rebounded and remain high today.

The predicted farm bankruptcies never materialized -- with just 1 percent of farmers going out of business.

The value of farm output soared 40 percent in constant dollar terms since the mid-1980s and agriculture's share of national output rose from 14 percent to 17 percent today.

Since subsidies were removed, productivity in the sector has risen 6 percent annually -- compared with just 1 percent before reform.

New Zealand's farmers have competed successfully in world markets against subsidized producers in much of the rest of the world.

Can anyone successfully argue that we shouldn't do the same thing, and quite likely, see exactly the same results? Oh, I'm sure someone will try, particularly the folks from the "corporate farm" lobby. But maybe it's time we wean these folks off the government teat and let them succeed or fail on their own rather than allowing them to continue dipping into the taxpayer's wallets.

I must admit to being on the edge of Debt Crisis Fatigue after being bombarded by Obama, the Democrats, and the media for months on end about our impending doom if Congress doesn't pass an increase in the already outrageous debt limit.

I might not have nearly as much of a problem with Congress doing so if the Spender-In-Chief were willing to support spending cuts equal to the increase in the limit, but we all know there's no way he'll do that.

In truth, I don't like the idea of raising the debt limit even one penny. History shows us the promises made by Congress to cut spending if only the debt limit is raised have never been kept. All we've ever seen from such promises is more taxes and more spending. The promises made aren't any more real than the old "The check's in the mail" dodge, except that we're talking trillions of dollars, a number that doesn't seem to faze Obama or Congressional Democrats, but scares the bejeezus out of just about everyone else.

It's ironic, considering that many of the same people pushing for increasing the debt limit were vehemently against it the last time the issue came up. The difference this time around? Last time it was a Republican in the White House while this time it's a Democrat, and he's asking for an increase that is far greater than the last one.

Talk about a double standard.

If the President and his Democrat cronies won't control their insatiable appetite for running up the national credit card, particularly if they're not the ones who will have to pay the bill, then it's up to the GOP and the Tea Party to do it form them. Better it be done now than when it will be so painful that it brings the economy down even more than it already is. Obama and the Dems aren't willing to admit that the credit card company (that means us, folks) aren't willing to raise their credit limit until they pay off what they've already charged. Until then it will have to be as so many of we so-called "little people" do under these circumstances - pay cash, or do without.

The national credit card is maxed out and the issuers - We The People - are saying "Enough!"

This is an update to a previous post about how our government wastes taxpayer money on creating money, in this case on dollar coins no one wants or uses.

Now ABC News is on the case (thought they got it from NPR), reporting on how billions are wasted on those dollar coins that end up sitting in Federal Reserve vaults.


While the report points the finger at legislation that mandated the minting of the coins, specifically the Presidential series coins, the blame is being laid in the wrong place, or on the wrong piece of legislation.

As I have written far too many times, the reason the dollar coin is unwanted is because Congress hasn't had the courage to do away with the dollar bill. As long as it is still in circulation the dollar coins will sit in those vaults, unused, unwanted, and costing the American taxpayers plenty.

The ongoing disagreement between Congressional leaders and the President about the debt limit, taxes, and spending is showing the American people more than they wanted to see. To me this means far too many of the Democrats still seem to think we can fix the the deficit problem by spending even more money we don't have and can't pay back even if they make "the rich" pay their "fair share" in taxes, and the President acting like a spoiled and petulant child, placing all the blame for the outcome of his ill-advised and fiscally disastrous policies on the GOP because they don't or won't recognize his genius.

As much as the Democrats and the media try to spin it, the Democrats are about to reap what they've sown, namely a seriously broken financial system and the enmity of a large majority of the American people, particularly those in flyover country.

One commenter to a previously linked WSJ piece has proposed a solution to the spending problem with deep cuts for agencies and programs that manage to do nothing but waste billions of taxpayer dollars and create misery for far too many of the people they say they're helping.

Here we go. A quick way to save a few bucks.

2011 Budget Line items to consider - spending at the federal level, independent of state spending:

$129.8 Billion Education (why is the federal government involved in this?) - Zero out

$495 Billion Welfare (that's charity, right? Is this an enumerated power at the federal level or is it a state power? My take is I didn't see a charity power and Grover Cleveland agreed with me.

Grover Cleveland veto statement when vetoing charity to help Texas farmers:

"I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that, though the people support the government, the government should not support the people. The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood."

-zero out.

--snip--

$22.7 billion Fuel and energy (as in Ethanol?) Why does energy need a subsidy, it's suppose to provide the value, not absorb it? - Zero out.

There's plenty more, so I suggest you Read The Whole Thing. While I don't agree with every point brought up, I can live with these proposed cuts as compared to some of those proposed within Congress.

It's gotten to the point where President Obama resembles one of those romantic swains who does not understand that "no" means "no", or in this case "Hell no!"

We have an economy that is still foundering due to job-killing regulations made by rogue bureaucracies, job-killing legislation by Congress, bailouts to commercial and financial institutions that don't deserve them, and a government spending spree that looks more like a teenager running around using daddy's credit card. But the 'teenager' doesn't understand that the credit card has reached its limit. What's worse is that he wants the credit card issuer (i.e. the taxpayers) to pony up even more credit to keep spending money he doesn't have and can never pay back. When he doesn't get his way he throws a tantrum, blaming the over-the-limit credit card he used on those no longer willing to have their pockets picked by an ungrateful and willful child.

Try as he might, I don't think Obama's going to get away with painting the GOP as the cause of the upcoming default on August 2^nd. The Republicans are standing their ground, not willing to give the President a pass by reneging on their campaign promises and raising the debt limit in return for 'future' spending cuts. All one needs to do is look how such promises made by Democrats in the past all fell by the wayside once they got their way to see how foolish trusting them again would be.

On top of that, the President wants to impose an additional $1 trillion in taxes on top of those he's already added to pay for it all. (We all know that theoretical extra revenue will not be used to pay down the debt, but will instead be spent on stupid and foolish things we don't need, want, or can afford.) That's all we need is to have yet another $1 trillion in capital removed from the economy, money that otherwise would be used to expand businesses, create jobs, and expand the tax base. Neither the President or Congressional Democrats see that every action they have taken over the past 4 years has narrowed the tax base, increased uncertainties in the business world which in turn has discouraged investment and hiring, and stretched out a painful recession and the resulting high unemployment/underemployment an additional 2 years with who knows how many more to follow.

What part of "Enough! Not one red cent more!" does the President fail to understand?

All of it, apparently.

For anyone who's been paying attention for even the past 6 months, it's obvious that our country has a major problem: debt.

While this is not a new problem, it is the magnitude of our national debt that has become quite worrisome. On top of that we have a Congress (or at least one chamber of Congress) that seems incapable of dealing with this problem. Rather than dealing with it, they seem fine with staying the course they set over four years ago. It doesn't help that the President seems hellbent on allowing them to continue their profligate ways, all while trying to stymie the Republican opposition trying to deal with it buy doing what needs to be done.

While the Democrats are convinced this country has a major revenue problem, just about everyone else knows what we have is a spending problem, and that we've managed to dig what John Stossel is calling The Money Hole.

While part of Congress and the President seem unwilling to do something to fix the problem, there are a number of other chief executives at the state level who have similar problems and met them head on. One in particular stands above all the others.

Some governors have shown the way. You know about Chris Christie, Scott Walker, Rick Scott, John Kasich, etc. But you probably don't know about Luis Fortuno.

Fortuno is governor of Puerto Rico. Two years ago, he fired 17,000 government workers. No state governor did anything like that. He cut spending much more than Walker did in Wisconsin. In return, thousands of union members demonstrated against Fortuno for days. They clashed with police. They called him a fascist. (Gee, that seems to be the accusuation du jour, as a union leader called Chris Christie a Nazi, too. -ed.)

Fortuno said he had to make the cuts because Puerto Rico's economy was a mess.

"Not just a mess. We didn't have enough money to meet our first payroll."

Fortuno's predecessors had grown Puerto Rico's government to the point that the state employed one out of every three workers. By the time he was elected, Puerto Rico was broke. So the new conservative majority, the first in Puerto Rico in 40 years, shrank the government.

What did Fortuno cut? Believe it or not, everything, including his own salary. Nothing was immune from his budget ax. As he said, raising taxes wasn't going to happen because they were already too high. And he didn't waste time doing it, either.

Fortuno's advice for leaders who want to shrink the state: "Do what you need to do quickly, swiftly, like when you take off a Band-Aid. Just do it. And move on to better things."

The longer the delay, the less likely it will get done to the level needed in order to turn things around.

Many of our states are in a similar bind.

Governor Chris Christie of New Jersey has been fighting this battle from the day he took office. And while he hasn't been gentle in dealing with the Garden State's abysmal financial conditions, he has been straightforward dealing with them. He hasn't pulled punches. He hasn't apologized. And he hasn't taken crap from state employees or teachers who feel they are entitled to plunder New Jersey taxpayer's wallets. He's told it like it is and the taxpayers of New Jersey appear to like what he's been saying.

My home state of New Hampshire, while not in the dire financial straits seen in New Jersey, California, Michigan, and a whole host of other states, has still had to deal with the aftereffects of a four year spending spree by legislative Democrats that started in 2007.

Normally a frugal state, New Hampshire legislative Democrats and the governor opened up the floodgates for state spending, increasing the state budget by over 30% in four years. The only problem was that they used overly optimistic revenue projections to justify it. Their projections were wrong and they left the state with an $800 million+ deficit, something illegal under the state constitution. They attempted to plug the deficit by boosting business taxes during a deep recession and seizing surplus funds from a state-chartered (but not state-funded) medical malpractice insurance agency, just to name two instances where they tried to use un-New Hampshire-like tactics to refill state coffers. Both failed, the first when voters revolted and threw the Democrats out, and the second when malpractice policyholders sued the state in court and won a decision that banned it from 'appropriating' private funds to which the it had no claim.

This year the Republican-dominated legislature cut the budget by 10%, though the Democrat governor may veto it as it stands. (The GOP has a supermajority, meaning they can override the veto should the governor do so.)

It's not just the states that have had to bite the bullet to fix government overspending.

Our neighbor to the north found itself in a similar position to where we are today, but they didn't hesitate when it came time to put their financial house in order.

When I think Canada, I think big government. I'm embarrassed that I didn't know that in the mid-'90s, Canada shrank its government. It had to. Its debt level was as bad as ours is today, almost 70 percent of the economy. Canada's finance minister said: "We are in debt up to our eyeballs. That can't be sustained."

--snip--

The problem, he added, was that Canada had a government safety net that was more like a hammock.

So in 1995 Canadian leaders cut unemployment benefits and other programs. It happened quietly because it was a liberal government, and liberals didn't want to criticize their own. The result was that Canada's debt stopped increasing. As the government ran budget surpluses, the debt went down.

--snip--

Canada fired government workers, but unemployment didn't increase. In fact, it fell from 12 percent to 6 percent. Canadian unemployment is still well below ours. And the Canadian dollar rose from just 72 American cents to $1.02 today.

That means that laid off government workers got new jobs elsewhere and became productive citizens rather than a drain on the taxpayer's wallets and the Canadian economy. Isn't it likely the same thing will happen here as well? Or are our gummint employees only competent enough to work for the government? (Unfortunately that might indeed be the case, as sad as that sounds.)

So the question is whether or not Congress will tackle the fiscal mess they helped create? Or will they continue along the path of least resistance (and the least amount of work) and not address the problem until they have no other choice, like when we're coming after them with pitchforks, torches, and a lot of rope?

If we need any more proof of the axiom "Insanity is defined as doing the same thing over and over again, but expecting different results this time", then here it is:

Democrats want to go back to the bad old days of dozens of income tax rates, with the highest being 49% (though some are suggesting 70%), figuring they'll collect billions more in tax revenues. However, history shows the won't collect all that much more and in fact will collect even less than they do now.

The intelligentsia of the Democratic Party is growing increasingly enthusiastic about raising the highest federal income tax rates to 70% or more. Former Labor Secretary Robert Reich took the lead in February, proposing on his blog "a 70 percent marginal tax rate on the rich." After all, he noted, "between the late 1940s and 1980 America's highest marginal rate averaged above 70 percent. Under Republican President Dwight Eisenhower it was 91 percent. Not until the 1980s did Ronald Reagan slash it to 28 percent."

--snip--

All this nostalgia about the good old days of 70% tax rates makes it sound as though only the highest incomes would face higher tax rates. In reality, there were a dozen tax rates between 48% and 70% during the 1970s. Moreover--and this is what Mr. Reich and his friends always fail to mention--the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.

All this will do is narrow the tax base even farther than it already has been, placing an even greater burden on upper income Americans. The so-called Fairness in Taxation Act will be anything but. The Democrats seem to worry the rich aren't paying their "fair" share. Never mind that they already pay a very large majority of income taxes. Never mind that just under half of American wage earners already pay no income tax at all. How is that not fair? Oh, yeah, I forgot. To tax-and-spend Democrats, a fair share is always defined as "more than they pay now."

They've chosen to ignore the effects such tax rates will have on the economy, that being that it will kill off any recovery there may have been as investment capital flees the country, meaning businesses won't be able to expand and jobs these businesses might have been able to provide won't be created. All they have to do to see what the effects of a return to those draconian tax rates is look at what the US economy was like back in the 1970's.

For those of you who have forgotten (or weren't born yet), the economy sucked. Unemployment skyrocketed. Inflation reached staggering rates, as did interest rates. Now these know-nothings want to take our already shaky economy and create an even bigger recession when they kill off any incentive to invest, to expand, to do better. Haven't they learned that if you punish people for succeeding all they will get is failure and a shrinking economy, along with plummeting tax revenues? Obviously not.

Need another example? How about the UK during the same time? They greatly increased income taxes across the board, with the top tax rate reaching 98%. As soon as the government imposed those taxes, the British economy collapsed as wealth and investment capital fled for more friendly environments. It wasn't until the 80's when Maggie Thatcher became Prime Minister and drove Parliament to end such insanity that the British economy recovered.

Yet here we have another bunch of economic morons within Congress who want to do the same thing, figuring it will have little if any effect on the economy. They have chosen to ignore history, and are thereby doomed to repeat it. Unfortunately it will be We The People who will pay the price for such stupidity and arrogance.

A few weeks ago my post quoting one of the unfortunate truisms we live under - how regulated portions of the economy tend to have the biggest problems - struck a chord with one of my commenters.

Apparently she believes we don't have enough regulation, citing the problems caused by shady banking practices that helped bring down the economy as the only justification for even more regulation. I came back at her with the problems within the telecommunications industry because of heavy-handed regulation, much of it at the behest of "rent-seekers". Such 'regulation' is crony capitalism at its worst and in the end benefits no one except the rent-seekers. And even they feel the negative effects eventually, making far less money than they might have otherwise and costing the consumers plenty.

There are plenty of other examples of regulation having exactly the opposite effect from the one most would expect. The question is, where to start?

How about one of my favorite targets, gasoline? Or should I say ethanol in gasoline?

Ethanol

The EPA, in it's push to clean up the tailpipe emissions of anything that burns gasoline, decided that pump gas needed something that would help gas burn cleaner, thereby reducing pollution. At first that something was MTBE. MTBE certainly helped engines with carburetors burn cleaner, but it had little effect on fuel injected engines. Unfortunately MTBE had a serious side effect.

While it helped gas burn cleaner, it also polluted water supplies as it was a hydrophilic substance, meaning it was chemically attracted to water. Unfortunately the water it was attracted to far too often was that in out municipal water supplies and private wells. MTBE started showing up in places it didn't belong. It didn't help things that it's also considered a carcinogen.

So in its wisdom, the EPA banned the use of MTBE and decided ethanol would make a great substitute. Like MTBE ethanol also helped gasoline burn cleaner with the added benefit of boosting the octane rating of gasoline. While the water pollution problem was solved, other problems raised their ugly heads, some of them quite costly to deal with.

Like MTBE, ethanol is hydrophilic. It absorbs water. The problem with it is that if it absorbs enough water it separates from the gasoline, turns into a yellowish sludge, and settles to the bottom of the tank. This has two effects. First, it lowers the octane rating of the gasoline. Second, the sludge will clog the fuel systems of the vehicles it's used in.

On more than one occasion I've written about the problems with ethanol in marine gas and how it costs boat owners millions in repairs. The same holds true in other areas, such as small gas-powered equipment. Lawnmowers, chain saws, weed-trimmers, snowblowers, generators, lawn tractors, and a whole host of other equipment don't get along with 90/10 gasoline/ethanol mix presently being sold in the US. Corrosion, detonation, and deterioration of plastic/rubber parts in the fuel systems plague otherwise trouble-free gas powered equipment.

But that's not the whole story of ethanol. There are other unintended consequences created by the use of ethanol as a fuel component.

One of the biggest is the effects on food prices, followed only by the greater pollution generated by its production.

When land previous used to grow food is now used to grow the feedstock for ethanol (corn), the supply of food goes down and prices go up. More pollution is created when those feedstock crops are grown because the farmers will use even more fossil fuels and petroleum-based fertilizers to grow them. The amount of energy derived from the ethanol created from those crops barely equals the amount of energy used to grow and process those crops in the first place.

But do you know what the biggest irony of this story is? Gasoline/ethanol fuels don't help fuel-injected engines burn any cleaner than straight gasoline does. These days, how many engines in cars and trucks sold over the past decade and a half or so aren't fuel injected? None of them.

Oh, and one other thing we must remember about ethanol: it contains less energy per gallon than gasoline, meaning you need to burn more of it to get an equivalent amount of power out of the engine using it. What that means is you get fewer miles per gallon with ethanol-blended gasoline than you do with straight gasoline. And this is good how?

Air Pollution Other Than Tailpipe Emissions

Here's another area where the EPA has gotten it wrong, and it's all going to cost us plenty with little return seen for what we spend.

First, I have to ask you out there how many times you've heard this refrain: "It's just awful! Air pollution is getting worse all the time!"

I've heard it far too often over the past 10 years or so. There's only one problem...it's a lie.

I can't speak for you, but I can honestly say I remember the days when the smog was so bad in some cities that it cast a dark brown pall over them. Automobiles, trucks, power plants, and factories spewed all kinds of noxious fumes from their tailpipes and smoke stacks. The air stank of all kinds of chemicals and partially burned hydrocarbons, even in many of the smaller cities.

Can we honestly say that is the case today? Not by a long shot.

But what effluvia still spews into the atmosphere isn't necessarily the fault of those generating it so much as it's the rather rigid rules created by the EPA that makes it far more expensive to clean up the emissions from the smokestacks than it needs to be. What do I mean by this? Call it the All-Or-Nothing rule.

Let's use coal-fired power plants in the mid-West as an example of the shortsightedness of this rule.

At one point during the Bush Administration, the president wanted to relax rules that would make it easier for the aforementioned coal plants to upgrade their systems to make them more efficient. The upgrades would also have the side effect of making the plants run cleaner than they would without the upgrades. But those upgrades also meant they had to go well beyond those changes and install scrubbers and other air pollution controls as if the plants were brand new. New plants had to meet far stricter emissions requirements than the older plants. The cost to make the older plants meet the new requirements exceeded that of building a new plant. Under EPA rules the utilities had two choices - spend far too much money to upgrade the old plants to meet new plant requirements, or don't do the upgrades at all. There was no in-between solution as far as the EPA was concerned.

So what happened?

President Bush was lambasted by Congressional Democrats and enviro-socialists for "allowing his buddies in the energy industry" to pollute the air all in the name of obscene profits. Congress killed any chance the utilities would get a waiver to reduce their emissions less than the EPA wanted them to. The end effect: the coal plants were not upgraded, their efficiencies were not increased, and their emissions did not decrease. Yet somehow the EPA and the left saw this as a victory for the environment. They wanted the whole thing but they ended up with nothing at all and everyone downstream of those plants are still paying the price.

This is yet another case where government regulation had the opposite effect from that intended.

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This is the first in a series of posts dealing with the problems of government regulation overstepping its bounds and causing far more harm than good.

Part 2 will cover energy and how the government regulations are making sure we'll have less of it at a much higher costs.

I've seen this on at least one other occasion, but it's still as powerful as when it was first published back in 1985, and again in both 1995 and 2008 (with some additions and changes).

"This" is an editorial written by Charley Reese and it rightly attributes all of this country's problems to the 545 people in Washington who are, at the heart of it, responsible for the ills we've suffered for decades (and particularly the past few years). Reese doesn't play the partisan card, blasting both Democrats and Republicans for the troubles they've caused.

The portion quoted below is from the 1995 version.

Politicians, as I have always said, are the only people in the world who create problems and then campaign against them.

Everything on the Republican contract ( Newt Gingrich's Contract With America - ed.) is a problem created by Congress.

Too much bureaucracy? Blame Congress. Too many rules? Blame Congress.

Out-of-control bureaucracy? Congress authorizes everything bureaucracies do. Americans dying in Third World ratholes on stupid UN missions? Congress allows it. The annual deficits? Congress votes for them. The $4 trillion debt (now $14 trillion -ed.)? Congress created it.

To put it into perspective just remember that 100 percent of the power of the federal government comes from the U.S Constitution. If it's not in the Constitution, it's not authorized.

Though a little dated, the points Reese brings up are just as valid today as they were 16 years ago.

As the saying goes, Read The Whole Thing.

This has to be one of the best comments ever (made to this WSJ opinion piece):

It is no accident that the most heavily regulated sectors of the economy cause the most problems: healthcare, finance, energy. Let's admit the failure of the federal regulatory model for most problems, and openly and honestly look for alternative approaches.

It always seems to be that way.

Whenever we've deregulated sectors of the economy, they have always picked up momentum, served more people more efficiently, all while lowering the costs. One example that comes to mind: the airline industry.

All regulation has ever done is to short circuit the market feedback systems, making the regulated sector far less responsive to the needs of the people, more expensive, and closed to competition. In many cases government regulation was sought by 'rent-seekers', those wishing to prevent present or future competitors from expanding there presence within or entering the market. In effect, the government is asked to decide the winners and losers within that particular segment of the economy. Unfortunately the government usually chooses the wrong party to be the winner, all to the detriment of consumers. What makes it worse is that sometimes these winners also receive government subsidies (yet another market-skewing device), hitting the consumers in the wallet again. It's a lose-lose situation for consumer and the economy.

It's about time the government butt out of the economy and let the market decide who wins and who loses. In the long run the consumers and taxpayers will benefit.

As the clock ticks onwards towards midnight, Congress is still stalemated, with the possibility of a partial government shutdown looming.

The GOP wants to extend the continuing resolution that has funded government operations for the past 6 months for another week, but only if they can squeeze in $60 billion in spending cuts, which is about 1.6% of the total budget and 3.75% of this fiscal year's deficit.

But the Democrats want none of it. They want everything to continue as is. In fact, they have already stated the won't support cuts of any kind. That pompous ass Harry Reid has labeled the cuts as 'draconian', as if that piddling amount of money would be stealing the food out of the mouths of children and dumping the sick out of the hospitals and into the middle of the street. Harry Reid and his cohorts have pissed away over $4 trillion the government doesn't have over the past four years and he's complaining about cutting back spending by less than 2 percent?

I don't know about you, but my family and I have had to cut our budget by over 15% over the past 2 years, and while it hasn't been fun, we're surviving quite nicely, thank you. Is Harry (and the rest of the Democrats) saying it isn't possible to trim less than 2% from such a bloated budget? If so, then perhaps they should be fired.

Is it because he and the rest of the spendthrift Congresscritters in both parties have been in Washington far too long and have lost touch with reality? It's appearing that may indeed be the case.

When your elected representatives stop representing you and start representing a tax and spend-spend-spend ideology, it's time for them to be replaced with people who still remember what it's like out here in the real world.

UPDATE: Nick Gillespie reminds Obama and the Democrats "that they are in a pickle is because they utterly failed to pass a fricking budget last year even though they controlled the White House, the Senate, and the House of Representatives."