Goin' Galt in the Bay State

As a follow-up to my well-received post below (four comments!), here's another reason why concentrating tax revenues from a handful of citizens is bad policy: when there's a downturn, a good chunk of that taxable income disappears. From the Boston Globe: "State considering capital gains diversion plan"

The economic downturn has produced a record decline in the taxes Massachusetts collects from taxpayers on their investment profits, a $1.6 billion drop-off that is largely responsible for the worst fiscal crisis to hit state government in decades.

The 75 percent decline in capital gains tax payments for the fiscal year that ends June 30 is also producing an unusual consensus on Beacon Hill, where Governor Deval Patrick’s administration and lawmakers are moving to protect the state against wild swings in income by diverting more of the tax proceeds into savings.

The federal government now finds itself in a similar pickle: revenues from the "rich" are way down (and spending is way up) fueling record deficits. But instead of helping to foster businesses that create jobs and the income tax they generate, this administration is pushing a hefty levy for health insurance and energy costs.

What have years of high-tax, soak-the-rich, statist policies done for New Jersey?

Big Government is why New Jersey created only 6,800 private sector jobs from 2000 to 2007 - while public sector jobs grew by more than 55,800. Big Government is the reason New Jersey ranks as the worst of 50 states on the Small Business Survival Index. And Big Government is a leading reason New Jersey has a "corruption problem" that an FBI agent at Friday's press conference characterized as "one of the worst, if not the worst, in the nation."

There's a special kind of hubris in Washington, one that believes that it will somehow avoid the health care pitfalls of Massachusetts, the business-killing machine of New Jersey, and – hell – even the history of mankind.

Hope and change, baby!

Extra - And then there's Maine. Here's Betsy: "Learning from Maine's mistakes." (H/T Maggie's Farm.)

Defining fairness - Tax Foundation: "Tax burden of top 1% now exceeds that of bottom 95%."

This data is from 2007 and the top 1% paid 40.4% of all income taxes compared to 39.4% for (almost) everybody else. Since then, Obama has proposed allowing the Bush tax cuts to expire, an additional surtax to pay for government-run healthcare, raising the cap on Social Security taxes, and a limit on deductions for charity and "Cadillac" private health care insurance.

But let's put money aside for the moment: what does it mean for our democracy when a very small percentage of Americans pay all the taxes? Inexorably, it leads to a plurality who will always support a larger government because somebody else is picking up the bill. Eventually, to evoke Margaret Thatcher, the government is going to run out of "other people's money."

Sixty billion dollars later - Newsweek: "What green jobs?"

No thanks, we're full - CNBC: "Weak Treasury sales raise worries about US debt burden."

July 28 - For the record, I turned on the A/C today for the first time all summer. In related news, Chicago has been averaging a sweltering 69 degrees Fahrenheit this July.

Sunshine is the best disinfectant - It looks like Americans are getting edu-ma-cated on Obama's healthcare plan. Hot Air: "Majorities believe ObamaCare will raise costs, lower quality of treatment."

Hey, it's that penny guy again!



Welcome to the blogroll, Political Math.

You just don't want to know

The health care debate brought to mind this exchange between then-Congressman Sonny Bono and Chuck Schumer (possibly misquoting Bismarck):

Mr. Bono also spoke out at a meeting last month of the House Judiciary Committee. One of two nonlawyers on the committee, he grew frustrated by arguments over the details of a crime bill provision on searches by the police.
"When are we going to stop the games?" he asked, complaining that various members were showing too much of their legal knowledge.
Representative Charles E. Schumer, Democrat of Brooklyn, replied at the meeting: "We have to talk about the law. That's what we do here. We're making laws here, not sausages."

Ah, yes, because making law is a serious matter. But apparently the government takeover of one-sixth of the economy doesn't even merit enough gravity to read the actual legislation: "Conyers Sees No Point in Members Reading 1,000-Page Health Care Bill--Unless They Have 2 Lawyers to Interpret It for Them." (Video here.)

Is anybody as mortified as I am by the meat-grinder politics at play here? Nancy Pelosi swears she's going to cram this bratwurst down our national gullet and – mark my words – Barack Obama is going to sign anything with the words "health care" on it, no matter how disruptive and expensive.

Extra – Robert Samuelson: "Obama's misleading medicine"

More – Here's Jennifer Rubin on Contentions: "Translation: ObamaCare, far from reducing health-care costs and the deficit, increases them - dramatically and with no funding source identified to pay for the expansion."

Dodd's done - AP "Dodd, Conrad told deals were sweetened": "Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation''s largest lenders, the official who handled their loans has told Congress in secret testimony."

In a recent poll, Dodd was viewed by a majority of voters as "not trustworthy."

MRIs and CAT-scans - This WashPost editorial "The health-care sacrifice" makes a bunch of good points including the fact that health care costs have risen dramatically due to technological advances. Are Americans willing to forego these expensive processes in the interest of controlling the cost of national health care? This is a question that needs to be answered.

He's toast - He promised reform, but failed to deliver. He presided over a health-care plan without regards to costs and now he's raised taxes to pay for profligate spending. I'm talking about Massachusetts governor Deval Patrick, of course, who IMO has virtually no chance of re-election. Boston Globe: "Patrick support plummets, poll finds."

There's only you and me and we just disagree - Fox News: "Key Senate Democrat concedes Republican support needed for health overhaul."

Thumbs down - Last weekend, I picked up "Ender's Game" because I heard it was some kind of sci-fi masterpiece. It wasn't awful and the plot was somewhat engaging, but I just couldn't get past the dialogue. The story's protagonist is taken to a military school at age six but he has all the mannerisms of an adult, behavior that doesn't change a bit over time. I don't care how far in the future this story is set, or how much of a genius Ender is supposed to be: a six-year-old simply doesn't have the emotional and intellectual development to behave the way that Ender did in this book. It was a constant distraction, so I'm going to have to pan the book.

The CBO won't say 2+2=3 - Politico: "CBO deals new blow to health plan" The independent accountants say it will save NO money over 10 years. Keep in mind that the whole point of this reform is to somehow curtail the deficit spending that is already assumed as Medicare expenses grow.

Extra - Legal Insurrection: "What a pathetic joke the Democratic legislative effort has become. Loss of freedom and no meaningful cost savings."

Dump Dodd - I've seen a few "Dump Dodd" bumper stickers and I think Connecticut has had enough of their current Senator. Now he's making the lobbyists cry by taking their filthy money. For the kids!

Stupid President - I've been mostly ignoring the Obama/Gates/Crowley controversy because I'm much more worried about the fiscal insolvency of the world's largest economy. But can Obama - that great communicator - honestly claim that by calling a police officer "stupid" he "didn't mean to malign the arresting officer"?

Obama had two non-healthcare questions in his press conference and he flubbed the last one badly.

More - Minuteman: "Sorry seems to be the hardest word."

Because you can't simultaneously spend and save money - Charles Krauthammer explains what happens when campaign rhetoric runs up against dollars-and-cents reality: "Why Obamacare is sinking."

Extra - Contentions: "Each bill is worse than the last."

We can't let the evil Re-thug-licans win, so let's bankrupt the country

How tiresome is this excuse? Here's Democratic chair Henry Waxman explaining why he may bypass a vote on the Democrat-controlled Energy and Commerce committee if Blue Dog Democrats fail to vote health care reform out of committee:

"I won't allow them to hand over control of our committee to Republicans," Waxman told reporters. "I don’t see what other alternative we have, because we're not going to let them empower Republicans on the committee."

Somebody call the waaaaah-mbulance. Eric Hoffer once noted that political movements can't spread without belief in a devil as a unifying force. But I this quote is more apt:

Some of the worst tyrannies of our day genuinely are "vowed" to the service of mankind, yet can function only by pitting neighbor against neighbor.

And that's where the health care debate now stands: we're going to "help" everybody except those damn insurance companies, the tonsil-ripping doctors, the Republicans and Libertarians, the Mayo Clinic, and the Congressional Budget Office.

Damn them all, full speed ahead!

Pawlenty pegs Massachusetts' health care plan

From Politico, here's Minnesota governor Tim Pawlenty:

He also took a shot at the Massachusetts model. "The cost of that thing has nearly tripled in just 36 months and they're looking for an additional federal bailout," he said. "It has not been successful in containing costs."

That's spot on, and I'm surprised that the Bay State model hasn't gotten more attention in the national health care debate. If the Massachusetts system is a window into the future of health care reform, there's not much to like. From USA Today, here's "Massachusetts has lessons for health care debate"

The state that pioneered health care for all is about to take another leap into the unknown: paying for it.
Three years after mandating that residents get health insurance and requiring employers, insurers and taxpayers to chip in, Massachusetts has yet to control soaring costs that are eating up half its budget. So it's considering an equally radical idea: changing the way doctors and hospitals are paid to reward results.

And by "changing they way doctors are paid" they don't mean with rolls of quarters instead of dollars. They mean "less."

And then there's access to the healthcare we're paying more for:

Quality has been an issue, too. Because more people have insurance, some doctors and safety-net hospitals are overwhelmed. A study by the non-partisan Urban Institute found one in five adults in the state have been turned away by a doctor's office or clinic.

And overwhelmed hospitals are going broke:

But if anything, demand has increased as the newly insured seek more medical attention. "The funding levels are not keeping pace with the volume that we're seeing," says William Halpin, CEO of South Boston Community Health Center.
"There's been a little bit of robbing Peter to pay Paul."Boston Medical Center, the state's largest provider to the poor, filed a lawsuit against the state last week charging that it's getting only 64 cents on the dollar to care for low-income patients.

So there you have it: higher cost, less access, and underpaid doctors and hospitals. Remind me again why health care reform is something we must do.

Extra - The Hawaii plan was also a debacle.

This surprises me not one whit - WSJ: "Jersey mayors stung in graft probe."

There goes your health insurance - Betsy has a long post detailing how a public option plan will crowd out private insurance because it doesn't play by the same rules: the government-run will be subsidized by taxpayers and will dictate payment terms to doctors and hospitals, just like Medicare does now.

Here's the nightmare scenario: companies drop private insurance for the government plan, the program becomes huge and thus hugely expensive, while hospitals go bankrupt due to reduced reimbursement rates.

What's not to love?

Denial ain't just a river in Egypt - Charles Krauthammer quips that Obama is living in an alternate reality: there will be no pain, no rationing, no loss of coverage, and the only people who will have to sacrifice are a couple of millionaires who oughta pay for everything anyway. What a deal!

Cleveland Plain-Dealer, hell yeah! - Great question asking if Congress will join the public health care option if it's so awesome. Obama says he won't because he's President.

Obvious question - If the growth of Medicare and Medicaid threaten to bankrupt the country, why not just reform those programs first before we swallow nationalized health care?

Extra - From Greg Mankiw's blog: "An obese friend is told that he should eat less and exercise more. Instead, he adds an extra serving of cake after dinner. But don't worry: His cake-eating plan is calorie-neutral, as he promises to exercise more as well. "

Chip Reid follows up on Medicare - The new health care plan depends on slashing payments to Medicare to pay for this monstrosity. Won't this mean sacrifice in Medicare? Nope!

Jake Tapper elicits a LOL moment - I'm watching Obama's press conference and ABC News asked (paraphrasing) if Americans will have to make any sacrifice at all for government-run health care. Obama's rough answer: "no."

This is willful naivete. Obama cannot possibly believe that we can spend $1.5 trillion dollars and force (according to the CBO) tens of millions of people off private insurance without causing pain. He can't believe that there will not be some kind of health care rationing if millions of Americans join a government-run program. Is he aware of the country called "Canada"? Has he seen the problems caused by the public program in Massachusetts, where costs have run at twice the original estimates?

The Blue Dogs fail to heel

Fox: "Key House panel cancels health care session"

A key House committee on Tuesday indefinitely postponed voting on health care reform legislation, after Democratic leaders were unable to line up enough votes from moderate members of their own party.
The House Energy and Commerce Committee canceled the session as it faced serious concerns about the legislation from fiscally conservative Blue Dog Democrats, who hold a large number of seats on the panel.

I ask again: where is the national crisis that requires a new, expensive, government bureaucracy to re-wire one-sixth of the U.S. economy?

More than eight in 10 Americans questioned in a CNN/Opinion Research Corp. survey released Thursday said they're satisfied with the quality of health care they receive.

Well, that's the vox populi. What do the pros at the world's pre-eminent health care service think of this legislation?

President Obama might have touted the Mayo Clinic as a model of healthcare delivery, but the Minnesota medical center is hardly showing affection for House Democrats' healthcare reform proposals.
The Clinic believes the proposed House legislation "misses the opportunity to help create higher-quality, more affordable health care for patients," it said on its Health Policy Blog. "In fact, it will do the opposite."

Ouch: that's a kick in the shin that no doctor will treat with government-set reimbursement rates.

Let us now praise the engineers - On the 40th anniversary of the moon landing, let's give a hat tip to the pale, the short-sleeved, the bespectacled impresarios of the slide rules who made the dream reality: "Retired engineers remember Apollo 11."

Extra - Opinion Journal: "Celebrity culture vs. the Right Stuff."

Fool me thrice...ah, forget it – Associated Press: "US financial market bailout tab hits $4.7 trillion"

Fool me twice, shame on me

Fox Business asks "Where are the cuts?"

Today is a self-imposed White House deadline to identify another $100 million in 2009 budget cuts requested by President Obama in April from his cabinet secretaries--and so far, it has not announced any cuts.

Just for perspective, the U.S. is on target to run a $1 trillion budget deficit this year but the Obama administration couldn't find 0.01% to cut.

Fool me once, shame on you

I wonder how much of the escalating pushback against Obama's healthcare initiative is being driven by the utter failure of the massive stimulus package to do any stimulating. Even though the Democrats' plan hinges on taxing the rich, most Americans still want to see a positive return on investment.

Extra - Fred Barnes: "Democrats got what they wanted in the stimulus bill. The public knows it."

More - Pay no attention to that man behind the curtain with the budget analysis!

My kids love this stupid show - Apparently so does the Boston Globe: "Let us now praise 'Wipeout'"

Google Trends is our friends - The dubious case for economic policy, courtesy of Hoystory.

Government-run healthcare is sounding worse and worse

Recall this story about how Boston Medical Center is poised to lose a massive $175 million this year thanks to the very health care reform that Barack Obama wants to impose on the whole country. Take a look at the future:

Large urban teaching hospitals - including hospitals that are the biggest engines of the Boston economy - are facing the loss of hundreds of millions of dollars under national health care reform as rural lawmakers on Capitol Hill wage a fight to win more federal cash for their local institutions.

As the BMC model shows, this will only hurt the poor patients that government-run healthcare was supposed to help. This is why Obama is trying to rush legislation through Congress before representatives can listen to those they represent.

Extra - Congress says: "state-run healthcare for thee, but not for me."

More - Minuteman: "Trouble in paradise."

Keep safe

I had a bunch of health care stuff I wanted to post but I'm tired after working through some content for my latest class. So here's an "Ask a Spy" clip from my new favorite show "Burn Notice."

Nice work if you can get it

Washington Post: "CBO Chief Criticizes Democrats' Health Reform Measures - Director Says Proposed Changes Would Increase Health-Care Spending"

Instead of saving the federal government from fiscal catastrophe, the health reform measures being drafted by congressional Democrats would increase rather than reduce public spending on health care, potentially worsening an already bleak budget outlook, the director of the nonpartisan Congressional Budget Office said this morning.

Let me get this straight: spending $1.5 trillion over a decade and much, much more afterwards by assuming the health care expenses of millions of Americans will cost more money? Who knew!?

Update - The director of the CBO has updated his blog with the "Long term budget outlook." Obama is "bending the curve" way, way up. The debt curve, to be clear.

More - Joe "much higher IQ" Biden explains it all: "We have to go spend money to keep from going bankrupt." Hey, that's why the man pulls in the big crowds.

Thou shalt not covet

With the new health care bill, the federal government has gone full Robin Hood and that's just fine with former Labor secretary Robert Reich:

I don't recall the last time Congress came up with such a direct redistribution. Occasionally Congress closes a few tax loopholes at the top and offers a refundable tax credit to workers at the bottom, or it creates a poor people's program like Medicaid, paid for out of general revenues from a progressive income tax. But to say out loud, as the House has just done, that those in our society who can most readily afford it should pay for the health insurance of those who cannot is, well, audacious. There's another word for it: fair. According to the most recent data (for 2007), the best-off 1 percent of American households take home about 20 percent of total income -- the highest percentage since 1928. Yes, I know: Critics will charge that these are the very people who invest, innovate, and hire, and thereby keep the economy going. So raising their taxes will burden the economy and thereby hurt everyone, including those who are supposed to be helped.

But there's no reason to suppose that taking a tiny sliver of the incomes of the top 1 percent will reduce all that much of their ardor to invest, innovate, and hire in the future. Yet if this tiny sliver means affordable health care for a far larger number of Americans, who will be able to get regular checkups and thereby stay healthy and productive, the positive effect on the American economy is likely to be far greater.

Forget the fact that this latest "sliver" comes on top of higher tax rates, a personal exemption phase-out, a hiked capital gains tax, along with a proposal to raise the cap on Social Security taxes which would be the largest marginal rate tax hike in history. And put aside, for the moment, that the top 10% of taxpayers already pay 71% of all federal taxes. At what point did the income of the wealthiest workers in America become fair game for all manner of government spending?

Nowhere in the Democrats’ plan do they explain why 2.1 million Americans should have to pay to reform the health-care system for 300 million Americans, nor does the Post explain why 2.1 million Americans should have to pay for the massive deficits created by Democrats in Congress and Barack Obama. Both accept the notion that government exists to transfer wealth without explaining at all the basis for a free government to do so. If we need massive health-care reform, then the costs should be borne by everyone - and when that happens, you will find massive health-care reform to be a lot less popular than when Obama, Rangel, & Co try to pass it off as something for nothing.

This President and Congress have already decided – like the apocryphal Winston Churchill story – that the "rich" are a piggy bank to be smashed in perpetuity. Now they're just haggling over the price.

Selective labeling

Here's how the Washington Post tagged an opinion piece by Barack Obama:

The writer is president of the United States.

And here's how they tagged Sarah Palin's opinion piece today:

The writer, a Republican, is governor of Alaska.

Apparently one writer is motivated by politics. The other is awesome.

Oceans of red ink - Michael Barone has a must-read article about the legislation in Congress that has a low chance of helping Americans but 100% chance of bankrupting the country: "It turns out that details matter, a lot, when you're slinging around great gobs of dollars."

Extra - Robert Samuelson hit on a similar theme today: "Without anyone much noticing, our national government is on the verge of a permanent expansion."

Teleprompter down! - TOTUS took a dive today but Obama continued with the vice-teleprompter, thank heaven.

More - Video here. Looks like a suicide to me.

I'm a poet and unaware of that fact - Having solved all other problems in Massachusetts, two Beacon Hill legislators are looking to establish a state poet laureate.

Kids care more about cellphones than acceleration

From "American Beauty":

Carolyn Burnham: Uh, whose car is that out front?
Lester Burnham: Mine. 1970 Pontiac Firebird. The car I've always wanted and now I have it. I rule!

Sorry, Lester, but that's old man talk. According to the Boston Globe, kids are more concerned about the features on their Blackberries than the latest Buick:

"I don't care what kind of car I drive as long as it runs and gets me to and from work," [20-yr. old] Michelle Gildea said.

And therein lies the latest nail in the automotive industry's coffin. Cars used to have a mystical aura of freedom and independence:

Now they're just a means of conveyance from point A to point B.

And the wheels that once lured young drivers - the sleek sports car, the muscle car, the used luxury sedan, the souped-up vintage jalopy - have been cast aside or priced out of reach for first-time buyers. It is a development industry analysts attribute in part to Toyota, the first major manufacturer to focus on quality and price instead of design and prestige. American automakers, in an effort to cut costs to stay competitive, followed suit.

These kids today with their "quality and price"consciousness! What's this world coming to?

Say that three times fast – I'm posting this headline from today's Boston Globe for no other reason than I think they were shooting for a tongue twister: "News of zoos' financial woes stuns."

Look homeward, Ted Kennedy

As Ted tries to complete his half-century quest for nationalized health care, it's worth noting what the Massachusetts model has done for the Bay State. From today's Boston Globe, here's "Boston Medical Center forecasts first loss in five years."

Boston Medical Center, the state’s largest provider of medical treatment to the poor, is bracing for dramatic financial losses, which some fear will force it to slash programs and jeopardize care for thousands of poverty-stricken families.

The hospital projects that it will lose $175 million in the fiscal year starting Oct. 1, an 18 percent operating loss that is unusually large even in Massachusetts’ up-and-down hospital industry. The hospital estimates that it will close this year $38 million in the red, its first loss in five years.

Ironically, hospital officials blame the downturn partly on changes ushered in with the state’s groundbreaking mandatory health insurance law, which Boston Medical Center supported and that benefited many of its patients. As part of the law, the state phased out special subsidies for hospitals that treat large numbers of poor patients, a significant shock for Boston Medical Center.

As noted yesterday, the Obama administration is considering the Massachusetts model, writ large, for the entire country. Costs and results seem to be of little consequence.

Learn from our mistake, America - Opinion Journal: "The Massachusetts health mess"

Get ready to laugh - The quote of the day goes to Arianna Huffington: "There's absolutely no way you'd call the Huffington Post a partisan defender of the Obama White House." Heaven forfend!

The decline and death of Cadillac

The unparalleled The Truth About Cars has a great post about the consequences when government and industry clash. Here's "General Motors Zombie Watch – Cadillac must die."

There’s only way for Cadillac to recapture faded glory. Cut the crap and build the best. The best no-holds-barred luxury cars. Stylish, no excuses vehicles, meticulously engineered, rock solid. And then they have to create a dealer network that kisses customers’ asses like none before.

Never. Gonna. Happen.

Even if we assume Cadillac’s rebirth could happen-that GM could find the courage to cull Caddy’s cancerous cars and trucks, that it could summon the creative and financial resources needed to be the best of the best-the U.S. government can’t let it happen. It’s the wrong image.

That's correct: the feds want Government Motors to make politically-correct hybrids like the Chevy Volt but they also want the auto companies to make a profit and get out of debt. These are conflicting goals. Auto companies make almost all their money on large trucks and SUVs.

I might have told this story before but many years ago I visited a major auto company and there was a Smart Car sitting in an atrium. The engineer I was speaking with dismissed it thusly: "We don't make any money on those. The only reason we build them is to meet fleet milage standards." So there you go: those tiny cars exist only to meet government rules while the big cars generate profit.

Apres health care, le deluge

Word on Capitol Hill is that the Democrats are scrambling to find ways to pay for the $1 trillion+ that will be required to pay for health care reform. My guess is that they're going to play fast and loose with the actual cost projections until the Trojan Horse is in place. They'll justify the lowball estimate as the necessary lie to enact legislation that will rewire one-sixth of the U.S. Economy. Greater good and all that.

Social Security was once good legislation and a bargain too! But it was so good that nobody could ever cut the program. Medicare, too. Now 80% of taxpayers pay more in payroll taxes than income taxes. Here's how those programs started small and grew expensive:

Payroll tax rates by decade:

1940: 2%
1950: 3%
1960: 6%
1970: 9.6%
1980: 12.3%
1990: 15.3%

Those rates are for employee and employer together. If you're unlucky enough to be self-employed, those rates are for you and you alone. There is zero chance that the cost of national health care will not rise in the same manner. Once we pass this bad legislation, there will be no way to unring the bell.

Update - Signs of sanity: Blue Dog Democrats rebel.

An epic tale of pride and ruin – Business writer Michael Lewis has a great piece in Vanity Fair on Joe Cassano who headed up AIG's Financial Products unit and started the dominoes tumbling in "The man who crashed the world." For extra background on the financial meltdown, be sure to also read Lewis' "The End."

The benefit of experience - Metafilter: "Insights gained via one's career." I like this one: "If you're reading from a Powerpoint slide, your audience is bored."

Bjartur of Summerhouses is my hero

Some time ago, I heard an NPR segment called "You must read this" about overlooked literary masterpieces. One of the books reviewed was Halldor Laxness's "Independent People." I've read a lot of books in my life, but this one easily makes the top five. I devoured it during my camping vacation. The story follows the epic struggle of Bjartur to make himself an independent man, free of debt and the influence of the Myri people. There's not a more stubborn man in literature but despite his effortless cruelty to his family, you can't help but feel for the man and his unending battle against worms, debt, reindeer, Icelandic weather, cows ("better a coffin than a cow!") and the tide of history. Very, very highly recommended.

Your taxes will go up

Back during the Presidential campaign, one axiom that came to light is that all of Obama's promises have an expiration date. Well, as Fred Hiatt writes in today's WashPost, Obama's pinky-swear to hold tax hikes to only the "rich" is unsustainable:

The bottom line is this: You cannot run a progressive government of the kind Obama favors by collecting only 18 percent of the gross domestic product in taxes, which has been the norm over the past 40 years. Nor can you increase the tax take to 24.5 percent of GDP -- which is what Obama proposes to be spending in 2019 -- simply by making the rich pay more.

But rather than level with the American people about this, or lay out a plan to raise the needed taxes, the Obama administration and the Democratic Congress are putting the spending pieces of progressive government in place and apparently counting on the tax piece to fall into place later.

All of this spending on top of unsecured spending would have been irresponsible by itself if it wasn't for the fact that the federal government has no intentions of facing the gaping entitlement spending hole we've already dug:

The CBO says that in recent months a dismal outlook has gotten even darker as projected future spending -- particularly on entitlements such as Social Security, Medicare and Medicaid -- expands much faster than expected revenue.

When you spend more than you take in, your debt grows. Federal debt held by the public peaked at 113 percent of total GDP right after World War II, when the U.S. government had to spend vast amounts to defeat Germany and Japan. Today, the debt stands at about 41 percent of GDP.

But with the government running trillion-dollar deficits and facing the Baby Boom generation beginning to retire, CBO estimates that the debt will break the previous record by 2026 and hit 200 percent of GDP by 2038.

Let's throw a public pension shortfall on top of all this for good measure. We cannot possibly borrow enough money to pay for everything and we'd need to find the Mother of all Pawnshops to accept Hawaii. Where's the money going to come from? You, my friend, and your kids and grandkids.

Extra - Bloomberg: "California's nightmare will kill Obamanomics." Let's hope so. (H/T Maggie's Farm.)

The cycle of poverty

The Sunday Washington Post magazine had a feature article titled "Family Man" about a young father who is "determined to be a loving dad and strong breadwinner." The piece has plenty of criticism for the young couple but I couldn't get past the generally laudatory theme that brave Bobby decided to take care of his family. Well, to evoke Chris Rock, that's what he's supposed to do.

Just to recap: Bobby got involved with Lori who had already had two children from two separate men. The "condom slipped" and she then had Bobby's son, Junior. The car got wrecked by a friend. They're living with the girl's father. Lori needs medication for her bipolar disorder and Bobby has rotting teeth; there's no money for either. (The kids get healthcare through the state of Maryland.) By the end of the story, we find Lori waiting tables at a restaurant while Bobby studies for his GED while working at a car wash.

But no matter what Bobby & Lori's good intentions, their poor decision-making dooms them to be forever dependent on family and then the state. First Bobby had a good construction job until:

Last September, slightly less than a year after he started working at the site (and after a conversation in which he told his boss to "stop f-in' with me"), Bobby was fired.

No unemployment compensation for you, wiseguy. Later a tax refund arrives:

His spirits pick up a few weeks later when he receives a tax refund check for $7,000. About $3,300 of that goes to pay back a loan from his grandfather and to Pete for rent. He takes Lori to Wal-Mart at 11 one night for a shopping spree. With no assurance that things are going to improve any time soon, why not splurge a little?

Lori plows through the racks of Faded Glory short sets and Hanes tees that night to find several pastel outfits for Faith and Hope and something more rugged-looking for Junior. She talks Bobby into buying a Nintendo Wii. They end up spending $800 on various items, and when they get home, Lori insists on learning how to play games on the Wii immediately. They stay up until 3 a.m. in front of the TV screen, laughing and shoving each other like small kids.

More irresponsible purchases:

Bobby tells her that earlier that day he stopped by Circuit City, which is going out of business, to pick up snacks for the kids and two DVDs for them to watch, including "Dude, Where's My Car?"

Apparently, this is not a good time to kick old habits:

Lori says she's going out more often to bars with her girlfriends after work.

He [Bobby] excuses himself to go outside and have a Marlboro Menthol.

He directs her eyes to a gold crucifix that he wears around his neck.

He stops by Applebee's for chicken tenders, and no sooner is he seated than Lori texts asking the time of his interview at the carwash.

And now the coup de grace where Bobby dreams of spending money he doesn't have for things he doesn't need and can't afford:

At 3 p.m., he drives to the carwash. He is back at the house in a half-hour, saying he got the job. One of the first things he thinks of, when he realizes he'll be bringing home a paycheck again, is buying something he saw earlier at Costco, an outdoor playset with a playhouse, slide and swings -- three swings, he points out.

The playset is called the Rainbow All-American Double Decker, and it could be his for $1,299. For that sum, he could get his rotting wisdom teeth removed. Or Lori could buy a year's supply of pills. Or Hope could start seeing a speech therapist. Still, wouldn't it be great to teach Junior to scale the climbing wall and make sand castles?

"Me and him are gonna grow up together," Bobby says.

I want to sympathize, I do, but when you give kids money they go out and buy candy. When you give money to kids who have kids, they spend it on Olive Garden and Nintendo Wii games. They're children, one and the same. Simply put, Lori's father should take 100% of their income and parcel it out to them like an allowance.

Back to work - Just got back from a week of camping in the Shenandoah Valley. Blogging resumes tomorrow and aren't you thrilled? Yes. Yes you are.

Happy Independence Day, America!

Adventures in socialized medicine - Buffalo, New York picks up the slack for Canada.

So I've been out all day...what's going on? - Sarah Palin did what? This doesn't seem to make any sense.

Leave well enough alone - The "cost of inaction" threat has been used to pass a lot of bad legislation.

Everything old is new again - The blogosphere sparkle and fade, according to Apt 11D. I've never viewed my blog as a pathway to money or another career; it's just forum to vent my political views. Also, I knew my one-man, part-time status would relegate me to a low readership. But, hey, every once in a while I get a big hit and maybe somebody out there thinks about the issues I care about. So that's good enough for me.

Miami looks nice - I know I should be following the news but, to be honest, I've been watching the Burn Notice marathon on USA network all day. It's like "Mission: Impossible" meets "The A-Team."

Crush the competition - Why does Walmart support health care reform? For the same reasons that Philip Morris supported FDA legislation of tobacco. Wake up and smell the Marlboros.

More - From the Corner.

That's my IP - Mises Economics blog: "Centocor vs. Abbott: Biggest patent verdict ever."

Warmonger! - More "if Bush did this" fodder: "U.S. Marines, Afghan forces launch major military operation in Afghanistan." Dennis Kucinich, where art thou?

Pre-screened questioned from handpicked questioners - Minuteman: "Orchestrated when Bush did it." Obama...not so much. At least not without his teleprompter.

Extra - Media skepticism from Hoystory.