Are people the problem or the solution? Reply


By Tom Quiner

Someone I know once said only partially in jest, “I hate strangers.”

I continued the banter by responding “I love strangers, because they represent opportunity.” I meant it.

I have benefited profoundly from strangers.  So have you. Strangers have invented things that make our lives better. They developed new medicines and cured diseases. They’ve prayed for you and me. They have cheered for the same team and laughed at the same jokes as you and I have. They have donated money to charities I respect.  And they have paid taxes to help support government services.

Strangers are people we don’t know. We need more of them.

In other words, I think people are the solution to our problems. Not everyone agrees. Some folks think there are too many people in the world. They think people pollute the environment. That they consume too many of the world’s resources. They they exploit their neighbor.

There are people who do just that.

The American system has a way of bringing out the best in people. I think we need more Americans. This has been THE most innovative country in the history of the world. Innovation tends to flow from our youth.  Studies tell us that innovation peaks in thirty-somethings and then begins to decline.

Innovators come up with solutions to our problems. They create jobs.

We need more of them.

How can we get more? I propose we start with a ban on abortion. We’re killing off the people who will make our country and the world better.

The preborn represent opportunity. They represent hope.

Let us begin protecting and nurturing them as America used to do.

People are the solution.

 

Will the President’s deficit reduction plan work? Reply


By Tom Quiner

The cornerstone of the President’s plan to reduce our deficit is to take away corporate tax breaks for corporate jets.

Charles Krauthammer did an analyses to calculate the net effect:

“I did the math. If you collect that tax for the next 5,000 years — that is not a typo — it would equal the new debt Obama racked up last year alone. To put it another way, if we had levied this tax at the time of John the Baptist and collected it every year since — first in shekels, then in dollars — we would have 500 years to go before we could offset half of the debt added by Obama last year alone.”

Okay, let’s cut the President a little slack, because he has another good idea, namely to take away an oil company tax break. Mr. Krauthammer made an extrapolation on how this would affect the deficit:

“Obama’s other favorite debt reduction refrain is canceling an oil company tax break. Well, if you collect that oil tax and the corporate jet tax for the next 50 years, you will not yet have offset Obama’s deficit spending for February 2011.”

The President’s premise is that we’ve got a tax problem. Charles Krauthmammer shows that tax increases just won’t cut it.

We need spending restraint.

 

Is Obamanomics a better strategy than Reaganomics? PART 2 Reply


By Tom Quiner

President Obama is the anti-Reagan as I pointed out in yesterday’s Quiner’s Diner post. His economic policy is pretty much the opposite of the path taken by Mr. Reagan.

So the bottom line is the bottom line. How do results compare?

When Ronald Reagan took office, the misery index (the unemployment rate added to the inflation rate) stood at a staggering 19.33. By the time he left office, it had fallen to 9.72.

When Barack Obama took office, the misery index stood at 7.83. In his third year in office, it has risen to 12.67. His approach isn’t improving our economic misery and may be making it worse.

The economy began to boom in Mr. Reagan’s third year in office as the impact of Reaganomics was felt. The GDP increased between 5 to 8 percent per quarter in his third year and continued a torrid pace right into the election cycle in his fourth year in office.

Unemployment was still high, but dropping steadily, reaching 7.2 percent by election day.

Mr. Obama’s numbers don’t look so good. The Federal reserve projects a growth in GDP of less than 3 percent this year. And latest unemployment numbers continue to nudge upwards above 9 percent.

The impact of Reaganomics was felt for years.

The economy grew by a third over the next seven years.

Twenty million new jobs were created. Civilian employment increased by 20 percent.

The unemployment rate came down to 5.3 % by the time he left office.

Let us compare results as accurately as we can:

• The Reagan recovery averaged 7.1% economic growth over the first seven quarters compared to 2.8% for Mr. Obama. And its dropping during the current President’s watch.

• Unemployment fell 3.3 percentage points during Reagan’s first seven quarters compared to 1.3 for Obama.

It’s important to note that Mr. Reagan accomplished all of this while having to tame inflation at the same time. Mr. Obama, on the other hand, entered office with inflation relatively low.

At this stage in the game, the Reagan model is outperforming the Obama model.

Is Obamanomics a better strategy than Reaganomics? Reply


By Tom Quiner

The economy was in shambles when Ronald Reagan took office, much worse off even than when Barack Obama took office.

The misery index, which adds the inflation rate to the unemployment rate, stood at one of its all time highs at 19.33 when Mr. Reagan took office. By contrast, it stood  at 7.73 when Mr. Obama took office.

The poverty rate was in the midst of an explosive increase, increasing by a third from 1978 thru the recession he inherited.

Real median family incomes decreased by ten percent from 1978 to 1982.

The stock market was in a state of collapse, losing 70% of its real value from 1968 to 1982.

America’s economy was a mess, even worse than that which Mr. Obama faced upon taking office. By no means do I diminish the severity of the economic situation brought on by the subprime mortgage crisis. Things were bad in 2008. Things still are bad. But they were worse in the early 80s by most economic yardsticks.

What is interesting is the different paths these two presidents took to fix the economy’s structural flaws.

Mr. Obama has pursued a course pretty much the exact opposite of that taken by Mr. Reagan.

Mr. Reagan cut taxes. He reduced the top marginal income rate from 70% to 50%, in other words, a big tax cut “for the rich.” He went further and cut taxes across the board by 25% for everyone else. And he got Congress to lower them even more a few years later.

Mr. Obama is agitating to increase taxes on the most productive Americans, aka “the rich.” Rates will increase in 2013 for top earners by 20%, and the capital gains tax rate will increase by 60%.

When it came to government spending, Mr. Reagan cut spending. In all, government spending shrunk from 23.5% of GDP in 1983 to 22.3% of GDP by 1988.

On the other hand, Mr. Obama increased government spending by 23% his first two years. His 2012 budget plans on increasing spending another 57% by 2021.

The Reagan approach was accompanied by a tight money policy from the Federal Reserve.

The Obama approach is accompanied by a loose money policy from the Federal Reserve.

Mr. Reagan cut government regulation beginning with an end to price controls on oil and natural gas.

Mr. Obama has signed massive new legislation into law which will increase government regulation of health care, finance, and energy.

Where Mr. Reagan unleashed the market place, Mr. Obama has embraced central planning as the cornerstone of Obamanomics.

In summary, Reagan cut taxes, Obama is increasing them.

Reagan cut spending, Obama increased it.

Reagan used a tight money policy, Obama, loose money.

Reagan cut regulations, Obama increased them.

So which approach worked best? Quiner’s Diner will look at the results tomorrow. Please check back.