Read This If You Think the Tea Party Is EXTREMIST

Republicans, and Democrats are calling the Tea Party Congressman extremists. We have left wing pundits like Paul Krugman calling them extremists.

I agree, they need to get on board and pass the Boehner Plan-but if you haven’t read this article you ought to, it’s genius. Here are some facts to ponder,

The National Debt on the day Bush took office was $5.7 trillion. On the day he left office the National Debt was $10.6 trillion, a $4.9 trillion increase in eight years. Today, the National Debt stands at $14.4 trillion, a $3.8 trillion increase in two and a half years. That sounds bipartisan to me.

Federal government spending has risen from $1.9 trillion in 2001 to $3.8 trillion in 2011, a 100% increase. Federal government revenues grew from $2.0 trillion in 2001 to $2.5 trillion in 2008, before collapsing to $2.2 trillion today. GDP over this same time frame has grown 47%.
The annual Federal budget deficit in 2007 was $160 billion. Annual deficits between 2002 and 2008 ranged between 1% and 4% of GDP. Since 2009, annual budget deficits have exceeded $1.1 trillion and will continue to exceed $1 trillion as far as the eye can see. Annual deficits now exceed 10% of GDP.
The Federal government spends in excess of $1.2 trillion per year on the cost of present and past wars, or 55% of all tax revenues.
With a gun to their head from Wall Street banks, Congress handed over $700 billion of taxpayer money to the criminal banks that had just crashed the worldwide economic system with their casino gambling. These banks have been getting free money from the Federal Reserve since 2008 and have rewarded themselves with in excess of $70 billion in bonuses since 2008.
Obama handed $800 billion of pork to his constituents across the country in order to create 3.5 million jobs. The $800 billion is gone and we’re still waiting for the jobs.
The home buyer tax credit scheme cost Americans $22 billion, or $100,000 per additional home sold, and home prices are now 5% lower than they were before this worthless Keynesian scam. And prices continue to fall.
The Cash for Clunkers debacle cost Americans $3 billion, or $24,000 per junked car, as a payoff to Government Owned Motors and Obama’s union backers.
The taxpayer bailout of Fannie Mae and Freddie Mac has cost Americans $160 billion so far, with at least another $150 billion to go.
The Federal Reserve tripled their balance sheet to $2.7 trillion and is now leveraged 55 to 1, twice the leverage of Bear Stearns and Lehman Brothers when they failed. A 2% decline in the value of their assets wipes out their capital.
The government and Federal Reserve threatened the FASB into changing the accounting rules so the Too Big To Fail Wall Street banks could fraudulently report the value of the assets on their books, to appear solvent.
Obamacare will add 30 million people to the government controlled healthcare system, while adding mountains of new bureaucracy, and trillions of added costs.
And last but not least, the country goes $4 billion further into debt every day. Or for further perspective: $166 million per hour; $2.8 million per minute; $46,000 per second.

Go read the whole thing and look at the charts.

14 thoughts on “Read This If You Think the Tea Party Is EXTREMIST

  1. This is a great article.  Here are a half a dozen places where the government is spending money in a manner that is not productive.  Why, with all of these obvious places to cut, are we looking at cutting Social Security and Medicare?

    1. we can issue vouchers and do those two programs cheaper.  what’s the rate of return on Social Sec?  What’s the long term rate of return on the S+P?  Where would you rather people put their money?

      1. What you are not considering is the volatility of the returns on the S&P. For the last ten years the stock market has been essentially flat and some people have experienced negative returns during that time. If you are unfortunate enough to be cashing out during a severe downturn you quality of life could be severely impacted.

        I am not saying that private investment should not be a component of retirement planning. It should be one of several. Why should we give vouchers and force more people to go to the same banks and insurance companies that were mismanaged private funds and contributed to the crisis we find ourselves in now?

          1. The last 110 years is not the critical element to this discussion.  In this case your ability to compound is sensitive to what 30-40 year span you are invested in the market.  The fact of the matter is that if you were counting on compounding your returns over the last 10 years you would have likely failed as a retail investor.  Over a 30-40 year period this has a tremendous impact.

            Furthermore, what if you had invested a large portion with Bernie Madoff?  Now through no fault of your own you are left with no income.  This doesn’t seem reasonable to me.  As I said before, I think that private investment should be a component of retirement planning but there is no reason it should be the only component.

          2. A social safety net (which can be constructed largely in the form of vouchers + negative income tax at low levels of income) can provide insurance against large negative retirement savings events. The upside would be better managed by Social Security managed as a defined contribution plan – which would also save the retired from having their pensions looted by Congress.

            Medical care is quite complex, but vouchers (Swiss style) seems like a very good model. Political realities make it impossible, sadly.

          3. Milton

            I am opposed to vouchers for these critical components of the social safety net because it will funnel additional money to the financial and insurance sector. These industries are already big enough and have made a large contribution to the mess we find ourselves in now. As it stands these sectors don’t make much if any money off of the bottom half of earners. Why give them access to that?

          4. So it’s better to let federal or state governments run pensions & healthcare? Really? Have you been paying attention to the state of Social Security? Or, say, almost any state-run pension plan? Read up on SURS (a state employee pension fund in Illinois) as one example. Looted & pillaged, or just horribly managed. Most govt. pension funds are now severely under funded. I’ll take those evil finance & insurance cos. instead, thanks.

  2. Let’s leave state run “as in municipal” pension funds aside for a moment since the focus of the recent debate has been Social Security.  What in your mind is the current state of Social Security?  You are probably going to say that it is underfunded.  The reason for this perception is that we have a tax that is specifically set aside for this purpose.  There is no “Defense” tax or this would be severely “underfunded” as well.  So the fact that the citizens of this country have paid into this pension plan obligates the government to make good on their end of the bargain.  No if all other cost cutting measures have been tried, and cost cutting is necessary ( I don’t believe it is) then maybe Social Security should be on the table.
    As far as the “evil” banks and insurance companies go.  We see that it turns out that they were underfunded as well and the government picked up that bill.  So my question is would you feel so comfortable leaving you retirement in the hands of banks and insurance companies if the government wasn’t backstopping them.  If they had not bailed them out it is likely your retirement savings would have been severely compromised during the last 3 years.

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