In 1995 the elected leaders in the House of Representatives balanced the budget for four consecutive years while lowering taxes, increasing defense spending and increasing spending on intelligence spending.  What was discovered by this process was that by cutting taxes economic growth occurred through increased revenues that assisted with balancing the budget.  Priorities were set to increase spending in key areas while reducing it in nonessential areas.  Additionally, they eliminated pork barrel spending all together for that four year period.

Consider the priorities of the Obama Administration 9000 pork barrel projects in the $3.7 trillion dollar 2009-10 budget.  Massive entitlement spending and government public works projects and at the same time increasing taxes.  The  result of higher taxes and an economy in recession is a decrease in Federal Government revenue.  This is exactly what is happening today due to the poor choices of the American people in selection of representatives to Washington that are concerned with socialist ideals instead of the long term economic well being of the American people.

IRS Tax Revenue Falls Along with Taxpayers’ Income

By John Waggoner, USA TODAY, Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago – the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.

When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. “It illustrates how severe the recession has been.”

For example, 6 million people lost jobs in the 12 months ended in April – and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago.  “These are staggering numbers,” Lynch says. Big revenue losses mean that the U.S. budget deficit may be larger than predicted this year and in future years.

“It’s one of the drivers of the ongoing expansion of the federal budget deficit,” says John Lonski, chief economist for Moody’s Investors Service. The Congressional Budget Office projects a $1.7 trillion budget deficit for fiscal year 2009.

The other deficit driver is government spending, which, the AIER’s report says, is the main culprit for the federal budget deficit.

The White House thinks that tax revenue will increase in 2011, thanks in part to the stimulus package, says the report from AIER, an independent economic research institute. But it warns, “Even if that does happen, the administration also projects that government spending will be so much higher each year that large deficits will continue, and the national debt held by the public will double over the next 10 years.”

The government may have a hard time trimming spending to reduce the deficit when the recession ends. The 77 million Baby Boomers- those born in 1946 through 1964 – will start tapping their federal retirement benefits soon, which means increased government outlays for Social Security and Medicare.

“It will be doubly difficult for federal government to reduce expenditures and narrow the deficit as rapidly as they did following previous recessions,” Lonski says. At the end of the last major recession, in 1981, Boomers were in their 30s. Their incomes were expanding, as was their appetite for goods and services.

The Boomers now are in their 50s and 60s and unlikely to keep increasing incomes for long, which means that revenue from income taxes could flatten in the next few years. Also, Lonski says, they are more likely to save for retirement than spend – and consumer spending is a big driver of the economy.

“The American consumer led us out of previous recessions with some semblance of gusto,” Lonski says. “They’re too old to do it now.”

Actually, they are now taxed to death and their ancestors are faced with deficits that are not a government priority to resolve but an ideological attempt by the totalitarian administration now in power to enslave the public with debt so that they will be subservient to their over lords and elected liberal party masters.  With less revenue government must borrow and create more debt to fund its Marxist-fascist ideology eliminating freedom, liberty and the American way of life as we have known it.

Richard Fisher, president of the Dallas Federal Reserve Bank, an outspoken free-marketer and believer in the Schumpeterian process of “creative destruction”, has been running a fervent campaign to alert Americans to the “very big hole” in unfunded pension and health-care liabilities built up by a careless political class over the years. “We at the Dallas Fed believe the total is over $99 trillion,” he said in February.”This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them,” he said.

US mandated programs outside the budgetary process are Social Security, Medicare, Medicaid as well as Income Support programs such as Food Stamps and Veterans Retirement program.  All of these programs are in severe financial shape and go to directly caring for Americans this is not including Comrade President Obama’s new unfunded mandate for health care.  It is anticipated that this new program will dwarf the following entitlement programs that are for all intents and purposes broke.

We are not even discussing the repayment of a $3.7 trillion dollar budget or the bail out trillions and the debt service to cover those loans.  The USA is sinking and foreign debt is the life raft!

Keep in mind today’s GDP is approximately $1.5 Trillion!

Social Security $14.8 Trillion:

Social Security is funded through payroll taxes. Through 2017, Social Security collects more in tax revenues than it pays out in benefits because there are 3.3 workers for every beneficiary. However, as Baby Boomers start to retire and draw down these benefits, there will be fewer workers to support them. By 2040, the Social Security Trust Fund will be bankrupt and 100% of benefits will be paid from that year’s payroll and general tax revenues.

The Unfunded Medicare liability is $74 Trillion:

Medicare is funded by payroll taxes and premiums which currently cover only 57% of current benefits. The remaining 43% is financed from general revenues. Because of rising health care costs, general revenues will have to pay for 62% of Medicare costs by 2030.

The Medicare Part A Hospital Insurance program, which collects enough payroll taxes to pay current benefits.

Medicare Part B, the Supplementary Medical Insurance program, and Part D, the new drug benefit, which is only covered by premium payments and general tax revenues.

Adding up Medicare Part A, Part B, and Part D in order to meet the obligations to Medicare current and future recipients would require $74 trillion in the bank today.

The unfunded Federal Medicaid liability – $673.7 by 2017 billion

Medicaid is a health and medical services program for certain individuals and families with low incomes and few resources. Primary oversight of the program is handled at the federal level, but each state: Establishes its own eligibility standards, determines the type, amount, duration, and scope of services, sets the rate of payment for services, and administers its own Medicaid program.

As the economy weakens more workers are becoming unemployed and many are enrolling in Medicaid because they have no alternatives for coverage.  As state revenues are declining they are faced with more demands for Medicaid services and fewer resources to pay for them resulting in a deepening worsening fiscal situation for states.

Medicaid represents 40 percent of Federal government general revenue spending on health care and 41 percent of such spending by States. Federal spending for Medicaid accounted for 7.0 percent of the entire Federal budget in 2007 and is projected to account for 8.4 percent by 2013. Over the next 10 years, expenditures on benefits are projected to increase at an average annual rate of 7.9 percent and to reach $673.7 billion by 2017.

All Other Mandatory Programs – $357 billion

These programs include Food Stamps, Unemployment Compensation, Child Nutrition, Child Tax Credits, Supplemental Security for the blind and disabled, Student Loans, and Retirement / Disability programs for Civil Servants, the Coast Guard and the Military

Conservative principals enforce free expression; progressive liberals are in favor of free expression when it trumpets their issues or concept of ideas.  Perhaps the question is what is the purpose of government in the mind of each train of thought?

In the issue of abortion the conservative pushed for government control based on the principal of saving a life where as the liberal wants government out of the business of regulating individual personal morals.

Yet liberals who support a woman’s right to have an abortion don’t believe the same person has the wherewithal to make their own investment decisions and that they need a financial life support system of health care, social security, welfare – basic lifetime entitlements.

The liberals feel that torture, as defined as water boarding should be outlawed by government even if it would save lives when at the same time they are in favor of bombing villages where innocent children are blown up to kill a terrorist. What kinds of principals are involved and what kind of logic is there for the use of government to protect the criminal while the innocent is destroyed?

The liberal progressives have called the Republicans under the Bush Administration totalitarian when policies to ease drop on international phone calls could lead to listening in on domestic calls.  Yet the same liberals touting free speech and open expression want to shut down conservative talk radio for the same reason they wanted an end to international ease dropping as an infringement of free speech.

Liberal progressives are uncomfortable with capitalism based upon Comrade President Obamas nationalization of banks, insurance companies, the auto industry, health insurance companies and the list is growing. Liberal progressives want comfort and certainty of government control along with the power to enforce their demands in the market place just as the conservative wants government to control abortion.

This argument leads back to the moral issue of unregulated life at inception, verses conservative anti abortion policies by the government to protect birth.   How?  American economics are aborted at conception by liberal progressive policies of taxation, regulation, union control and now direct government involvement in decision making.

Liberals are in favor of government supported abortion of capitalism whereas conservatives want free enterprise capitalism to be protected at inception.

How consistent can you get!

Modern Life with its rush and instant gratification and the success of American business has given many Americans a false sense of security in our government.  This reliance and American silence in the early implementation of Comrade President Obama’s use of government as an instrument  for control of basic liberty’s, have never been  considered that they could be take from us.  As Americans we are ill equipped to assess that freedom is now under attack.   At the same time we have become unconscious of our history and apparently to busy or to indoctrinated by the liberal media machine to see the trend that is forming.

Americans are constantly bombarded with new impressions and ideas, yet the continuity of conservative values including less government intrusion and emphasis on the family has become jaded by the actions of the new administration.  Americans are truly unequipped to deal with new issues such as Comrade President Obama’s class bribery, an instrument he has unleashed that is just now making known its destructive force on the fabric of American life in the form of taxaton.  Many Americans are facing the fact that it is time to cut their incomes below $250,000.

ABC News reports that upper income taxpayers are now searching for ways to cut their income rather than become a victim of President Obama’s agenda to penalize families making $250,000. It is unlikely that at any other time in American history, has a more compelling argument been made that is best to underachieve. That economic security means earning less money. And that the fear of the government targeting you as an entrepreneur, a small business owner, or even a moderately successful investor is a real and legitimate fear.

Dr. Poczatek put it best when she said: “The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make, but if I’m going to be working just to give it back to the government – it’s de-motivating and demoralizing.”

The tax increases Comrade President and his Democratic Congress have approved will raise taxes by $1 trillion on the top 2.5 million tax filers. That comes to $400,000 per tax filer over ten years. The Obama administration future cap-and-trade system will have an overall hidden tax burden on consumers of $646 billion in new revenue.

In the good ol days (pre-Obama) Americans use to work for the Government four months of the year and got the keep the rest, now Americans will work over half the year for the Government while listening year round to the media extolling the benefits of the new Marxist-fascist doctrine of hope and change.

These socialist changes to the American way of life conflict with the fundamentals of our constitution and human nature which the constitution was modeled after.  In the long run this oppression of the American people cannot succeed, because it infringes upon the basic sense of right and wrong.  All the schemes of the Marxist-fascists in office that have passed this oppression do not respect American Property rights as part of the ingrained social contract Americans have unconsciously adopted and have made them proud to be American.  Let Comrade Obama betray the Judeo-Christian values to the World and bow to Muslim leaders, when no American President has ever disrespected his nation like this man, Americans will not forsake their freedom to elected tyrants.

Let us hope that in a decade Americans will have made the changes to take back their Liberty from the Liberal Tyrants who proclaim they know what is best for us, when what we need is freedom, liberty and the pursuit of happiness as we define it not as it is defined by the State!

As Americans tighten their belts preparing for the worst economic times in their lives Comrade President Obama is telling them they should be prepared to sacrifice.  Yet what they will be sacrificing is not quite clear because the program of recovery of economic stimulus by massive government spending has never been tried before.  Logically, business and free enterprise, capitalism is the economic engine that has gotten America to be the wealthiest nation on earth. Government spending has proven an inefficient and degrading to economic recovery.  Then why is the President pushing these programs?

As his chief of staff Rahm Emanuel has said, “We have fundamentally shifted the center of gravity in this budget, in the same way Reagan did “We are going to use this time and this moment to do what needs to be done.” Comrade Obama’s $3.7 trillion budget is an effort to reshape America from a capitalist system to a Socialist-Marxist system based on the objectives outlined in the budget.  Socialized government will run health care, education, cap and trade and alternate energy, effectively killing private enterprise.  Additionally, there is bank nationalization, direct control of the largest insurance company in the world AIG, new powers for Geithner and Bernanke to reorganize any financial institution they deem needs to be restructured.  In his first 100 days Comrade Obama with his willing accomplices in Congress will reorganize of the capitalist system into a new Marxist societal model.

Additionally, Comrade Obama is working on organizing Americans to rely on federal job dollars for volunteer programs: expanding AmeriCorps to 250,000 slots and doubling the size of the Peace Corps, integrating service-learning programs into schools and universities; providing new service opportunities for working Americans and retirees;  expanding service initiatives that “engage disadvantaged young people and advance their education”; expanding the capacity of nonprofit groups to innovate and expand successful programs across the country; and enabling more Americans to serve in the armed forces.

At a time when people are losing their jobs the only jobs being offered are government jobs, some will even have uniforms just like the Hitler youth groups did before WWII.  If you think these people won’t vote socialist to keep their paycheck, you haven’t seen what has happened in Europe.  With Comrade Obama’s open boarder program and inviting illegal’s to swift citizenship there will be another voting bloc that will keep the Marxists in power.

Comrade Obama is swiftly and effectively consolidating power, implementing government programs to support his new regulations and taxation policies, including nationalizing the financial sector of the economy that cannot sustain itself without government bailouts.

The risks for Comrade Obama are that there will be no way to pay for it all without taxing the American’s he has vowed to protect, yet his Marxist Agenda is of a higher priority and he will lie and mislead the people who elected him on his promises and deliver them into European suffering.  The budget and deficit spending he is championing is awakening democratic moderates that his agenda is anti-American.

Comrade Obama is aware the economy will not recover under these programs it will not grow as sold to America but will sustain itself by government spending, until the debt and taxes stop the transparent recovery and the population are duped into a system of complete government control.  Our only hope is that the Supreme Court will find unconstitutional the crimes he is committing against this Nation.

Last night on his sixty-third day in office, the President proved he could take powder puff punches from the press as he played rope-a-dope in front of the American public.  He had to be in the public ring because the American’s are not buying into tax and spend redistribution of wealth proposals he and his team are putting forth.  He answered reporters’ questions and knew details of programs.

What he did not do, and it appears everyone missed this, is explain why this Keynesian economic program will work?  Keynesian economics like liberalism from which it takes its principals has never worked.  What President Obama and his team are attempting to do is make private enterprise into non profit entities with salary caps for the executives and mass unionization for employees.  How do you expect this economic model to succeed Mr. President?  Oh, no one asked him this question!

I am sick and tired about hearing the ambitious agenda President Obama is proposing, when there is no thought as to how or why it will work.  Government is a parasite that cannot survive without business.  Yet government spends more money than business is capable of producing and it is borrowing from future generations to implement this socialist agenda to make it happen.

Unless the full capability of the American capitalist is unleashed there can be no recovery.  President Obama promises to cut government programs that are not working but how can a tiger change its stripes?  He is implementing Keynesian economic theory as an experiment when America needs a proven strategy that has worked in the past.

Lets take a look at the Keynesian economic theory:

During the Great Depression, classical Keynesian theory defined economic collapse as lost incentive to produce and unemployment was caused only by high non-adjustable wages.  Keynes, will resist wage reductions.

If wages and prices are falling, people would obviously expect them to fall. The Public’s perception of the economy spiraling downward would cause those who had money simply wait as falling prices made it more valuable-rather than spending. Deflation would make normal debts more valuable as the price of the dollar would rise.

Keynes contended that demand for goods might be insufficient during economic downturns, leading to unnecessarily high unemployment creating a loss of potential output. Keynes argued that government policies could be used to increase aggregate demand, thus increasing economic activity and reducing unemployment and deflation.

Keynes’s theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated policies which acted against the tide of the business cycle.  Namely deficit spending when a nation’s economy suffers from recession when recovery is long-delayed and unemployment is persistently high-and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays.

Keynesians policies peaked in the 1960s, when it seemed to many that prosperity was now permanent. However, the economic problems of the 1970s, this modern liberal economic theory fell in disfavor. During this time, many economies experienced high and rising unemployment, coupled with high and rising inflation; Keynesian theory had no solution for this complex  economic problem. The government application of free market incentives by deregulation promoting anti-recession, anti-inflation, debt abhorrence policies appears to be contrary to Keynesian policy. This dilemma led to the end of the Keynesian near-consensus of the 1960s, when the economy entered stagflation with high gasoline prices of the 1970′s.

The application of Keynesian policy has never been tried during a recession/depression its tenants only work during boom times and it may be the root cause of recession which is why it was proven not to work just 40 years ago in America.

Last night on his sixty-third day in office, the President proved he could take powder puff punches from the press as he played rope-a-dope in front of the American public.  He had to be in the public ring because the American’s are not buying into tax and spend redistribution of wealth proposals he and his team are putting forth.  He answered reporters’ questions and knew details of programs.

What he did not do, and it appears everyone missed this, is explain why this Keynesian economic program will work?  Keynesian economics like liberalism from which it takes its principals has never worked.  What President Obama and his team are attempting to do is make the private enterprise into non profit entities with salary caps for the executives and mass unionization for employees.  How do you expect this economic model to succeed Mr. President?  Oh, no one asked him this question!

I am sick and tired about hearing the ambitious agenda President Obama is proposing, when there is no thought as to how or why it will work.  Government is a parasite that cannot survive without business.  Yet government spends more money than business is capable of producing and it is borrowing from future generations to implement this socialist agenda to make it happen.

Unless the full capability of the American capitalist is unleashed there can be no recovery.  President Obama promises to cut government programs that are not working but how can a tiger change its stripes?  He is implementing Keynesian economic theory as an experiment when America needs a proven strategy that has worked in the past.

Lets take a look at the Keynesian economic theory:

During the Great Depression, classical Keynesian theory defined economic collapse as lost incentive to produce and unemployment was caused only by high non-adjustable wages.  Keynes, will resist wage reductions.

If wages and prices are falling, people would obviously expect them to fall. The Public’s perception of the economy spiraling downward would cause those who had money simply wait as falling prices made it more valuable-rather than spending. Deflation would make normal debts more valuable as the price of the dollar would rise.

Keynes contended that demand for goods might be insufficient during economic downturns, leading to unnecessarily high unemployment creating a loss of potential output. Keynes argued that government policies could be used to increase aggregate demand, thus increasing economic activity and reducing unemployment and deflation.

Keynes’s theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated policies which acted against the tide of the business cycle.  Namely deficit spending when a nation’s economy suffers from recession when recovery is long-delayed and unemployment is persistently high-and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays.

Keynesians policies peaked in the 1960s, when it seemed to many that prosperity was now permanent. However, the economic problems of the 1970s, this modern liberal economic theory fell in disfavor. During this time, many economies experienced high and rising unemployment, coupled with high and rising inflation; Keynesian theory had no solution for this complex  economic problem. The government application of free market incentives by deregulation promoting anti-recession, anti-inflation, debt abhorrence policies appears to be contrary to Keynesian policy. This dilemma led to the end of the Keynesian near-consensus of the 1960s, when the economy entered stagflation with high OPEC gasoline prices of the 1970′s.

The application of Keynesian policy has never been tried during a recession/depression its tenants only work during boom times and it may be the root cause of recession which is why it was proven not to work just 40 years ago in America.