The Cynical Economist

America and the ‘you didn’t build that’ revolution

According to the World Bank, the cost of starting a business in the United States has doubled since 2007, and in “ease of starting a business” we’ve dropped from third in the world in 2007 to thirteenth.

Business Fears The Obama Cliff, Not the Fiscal Cliff

The New York Times says businesses are cutting back because of the “fiscal cliff” of spending cuts and tax hikes that’ll kick in should Congress remain gridlocked. But what worries businesses more is the Obama Cliff.

Federal Deficit Highest Since 1940s

A new visual from the “Face the Facts USA,” a non-partisan election project from George Washington University, shows the federal deficit has risen significantly under President Barack Obama, and that the government is increasingly spending money it doesn’t have.

Obama’s budget would add $10.6 trillion in federal debt

President Obama’s budget will add almost $11 trillion to the federal debt over the next ten years, according to the ranking member on the Senate Budget Committee.

Obama’s budget, which was unanimously voted down in the House and the Senate, would increase the national debt to $25.4 trillion by 2022

Arthur Laffer: The Real ‘Stimulus’ Record

In country after country, increased government spending acted more like a depressant than a stimulant.

Federal Spending: Killing the Economy With Government Stimulus

President Barack Obama’s presidency hangs in the balance after another disappointing employment report.  He continues to advocate new government “stimulus” programs to boost his reelection campaign.  However, Washington is awash in government “stimulus,” without effect.  Only productive private investment will spark economic revival.

When both financial and economic crises hit, President George W. Bush backed a $170 billion “stimulus” bill and then massive industry bail-outs—of banks, Wall Street, automakers, and the housing industry.  President Obama accelerated the latter efforts while adding his own $825 billion American Recovery and Reinvestment Act in early 2009.  Several smaller “stimulus” efforts costing well over $100 billion followed.

As a result, federal outlays and debts exploded.  In 2008 federal red ink was “only” $479 billion.  Since then Uncle Sam’s annual deficit has exceeded a trillion dollars.  In addition, the Federal Reserve launched a massive “stimulus” campaign—costly bail-outs and mortgage purchases, near zero interest rates, and two rounds of “quantitative easing.”  Economist Joseph Stiglitz noted earlier this year that “Beginning in 2008, the balance sheet of the Fed doubled and then rose to three times its earlier level.”

None of these efforts have spurred economic growth.  In fact, unemployment soared, hitting ten percent.  The jobless rate is still over eight percent despite administration prom

How Times Have Changed - by Walter E. Williams (a must read)

Having been born in 1936 has allowed me to witness both societal progress and retrogression. High on the list of things made better in our society are the great gains in civil liberties and economic opportunities, especially for racial minorities and women. People who are now deemed poor have a level of material wealth that would have been a pipe dream to yesteryear’s poor. But despite the fact that today’s Americans have achieved an unprecedented level of prosperity, we have become spiritually and morally impoverished compared with our ancestors. Years ago, spending beyond one’s means was considered a character defect. Today not only do people spend beyond their means but also there are companies that advertise on radio and TV to eliminate or reduce your credit card and mortgage debt. Students saddled with college loans have called for student loan forgiveness. Yesterday’s Americans would have viewed it as morally corrupt and reprehensible to accumulate debt and then seek to avoid paying it. It’s nothing less than theft. What’s worse is there’s little condemnation of it by the rest of us.

Government Motors Spends $600M on UK Soccer Promo

General Motors plans to shell out as much as $600 million to sponsor a European soccer team despite owing $27 billion to American taxpayers. GM’s Chevrolet logo will appear front and center on the jerseys of soccer powerhouse Manchester United, as part of one of thelargest sponsorship deals in U.S. history. GM will pay $60 million per year for the logo—nearly double the $31 million European insurance company Aon paid—despite plummeting sales and massive liabilities. The U.S. Treasury owns 26.5 percent of the stock of the Detroit-based automaker, which has been reeling from a dwindling European car market. Stock price is down.

The feds’ war on…Buckyballs!  - A dozen swallowing incidents have been linked by the CPSC to Buckyballs since 2009. Compare that to the estimated 30,000 emergency room visits that occur every year as a result of children swallowing government-minted coins.

What Obama Didn’t Learn From the 1990s

The economic growth of the 1950s, the ’60s and the Clinton years had many causes. But one of them wasn’t high marginal tax rates.

GAO: $460 million food stamp benefits went to households ineligible under federal limits

The Government Accountability Office has identified $460 million dollars in Supplemental Nutrition Assistance Program, or food stamp, benefits that went to households with incomes over the federal SNAP eligibility limits.

The recently released report explains that for fiscal year 2010, states which have expanded eligibility for SNAP through broad-based categorical eligibility (BBCE) made 473,000 additional households eligible SNAP benefits, resulting in an estimated $38 million a month in extra costs, or $460 million in total.

Just a charade: Unionization as a ‘civil right’

In order to convince Nissan workers in the Deep South to unionize, the leaders of the United Auto Workers (UAW) have become masters of civil-rights rhetoric. The UAW fondly compares the “worker rights” of today to the decades-long struggle of African Americans against Jim Crow laws. Top UAW official Gary Casteel observed, “We’ve been saying that worker rights is the civil rights battle of the 21st century.”

This effort by the UAW, however, is nothing more than a rhetorical ploy that obscures the real issues. The UAW claims unionization is a civil right, when in fact union bosses often trample those rights.