 by: Matt WelchThis weekend's Wall Street Journal, in the course of sketching out the fiscal contours of Stimulus II, makes that claim. Excerpt: Remember how $200 billion in federal stimulus cash was supposed to save the states from fiscal calamity? Well, hold on to your paychecks, because a big story of 2010 will be how all that free money has set the states up for an even bigger mess this year and into the future. The combined deficits of the states for 2010 and 2011 could hit $260 billion, according to a survey by the liberal Center on Budget and Policy Priorities. Ten states have a deficit, relative to the size of their expenditures, as bleak as that of near-bankrupt California. The Golden State starts the year another $6 billion in arrears despite a large income and sales tax hike last year. New York is literally down to its last dollar. Revenues are down, to be sure, but in several ways the stimulus has also made things worse. How's that? Read on: First, in most state capitals the stimulus enticed state lawmakers to spend on new programs rather than adjusting to lean times. They added health and welfare benefits and child care programs. Now they have to pay for those additions with their own state's money. A few governors, such as Mitch Daniels of Indiana and Rick Perry of Texas, had the foresight to turn down their share of the $7 billion for unemployment insurance, realizing that once the federal funds run out, benefits would be unpayable. "One of the smartest decisions we made," says Mr. Daniels. Many governors now probably wish they had done the same. Second, stimulus dollars came with strings attached that are now causing enormous budget headaches. Many environmental grants have matching requirements, so to get a federal dollar, states and cities had to spend a dollar even when they were facing huge deficits. The new construction projects built with federal funds also have federal Davis-Bacon wage requirements that raise state building costs to pay inflated union salaries. Worst of all, at the behest of the public employee unions, Congress imposed "maintenance of effort" spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes. The upshot? This is the opposite of what the White House and Congress claimed when they said the stimulus funds would prevent economically harmful state tax increases. In 2009, 10 states raised income or sales taxes, and another 15 introduced new fees on everything from beer to cellphone ringers to hunting and fishing. The states pocketed the federal money and raised taxes anyway. Now, in an election year, Congress wants to pass another $100 billion aid package for ailing states to sustain the mess the first stimulus helped to create.
 by: Tad DeHaven Huge deficit spending, a supposed stimulus bill, and financial bailouts by the Bush administration failed to stave off a deep recession. President Obama continued his predecessor’s policies with an even bigger stimulus, which helped push the deficit over the unimaginable trillion dollar mark. Prosperity hasn’t returned, but the president is persistent in his interventionist beliefs. In his speech yesterday, he told the country that we must “spend our way out of this recession.” While a dedicated segment of the intelligentsia continues to believe in simplistic Kindergarten Keynesianism, average Americans are increasingly leery. Businesses and entrepreneurs are hesitant to invest and hire because of the uncertainty surrounding the President’s agenda for higher taxes, higher energy costs, health care mandates, and greater regulation. The economy will eventually recover despite the government’s intervention, but as the debt mounts, today’s profligacy will more likely do long-term damage to the nation’s prosperity. Some leaders in Congress want a new round of stimulus spending of $150 billion or more. The following are some of the ways that money might be spent from the president’s speech: - Extend unemployment insurance. When you subsidize something you get more it, so increasing unemployment benefits will push up the unemployment rate, as Alan Reynolds notes.”
- “Cash for Caulkers.” This would be like Cash for Clunkers except people would get tax credits to make their homes more energy efficient. Any program modeled off “the dumbest government program ever” should be put back on the shelf.
- More Small Business Administration lending. A little noticed SBA program created by the stimulus bill offered banks an “unprecedented” 100 percent guarantee on loans to small businesses. The program has an anticipated default rate of 60 percent. Small businesses need lower taxes and fewer regulations, not a government program that perpetuates more moral hazard.
- More aid to state and local governments. State and local government should be using the recession to implement reforms that will prevent them from going on another unsustainable spending spree when the economy recovers. Also, we need fewer state and local government employees – not more – as they’re becoming an increasing burden on taxpayers.
The president said his administration was “forced to take those steps largely without the help of an opposition party which, unfortunately, after having presided over the decision-making that led to the crisis, decided to hand it to others to solve.” Mr. President, nobody has forced you to do anything. You’ve chosen to embrace – and expand upon – the big spending policies that were a hallmark of your predecessor’s administration.
 by: Thomas Craig
As a Libertarian-Republican, I am strongly opposed to almost every tax out there (especially the income tax). While taxes are necessary to keep our Country functioning, they are too often imposed and way too high. There is one tax that I do support, a "war surtax". In the budding days of our Nation, Thomas Jefferson proposed that we implement a war surtax so that we know the financial cost of our actions, we don't bury ourselves in debt to pay for it, and most of all, so our Leaders are that much more motivated to end any war. Jefferson wanted us to avoid war and the idea of a surtax would be a strong deterrent. Unfortunately, Jefferson was not in the majority with this belief. Skip forward over 200 years later and we find ourselves borrowing billions of dollars from our competitors and enemies to finance a war where the objective is becoming more and more blurred. The wars in Iraq and Afghanistan are being paid for with borrowed money and that money is going to have to be paid back sooner or later. Instead of sacrificing and paying for the wars with our money, we have chosen to sacrifice our children's economy.
Rep. Obey (D-Wis) and Sen. Levin (D-MI) both have proposed legislation which would impose a tax on a percentage of your income (tax would vary from 2% for middle class and low income to 12-15% for high income) to help pay for the wars. This is a logical idea and dramatically help the debt we are accumulating fighting these wars. There is an alternative, however, and it is simply to end the wars and bring our troops back home. It is perfectly acceptable to support the war effort and to support sending in reinforcements. Keep in mind, however, that if President Obama sends the requested 40,000 troops to Afghanistan, it will cost an estimated $40 Billion according to the Office of Management and Budget.
Is it worth the cost of human lives and if so, is it worth crippling our Nation under debt?
 by Thomas Craig
One word. Unbelievable. The Nation, no... the WORLD have unanimously condemned this man as running the biggest ponzi scheme in history. While I agree that this man is scum, I don't credit him with pulling off the largest heist in history. For that dubious honor, we must look to our own Government. Let's take social security for example. Anytime an American receives a paycheck, a portion of that paycheck is taken out and put towards social security. (At least Madoff's victims voluntarily gave him their money.) Our "contributions" are then used to pay for retired workers who paid their dues earlier. When I retire, my children will pay a portion of their paychecks so that the Government can pay for my retirement. In addition to this basic ponzi formula, our Government (much like Madoff) continually dips into the money set aside for social security to pay for completely unrelated expenses. Look up "Ponzi Scheme" on wikipedia. Their definition is... A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. Who will be held responsible when this ponzi scheme fails? President Bush tried to break this cycle and allow individual investment of one's own money instead of mandatory contributions. The Democrats defeated this by fear-mongering senior citizens into thinking they will lose their benefits. A real solution was introduced and the Left rejected it! Was it a perfect solution? No, they never are, but it sure was a good start. I don't mean to minimalize what Bernie Madoff did, but I think it is an ample opportunity to address the ongoing Great American Ponzi Scheme. As we all have learned, Ponzi schemes inevitably fail. The larger the scheme, such as Madoff's $65 Billion, the longer the charade might take to unfold. History, however, has shown that it WILL always unravel in the end. You think the crisis is bad now? Unless Washington does something, just watch and wait to see the crises to come.
 by Thomas Craig
I know, the title is maybe a bit much. I'm having a hard time lately just like I know you are having a hard time as well. We are standing by and watching our Country change into something and it terrifies us because we don't know what it will become. What is even scarier is that it seems like our Government doesn't know what it will become either. I sit and I pray that the Obama administration will surprise us and we will be lifted out of our current state. Every day that passes, however, seems to convey the message that the President and our Government are in complete disarray. It seems like our Government is being run no better than a fraternity house. I'll tell you what I see. I see a stock market that is failing because of a lack of direction and focus in our leadership. I see a President who promised to stop earmarks and then goes ahead and signs off to 9000 of them. I hear a President, who promised America that he has solutions, and instead merely blames his predecessor and throws his hands up as if to say that since he didn't cause it, he shouldn't be held responsible to fix it. It’s almost as if we should be grateful that he is trying to fix it at all. I see a Treasury Secretary who has zero faith from the People as well as Congress. I see Republicans who advocate reforming the Party and vowing to return to our principles, and then go ahead and add in thousands of earmarks themselves. I see a Speaker of the House who treats her position as if she won the lottery and can say, do, and spend whatever she pleases. I sense, because my actual sight has never witnessed even a picture of it, trillions of dollars of debt that is borrowed from our Children or China (I'm not sure which is worse). New taxes will take effect, and old taxes will rise. Sure, only "rich" people will have their taxes increase. You won't feel it at all unless of course you happen to purchase goods or services of any sort. I see trillions spent on bailouts and stimulus. I hear the call of our Leaders for trillions more to be spent to stop what the free market is naturally trying to accomplish. Around the world, I see foreign nations test our resolve and flex their muscles and in return we invite them to sit down and talk. I see Afghanistan failing and Mexican drug cartels pressing hard on our border.
Our individual freedoms are shrinking and our Government is growing. More than ever before are we so controlled by our Government. What saddens me is that America asked for it. They saw a young man who talks a good game and who sold them Heaven itself. That man is now winging it and trying to learn as he goes. Of course the alternate option was not much better.
Republicans need to accept the misdeeds perpetrated by the Party during the Bush years. I supported Bush and so I am guilty as well. I supported the Patriot Act and I supported the expansion of our Government. Both violate the Republican principles of individual freedom and limited Government. I see all of this and I pray that our best days are ahead of us, but I fear that we might not be able to come back from where we are going.
 by: Thomas Craig
Please take a moment to read the excellent article in Newsweek entitled "We are all Socialists Now". Here is the link We are all Socialists Now.
Unfortunetly, we have nobody to blame but ourselves. What got us in this current position is the fact that over the last years, Republicans have been acting like Democrats. We have been growing government, spending and borrowing at ridiculous levels, and turning our backs on our fiscal responsibility. Sure we seem to be the watchdog now, but can you really protect the herd once the wolves are in the pen? We invited this situation and now we are heading down a path which was truly feared by the Founding Fathers. What puzzles me is that Liberals do NOT want government intervening when it comes to physically protecting our lives, yet they are happy to hand over their money, businesses, and economy as a whole to the government. The truly sad part is that this Socialist Revolution is taking place as a result of Generational Warfare. It seems pretty unfair being that one side of this conflict is currently wearing diapers. Let's hope they are a very forgiving bunch.
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