Don's Tuesday Column

THE WAY I SEE IT   by Don Polson  Red Bluff Daily News   12/30/2014

   Spreading wealth creates takers

Here are some end-of-2014 items that haven’t gotten nearly the notice and attention they have deserved; readers are free to conclude why.

The most recent announcement that America’s economy grew at a 5 percent annual rate in the 3^rd Quarter (Q3 being July 1 through September 30) drove all sorts of chest thumping by Obama acolytes, defenders and hacks about the (supposedly) strong recovery. Some conservatives and Republicans had no discouraging words. Many of us, however, take any message from Emperor Obama and his state mouthpieces with healthy skepticism, confident that counter-narratives will be found, buried in the details.

Our skepticism is not only justified, but also proven correct about such statistical exuberance and recovery pronouncements. Look up, at Powerlineblog.com, a December 26 post, “About That 5% GDP Growth Rate…” that cites the analysis of Tyler Durden, zerohedge.com, in, “Here Is The Reason For The ‘Surge’ in Q3 GDP.” The bottom line: sleight-of-hand, smoke and mirrors created the 5% rate, and the so-called economic recovery.

The Bureau of Economic Advisers (BEA, or the economic branch of Emperor Obama’s propaganda operation) arbitrarily assigned a surge in health care spending, present in the previous 6 months of 2014, to the most recent quarter. Reason? Goose the numbers for the predictable political and PR gain. You see, when the economy grows due to increased sales of actual goods and services in the free market, that’s a good thing. Government spending has no such economy-growing effect, coming from taxes (money not spent by consumers), borrowing (money to be paid back from future taxes) or inflation (diminishing the value of citizens’ money against rising prices).

Heath care spending, absent government interference, is a part of the “consumer spending” segment of the economy. Obamacare (Affordable Care Act—ACA) is clearly a major interference in the health care system, as evidenced by the proliferation of mandates, taxes and regulatory requirements. In spite of promises and projections to the contrary, i.e. that Obamacare would “bend the cost curve down,” the health care law’s unintended actual consequence has been to artificially balloon spending on health care through higher premiums, deductibles and costs.

So, the left wants it both ways: First, they predict rosy scenarios of reduced spending on health care/insurance from the ACA; then they boast about an improving economy based only on the artificially inflated health spending resulting from Obamacare. That gets folded into the rest of the “real goods and services” like durable goods, software, financial services, manufacturing, etc. All backed by supposedly objective, “official” BEA statistics. What shameless manipulation.

Regarding our individual or collective perception of abundance and economic growth, a chart by Veronique de Rugy, titled “Total Spending per Capita by Major Spending Categories,” illustrates the long-term trend of federal spending per person over 52 years. The 3 categories used, “discretionary,” “mandatory” and “interest,” show the cost to each American rising from around $4,000 in 1962 to a mind-blowing $12,000+ in 2009 (over $11,000 in 2014).

Adjusted to 2014 dollars, the trend tells us that a family of four pays not only $12,000x4, or $48,000, but also pays around $32,000 more per year than they would have in 1962. Moreover, “discretionary” spending has remained relatively flat around $4,000 per person per year. Folks, it’s the “mandatory” spending that has ballooned from $1,000 per person to about $7,000. My guess is that you would find military spending flat or declining over 52 years, leaving the overwhelming growth due to “entitlements,” or income-based transfers.

I posted another chart at donpolson.blogspot.com on December 11: “New CBO study shows that ‘the rich’ don’t just pay their ‘fair share,’ they pay almost everybody’s share.” It broke down the amount of federal dollars received and paid, for 5 income segments. The richest two segments, with average incomes of $83,000 and $235,000 respectively, are the only ones that actually pay, on average, more than they receive ($700 and $46,500). The bottom 3 quintiles (incomes averaging about $15,000, $30,000 and $50,000) are receiving more than they pay in taxes ($8,600, $12,500 and $9,100 respectively).

The conclusion in all of this is that America has truly “progressed” (to use leftist jargon) into a redistributionist, rich-pay-poor-receive, more-folks-in-the-wagon-than-pulling-it, model. We’ve descended from a nation where most people proudly provided for themselves from their own labors and ingenuity, to a nation where most people depend on someone else paying more taxes than they receive in benefits. The Not-So-Great Society has created a virtual nation of takers.

An economically ignorant Obama, on 9/2, “calls for higher wages to rev economy” (AP). Only an economy where the collective and individual burden of government is light or declining will allow, inspire and encourage the entrepreneurial, free market job creation that drives higher wages. Obamacrats will never get, let alone accept, that economic reality.

“Obama wants election about the economy, not him,” (AP, 10/10). Voters rejected the Emperor and his pathetically weak recovery. Both Obama and his ideologues are economically clueless on how to change this: “Labor Force Participation Remains at 36-Year Low” (cnsnews.com, 12/5). Obama and his Democrats have truly created a “jobless recovery.”