State of the Repeating Union

A president, embattled with public opinion against him, stood up at the podium of our nation’s capitol and proceeded to give a speech talking about opportunity, hope, and bringing American’s back to work. He spoke of a wounded veteran, renewable energy being the future, and affordable healthcare for all. He was given many standing ovations as he talked about difficult times, expanding the war on terror, a recovering economy, and a brighter future because of the last 4 years of his hard work.

You may be thinking of President Obama’s speech yesterday – but no, this speech was given by President Bush at the State of the Union in 2007 and it bears a striking resemblance to this year’s State of the Union. Not only is the general theme the same, but both presidents declare recovery is at hand and opportunity is the most important task on their agenda as leader of this country.

On health care:

BUSH: A future of hope and opportunity requires that all our citizens have affordable and available health care. When it comes to health care, government has an obligation to care for the elderly, the disabled and poor children. And we will meet those responsibilities.

OBAMA: One last point on financial security.  For decades, few things exposed hard-working families to economic hardship more than a broken health care system.  …. That’s what health insurance reform is all about – the peace of mind that if misfortune strikes, you don’t have to lose everything.

On renewable energy:

BUSH: When we do that, we will have cut our total imports by the equivalent of three-quarters of all the oil we now import from the Middle East . To reach this goal, we must increase the supply of alternative fuels, by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017.

OBAMA:  I’ll cut red tape to help states get those factories built, and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas ….  The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades. …. An autoworker fine-tuned some of the best, most fuel-efficient cars in the world, and did his part to help America wean itself off foreign oil.

On unemployment:

BUSH: A future of hope and opportunity begins with a growing economy, and that is what we have. We are now in the 41st month of uninterrupted job growth, a recovery that has created 7.2 million new jobs so far. Unemployment is low, inflation is low, wages are rising. This economy is on the move.

OBAMA: The lowest unemployment rate in over five years.  A rebounding housing market.  A manufacturing sector that’s adding jobs for the first time since the 1990s.  More oil produced at home than we buy from the rest of the world – the first time that’s happened in nearly twenty years.  Our deficits – cut by more than half.  And for the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is.

On opportunity:

BUSH: Our job is to make life better for our fellow Americans, and to help them build a future of hope and opportunity. And this is the business before us tonight.

OBAMA: …a rising America where honest work is plentiful and communities are strong; where prosperity is widely shared and opportunity for all lets us go as far as our dreams and toil will take us – none of it is easy.  But if we work together…

The list of examples goes on and on. Even the feel of it is almost identical if you listen to both speeches. Either speech could have been given and it would be appropriate as it seems nothing has changed: the economy is still doing poorly, we’re still at war, we still have companies fleeing over seas, unemployment is still high, the deficit is at the highest it’s ever been, and the list (again) goes on and on. Despite hearing this speech twice now, once in 2007 and once in 2014, I’ve yet to hear any actual information about the current state of the union. No hard facts or charts. No admissions of mistakes we’ve made. Nothing but a lot of chest-beating about America, empty promises, political rhetoric, and a huge amount of self-aggrandizing.

It’s become obvious that these are not, nor have been for a long time, about the actual state the union is in as directed by the constitution (that document we rarely follow anymore). They have just become another time to spew political propaganda at the masses without doing one bit of informing them. It shouldn’t be a surprise to you, dear reader, that both Bush and Obama gave similar speeches – after all, their war on liberty has been nearly identical.

Welcome to the new, old age.

Obama’s State of the Union proposals to cost taxpayers $84 billion

MoneyPresident Obama put forth a plethora of proposals during the State of the Union speech last week that, he said, would not raise the national debt.  According to the National Taxpayer’s Union, the total cost to taxpayers of those proposals could reach $83.4 billion, the most expensive plan yet by Obama during the State of the Union speech.

“This is a slush fund that has a lineage back to the 2009 stimulus and more recently the President’s Jobs Act from the last Congress; back then CBO scored it at $39.16 billion over five years, which breaks down to $7.832 billion on an annualized basis,” said NTU’s Executive Vice President, Pete Sepp.  The taxpayer’s watch dog group estimated the cost to implement 40 items mentioned during Obama’s speech that would cost the American taxpayer.

Speaking of the President’s vague tax proposals, Sepp said that they “contained enough buzzwords to bear a close resemblance to the tax reform blueprint he put out last year, which in turn draws from previous administration plans. The window-dressing changes, but not so much what’s behind it.”

Listen to the Podcast of the NTU analysis.

Minimum wages kill jobs, increase costs and send money overseas

workers-wages-vsA portion of President Barack Obama’s State of the Union speech discussed the creation of an economic climate that encourages businesses to open up shop in the United States and invest earned capital locally rather than overseas.  The president then addressed several policies that would accomplish precisely the opposite.

Obama proposed raising the federal minimum wage from $7.25 to $9.00 an hour, arguing that it would raise the incomes of millions of families. “It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets,” he said.

The problem?  It’s a lie.  Entry level economics courses teach the true effect of minimum wages.  Minimum wage jobs are filled by low skilled labor, many of whom are in high school and college and learning the skills necessary to succeed in the United States…skills such as working with others, taking direction from managers, being responsible with your authority and privileges.  Minimum wage jobs are teaching jobs.  When governments raise the minimum wage, businesses respond by slashing opportunities to these jobs, or increasing the price on products and services – or both.

What incentive do businesses have paying unskilled laborers more money?  I was asked a question recently: “How do you expect a person to make a living off of minimum wage?”  My answer is simple: I don’t.  Low skill jobs are not designed to support entire families.  Ask yourself a simple question – why would somebody work 60-hour weeks at a high-skilled professional job to support his or her family, when they could serve up burritos at the local Taco Bell and still support their family?  This is not realistic, and the world does not – and cannot – work this way.  There is a reason why people obtain the skills to get better jobs.  This is what makes career progression even possible.  It is why your local grocery store is clean and stocked with food, and why you are probably reading this article from the comfort of your home or building.

The net result in rising minimum wages is fewer jobs and an increase in prices for all of us.  How does this help the economy?  How does this help the very people whom our president claims to care about?  It doesn’t.  In fact, Obama’s policies demonstrably hurt the lower and middle classes by once again putting the burden of federal regulation on them.

To incentivize business, government needs to create a climate where businesses can operate without the fear of countless punitive regulations.  To encourage businesses to stay here in the United States, cut the corporate income tax rate.  Cut the personal income tax rate and cap it below 20%.  Remove the minimum wage, which is far beyond the scope of the federal government, and let states decide what is in the best interest of their residents and businesses.

More business-friendly states will, naturally, see more business – and less business-friendly states will be forced to change.  The free market is a powerful thing.  It works.  Americans see it work all the time in their local communities.  So much of what Americans spend their money on comes at the discretion of the free market.  It is enabled by a company’s ability to develop products and services that the people want and make money while doing so.  The free market builds economies, not the government.

While our government continues to willfully ignore even the most basic economic principles of incentivizing business, low and middle class Americans will be forced to continue shouldering the burden of its incompetence.