August 12, 2011

Reviewing the Iowa GOP debate - Redneck style

Although many pundits tout Romney as the winner in the Iowa debate, I prefer to rate the contenders by how they improved their positions in relationship to the others in the field.  I saw the debate much like a NASCAR mid-race pit stop.

Big winner out of the pits:
Newt Gingrich - Speaker Gingrich demonstrated a superior command of facts and knowledge of history, along with the ability to articulate his stance on issues.  His "take no prisoners" chastising of Chris Wallace was classic.  He has the horsepower if he can keep it on the track.

Next out:
Herman Cain – Mr. Cain entered the debate pegged as the also ran with a sputtering engine due to missteps and poorly phrased responses during recent interviews.  While many expected him to falter again, Cain had done his homework, and came race prepared with a surety of purpose.

Following by a whisker:
Michele Bachmann – Representative Bachmann continued to gain on presumptive leader, Romney, with her poise under attack.  While seeming imperturbable in her response to Byron York’s misogynistic question about her marriage, she showed she was not afraid to mix it up in the corners when she put Pawlenty into the retaining wall.

Maintaining their positions:
Rick Santorum – Senator Santorum exited unscathed, with his conservative credentials intact and still in the trophy hunt.
Jon Huntsman – Governor Huntsman gave no indication he was ever serious about his run.  He entered in last place, and seemed content with cruising along as if he were going for a Sunday drive.

Falling back:
Mitt Romney – Well, falling back may be a bit strong.  Governor Romney looked and sounded Presidential.  He did himself no harm.  He came in as the overall points leader and left as the points leader.  However, he did lose ground to the hard charging Bachmann.

Dropping way back:
Ron Paul – Representative Paul blew a tire with his assertions that Iran having nuclear weapons would be no threat, and they had the “right” because other nations possessed them.  He has no chance, but his spin-outs keep the race interesting.

Behind the wall:
Tim Pawlenty – Governor Pawlenty tried desperately to make a move, but playing bumper tag with Bachmann and Romney proved a poor strategy.

On the infield grass picking flowers:
Gary Johnson – A non-qualifier mentioned only because he is still an officially announced candidate.

Dennis P. O'Neil

August 6, 2011

Why not a WPA type program? My take.

A friend responding to one of my facebook status posts about S&P's downgrading of U.S. debt from AAA to AA+ asked a fair question on a sentiment expressed by many:
... why don't we do something like the programs many years ago that employed lots of people to build roads and interstates and plant forests and stuff. Seems it would be good for all of those forest fires out west. And we wouldn't have so many bridges falling apart. Seems better than becoming a welfare state.
The following was my reply:
While something like re-instituting a modern version of the WPA may sound good on paper to proponents of Keynesian economics, the numbers never add up in the end. They contend that government spending money by creating “make work” jobs will grow the economy. Their argument being that people on the receiving end will spend that money on goods and services, and pay taxes on that income, increasing the government revenues.
Take a hypothetical pair of workers, Bill and Phil. Bill works in the private sector, receives a weekly pay of $1000 and pay taxes of 20% on that income, adding $200 weekly into government coffers. Phil works at a government “created” job, also receives $1000 per week, taxed at the same 20% rate. Keynesians point to Phil and reason that they have “grown” the economy by $1000 and increased revenue by $200.
However, while Bill and Phil contributed a combined $400 in tax payments, the government paid out $1000 to keep Phil working – a net LOSS of $600. Therefore, the government must tap not only Bill and Phil, but three other workers at $200 per week just to keep the books balanced. In other words, the government must take $800 out of the private sector (taxes paid by Bill and three others) just to maintain one job for Phil.
Now let’s assume both Bill and Phil are tradesmen skilled in bridge building. A company gets the contract to replace a failing bridge. The company owner can hire Bill, using money out of his own pocket, or he can hire Phil and have the government pick up the tab. What company owner would pass on that deal? Phil gets the job and Bill is out of work, with the net result of government revenues dropping by $200.
The government must now find that extra $200, either by raising taxes on Phil and the three remaining workers, taking more money out of circulation, or borrowing enough to cover the difference – plus enough extra to cover unemployment insurance payments to Bill until he can find another job. That is the beginning of a downward spiral with only one outcome, a shrinking economy burdened by excessive government debt.  -- Sound familiar?

Dennis P. O'Neil