This week, a memo leaked to Politico, by DNC pollster Joel Benenson, warned that Democrats risk facing a backlash on the way they have handled Obamacare. Specifically, the polling found that independent voters were most angry with “the stagnation and the backroom deal-cutting, particularly those that benefit the constituents of key swing senators or special interests.”

Democrats are facing the same political consequences as the Republicans in 2006: The loss of the valuable middle, and for precisely the same reasons.

This is dangerous territory for the majority. Voters have reason to be upset with Pelosi’s tricky maneuvering, and they have even more reason to be furious with what’s in the bill.  Unfortunately, while most of the pundits and news media are caught up in the legislative chess match and games of political chicken, almost everyone in official Washington has lost sight of the substance of the debate — the bill does nothing to truly reform health care. 

Our country is torn apart for a bill that covers only 4% of total health care expenditures — it raises costs, taxes and balloons the deficit, all while lowering the quality of care.

What is the real goal of this health care package — to control health care costs or control the market space?  The proof is in the legislation. The Senate-passed bill increases costs and taxes by putting a policy in place that ultimately leads to a government takeover: the regulations are structured in a way that makes it nearly impossible for free enterprise to flourish.

For example, if the goal of this bill was to control costs, why would the legislation penalize younger, healthy workers with a tax when they are precisely the group that diversifies the insurance risk pool for insurance providers, which concretely lowers everyday insurance premiums?    

Not all new proposals and regulations are bad. A good litmus test for any new government initiative is this — regulations should not punish an individual or family because they (or their employer or labor union) choose to pay for premium services. Nor should an individual be punished for choosing nothing. They should be forced to face the consequences of their risky decisions.

At a time when distrust in government is at an all-time high, it is no wonder why there’s such passionate resistance to the heavy hand of government being so involved in such a critically important and personal industry. But with all the focus on process (which the president and Democrats have already lost on), let’s focus on what really matters: lower health care costs for Americans. This bill is not the solution.

Governor Christie ventured deep into George Norcross country to speak about the tough realities of this year’s budgetary woes. It was another sign of raw political courage by the former prosecutor as he seeks to slay the treasure-hogging dragon of Trenton.

His appearance in Camden County, home of New Jersey’s most corrupt tax-levying political dictatorships (both county-wide and in many municipalities) and the site of our state’s own third world theme park known as Camden, probably caused many of the vile serpents of political corruption in the Norcross machine to run and hide under the nearest rock.

It was against the backdrop of this rampant fiscal debauchery and pay-to-play landscape that Governor Christie soberly announced that “seventy billion dollars worth of wealth has left New Jersey in the last four years,” thanks to the ridiculously high tax rates (income, property and sales) foisted upon the state by years of liberal utopian budgeting.

He also pointed out the sad reality that in the political Olympic sport of taxing the snot out of citizens, New Jersey is currently the national champion when taking all areas of taxation into consideration. Thank you Mr. Corzine.

Speaking of the Wizard of Wall Street, Governor Christie also brought up the fact that Mr. Corzine continues to, as Save Jersey Blogger Matt Rooney puts it “seriously wound the Garden State from beyond the political grave” in his last minute deal to ban Governor Christie from firing a single public employee until January 2011.

As Christie stated, “My lawyers have now told me that I am bound by that deal. If I could stop it, I would, except the previous governor tied my hands. I cannot lay off one state worker, I cannot furlough a state worker until January of 2011. That was a great election-year deal he made for us. It is an exquisite pair of handcuffs he put on his successor, but I guess he didn’t think he was going to have a successor.”

It is just this kind of frank talk and political courage that will keep Christie in the public’s good graces even as he makes many very tough and unpopular spending cuts. It is also precisely the contrast of this responsible adult leadership soaked in common sense with the childish schoolyard stunts like Mr. Corzine’s parting gifts that is finally waking the sleeping giant of the New Jersey electorate to look “queasily upon what they have done” all these years, as the Bard might say.

It’s bad folks. Just how bad has been nefariously hidden from the light of day by the magic and dark arts of Corzine and his fellow Wall Street wizards. The state has been robbing the pension plans of teachers and public workers, as well as the unemployment insurance trust fund for years to balance budgets, while subsidizing inept money losing industries like public transportation for years just to stay in the good graces of the unions.

On top of that, the serious financial burdens levied by our government have created such a hostile business environment that New Jersey is “disproportionately affected” by the economic malaise permeating the nation under Obama-Biden’s socialist dirge.

Political leaders from both parties have too long ignored the financial woes in our state, choosing to punt the problems down the line to some future generation to deal with. Thankfully, Governor Christie tells us that the day to deal with it is today.
While serpents and scoundrels from Trenton call Christie’s attempts to seriously deal with the problems “immoral” New Jersey residents seem to understand that tough choices need to be made to stave off financial armageddon. Christie believes the people are ready to hear the truth.

As Governor Christie closed his remarks in enemy territory, he in essence closed with the classic “if I die, I die” approach to governing. A politician dedicated to solving problems and not preserving his own personal career and gravy train. In New Jersey. In Camden County. It was a sighting akin to the Loch Ness Monster or Big Foot.

It’s a wondrous thing to hear a politician say these things. In a political age where the president and his pals in congress see poll after poll, town hall meeting after town hall meeting, and election after election repudiating their vast socialist agenda as not a rebuke of their schemes, but rather a sign of our inability to understand what’s good for us, it is refreshing to see a politician not only listen, but give the American people the respect they are due.

This article originally appeared on my Examiner.com page. You can view it on that site, by clicking here.

The Colorado legislature and Governor Bill Ritter (D) recently passed a bill which Amazon.com felt would be too costly to come into compliance with, and pulled out of all relationships with Colorado-based advertisers. As of March 8, 2010 Amazon sent a letter to its associates in Colorado explaining the closing of their accounts. The text of that letter can be found at the bottom of this post.

The decision to do this was probably a difficult one for Amazon, and will no doubt lead to some loss of sales for them, but it’s understandable that they felt the need to take this step. The Ritter administration and the Democrat-controlled Colorado legislature grows increasingly hostile towards business, even in this harsh economy. As businesses flee Colorado, they take their jobs and tax revenue with them. Governor Ritter has shown time and time again to be committed to political ideology rather than the people of Colorado, and he has the enthusiastic backing of a willing majority in our state legislature. Colorado’s fall to one-party-rule has been devastating to the state’s oil and gas industry, and as they scramble to plug the resulting hole in the state’s budget we see new taxes in ill-conceived bills like this one.

The Colorado legislature and the Ritter administration should be ashamed of their overall attitude towards the businesses that provide employment for the people of our great state, and ultimately pay the state’s bills.

Dear Colorado-based Amazon Associate:

We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter, who signed the bill.

Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.

Who’s behind the tax on soda? Who do you think is behind increased taxes?

From MediaPost:

New York Soda Tax Proposal Erupts Into Ad Battle
Ad Age, Wednesday, March 3, 2010, 10:36 AM
The Alliance for a Healthier New York is running ads urging New Yorkers to support a proposed sugar tax with the sentiment that “for just a few extra pennies we can reduce obesity, diabetes and heart disease and stop devastating health-care cuts in Albany,” Natalie Zmuda reports.

The American Beverage Association is countering with TV, print and radio ads that point out that the tax would be a burden on consumers. Some ads claims that the price of beverage products would go up by 50%; in a TV spot, the owner of a Bronx supermarket talks about how his customers are already on a budget and can’t afford an additional tax.

“The Alliance for a Healthier New York.” Who could be against a healthier New York?

Let’s look at the Supporters:

SEIU - 1199
SEIU/CIR

Lovely. Let’s look at where the tax money will go:

Isn’t this just a way to increase revenue for the state?
While revenue would be generated by the sugar-sweetened beverage tax and used for health related initiatives, the measure is designed to do both–decrease consumption of sugar-sweetened beverages, just as the cigarette tax is levied to decrease tobacco use — and improve health, as well as provide needed revenue. Revenue generated from this tax will go to the New York State Health Care Reform Act (HCRA) Resources Fund to be used for health care and health related initiatives.

The SEIU is endorsing a tax that will collect money for the New York State Health Care Reform Act Resources Fund. Let’s look at that law:

Moneys in the health care reform act resources fund shall be kept separate from and shall not be commingled with any other moneys in the joint or sole custody of the comptroller and the department of health.

An SEIU slush fund! Bankrupt New York can’t use the “soda tax” money for anything else, like, oh, to pay down its debt or to lower taxes. Of course not.

From Crain’s New York Business on March 2nd:

This year, the governor is threatening to cut specific funding lines in health care if the drink tax does not pass. That has mobilized institutions that would be hurt by those cuts to support the tax. Legislators, though, could decouple the drink tax and the health spending cuts.

This tax has nothing to do with obesity. It’s all about hiring more unionized government workers. Its union (SEIU) will then continue to buy its legislators.

New York State has been described as having the must dysfunctional legislature in the country, but that’s not true. It functions. It just functions for the municipal unions and against the taxpayers.

Once the “soda tax,” is enacted, keep in mind that it will never go away, and that it will be increased in both amount and scope (the universal law of all taxes).

If New York State really wanted to fight obesity, it would cut its tax rates and encourage business. People who have a job are generally thinner than those who don’t.

Yep, our elected officials have really run up $1,028,000 of public obligations for the family of the average American.  No kidding. 

First there’s the hard debt - contractual obligations of the government.  Roughly $87,000 per family - half the value of the average home in America. It’s chicken feed to America’s politicians.  

Then there’s the semi-hard debt - primarily retirement benefits for civil servants that their governmental employers have not saved.  That’s almost as much, $73,000 per family.  Think taxpayers can wrest control of that money from unions?  It’ll be a whale of a fight.

Then there are the best loved brands in government: Social Security and Medicare.  They are slated to consume $368,000 per family more than tax revenues over the next 75 years.   Beyond 75 years, those two programs are short another $500,000 per family.  (The Treasury, Social Security and Medicare Trustees Reports, GAO, and Census Bureau have additional details if you’re interested.)

To put in perspective, it would take $1,028,000 per family invested today and growing to pay off government’s debts, promises, and implied promises: federal, state and local, as they come due.

This is in addition to the taxes citizens already pay.  

Every year the balance is not paid down, it grows at the rate of interest - like an unpaid mortgage.

This analysis makes the heroic assumption that taxpayers will not be called upon to make good on any loans that they have co-signed.  No FDIC problems, no bad TARP money, no further Fannie and Freddie losses, no student loan troubles, etc… 

In the interests of credibility, it is imporant not to exaggerate the problem.  America can cut the total unfunded liability in half easily - simply by deciding the country is not going to pay Social Security and Medicare to anyone roughly 8 years old or less or to those not yet born.  Simple, right?  Not in a political environment…might not even be possible.

Visit MyGovSpending.com/beginner/new (full disclosure: it is my site) for a view of your families’ total tax bill, share of government spending, your share of the deficit and the national debt.  I think you should know.

The numbers are big.  There’s not much time.

Okay, if we really have to go to this dog and pony show we better show up with some nice easy for Joe Sixpack to understand points that will make ObamaCare look like the massive overreach it represents. I’m no wonk but I thought of a few things that if we just hammer them every time it is our turn to speak then I think we win this thing.

1. There is no crisis- This whole “The sky is falling, The sky is falling!” has been the Allinskyites MO for as long as I can remember. I think the American people are on to them, though. Whether it be healthcare, global warming(I don’t even capitalize that anymore) or even this stupid H1N1 panic, they are sitting there like The Boy Who Cried Wolf talking to a bunch of non-believers. We still have, by far, the best quality healthcare in the world. Last time I checked there were not people dying in the streets, not even illegal immigrants. So, I would make the president define exactly what is the “crisis” we are trying to solve other then the Democrat party’s intense fantasy of taking over 1/6th of the economy.

2. Most people like their current health insurance- Over 85% of the American people already have health insurance and I think something like 80% of those rate their insurance as good, very good, or excellent. That means that 68% of Americans are happy about something. It seems to me that getting 68% of Americans to agree on ANYTHING is almost impossible so the President and his henchmen have really stuck their you know whats into a hornet nest by trying to take away something that generally people like. Make them explain why they need to screw everyone else in order to help 15% of the people who don’t have health insurance, many of whom choose not to have health insurance but will be forced to buy it under the President’s plan at the point of a gun. How American is that?

3. The real problem is skyrocketing costs- The Democrat proposals do nothing to lower the actual cost of healthcare delivery which would lead to lower insurance costs, as well. The average guy on the street(me) looks at this and says, “I already have health insurance that costs too much. Now we are going to provide insurance for a bunch of new people? What’s that going to do for me?” I think people know inherently that their costs are going up. Why don’t we instead do some incremental things that help bring costs down while at the same time providing some reasonable incentives for businesses and individuals to purchase their own insurance? Seems pretty logical, no?

4. Jobs, Jobs, Jobs- Why don’t we get the economy growing again before we go providing another big entitlement program? We have an employer based healthcare insurance system. Wouldn’t it make more sense to address the unemployment in this country(now, there’s a crisis) to see how many people we can get back to work before we go and screw up the world’s best healthcare system? The whole healthcare insurance “problem” looks a little different at 5 or 6 percent unemployment than it does at 10 percent unemployment. You said you were going to get focused. Get focused.

5. We’re broke- You know you just pissed away $787B on a “stimulus” that sent the unemployment rate from 7.5% to 10% and that was just you’re first year in office. We do have a fiscal crisis at every level of government and now you want to double down. Sir, with all due respect, it is not your money. Americans may have been dumb enough to elect you but the American Treasury is not your little private piggy bank to go and try some stupid Socialist experiment that has already been a failure everywhere else in the world. This is America, Jack! In just three short years you can go and take a teaching post up at Harvard with your angry buddy(can’t remember his name) and sit around and talk with him and Michelle about what a rotten country America is but, until then, get your hand off my wallet!

There’s more but that ought to be a start.

I had heard from a source that income taxes are going to be killer this year, with most people getting less or even owing money on their taxes this year (I’ll explain in a moment).  Normally I look forward to tax season as I generally get a nice fat check back from the government which I generally use to purchase a firearm.  Background on me: single with no house and I withold about $50 extra every pay period for taxes.

Anyhow I do my taxes on Turbo Tax and it says I owe $667 on taxes.  Damn.  Just . . . damn.  I was laid off for two months and found work at a (believe it or not) higher salary.  But still, holy cow.

The political slant here is that I’m told Obama’s craptastic stimulus that ‘gave’ you $20-$40 more per paycheck wasn’t actually a tax break, it was a manipulation of your withholding that would come back to bite you right about, say, now.  Anyway, I was wondering if any of you were having this problem?  None of my friends or family have filed yet.  I’ve never owed on my taxes before.

Once again our good friends on Capitol Hill and at 1600 Pennsylvania Avenue have put forth their budget, and once again they prove that they either don’t realize or don’t care that their profligate spending will ensure that we have a never ending recession.  I know I’ve done this before, but since we’re headed down Debt Alley again, I’m going to explain why deficits are going to choke off recovery:

A fundamental identity of macroeconomics is called the National Income Identity which breaks out the components of the total economy that sum to the GDP.  It states that the GDP is equal to the sum of consumer spending, investment, government spending, and net income from international trade.  GDP is also equal to the sum of consumer spending, taxes, and savings.   Symbolically:

GDP = C + G + I + (X - IM) = C + S + T

Some simple algebra can recast this equation into two interesting forms.  First, we can see exactly from where the money for government spending comes:

G = T + (S - I) + (IM - X)

This tells us that government spending is funded from a) tax revenue (T), b) crowding out private investment by diverting savings to bond sales (S - I), and c) foreign entities reinvesting their dollars, which flow out of the US economy by way of a trade deficit, in bonds (IM - X).

The second form shows the investment potential of the economy - money available to invest in the private economy to replace depreciating assets, invest in technology, and, most importantly, hire new employees.  It is:

I = S + (IM - X) - (G - T)

This tells us that capital for investment comes from a) savings (S), b) reinvested dollar outflows (IM - X), and is diminished by governmental deficit spending (G - T).

Now the numbers: The GDP estimates are in the range of 14.5 trillion dollars.  The budget calls for 3.69 trillion in spending with 2.09 trillion in taxes (1.6 trillion dollar deficit).  The trade deficit runs generally 38 billion per month; that rate extrapolates to 456 billion annually.  The savings rate (percent of GDP minus taxes) is estimated to be in the 5% range; this gives 620 billion in savings.  How does this budget do?

I = S + (IM - X) - (G - T) = 600B + 456B - 1600B = -544 billion (-3.75% of GDP)

What does this mean?

1. Every dime of GDP which does not go to consumer spending and taxes will be diverted to fund the government - nothing for investment, zero to replace depreciated equipment, nada to invest in technology, and bupkis for new hiring.

2. Even after crowding out every bit of investment, the government STILL needs $544 billion more.  This is where the Fed starts printing money and debasing the currency.

The “Progressives” (who know so much better about what’s right for America than us - just ask them!) like to jump on President Reagan’s back about his deficits.  His biggest was 1986: $221.2 billion ($990.4 billion in spending with $769.2 billion in tax receipts) in a $4.428 trillion GDP; 3% trade deficit ($133 billion) and a savings rate of 8.5% (this is from St. Louis Fed data), making savings $311 billion.  So, how does this measure up?

I = S + (IM - X) - (G - T) = 311B + 133B - 221.2B = $222.8 billion (5% of GDP)

Five percent of GDP available to invest.  GDP grew 3.5-4% during that time.  By the way, if you want to have a 5% investment pool available in the current economy you’ll need to cut $1.221 trillion from the budget, leaving a deficit of “only” $379 billion (and I don’t want to hear a word about hiking taxes - those who do get an F and a lecture about how increasing marginal tax rates steepens the Investment-Savings curve and reduces total economic output).

So why do the “Progressives” run deficits which can never be sustained?  I have three ideas:

1. They have no clue about principles of macroeconomics which any first year economics student knows well (so what are Romer, Goolsbee, Summers, Bernstein, et al doing to earn their pay?).

2. They know about these macroeconomics principles, but don’t care.

3. They wish to “fundamentally transform the United States of America”, and this is a step in that process.

If anyone in the Administration reads this and wants to provide an answer you can find me on Twitter - @mikegesner.