Entitlement Gloom
By John Batchelor on November 29, 2012 at 5:00 AM in Current Affairs
LARRY is on John Batchelor right now. If you miss it, look here to see the podcast. He is explaining the process through which CIA memoranda go from person to person.
Ladies and Gentleman, I titled this image: “THEY WHO RULE US ALL.” That sizes it up. These geniuses are supposed to lead the U.S. of A. out of its precarious financial state? I don’t think so. See, I thought we needed a good money manager. Mitt Romney would have had to deal with these people, so his first six years would have been tough. If the Republicans got their act together, I hoped Harry Reid could be defeated. Now we have more Democrats in the Senate, so my idea isn’t going well. But I hope you’ll read the always scintillating John Batchelor. (Listen tonight (9 p.m. to 1 a.m.) – Bronwyn
Senate Majority Leader Harry Reid: “President Obama said that Social Security is not part of what . . . we’re going to do in this. And I agree with him.”
I spoke with Larry Kudlow of CNBC, Sudeep Reddy of WSJ, and John Cochrane of Hoover, to learn there there is no deal to be had in Washington over the threat of a recession that will follow the tax increases and spending cuts that start at midnight on December 31, the infamous fiscal cliff. [See Larry Johnson's Obama's Second Bite at the Apple" and Steve's post, "Moving On To 2016…"]
Senator Toomey of PA tells Larry Kudlow that he knows of no deal in the Senate. Nor does he know what POTUS Obama will says as he departs the White House for a campaign swing in Pennsylvania on the morrow. No…
(The video of the conversation on Larry Kudlow’s program is at the end of this post.)
Spoke Larry Kudlow of CNBC, Sudeep Reddy of WSJ, and John Cochrane of Hoover, to learn there there is no deal to be had in Washington over the threat of a recession that will follow the tax increases and spending cuts that start at midnight on December 31, the infamous fiscal cliff.
Senator Toomey of PA tells Larry Kudlow that he knows of no deal in the Senate, nor does he know what POTUS Obama will says as he departs the White House for a campaign swing in Pennsylvania on the morrow. No deal.
Sudeep Reddy reports that the White House speakers the last weeks have used the word “rates” when talking of increasing taxes, meaning that the Democratic position is that tax rates must climb, that capping deductions is not adequate for a deal.
Senator Durbin of IL tells a think tank today, according to Sudeep Reddy, that the Senate Democrats do not want entitlements on the table in a hasty deal, that entitlements can be dealt with next year, in the new Congress, 2013.
This statement alone is a deal killer, and Durbin and the White House know it.
Entitlement Gloom.
What I learn from Professor Cochrane is that the entitlements that the federal, state and city governments provide — the entitlements that the Democrats refuse to reduce — could very well be part or much of the reason there is such sluggishness surrounding the economy.
Benefits such as unemployment, food stamps, housing subsidies, all healthcare provided by the state, create a ball a chain around the recipient that keep him or her from growth and profit because of arbitrary limitations.
Earn a dollar more than this particular amount, and you lose the benefits; therefore, remain low-income and dependent (or in the gray and black market and dependent). Washington and the state capitols are not providing a safety net, they are maintaining a cage.
Also, the governments must tax for the money to supplement the dependent, and this drains cash from the private economy where it would grow jobs. All this is the entitlement gloom of the last four years. The rise in food stamps is not an expression of helplessness, rather it is a measure of how the growing entitlement drags down growth.
The explosion of entitlements is not a symptom of the recession and despair, it may well be a dominant cause of the same.
– From the blog for the John Batchelor Radio Program, that as I type this, goes on the air in 45 minutes.
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