Obama’s Downgrade May Last Until 2029

Ben Johnson, The White House Watch

Obama scored another historical first on Friday, becoming the first president to see the U.S. credit rating downgraded by Standard & Poor’s, from AAA to AA+. While we hope his presidential reign lasts no longer than January 2013, Americans may have to live with the consequences of Obamanomics for more than a decade to come. The chairman of Standard & Poor’s sovereign debt ratings, John Chambers, told ABC’s This Week program on Sunday the United States could be stuck with the lower credit rating between nine and 18 years. “We’ve had five governments that lost their AAA that got it back,” he said. “The amount of time that it took for those five range from 9 years to 18 years.” He forecast that digging America out of the debt ditch “could take awhile,” and that it would require two things: “a stabilization of the debt as a share of the economy and eventual decline” and “more ability to reach consensus in Washington than what we’re observing now.”

The president’s commitment to deficit spending and unwillingness to make enforceable budget cuts leave a grim prognosis. But the outlook gets worse. As this author noted Friday, there is a chance America will be downgraded yet again. Chambers placed the odds of a future downgrade at one-in-three. Scoring a AA rating would place the Land of the Free on equal terms with Spain and Qatar.

These realities had Obama in full Alinsky mode during his 1 p.m. speech (which took place at two o’clock this afternoon). He opened by saying, while Tea Party intransigence forced S&P to cut our debt rating, “The markets, on the other hand, continue to believe our credit status is AAA.” To bolster his case, he added, “Warren Buffett, who knows a thing or two about good investments, said, ‘If there were a quadruple-A rating, I’d give the United States that.’” Even as he spoke, the stock market was in free fall. The Dow Jones industrial average fell 634.76 points this afternoon. The slide capped off a string of losses so severe that CNBC reports, on this eighth day of the month, “August is already on track to be the worst month for the S&P [500] and Nasdaq since Oct. 2008,” the first full month of the economic meltdown. And despite earning the Obama administration’s seal of approval, Standard & Poor’s marked down Buffett’s Birkshire Hathaway holding conglomerate from “stable” to “negative” today.

Obama’s Surrogates Savage the Savers

Democratic talking heads did their best to pin blame on their political opponents. This weekend, both David Axelrod and Sen. John Kerry repeated the phrase “Tea Party downgrade.”

Treasury Secretary Tim Geithner eschewed presidential responsibility, as well. “Congress ultimately owns the credit rating of the United States,” he said. This would be true in the sense that Obama offered absolutely no leadership during the debate and presented no plan of his own but would overlook the president’s addiction to deficit spending and hostility to fiscal (or political) responsibility. Geithner, suddenly discovering the Founding Fathers, noted Congress has “the power of the purse in the Constitution.” That fact did not keep Geithner from publicly musing about having Obama unilaterally raise the debt ceiling in late June, leading to a chorus of Democrats demanding the president invoke the 14th Amendment to claim the power of the purse as his own.

Not everyone is reading from the same script, though. As usual, Bill and Hillary Clinton have taken the crisis to spin things in their favor. The Hill newspaper reports former Clinton administration appointees, who insisted on remaining anonymous, said Obama….

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Obama Promises “Job-Killing Tax Increases” After 2012, Says Job Losses Prove Stimulus Worked (Videos)

Ben Johnson, The White House Watch

If you were regularly described as one of the most “brilliant” leaders in our nation’s history and were poised to launch a 16-month-long crusade to convince the nation to re-elect you, how would you sell your dismal economic record? Barack Obama gave his answer in a press conference yesterday, when he promised to deliver “massive, job-killing tax increases” and claimed a 9.2 percent unemployment rate proves he was right all along and Americans should be grateful.

Obama’s plans for the nation include more redistribution of (borrowed, Chinese) wealth, financed by $1 trillion in tax increases. Even Obama understands the likely impact of this move. In 2009, he told MSNBC’s Chuck Todd, “You don’t raise taxes in a recession,” and during the lame duck session of Congress he called extending the Bush tax cuts “an essential step on the road to recovery.” In Monday’s press conference, he admitted:

So, when you hear folks saying, “Well, the president shouldn’t want massive job killing tax increases when the economy is this weak.” Nobody’s looking to raise taxes right now. We’re talking about potentially 2013 and the out years.

In other words, he promised he will wait until he is safely re-elected and beyond the reach of the people (except for impeachment), then destroy the economy. Obama ’12!

(Story continues after video.)

Only the most naive believe these tax hikes will only touch the “millionaires and billionaires” Obama constantly inveighs against. The Associated Press noted yesterday, “Proposals under consideration include raising taxes on small business owners and potentially low- and middle-income families.” After all, the wealthiest Americans are already paying a disproportionate percentage of income taxes. Patrick Tyrrell of the Foundry blog writes that the IRS estimated as of “2008, the top 25 percent of income earners—those earning $67,280 or more—pay 86.34 percent of the income taxes, yet earn only 67.38 percent of all income in the U.S.” If Obama is re-elected, he has told American you can expect unemployment to skyrocket.

Obama then added an odd claim: that the discouraging job reports of Recovery Summer 2.0 prove his stimulus plan worked. He said….

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Tax Hikes Are Coming, If Obama Gets His Way

Dr. John A. Sparks

President Obama is now openly proposing tax increases on at least two important fronts as part of his “solution” to the growing debt crisis.

The president’s favorite approach is to talk about the “wealthiest Americans.” In his speech on April 13, he proclaimed that he will do away with the “Bush tax cuts” for the rich as soon as he has the opportunity. Just a week later, April 21, he said that wealthier taxpayers like him should be willing to pay “a little bit more” to prevent various social programs for the elderly and the young from being cut. Of course, this is his way of preparing high-earning Americans for a jump in their federal income tax rates. Apparently, he believes that they are not currently doing their part or paying their fair share.

Listening to President Obama talk, one would think that the present federal income tax system is a flat-rate system where everyone, no matter what their income, pays at the same rate. Of course, the current system is, and has been for a long time, a steeply graduated tax system where the highest earners pay at the rate of 35 percent on the topmost portion of their earnings while low earners pay at the rate of 10 percent. Now, Mr. Obama wants to push the highest rates even higher, to near 40 percent. President Obama believes, perhaps rightly, that soaking the rich will not hurt him politically.

But the president is targeting more than the wealthiest. In fact, in his desperation, he is apparently now prepared to impose heavier tax burdens on middle-income Americans as well. How? In a recent speech he stated that he wants to raise the “cap” on Social Security. The cap on Social Security taxes works this way: If an employee earns more than the cap (currently, $106,800) in a given tax year, Social Security taxes are not deducted from the amount of earnings over the cap. So, for example, if an employee earned $126,800 in 2010, he would pay 6.2 percent in Social Security taxes on the first $106,800, or $6,621.60. The employer would also pay 6.2 percent. On the overage—the $20,000 of income beyond the cap—neither the employee nor the employer would pay any Social Security tax.

However, if President Obama has his way and the cap is raised by….

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Team Obama Deflects Blame for Higher Prices

Dr. Mark W. Hendrickson, FloydReports.com

As Americans increasingly feel the pinch of higher prices for food and fuel, the Federal Reserve’s QE2 policy of creating more money has been called into question. Asked if the Fed bore some responsibility for these vexing price increases, Fed Chairman Ben Bernanke essentially replied, “It’s not our fault.” Instead, Bernanke blamed the price increases on “global supply and demand conditions.”

Is Chairman Bernanke correct? To use a well-known phrase: Not exactly.

Far be it from me, as an economist, to downplay the importance of supply and demand in determining prices. Certainly supply and demand have been pushing food and fuel prices higher. But those factors don’t account for all of the increases. For Bernanke to claim that the Fed’s inflationary monetary policies have not put upward pressure on prices is preposterous.

Let’s examine some of the causes of higher food and fuel prices more closely.

First, fuel: For decades, it has been federal policy to declare huge tracts of domestic territory off-limits to petroleum production. Team Obama—whose secretary of energy, Steven Chu, publicly declared in 2008, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe” (i.e., $8 per gallon)—has been the most radical anti-drilling administration ever. With government having succeeded in artificially suppressing supply to such a great degree, prices for oil and gasoline can’t help but be higher than they should be….

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What Would Jesus Cut?

Dr. Shawn Ritenour, FloydReports.com

That is the question asked by the left-leaning Christian organization, Sojourners, in its campaign of the same name. It is a most appropriate question given the battle over the budget and given this time of year, not long after the most holy holiday of the year for Christians.

Sojourners claims that, despite record budget deficits and national debt, reducing subsidies for things like vaccines and bed nets in Africa, school lunch programs, early childhood education, and income maintenance in the United States is immoral. Indeed, such subsidies, Sojourners says, “are dollars we can’t afford to not invest.”

What are we to make of these claims? Certainly we are called to love our neighbor as ourselves and this love, when directed toward the poor and needy, must manifest itself by providing real material help to those who truly need it. It is not enough merely to wish a suffering soul to be warm and well fed. We must be willing to put our money where our mouth is.

It is a mistake, however, to treat as materially poor those who merely have lower incomes than others. For example, the average officially “poor” American has more living space than the average person living in Paris or London. Sixty-two percent of officially poor American homes have satellite or cable television and nearly 75 percent own an automobile. In the United States, what passes for poor certainly does not imply destitution.

Most important, we need to remember that….

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