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Heritage: Spending Cuts Are Happening, One Way or Another

Now that the March 1 deadline is approaching, the President is urging Congress to offset the sequestration budget cuts with more tax increases.

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Federal budget cuts called “sequestration” are scheduled to hit in just 10 days. The sequestration cuts are not perfect—they’re a blunt instrument to cut spending, rather than a deliberative plan that sets priorities, trims entitlements, and cuts other spending. But they are law.

It would be better to replace them with smarter cuts, but the reality is that Washington has to start cutting spending now. Real program reforms and a balanced budget are the only way to solve our continuing fiscal crises. So it is critical that Congress keep its word and follow through on these spending cuts to prove it is serious about bringing our budget into balance over the next 10 years.

Now that the March 1 deadline is approaching, the President is urging Congress to offset the sequestration budget cuts with more tax increases.

That’s simply unacceptable, says Heritage’s Grover M. Hermann Senior Fellow in Federal Budgetary Affairs, Patrick Louis Knudsen: “President Obama has already pocketed a $618 billion tax increase, so simply holding the line against taxes is a given.”

Lawmakers shouldn’t be fooled by the President’s rhetoric on a “balanced” approach to sequestration or any other budget issue—that simply means he’s looking to raise taxes again.

Instead, they should be focusing on true balance—balancing the federal budget in the next 10 years. Producing a budget would be a start, but balancing that budget is the way to put the country back on track. Knudsen explains:

Government spending and debt are both too high, and this threatens all Americans with a weaker economy and a lower standard of living. Every opportunity to reduce spending and put the government on the path to a balanced budget must be taken. Anything less is a path to defeat.

We need spending cuts that are targeted to the programs that need reforms—the entitlements that are the major drivers of our growing deficit.

Sequestration leaves many programs like Social Security, welfare, food stamps, and Medicaid untouched, while having devastating effects on national security. Trying to use defense cuts to balance the out-of-control entitlement spending while we still face growing threats (Russia, China, Iran, and al-Qaeda affiliates) is a fool’s errand that will create a hollow military and do nothing to fix economic troubles.

But if Congress does not replace the sequestration cuts with smarter cuts—like eliminating Obamacare funding or other ineffective programs—then the sequestration cuts will be our first step toward getting serious about federal spending.

LEARN MORE:

Memo to Congress: Capitulation on Sequestration Cuts Is a Path to Defeat

Watch Out…The President’s Talking “Balance” Again

Read the Morning Bell—and more!—en español every day at Heritage Libertad.

 

Originally posted at The Foundry by Amy Payne

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Wealth is not Created at the Top: It is Only Devoured There

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The UK has left the EU and we can argue about the minutiae of Wealth until we’re blue in the face. But the overriding factors are apparent and in one of the richest countries in the world it is shocking that so many people can’t even be sure if they are going to be able to eat enough today or provide for their loved ones.

These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurial-ism that are helping to advance the whole world – Opinion by 

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… across the spectrum virtually all agree that wealth is created primarily at the top and so entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.

Bankers, pharmaceutical giants, Google, Facebook … a new breed of  rentiers are at the very top of the pyramid and they’re sucking the rest of us dry

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In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

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But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.

But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely that makes us overlook their massive rent-seeking…

CONTINUE READING HERE:

The problems we face are that the politicians are firmly in the hands (pockets) of the uber wealthy. We live in a corporate plutocracy and those holding all the wealth and therefore power have no intention of changing the status quo, even if it isn’t sustainable. They remind me of bacteria (or cancer) devouring the host body more and more even though eventually it will kill them too.

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Donald Trump Forgets Important Lesson From Grandad:

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Harper’s Magazine reprints an interesting letter from US President Donald J. Trump’s own grandfather that may get you thinking. Here is it then:

The Emigrants – By Friedrich Trump – From a letter written in 1905 by Friedrich Trump, Donald Trump’s grandfather, to Luitpold, prince regent of Bavaria. Trump had been ordered to leave Bavaria for failing to complete mandatory military service and to register his initial emigration to the United States twenty years earlier.

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Prince Luitpold rejected Trump’s request for repatriation; the family later settled in New York. Translated from the German by Austen Hinkley.

Most Serene, Most Powerful Prince Regent! Most Gracious Regent and Lord!

I was born in Kallstadt on March 14, 1869. My parents were honest, plain, pious vineyard workers. They strictly held me to everything good — to diligence and piety, to regular attendance in school and church, to absolute obedience toward the high authority.

After my confirmation, in 1882, I apprenticed to become a barber. I emigrated in 1885, in my sixteenth year. In America I carried on my business with diligence, discretion, and prudence. God’s blessing was with me, and I became rich. I obtained American citizenship in 1892. In 1902 I met my current wife. Sadly, she could not tolerate the climate in New York, and I went with my dear family back to Kallstadt.

The town was glad to have received a capable and productive citizen. My old mother was happy to see her son, her dear daughter-in-law, and her granddaughter around her; she knows now that I will take care of her in her old age.

But we were confronted all at once, as if by a lightning strike from fair skies, with the news that the High Royal State Ministry had decided that we must leave our residence in the Kingdom of Bavaria. We were paralyzed with fright; our happy family life was tarnished. My wife has been overcome by anxiety, and my lovely child has become sick.

Why should we be deported? This is very, very hard for a family. What will our fellow citizens think if honest subjects are faced with such a decree — not to mention the great material losses it would incur. I would like to become a Bavarian citizen again.

In this urgent situation I have no other recourse than to turn to our adored, noble, wise, and just sovereign lord, our exalted ruler His Royal Highness, highest of all, who has already dried so many tears, who has ruled so beneficially and justly and wisely and softly and is warmly and deeply loved, with the most humble request that the highest of all will himself in mercy deign to allow the applicant to stay in the most gracious Kingdom of Bavaria.

Your most humble and obedient,

Friedrich Trump

… Well then. Long ago, yes.. Still applies? You tell me.

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