Tuesday, October 1, 2013

Spending Caps

After maxing out his credit card at 17 Trillion dollars, President Obama wants to crash through the cap and increase his credit limit by trillions more. He sounds like a petulant adolescent who spends his weekly allowance almost immediately and then asks for more. Actually he demands more and reviles and insults the very people he needs to get what he wants. Rather than negotiate he resorts to bullying.

This is the same Barack Obama who as a young Senator opposed President Bush’s attempt to raise the debt ceiling when it was only half what it is now. In less than five years in office President Obama has doubled the national debt. What has been the result? What have we gained from all his attempts to stimulate and grow the economy?

Over the weekend Bridgeport’s hometown newspaper, the Connecticut Post, published figures on the city’s continuing economic plight. A front-page headline indicated that 1 in 7 children in the state of Connecticut live under the official poverty line. Bridgeport has been among the hardest hit. According to US Census figures 38% of Bridgeport’s children now live below the poverty line, compared to 28% back in 2008.

One must always take these figures with a grain of salt but it would appear that things have certainly gotten worse in Bridgeport during the Obama presidency. Bridgeport is a virtually one-party city controlled for years by the Democrat leadership. Three years ago its overwhelming Democrat vote enabled a Democrat governor to be elected by the narrowest of margins. Nevertheless, neither a Democrat President, Governor, nor Mayor, has been able to get Bridgeport rolling.

The paper even printed a chart showing that median income in Bridgeport had declined dramatically during the past four years. In 2012 “median” household income in Bridgeport was $37500, down 14% from over $43000 in 2008. Median income is not average income. When the Census Bureau says median income, it just means that half of the households in that area make over the median, while the other half make less.

In other words, half the households in Bridgeport in 2012 made over $37500 in 2012. Although other cities in Connecticut are doing better, all are off their 2008 highs. The Governor’s hometown of Stamford has a median income of $75000 but it is still 10% off its 2008 figure. The median income of the entire state of Connecticut was $67000 last year, but that is only 92% of its 2008 figure. Guess which city has the highest median income in the whole US? It’s not New York or Los Angeles. Census figures show that in Washington DC 50% of the households make more than $86000 per year.

No wonder that city is out of touch with the rest of America. The Census figures show that during his first administration, the President’s attempts to stimulate the economy have driven large segments of the population towards poverty. Household incomes are down all over the country but the President can only suggest borrowing more money, and then taxing people more to pay for it.

Maybe the President could take a lesson from the world of sports. The aging New York Yankees failed to make the playoffs this year for the first time in years. At the beginning of the season their payroll was over 228 million but some of their aging stars broke down this year and they were passed by younger, hungrier teams. In fact, small market teams Cleveland, Tampa, and Oakland made the playoffs but their combined payrolls were less than the Yankees.

Now the Yankees are going to have to find a way to get under the salary cap next year while at the same time meeting the incredible demands of Robinson Cano, their star infielder, for a 10 year contract worth over 300 million. If the Yankees exceed the payroll cap next year, they will have to pay a huge penalty. If President Obama exceeds his budget cap this year, we will have to pay the penalty.


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