Economic Facts - Stephen Moore

President Barack Obama needs a reality check. Earlier in Indiana, he accused his critics of ignoring the “facts” and purporting “myths” about his economic record. But if Republicans are truly ignoring the facts, Obama should consider it a blessing.  A quick look at the facts will show that Obama’s economic performance has been weak—even by his own standards.

In its budget for the fiscal year 2010, the Obama administration estimated that real gross domestic product would decline in 2009 by 2.8 percent that year and then increase by 2 percent in 2010.  Furthermore, the White House forecast that by 2011 its massive stimulus program would start paying off, with growth accelerating to 3.8 percent that year and then soaring above 4 percent from 2012 to 2014.

The chart below compares Obama’s predictions to actual growth statistics from the U.S. Bureau of Economic Analysis.  When it comes to economic growth, Obama has consistently failed to meet his own expectations. Not only has Obama’s economic recovery been the weakest of any post-recession recovery1 since World War II, but he is also on pace to become the first U.S. president2 in history to have never presided over a full year of growth averaging at least 3 percent.

But is this really surprising? We know that Obama has done virtually everything wrong when it comes to promoting growth.  Here’s a reminder:

1. Obamacare: When Obama pushed this boondoggle of a bill, he said on several occasions3 that it would lower health costs by $2,500 per family. Instead, insurance premiums have risen— in some cases nearly 30 percent.  On top of this, business owners are hiring fewer people to stay beneath the 50 employee threshold, which mandates business owners employing 50 people or more to provide full health insurance.

2. Regulation: It’s hard to grow, when the federal government is literally standing in the way of business.  According to a recent Heritage Foundation study4, More than $22 billion per year in new regulatory costs were imposed on Americans, costing Americans nearly $100 billion annually under Obama’s presidency.       

3. Taxes: Obama has raised taxes on investment income by nearly 60 percent (raising capital gains tax from 15 percent to 24 percent), and pushed the top marginal tax rate (the tax on small business owners) to 40 percent.  The U.S. has the highest business tax rate in the world; causing companies to flee offshore (with jobs) to find a better deal elsewhere.

After nearly eight years of “hope and change,” wages are stagnant, growth is sputtering, entrepreneurship is in decline, our once great domestic companies are finding a better deal off shore, and more Americans are out of the work force than ever before.

The “facts,” Mr. Obama, speak for themselves.

Hopeful Signs by Toni Boucher

2/11/16

“Do my ears deceive me? Did I hear that Governor Malloy may be moving closer to the other side of the political aisle? There are hopeful signs that a change in direction may be on the horizon.  In his recent the State of the State Address, the Governor seemed to be speaking from the Republican playbook and using many of our proposals to fix Connecticut problems. That is good news, and an optimistic start to the 2016 legislative session.

It does make one wonder, where was the administration five years ago? They must now recognize it is time to get real and finally accept that the financial survival and sustainability of the state of Connecticut, its businesses, and its people are in jeopardy.

For many years, the Republicans had provided the administration with the vast majority of the proposals that the governor issued.  Now, it appears it is finally sinking in that as the state is facing a financial disaster, there is no other choice than to face the stark reality of the dire situation their majority party created.  After making the point that we are living in changing times, that wages and home values are not increasing and businesses are hurting, the Governor has come to terms with the state’s new economic reality.

 

In his speech the Governor offered these reforms:

  • The state must limit spending to the revenues available.
  • Cuts in spending must be made when they do not match incoming revenues.
  • The government should be living within their means.
  • Attrition in the public sector must happen to decrease spending.
  • The spending cap must be enacted, 25 years after it was passed by the citizens of Connecticut.
  • Public sector pension and post-employment costs must be reined in.
  • Collective bargaining contracts should reflect what Connecticut can afford, and not be based on past practice.
  • Pension changes are being sought that would convert defined benefit pension plans to defined contribution plans.
  • Prioritizing funding for core services.
  • Departments should provide information on how it spends its funds online for total transparency.
  • A Constitutional Lockbox of transportation funds.
  • No items should be added to the budget without a public hearing as has been common practice in the past.
  • There should be compromise and all ideas are welcome.

Sound familiar? Republicans have been offering these policies to the other side for years and even as early as this week!  It is unfortunate that these proposals were not on the agenda five years ago, when they may have put Connecticut on a sustainable path, and we would not be facing today’s critical financial circumstances.

All in all, however, the Governor’s address is good news. It is time to get serious, bring all parties to the table and turn these necessary proposals into action! Connecticut is a state we all love, and with so much at stake, it is essential that we come together to effect the changes required to move it in the right direction”.

State Senator Toni Boucher

Why GE Left by Themis Klarides

1/28/16

“House Speaker Brendan Sharkey recently toured Bristol Hospital alongside the facility’s CEO and proclaimed that he now has a deeper appreciation of all the good work being done by the community-based facility and the challenges that it faces.

This, after Democrats castigated state hospital executives for months as greedy, overpaid functionaries more concerned with their own bottom lines than delivering quality healthcare at more reasonable prices. Cut CEO pay, that will fix the massive state budget deficit, they said.

In the same breath, the speaker tried to convince the press that Republicans were responsible for massive funding cuts to hospitals last year that resulted in hundreds, if not thousands, of layoffs. It was a distortion of reality: Democrats approved the budget cuts, people were laid off as promised. Republicans actually voted to restore all the lost funding repeatedly in 2015.

The very next day the Senate Democratic President Martin Looney tried to convince reporters and the public that Democratic tax increases and their punitive public policies toward business had nothing whatsoever to do with the decision by General Electric to move its corporate headquarters from Fairfield to Boston.

For months hospitals warned of the dire consequences of the massive cuts - $192 million in the initial budget the Democrats pushed through in the spring without a single Republican vote. The Democrats promised Connecticut that their way was the right path, a promise that immediately proved fleeting.

When the layoffs started rolling through virtually every state hospital like a virus, the Democrats railed that the hospital executives were over paid and responsible for the pain inflicted on their former employees as they headed out the door for unemployment.

In a parallel course GE and the state’s other largest employers warned for months that if the Democrats’ planned tax hikes went through it would cause them to reconsider their futures here. Gov. Dannel P. Malloy, abetted by his fellow Democrats, scoffed at the notion that these corporations would ever leave, and that they should pay more to finance Connecticut’s social welfare system and services.

Too late to save the hospital workers lost in the initial layoffs, too late to convince GE they would be wise to stay put. Up until the end of the GE saga the Democrats blamed Republicans for rooting for failure and overstating the threat to the state if this employer of 5,700 in Connecticut moved its headquarters elsewhere.

What lies ahead? Perhaps under this new found appreciation for state hospitals these institutions will fare better than they have in the last few years under Democratic control of both chambers in the legislature and the governor’s office. But remember, the state faces more massive projected deficits in the next fiscal year and beyond.

The events of this last week are not restricted to hospitals or giant corporations but have implications for all businesses big and small. It is not just about GE, Fairfield’s largest employer, but the 65,000 smaller contractors and suppliers that do business with the parent. It is not just about our hospitals, typically any community’s largest employer, but the thousands of other related services and business that depend on them to survive. The major question I pose as we move toward another legislative session next month is, what is the lesson learned?

Themis Klarides

CT House Republican Leader”