DC: The New Baghdad

--- by Micheal

The recent shootings in Arizona have revealed how much Washington DC is like Baghdad. The sectarianism in DC is so strong and so rampant, that any negative event to "Our Side" is met with shouting and calls for jihad against "Them."

The Democratic leadership were quick -- quicker than a knee jerk -- to blame the other tribes (the Republicans and/or Tea Party). Angry talk-show hosts, Sarah Palin, etc. etc., were to blame. Why? Because one of their tribe had been shot. It simply MUST have been a sectarian attack by Them.

Enter yesterday's Fox News story that the gunman was not political. His friend from school said he was generally disaffected, upset over personal issues and was more than likely lashing out at the world. Gifford was just a high-profile target. Her party was not.

The Democratic pulpit pounding is laced with self-contradiction. Angrily, they denounce anger.

Thus is sectarian violence escalated.

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e-mail-author unknown

An excellent object lesson makes the point!*

A young woman was about to finish her first year of college. Like so many others her age, she considered herself to be a very Liberal Democrat, and among other liberal ideals, was very much in favor of higher taxes to support more government programs, in other words redistribution of wealth.

She was deeply ashamed that her father was a rather staunch Republican, a feeling she openly expressed. Based on the lectures that she had participated in, and the occasional chat with a professor, she felt that her father had for years harbored an evil, selfish desire to keep what he thought should be his.


One day she was challenging her father on his opposition to Higher taxes on the rich and the need for more government programs. The self-professed objectivity proclaimed by her professors had to be the truth and she indicated so to her father. He responded by asking how she was doing in school.

Taken aback, she answered rather haughtily that she had a 4.0 GPA, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew. She didn't even have time for a boyfriend, and didn't really have many college friends, because she spent all her time studying.


Her father listened and then asked , 'How is your friend Audrey doing?' she replied, 'Audrey is barely getting by. All she takes are easy classes, she never studies, and she barely has a 2.0 GPA. She is so popular on campus; college for her is a blast. She's always invited to all the parties and lots of times she doesn't even show up for classes because she's too hung over.'

Her wise father asked his daughter, 'Why don't you go to the dean's office and ask him to deduct 1.0 off your GPA and give it to your friend who only has a 2.0. That way you will both have a 3.0 GPA, and certainly that would be a fair and equal distribution of GPA.'



The daughter, visibly shocked by her father's suggestion, angrily fired back
'That's a crazy idea, how would that be fair! I've worked really hard for my grades! I've invested a lot of time, and a lot of hard work! Audrey has done next to nothing toward her degree. She played while I worked my tail off!'


The father slowly smiled, winked and said gently, 'Welcome to the Republican party.'

If anyone has a better explanation of the difference between Republican and Democrat I'm all ears. If you ever wondered what side of the fence you sit on, this is a great test!

If a conservative doesn't like guns, he doesn't buy one. If a liberal doesn't like guns, he wants all guns outlawed.

If a conservative is a vegetarian, he doesn't eat meat. If a liberal is a vegetarian, he wants all meat products banned for everyone.

If a conservative is homosexual, he quietly leads his life. If a liberal is homosexual, he demands legislated respect.

If a conservative is down-and-out, he thinks about how to better his situation. A liberal wonders who is going to take care of him.

If a conservative doesn't like a talk show host, he switches channels. Liberals demand that those they don't like be shut down.

If a conservative is a non-believer, he doesn't go to church. A liberal non-believer wants any mention of God and religion silenced. (Unless it's a foreign religion, of course!)

If a conservative reads this, he'll forward it so his friends can have a good laugh. A liberal will delete it because he's "offended".

4 Options

by Charles Arlinghaus

Only 4 budget options: borrowing, begging, taxing, cutting

THE CURRENT election campaign for state of fices has focused on the extraordinarily difficult fiscal situation the state finds itself in. Balancing the state budget without another federal bailout seems nearly impossible at first glance. This year, no one will come to our rescue and allow us to put off difficult decisions, so we have three basic choices: raise taxes, cut spending or borrow the money.

Over the last two budget cycles, New Hampshire’s tax revenues have been flat. In the 2006-2007 biennium, tax and fee revenues for the general and education funds were $4.47 billion while the current 2010-2011 budget is projected to be $4.45 billion. Despite that tiny drop, spending increased at historically average rates, growing from $4.4 billion to $5.1 billion.

That gap and the projected deficit are the same problem.

My estimate of the starting gap between spending and revenue is $691 million. The gap still exists because instead of solving the problem and bringing taxes and spending into line with each other, we borrowed $156 million and used a $351 million federal bailout and other onetime revenues, like the sale of state property for $90 million.

Can we just grow our way out of the deficit? As everyone understands, economic growth helps our financial picture. If general revenues, aside from the ones that are fixed payments, were no longer flat, but grew at a historically reasonable rate of 3 percent per year, we would shrink the deficit by $166 million. Similarly, spending growth of the same 3 percent per year (a bit less than the growth over the last four years) would add $232 million to the shortfall.

My estimate of $691 million in the hole assumes no spending or revenue growth. So if we did have reasonable economic growth, even if we held spending to a zero increase for two straight years, a feat achieved only once in the entire post-World War II history of the state (Steve Merrill’s second term), the remaining hole would still be $525 million.

Elected officials and wouldbe elected officials should be asked about the four choices they have. First, will you borrow more money to pay operating expenses? In the last budget, we borrowed money to pay the state’s building aid program, and we borrowed from the future to pay for debt service.

Ask them if more borrowing is on the table, or if we can, as we should, dismiss it as a one-time bad idea.

The second option is to beg the federal government to borrow more money to send us another bailout. At this point, I don’t think anyone honestly believes another bailout dime is coming from a federal government one step removed from bankruptcy. So assume begging Washington is off the table.

That leaves us with taxes and spending. I think we all agree that whatever recovery we’re in is precarious. Taxes are essentially a price on economic activity. And while we all pay some price, few of us are prepared to raise the price of any economic activity right now. If your favorite official is unwilling to rule out raising the price of economic activity, ask which ones they are considering.

The final choice is spending cuts. At this point, every politician of any stripe is at least talking about cutting spending.

Of course, it being election season, my cuts are reasonable and prudent. Yours are the height of insanity.

Across the country, 37 states cut their spending in response to the decline in tax revenue.

New Hampshire was not among them. It is reasonable then to think we can make some of the tough decisions the other 37 have made.

One objection to cutting is that about 45 percent of general and education fund spending is some form of municipal or school aid. My deficit estimate includes about $120 million of municipal aid reductions that are scheduled to come back next year. When politicians say they won’t cut local aid, are they counting that $120 million? By the way, if those cuts were continued and we had the revenue, but no spending as we talked about above, then flat spending otherwise would leave us “only” $400 million short.

For those of you keeping score at home, $400 million is 8 percent of the total general and education fund spending in the last budget. If we cut every department and program by an average of 8 percent — some more, some less — the budget is balanced. If you won’t cut spending that much, you must either tax or borrow; those are the choices.

But now is the time to ask when politicians are listening to you, not the lobbyists. Will they borrow again? Will they raise taxes? Will they cut spending?

Or are they just hoping for the best?

. Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a freemarket think tank in Concord.

New Hampshire's precarious fiscal state.

BY Charles M. Arlinghaus

In the midst of ongoing political debate over deficits, shortfalls and fiscal management, one important truth about New Hampshire's fiscal state of affairs is impossible to obscure. We're a mess and it's getting worse not better.

The governor and his opponent spout dueling budget histories and have defenders of their numbers. The governor's tells us correctly that what is labeled general fund in the current budget is a smaller number by 1 percent than the items labeled general fund in the last budget.

What gets left unmentioned is that $248 million that was labeled general fund in the last budget has been moved off-budget to make it appear to be cut even as we continue to spend the money.

A good example: liquor spending was called general fund in the last budget. This year we still spend $90 million but we label it as liquor fund. If you consider relabeling a spending cut, then the general fund is down. If not, it's up.

Avoiding some of those games, challenger John Stephen proclaims total spending is up 24 percent over the last two budgets. Former candidate Mark Fernald has criticized the number for not including cuts and for including a lot of spending that he wouldn't count (retirement contributions or federal funds for example). But again, if you compare apples to apples and back out of each number spending reductions, lapses and other budget deductions, the increase is 23.7 percent not 23.6 percent.

But at the end of the day, bickering over the precise number is much less important than explaining the problem. Let's go ahead and leave out all the federal dedicated funds and state dedicated funds that the governor and Mark Fernald want us to. How then does the state operating budget look, the programs supported with general tax and fee revenues?

In New Hampshire, as in most states, state spending be paid for by hook or crook. Once we spend we must tax, borrow, or do something else to find the cash.

Because taxes have been flat the last few years, the government was only able to increase spending by finding the money through borrowing and bailouts.

The current budget uses $156 million in borrowing to pay for operating expenses, mostly school building aid grants and to pay the interest on debt.

In addition, we used $351 million in federal bailouts. One kind of stimulus money went to specific projects like a bridge or road paving but another pot of money was a bailout for state governments to put in their operating account. New Hampshire's total was $351 million.

Finally, we used another $90 million of one-time revenues like the money the state hopes to reap from selling off unused or unwanted state assets — not a bad idea but you can only sell something once.

Those three categories of special revenue total $600 million and won't happen again. We can't sell a second time, there won't be another state bailout, and borrowing again is regarded as insane across party lines.

So when people speak a deficit next year, they mean that the starting point for the next is a gap between revenues and existing spending that must be closed.

That $600 million won't recur so it must be replaced or spending cut to a lower level.

In addition to that $600 million one-time revenues, the legislature made some temporary cuts.

For example, aid to municipalities under a program that began when the business profits tax took over local revenue sources in 1970 was suspended. But we told towns not to worry that it was just for two years. Get through this budget and the program returns.

A series of similar temporary reductions that are by law scheduled to come back amount to $159 million in the current budget.

Because of implementation, revenue growth, and differences between the first and second year of the budget, my own estimate of the starting deficit is about $691 million. Some analysts are 10 percent higher or lower, but at the same order of magnitude.

The point is not to argue about the precision of the number to three decimal points. Rather we need to understand that we are in a bad place. While the majority of the states cut spending to close a gap, we used borrowing and a federal bailout. It means that the most difficult decisions are still to come.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank based in Concord. He can be reached at Arlinghaus@jbartlett.org