Netanyahu Scores; Obama Bombs

A thousand years before Christ was born a Jewish king ruled on a throne in Jerusalem. David’s kingdom ranged from Sidon on the north in modern day Lebanon down to the Gulf of Aqaba on the south, which is the tip of the Red Sea east of Egypt. It encompassed the land from the Jordan River west to the Mediterranean, part of which is today’s West Bank, though it was called Judea and Samaria in the time of Christ. David’s kingdom also included land east of the Jordan comprising modern day Jordan and Syria.

When David died, Solomon his son inherited the throne and expanded the kingdom, and upon Solomon’s death, a civil war divided the Jewish nation into two kingdoms, the one of the north being called Israel and the one of the south called Judah. The kingdom of Israel was conquered in 722 B.C. by the Assyrians who deported the captive Jews to Nineveh in modern day Iraq. As was the custom of the Assyrians, the Jews of the northern kingdom were assimilated into the mixed societies of other Assyrian conquests and essentially ceased to exist as a national identity.

Assyria was conquered by the Babylonians, who in time conquered the southern kingdom of Judah in 597 B.C., deporting those Jews into exile in Babylon which also is in modern Iraq. When the Persians – today’s Iranians – conquered the Babylonians, the exiled southern kingdom Jews were allowed to return to Jerusalem and rebuild their Temple and city, which had been destroyed during their conquest. The territory west of the Jordan was thereafter inhabited by Jews continuously until they revolted against their Roman conquerors in 70 A.D. The Temple was again destroyed and the Jews were scattered in the Diaspora until the founding of the modern state of Israel for post-war survivors in 1948.

In last year’s blogs, Inventing the Middle East and A Fool’s Errand, posted on September 11 and 18, 2010 respectively, I covered an historical background for modern Israel which I won’t repeat here but they are worth reading or rereading as a context for this blog. They explain, for example, that an area called Palestine was part of the Turkish Ottoman Empire for the 400 years preceding World War I.

(Palestine, incidentally, was an anti-Semitic name given to the area by Roman Emperor Hadrian in 135 A.D. after putting down the Bar Kochba revolt. It derives from the name of a hated Jewish enemy – the Philistines – who were of Greek origin, not Arabic)

It seems Obama has little understanding of the ancient and modern history of Israel because in his State Department speech on May 19 he called on the state of Israel to commit national hari-kari as their ancestors had repeatedly done. In what Ed Morrisey’s Hot Air blog calls the “Obamateurism of the Day” Obama’s speech drew a firestorm of criticism from Democrats and Republicans alike for its sheer dumbness in calling on Israel to essentially make peace at any price with the Palestinians.

It would take a very long blog to comment on every outrageous Obamateurism included in the speech so I’ll concentrate on the worst of the worst. To wit:

For decades, the conflict between Israelis and Arabs has cast a shadow over the region. For Israelis, it has meant living with the fear that their children could be blown up on a bus or by rockets fired at their homes … For Palestinians, it has meant suffering the humiliation of occupation, and never living in a nation of their own.

In other words, Obama considers “suffering the humiliation of occupation” – which is flat out untrue – and “never living in a nation of their own” – which is a misrepresentation – the moral equivalent of having your kids blown up on a bus and shooting rockets into Jewish homes?

It was Jordan which began calling Judea and Samaria “the West Bank,” when the Jordanian Arabs seized that territory at the end of Israel’s war of independence. The Arabs who are called Palestinians today, as if the term signified nationality, never created a Palestinian state when it was well within their power to do so, making Obama’s claim of “never living in a nation of their own” specious. Jordan’s claim to Judea and Samaria was never recognized by the international community, so ownership has never been resolved. Israel seized the territory in the 1967 war. For all of these reasons, Obama’s claim of “humiliation of occupation” is baseless. There has never been a Palestinian sovereignty in the West Bank.

Continuing, Obama said,

… because of our friendship [with Israel], it's important that we tell the truth: The status quo is unsustainable, and Israel … must act boldly to advance a lasting peace.

This is a set up, as we shall see. A more accurate statement would have been, “Israel must act dangerously to advance the peace I have in mind.” (Having rammed healthcare through, Obama is still in legacy-building mode.) Conspicuously absent is no bold or dangerous acts are asked of the Palestinians.

Declaring that “… it is up to the Israelis and Palestinians to take action. No peace can be imposed upon them …” Obama then imposes peace on them with this statement, obviously a deference to Palestinian demands which have and will continue to be rejected by Israel:

The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps...

Borrowing an Obamaism: let me be clear on this. The 1967 lines were never formal borders. Obama knows this or ought to know this if he is going to play diplomacy. The 1967 line in the West Bank is in fact the 1949 Armistice Line at which Israel stopped the attacking Arab armies in the 1948 war at the end of Israel’s war of independence.

After the 1967 “Six-Day War,” UN Security Council Resolution 242 declared that a new border must replace the armistice line. The British ambassador to the UN said at that time, "I know the 1967 border very well. It is not a satisfactory border; it is where the troops had to stop." His US counterpart agreed, saying "historically, there have never been secure or recognized boundaries in the area." President Lyndon Johnson admitted the need for a new boundary instead of going back to the lines from which the conflict erupted when he said, "It is clear, however, that a return to the situation of 4 June 1967 will not bring peace. There must be secure and there must be recognized borders."

So Obama is the first American president – the first – to call for a settlement of the Israeli-Palestinian conflict premised on the 1967 borders, an old armistice line, which among other things would divide Jerusalem and give to the Arabs the historically significant place of David’s throne 3,000 years ago and Bethlehem, the birthplace of Christ 2,000 years ago. How mesmerizing is the simplicity of pure stupidity!

And what truly demonstrates a lack of class in diplomacy and shows how far over his head Obama is in matters like these is that he sprung this ill-conceived idea in a speech delivered the day before Netanyahu was to meet to discuss negotiations with Obama and while Netanyahu was still in Israel!

What possible motive could Obama have had to do such a thing? (Maybe I’m giving too much credit in assuming that Obama had any motive.) Was it to bully Netanyahu into a corner before their meeting? Did it signal a shift in US policy toward the Palestinians? Whatever, it certainly torqued Netanyahu who immediately protested, saying that for Israel to return to its pre-1967 borders would leave it “indefensible.” Reportedly Netanyahu had a heated phone conversation with Secretary of State Clinton before the Obama speech, and he demanded that the president’s reference to 1967 borders be cut from the speech, which Obama obviously ignored.

Therefore, after their White House meeting it was apparent that things hadn’t gone well in the Oval Office. Unlike Obama, Netanyahu fought for his country in special operations, which included the 1972 hostage rescue raid on a hijacked airliner. So Netanyahu isn’t intimidated by a community organizer. In contrast, Obama's body language after the Oval Office meeting said it all. He looked like a pouting brat as an independent-minded Netanyahu spoke and the president sat with his hand across his mouth, glaring in condescension at his guest.

Netanyahu looked directly at Obama and lectured him before the cameras, saying Israel will not go back to the 1967 borders because they are indefensible, and Israel will keep a military presence in the Jordan Valley. As if he was the professor and Obama was a student, the Israeli Prime Minister said:

Remember that, before 1967, Israel was all of nine miles wide. It was half the width of the Washington Beltway, and these were not the boundaries of peace; they were the boundaries of repeated wars, because the attack on Israel was so attractive. So we can't go back to those indefensible lines, and we're going to have to have a long-term military presence along the Jordan [Valley].

Netanyahu had too much class to remind the pouting president that when candidate Obama toured an Israeli town in 2008, he said, "If someone was sending rockets into my house where my two daughters sleep at night, I'm going to do everything in my power to stop that, and I would expect Israelis to do the same thing."

I can’t end without commenting on one other dictate in the Obama speech, though there were many just as ridiculous as this one.

The United States believes that negotiations should result [for] two states with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine. The Palestinian people must have the right to govern themselves ... in a sovereign and contiguous state.

Interesting statement. Anyone looked at a map of Israel lately? How could Palestine have “borders with Egypt, Jordan and Israel”? The only Palestinian territory bordering Egypt is the Gaza Strip. And how, pray tell, would Palestine, sometimes known as the West Bank, achieve this chimerical contiguity with Gaza? Why, by cutting Israel in half, of course. Wow! Two Israels would certainly be easier to defend against those rockets that Obama would never subject his daughters to, especially when a launcher with the power of a B-B gun could hit anywhere in Israel. The 1967 war pushed the borders out in order for Israel to have a fighting chance in defending itself. Obama is proposing to pull them back cheek to jowl?

Tuesday, Netanyahu addressed a joint session of the US Congress. Obama left the country.

Too bad. He missed an inspiring speech that got 50 standing ovations from both sides of the aisle, delivered by a man who was so comfortable in the occasion that it was more a chat than a speech. No lecturing. No condescension. It’s worth listening to on YouTube.

I wish I could comment on the many really good points Netanyahu made. But I've about used up my word budget, so I’ll just include these without comment.

[A]ll six Israeli prime ministers since the signing of the Oslo accords agreed to establish a Palestinian state, myself included. So why has peace not been achieved? Because so far the Palestinians have been unwilling to accept a Palestinian state if it meant accepting a Jewish state alongside it. You see, our conflict has never been about the establishment of a Palestinian state. It’s always been about the existence of the Jewish state. This is what this conflict is about. ...

President Abbas must do what I have done. I stood before my people – and I told you it wasn’t easy for me. I stood before my people, and I said, “I will accept a Palestinian state.” It’s time for President Abbas to stand before his people and say, “I will accept a Jewish state.” Those six words will change history. They’ll make it clear to the Palestinians that this conflict must come to an end, that they’re not building a Palestinian state to continue the conflict with Israel, but to end it. And those six words will convince the people of Israel that they have a true partner for peace. ...

You know, everybody knows this. It’s time to say it. It’s important. And as for Jerusalem, only a democratic Israel has protected the freedom of worship for all faiths in the city. Throughout the millennial history of the Jewish capital, the only time that Jews, Christians and Muslims could worship freely, could have unfettered access to their holy sites, has been during Israel’s sovereignty over Jerusalem. Jerusalem must never again be divided. Jerusalem must remain the united capital of Israel. ...

In recent years, Israel withdrew from South Lebanon and from Gaza. We thought we’d get peace. That’s not what we got. We got 12,000 rockets fired from those areas on our cities, on our children, by Hezbollah and Hamas. The UN peacekeepers in Lebanon, they failed to prevent the smuggling of this weaponry. The European observers in Gaza, they evaporated overnight. ...

So if Israel simply walked out of the territories, the flow of weapons into a future Palestinian state would be unchecked. And missiles fired from it could reach virtually every home in Israel in less than a minute. ...

I want you to think about that … Imagine there’s a siren going on now, and we have less than 60 seconds to find shelter from an incoming rocket. Would you live that way? Do you think anybody can live that way? Well, we’re not going to live that way, either. ...

Netanyahu once pinned back a US diplomat’s ears with 10 words that should serve as a warning to the policymakers and State Department pinheads who think they can impose an American-styled peace on an Israel which lives every day on a bull’s eye: "You live in Chevy Chase,” Netanyahu said. “Don't play with our future."

It’s advice that could benefit Obama, if he was able to accept advice. Which he can’t.

Ryan’s Plan to Prosperity

Paul Ryan has called himself “the Paul Revere of fiscal problems.” This past Monday he galloped off to Chicago, Obama’s home town, to warn, not that the British were coming, but that a more serious threat was coming – a debt and spending crisis that could change the American way of life permanently.

Selling that message to the American people will not be easy. The political elites on the Left believe the role of government is to direct people’s lives, limit their freedom, increase their dependency, and of course, reelect the elites so they can continue to create an American nomenklatura. Unsurprisingly, Democrats have turned up the volume on their obfuscation message machine to confuse and frighten people about the Ryan debt plan, especially his proposals to make entitlements more responsible.

Polls show, however, that the Democrat demagoguery isn’t working too well, especially their “Mediscare” campaign. According to Gallup polling, Ryan’s plan is more accepted than Obama’s debt reduction plan in every age group except the young. In fact, support for the Ryan plan increases with each older age group to the point that it is supported by almost half the seniors (48%) compared to Obama’s plan (42%) even though Ryan proposes to change Medicare essentially into a voucher system. Obama proposes to do nothing to Medicare – except let it go broke.

A separate Kaiser Family Foundation survey found that a majority of the public (54%) supports Ryan's plan to convert Medicare into a voucher program when it's accurately described as a way to "reduce the deficit and let seniors choose plans based on cost and quality."

Ryan has enlisted the help of House allies in the Republican caucus to fan out into the hustings and help explain the plan. One of Ryan’s warriors is freshman representative Tim Meehan, elected in a swing district not far from Valley Forge. Speaking at a retirement village last week, Meehan concluded his presentation to a group of seniors Democrats love to scare, saying, “You have a congressman from Wisconsin who is showing more leadership and direction than the president of the United States. That is a sad commentary on the moment.”

It came as a shock, then, when none other than Mr. Conservative, Newt Gingrich, sounded off on Sunday’s “Meet the Press” program, calling the Ryan plan “right-wing social engineering” and “radical change from the right." A measure of the support Ryan’s plan enjoys was revealed in the ensuing uproar when conservative pundits and talk show hosts rose in high dudgeon to condemn Gingrich’s remarks. Conservative talk show host, Bill Bennett, obsessed throughout his Monday morning show over the former speaker’s remarks, calling them “an unforgivable mistake” and effectively removing Gingrich from “serious consideration” in 2012. On Tuesday’s show, Bennett was still peeved about Gingrich’s apostasy and invited Gingrich to give an account of himself. Gingrich did himself no favors, denying having said certain things until Bennett played audio clips for him – but that’s another story for another time.

Suffice it to say the House of Representatives passed the Ryan plan a month ago by a vote of 235 to 193 with every Democrat voting "no." The Democrat scare machine went to work, causing some Republicans in tight 2012 House races to get sweaty palms. But current House Speaker John Boehner continues to deny that Republicans are “running away” from the Ryan plan. “That’s just not a fact,” he told Face the Nation recently. “You can ask any one of our members, and they’ll tell you that on average, 80% of the people at these town-hall meetings were supportive of taking big steps to put our fiscal house in order.”

There is no denying that it’s the GOP which is leading the debate on how to get the country’s fiscal future back on track, which the Obama administration derailed with some help from George Bush. Meanwhile, the Democrats have now gone nearly 750 days without passing a budget in the Senate, which they control. Ryan’s spokesman Conor Sweeney told the National Review that “Republicans agree we need to fix our fiscal mess, whereas Democrats can’t even agree that the government needs a budget.”

Ryan continues to present his plan as a sharp contrast to the plan Obama has put forward. And this Monday, Ryan went to great lengths and with great effect to do just that in his speech to the Economic Club of Chicago.

Here are the highlights of his remarks.

The budget debate, Ryan said, has become a “game of green eyeshade arithmetic” in which the government elites – including Obama – insist that temporary spending restraints must be traded for permanent tax increases. This sets up the debate to be little more than an argument over who to hurt and how to manage the decline of our nation. So, higher taxes and rationed healthcare become givens when certain entitlements and spending are declared off-limits for reform. Ryan calls this a “shared scarcity” mentality. It is Obama’s vision of America’s future. To quote Ryan:

In a recent speech he gave in response to our [the Ryan] budget, President Obama outlined a deficit-reduction approach that, in my view, defines shared scarcity. The President’s plan begins with trillions of dollars in higher taxes, and it relies on a plan to control costs in Medicare that would give a board of 15 unelected bureaucrats in Washington the power to deeply ration care. This would disrupt the lives of those currently in retirement and lead to waiting lists for today’s seniors.

Shared scarcity represents a deeply pessimistic vision for the future of this country – one in which we all pay more and we all get less. I believe it would leave us with a nation that is less prosperous and less free.

The missing ingredient in a “shared scarcity” mindset is economic growth. Shared scarcity fails to consider all of the strategies which ought to be deployed to provide incentives for economic growth. It chases ever-increasing spending with ever-increasing taxes, which, in Ryan’s view, reduces the number of “makers” in American society and expands the number of “takers.” The incentives for hard work and risk taking are therefore eliminated, creating a society of discouraged, complacent, and dependent citizens.

Those committed to the mindset of shared scarcity, Ryan said, are telling future generations, “Sorry, you’re just going to have to make do with less. Your taxes will go up, because Washington can’t get government spending down.” They are telling future generations, “You know, there’s just not much we can do about healthcare costs. Government spending on healthcare is going to keep going up and up and up… and when we can’t borrow or tax another dollar, we’ll have to give a board of unelected bureaucrats the power to tell you what kind of treatments you can and can’t receive.”

In contrast to Obama’s pessimistic proposal for spreading the pain around, Ryan proposes four commonsense pillars to restore economic growth in this country and to step back from the spending abyss which the Bush and Obama administrations pushed the country toward.

Ryan’s first pillar for economic growth is for government to stop spending money it doesn’t have which is forcing it to borrow at unprecedented levels. He noted that the rating agency S&P recently downgraded the outlook on US debt from “stable” to “negative.” That sends a bad signal to growth creators. If S&P is telling business that America is a bad investment, they’re not going to expand and create jobs in America – not at the rate we need them to. More debt means more uncertainty, and more uncertainty means fewer jobs.

Averting a debt crisis ultimately means getting healthcare costs under control. The House-passed Ryan budget gets healthcare spending under control by empowering Americans to fight back against skyrocketing costs. The Ryan budget makes no changes for those in or near retirement, and offers future generations a stronger voucher-based Medicare program that they can depend on to guarantee coverage – a plan that provides less help for the wealthy and more help for the poor and the sick.

There is widespread bipartisan agreement, Ryan noted, that the open-ended, fee-for-service structure of Medicare is a key driver of healthcare cost inflation. His disagreement with Obama isn’t about the problem; it’s about the solution for controlling costs in Medicare:

If I could sum up that disagreement in a couple of sentences, I would say this: Our plan is to give seniors the power to deny business to inefficient providers. Their plan [Obama’s] is to give government the power to deny care to seniors.

Ryan reaffirmed the Republicans’ commitment to repeal ObamaCare and its burdensome maze of new regulations. Not only does ObamaCare impose an unconstitutional mandate on every American; it also imposes new regulations on businesses which are stifling job creation.

Let me share with you a figure that serves as a devastating indictment of the new healthcare law: So far, over 1,000 businesses and organizations have been granted waivers from the law’s onerous mandates. These waivers may prevent job losses now, but they do not guarantee relief in the future, nor do they help those firms that lack the connections to lobby for waivers.

What Ryan failed to mention is that 20% of the most recent batch of 204 waivers were given to businesses in Nancy Pelosi’s district.

Ryan’s second pillar for economic growth was the restoration of common sense to the regulatory environment. Regulations should be fair, unintrusive, and should not cause uncertainty as to their impact on America’s employers. Ryan would dismantle the growing scourge of crony capitalism, in which Washington bureaucrats abuse the regulatory process to pick winners and losers in the private economy. The NLRB and the FCC come to mind.

Congressional Republicans continue to advance reforms that stop regulatory bureaucrats from strangling job growth and innovation with red tape. We’ve advanced legislation to stop the EPA from imposing job-destroying energy caps on American businesses. We’ve advanced legislation to revisit the flawed Dodd-Frank law, which actually intensifies the problem of too-big-to-fail by giving large, interconnected financial institutions advantages that small firms do not enjoy.

Ryan’s third pillar recognizes that the economy can’t get back on track if Obama gets his way in trying to tax the country back into prosperity. Prosperity requires low tax rates and a tax policy that doesn’t change year by year, thereby creating so much uncertainty that businesses have no incentive to invest capital to create jobs. Even non-economists understand that high marginal tax rates are a drag on the economy and growth.

As the University of Chicago’s John Cochrane recently wrote, “No country ever solved a debt problem by raising tax rates. Countries that solved debt problems grew, so that reasonable tax rates times much higher income produced lots of tax revenue. Countries that did not grow inflated or defaulted.”

Ryan acknowledged that his plan is in fundamental disagreement with Obama and the Democrats regarding tax reform. A simpler, fairer tax code is needed because individuals, families, and employers now spend over six billion hours and over $160 billion per year figuring out how to pay their taxes. The tangle of special interest credits and deductions that currently exist must be eliminated in order to lower tax rates and promote growth. The Ryan budget that passed in the House does that by making the tax code “simpler… flatter… fairer… more globally competitive… and less burdensome for working families and small businesses.”

In contrast Obama says he also wants to eliminate deductions, but at the same time he wants to raise tax rates. That includes raising the top rate to a whopping 44.8%., which would amount to a $1.5 trillion tax increase on families and job creators. As always, Obama says that only the richest people in America would be affected by his plan. “Class warfare may be clever politics,” Ryan said, “but it is terrible economics. Redistributing wealth never creates more of it.”

The fourth and final pillar of the Ryan plan calls for rules-based monetary policy to protect working families and seniors from the threat of high inflation. It would restrict the current Janus-headed Federal Reserve to a focus on price stability only and get it out of its full employment role. The Fed, like most government agencies has extended its tentacles like kudzu, intruding ever more into the private sector, and most recently used monetary stimulus to bail out the failures of Washington politicians.

Families and businesses rely on a sound money policy, and the Fed will have its hands full if it sticks to that one goal alone. However, the Fed’s recent waywardness from rules-based monetary policy has increased economic uncertainty and caused its critics to call for eliminating the Fed. The Federal Reserve was intended to be an independent agency, not a political arm of the White House. It should explicitly publish and follow a monetary rule as its means to achieve its sound money goal.

We can’t achieve this goal by simply rubber-stamping increases in the national debt limit without reducing spending in Washington. Ryan noted:

Speaker Boehner made this clear in a recent speech at the Economic Club of New York: If the debt ceiling has to be raised, then we’ve got to cut spending. The House-passed budget contained $6.2 trillion in spending cuts. For every dollar the President wants to raise the debt ceiling, we can show him plenty of ways to cut far more than a dollar of spending. Given the magnitude of our debt burden, the size of the spending cuts should exceed the size of the President’s debt limit increase.

In concluding, Ryan told his Chicago audience that the country faces a choice between two futures. It can continue to go down the path toward shared scarcity – the path that the Obama administration has put the country on – or it can choose the Path to Prosperity – the name for the Ryan plan.

Ryan closed by recalling a statement by his mentor, the late Jack Kemp, who in 1979 gave this rationale for the only real choice America has:

We can’t progress as a society by using government to diminish one another. The only way we can all have more is by producing more, not by bickering over how to share less. Economic growth must come first… for when it does many social problems tend to take care of themselves, and the problems that remain become manageable.

Amen, Jack Kemp.

The Debt Ceiling Kabuki Dance

In 1917 the US Congress instituted the debt limit as a mechanism for keeping its spending in check. It worked for a while, but then in the 1960s the Johnson Administration began spending money like a drunken sailor. (Actually that gives drunken sailors a bad name. When they run out of money, they have to stop drinking.)

Throughout the last 50 years Congress has been drinking heavily, but unlike sailors whose money supply limited their consumption, Congress found it could keep its habit going by borrowing money to drink. When it hit the spending limit imposed by the debt ceiling, not to worry – just raise the ceiling.

Since 1962, the Congress has raised the debt ceiling 74 times, about once every eight months, and in the past 10 years, Congress has raised the debt limit 10 times. Little fanfare accompanied this spending alchemy and little was done to slow down the excesses that necessitated going back to the banker – the American people – to put more future generations on the line to pay for the gluttony of their parents and grandparents. Only when opposing parties held the White House and Congress did the participants drag out their Kabuki costumes so they could overdress and overact as if either party gave a flip about the consequences of increasing the spending limit. And when the Kabuki charade was over and each party had postured in righteous indignation for its respective constituency – at least enough to assure reelection – the two sides went back to the hard task of spending more money.

This time may be different.

The current occupants of the House of Representatives and a third of the Senate were elected in 2010 by an electorate which seemed intent on ending juvenile delinquency in Congress. Voters will be paying attention as never before to the debt ceiling debates that will begin in just a few weeks. One hopes that enough of them are sick of the profligate spending in Washington to make it the key issue in the 2012 elections. If those Representatives sent to Congress in 2010 fail to get the job done, they should be thrown out and replaced as their predecessors were. And while the newly minted and reelected 2010 Senators are safe for six years, another third will be on trial for their lives as well as a president who doesn’t seem to know the meaning of restraint.

The American people want government downsized and spending reduced. Those they elected in 2010 talked the talk; if they don’t walk the walk, off with their heads and bring in the next group of try-outs.

No more debt ceiling increases as usual!

Why have a debt ceiling at all if it is going to be routinely increased every eight to 12 months? Why don’t we just get rid of the debt ceiling altogether? Oh, because Congress needs some restraint. Okay, then, let’s restrain them. Don’t raise the debt ceiling. Or if it is raised, make the incremental increase so small that it only gives the big spenders in Washington no more than a month to get serious about cutting spending. Giving Congress another trillion in breathing room on top of the $14 trillion they’ve already blown just delays the inevitable. But a few billion in additional credit? That’s decimal dust and will force Congress to focus. More importantly, it will cause the American people to focus because small incremental increases will make the debt issue the subject for the evening news talking heads for years until the problem is solved.

The US will bump up against the current $14.3 trillion debt ceiling this month. Don’t be fooled by what you hear coming out of the Democrat camp and Tim Geithner, Obama’s hapless deer-caught-in-the-headlights Treasury Secretary. Both would have you believe that the US will suffer an economic Armageddon if the debt ceiling isn’t raised immediately and raised big. Phooey! The US will not default on its debt, and if Geithner truly believes that, he needs to resign his cabinet post and look for a real job.

Here’s why.

If Congress refuses to raise the debt ceiling, the federal government will still have more than enough money to fully service our debt. Next year, about 7% to 10% of all projected federal government expenditures will go to interest on our debt. Tax revenue is projected to cover at least 70% of all government expenditures. So, under any circumstances, there will be plenty of money to pay our creditors.

Moreover, as the Congressional Research Service has noted, the Treasury Secretary himself has the discretion to decide which bills to pay first in the event that a cash flow shortage occurs. Thus, it is Geithner who would have to consciously, and needlessly, choose to default on the national debt if Congress chooses not increase the debt ceiling.

Geithner, however, disagrees, using this analogy of a typical American homeowner to explain why: "A homeowner could decide to 'prioritize' and continue paying monthly mortgage payments, while opting to cease paying other obligations, such as car payments, insurance premiums, student loan and credit card payments, utilities, and so forth. Although the mortgage would be paid, the damage to that homeowner's creditworthiness would be severe."

Geithner, however, mistakenly assumes that American homeowners always pay their expenses with borrowed funds because that’s the way the government does. Most do not. When tough times come, families eat out less, go to fewer movies, buy fewer clothes, and postpone vacations. If those things don't save enough, then they might borrow money to pay bills or skip payments, but their credit limit will always keep their spending in check.

Congress has largely avoided the cost-cutting that families are forced to do. The feds have not reduced spending despite lower tax revenues during the current recession. Now, the Obama administration says if we don't raise the debt ceiling, the nation could go into catastrophic default.

Congress has never before refused to raise the debt ceiling. But it has frequently taken its sweet time to do so. In 1985, Congress waited nearly three months after the debt limit was reached before authorizing a permanent increase. In 1995, 4-½ months passed between the time the country hit the debt ceiling and congressional action. No, the sky did not fall. And in 2002, Congress delayed raising the debt ceiling for three months. In each case, the U.S. and the economy survived.

Federal revenues will reach $2.2 trillion this fiscal year. Interest payments on the nation’s debt are estimated to be $205 billion this year. Taking interest payments off the top leaves $1.9 trillion for Congress to spend. That’s enough to pay for Social Security ($741 billion), Medicare ($488 billion), and Medicaid ($276 billion), with $395 billion left for other programs.

Clearly $395 billion is not going to pay for the bloated government the country has come to tolerate under Bush and Obama without ever thinking about how to pay for it. Assuming entitlements mentioned above are not touched, $395 billion won’t pay the defense budget, for example. The DoD requested a jaw-dropping $553 billion for next year – about $1,800 for every man, woman, and child in this country (excluding illegals, of course.) DoD also wants an additional $118 billion for “overseas contingency operations” whatever the heck that is. A couple of hundred bombs dropped on Libya maybe?

So, there is no more money and $395 billion can’t cover the nearly $700 billion for the Pentagon, and it certainly can’t be further stretched to cover $115 billion or so for homeland security, $82 billion for HHS, $77 billion for education, $42 billion for HUD, $21 billion for DOJ, $22 billion for agriculture, $14 billion for Treasury, $13 billion each for the Labor and Transportation Departments, $12 billion for the Interior Department, $10 billion for EPA, and on and on and on. And we still have to pay for the excesses of ObamaCare down the road whose price tag we don’t yet know.

The people running this government are never going to deal with our unsustainable spending situation unless and until it becomes unavoidable for them to ignore it. The only way to make that happen is for Congress to refuse to raise the debt ceiling and force Obama to prioritize payment of those obligations that must be paid to maintain the full faith and credit of the United States. Only when there is no way around it will the American people, more particularly the taxpayers, get serious about what government should and should not do, and what kind of welfare state they are willing to pay for.

If America truly demands all this spending by the feds, then let's pay for it now. Let's raise taxes to cover it all. But if we paid for current spending with current revenue it would require hiking taxes almost $1.7 trillion. That's the projected deficit for 2011, and it dwarfs this year's individual income tax receipts, estimated to be $956 billion. Even if we doubled this year's total budgeted tax receipts, about $1.614 trillion, we still couldn't cover the deficit for 2011.

So given the current level of spending, all Americans – including the 50% who pay no taxes – should be compelled to pay for what Obama and Congress spend, instead of shifting it to future generations. As long as there are free loaders who pay no taxes, they will take no interest in government spending. Yes, I mean taxing even the little old blue-haired ladies. Once everyone got interested in what government spends, there would be blood and rioting in the streets. The economy would crash and maybe, just maybe, voters (included the current free loading voters) would demand an end to the insane spending or throw out the big spenders.

But as long as our wrong-headed government continues to run budget deficits, its access to cheap borrowing – i.e. low interest rates – is the only way it can avoid default. For example, assume that interest rates don't change and continue to stay low. Then in 2020, 70 cents of every federal dollar will be spent on interest to service the debt, Social Security, Medicare and Medicaid. But if interest rates rise by just 1%, 90 cents of every dollar would go toward the debt, Social Security, Medicare and Medicaid, leaving just 10 cents to split among education, defense and all other discretionary items.

Perhaps the strongest argument for not raising the debt ceiling, as these figures show, is that the US is bound to default the debt in the next decade or so. It will either explicitly renege on payments – unlikely – or it will print so much money that it pays its debt in cheap dollars – the most likely scenario. The government's own projections show the debt quickly rising to alarming levels under reasonable assumptions, and none of their models considers the possibility of a continued recession and a collapsing dollar.

The debt ceiling, boys and girls, is the key in stopping the politically-motivated spending insanity. It will prevent the inevitable collapse of the dollar and the economy, which will happen if Washington keeps to its spendthrift ways, and it is the best way to enforce restraint on the cowards in Washington. Of course voluntary spending reductions would be better than capping the credit spigot. But absent that, cutting up the Congressional credit card is better than the Kabuki dance that Congress is about to embark on.

Refusing to raise the debt ceiling would be a "balanced-budget amendment with teeth," as one pundit observed. Politicians are notorious for avoiding budget cuts that might alienate the powerful interest groups which contribute to their campaign coffers. But if the newly elected budget "hawks" really want to impress us, let them refuse to raise the debt ceiling regardless of John Boehner’s or Mitch McConnell’s rants. That will give the old guard no choice but to start slashing.

Almost five years ago, in March, 2006, the usually silent junior Democratic senator from Illinois, Barack Obama, unexpectedly piped up to oppose increasing the nation's debt ceiling, explaining:

The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government's reckless fiscal policies. ... Increasing America's debt weakens us domestically and internationally. Leadership means that "the buck stops here." Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

Of course, George Bush was president then. Senator Obama's insight five years ago about the ever rising debt as a "failure of leadership" and that "Americans deserve better" is one of the few things he’s ever gotten right.

Obama’s Empire

When he was elected in 2008, Obama thought his job as president was to rule, not to govern. It came as no surprise, then, when his (and incidentally, Obama refers to all government agencies as “his”) FCC tried to shanghai the Internet under the cockamamie doctrine of net neutrality. And it should come as no surprise now that his National Labor Relations Board has taken onto themselves the power to tell privately-owned companies where they may locate and thus how they may operate their business.

Obama, whose empire has been the majority owner of privately-owned Chrysler, General Motors, and AIG and owner of a controlling interest in Citigroup, told Boeing that it cannot build its new 787 Dreamliner in a North Charleston, SC plant that Boeing has spent nearly $2 billion and 17 months to construct. (Well, OK, technically the NLRB issued the order, but Obama appointees fill four of the five positions on the Board and General Counsel, Lafe Solomon, is his unconfirmed nominee.)

Two years ago, Boeing announced its plans to build a new plant to assemble the new 787 Dreamliner – a state-of-the-art airplane. It would be an understatement to say that Boeing is unionized. The Boeing union, the International Association of Machinist and Aerospace Workers, is the poster child for everything that is wrong with unions. The IAM (not a bad acronym because the union thinks it’s all about them) has shut down Boeing’s commercial aircraft production line four times since 1989, and a 2008 strike lasted 58 days, causing the company a revenue loss of $1.8 billion.

Yet, even though it was not a requirement of Boeing’s union agreement, the company attempted to negotiate a no-strike pledge in return for locating the 787 assembly plant near Seattle. Negotiations broke down because of the union’s insistence (I AM!) that it get a seat on the Boeing board and a commitment from the company that all future airplanes would be built in Seattle.

Boeing senior management decided that another location away from the strike-happy IAM was therefore in the best interests of their shareholders and customers, and it chose South Carolina, which is one of 23 right-to-work states in the country. Boeing currently has a sub-assembly plant in Charleston that is not represented by the IAM, because the workers threw out the union in an election (I’M NOT?) in September 2009. The plan for the 787 was to assemble seven per month in Seattle and three per month in Charleston.

Boeing has added 2,000 Seattle union jobs since announcing in October 2009 that it would expand its operations in SC to build some of the 787s. So it’s not like Boeing is taking work from the I AMs. Yet the union waited for 18 months before deciding it didn’t want those three 787s per month built by non-union labor in SC, and two weeks ago it filed a complaint with the NLRB alleging that Boeing is unlawfully transferring work to a non-union facility in Charleston. The NLRB happily agreed with the union (surprise!) and issued this statement:

To remedy the alleged unfair labor practices, the Acting General Counsel seeks an order that would require Boeing to maintain the second production line in Washington state. The complaint does not seek closure of the South Carolina facility, nor does it prohibit Boeing from assembling planes there.

The NLRB cited “repeated statements to employees and the media” by Boeing executives that past strike activity and the possibility of future strikes was a deciding factor in locating the second line in a non-union facility. Well, no kidding, Dick Tracy!

Failing to get a no-strike pledge out of the IAM the "overriding factor," said Jim Albaugh, CEO of Boeing Commercial Airplanes, "was that we can't afford to have a work stoppage every three years."

Yet, the NLRB decided:

Boeing had violated two sections of the National Labor Relations Act because its statements were coercive to employees and its actions were motivated by a desire to retaliate for past strikes and chill future strike activity.

Coercive? A desire to retaliate? When did making a statement of fact become coercive? When is attempting to remain competitive against Boeing’s most aggressive competitor – Airbus – and possible competition from China in the future “a desire to retaliate”?

Over the past 25 years job growth in right-to-work states like South Carolina has been over twice as high as in unionized states. Between 2000 and 2010 employment has grown by 2% in right-to-work states and declined by 4% in unionized states. That’s the bumble bee in the IAM’s Fruit of the Looms. After peaking in the 1950s at 36%, private sector union membership has been declining for 50 years and now represents only 7% of private sector employees. It doesn’t require clairvoyance to see that the American union movement is facing extinction – at least in the private sector. And it’s why the all-out fight was waged last month in the Wisconsin teacher strike.

Boeing rightfully criticized the IAM for waiting 18 months to make its complaint. It comes a month after a fellow union spent $3.5 million and failed to buy a seat on the Wisconsin Supreme Court. And it comes just as Obama is ramping up his reelection race and will desperately need union votes, money, and organization to buy him four more years to help resuscitate the union movement. Like he did when he appointed all but one key position in the NLRB. The labor movement is looking for a scalp. Obama’s NLRB is trying to give it one with Boeing.

The NLRB is one of the many bad things which came out of the first Franklin Delano Roosevelt administration and is essentially a wholly-owned subsidiary of the nation’s labor unions. One of Obama’s appointees to the board was such an awful choice that even the Democrats wouldn’t vote to approve him – Craig Becker. So, as he has done before when the Senate fails to rubber-stamp his decisions, Obama waited for the Senate to leave town and gave Becker a recess appointment.

Becker was formerly a lawyer for the Service Employees International Union – the union which figured heavily in Obama’s 2008 election. Becker’s writings include his opinion that the NLRB could impose "card check" rules for union organizing without an act of Congress. You can see why Obama took a shine to him: they think alike. Congress is a constitutional abstraction to both of them.

Card check denies workers from casting secret ballots in union elections. The NLRB is currently suing Arizona and South Dakota to invalidate their constitutional amendments banning card-check, and the NLRB has threatened two other states with similar amendments: Utah and, ah yes, South Carolina.

Becker also wrote an opinion that employers (like Boeing) should have no right to be heard in either a union representation case or an unfair labor practice case. In other words, employers have no rights before the NLRB to give their side of the story.

Becker is bad news for democracy.

Senate Republicans were rightfully concerned about putting a top labor lawyer in the position to mediate disputes between companies and unionized employees. During Becker’s failed confirmation, John McCain commented that Becker was “the first person nominated” for the board “who comes directly from a labor organization.” I’m surprised that McCain was surprised. Becker was nominated by Obama – also a lawyer and a community organizer, which is the first cousin of a union organizer.

The National Labor Relations Act is a terrible law. The NLRB’s general counsel acts as a prosecutor, the board itself acts as a panel of judges, and federal courts review the board’s decisions on appeal. According to the law, it is an “unfair labor practice” for an employer to “interfere with, restrain, or coerce employees in the exercise” of their right to participate in protected union activities, which include striking. It is also an unfair labor practice if a business discriminates “in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization.” These are defined so broadly by the NLRB in its decisions, that they can mean anything – and everything.

According to the US Supreme Court, the act “did not undertake the impossible task of specifying in precise and unmistakable language each incident that would constitute an unfair labor practice” — which is to say, it failed to offer companies a way to predict which of their actions would later be considered illegal, leaving that decision to people who are appointed by the president (who is often elected with great help from unions). It should not surprise anyone that, given the highly contentious nature of labor disputes, this hasn’t worked out so well. In the years since the NLRA’s enactment, the board and the courts have been making up law as they go along.

Under the NLRA as it’s been interpreted, the first step for the general counsel in the Boeing case will be to prove that the company’s actions interfered with or discouraged union activities in some way. Boeing points out that the expansion into South Carolina didn’t actually cost the Washington plant jobs — in fact, employment at the unionized plant has grown in recent years as I mentioned earlier. However, the decision not to put the production line in Puget Sound certainly does mean that Boeing will have fewer jobs in the Seattle area than it would otherwise. The pro-union NLRB will no doubt fail to see any difference in Boeing’s decision to add new capacity in another part of the country versus destroying existing capacity or firing unionized workers.

The next step will be to prove that Boeing acted out of “anti-union animus,” or to show the Boeing’s decision to assemble airplanes in SC so patently destroys the protected rights of workers that Boeing’s motives are obvious and don’t have to be proven in trial. The general counsel’s complaint claims that Boeing’s behavior is bad enough in itself to demonstrate motive, and therefore Mr. Lafe Solomon offers no proof for “anti-union animus.” The fact that Boeing’s existing collective-bargaining agreement with the union gives it the right to locate new capacity wherever it wants will be fobbed off as a “so what?” by the NLRB.

Yes, the IAM’s strike history was quite likely a factor in Boeing’s decision to locate a back-up plant in SC – a right to work state. Yes, Boeing officials have stated as much in public statements about the new plants. Mr. Lafe Solomon will try to make that a confession in his argument before the administrative law judge who hears this case, and I hope that Boeing reminds the court that we still have the quaint notions expressed and protected by the First Amendment.

There is a precedent case by the Supreme Court that argues in favor of Boeing. In 1965 the court said a company could “transfer work from one plant to another” to “blunt the effectiveness of an anticipated strike.” In today’s case, Boeing wasn’t transferring work; it was adding new work and it was doing so within an existing agreement that Boeing had with the union. Moreover, Boeing offered to put that new capacity in the Seattle area where it would have been unionized, but the Neanderthals who run unions were too piggish to trade that for a no strike pledge.

The next step in this opéra bouffe is a hearing June 14 in Seattle before an administrative law judge who works for the NLRB. That ought to be a fair and balanced hearing. The full NLRB board will then review that judge's decision, a process that could take months, prolonged no doubt by debates over how an arm of government can take away a right of a private enterprise business and get away with it.

If Boeing contests the NLRB ruling, the case will thankfully be transferred to the federal appeals court system where the union holds less sway, and it possibly could make it all the way to the Supreme Court. If so, this landmark case could see two years before it’s settled during which, I hope, union-free 787s will be rolling off the line in SC, unless the IAM is able to get a restraining order. If a TRO is issued, let’s hope that somewhere in the federal judicial system there is a judge with enough years past puberty to agree that it’s plain stupid not to let Boeing use a facility it has built at great expense in SC while this ridiculous case is being litigated.

By the way, the Boeing case has gotten the attention of nine state attorneys general. They have collectively signed a letter to the National Labor Relations Board, calling the Boeing suit a de facto assault on their states' economies. Which it assuredly is. Beyond crass labor politics, an adverse NLRB ruling against Boeing that is upheld by the federal court will set a terrible precedent for the flow of jobs and investment within the US. It will give unions a veto over management decisions about where to build future plants. And it would undercut the right-to-work statutes in 23 American states. No doubt that’s the real union agenda here.

With a Republican House, Obama's pro-union legislation is dead in Congress. But it looks like his appointees are determined to impose his agenda by regulatory fiat – as they have repeatedly since this guy became president – no matter what damage is done to investment decisions and job creation in the private economy.

Maybe the next time Boeing will build its plants in Bulgaria!