As the President’s latest budget commission falls apart, it’s important to understand the lack of leadership we’re getting in Washington. Here’s a very quick video of an exchange between Paul Ryan and CBO Director Doug Elmendorf concerning President Obama’s budget framework.

In 2010, Democrats in the House and in the Senate failed to introduce or pass a budget. They seem to have forgotten that passing a budget is part of their job. In February of this year the President released a budget proposal that was so bad that even HE came out two months later to discuss a new budget framework. The problem is that all he did was issue a speech, not a new budget. Democrats have refused to release a budget proposal in either the Senate or the House. Republicans in the House have passed a budget. It’s time for the Democrats to step up and provide their own budget that can be scored by the CBO and scrutinized by the American people.

But you want to hear something funny? Let’s look back on how we got here. Instead of tackling the budget, the debt and the deficits, the President put together his bipartisan debt commission led by Erskine Bowles and Alan Simpson to study the problem, and recommend solutions. When the President introduced his budget earlier this year he ignored just about every recommendation from his own commission. And what does he do when it becomes clear that his budget proposal is a complete flop? He creates a new commission led by Vice President Biden.

Now for the funny part. In 2008, candidate Obama had this to say about John McCain’s suggestion to put together a commission to study a problem (found on Politico):

Just today, Senator McCain offered up the oldest Washington stunt in the book – you pass the buck to a commission to study the problem. But here’s the thing – this isn’t 9/11. We know how we got into this mess. What we need now is leadership that gets us out. I’ll provide it, John McCain won’t, and that’s the choice for the American people in this election.

You couldn’t make this stuff up if you tried.

I was visiting with a relative a few years ago. He was a self-described liberal at the time. I asked him what he believed the primary function of government should be. His response: “The redistribution of wealth.”

Do you know a single liberal who would not advocate for increasing taxes on the rich?

I am a fiscal conservative and a social liberal. A man without a party. I have many friends who consider themselves to be liberals, meaning that they’re fiscally liberal as well as socially liberal, though most of them would probably not make a differentiation between the two. Some of them are environmentalists. Some advocate for women’s rights. Others focus on gay rights, or education, or poverty, or minority rights, or health care. These are all issues I have a great deal of compassion for. But the tie that binds liberals is the belief that we should raise taxes on the rich in order to expand government programs to fix social issues. Redistribution of wealth.

So how does this relate to Keynesian Economics?

I wrote two articles about Keynesian Economics back in March (Keynesian Economics Insufficient and The Stimulus and the CBO). I won’t rehash what we’ve already covered, but there is a core belief among Keynesians that is relevant to this discussion. Keynesians believe that for every dollar that is spent by the government, GDP will increase by more than a dollar. They call it a multiplier effect. Keynesian Economists have developed a series of formulas and multipliers they use to predict the growth of GDP from government expenditures. The government can “spend” money in many different ways, and these economists assign different multiplier values to each of these. And these economists believe that as GDP increases, jobs are created. They have a formula for that, too. So using these multipliers and formulas, they can predict the number of jobs that will be created as the government spends more money. (This is how the CBO has concluded that the Obama stimulus created jobs despite all evidence to the contrary.)

Redistribution of wealth is a political agenda. Keynesian Economics is a view of economics that states that when the government spends money, GDP rises, and jobs are created. It is my belief that many on the left gravitate to Keynesian Economics for just this reason. When you can justify endless government expenditures under the belief that we can solve our social issues while improving the economy, then what possible reason could there be to limit the growth of government? All we have to do is continue to raise taxes on the rich, increase funding to government programs, and we solve our problems. If you read Paul Krugman, the economist and writer for the New York Times, this is certainly what he has advocated for years.

Well, the problem is that Keynesian Economics has been found lacking. The expansion in the federal government did not create jobs, and did not fix the economy.

The Obama Stimulus
So does that mean that the Obama stimulus plan failed? If your measurement is what we were told by its supporters before the bill was passed, then yes, the stimulus failed. The economy has continued to struggle, and unemployment has far surpassed the administration’s original predictions.

But it would be a huge oversimplification to blame the stimulus for the current condition of the economy. In many ways, it would be just as dishonest as the Keynesians who continue to say that the stimulus created millions of jobs and kept us from a depression. The stimulus does not live in a vacuum. And to pretend that it does is illogical at best, and dishonest by those who should know better.

There is a larger narrative here. The stimulus bill was flawed, but certainly contained some tax cuts and business incentives that many would agree are good for the economy. And there’s a case to be made that under certain conditions, some government expenditures do benefit the economy. But the larger issue is that for everything that was done right, and there were a few, there were many more that were done wrong that have stifled economic growth. Unprecedented federal deficits and a huge expansion of the federal debt. The looming threat of increasing tax rates. An incoherent energy policy. The implementation of ObamaCare. New federal regulations, many from the EPA and the  banking reforms, that will cost businesses billions of dollars to implement. The projected growth and insolvency of entitlement programs including social security, Medicare and Medicaid. Unfunded liabilities to government employee pension plans. The list goes on and on. The administration has earned its reputation of being unfriendly to the business community. And the business community has responded by running for cover.

So did the stimulus fail? What if the stimulus had been accompanied by reductions in needless regulations, permanent reductions in tax rates and real tax reform, a free market approach to health care reform, entitlement reform, a legitimate plan to tackle our debts and deficits, and fiscal discipline from Congress? Do you believe that our economy would be better off today? Worse? The answer to that question is what separates fiscal conservatives from fiscal liberals.

A Final Note
Dishonesty is a primary reason that I don’t like most politicians and members of the media. I continue to hear from the administration how the stimulus kept us from a depression, despite a complete lack of evidence to support their conclusion. Nobody was predicting a depression before the stimulus bill was passed. And it’s revisionist history now to say that we would have gone into a depression without the bill. Here’s an article from IBD that explains how the data shows that the recession had already leveled off BEFORE the stimulus bill went into effect. Here’s a short piece from the article:

The conclusion is that in claiming to have staved off a Depression, the White House and its supporters seem to be engaging in a bit of historical revisionism.

Economists weren’t predicting a Depression.

White House economists forecast in January 2009 that, even without a stimulus, unemployment would top out at just 8.8% — well below the 10.8% peak during the 1981-82 recession, and nowhere near Depression-era unemployment levels.

The same month, the Congressional Budget Office predicted that, absent any stimulus, the recession would end in “the second half of 2009.” The recession officially ended in June 2009, suggesting that the stimulus did not have anything to do with it.

Lots going on around the country. Just a few thoughts for a Friday morning.

GOP Contenders and Pretenders
It’s way too early to get hung up on the polls showing support, and lack of support, for many of the Republican presidential hopefuls. We’re still about a year and a half out from the election. An eternity in political years. At this same point in time in prior elections, we wouldn’t have found strong and cohesive support for eventual winners such as Jimmy Carter, Ronald Reagan or Bill Clinton, so it would be a mistake to conclude what will happen during the Republican nomination process based off of the early polls.

For the last year the media has talked about the big four: Mitt Romney, Sarah Palin, Mike Huckabee and Newt Gingrich. Two aren’t running, and Gingrich will be a non-factor. He had no chance before a series of missteps sabotaged his campaign. I’ve always felt like it was Romney’s race to lose, and that he would do just that. Lose.

If you had asked me a couple months ago, my prediction would have been that the eventual nominee would come from a handful of governors such as Mitch Daniels, Chris Christie, Haley Barbour or Tim Pawlenty. But this dynamic changed significantly when three of the four decided not to run, and Pawlenty has failed to gain any traction towards the nomination. It’s still too early to know for sure, but Pawlenty just doesn’t look like he can excite either the Republican establishment or the Tea Party activists. Most of the rest of the field looks unelectable, but I would again issue the warning that it’s far too early to draw such conclusions.

Dick Morris has an interesting analysis of the nomination process. He describes that the Republicans are currently in the quarter finals where they will narrow it down to one establishment candidate, and one more conservative candidate. Morris lists Romney, Pawlenty and Jon Huntsman (who has informally announced his intention to enter the race) as the likely establishment candidates, with Romney as the most likely winner from this group. He also lists Michele Bachmann or Herman Cain, and to a smaller degree Gingrich, as the most likely to emerge as the main opposition to Romney. Dick’s analysis only considers those who are currently running.

Personally, I believe that Bachmann, Cain and Gingrich are all unelectable. But I’ve been wrong before. I wasn’t convinced that Americans were ready to elect a black president, and am glad to admit that I underestimated the American people.

My prediction? I think it’s incredibly likely that somebody else is going to enter and impact the race, with the most likely being Rick Perry, the governor of Texas. The Tea Party activists will like his track record of creating jobs in Texas. And he could appeal to many in the Republican establishment. Truthfully, I know little about Rick Perry, and am not endorsing him, and won’t bother spending any time researching him until he officially declares his intentions. But if I was a betting man? I think Perry has a very strong chance to win the nomination given what we know about the current field.

So now I’ve ignored my own warnings about coming to conclusions this early in the process.

Economy is in Bad Shape
According to DNC party chairwoman Debbie Wasserman Schultz: “We own the economy. We own the beginning of the turnaround and we want to make sure that we continue that pace of recovery, not go back to the policies of the past under the Bush administration that put us in the ditch in the first place.”

This pace of recovery? You mean the 1.8% economic growth this last quarter and the rise in the unemployment numbers?

This does seem to fly in the face of President Obama’s continued assertion that the current economic conditions remain Bush’s fault. I’m glad to see one Democrat stand up and admit that their party owns the economy. They do. Expect to see the Republicans use this repeatedly against the Democrats for the next year and a half.

For some strong analysis on the current state of the economy, read this from Martin Feldstein in the WSJ. I don’t completely agree with his comments on the stimulus, but overall he’s right on the money. The strongest paragraph:

The economy will continue to suffer until there is a coherent and favorable economic policy. That means bringing long-term deficits under control without raising marginal tax rates—by cutting government outlays and by limiting the tax expenditures that substitute for direct government spending. It means lower tax rates on businesses and individuals to spur entrepreneurship and investment. And it means reforming Social Security and Medicare to protect the living standards of future retirees while limiting the cost to future taxpayers.

Feldstein was the chairman of the Council of Economic Advisers under President Reagan, and is a professor at Harvard.

Weiner-Gate is Over, We Think
Yesterday afternoon, Anthony Weiner announced his resignation from the House of Representatives. I don’t want to spend a lot of time rehashing what happened. As long as we have politicians, we will have political scandals. It happens in both parties. It’s happened before. And it will happen again.

But there are a couple things we should learn from this:

1. Don’t take on the media. Gary Hart was the front-runner for the Democratic in 1988. When reports started to leak about his infidelity, Hart dared the media to follow him. And follow him they did. What was Hart thinking? Who knows. But the media quickly got pictures of Hart with Donna Rice, and Hart’s political career was over.

Weiner thought that he was smarter than the media, and could lie his way out of his mess. What was he thinking? Who knows. He basically dared the media to dig up the truth with his ongoing press conferences and interviews. You can’t sit there and blatantly lie to the media and expect even the most liberal of media outlets to ignore you forever.

2. Tell the truth. Isn’t this something we were all taught as children? The lesson should be simple. Tell the truth and throw yourself on the mercy of the American people. Overall, we’re a forgiving people. I suspect that Weiner could have weathered the storm if on that first day he had just said “I screwed up. I have told my wife what I’ve done, and we will work through this. I apologize to everybody…” The mainstream media would have been happy to brush this story aside. Some rightwing bloggers would have hung on for a week or two, but it likely would have gone away.

3. Moral leadership from our politicians is rare. And I struggle with this a bit. We should hold our elected officials to high standards. Yet I’m tired of career politicians, and would like to see term limits placed on Congress. And if we want to elect the best people to these offices, we will need to overlook a few skeletons in their closets. I could have overlooked this behavior in Weiner if he hadn’t so brazenly come out and lied about it.

Just ask Richard “I am not a crook” Nixon. The truth will come out, and you better be on the right side of it.

“I say that, at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more.” — President Obama, April 13, 2011

A few weeks ago I posted an article about tax revenues as a percentage of GDP. My point at the time was to explain how tax rates have had little effect on tax revenues generated. Whether tax rates have been high or low, we have typically generated about the same tax revenues as a proportion of GDP. The great truth is that it’s the economy that drives tax revenues, NOT tax rates. The higher the GDP, the higher the tax revenues.

The President and his partners in the media are making the claim that, as Jake Tapper from ABC News puts it, “the U.S. has the lowest tax rate as a percentage of GDP since the 1950s.” This claim in not only inaccurate, it’s intentionally misleading. The message is that our tax rates are too low, and that’s why we are now collecting less tax revenue as a percentage of GDP.

The accurate statement would be that “tax revenues” as a percentage of GDP are at their lowest since 1950. This statement carries a different meaning than saying “tax rates”. But the truthful statement doesn’t fit the President’s agenda, or the media’s agenda, of raising taxes on the “rich”.

So let’s look at the facts.

The post-World War II average of tax revenues as a percentage of GDP is 17.8%. So given the comments made by the media and the President, you would expect during the Bush years that we must have been collecting less than this. Here are the numbers:

2001: 19.5%
2002: 17.6%
2003: 16.2%
2004: 16.1%
2005: 17.3%
2006: 18.2%
2007: 18.5%
2008: 17.5%
2009: 14.9%
2010: 14.9%

From 2001-08 (the Bush years), that’s an average of 17.6% of GDP, roughly equivalent to the 60 year average of 17.8%.

So what do these numbers show us? That during a time of lower tax rates compared to our historical average, we have still been collecting the same percentage of tax revenues compared to GDP that we have collected for the past 60 years.

Also, when you look at these numbers, you see how the numbers decline during and following the last recession (the one that Bush inherited in the early 2000s), and then grow as our economy continues to recover and expand. By 2007 under the Bush tax rates, we were well above the post-World War II average collecting 18.5% of GDP in tax revenues. Then as we head into this latest recession, the numbers begin to decline again. But this time they fall more dramatically. Why? Because the economy fell more dramatically.

The changing tax revenues over time are the result of fluctuations in the economy, not tax rates. Raising or lowering the tax rates will not have a substantial effect on tax revenues generated as a percentage of GDP. Want to increase tax revenues? Fix the economy.

Taxing the Rich Makes Tax Revenues More Volatile
I had already been thinking about writing this post (I have a long list of potential posts rattling around in my brain that I never get around to writing), but this morning I read an interesting article on IBD about this very subject. (Read the article here.) They expand on these facts, and explain how shifting more of the tax burden to the rich and to business only makes tax revenues more volatile during a recession. Here’s what I found most interesting in the article:

It’s not that we’re taxed too little, but that the tax burden is heavily skewed toward an increasingly narrow, volatile tax base — businesses and the “rich.”

Together, income taxes paid by corporations and the wealthiest 5% of Americans account for a stunning 41% of all federal revenues. At the other end of the spectrum, almost half of Americans pay no federal income tax at all.

As a result, federal revenues now swing more wildly between boom and bust. Here’s why:

Although liberals will never admit it, the rich typically suffer big income losses during recessions.

An IBD analysis of Internal Revenue Service data shows that the total adjusted gross income of the top 5% of taxpayers fell 11% from 2007 to 2008 (the most recent year for which the IRS has data), while the bottom half of taxpayers saw their AGI decline just 0.3%.

As a result, tax payments from the top 5% plunged $70.6 billion — accounting for 84% of the revenue loss over those two years, the IRS data show.

And as corporate profits dry up in a downturn, so do corporate tax payments.

Broadening the tax base would minimize this whipsaw effect, as evidenced by the fact that even as income tax revenues plunged, the far more broad-based payroll taxes — paid by every worker — climbed slightly.

If Democrats have their way, the federal tax burden will be even more skewed toward the “rich,” which will, in turn, make federal revenues still more volatile.

The moral of the story? We badly need tax reform, not increases in tax rates on the wealthy and on business. Both the Obama debt commission and Paul Ryan have suggested lowering the tax rates and eliminating deductions in order to broaden the base of tax payers. Personally, I don’t think that goes nearly far enough. Our tax system needs to be completely overhauled. But don’t hold your breath.

Note: Tax facts found here.

A couple interesting tidbits from Washington this last week.

The Budget Vote
In the Senate, four different budgets came to the floor and were voted on by senators. All were defeated. I did some googling over the weekend to read the coverage from the press. Virtually every story detailed how the “controversial” Paul Ryan budget had been defeated 40-57. And at least half of the stories I read from the major media outlets completely ignored that President Obama’s budget had been voted down 0-97.

Here’s one sample article from ABC News. The headline is “Senate Shoots Down Controversial Ryan Budget & President Obama’s Plan, Too”. At least ABC News mentioned Obama’s budget, which they must not consider controversial at all. The explanation from ABC News, which echoed the rest of the mainstream media when the Obama budget was mentioned, was that the Democrats were “voting against it because they believe it is outdated”.

I have a problem with this explanation. The President gave a speech outlining some different priorities than the budget proposal he had released just a couple months ago, but has never actually released an updated budget. His original budget proposal is still displayed on the White House website. And for that matter, the democrats in the Senate have not proposed a budget in more than 750 days. So the President’s budget proposal IS the most recent budget proposed by Democrats.

The Debt Ceiling Vote
In another vote that was purely political, the House voted on a “clean” bill to raise the debt ceiling by about $2 trillion. The President has been requesting a clean bill on a debt ceiling increase, meaning that there are no budget cuts or other proposals tied to the bill. There were 114 Democrats in the House who had signed a pledge in support of President Obama’s preference for a clean bill. But when the vote came to the floor, it went down 318-97 with 7 Democrats voting “present”. Nearly half of the Democrats voted against the bill. Of the 114 Democrats who had signed the pledge for a clean bill, 29 ended up voting AGAINST the clean debt ceiling bill.

This bill was expected to fail, and was intended to fail. The only question was which Democrats would vote for or against the bill. And who would cowardly vote “present”.

I am often amazed by the amount of disinformation that is spread by politicians, activist organizations and members of the media. Today we’re going to look at the fuzzy math behind the Medicare debate. But before we get to Medicare, there are a couple other concepts we need to understand.

The Federal Budget
We have recently discussed how raising taxes will not fix our federal budget problems. It’s important to know how our money is spent, and the impact the entitlement programs have on the budget. Let’s split the budget info four categories:

1. Mandatory Spending: The ONLY spending that is truly mandatory is servicing the debt.
2. Entitlement Programs: social security, Medicare and Medicaid.
3. National Defense
4. Everything Else: This is often referred to a “non-military discretionary spending” but I don’t like that phrase. In my opinion, entitlements should also be considered “discretionary spending”.

Keep in mind the recent disagreements between the two parties in passing a budget, and the discussions of what can be cut from “discretionary spending”. They’re arguing over pennies. The reality is this — if we reduce “Everything Else” (the “non-military discretionary spending”) to $0, we would still be running a deficit of more than a $1 trillion this year. Reducing spending on an assortment of “discretionary” programs cannot fix the problem. And entitlements will only continue to grow  — both in a literal sense, and as a proportion of our federal budget. There is no path to fiscal responsibility that does not include reforming military spending and entitlement programs. (Here’s a good read on Politifact about the budget.)

ObamaCare Math
Now before we dive into Medicare, we also have to look at the math behind ObamaCare because it’s directly related to the recent discussions on the solvency of Medicare. According to its supporters, ObamaCare has been estimated to cost $1 trillion over the first ten years. To pay for ObamaCare, Congress plans to reduce payments to Medicare by $500 billion, and increase taxes by $500 billion, over these same ten years. I have said all along that this math is bad. That ObamaCare will cost more than $1 trillion. That Congress will not achieve $500 billion in cuts to Medicare. And that we would not likely see $500 billion generated in new tax revenues. But for today, that’s beside the point. Let’s assume that all of these numbers are golden. That we can and will pay for the first ten years of ObamaCare as explained through these cuts in Medicare and increased taxes.

So what does this have to do with Medicare math? Everything.

Medicare Solvency
As of today, the federal government receives more in Medicare tax revenues than it pays out in Medicare coverage. But as we move forward, this will no longer be true. We will continue to have a smaller percentage of people paying into the system with their Medicare taxes, and an increasing number of people receiving Medicare benefits. Expenses will soon surpass revenues.

People who oppose Medicare reform point out that the CBO says that ObamaCare extends the solvency of Medicare. That Medicare is not an impending problem and does not need to be fixed. But this is an inaccurate portrayal of what is going on, and what the CBO has said.

If you ONLY look at Medicare expenses and revenues generated from Medicare taxes, then we have indeed extended the solvency of Medicare with ObamaCare. It will take longer for Medicare to become insolvent — meaning that we’re paying out more in services than we’re bringing in in taxes. But that’s if you don’t use these savings and revenues on anything else. You can’t pay for ObamaCare AND use this money for Medicare. This is clarified by the CBO in this memo. Here’s the key part of the explanation:

The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.

So you can either use this money to pay for Medicare OR you can use this money to pay for ObamaCare. But it cannot be used for both. So either we have not extended the solvency of Medicare, or a significant portion of ObamaCare is unfunded. Take your pick.

Medicare Reform
Medicare under its current form will soon become insolvent and must be reformed. Is the Paul Ryan plan a good plan for fixing Medicare? I don’t know yet. I’m still trying to fully understand it. What I can tell you is that Ryan is well intentioned. Tackling entitlements is risky politically, and may cost the Republicans in 2012. Ryan and the Republicans will continue to be demonized and demagogued (I’m not sure that’s actually a word but I like it) over Medicare.

The arguments that are being made to oppose Medicare reform are much like the arguments made by those opposing welfare reform in the ’90s. The GOP fought for welfare reform, and it was eventually signed into law by President Clinton. Today, welfare reform is viewed as highly successful. And it appears that President Clinton supports the idea of Medicare reform as well:

UPDATE 6-5-2011: As I continue to research Medicare, I’ve found that I made a pretty glaring mistake in this article shown above. Though the mistake only further illustrates our need for Medicare reform. A significant portion (about half) of the revenues used to pay for Medicare already come from other sources. A quote from PolitiFact: “Medicare, which provides health care to about 50 million elderly or disabled Americans, is financed through a combination of funding streams: a Medicare payroll tax; general revenue (mostly from federal income taxes); premiums paid by Medicare users; and a tax on Social Security benefits and state payments toward the prescription drug benefit.” I am unclear how anybody can claim that Medicare is “solvent” when half of the costs are paid for by revenues outside of premiums and the Medicare payroll tax. Read this post on PolitiFact.

A quote from President Obama: “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 U.S. 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.”

On this I’m in complete agreement with our President. But unfortunately, do you know who does not agree with this statement? Our President. He spoke these words in 2006 while a member of the Senate.

Now the President says he was wrong. Well, he doesn’t say it. His press secretary Jay Carney says that the President regrets his vote against raising the debt ceiling in 2006:  Obama “thinks it was a mistake,” presidential spokesman Jay Carney told reporters. “He realizes now that raising the debt ceiling is so important to the health of this economy and the global economy that it is not a vote that, even when you are protesting an administration’s policies, you can play around with.” (Yahoo News)

The administration has gone so far as to explain that a failure to raise the debt ceiling would result in “Armageddon-like” consequences for the economy. They have also suggested that we should raise the debt limit in a “clean” bill, which means “no strings attached”.

Personally, I’m hoping for plenty of strings. Our continuing deficits and national debt are the albatross hanging around the neck of our economy.

Will The Senate Release a Budget Plan Please?
And in a related story, the democrats in the Senate were getting close to finally releasing a budget proposal to counter Paul Ryan’s budget plan. But many democrats remain leery of putting a plan on paper that can be scrutinized by the public. This is of course why they failed to present or pass a budget last year. So what happened? The President has preempted the release of the plan and called for ANOTHER bipartisan commission to discuss a compromise on the budget. How can a “compromise” be discussed when the democrats won’t release a budget proposal? (Townhall.com)

Wow. Good start for the Chiefs. They trade back, pick up a high third round pick, and fill one of their most glaring needs. How can you not like that?

And best of all? They didn’t draft a right offensive tackle in the first round.

Here’s what you need to know about Baldwin. He’s big — almost 6′5″ and 228 pounds. He can stretch the field. He’s fast — he runs a 4.5 40. He’s got great hands and is known for making spectacular catches. And he’s explosive, averaging more than 18 yards per catch in college. He will be a great complement to Dwayne Bowe and Tony Moeaki in the red zone. Matt Cassell should be a happy man today.

Some of the “experts” have labeled Baldwin with some potential character issues. We know how much importance general manager Scott Pioli puts on character. And if Pioli is satisfied with Baldwin’s character, then so am I. (Until proven differently.)

Some may also call Baldwin a “reach” to be taken late in the first round. There were two wide receivers with very high draft grades — A.J. Green and Julio Jones. They were among the first six taken in the draft. Then there was a whole group of receivers with similar grades expected to go in the second round. Baldwin was in this group. Most of the others were under six feet tall. Baldwin was the one that stood out to me as the freak athlete with size, speed and hands. He wasn’t likely to make it to the Chiefs pick in the second round. And the Chiefs obviously had the highest draft grade on him of all the remaining receivers.

Should give some kudos to Nick Wright at 610 Sports who talked about Baldwin as a great choice for the Chiefs prior to the draft. He was hoping that Baldwin would fall to the Chiefs with their second pick, but didn’t expect him to last that long on the board.

The Chiefs have three picks tonight — numbers 55 (round 2), 70 and 86 (round 3). Would like to see the Chiefs find an outside linebacker and interior offensive lineman tonight. GO CHIEFS!

I have a confession to make. I’m not excited about the NFL draft this year. I think my brain is still waiting for free agency. And I’m definitely behind in my research. So take this for what it’s worth. It seems that most mock drafts have the Chiefs selecting an offensive tackle in the first round. If they do, I’ll be shocked.

Let’s review the Chiefs’ biggest needs. And when you think of the team’s needs, don’t just focus on this year. Think about the next three years, and what contracts will be expiring among the current players. And what players are nearing the end of their careers.

1. Nose Tackle: This is where the lack of free agency makes this draft even more interesting than normal. Ron Edwards and Shaun Smith are both free agents. If the Chiefs played a game today, their starting nose tackle would probably be Anthony Toribio. Who? Exactly. Now the Chiefs might feel good that they’ll get Edwards and Smith signed, but there are no guarantees. And neither of them are long-term solutions at nose tackle. This is the biggest hole in a young and developing defensive unit.

2. Wide Receiver: Not only do the Chiefs have a big hole in the starting position opposite Dwayne Bowe, but I believe that Bowe has only one year left on his contract. If they lose Bowe next year, what do they have left? Not much.

3. Offensive Center / Guard: Starting center Casey Wiegmann is a free agent, and he’s 37 years old. Left guard Brian Waters is 34, and nearing the end of his career. The only guy on the roster that looks like a future replacement is Jon Asamoah. The Chiefs need at least one more projected starter for the future interior of their offensive line.

4. Cornerback: Starter Brandon Carr is a free agent, and is inconsistent. Rookie Javier Arenas is good in the slot, but does not project to be a starting cornerback. And you can never have enough good cornerbacks on your team.

You can argue that the team needs more talent at linebacker and at offensive tackle. I won’t argue that point. They do. I just don’t list either as one of their top four needs. Though that doesn’t mean that they won’t find value here with the 21st pick in the draft.

Now back to offensive tackle. When the Chiefs pick late in the first round, the available tackles will likely all be projected as right tackles, not left tackles. Why would you draft a right tackle in the first round when you clearly have other, more important needs? The Chiefs want to find the right fit for the person, the position in the draft, and team need.

So who will the Chiefs draft this year? I would love to see the Chiefs have the opportunity to draft center Mike Pouncey from Florida, who is widely regarded as the best interior offensive lineman available. Most mock drafts have him picked just a few spots in front of the Chiefs. He could slide to the Chiefs, but it’s not likely. The draft appears pretty deep along the defensive line, and I wouldn’t be shocked to see the Chiefs draft a pass rushing defensive end who they can move to the outside linebacker position opposite Tamba Hali. Late in the first round there’s usually good value for an inside linebacker, and I can imagine the Chiefs looking for some competition for Javon Belcher in the middle. And there are a couple of cornerbacks who are projected to go late in the first round. Corners often seem to go a little higher than they’re ranked, so keep on eye on players such as Aaron Williams and Brandon Harris. The general consensus is that their won’t be a wide receiver on the board worthy of picking when the Chiefs pick. So unless the Chiefs trade down, they’re not likely to grab a receiver with their first pick.

Prediction: If Pouncey is on the board, he’s our man. But that seems unlikely, and he’s the only interior offensive lineman worth taking with this pick. The Chiefs decide they don’t find enough value among the available wide receivers, nose tackles and outside linebackers. They try to trade down but can’t. Wanting a bigger cornerback to partner with Brandon Flowers, the Chiefs pick Aaron Williams from Texas. He’s got good size, and is good against the run and the pass. Does anybody know if he’s a team captain?

In my last post I pulled data from our history to illustrate how even very high tax rates on the rich do not lead to larger tax revenues compared to GDP. We’re tried it and it doesn’t work.

Another argument I’ve heard from the far left is that our country is not broke. We have plenty of money. It’s just that all of the money is being hoarded by the few at the expense of the many. I am open to the discussion that a large portion of our wealth is held by just a few people. And we badly need tax reform in this country. No, not just reform. We need a tax overhaul. But that discussion will wait for another day. Today we need to discuss this myth that if only we could take all this money from the rich we could afford our current level of spending. We could afford health care, Social Security, Medicare, Medicaid and much more. If you believe economists like Paul Krugman, we could afford to exponentially expand the government to take care of even more people if only the rich didn’t have all of our money.

You must watch this video from conservative Bill Whittle:

Now I haven’t fact checked every piece of information in here, but it’s certainly inline with the data I know about our wealth, our resources, the size of our federal government, and tax collections. I did some googling to see if I could find articles about the inaccuracy of this information. I didn’t find any.

Matter of fact, here’s an article from Walter E. Williams, a professor of economics from George Mason University discussing the facts in this video.

On a personal note, I do have one issue with this video. I’m not big into political correctness, but why is it OK to bash fat people? We can’t make fun of Jews or Muslims. We can’t make derogatory comments about blacks or Hispanics. As Kobe found out, we can’t use gay slurs in regards to officials. So how come it’s OK in our country to bash fat people? Whittle could have made this same argument without the personal comments about Michael Moore.

And thanks to Bruce for sending me a link to this video.