It’s Thursday, March 14th, 2013…but before we begin, in accordance with the recommendation of our liability insurance consultant, one William Meisen, Esq., we offer the following content advisory which shall be applicable to all editions of The Gouge, past, present and future:

And if you believe that, we know a President with a budget he’d like to sell you.

Now, here’s The Gouge!

First up, as the WSJ‘s Dan Henninger describes, should the public’s education in economics continue, sequestration may be the best thing to happen to Republicans since Ronald Reagan:

Escape From Spending Hell

The sequester proved that spending cuts aren’t a political third rail.

So it looks like we’ve all been sentenced to spending at least two more years in budget hell with Barack Obama. Under the rules of budget hell set the past four years by the prince of Pennsylvania Avenue, you’re not allowed to do anything real about federal spending. You can only fight over federal spending. Forever.

Paul Ryan on Tuesday tossed his third House GOP budget into this void. He hopes to reduce long-term spending to an average of 19.5% of GDP. The Beltway press called it an opening “salvo.” Yesterday his Senate counterpart, new Budget Committee Chair Patty Murray, introduced the Democrats’ budget, teeing up what the Washington Post called a “budget duel.” Welcome to the Obama street-fighting army, Sen. Murray.

All hope is not lost. Amid the sequester smackdown with the White House, Republicans did something off-script: They called the Obama bluff. They let the sequester’s spending cuts occur, and the apocalypse didn’t descend. The only thing that cracked was the president’s approval rating.

The sequester’s big discovery was that spending reduction isn’t a political third rail. But if the winds are starting to shift, Republicans are going to need all the help they can get to convince the American people that more cuts in spending will preserve and protect their economy.

Help is at hand—economist Alberto Alesina. Mr. Alesina, a professor at Harvard University, may be the last economist that Democrats want to deal with at the moment Americans are finding sympathy for spending cuts.

Ever since Ronald Reagan legitimized the efficacy of tax cuts, Democrats have sought to discredit his idea and restore the New Deal theory of a Keynesian multiplier, which dates to 1931. It holds that more public spending will revive a struggling economy. No president has believed more in the miracle of the multiplier than Barack Obama. (Or at least tried to sell it harder.) Across four years he has led the country on a kind of Keynesian death march, pushing federal spending to 25% of GDP and producing weak growth. We’re looking at four more years before the Keynesian mast unless the Republicans can offer an intellectually respectable alternative.

Mr. Alesina has identified the alternative. His, and others’, work the past decade with how struggling economies revive suggests that the Obama spend-more solution is the opposite of what the U.S. should be doing.

There is general agreement on at least two things about the current U.S. economy. It is emerging from the deepest recession since the Great Depression, and its debt level is unsustainable. (NOT according to The Obamao.) The path back to stronger growth, argues Mr. Alesina, is a combination of significant, permanent cuts in public spending and relatively small tax increases, if any. This view isn’t born of “right-wing” ideology. Mr. Alesina is an Italian, as are many of his co-authors. As Europeans, Mr. Alesina and his colleagues were forced to confront the biggest challenge facing Western economies the past 40 years. Europe rose from the ashes of war, but how would it rise from the ashes of debt, as benevolent postwar spending programs outstripped revenue?

Mr. Alesina and his colleagues wanted to answer the most basic question: What works? (Ergo, the polar opposite of Liberals, who seem to view increased taxes and spending as the preordained answer to everything.) They sought the answer (which they published in an August 2012 paper on “fiscal consolidations” for the National Bureau of Economic Research) by analyzing an International Monetary Fund history of all the fiscal plans that 17 OECD governments enacted between 1978 and 2009, including the U.S., Canada and Japan. Together, these countries tried everything to grow—raise spending, cut spending, raise taxes or cut them, in endless combinations. What helped?

“Adjustments based upon spending cuts,” the economists concluded, “are much less costly in terms of output losses than tax-based ones. Spending-based adjustments”—that is, cuts—”have been associated with mild and short-lived recessions, in many cases with no recession at all. Tax-based adjustments”—tax increases—”have been associated with prolonged and deep recessions.”

The debate over “failed austerity” is misleading because it emphasizes spending cuts but rarely mentions tax increases. “Austerity” plans, the Alesina studies suggest, fail to revive growth when they too heavily rely on raising taxes on income and capital—as across Europe and now in the U.S.

There is no magic ride back to prosperity. The Alesina team is describing the least-bad antidote for the long-term poison of destructive national debt. Fiscal plans based on large, permanent spending cuts are associated with renewed growth more than any alternative policy mix that has been tried. Indeed, spending cuts without big tax increases look to be the only thing that really works. The leading example the past 15 years is . . . Canada. And just an observation: The Dow proceeded to its high after the sequester happened. The cuts were the first credible step in rebuilding private-sector confidence.

The Patty Murray budget: A $975 billion spending cut and a $975 billion tax increase.

The Paul Ryan budget: $4.6 trillion of spending cuts and no new taxes beyond the fiscal-cliff increases.

Neither budget is anything the world has never seen. The available record suggests which of the two is the road to perdition.

In a related item, brought to us by Political Diary, Jason Riley tells us what, or more precisely, who is on…

Obama’s Menu

Republican lawmakers who have been dining with President Obama are skeptical of his outreach efforts. Perhaps they’re starting to figure out who’s on the menu.

“In conversations with House and Senate Republicans late Tuesday, a deep suspicion of his motives for reaching out and his commitment to working with them on fiscal and other issues hung like a dark cloud over their otherwise predictable comments expressing cautious optimism that Washington could be on the cusp of a new era of bipartisanship,” reports Roll Call.

Last week Mr. Obama dined with a dozen Republican senators, and the overtures continued this week with visits to Capital Hill. Having been repeatedly burned while trying to reach a “grand bargain” with the president, House Speaker John Boehner and Senate Minority Leader Mitch McConnell aren’t much interested in further discussions with the White House outside of the regular budget process. That’s left the president dealing with rank-and-file Republicans, who are apparently becoming just as suspicious as their caucus leaders.

The reality is that the substance of Mr. Obama’s demands hasn’t changed, only the fact that he’s now making them in person over fancy meals. The president continues to insist on higher taxes in return for entitlement spending reductions. The goal is to peel of[f] a few Republicans to help him pressure the GOP leadership. If it doesn’t work, Mr. Obama will say that he tried but that GOP obstructionists stood in the way. (Our sincere thanks to all 12 idiots who attended!) In fact, the only thing he’s trying to do with this faux-bipartisanship is put one over on voters. Republicans have already given him his tax rate hikes. They’re not the ones standing in the way of a deal.

Channeling Ben Franklin and Rod Serling, it’s our observation…

…we either all hang together, or get eaten…one at a time.

Then there’s this analysis of The Dear Misleader’s brief veneer of cordiality, courtesy of Jonathan Tobin and Commentary Magazine:

Obama Goes Back to the Blame Game

White House staffers who have been grumbling about President Obama’s outreach efforts with Republicans in the past two weeks probably cheered up a bit when they saw their boss’s interview with ABC’s George Stephanopoulos yesterday. While the president was still talking about the virtues of schmoozing with the GOP, the more he talked about the substance of the budget negotiations the less likely it seemed that there would ever be much to talk about.

Liberals were denouncing the budget proposal put forward by Rep. Paul Ryan yesterday as a sign that Republicans were unwilling to bow to the president’s dictates and abandon their principles. But in his interview, the president was characterizing the issues that would have to be resolved in a way that makes it appear he isn’t backing down either. More than that, his lack of urgency about dealing with the debt crisis and his unwillingness to contemplate any meaningful reform of entitlements as well as the way he spoke of GOP efforts in that direction gave the lie to the current media narrative about his desire for compromise. If the president can’t even conduct a charm offensive without demonizing the other side in this dispute, then the whispers from the White House staff that the entire exercise is a cynical sham appear to be entirely correct.

To give President Obama his due, his continued willingness to talk to Republicans is a positive development, albeit four years too late. (An assessment with which we most heartily disagree!) So, too, is his emphasis on the importance of economic growth. Prosperity would go a long way toward solving the budget problem, but any scheme put forward based on that assumption is a prayer not a plan. Nevertheless, every moment that he spends talking about building the economy rather than building the government must be counted as a plus for the cause of fiscal sanity.

However, the more the president talks about his ideas about a compromise with what he patronizingly referred to as the “common sense caucus” among Republicans, the more it sounds as if his definition of the word is very different from that of Webster. His statements made it clear that he is not particularly interested in dealing with the deficit. Even worse than that, his approach to one of the key planks of a prospective deal—entitlement reform—amounts to nothing more than lip service.

The president dismissed Ryan’s plan for balancing the budget in 10 years not just because it was predicated on repealing ObamaCare but because he doesn’t think there’s any real need to reach even that long-term goal. As he told Stephanopoulos:

We don’t have an immediate crisis in terms of debt. In fact, for the next ten years, it’s gonna be in a sustainable place.

But the problem goes deeper than the president’s apparent complacence. Although he said “entitlement reform” would be part of a deal, he slipped back into his usual campaign rhetoric when discussing how that would be accomplished:

No. We’re not gonna balance the budget in ten years because if you look at what Paul Ryan does to balance the budget, it means that you have to voucherize Medicare; you have to slash deeply– into programs like Medicaid; you’ve essentially got to– either tax– middle-class families a lot higher than you currently are; or you can’t lower rates the way he’s promised.

In other words, the president’s concept of reform is indistinguishable from his re-election vows to preserve the status quo that earned him the loyalty of his party’s base.

Moreover, discussion of balancing the budget elicits more of the president’s scorn as well as a standard piece of Obama demagoguery:

And, so– you know, my goal is not to chase– a balanced budget just for the sake of balance. My goal is how do we grow the economy, put people back to work, and if we do that we’re gonna be bringin’ in more revenue. If we’ve controlled spending and we’ve got a smart entitlement package, then potentially what you have is balance. But it’s not balance on the backs of, you know, the poor, the elderly, students who need student loans, families who’ve got disabled kids. (And, other than the unborn and those hoping to tour the White House, he’s all about the children!)

Lost from his analysis is any acknowledgement that what he is doing is paying for all the benefits he wishes to distribute by piling up debt that will be put upon the backs of the kids and students who will be the taxpayers paying down the deficit he has grown a decade from now and beyond that. The generational theft that he is supervising will hurt the middle class that he is constantly telling us he cares about far more than the wealthy whose taxes he wishes to raise.

Indeed, far from working toward establishing common ground with Republicans, the president seemed to be much more interested in preparing to lay the blame for any failure to make a deal on the GOP:

But ultimately, it may be that– the differences are just– too wide. It may be that ideologically, if their position is, “We can’t do any revenue,” or, “We can only do revenue if we gut Medicare or gut Social Security or gut Medicaid,” if that’s the position, then we’re probably not gonna be able to get a deal.

Ryan and other Republicans may have their differences with the president but, as he well knows, their goal is to reform entitlements in order to preserve them. Without taking steps to make these programs fiscally viable by increasing the age of eligibility and means testing, they will eventually drown the federal government in a sea of debt that it cannot tax its way out of. Rhetoric about gutting Social Security and Medicare is not reaching out. It is just the same old Obama class warfare that helped create the current deadlock.

The president’s falling poll numbers and the shrinking gap between those who blame Republicans and those who blame the White House for the impasse created the need for an Obama charm offensive. The crying of wolf about the sequester from the White House flopped not just because it wasn’t credible but because the public—even many of those who voted for the president—understood that the only way to deal with the debt and to fix the nation’s problems is to start shrinking government rather than expanding it. Though he may be preparing the ground for blaming the GOP for the failure to find a compromise (and, he hopes, win the 2014 midterm elections), he may find that this tired act is wearing out its welcome.

But he’s a one-trick pony…a fact America may finally be starting…

…to notice.

Next up, in another forward from Bill Meisen (the only guy we know with more spare time on his hands than Obama!), it’s today’s installment of our “THAT Was Then; THIS Is Now!” segment; first, THAT was then:

THIS is now!

U.S. to let spy agencies scour Americans’ finances

The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters. The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts (WHOSE “legal experts”?!?) say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.

Financial institutions that operate in the United States are required by law to file reports of “suspicious customer activity,” such as large money transfers or unusually structured bank accounts, to Treasury’s Financial Crimes Enforcement Network (FinCEN). The Federal Bureau of Investigation already has full access to the database. However, intelligence agencies, such as the Central Intelligence Agency and the National Security Agency, currently have to make case-by-case requests for information to FinCEN.

The Treasury plan would give spy agencies the ability to analyze more raw financial data than they have ever had before, helping them look for patterns that could reveal attack plots or criminal schemes. The planning document, dated March 4, shows that the proposal is still in its early stages of development, and it is not known when implementation might begin.

Meanwhile, the silence from Liberal Civiltarians and the MSM is positively deafening!  Okay, deafening and dumbing!

On the Lighter Side…

Then there’s Mr. Meisen’s favored explanation of the supposed lesbian-obesity problem:

Moving on, courtesy again of that rarest of birds, the Tufted Portland Conservative, yet another sordid story ripped from the pages of the Crime Blotter:

Prosecutor: Man killed because of the way he wore his hat

Wearing his hat cocked to the right got an innocent 19-year-old Zion man killed early Sunday, Lake County prosecutors said today. Jose M. Garcia, 18, of the 600 block of Deepwoods, Mundelein, and Jose Rebollar-Verara, 24, of the 500 block of N. Carol Lane, Round Lake Park, thought that the tilt of Gabriel Gonzales’ hat indicated that he was a member of a rival gang, said Lake County Assistant State’s Atty. Ken LaRue.

Gonzales was leaving the One Stop Food and Liquor store, at 1015 Fairfield Road at about 12:45 a.m., when Garcia and Rebollar-Verara followed him outside and began flashing gang signs, LaRue said. Gonzales turned to run away and Garcia shot at him ten times, hitting him once in the back, LaRue said. …There is no information that Gonzales was in a gang, LaRue said.

Garcia has 30 previous arrests as a juvenile and adult – including six convictions for domestic battery, LaRue said. Rebollar-Verara has eight previous arrests, including two weapons convictions, he said.

Yet Dimocrats would still seek to convince us guns are the problem…and more restrictive gun laws the solution.

Finally, in the “We’ve All At Least THOUGHT About It” segment…

Preschool teacher arrested after allegedly drugging toddlers with sleep aid

It all started with the Sominex…

C’mon…at one time or another, the thought at least occurred to you! 😉

Magoo