Gas Prices have not risen much since 2008

Gas prices have doubled since Obama took office. 

Average gas price today is $3.79 a gallon

Average gas price on the day Obama took office was around $1.80 a gallon (this is at the height of the recession)

Average gas price July 2008 $4.12 a gallon (this is the high it hit under Bush before the recession)

Adjusted for inflation the highest gas prices got under Bush would be around $4.35 today. 

So, excluding the crazy circumstance that gas prices shot way down to below $2.00 a gallon just as Obama was taking office and then taking into account inflation, gas prices have not truly doubled under Obama although they have went up more than any of us would like. But there is also a delicate balance of supply and demand at work here and as prices of gas start to go up it is a sign that the economy is doing well. More people are using gas and therefore prices go up. Then when people start to try and conserve gas because they have less money the prices go down in a attempt to get people to buy more gas. 

Anyway, my argument is that gas prices have risen under Obama from an average somewhere above $3.00 a gallon the year before he took office to about $3.80 now. I do agree that if gas was down around $3.00 a gallon it would make things easier for our daily lives but I also think that gas prices going up is a sign that this economy has improved.

Here are the averages for gas prices in 2008 from a website called consumerreports.org

01/08 – 3.11

02/08- 3.04

03/08 – 3.16

04/08 – 3.39

05/08- 3.72

06/08 – 3.98

07/08 – 4.11

08/08 – 3.88

09/08 – 3.68

10/08 – 3.48

11/08 – 2.22

12/08 – 1.81

Added together and divided by 12 gives you an average of $3.30 a gallon the year before Obama took office.

If you removed the last two months of 2008 due to the extreme conditions of the recession you get an average of $3.55 a gallon in 2008 then I could only find a calculator to adjust for inflation to the year 2011 but when you adjust $3.55 to what it cost in 2011 you get $3.70.

So, effectively we were paying an average of somewhere above $3.70 a gallon for our gas most of the year 2008.

Spending Cuts, Raise Revenue, Economic Growth

About 40% of the US federal budget is currently borrowed. That’s crazy, right? We actually had a surplus under Bill Clinton. We didn’t borrow anything for the last four years of Bill Clinton’s administration. We need to get back to that. Well, there’s 3 ways to close that deficit.

1.       Spending Cuts

2.       Raise Revenue

3.       Economic Growth

SPENDING CUTS

Let’s first look at cutting spending. A lot of people feel like President Obama has exponentially increased federal spending when in fact under President Obama spending has risen at the lowest rate since the 1950s.

So far under Obama spending has risen by 1.4%. This is significantly lowers then any president since Dwight Eisenhower and in comparison to Bush’s 2^nd term of 8.1% is much lower. But this doesn’t happen in a vacuum. The Federal budget is not like a family budget. Some targeted spending leads to more economic growth and some just becomes wasteful and adds to our deficit.  In contrast to a family budget sometimes you have to spend money to make money. So, the spending cuts should not all be considered a zero sum game. In some cases when we make cuts to the federal budget we end up losing more economic growth then the cuts are worth. In turn we can actually make the budget deficit bigger by cutting spending to things that will create economic growth and tax revenues.

Of course Democrats as well as Republicans want a balanced budget but cuts alone will not do it. And if we cut investments in our society that actually have an economic benefit to our country then we actually make the deficit larger. We do need to make targeted cuts but we also need targeted deficit spending so we can continue to invest in our society help our economy grow.

RAISING REVENUES

This means raising taxes. Of course no one wants to pay higher taxes but paying taxes does give us many benefits. In a time of recession we don’t want to raise taxes on the poor and middle classes who are struggling just to pay their bills. These people spend a majority of their paychecks every time the get one and that money directly stimulates the economy very quickly where the richer you are the more likely that your money will move much slower though the economy in effect not creating jobs fast enough. In a recession richer people are more hesitant to invest or spend so just as a practical issue it does not help to give them tax breaks.

As I’ve said before WE BORROW 40% OF OUR FEDERAL BUDGET. It should seem obvious that along with spending cuts we need to raise some taxes. All we are talking about is raising taxes back to 39% from 35% on the top wage earners. This will help put us on a path to close the gap and balance our budget. The top wage earners in our country have done much better than the rest of us over the past decade or two do in part to a tax code that has given them too many breaks. It is not unreasonable to raise their rate to 39% when historically the rate has been well over 50% for the past 100 years and hit a high of 92% under Republican president Dwight Eisenhower. Those numbers seem unfair and the Democrats are not proposing anything near that.  Raising the top tax bracket to 39% seems fair as well as something that we need to do to start to address our budget deficit.

The other thing we need to address are the loop holes and capital gains tax rates that many of the richest Americans and biggest corporations can use to avoid paying their fair share of taxes. Last year the largest corporations in America averaged paying 9% taxes to the government when the tax rates for corporations vary from 15% to 35%. I assume they pay the 9% tax rate in a legal way though using corporate loop holes but this is not fair and not beneficial to our country. Then when you look at a capital gains tax that is set of a flat rate of 15% no matter how much money you are making I think that number needs to be changed for the top earners.  I do believe that 15% is a good number to encourage investments but when someone is making millions of dollars on capital gains and with loop holes is able to pay less than the average hard working American, I believe that to be unfair. We should have a progressive tax rate on capital gains so that once you are making a large amount of money from investments then you should pay taxes equivalent to what you would pay if you had earned that money working hard for a living.

ECONOMIC GROWTH

The last 9 or 10 months of the Bush administration and the first 9 or 10 months of the Obama administration we were hemorrhaging jobs. We were losing between 300,000 and 800,000 every month. At that time it was almost universally agreed upon by both the Democrats and the Republicans that in order to stop the job losses and to encourage economic growth we needed a big stimulus and also needed to bail out some of our major industries. This is something no one wanted to do but we saw that it was needed and came together to prevent a depression. Now that the stimulus and bail outs have worked to save us from a depression we have cut spending so much that growth has flatland. Of course unemployment has been going down slowly and since the beginning of 2010 we have added private sector jobs to the economy every month but it’s been a slow recovery. But we were in a deep hole and we are coming out.

Obama seems to be a very compromising president and has not raised taxes or increased spending when these things seem to be needed if we what to grow our way out of this economic turndown. We can all see schools with less teachers, cities with less policemen, and a general cut back on all of the services that our government provides us. When we cut those jobs then it creates a multiplier effect where more people are no longer working in the public sector and are now competing for jobs in the private sector. This creates higher unemployment and is a downward spiral of less and less economic activity.

Now there is also a multiplier effect going the other way when we invest in our society. Obama did use some of the stimulus money to try and save public sector jobs which allows for more people to be put to work and those people spend money which in turn creates economic activity creating jobs in the public sector. Although some of this has been done I believe that we have not seen fast enough growth because stimulus spending has been slowed down to a trickle.

We need to spend more money on bridges and roads, research, education, and all kinds of government projects in order to get the economy moving in the short term and in the long term. Some of these projects are more productive than others but when something like a “bridge to nowhere” seems to be an obvious mistake, that doesn’t mean we should cut back on building and repairing all bridges. We just need to decide which projects will give us the most bang for our buck and invest as wisely as we can. Public works programs can create economic activity that actually creates revenue for our country that ends up being larger than the amount the projects cost. We need to have a debate on what programs are investments that create growth and what projects cost more money than what they are worth. But we need to invest in our society if we want to come out of this economic downturn quicker.

So, in closing. Yea, let’s make some targeted cuts. Let’s raise some revenues on people who can afford it so we can start to close our budget deficit. And let’s invest in our own country to promote growth which also raises revenues so we can be a more prosperous country.

WWRD

Everything the president does is political. He can’t have dinner, go to church, go for a run, or anything else without thinking of how it affects his political career or his ability of passing and enforcing legislation that he believes to be the right direction for the country. Bush didn’t just go to his ranch in Texas and chainsaw some wood without having a meeting about how the media will cover that event and President Obama also understands that everything he does will be spun in the media for political gain or for political loss. 

Anyway, I don’t mind that. It’s ok for politicians put on a show for the public. I like a guy that can chainsaw some wood or picks brackets for March Madness and those things are fine for a president to do but they don’t matter that much and I wish the media didn’t over emphasize these things.  I wish the media could focus more on the policies and accomplishments that a president has made. When a president does do some political theatrics to highlight a policy or accomplishment I wish the media would see that as a legit way to highlight what they have done and the direction they want the country to go. Those things are important because based on what we see these guys do we will decide to vote for them or not.  

A few days ago President Obama went to Afghanistan to sign an agreement with the Afghan government and give a speech to the troops still serving there. This just happened to be on the same day as the anniversary of the death of Osama Bin Laden. Well, we all know that’s not true. Of course, President Obama went to Afghanistan on that exact day to remind us of his administrations accomplishments of one year ago. But is that a wrong thing to do? Should he have gone on a different day or not have gone at all? I would say that reminding the American people that it was on his watch and it was his decision that ended up killing Osama Bin Laden is not a deceptive political tactic. It just reminds us of President Obama’s record. And I feel it is important for us to be reminded of his foreign policy record because I feel the democrats have been painted unjustly as week on foreign policy. 

Over the past year President Obama and the Democrats have shown a lot of restraint in shamelessly promoting their own foreign policy accomplishments but there does come a time when the American people should be reminded about what the record is.  

Lately there has been a lot of criticisms for the following ad about Obama’s decision on killing Osama Bin Laden and the contrast to what Romney might have does if he was in office. 

http://www.youtube.com/watch?v=AYykD6_OHO0

This ad seems to be fair in that it takes Romney’s actual words and uses them in context to ask the question “What would Romney have done.”  Romney seems to have made clear that the war on terrorism should not include spending excessive resources going after one man. And it seems clear to me that if the operation would have failed Romney would now be attacking Obama for wasting resources and lives going after one man. 

Romney’s response to the ad is that he would have made the same order that President Obama did and that “even Jimmy Carter would have given that order” (meaning killing Osama)

This does not seems to be in line with Romney’s previous statements and it seems to be fair to contrast what President Obama said he would do and then actually did do with what Romney said he would actually have done and then what he now says he would have done. Of course, in any situation there are nuances and room for explanations but my point is that the actions of President Obama with the handling of the killing of Osama Bin Laden and his actions one year later in reminding us what was done and what might have be done under a Romney administration were totally fair. 

It could be argued that President Obama has not handled all aspects of his administration and/or campaign fairly but in this circumstance I think it should be recognized that he has.  

A fair possible criticism of President Obama is that the killing of Osama Bin Laden was excessive and unnecessary and that the risks taken were not worth the potential disaster that could have happened. I’m not inclined to agree with this argument but at least it would be a respectable and consistent argument coming from the right. The argument could be that the potential loss of American lives going after one man who at that point was not functionally the leader of Al-Queda as well as the international law that was broken going into sovereign country that we are not at war with has a much bigger down side then an upside.  Weather this mission was a success or a failure the risks taken were not worth the potential disaster. 

I don’t agree with those statements but it would be a compelling argument to me. I would respect someone making that argument even though I would disagree with them. Possibly Ron Paul is making that argument but other than him I have only heard from conservative media that President Obama is using the death of Bin Laden for political gain and that inferring that Romney would not have made the same call is somehow unfair.   

President Obama, when asked to respond to excessive celebration in regard to the anniversary of the death of Bin Laden and also the inference that Romney might not have made the same decision that he did, gave an appropriate response that you can hear for yourself below. 

http://www.youtube.com/watch?v=lRF6--PpRRk

The Federal Budget

One thing I continually hear on the news is that Obama and the Democrats have no plan for a budget because they haven’t passed a budget though the Democratically controlled Senate for almost three years when the Republicans have passed Paul Ryan’s plan in the Republican controlled House and try to demand that the Senate should also pass this budget. This argument on the surface seems to make sense but in this political climate there’s no upside to the Dems passing a Budget in the Senate when they know it will be crushed in the House. The Dems don’t want to pass a radically left leaning budget just to have it crushed in the House and they don’t want to pass a compromised moderate budget without the help of the Republicans creating it because the Republicans seem to have a strategy of forcing the Democrats to start from a compromised moderate position and then still calling that compromised position “radically left.” Then the national debate on any issue becomes the far right verses the a moderate centrist position and the Republicans still seem to hold a hardline without compromising from that position and many of the conservative commentators as well as politicians themselves use harsh rhetoric against these moderate positions calling them “Communists” or “Socialists” no matter how moderate the positions are. It seems to just be a tact used against anything that Obama and the Dems say no matter if the positions are actually moderate or if they were even Republican positions five, ten, or fifteen years ago.

Paul Ryan and the Republicans have purposed a plan that dramatically cuts spending while at the same time cuts taxes. Getting into the specifics of how it cuts spending in places that we can’t afford to cut, and cuts taxes disproportionally to individuals and companies who don’t need the cuts is not even needed at this point. We can look at how the basic concept of this plan is nowhere near a compromise while most American want the congress to find a compromise to our budget problems.

Most people agree that some difficult cuts will need to be made because 40% of our federal spending is currently borrowed but it seems obvious we can’t just close that gap with all cuts to out spending. And it seems more obvious that tax cuts actually add to the deficit unless you subscribe to the idea that tax cuts will always create jobs fast enough to bring workers back into the workforce now paying income tax and stimulating economic activity that would actually bring in more tax revenue then the initial tax cuts take away. Then as we look over what difficult cuts may need to be made to our budget because of wasteful spending and because of programs that do not give society as much benefit as initially expected we also need to look at how some new investments in our economy will help our economy grow and we can actually get a return on our investments. The idea is that when we invest in infrastructure like roads and bridges, as well as teachers, police, firefighters, and so on and so on, there will be more people with jobs and therefore more money in the economy. These people will then spend more money creating even more jobs. This is called a multiplier effect and works best from the bottom up because people in the lower and middle classes spend a much larger percentage of their income therefore stimulating the economy much faster while many tax cuts for wealthier people do not flow though the economy very fast because that money will be more likely to sit in a bank or investment that does not stimulate the economy as fast as increasing the disposable incomes of lower and middle class people. The Government helps stimulate the economy by investing in jobs and more jobs will be created as a consequence of people having more money, then the government will actually get a return on their investment because more people will be paying taxes and less people will be using entitlement programs. This coupled with a low tax rate for the middle and lower classes help the economy grow at a rate where we can add new tax revenues just from people going back to work and paying their income taxes. The idea that the wealthiest people should pay a high income tax rate helps even the wealthy. Since they can afford to help make an investment in our society they will benefit from a better economy. All sectors of society can grow when we make the right investments in society like we saw in the 1990s.

(And on a side note while the wealthiest people in America do pay a higher percent on their income taxes they actually pay less on their payroll taxes and most of the other ways that taxes are collected are either a flat tax or a flat fee that are more beneficial to you the wealthier you are)

Now back to the point, Obama and the Democrats can’t pass a budget.

Well, there’s no upside to the Democrats passing a budget in the Senate when they know the House will just reject it. If they pass a budget that is very progressive and invests in our country while taxes the wealthiest people a little more Republicans will just call it “Communism” and say that Obama and the Democrats were never willing to work with the Republicans to reach a compromise on what’s best for our country. But if they purpose a very moderate plan that does very little to invest in our country and actually makes the difficult cuts to programs that Obama seems to be willing to do they will get torn apart from both side. The Liberals will be mad that the Democrat aren’t willing to fight for them and the Republicans will either call the moderate plan a “far left communist style budget” or they will say it’s a good start but we need to compromise from that point and they will move the new moderate budget much closer to the Ryan Budget before they would think about passing it therefore not truly compromising at all.

In this scenario there is no upside in passing a budget that can’t pass the House and won’t even start the legitimate process of compromise. Obama has seemed to want to sit down with the Republicans and find that compromised budget that everyone wants but they have taken the hardline route of no tax increases, deep spending cuts, and little to no investment in our country. I understand that some of those difficult decisions need to be made but the Republicans have walked out of budget meetings on multiple occasions over the issue of no tax increases when it seems obvious that we need at least some modest targeted tax increases as well as some spending cuts to close the large gap between what we take in and what we spend.

Santorum drops out but Romney hasn't won it yet

Today is April 11, 2012 and yesterday Rick Santorum dropped out of the Race for the Nomination of the Republican Party. Partially because this is the second time during this campaign that his daughter had been hospitalized but I believed that mostly he didn’t see a viable path to the nomination and wanted to avoid the possible embarrassment of losing his home state of Pennsylvania. Losing Pennsylvania would severely cripple his chances at pursuing political office in the future.

So, now the headlines read respectively:

CNN.com: It’s game on between Obama and Romney

FoxNews.com: Presidential race now down to 2 clear choices (Referring to Romney and Obama)

MSNBC.com: What we learned from the GOP race (This assumes that the race is over now)

The problem I have with all of these headlines is that they’re wrong. I’m not saying that at this point that it’s not fairly likely that Romney will win the Republican nomination but I’m just saying that the race is far from over. It’s really bothersome to hear how almost everyone in the media is talking like this things is over.

According to NBC’s numbers Romney has 573 delegates out of the 1144 needed to secure the nomination. Up to this point Romney has only won Republican primaries in States that lean Democratic in the General elections states that have large Mormon populations. The exceptions to this are that he won the swing states of Ohio and Florida as well as Virginia, although he won Virginia with both Santorum and Gingrich not being on the ballot. And most of the states that he won he was not able to break 50%. The exceptions were Massachusetts(one of his home states), Virginia (where only Ron Paul was running against him), Nevada, and Idaho. It seems as though it is obvious that most of the Republican Party does not want Romney to be their nominee especially people from traditionally Republican states.

The next primary day is April 24^th where five traditionally democratic states will decide who they want to be their nominee. Connecticut, Delaware, New York, Pennsylvania, and Rhode Island will all be holding primaries and if things go to plan Romney will have a good day. I’m sure Romney will be able to win all of these states with his only two competitors being Newt Gingrich and Ron Paul but what if he still can’t break 50% in these states. What if he can only get around 45% of the votes and Gingrich and Paul split the other 55% of the vote. That would not send a message of confidence to the Republican Party that Romney has this thing locked up. Then in May there will be a slew of more conservative states that will vote and I believe that it’s possible within todays Republican party that all of these states could vote for Gingrich over Romney as a protest to what many Republicans see as a unprincipled candidate that is not conservative like them.

So, in May we will have Indiana, North Carolina, West Virginia, Nebraska, Oregon, Arkansas, and Kentucky. If Romney loses all or most of these races the more favorable month of June may not save him. In June we will have the primaries of California, Montana, New Jersey, New Mexico, South Dakota, and Utah. At that point every vote may be a clear vote either for Romney or against just in protest even if the person voting doesn’t really like Gingrich or Paul. They may vote for one of the two of them just to prove the point that they don’t want Romney.

If Romney is able to win every traditionally Democratic state and lose every traditionally Republican state excluding Utah, which he will win, my calculations have him at 1099 delegates going into the convention. Now these numbers are not solid numbers. Each state has different ways to award these delegates and different laws on whether these delegates of truly bound to vote for their candidate and there will be a possible legal battle over the 50 delegates that were awarded to Romney from Florida since Republican rules do not allow Florida use a winner take all system in this year’s primary. So that number could get bigger or smaller. And if Romney pulls off some big wins in some more conservative states he’ll be able to secure the nomination before we get to the convention but the truth is we don’t know yet.

I do need to mention that there are people know as super delegates who could help Romney get over that hump. They can go to the convention and vote for whoever they want. In a scenario where Romney has won a few conservative states I’m sure they will all jump on his band wagon but if he starts to really show that he is a weak candidate they might vote for someone else just to stop him from being the nominee.

So now the question is if not Romney then who. Well, in my opinion at this point I do think it will be Romney but I’m just putting the idea out there that he doesn’t have it wrapped up yet. If at the convention no candidate gets the 1144 delegates that they need to get the nomination then they all just vote a second time and a third time and as many times as it takes until someone gets the 1144 delegates that are needed to win the nomination. If no compromise can be made on one of the three candidates left in the race then maybe some other Republican will come out of the blue to win the nomination. I really don’t know what will happen but I just want to people to understand that Romney is not the only choice left and anything can happen at the convention if he does not have the 1144 delegates that he needs going into the convention.