WEDNESDAY, January 21, 2004

THE STATE OF THE UNION

First of all ... an abbreviated Nealz Nuze today.  We got back to the hotel room after the State of the Union Message last night at around midnight. A few hours sleep and we're on the way to the White House for today's show.  Needless to say, it should be interesting. 

My most vivid memory of last night's speech was the Democrats' clear hatred of the mention of anything relating to tax cuts.  It's clear that Democrats hate the idea of tax cuts for anyone but their core constituency with a blinding passion. There was applause from the Democratic side of the aisle when Bush pointed out that if the Congress didn't act to make his tax cuts permanent there would be a massive tax increase.  Amazing.  There seems to be no greater crime to a Democrat than to allow a successful person to keep one more dollar than necessary of the money they have earned from their hard work and good decision making.

After the speech I spent some time in the Capitol's Statuary Hall.  This is where the media conducts its feeding frenzy on politicians following the speech ... or are the politicians conducting a feeding frenzy on the media?  Hard to tell.  I stood next to some politicians as they shared their deepest thoughts with reporters on the President's remarks.  One thought kept going through my mind:  "Are these people really this ignorant?"

These Democrats would tell the reporters that Bush's talk of tax cuts and new spending programs (yes, there are some) was irresponsible in the face of our "massive" budget deficits.  In their public utterances Democrats lead you to believe that there are only two ways to reduce a budget deficit:

1.  Cut spending.  This is completely unacceptable to Democrats (and apparently to President Bush), which leaves us with ...

2.  Raise taxes.

Now ... to answer my own question: "Are these people really this ignorant?"  The answer is no.  They're not that ignorant ... but they think that you are.

We've talked about this before.  America operates and thrives in a free enterprise economy, yet our government-operated schools teach virtually nothing to our children about the economics of free enterprise.  So ... let me take up the slack.

Let's say you sell widgets.  You sell 1000 widgets at $100 each.  Each widget costs you to $90 to manufacture and market.  That leaves you with $10 profit for each widget.  That's a $10,000 profit at the end of the year.  You make ten grand.  But what if your personal expenses are $12,000?  You're running a $2,000 budget deficit!   Now a Democrat will try to convince you that you have only two options here.  First, you can cut your manufacturing costs by $2.00 a widget.  Now you have a balanced budget.  Second, you can increase the costs of your widget by two bucks a shot.  Bingo!  Budget balanced!

There's a third option.  You can sell more widgets.  If you sell an extra 200 widgets without increasing your personal expenses you will have killed off your budget deficit.  If you sell 500 more widgets you're going to be running a budget surplus!  Wow!   From a budget deficit to a budget surplus .. and you didn't have to raise prices or cut your manufacturing and marketing costs.  In fact, if you sell an extra 500 widgets you can even cut the price of each widget by $1.00 and still have a surplus! 

Please, those of you who went to government schools .. .tell me that you get it.  You can cut your taxes (prices) but expand the economy (the number of widgets sold) and move from a budget deficit to a budget surplus!  Believe me, Democrats understand this ... but they think that you don't.  That's why they can sit there and play their absurd little "You can't cut taxes when you have a budget deficit" game.

Two more quick things:

Bush promises his next budget will only increase discretionary spending by four percent.  Why four percent?  Why not a decrease!  The first three years of the Bush presidency rank as all-time champions for government spending increases.  After three years of spending like this what's wrong with actually cutting discretionary spending?  At some point we're going to have to start reducing the size of the federal government .. or this Republic will die.  What better time than now?

Bush also came up with another plan for still more "refundable tax credits."  This one is for the cost of catastrophic health care insurance.  I hate that term.  A "refundable tax credit" is nothing but a welfare payment.  It's taking money away from the person who earned it and giving it to someone who did not.  I don't care what the money is for ... it's theft.  If we're going to expand government giveaway programs, at least have the political courage to call a welfare program a welfare program. 

Click here.  Just do it.  You won't regret it.  You need to remember ... you need to be reminded.  You must never forget.

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