Herman Cain: Questionable Character?

I already examined the key message of Herman Cain's campaign with the 9-9-9 plan, finding it to be unsustainable, unreasonable, and unfair. Now, the Pizzaman has come under fire for what seems to be his first blunder:

Cain, at a campaign event in Tennessee on Saturday, defended the idea of building a barbed-wire fence along the border, "electrified, with a sign on the other side that says it can kill you."

While he may claim to have been joking, what makes the incident worse is this follow up comment:

The Republican candidate then dismissed criticism that he's being "insensitive," saying "what's insensitive is when they come to the United States across our border and kill our citizens."

That just comes across as generalizing and ignorant. Hispanics are unhappy with his remarks:

"Whether or not he made his comments in jest, Mr. Cain's words show a lack of understanding of the immigration issues our country is facing and a staggering lack of sensitivity. Surely, Mr. Cain understands the duty that candidates have to offer responsible policy proposals," he said in a statement. "Leave the comic routines to the professional comedians."

I don't know how many Latino voters Cain has alienated, but this is a significant slip up. Whether you're Latino or not, you're going to have questions about Cain's character and ability to have diplomatic relationships with the Latin countries.

It isn't just the Hispanics who are unhappy with Cain. African Americans are not fans, to say the least:

Largely located on the lower rungs of the American socioeconomic ladder, most black Americans appreciate sources of opportunity and power that Cain despises: unions, governmental support for the needy, a robust, government-supported full-employment policy, the public provision of health care. His worry, remarkably, is that America is too egalitarian. His signature policy -- the 9-9-9 tax reform proposal -- would institute a regressive consumption tax nationally and starve Social Security and Medicare. It would redistribute income upward. No wonder blacks overwhelmingly repudiate him and his tea party allies.

And he thinks he can win a third of the black vote. Doesn't this reek of ignorance? You can't just bank on anti-Obama sentiment. His policies and plans are going to be detrimental to that community. As a result, Cain seems out of touch.

If you dig into his past, there are more potential road bumps:

“The problem is not the responsible drinker,” Cain wrote in one letter to the editor.” It is the alcohol-abuser who gets behind the wheel of a car. In fact, according to the National Highway Traffic Safety Administration, two-thirds of all alcohol-related fatalities are caused by drivers with a BAC of 0.15 or higher.”

I'm sure there are plenty of families who have lost loved ones that would repudiate that statement.

Herman Cain has done a lot to emerge as a contender, but there are still many things that keep him from being a legitimate candidate for President. I think the number one thing is his electability and his complete alienation of certain segments of the voting public. This is an election that the GOP could easily win, especially with this struggling President. However, you can't take chances in being represented by a controversial candidate. To win this election, you need someone that will appeal to those that are frustrated with Obama. Herman Cain is not that guy.

Healthcare Setback?

If you haven't heard, Obama's healthcare reform law has been appealed to the Supreme Court:

WASHINGTON, Sept 28 (Reuters) - The Obama administration on Wednesday asked the U.S. Supreme Court to back the centerpiece of Barack Obama's sweeping healthcare overhaul -- the requirement that all Americans have health insurance.

The appeal was largely expected as a high court ruling against the law could be a fatal blow to the president's signature domestic policy achievement and could have major implications for his re-election bid.

The case is important because healthcare reform has been on of the corner stones of Obama's presidency. Additionally, the ruling will come down only a few months before what should be a heated reelection campaign for the President. Obama supporters are confident:

“We believe that a prompt resolution of the constitutionality and severability of the individual mandate is in the best interest of individuals, employers, states, and the federal government. We are confident in the merits of our legal arguments, and we look forward to presenting them to the Supreme Court.”

What may be more concerning than the constitutionality of the law at this moment, is the rising costs of healthcare:

Even a slow economy can't stop healthcare costs from rising. A new report by the Kaiser Family Foundation and the Health Research & Educational Trust shows that the cost of employer-provided insurance rose 9% this year — even as workers and their families were cutting back on trips to the doctor's office — and has more than doubled over the last decade.

Costs are growing out of control since Obamacare was passed:

The report was based on interviews with more than 2,000 employers between January and May. Researchers found that premiums rose three times faster from 2010 to 2011 than they had the previous year, pushing the average cost of policies for single workers to $5,429 and for families to $15,073.

The Republicans are having a field day:

“As this survey shows, the president’s promise that his partisan health law would lower costs was just empty rhetoric,” Sen. Orrin Hatch (Utah), the top Republican on the tax-writing Senate Finance Committee, said in a statement. “The fact is employers aren’t hiring, in large part, because they have to spend more and more money on health insurance.”

And Paul Ryan is always lurking with a fiscally responsible plan:

“Giving patients and consumers control over healthcare resources would make all Americans less dependent on big business and big government for our health security; give us more control over the care we get; and force health care providers to compete for our business,” Ryan said.

Until there is a ruling on this, healthcare will continue to be a hotly contested issue. In addition, all the Republican presidential candidates have said that if they are elected, they will repeal the law. The shelf law for Obamacare might not be that long anyway.

On a more concerning note, at the moment, it appears that healthcare reform may not reduce the cost of healthcare, thus making the law expensive. This will make it anti-jobs because company growth will be restrained by these costs. Furthermore, with our national debt crisis, it is important that the legislation we pass has a positive effect on our economy. I'm not convinced that this is the right move for that.

Obama vs. Congressional Black Caucus

Barack Obama gave a speech to the Congressional Black Caucus on Saturday:

President Obama won accolades from supporters praising his speech to the Congressional Black Caucus Saturday night, but not everyone is convinced the president is invested in his recommitment to fighting Republicans and helping minority communities.

He has urged them to support him:

"I expect all of you to march with me and press on. Take off your bedroom slippers, put on your marching shoes. Shake it off. Stop complaining, stop grumbling, stop crying. We are going to press on. We've got work to do, CBC," he said.

Not everyone is happy with him:

"We have a president that yesterday says to the Congressional Black Caucus take off your slippers, implying that black people with 16.7 percent unemployment are staying home in their slippers. I doubt it. They are all looking for jobs and waiting for the president to come up with a plan," said Cheryln Harley LeBon, a member of the national advisory council of the Project 21 black leadership network and former senior counsel to the Senate Judiciary Committee.

And it's not exactly a great endorsement when the President of the CBC has this to say:

"If [former President] Bill Clinton had been in the White House and had failed to address this problem, we probably would be marching on the White House," Cleaver told “The Miami Herald” in comments published Sunday. "There is a less-volatile reaction in the CBC because nobody wants to do anything that would empower the people who hate the president."

They can't react like they normally would because the President is black. They are backing him only because of his race. As an organization, it makes sense to protect future black leaders who might want to run for office from the bias that would come from this, but it certainly doesn't them right now. Obama's presidency has not been kind of blacks across the United States. African Americans have one of the nation's highest unemployment rates. These are the people who helped get him elected, and he's taken them for granted.

Maxine Waters had this to say:

She is saying what needs to be said. There was great optimism when Obama was elected, but the black community has had to be very patient to get him to help them as he has tried to address national issues. They've suffered:

The CBC has been holding a series of town hall meetings and jobs fairs across the country, where Waters said people have been "circling the blocks to get a chance to talk to employers."

"They want to know that we recognize, and that the president recognizes the pain that is in the African American community," she said.

They continue to be patient, but how long can you be patient? While Obama needs to make a national appeal, he has to give blacks something in order for them to vote for him in the next election. I'm not saying that they won't vote for him next election. I'm saying that they might not vote at all.

Obama can't risk alienating this part of his base. Things are bad. He needs to get find a way to make things better, or else he's toast.

Stuttering Perry

When I first heard Rick Perry declare his candidacy, I was excited. It meant new blood in the race; someone different who could inject life into the GOP. The more I've seen of him, the more I am unimpressed with him as a person and as a leader.

I'm not the only one that think so:

While he established himself as the frontrunner, those days were numbered as he quickly has lost ground as a result of the last two debates. I can't really explain it because he has a good enough record where he really has a chance. Time and time again he seems unprepared in the debates. He's getting hammered on Social Security. He's getting hammered on crony capitalism. He's getting hammered on immigration. If he had been prepared, he would withstand the attacks, but he's just taking the hit. He's campaign has taken a hit.

He can't even attack an opponent right now:

The most telling moment Thursday evening was a botched attack on top rival Mitt Romney for Romney’s move during his political career toward more conservative stances in a number of issues, an attack that obviously had been readied in advance.

But Perry blew the delivery, offering instead a muddled stew of lines about Romney’s positions on abortion and healthcare, leaving the audience at the Fox News/Google debate in Orlando, Fla., and the audience at home unsure where Romney stood now or Romney stood then. (Of course, Romney’s critics would maintain that has always been the case.) It allowed Romney to close his portion of the debate decisively, while making a case that Perry didn’t seem to have a grasp of the issues.

The lack of preparation has reflected poorly on him. It would be easy to compare him George W. Bush, but that might be unfair to Bush at this point. Perry is just weak:

Perry arguably let Santorum push him around on border issues, as well, where Perry’s expertise should be unchallenged. Instead, Santorum hammered Perry on providing college tuition aid to the children of illegal immigrants and mocked him on border security. In another answer, Perry misspoke, saying Medicaid when he meant Medicare.

May be debating is just not his thing. However, as a President, you need to be multidimensional. There's also the fact that Perry has repeatedly stated that he wants to have a conversation on the issues, yet in the debates, he has repeatedly shied away from such discussion.

Don't even get me started on that smile.

But that has more with the "look," which when all is said and done isn't important if a man (or woman) is capable. However, if a man is capable, he most certainly look Presidential, right? It's the stupidest thing to judge a potential President on looks, but people do do it. But is this a Presidential look?

The aura of that first speech is lost. This is no secret:

When former senator Rick Santorum started to push Perry on his illegal immigration record, Perry made the mistake of asking Santorum whether he had been to the border. Of course, the former two-term senator has. Lots of members of Congress have. (And you don’t ask questions like that unless you’ve got a pretty good idea about the answer.)

That was symptomatic of Perry’s problems Thursday night. While he tried to recover from the attacks on himself by leveling his own attacks on the other candidates — mostly Mitt Romney, of course — he showed himself to be pretty inept at the art of the attack.

Whether or not debate is an important part of being president, it will be an important part of the election. If he does get past the attacks from Romney, Bachmann, Santorum, and the rest of the GOP Presidential hopefuls, he will have to go toe-to-toe with Obama. Now, that might be easier considering Obama has struggled on issues which Perry has succeeded. However, Obama has already once been elected President. He can do it again.

Perry needs to step up his game, or step down from his candidacy.

Attacking Obama

Rick Perry released his first ad:

Ripping Obama and attacking the state of the nation. The visuals are moving. I would have gone for a more subtle jab:

I would have done a take of the iconic Shepard Fairey print of Obama, except, of course, with the zero for his zero job growth in August.

Under the Microscope: Job Creation

Since I called out Obama for not knowing how to create jobs, I guess I should tackle this issue.

My main beef with Obama is that he's using fiscal stimulus to try and create jobs. The way he's spending just isn't working. The economy continues to suffer even as he's spending billions of dollars "creating jobs:"

What’s clear, however, is that the Obama Administration badly needs a re-start after a(nother) disastrous August that saw the president’s numbers drop to record lows and the country descend deeper into economic pessimism.

Assuming that the jobs report shows in the neighborhood of 60,000 jobs created, it would provide fodder to Obama’s Republican critics who have long argued that not only are his policies not working but that the administration has little idea what else to do to make things better.

Despite this, it seems that President Obama wants to do more of the same:

President Barack Obama signaled Monday he'll propose a major infrastructure program and an extension of a payroll tax break in the jobs speech he planned to deliver Thursday before a joint session of Congress.

While the state of this country's infrastructure is a topic for another day, at what point will Obama realize that "creating" construction jobs is creating work not jobs. Once these projects are completed, there's nothing left to do unless you spend more money on improving infrastructure. It's just a spending spiral that he's creating. You can't do that.

The GOP has not made job growth a priority:

But issuing a call for jobs isn't as simple as it may seem. While the new jobs numbers present the GOP with an obvious issue with which to hammer the president, Republicans in Congress and out on the campaign trail have spent much of the year focused on a different economic area: fiscal austerity and proposals to pare the big federal budget deficit.

However, it seems that it will become a more contested issue. Mitt Romney outlined his plan today:

Standing in front of a large banner that read “Day One, Job One,” Mr. Romney detailed the 10 actions he would take the first day of his presidency. Five of them are executive orders, and the other five are pieces of legislation that he would send to Congress and request action on within 30 days.

“The right course for America is to believe in growth,” Mr. Romney, a former Massachusetts governor, said at McCandless International Trucks. “Growing our economy is the way to get people to work and to balance our national budget.”

The way I see it, in terms of the difference to approaches, Romney is putting the money back into the households and to the businesses, while Obama is using that money to spend on creating jobs. Clearly it's more efficient Romney's way. I'm not convinced that how great an effect it will have.

Jon Huntsman had an op-ed in the Wall Street Journal this morning:

Our entrepreneurs are harmed as much by overregulation as by overtaxation.

I believe that this is more the way to go.

Henry R Nothhaft had this to say yesterday:

We know, for starters, that 100% of net job growth in the U.S. comes from entrepreneurial start-ups, as a Kauffman Foundation report documented in 2010. If you took start-ups out of the picture and looked only at large or incumbent businesses, job growth over the last 35 years would actually be negative. In the words of Kauffman's Tim Kane, "When it comes to U.S. job growth, start-up companies aren't everything. They're the only thing."

While big companies may have to hire or fire people from time to time, they're, for the most part, mature companies. They're not going to continue to grow. The new technologies that are born and the new jobs are spurred by small businesses:

As I noted in an article last year with retired chief judge Paul Michel of the U.S. Court of Appeals for the Federal Circuit, which handles patent appeals, simply clearing the patent backlog could create up to 2.25 million jobs by 2014. And it wouldn't cost the taxpayer a dime, since the patent office is the only self-supporting agency of the federal government.

The problem with the current government is that they're not spending money right. I don't trust a government that is going to take tax payer money and misappropriate it in misguided band-aid programs.

While I'm not satisfied with the Republicans' plans thus far, I feel their plans will better alleviate the troubled economy because it will allow households and firms to choose where to spend that money. Deregulation has been mentioned by several candidates, but there hasn't been a specific plan laid out. Hopefully, as the election trail heats up, the candidates will be pushed to come up with specific ways to fix the economy and to create jobs.

Obama: The Failed Solar Promise

One of the cornerstone's of Obama's campaign was to invest in clean technology jobs. One of the companies that the government extended a loan to has filed for bankruptcy:

Despite receiving a $535 million federal loan and about $1 billion in venture capital, high-profile solar-panel maker Solyndra Inc. plans to file for bankruptcy protection, undermined by a weak global economy and competition from China.

Solyndra's failure has brought up bigger issues, like what justified the federal loan to begin with:

Lots of venture capital companies bought into the hype, investing in green technology to piggyback their own capital on federal favoritism. Solyndra's relationship with the White House came under special scrutiny because of Solyndra backer and Tulsa billionaire George Kaiser's history as an Obama fundraiser. In a letter to Energy Secretary Steven Chu in February, the House Energy and Commerce Committee raised concerns about the loan, noting that the company had suffered "financial setbacks," and asking for information about "whether Solyndra was the right candidate" for the loan guarantee.

Zero Hedge called this the day before:

These points all lead me to wonder about a big company in this space, Solyndra. This is a private company. I don’t have any financials to look at as a result. Neither do you. But you should, this company is heavily indebted to Uncle Sam.

So what in God's name are they doing?

I don't want to get too much into chrony capitalism, using public funds to feed special interests or to benefit campaign financiers. There are better solar companies that are thriving. Why did Obama put it into that black box?

Clearly, there's bigger problems:

Arlington officials boast the project will save $14,000 in annual electricity costs, but the solar panels have a life span of no more than 10 to 15 years. So the feds spent $300,000 to shave at most $150,000 off the net present value of Arlington's electric bills. Some 3,000 counties across the country received federal funds for the same kind of negative-return energy conservation "investments." This is the kind of "clean energy" program the administration wants to expand.

He has no idea what he's doing. It makes no economic sense to put money into a technology that doesn't pay off. This is throwing money away. The construction jobs are temporary. This is wasted money. Without even getting into where the money is going, a rich county, it doesn't make sense to put solar panels on a roof when it doesn't make economical sense. That's not investing in clean technology. That's wasting money.

Investing in clean technology would mean growing the technology so that there are jobs to help advance the technology within the industry. Obama has been so out of touch with what really works and that's the problem. He keeps talking about stimulus and improving infrastructure, but all he's doing is creating temporary low-skill jobs. On top of that, when he's investing into new technologies, he's putting money into failing companies like Solyndra.

I think it's safe to say that Obama has not delivered on his promise to create clean technology jobs, but to go even further, I'm not sure he even knows what creating jobs is. The struggling economy and his failed policies only reinforce this belief.

Tackling Taxes

With the pending debt crisis, the issue of taxes has become a much discussed issue. The biggest backlash in the debate seems to have been spurred by Warren Buffet, who says the ultra-rich should be paying more. A New York Post op-ed says that this is misguided:

Left unsaid is that much of that is taxed at 35 percent (via the corporate income tax) before he even gets his hands on it. So in effect, he’s paying taxes twice (that is, when his companies actually pay, anyway).

Counting both taxes, his effective rate would really be well north of 40 percent for a big chunk of his income.

In addition, Obama has propagated rhetoric against Corporate Jet Owners:
This, according to Republicans, has spurred a class warfare about who pays what taxes. The Daily Show pretty much explains it best:

The Daily Show - World of Class Warfare - The Poor's Free Ride Is Over
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

This dialogue of shifting the burden of taxes from the rich to the poor has been a common thread from the Republican candidates. Fact of the matter is that the people who aren't paying taxes are amongst the poorest in our country. They live from pay check to pay check and can't afford to pay taxes without threatening their already low standard of living. Quite simply, it's a type of tactical rhetoric to enrage the contingency they're appealing to who tend to hate taxes and hate paying them. To these people, everyone should share the burden if there is a burden at all. Here's what Michelle Bachmann had to say:

"Part of the problem is today, only 53 percent pay any federal income tax at all; 47 percent pay nothing," said Bachmann. "We need to broaden the base so that everybody pays something, even if it's a dollar. Everyone should pay something, because we all benefit."

It's not just her saying this. Jon Huntsman is also in the we need more people paying taxes boat (8:11). I agree with Huntsman as saying we need people to have a stake in our spending. If you aren't paying taxes, what do you care how the government is spending those funds?

The problem though is that people are looking at it from a budgetary stand point. Taxing the poor shouldn't be seen as the way to increase tax revenues. It should be used more to make sure people have a shake in the government's spending. It should be to keep the government accountable.

But as I said before, these are the poorest of the poor:

Consider: Of those households that do not owe income taxes, about a third earn $10,000 a year and a slightly smaller share earn between $10,000 and $20,000. More than three-fourths earn $30,000 or less.

In addition, the notion that these households pay no taxes is flat-out wrong. They pay — leaving aside state and local sales, income and property taxes — federal gasoline and other excise taxes and, most significantly, payroll taxes on every dollar they earn. These taxes are regressive. Everyone pays the same share, regardless of income, so they hit the poor hardest, and they counterbalance the progressivity of the income tax code.

Let's not worry about taxes from a who pays stand point then. Let's worry about taxes from the stand point of the budget. Raising tax revenues is necessary in times where the budget is a concern. Deciding the budget isn't as simple as cutting spending and increasing taxes though. It is important to also consider the effect that these changes will have on the economy.

The economy is struggling.

We need policies that encourage economic growth. Let's start with Obama's plan to raise taxes and see if it would positively affect the economy. We'll look at the UK for evidence. The UK raised the top tax bracket to 50% for the wealthiest:

The new rate will affect the 300,000 highest earners in the UK, out of the 29 million people who pay income tax.
It will be levied on taxable incomes greater than £150,000 a year and aims to raise an extra £2.4bn by next year.

This is, in effect, similar to what Obama wants to do in taxing those making $250,000 or more. So did it work?

The most likely explanation is that higher income tax receipts partially represent the new 50p rate kicking in and rasing revenue. How else to explain the figures? Receipts are up way in advance of earnings or employment growth.

So it has worked in raising revenues. The big question then becomes has it helped the economy? It seems not:

"We always said that recovering from the deepest recession that we've had for many decades, with the largest budget deficit that we've seen for a very long time was going to be choppy and I think probably the waters have been choppier than anyone expected. We've seen big headwinds in the global economy, rising oil prices, rising commodity prices. All those things have an impact on the British economy."

Those same variables would seemingly have the same effect on the US economy. Raising revenues won't be worth it if you have events like this going on:

A solution that also addresses the economy would be the best case scenario. So what other options are there? Michelle Bachmann has proposed that we cut taxes:

Representative Michele Bachmann promised Saturday that as president she would turn things around within one economic quarter, in part by cutting corporate taxes and eliminating capital gains and inheritance taxes. Painting President Obama as doggedly antibusiness, Mrs. Bachmann asked, “Why in the world wouldn’t we do what we know works to create jobs in this country?”

Why would we want to cut taxes when we need to raise revenues? This doesn't seem intuitive does it? Well, a lot of companies have a lot of cash on their balance sheets, but they aren't using it:

Tax policy is driving much of this trend. For multinational corporations, cash earned abroad cannot easily be remitted to the United States. If it is paid back to the United States, it is subject to a dividend tax that can rise to as much as 35 percent. Companies are loath to pay this tax because while they can offset it with taxes paid abroad, the companies still end up paying a relatively high tax rate.

However, lower taxes won't solve the problem completely:

Five companies alone — Pfizer, Merck, Hewlett-Packard, Johnson & Johnson and I.B.M. — repatriated $88 billion, But the repatriation did not result in increased investment. Instead, companies largely repatriated the money and used their current United States holdings to pay out dividends or engage in share repurchases. This was contrary to what Congress had intended.

While the cash was not used for investment, this does not mean it did not have an overall positive effect on the American economy: shareholders went on to spend this cash. The study’s authors acknowledged this, stating that “presumably these shareholders either reinvested these funds or used them for consumption, thereby having indirect effects on firm investment, employment or spending.”

How can this be fixed?

A permanent tax reduction would not only cut taxes but actually raise revenue, allowing for Republicans to vote for it. And it should be a holiday without restrictions — trying to force companies to invest the money rather than pay dividends is a useless exercise that will create only more bureaucracy.

Even if the money were largely spent on buybacks and dividends and a large portion were kept abroad, it would still be reasonable to expect $300 billion to $600 billion to be repatriated. This money would flow into the economy, making the dividend tax cut a stimulus package that Democrats could support.

Lowering taxes isn't the complete solution, but there are ways to combat corporate loopholes and encourage the return of that money into the United States. Tax-friendly areas have been known to do well, as was chronicled in the WSJ documenting the success of the Swiss region Zug:

Developed nations from Japan to America are desperate for growth, but this tiny lake-filled Swiss canton is wrestling with a different problem: too much of it.

Zug's history of rock-bottom tax rates, for individuals and corporations alike, has brought it an A-list of multinational businesses. Luxury shops abound, government coffers are flush, and there are so many jobs that employers sometimes have a hard time finding people to fill them.

Zug provides an example where lower taxes has helped grow the economy and grow tax revenues. This is because as the economy has grown, there's been more wealth to kick back to the government. The government are getting lower percentages of incomes, but those incomes are growing because of the burgeoning economy.

We've actually seen this work in the United States before, when Reagan cut outrageous taxes leftover from the Carter administration. While this didn't rejuvenate the economy immediately, it helped the economy regain momentum through the 1990s, while the Clinton administration operated at a budget surplus.

Government officials need to take a hard look at this. The debt crisis is clearly an important issue. The solution, however, must make long-term sense. To me, this means that the government should encourage economic growth to raise in the future tax revenues. The shortfall from lowering taxes can be done by cutting spending.

The answer to our problems is addition by subtraction. The economy needs a boost. This is the way to do it.

What is Entitlement Reform?

On my Twitter, I tweeted that if there's anything you're unsure about or you want to learn about, you should let me know. A lot of my own posts start that way. I look at things that are in the news that I want to learn more about, so I research them. I try to apply it to what's going in the world, why it's important etc.

Today, let's talk about entitlement reform.

So what is it? Yahoo! Answers has this:

Entitlements are like government handouts..Welfare, Medicare, and social security are all considered entitlements. The entitlements make up about 56% of the federal budget, so most conservatives believe that they should be reformed.. like raising the age to claim Social security.

So as one would suspect, they have to do with spending initiatives.

With the deficit crisis, entitlement reform has been in the news a lot lately. The cost of a lot of these programs are spiraling out of control and making it hard to control the deficit. Some legislators believe that these costs must be controlled in order to give our country a chance at financial survival.

Let's start at the top with Obama:

"There have been times when our side, when Democrats aren’t always as flexible as we need to be," Obama said. "Sometimes I do get frustrated when I hear folks say, 'You can't make any changes to any government programs.' Well, that can't be right."

This isn't a soft issue. This is something that is going to challenge many people's political ideologies and go against what they stand for. Obama has been a champion of liberal doctrine, but he understands that this is a growing issue:

"We will not be able to sustain that program no matter how much taxes go up," he said in late July. "I mean, it's not an option for us to just sit by and do nothing."

You cannot keep raising taxes to make these things happen. You're taking away the competitiveness of the country if you're taking everything from people and giving it back in the form of entitlements.

These entitlements are a cost driver and are one of the main reasons that the US recently had it's credit downgraded:

"The key thing is, yes, entitlement reform is important because entitlements are the biggest component of spending, and the part of spending where the cost pressures are greatest," Beers said.

So the people responsible for downgrading our debt are cognizant of the fact that entitlements are going to continue to be an issue going forward.

So what's the significance of this?

Well, the debt crisis has created uncertainty and volatility in the markets. There are worries about a potential default in the future. Companies aren't hiring. Much of the problems associated with economic worry are tied to growing debt problems, so tackling and controlling entitlements are going to be one of the top issues of the next election. While the economy will most likely be the top issue, one of the paths to bettering the economy should come through reducing the deficit and reducing uncertainty.

Paul Ryan has been one of the most outspoken politicians on entitlement reform:

Ryan added that he's willing to discuss tax reforms in a way that would promote economic growth and job creation, including addressing "special interest-driven loopholes," but qualified any reforms by adding, "if you're just raising revenues to chase ever high spending, that's not good policy."

Ryan said ultimately the U.S. has to fix its entitlement system.

"The president just created two brand new health care entitlements, expanded Medicaid, a third, and then put this new rationing board in charge of Medicare," Ryan told "Fox News Sunday." "So they're unwilling to open up and restructure these entitlements, which according to S&P are the primary drivers of this debt."

Wall Street agrees:

Bill Miller of Legg Mason Capital Management, who appeared with Ryan, said the markets are looking to see a "reduction in uncertainty," which means both fundamental tax reform and changes to the entitlement structure.

"Discretionary spending doesn't matter at all in this thing except that it'll be a little bit of a drag on the economy. It's pro-growth policies and fundamental entitlement reform, especially on health care, that are the key things for to our long-term fiscal health and therefore the long-term confidence in the markets toward our country," Miller said.

The debt crisis is a top down concern for the markets and for the economy. If we address this debt crisis through entitlement reform, we can help ensure the fiscal safety of our country and work towards suring up our markets' confidence.

So while the election will focus on the economy, entitlement reform should come up. Ryan is one of the most outspoken politicians on entitlement reform and if he decides to run, I will surely profile him. Regardless, his Path to Prosperity will be a topic of discussion.

The question is whether the rest of the candidates take his cue and make it a primary talking point or they try to focus solely on the economy without tackling the debt issue, attacking each others' records and Obama's record. In the meantime, it will be interesting to see if Obama follows through on what he has already said. If he does make the move and extend his hand to implement entitlement reform, will that give him a leg up in the race? These questions will be answered in the weeks or months to come.

The Other Side

Quite recently, in the eye of this debt deal, President Obama has been lambasting oil companies and other corporations for avoiding taxes through loop holes:

He also goes after corporate jet owners. It's been going on like a broken record. I get why he wants them to be burdened with more taxes, considering they can probably afford it, but I don't know if it's "fair" or "equitable."

Nobody wants to pay taxes because they have no say into what the way that government is going to spend it. Government is inefficient both with layers of bureaucracy and wasteful programs such as Medicare, Welfare, and now ObamaCare. I'm not saying these programs aren't necessary, but rather that these programs aren't efficient.

On the other end of the spectrum, you have Republicans like Paul Ryan, who have consistently criticized the Democrats' irresponsible spending habits. Ryan was extremely pleased with the spending caps put on by the new debt deal:

But that did not stop him from writing a scathing op-ed in the WSJ regarding Obama's budget inadequacies:

Since then he has offered a lot of rhetoric but no real plan to avoid a spending-driven debt crisis. His speeches and press conferences are no substitutes for actual budgets with specific numbers and independently verified projections of future deficits and debt. Meanwhile, it has been over two years since the Democrat-controlled Senate passed any budget at all. This is a historic failure to fulfill one of the most basic responsibilities of governing.

The necessity of controlling federal spending is better illustrated by these graphs:

Needless to say, this problem isn't going to go away. In fact, it's only going to get worse unless we find a solution to this problem. ObamaCare was unnecessary bloated program that compounds the already horrible spending practices of our government.

When you have government handouts with lax rules, people are going to take them. Why wouldn't you want free money? If you can get it, why not? It's costing governments millions of dollars as a result.

To illustrate this problem, I'll use the Michigan Bridge Card program as an example. This program had very lax rules, so many people, in particular, students took advantage of this program. Although their parents were paying for their school and housing, they used the fact that they had zero income to get these cards and to get free groceries. As a result, the state had to make tighter regulations (From MLive):

"We're ready to extend a helping hand to any citizen who is truly in need — including college students who care for young children and are taking the right steps toward becoming self-sufficient," said Maura D. Corrigan, Michigan Department of Human Services director. "Those who don't meet federal guidelines won't be able to take advantage of what is meant to be a temporary safety net program."

It turns out that certain government programs have the same type of loopholes as the corporate tax loopholes that Obama has so vehemently argued to close. The whole system is creating a sort of reverse incentivization to work less and get more for the government. That's not a driver for growth, that's not a driver for productivity, that's not a driver for innovation. You have to wonder whether part of the reason the unemployment rate is so high is because the benefits of being on unemployment is so good. Now Obama wants to lengthen unemployment benefits again:

A top goal for Obama and congressional Democrats is to extend both unemployment insurance and a payroll tax break. These measures were enacted at the beginning of the year. Obama could not achieve those extensions in the budget deal with Congress.

I understand why we have unemployment insurance, but at what point are we going to cut this off? If we keep extending these benefits, why should anyone try to get employment? Where is the incentive to work?

Right now, we have more benefits offered to people than ever before, yet we sit at 9.2% unemployment. It's hard to say the economy is struggling when companies' earnings are generally beating estimates. Part of this might be from job cuts, but even with these stronger earnings, companies like Cisco and Merck are still cutting jobs.

Closing corporate loopholes are just going to cut into these companies' profits. The time honored solution to increasing costs is job cuts. This will only serve to exacerbate the problem. I'm not saying that these loop holes should not be closed, but closing them now might not be the best solution.

The first response for these companies will be to protect their profits and margins in their shareholders' best interests. You have a difference between what Obama thinks sounds reasonable and what will actually happen. We are already in risk of another economic recession. It is important to wait until the economy shows real signs of health before taking constrictive measures like increased taxes.

In the meantime, you should incentivize people to get back in the work force. The extension of unemployment allows people to take their time getting back into the field and pick and choose jobs. Jobs should not be something that people should be picky about right now. The government is shouldering a burden of costs that it needs to pass on to the private sector. As a result, they need to push people to get jobs and remove the uncertainty of future taxes.

In doing so, the government will alleviate the pressure of future costs on companies, while providing a sense of urgency at the bottom of the work force to be more aggressive in the labor markets.

Whereas the threat of taxes casts uncertainties over the overall economy, incentivizing the job market has the opposite effect. With more people employed and less people claiming benefits, you're automatically going to see a shift in revenues and costs. If you tighten up the loopholes or the ease with which people can get other government benefits in order to reduce unnecessary government handouts, you will see savings there too.

The best way to economic recovery and solving this debt crisis is not through taxes, but the other side. We are spending way too much on all of these programs. We need tighten up the restrictions of these programs and provide incentives for growth. The government isn't going to spend its way out of this recession, but rather, they are going to stunt a potential recovery with these backwards measures.

I would urge President Obama to take measures that actually work rather than to get into the weary debate on revenues versus spending cuts. His best path to reelection in 2012 is not by playing party lines, but rather by making a strong effort to right this country's economy and to make positive strides on the issue of debt.

How About Better Transportation Resources?

Obama wants to improve roads and infrastructure:

Obama will tout proposals to improve roads and infrastructure during a campaign trip to Ohio, but that message was largely eclipsed by a renewed political battle over tax cuts for wealthy Americans set to expire at the end of this year.

I personally think it's a waste because I've seen a road near my house that was dug up and redone several times over the past year. Why don't we just have better alternative forms of transportation. In this day and age, there should be no excuse for not having cities with modern transportation such as a subway. Plus commuter trains would help ease access to urban jobs and reduce automobile usage. I feel strongly that we need to increase these alternative transportation resources. It's so easy to get around in Europe. Why is it so hard here?

He also wants to continue the tax cuts for people making less than $200,000, but not for people making more:

"We strongly believe that a healthy, vibrant, economically viable middle class is key to economic recovery and we strongly support the extension of tax cuts to the middle class," an administration official told reporters ahead of Obama's trip.

"But it's also true that we don't have 700 billion additional dollars to borrow to pay for tax cuts that essentially will go to millionaires," he added.

"Saving that $700 billion and applying that to the deficit is a much better use of that money."

Meanwhile, people are still struggling to get jobs. There's no job growth. How are people supposed to pay these taxes without jobs? Additionally, how is the government going to cut spending if it has to continue supporting these people. This is just a disgraceful situation.

Republicans Blast Obama

I'm sensing a pattern.

Obama Blasts Republicans

Here's what the video says:

The President blasts Republicans in the Senate who are blocking unemployment insurance and small business tax breaks to create jobs, even as they push for permanent, massive tax cuts for the richest Americans.

Why not give tax cuts to everyone. Higher taxes, higher interest rates, higher deficit is not the way to go.

Thanks For The Update, Barry!

Solar Power

We need to invest in alternative sources of energy. We have seen the negative environmental consequences are primary source of energy, oil and coal can have, with the oil gushing in the Gulf as well as the various mining explosions over the last year. Perhaps solar energy can provide a safe alternative to these sources.

Under the Border Walk

Cameron And Obama Talk About BP

Probably good for relations between the two countries.

Obama: Israel's Plan Failing

BP: To Face Punishment

If they US finds that BP has committed crimes, the US must be harsh. They cannot be weak with this punishment because it has had devastating effects in the Gulf Coast. The oil has reached all the way to Mississippi. The Obama Administration cannot take this lightly because this has been a huge cost for the people of that region. It has been a huge blow to his administration because they have not acted as quick as they should in shutting it down. They should have been aggressive about that and now they need to be aggressive in pursuing charges.

Rain On Obama