Category Archives: Economy

Can You Afford a Democrat Governor?

Can you afford Fred DuVal for four years as governor of Arizona?

Can your family budget endure the higher cost of living that comes with Democrats in office?

Are you ready to hand over more of your constitutional freedom to a Democrat?

Are you ready to experience less control over your own life?

Are you ready to pay higher taxes?

Are you willing to let a Democrat governor get between you and your doctor?

And endure even more regulation of and interference with your personal life?

And kiss your vacations good-bye?

Is our state government still not big enough yet?

Fred DuVal is a member of the Party of Control, which wants to exert greater and greater control over your personal life. The Party of Control could not care less about the Constitution and your freedom; it will do whatever it can get away with.

DuVal is running for governor this fall. Don’t let him win. Stay free.

Senator Ted Cruz Speech at CPAC

The Agenda: Cultural Marxism in America

Freedom vs. Control? Whom will You Elect in 2014?

The Arizona Conservative has officially begun tracking candidates for public office in the Grand Canyon State in advance of November‘s elections. Voters have two choices: candidates who will champion FREEDOM for the individual and those who will push policies that deny and reduce personal freedoms – the candidates of socialism and excessive government CONTROL of your life. Whom do you want in office? Those who respect your constitutional freedom, or those who would expand government and take away more and more of your freedom? Your vote will impact every facet of American society and culture.







Andy Thomas, Al Melvin,

Fred DuVal
Secretary of State Will Cardon Chris Campas
Attorney General Mark Brnovich Felicia Rotellini
State Treasurer Hugh Hallman
Supt. Of Public Instruction John Huppenthal Sharon Thomas, David Garcia
Mining Inspector Joe Hart Manuel Cruz
Congress-District 1 Adam Kwasman Ann Kirkpatrick
Congress-District 2 Martha McSally Ron Barber
Congress-District 3 Gabriela Saucedo Mercer Raul Grijalva
Congress-District 4 Paul Gosar Mikel Weisser
Congress-District 5 Matt Salmon
Congress-District 6 David Schweikert
Congress-District 7 Ed Pastor
Congress-District 8 Trent Franks Helmuth Hack
Congress-District 9 Vernon Parker, Wendy Rogers, Andrew Walter Kyrsten Sinema
 Arizona Senate-District 25  Ralph Heap  Bob Worsley

Watch for continued updates and additional choices in the weeks and months ahead.

U.S. Senator Ted Cruz Comments on Obama’s Continued Failed Policies

U.S. Senator Mike Lee’s Tea Party Response to State of Union Address

The War on Poverty at 50: A Massive Government Failure

This year marks the 50th anniversary of the “War on Poverty,” a massive government welfare program launched by President Lyndon Johnson. National Review Online impaneled experts to assess the program’s performance during its first half-century:

By John Armstrong, president, ACT3 Network

The War on Poverty was the most ambitious attempt in American history to eradicate poverty through government planning. I believe it was a virtuous plan, driven by idealism and deeply humanitarian concerns. But it was a massive government failure. The problem was that government’s good intentions were put into a hugely bureaucratic program with little awareness of the consequences of the moral choices the program created.

Michael Novak rightly writes in Writing from Left to Right, “There is a right way and a wrong way for government to get involved in humanitarian attempts to better the human condition.” Franklin Delano Roosevelt recognized this when he warned Congress in 1935: “The lessons of history, confirmed by evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration to the national fiber. To dole out relief . . . is to administer a narcotic, a subtle destroyer of the human spirit.”

It was this “narcotic” that was the real culprit in the War on Poverty. LBJ’s program clearly improved the condition of the elderly. It also brought attention to the great needs of many poor African Americans. But it lost sight of the moral consequences of good intentions gone awry by removing personal responsibility. In the end it eroded the national character of millions of Americans who were subtly taught that it really is more blessed to receive than to give. The fabric of this program, as FDR warned, was flawed. In time it was a coalition of Democrats and Republicans, along with President Clinton, who legislatively addressed the flaw!

Arthur Brooks, president, American Enterprise Institute

On January 8, 1964, President Lyndon B. Johnson declared a war on poverty. How goes the battle?

The past half-century has had its ups and downs, but the past half-decade offers reason for pessimism. Since January 2009,

Food-stamp recipiency has increased fully 50 percent. Forty-eight million Americans — one-sixth of our country — require food assistance to get by;

Labor-force participation has fallen to 63 percent. The smallest fraction of Americans since the 1970s are employed or seeking work;

Uptake of disability insurance — permanent unemployment for millions — has surged by 20 percent. On average, a million new people have begun collecting disability every year;

Unemployment among African-American teens has climbed to 38 percent.

The administration is quick to blame the Great Recession (or George W. Bush), and everyone knows the fierce headwind that the economic crisis created. But ultimately, there will be no excuses: History will assign responsibility to the president of the United States. Barring a miracle, the Obama years will be remembered as the time America gave up ground in our War on Poverty.

How could the administration right the ship? It could put genuinely pro-poor policies ahead of the perpetual political campaign. The president’s denunciation of income inequality and call to increase the minimum wage may be handy political cudgels, but neither is a policy that actually helps those most in need. Equalizing incomes per se does nothing to expand opportunity. And as my colleague Mike Strain points out, high minimum wages destroy job opportunities for marginalized Americans.

A better path forward would be to lower the minimum wage while expanding the Earned Income Tax Credit. Add in disruptive education reform and a radically pro-jobs agenda including everything from energy production to corporate-tax reform, and the Obama administration could execute a political turnaround for the ages.

Will President Obama be remembered for a legendary comeback or a historic failure to help vulnerable people? Listen carefully to his State of the Union address. If the president focuses on tangential issues such as income inequality and insists on counterproductive minimum-wage hikes, we will have our answer.

Arizona vs. Obama/Brewer Battle Heats up Friday

Next Friday, December 13, Judge Katherine Cooper of the Maricopa County Superior Court will hear oral arguments in Biggs v. Brewer.

In that lawsuit, the Goldwater Institute ‘s legal team is representing dozens of Arizona legislators and their constituents against the unconstitutional actions taken by Governor Jan Brewer and some legislators when they voted in June to expand Medicaid under ObamaCare.This is an extremely important lawsuit.

Proponents of the ObamaCare Medicaid expansion are trying to do an end-run around Prop 108, the most important taxpayer protection in the Arizona Constitution.

Under Prop 108, it is supposed to take a two-thirds majority of the legislature to raise taxes.

But Medicaid expansion proponents want to allow an unelected bureaucrat at AHCCCS to raise state taxes (mainly hospital bed taxes) by hundreds of millions of dollars per year — without the constitutionally necessary two-thirds vote of the Legislature!

In their efforts to squeeze a giant hospital bed tax (“provider tax”) through a tiny loophole in Prop 108, Governor Brewer and others are trying to pretend that the provider tax is not a tax — even though the provider tax is a TAX under the Social Security Act.  They are also trying to pretend that: the provider tax is not allocated according to formula, although it plainly is; the provider tax does not have a limit, although it is limited by federal law to six percent; and, we don’t know how much money will be raised by the tax, even though the governor and some Legislators are building budgets around the expected revenue.  Gov. Brewer and her allies are also in violation of Arizona’s constitutional regime of separation of powers.

History shows that removing taxpayer protections inevitably leads to higher taxes.

If Gov. Brewer and a group of Arizona legislators are allowed to unconstitutionally delegate to an unelected AHCCCS bureaucrat the authority to impose gigantic taxes on hospital patients, that action will kill Prop 108, clearing the way for other departments and agencies to raise taxes without getting approval by legislative supermajorities.

The oral arguments in Biggs v. Brewer will be heard from 3:00 to 3:45 pm in Courtroom 514 at the East Court Building at 101 West Jefferson.

Seating will be very limited, so if you wish to attend, we recommend arriving at the court at least an hour early.

Bill Whittle: The Hammer of Reality

Economics: Why Keynesian Economics Doesn’t Work

Whenever the economy tanks, people in Washington argue that the government should inject money into the economy to stimulate growth. If you think government is enormous now, Obama is agitating for even greater stimulus spending for trillions more in entitlements and make-work projects.

After the “Big Bang stimulus” totaling $4.7 trillion, unemployment remains at 9.1% and the economy has grown an anemic 1.3% (summer 2011 data). But the stimulus hasn’t failed, they say, the government just needs to spend a lot more and keep doing it until it works—the beatings will continue until morale improves.

The problem is, spend a trillion here and a trillion there and soon we run into some pretty big money.

What Is It and Where Did It Come From?

The idea of big government spending as national savior got started in the 1930s when the country was in the throws of the Great Depression. English economist John Maynard Keynes argued that the government could boost the economy if it borrowed money then spent it.

According to this theory, now known as Keynesian Economics, money would find its way into people’s wallets and then they would spend the money. This was supposed to “prime the pump” as money began circulating through the economy. One dollar spent is another dollar earned by someone else. (This is called the multiplier effect).

Following the Keynesian paradigm, Obama and the past Democratic Party-dominated Congress increased spending through the extension of unemployment benefits, the health care takeover, bailouts of financial  institutions, bailouts of homeowners, increases in other entitlement spending and the funding of hundreds of billions of dollars for special interest projects. Since domestic consumer spending accounts for 2/3 of the U.S. economy, all this government spending should have spurred demand, which in turn should have created more jobs to meet the production requirements to meet this new demand. This demand-side economics has not created jobs.

Keynesian theory looks good on paper and it would be the magic spell for flagging economies everywhere if it didn’t have this one glaring logical fallacy. It overlooks the fact that the government can’t inject money into the economy without first taking it out. The theory only looks at half of the equation. As the government puts money in the right hand, it borrows money from the left hand. Government spending clearly benefits those people who receive the money, but there is no net increase in productivity and no increase in the national income (GDP).

GDP will appear to grow as long as the money doesn’t run out. Once the recipients have spent the money, the growth fizzles. The economic reaction is unsustainable because the private sector understands that the government “stimulus” stimulates nothing in the long term, so they will not invest in new products or new hiring.

How Does It Affect the Economy?

The Keynesian response is to say that there will be an increase in the overall available cash, which increases consumer spending rather than the money sitting idle. That’s wrong because the money doesn’t sit idle. Why? Because of a key economic axiom: savings=investment

When people are not spending, they are saving, but they don’t keep their savings in a cookie jar. It is in the bank, in real estate, in stocks and other various instruments, including U.S. Treasury issues.

But when the government gives money to someone to spend, that money is taken from someone else who doesn’t get to spend it.

This can come in two forms: taxation and/or borrowing. The results of taxation are obvious. The effects of  borrowing are not so obvious. When the government borrows, it “crowds out” other types of investments. The government’s demand for money is high and generally the interest rates rise on the law of supply and demand. Higher interest rates translate to higher costs for businesses and consumers which can slow down  growth. Investors and entrepreneurs are then less likely to borrow and so new ideas, services and technology which do provide sustainable employment, don’t appear.

Under the current circumstances of 2011, the crowding out phenomenon has not happened because the Federal Reserve injected trillions into the economy through two rounds of quantitative easing, or QE. QE is when the Federal Reserve buys back its bonds. The Fed’s own demand for bonds raises the price of the  bonds, which in turn lowers their annual percentage yield. Since long term and medium term rates follow the Treasury bonds, these rates fall as well. This sounds like a good deal except “their ain’t no such thing as a free lunch,” as the late Milton Friedman said. The big flood of dollars without the increase in productivity is inflationary and the dollar loses its value. Inflation is here.

Nevertheless, businesses should be borrowing like mad but they’re not.

Excessive and ridiculous regulations, uncertainty about health care, corporate tax rates and cap and trade and other unlegislated environmental laws are terrible conditions for businesses and they will remain sitting on their cash in these terribly uncertain times until the heat dies down.

Keynesianism Has Failed: The Evidence

Keynesianism is a failure. Let’s look at the evidence.

During the Great Depression, Herbert Hoover increased taxes dramatically including the top tax rate from 25% to 63% (tax the rich), he imposed harsh protectionist policies such as the Smoot-Hawley Tariff Act, significantly increased intervention in private sector and most importantly from the Keynesian perspective, he boosted government spending, which he financed with debt, by 47 percent in 4 years.

Hoover entered office in 1929 with a small surplus and left office with a deficit of 4.5% of GDP. Growth went down and unemployment went up.

FDR followed the same approach. Top tax rate went to 79% [tax the rich], and government intervention became more pervasive and invasive. Keynesians, especially those in the Obama administration, point out that GDP did indeed grow under the New Deal, proving that stimulus works; and it will work again if the
government spends enough.

Looking at the graphs below, we can see that, under FDR, GDP remained pretty flat and unemployment remained staggeringly high until 1940. As Robert Reich is fond to saying repeatedly, “it’s not the deficit we  need to worry about; it’s jobs.”

A Word About FDR and WWII Spending Keynesian enthusiasts will point out that from 1940 on, GDP grew and unemployment went down rather dramatically. I agree.

The biggest jump in debt, employment and GDP came from mobilization and participation in WWII, all financed by the government through debt and the taxpayer. As long as the war carried on, all these factors would continue to grow.

We need to remember several key points about this. First, GDP came from the manufacture of armaments and everything that went along with that. Resources are limited so in order to keep the war effort going, there was a lot of rationing, including, but not limited to, anything involving metals, plastics, nylon, rubber, gasoline, sugar and flour.

Two, the war effort employed millions of active duty and civilian members in every imaginable sector.

Three, unemployment increased after the war as hundreds of thousands of returning soldiers started looking for work.Four, and this is especially important for the years following 1945, was that after the dust settled, the United States was the last man standing. With infrastructure, factories and resources all but destroyed in Europe and in parts of East Asia, the world was America’s customer. It was not the WPA, or even the war effort, that got the US out of Depression. It was America being open for business when no other country could supply all that was needed by the rest of the world. Private sector and free market to the rescue.

Five, defense spending trickles throughout the commercial sector, and technological innovation comes from it that offers ongoing benefits to industry and consumers alike–the gift that keeps on giving.

And six: providing for the common defense is about the only thing the Constitution mandates the government to spend money on.

But when the government spends money on entitlements and special interests that produce nothing, as in O’s stimulus package, then sustainable growth and job creation will never happen, any more than it did with FDR’s WPA.

Another example: in 1972 Gerald Ford gave tax rebates that did nothing to grow the economy because  the money did nothing to improve economic output.

On the international front, Japan tried to use Keynes to stimulate their stagnant economy but the only thing that went up was Japan’s debt, which had doubled during the decade.

Where Might This Economic Thinking Lead America?

The last point about the Keynesian approach is that government spending hurts economic output by misallocating resources. That is, the government chooses what gets developed in the economy rather than the free market which consists of businesses and consumers who decide what they want to buy.

If sound reasoning and all the data show that Keynesian is foolish economics, why does Obama want to keep trying the same approach over and over again? I don’t think that Obama has changed his mind about fundamentally transforming America. I think he is taking advantage of the recession to push his socialist agenda into place.

Either that or he is absolutely nuts.

SOURCE: Conservative Politics in the Progressive Era


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