Though too few noticed, this month Moody’s downgraded Illinois state debt to A2 from A1, the lowest among the 50 states. That’s worse even than California. The state’s cost of borrowing for $800 million of new 10-year general obligation bonds rose to 3.1%—which is 110 basis points higher than the 2% on top-rated 10-year bonds of more financially secure states.

This wasn’t supposed to happen. Only a year ago, Governor Pat Quinn and his fellow Democrats raised individual income taxes by 67% and the corporate tax rate by 46%. They did it to raise $7 billion in revenue, as the Governor put it, to “get Illinois back on fiscal sound footing” and improve the state’s credit rating.

So much for that. In its downgrade statement, Moody’s panned Illinois lawmakers for “a legislative session in which the state took no steps to implement lasting solutions to its severe pension underfunding or to its chronic bill payment delays.” An analysis by Bloomberg finds that the assets in the pension fund will only cover “45% of projected liabilities, the least of any state.” And—no surprise—in part because the tax increases have caused companies to leave Illinois, the state budget office confesses that as of this month the state still has $6.8 billion in unpaid bills and unaddressed obligations.

How much more evidence do we need that high taxes and big government are unsustainable?  Do liberals even care?

Mitch Daniels had a compelling response to the President’s State of the Union address:

“In three short years, an unprecedented explosion of spending, with borrowed money, has added trillions to an already unaffordable national debt.  And yet, the President has put us on a course to make it radically worse in the years ahead.  The federal government now spends one of every four dollars in the entire economy; it borrows one of every three dollars it spends.  No nation, no entity, large or small, public or private, can thrive, or survive intact, with debts as huge as ours.

“The President’s grand experiment in trickle-down government has held back rather than sped economic recovery.  He seems to sincerely believe we can build a middle class out of government jobs paid for with borrowed dollars.  In fact, it works the other way: a government as big and bossy as this one is maintained on the backs of the middle class, and those who hope to join it.

As WBBM Newsradio’s Regine Schlesinger reports, officially, the state [of Illinois] has a backlog of more than $4.25 billion in unpaid bills.

But Illinois State Comptroller Judy Baar Topinka says when one factors in other bills, the figure is closer to around $8.5 billion.

Topinka says this is extremely disappointing, since a year ago, the state sharply increased income taxes (by 67 percent) and corporate taxes.

“After the largest tax hike in our history, the state continues to be in this precarious fiscal position with persistent payment delays, and frankly, the situation is unlikely to significantly improve in the near term,” she said.

Some state officials say the solution is more borrowing to pay the bills, but Topinka says the solution is to cut spending.

One way of thinking about the administration’s approach is that it reflects a passive-aggressive attitude. Congress obliges the president to make a decision, so he makes one, but he also makes clear that it isn’t really a decision and he doesn’t appreciate being rushed. The administration’s approach to the economy has been consistently passive-aggressive. First it was “we inherited this mess.” Then, as time passed and that claim became decreasingly plausible, the bad economy became the fault of the “do-nothing Congress.”

Obama’s supporters in the media likewise try to shift responsibility away from the president. And while they sometimes have a point–the president’s power over the economy is limited–the passive-aggressive approach is even used to explain away Obama’s policy decisions.

The “Buffett Rule” would not tax the vast majority of his shielded income, including either his unrealized capital gains, which are currently taxed at zero percent, or charitable contributions, which are tax deductible.

If the “Buffett Rule” were applied as President Obama proposes, then Mr. Buffett’s federal tax bill would have been $14.4 million, rather than the $6.9 million he actually paid. As a fraction of his true income, his effective tax rate would only have risen from 6/100ths of 1% to 12/100ths of 1%.

 

It turns out that all of Obama’s tax increases wouldn’t actually make any real difference in Buffett’s own taxes.  But the hypocrisy of everyone involved worse:

Mr. Buffett’s donation to the Gates Foundation goes to the heart of my critique of his public call for higher tax rates on the rich. Just look at the second contractual condition for his ongoing pledge to the Gates Foundation: “The foundation must continue to satisfy the legal requirements qualifying Warren’s gift as charitable, exempt from gift or other taxes.”

 

In other words, if his gift weren’t tax sheltered he wouldn’t give it. So much for “shared sacrifice.”

Incidentally, I’m not the first to question Mr. Buffett’s commitment to “shared sacrifice” in balancing the federal budget. In a 2007 CNBC interview, when asked why he shelters his money through tax-free strategies rather than writing big checks to Uncle Sam, Mr. Buffett responded: “I think that on balance the Gates Foundation, my daughter’s foundation, my two sons’ foundations will do a better job with lower administrative costs and better selection of beneficiaries than the government.”

So Mr. Buffett thinks he and his family can put their money to better use than the government can. I guess he’s really not so different from the rest of us after all.

So Mr. Buffett isn’t really being honest with us after all… and neither is Obama.  The richest 1% will continue to shelter their income with the help of an army of lawyers and accountants… and the hard-working upper-middle class who makes more than 250 thousand dollars… THEY will get foot with the bill.  So much for ‘shared sacrifice’.

Via Class Warefare and the Buffett Rule — on WSJ.com

The problem with that narrative is that the number of bridges that are in bad shape has been falling steadily over time. The nation’s bridges appear to be in better condition than ever, as indicated by data from the Federal Highway Administration.

via Is Our Infrastructure Crumbling? – By Veronique de Rugy – The Corner – National Review Online.

The highly interventionist liberal experiment of the last two and a half years has been a spectacular failure, with 14 million Americans out of work, sliding consumer confidence, collapsing house prices, and falling stock markets.

 

This is why Barack Obama could well end up being the last big government president of the United States, a nation that simply cannot afford the lavish excesses of an imperious presidency that drains the pay-checks of hard-working Americans with impunity and reckless abandon. The historic loss of faith in the federal government under Obama has combined with growing support across America for a return to the limited government ideals of the Founding Fathers. Nothing is ever certain in politics, but it is hard to see how a future president can shamelessly adopt the same borrow, bailout and spend approach zealously adopted by the current administration, without extremely damaging consequences for the United States.

It has become increasingly clear to any who originally doubted the predictions of many on the right that the trillions in dollars in stimulus spending… loans to ‘green energy’ companies… and wall street bailouts have NOT accomplished what they were purported to… and have added a crushing debt burden that will undoubtedly stifle future growth. Solyndra loans were given without due dilligence… spent to invest in technology the private sector wouldn’t (without wondering WHY the private sector decided not to in the first place)… and now we have a huge mess on our hands.

At what point should we hold Washington Democrats responsible for this failure of judgement?!  2012 cannot come soon enough.

via Why Barack Obama could be America’s last big government president – Telegraph Blogs.

The Energy Information Administration estimates that new natural gas-fired plants will create electricity at a cost of $63.10 per megawatt hour, compared to the Administrations “green” favorites, offshore wind and solar thermal plants—like the one in Nevada funded yesterday—which cost $243.20 and $311.80.Even if you believe in the “green job” mantra, heres some more math: Yesterdays $737 million loan guarantee to Tonopah Solar Energy will create “600 construction jobs and 45 permanent jobs,” according to the company. The $337 million loan guarantee to Sempra Energy “will fund up to 300 construction jobs.” Thats $1.1 billion for 45 permanent jobs.By comparison, the proposed Keystone XL pipeline to carry crude oil from Western Canada to refineries on the U.S. Gulf Coast would create some 13,000 union jobs and around 118,000 “spin-off” jobs—if the U.S. State Department ever gets around to approving it. And taxpayers wouldnt have to risk a dime.

via Review & Outlook: What Solyndra Fiasco? – WSJ.com.

At its core, Obamanomics is about the top-down redistribution of wealth and income. Government spending on various “green” subsidies and programs, along with a cap-and-trade system to limit carbon emissions, would enrich key Democrat constituencies: lawyers, public sector unions, academia and non-profits.

Oh, and Wall Street, too. Who was the exclusive financial adviser to Solyndra when it was trying to secure the $535 million loan from Washington? Goldman Sachs. And had the cap-and-trade scheme been enacted, big banks stood ready to reap billions from the trading of carbon emission credits.

No wonder many Democratic strategists predicted their party’s 2008 landslide win would usher in a generation of political dominance. Obamanomics, essentially, would divert taxpayer dollars to the Green Lobby – and then into the campaign coffers of the Democratic Party. This is what crony capitalism is really all about: politicians enriching favored businesses, who then return the favor. Or maybe it’s the other way around, Who cares, really. It’s an endless, profitable loop for both.

via James Pethokoukis | Analysis & Opinion | Reuters.com.

The use of crude and violent language to condemn conservatives as enemies of the state, the gross manipulation of law to make the Constitution say whatever is politically expedient, and indifference to the actual arguments made by their political opponents—these are all-too-familiar progressive vices. They were exercised with abandon in the fury with which progressives responded to the complex questions raised by the Supreme Courts decision in Bush v. Gore, the detention of enemy combatants at Guantanamo Bay, and the invasion of Iraq. Tea party hatred is the successor of and stems from the same sources as Bush hatred.

Of course, a good bit of progressive vituperation can be chalked up to the ordinary passions of democratic politics, which can be high stakes and is a contact sport. But in the debt-limit crisis, the hypocrisy of progressives reached truly breathtaking proportions.

How often they have haughtily lectured the nation on the vital importance of civility in public discourse, the urgency of constraining executive power under law, and the need for impartial expertise in public affairs to pragmatically weigh competing public-policy options. But in the debt-limit debate the virtues they profess could hardly have been more spectacularly absent.

Ouch.

via Peter Berkowitz: The Debt Deal and the Progressive Crack-Up – WSJ.com.