I hope you can take a few minutes and give this great editorial in today's Wall Street Journal a read: The 2% Illusion -  Take everything they earn, and it still won't be enough.

To pay for the trillions in spending that President Obama and his Congressional Democrat allies have passed and are about to pass in the months ahead, our President has assured us that taxes on Americans making less than $250,000 will not be raised by "one single dime." His plan is to increase the tax rates on Americans making more than $250k a year to offset the spending. But is this even statistically feasible was the question the Wall Street Journal set out to answer?

You've got to read this for yourself to get a firm grasp of the numbers and statistics we're talking about here. But this sentence really stuck out to me:

"The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can't possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well."

Give it a read for yourself, and see what you think.

You've heard me recount a Bloomberg report that said with the passing of the economic stimulus package, you the taxpayer-- will be on the hook for $9.7 trillion dollars in total government commitment to carry out all the economic bailout/stimulus/relief plans of the past year.

This is what Bloomberg reported earlier this month:

"The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve."

Well, now it's gotten even worse. In just two weeks, Bloomberg has been forced to revise its analysis and increase that burden by almost $2 trillion. Bloomberg issued another report today that now raises the federal commitment to $11.6 trillion. That's real money, money that future generations have to pay for.

The spending spree has to stop, and I've joined with House Republicans in calling for a spending freeze. If families across America are tightening family budgets and cutting expenses, Washington must learn to do the same.

President Obama has not wasted any time since being sworn in as President in pursuing a truly liberal agenda. From the mega-"stimulus" package to a multi-hundred-billion-dollar mortgage plan - The Hill newspaper reports that his next target is health care reform. 

If the theme continues from his prior legislative accomplishments, we should anticipate a health care plan that spends more of your money and calls for greater government authority over your health care decisions.

It's already been reported that the recently signed economic "stimulus" package has laid the groundwork for a greater government stake in our health care system. As a result, I have no reason to believe that when the Democrats’ health care plans are revealed, the end result will be greater federal involvement. After all, government knows best -- doesn't it? Sadly, the Democrat majority in Washington thinks exactly that.

If you have not seen the Governors v. Congress piece in today's Wall Street Journal, I highly encourage you to give a read. It does a great job dissecting the very principled and rational reasoning as to why some Governors are rejecting their state's share of the funding from the recently passed economic stimulus package.

"These Governors -- Haley Barbour of Mississippi, Bobby Jindal of Louisiana, Butch Otter of Idaho, Rick Perry of Texas and Mark Sanford of South Carolina -- all have the same objection:

The tens of billions of dollars of aid for health care, welfare and education will disappear in two years and leave states with no way to finance the expanded programs."

As fair and sensible as this objection might seem, it may do no good because the Governor's will not have the final say as to whether or not they will accept the additional federal dollars. The article points to a "little noticed provision" that allows the state legislators to override the decisions of their governors as to how the state should spend or not spend the stimulus money.

So at the end of the day, despite not only principled objections but even empirical proof that these dollars will do more harm than good to a state's long-term economic vitality - these dollars could be spent whether a Governor likes it or not.

The WSJ piece concludes:

“Don't be surprised if two years from now states are still facing mountainous deficits. They will have their Uncle Sam to thank.”

At least these Governors did their part to warn us.

When President Obama released his plan this week to prevent home foreclosures, the point he wanted to get across to everyone watching was that money from folks who have been making their payments on time will not just be handed over to those folks who got in over their heads and bought a house they knew they couldn't afford.

But as the Wall Street Journal points out, it looks like President Obama's plan may do just that.

It's estimated that around four million homeowners are in danger of foreclosure, and in order to help them out, part of the President's plan creates a $75 billion program that would go towards reducing a homeowner's monthly mortgage payment. That breaks down to about $18,750 per home.

Now, we can debate whether this is the right thing to do as it may seem that you're rewarding the irresponsible while punishing those who have been playing by the rules; but what's most interesting are the statistics that show what happens if you were to drastically slash mortgage rates to make it a more feasible number to pay each month.

According to the December report by the Comptroller of the Currency and the Federal Office of Thrift Supervision:

"The number of loans modified in the first quarter that were 30 or more days delinquent was 37 percent after three months and 55 percent after six months. The number of loans modified in the first quarter that were 60 or more days delinquent was 19 percent at three months and nearly 37 percent after six months. One very troubling point is that, whether measured using 30-day or 60-day delinquencies, re-default rates increased each month and showed no signs of leveling off after six months and even eight months."

While this plan spends a heck of a lot of money, it doesn't fix the loan problem for the long term. As the Wall Street Journal points out: after all of this money, we still may not have fixed the problem.

I read an interesting article today in The Hill newspaper. It turns out that the U.S. Government has lost $86.5 billion of the money they put towards last October's Wall Street bailout in the stock market.

To give you some background on this, last fall in exchange for a sizable cash injection to struggling financial companies, the government received preferred stock from companies that received funding as part of the Capital Purchase Program. The rationale was that as a company began to turn around their financial situation as a result of the funding, their stock price would increase and the government would reap the benefits. However, according to a report conducted by the nonpartisan research think thank Ethisphere, a different picture is taking shape.

"The worst performer for the government was U.S. Bancorp; the U.S. lost $3.7 billion in the preferred stock that company gave it in exchange for an injection of $6.6 billion through the Capital Purchase Program (CPP). That’s a loss of 56.1 percent, according to Ethisphere.

"On a relative basis, the government’s preferred stock in Huntington Bancshares lost 81.5 percent, or $1.1 billion. Stock in Webster Financial Corp. has lost 76.1 percent."

And, The Hill notes that these calculations only run through February 13th.  “Since then, the government has probably done a bit worse, as the Dow Jones Industrial fell 297 points on Tuesday….”

If Congress is going to play the Market with your money, I thought you should know how your portfolio is doing.

This might come as a surprise to you, but the United States is near the top of the list of industrialized countries with the highest corporate tax rates.

You may be asking yourself "so what," or "who cares," but it's important to recognize that lower corporate tax rates result in attracting more investment capital. A reduction of the federal corporate tax rate would increase firms' productivity and investment incentives, and ultimately stimulate our nation's long-term competitiveness by enhancing economic freedom.  The end result would be a boon to your family budget.

The trend for countries around the world is to slash corporate tax rates to spur economic growth, yet Washington has yet to come to grips with this financial reality. 

Currently, America's combined corporate tax rate sits at 40%, and it has been there since 1994. Last year alone, 23 counties slashed their corporate rates, including Canada, China, Columbia, the Czech Republic, Denmark, Germany, Hong Kong, Israel, Italy, Malaysia, New Zealand, Singapore, South Africa, Spain, Switzerland, and the United Kingdom.

According to a new study release by the accounting firm KPMG:
 
“U.S. corporate income tax rate is higher than all other global regions—14 percentage points higher than the global average and nearly 17 percentage points higher than the average among European Union nations. Of the 106 countries surveyed, only the United Arab Emirates, Kuwait, and Japan impose a higher corporate tax rate than the combined rate of 40 percent. The United Arab Emirates and Kuwait each have a staggering tax rate of 55 percent; Japan’s rate is 40.69 percent.”

The Heritage foundation reports that:

"Even Europe's old welfare states have joined the aggressive tax cut parade: Sweden has cut its corporate tax rate to 28 percent from 60 percent; Norway's rate has dropped over 50 percent to 28 percent; and Denmark's corporate tax rate is now 25 percent."

In fact, Sweden is considering reducing it further to 26.3 % from the 28% it is at now.

If our competitors around the world are making their country a friendlier place to do business while America’s corporate rates remain high, it doesn't take an economist to realize that our global competitiveness will be left in the dust.

For more information about the study, check out the non-partisan Tax Foundation's most recent newsletter (Pg. 5).

If we want to create jobs and stimulate the economy, one of the best ways we can do that is by cutting the corporate tax rate, not by spending hundreds of billions to stimulate government and creating more and more debt for our children.

As Congress readies itself to spend $300 million on golf carts as part of their multi-hundred-billion-dollar stimulus proposal, the non-partisan Congressional Budget Office (CBO) has provided  some very alarming numbers - and Congress should take heed.

According to the CBO, in 2009 and 2010, 98% of the tax cuts in the Democrats' economic "stimulus" package will go into effect, providing for 1.4% growth in our nation's Gross Domestic Product in that time. However, the other 2% of the stimulus tax cuts will go into the economy between 2011 and 2019 - along with about half the spending in the package. The problem with this equation is that the $1.1-trillion price tag (which includes the interest on the total package), our increasing debt and our crowding out of private sector activity will drive down our Gross Domestic Product to .2% less than it is today, prior to the stimulus.

So what you want to take away from these numbers is this:

Believe it or not, Congressional Democrats proposed a radical revision of health care policy as part of their economic "stimulus" bill.  “Comparative effectiveness," as it is called, not only lays the groundwork for a full-fledged government take-over of Americans’ health care system, but seriously limits the choices for patients and doctors in pursuing treatment. 

What it does is put in place a National Coordinator of Health Information Technology that will “monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective.” Your medical treatments will be tracked electronically by the government to decide whether you're "too sick" to receive health care treatment. They will decide for you what scope of treatments should be made available to deal with your current ailment.

If this wasn't bad enough, the Democrats would like to sneak this past the American people by tucking it into this massively bloated multi-hundred-billion dollar spending package that they are framing as a measure to create jobs and help our struggling economy.

Like you, I have no idea how this health care proposal even begins to create jobs or help Americans financially.  But, it’s a far-too-common practice in Washington to sneak things into bills marked “CRISIS:  MUST PASS NOW” rather than go through public debate and open consideration.

The Democrat-majority is attempting to take advantage of our struggling economic situation to put in place liberal policies that have nothing to do with economic recovery. Don't be fooled.

Betsy McCaughey, a former lieutenant governor of New York and an adjunct senior fellow at the Hudson Institute wrote a great piece that sums up the dangers of these health care provisions.  Read it here on Bloomberg.com.

If you thought that the $827 billion "stimulus" package being hashed out this week in Congress was bad enough, you're going to be really upset to find out that if this package is signed into law -- you the taxpayer-- will be on the hook for $9.7 trillion dollars in total funds to carry out all the economic bailout/stimulus/relief plans of the past year.

According to the Bloomberg report:

"The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve."

Just like you, I'm getting pretty tired of these rushed multi-hundred-billion-dollar snap reactions. Months ago, we were told by then-President Bush and the Democrat-majority in Congress that we needed to act NOW to save our struggling financial markets. Without my support, we rushed through a $700-billion bailout bill (TARP) that was supposed to unfreeze the stagnant credit market. Guess what? It didn't work. And now, here we are again about to flush more money -- money we don't have -- down the drain in a sloppy and irresponsible spending spree that will leave the prosperity of our nation in great jeopardy.  And, President Obama is insisting that we push this bill through by Monday, February 16th.

I understand that Americans are hurting, and I want to help them; but there are wiser ways to go about this.  Congress should be working smarter, not faster.  And, Congress should focus on passing legislation that will allow our private sector to do what it does best – create jobs and prosperity.

But sadly, we're on the verge of placing free-market capitalism, the proven mechanism responsible for America's resounding wealth and prosperity throughout our nation’s existence, on the scrap heap of history.

Remember, it's going to be your children and grandchildren who will be paying the bill for our irresponsible spending spree.

A month into the 111th Congress, we've seen no signs of the “change” and “reform” to Washington promised by the Democrats last fall. Starting with a restrictive rules package meant to silence the House minority, the heavy-handed partisan talk continues.  For instance, President Obama made some strong remarks last night while before the House Democrats at their retreat in Williamsburg, VA.

According to Washington's DC Examiner newspaper:

"President Obama used some of his toughest partisan rhetoric yet... Accusing Republicans of engaging in 'phony arguments and petty politics,' Obama escalated the tone of his pushback against Republican complaints about the size and direction of the stimulus package."

Yahoo news reported today that:

"Obama... dismissed Republican attacks against the massive spending in the stimulus.

“‘What do you think a stimulus is?' Obama asked incredulously. 'It’s spending — that's the whole point! Seriously.'”

Maybe the Republicans’ problem is that this is simply a really bad piece of legislation.

Perhaps the spending that the President calls "essential" and "stimulating" is simply spending for the sake of spending.  Perhaps this bill pays little more than lip service to funding for transportation and infrastructure projects that will really put people to work. Maybe the bill is simply too bloated with pork barrel projects that will do nothing to put our economy on the track to greater prosperity.

The tone from the other side of the aisle is akin to:  There's a crisis facing our nation; something big needs to be done to fix it and this is THE solution. If you disagree or have a different solution, you are wrong and don't really care about fixing the problem and helping our nation.

Check out this link to see a list of examples of the wasteful spending provisions contained in this "stimulus" bill. While some of these projects may be worthy and deserve attention, they should be addressed separately and not lumped into a package that is strictly supposed to help the economy and put people to work.

The Hill newspaper's Congress Blog posed a question to Capitol Hill's influential lawmakers, pundits and interest group leaders in their weekly "Big Question" feature:

"Given Democrats’ grip on power, is there any need for them to seek Republican votes in favor of the stimulus?"

Here's what I had to say:

"On paper, no, but there’s much more to the responsibility of governance than merely having the votes to pass what you want. The success of this “stimulus” package will ultimately depend on how it’s viewed by the American people. And, until the recklessly irresponsible spending provisions in this package that will do NOTHING to create jobs and give an immediate jolt to our economy are removed, the Democrats will have a hard time calling this a success, regardless of how many votes they have."

Read the full post here.

Prior to the vote last week on the House Democrats’ 800-billion-dollar-plus spending package, I joined several of my House Republican colleagues in sending a letter to Speaker Nancy Pelosi about the ludicrous amounts spent on programs that have no impact on the immediate recovery of our economy.  For instance, the bill includes $15 billion for existing housing programs, the majority of which already have large unspent balances sitting in their accounts. 

Specifically, we expressed our concern that this bill opens the door for groups like ACORN to have access to billions more in taxpayer dollars. Between 1994 and 2008, ACORN has received at least $53 million in direct federal funding.  And, it receives millions more in federal funds indirectly through states and cities.

Last year, Congress included in the Housing and Economic Recovery Act of 2008 provisions that barred ACORN from receiving federal financial assistance under the Neighborhood Stabilization Program.  The provision barred funding for groups indicted for federal election fraud or hiring individuals indicted for such. 

Yet, under this new so-called “stimulus” bill, it is unclear whether the same restrictions apply. This is a serious omission that needs to be addressed.

As flawed as the American Recovery and Reinvestment Act of 2009 is in making reforms that will benefit our economy, these egregious omissions and gestures to political friends and allies is simply irresponsible and wrong.

To read the letter, check out the "Letters" section on my website under Financial Services.