Thomas Jefferson's Free-Market Economics

By Murray N. Rothbard

 

Thomas Jefferson (1743–1826) had been a friend and admirer of the philosophes and ideologues since the 1780s when he served as minister to France. When the ideologues achieved some political power in the consular years of Napoleon, Jefferson was made a member of the "brain trust" Institut National in 1801. The ideologues — Cabanis, DuPont, Volney, Say, and de Tracy — all sent Jefferson their manuscripts and received encouragement in return. After he finished the Commentary on Montesquieu, de Tracy sent the manuscript to Jefferson and asked him to have it translated into English. Jefferson enthusiastically translated some of it himself, and then had the translation finished and published by the Philadelphia newspaper publisher William Duane. In this way, the Commentary appeared in English (1811), eight years before it could be published in France. When Jefferson sent the published translation to de Tracy, the delighted philosopher was inspired to finish his Traité de la volonté and sent it quickly to Jefferson, urging him to translate that volume.

 

Jefferson was highly enthusiastic about the Traité. Even though he himself had done much to prepare the way for war with Great Britain in 1812, Jefferson was disillusioned by the public debt, high taxation, government spending, flood of paper money, and burgeoning of privileged bank monopolies that accompanied the war. He had concluded that his beloved Democratic-Republican Party had actually adopted the economic policies of the despised Hamiltonian federalists, and de Tracy's bitter attack on these policies prodded Jefferson to try to get the Traité translated into English. Jefferson gave the new manuscript to Duane again, but the latter went bankrupt, and Jefferson then revised the faulty English translation Duane had commissioned. Finally, the translation was published as the Treatise on Political Economy, in 1818.

 

Former President John Adams, whose ultra-hard-money and 100 percent-specie-banking views were close to Jefferson's, hailed the de Tracy Treatise as the best book on economics yet published. He particularly… (Read more) ​

 

Source: Mises.org

In Case You Missed It: Ron Paul Makes Statement on Super Committee

“This shows how unserious politicians are about our very serious debt problems”

 

LAKE JACKSON, Texas – 2012 Republican Presidential candidate Ron Paul released a statement today regarding the congressional Super Committee’s failure to meet its goal with the deadline fast approaching. See below for statement.

 

“This week marks the deadline for the so-called congressional Super Committee to meet its goal of cutting a laughably small amount of federal spending over the next decade.  In fact the Committee merely needs to cut about $120 billion annually from the federal budget over the next 10 years to meet its modest goals, but even this paltry amount has produced hand-wringing and hysteria on Capitol Hill.  This is only cutting proposed increases.  It has nothing to do with actually cutting anything.  This shows how unserious politicians are about our very serious debt problems.

 

“To be fair, however, in one sense members of the Super Committee face an impossible task.  They must, in effect, cut government spending without first addressing the role of government in our society.  They must continue to insist the federal government can provide Social Security, Medicare, and Medicaid benefits in the future as promised, while maintaining our wildly interventionist foreign policy.  Yet everyone knows this is a lie.

 

“Keep in mind that the 2011 federal deficit alone was about $1.3 trillion, which means the Super Committee needs to cut that much PER YEAR rather than over a 10 year period.  If Congress ever hopes to address its debt problem, it must first stop accumulating any new debt immediately, in 2012.

 

“Federal revenue likely will be about $2.3 trillion in fiscal 2012.  The 2004 federal budget was about $2.3 trillion.  So Congress simply needs to adopt the 2004 budget next year and the federal government will balance outlays and revenue.  That’s all it would take to produce a balanced budget right now.  Was the federal government really too small just 7 years ago, in 2004?  Of course not.  Only Washington hysteria would have us believe otherwise.

 

“Yet our Republican and Democrat friends on the Super Committee want to take 10 years, or even 30 years, to produce a balanced budget.

 

“Government spending isn’t just wasteful; it is often actively harmful to stated goals.  The Super Committee could simply apply 2004 spending levels across the board and a tremendous victory for fiscal sanity would be accomplished.

 

“What seems more likely, however, is a rearrangement of the tax code in an attempt to bring in more revenue.  Deductions and credits will be taken away, and the Bush tax cuts will be allowed to expire.  As a result, less money will remain in the private sector to create jobs and produce economic growth.  The Super Committee has an opportunity to take a small baby step in the right direction.  Instead, they no doubt will take this opportunity to raise taxes and make everything worse.  But increasing taxes will only diminish freedom and deepen the recession.  Instead of looking for ways to hike taxes under the guise of “raising revenue,” the Super Committee should put forth a plan of real spending cuts to put America back on the path to liberty and prosperity.”

Senator Rand Paul: Stop the Madness!

Dear lover of liberty,
 
In the next few weeks, I believe one of the most importantvotes of our political lifetimes will occur when the House and Senate each vote on a Balanced Budget Amendment to the Constitution.  The stage isset for a remarkable victory that could help save our economy and end the tax-spend-borrow addiction in Washington.
 
For years, our deficits have been soaring out of control.  President Obama has proposed a "budget" that will stillallow a $1.6 trillion deficit.  And Republicans are hardly better, with their budget calling for "only" a $1.5 trillion deficit.
 
The threats to our prosperity and freedom aren't hard to see.  Just look all around us, everyday, at the news coming from Washington.  More bailouts, trillion dollar "stimulus" schemes, huge new debt burdens for our children,higher taxes – it never ends.
 
You and I have a chance to help put a stop to these abuses ofpower.  And because the Balanced Budget legislation is a Constitutional Amendment, we don't need President Obama to sign it.  Congress alonecan fix this problem.
 
But without your involvement, I don't think it will happen.
 
Please see this message from my friend Matt Hawes, Vice President of Campaign for Liberty, so you canlearn more about their battle to help pass a Balanced Budget Amendment in Congress.  Time is short, so please take action today.
 
 
For Liberty,
 
Rand Paul
U.S. Senator, Kentucky

Solyndra warned White House in Oct. 2010

Excerpts from POLITICO

By Darren Samuelsohn

 

“Solyndra's top executive strategized with the Obama administration in October 2010 as the California solar company prepared to shut down an older plant and lay off nearly 200 employees, new internal emails show.

 

“CEO and President Brian Harrison flagged the company's bad news to a top DOE loan guarantee official in an October 25, 2010 email. The warning worked its way up the chain of command, ultimately reaching President Barack Obama's top energy and climate adviser, Carol Browner.

 

"‘Solyndra has received some press inquiries about rumors of problems (one of them with quite accurate information) and we have received in-bound calls from potential financial investors,’ Harrison wrote to Frances Nwachuku, the director of the portfolio management at DOE.

 

"‘It is our view inside Solyndra that while not desirable from DOE perspective we need to internally announce to employees and with one selected press member’…Harrison added. ‘It is our belief that it is better for all parties to get in front of the story and control the messaging rather than get behind the story and on the defensive… I would like to go forward with the internal communication…There will be no mention of the DOE.

 

“Nwachuku forwarded Harrison's email to the head of the DOE loan guarantee program, Jonathan Silver, who then kicked it up to Rod O'Connor, then Chu's chief of staff, and deputy chief of staff Brandon Hurlbut. A day later, O'Connor sent Harrison’s email to Vice President Joe Biden's chief of staff as well as Browner and her top deputy, Heather Zichal.

 

"Media reported that Solyndra was announcing plans to shut its first factory, called Fab 1, to save $60 million in capital expenditures. The company also would lay off about 40 employees and not renew contracts for about 150 temporary workers… (Read more)

Libertarians to Occupiers: Crony capitalism is the problem

WASHINGTON - Libertarian Party Chair Mark Hinkle released the following statement:

 

"I have been following the Occupy protesters, who call themselves the '99%', with interest.

 

"It's true that 99% of Americans do not enjoy the special benefits of crony capitalism. Crony capitalism is very different from real capitalism. In crony capitalism, government hands out special favors and protections to politically well-connected businesses.

 

"The TARP bailouts, Solyndra, and the military-industrial complex are all facets of crony capitalism.

 

"Libertarians love free markets and hate crony capitalism.

 

"Unfortunately, hypocritical Republican politicians have taught a lot of Americans to think that 'free markets' means freedom for government and big business to engage in crony capitalism.

 

"That's not what free markets are. A free market is where the government leaves businesses alone, does not attempt to pick winners and losers, does not stifle competition, does not hand out corporate welfare, and does not absolve businesses of liability for their actions. Most of our economy today does not resemble a free market at all.

 

"It's unfortunate that so many businesses today go to the government begging for handouts and special treatment. I wish they wouldn't. But the real problem is the politicians who choose to give those favors to them, at everyone else's expense.

 

"I hope the Occupy protesters will start to direct their anger away from Wall Street and big businesses, and toward our government, which has done so much to destroy free markets and entrench crony capitalism."

 

For more information, or to arrange an interview, call LP Executive Director Wes Benedict at 202-333-0008 ext. 222.

 

The LP is America's third-largest political party, founded in 1971.  The Libertarian Party stands for free markets, civil liberties, and peace. You can find more information on the Libertarian Party at our website.

 

P.S.  If you have not already done so, please join the Libertarian Party. We are the only political party dedicated to free markets, civil liberties, and peace. You can also renew your membership. Or, you can make a contribution separate from membership.

Trade Agreements Finally Poised to Create Jobs

After almost 1,000 days of sitting on three job-creating Free Trade Agreements (FTAs) with Colombia, South Korea and Panama, President Obama finally submitted the FTAs to Congress on October 3rd.[1] Only two days after receiving the FTAs from the President, the House Ways and Means Committee passed all three with bipartisan majorities.[2] Less than a week later, the Senate Finance Committee also passed all three FTAs with bipartisan majorities,[3] and on October 12th, both the House and Senate are scheduled to vote on all three FTAs -- less than 10 days after presentation by the President.

 

Trade with our current FTA partners supports almost 18 million U.S. jobs.[4] When the U.S. enters into new trade agreements, exports to those countries have historically grown fourfold in the first five years.[5] With 80 percent of the world’s purchasing power outside the U.S.,[6] trade agreements are necessary for future U.S. growth. President Obama’s delay has cost Americans hundreds of thousands of good jobs during a time of economic hardship.[7]

 

Korea Free Trade Agreement

The Korea Agreement will increase U.S. exports by $10-11 billion per year.[8] In 2010, Korea was the fifth-largest market for U.S. agricultural goods. This FTA will eliminate most Korean tariffs and quota tariffs, and open many sectors to U.S. exports, including autos, which had limited market access traditionally.[9] Increased U.S. exports to Korea would vastly outweigh increased Korean imports.[10]

 

Colombia Free Trade Agreement

The Colombia Agreement will increase U.S. exports by more than $1.1 billion per year.[11] Currently, U.S. goods face an average 12.5 percent tariff going into Colombia; this FTA will eliminate the majority of those tariffs immediately and eventually remove 99 percent of the tariffs.[12] Historically, Colombia has been the largest U.S. agricultural market in Latin America; however, U.S. exports fell 50 percent between 2008 and 2010 as U.S. exporters waited for this FTA while other nations entered into agreements with Colombia.[13] The Colombia FTA will result in a $2.5 billion increase in the U.S. GDP.[14]

 

Panama Free Trade Agreement

The Panama Agreement will increase U.S. exports of grain to Panama by 61 percent, and exports of cars and light trucks by 43 percent.[15] This FTA will eliminate the majority of Panamanian tariffs on American products immediately and eventually remove 99 percent of the tariffs.[16] American agricultural exports to Panama will increase by 20-46 percent.[17]

 

These three trade agreements will provide American exporters the same benefits foreign competitors already possess. Korea and Colombia already have, or are negotiating, trade agreements with other nations, including the EU, Canada, and each other.[18] Failure to implement U.S. trade agreements could result in $40 billion worth of exports lost to our competitors.[19] We must act; on a level playing field, American can compete and win.

 

After fast action by Congress, we will be left with a lingering question: How many American jobs were lost in the nearly 1,000 days that the President played politics with the Free Trade Agreements?

 

________________________

 

1 Statement from President Obama on the Submission of the Korea, Colombia, and Panama Trade Agreements, October 3, 2011, http://www.whitehouse.gov/the-press-office/2011/10/03/statement-president-obama-submission-korea-colombia-and-panama-trade-agr.

2 Camp Statement on Committee Approval of Free Trade Agreements, http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=263129.

3 The Colombia FTA passed Committee 18-6 and both the Panama and Korea FTAs passed by voice vote, http://finance.senate.gov/hearings/hearing/?id=611b68e1-5056-a032-52e9-e785d6525dd1 beginning at 74:30.

4 “Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners,” by Laura M. Baughman and Joseph F. Francois, May 14, 2010, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/100514_ftajobs_full_0.pdf.

5 “Myths and Facts: Trade Agreements, Deficits, Jobs and Growth,” http://www.chamberpost.com/2011/05/myths-and-facts-trade-agreements-deficits-jobs-and-growth.

6 Letter from National Association of Manufacturers to the President’s Council of Advisors on Science and Technology, April 20, 2010, http://www.nam.org/~/media/D3A22734DDDB4249AA61E6AD1A7B78E6/PCASTfinal.pdf.

7 “Trade Action – or Inaction: The Cost for American Workers and Companies,” by Laura M. Baughman and Joseph F. Francois, September 15, 2009, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/uscc_trade_action_inaction_study.pdf.

8 “The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications,” CRS Report RL34330, October 4, 2011, http://www.crs.gov/Products/RL/PDF/RL34330.pdf.

9 “Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama” CRS Report R40622, October 6, 2011, http://www.crs.gov/Products/R/PDF/R40622.pdf.

10 “U.S.-Korea Free Trade Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3949, September 2007, http://www.usitc.gov/publications/docs/pubs/2104F/pub3949.pdf.

11 “Proposed U.S.-Colombia Free Trade Agreement: Background and Issues,” CRS Report RL34470, October 4, 2011, http://www.crs.gov/Products/RL/PDF/RL34470.pdf.

12 “U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3896, December 2006, http://www.usitc.gov/publications/docs/pubs/2104F/pub3896.pdf.

13 “AFBF Advocates Passing FTAs at World Trade Month Event,” American Farm Bureau Federation, May 24, 2011, http://www.fb.org/index.php?action=newsroom.news&year=2011&file=nr0524.html.

14 “U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3896, December 2006, http://www.usitc.gov/publications/docs/pubs/2104F/pub3896.pdf.

15 “The Proposed U.S.-Panama Free Trade Agreement” CRS Report RL32540, October 6, 2011, http://www.crs.gov/Products/RL/PDF/RL32540.pdf.

16 “U.S.-Panama Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3948, September 2007, http://www.usitc.gov/publications/332/pub3948.pdf.

17 “Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama” CRS Report R40622, October 6, 2011, http://www.crs.gov/Products/R/PDF/R40622.pdf.

18 Information on Free Trade Agreements available at the World Trade Organization’s Regional Trade Agreements Information System, http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.

19 “Trade Action – or Inaction: The Cost for American Workers and Companies,” by Laura M. Baughman and Joseph F. Francois, September 15, 2009, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/uscc_trade_action_inaction_study.pdf.

UPDATE: He’s Making It Worse

Here's how the American Jobs Act works

Good afternoon,

Last night President Obama walked Congress and the nation through the American Jobs Act, his plan to create jobs in America now. It's up to Congress to act on this set of bipartisan ideas that put people back to work and put more money into the pockets of working Americans.

You can watch a special enhanced version of the speech, featuring charts and other relevant information here.

Here are a few important points about how the American Jobs Act works, and why Congress should act quickly:

·         First, it provides a tax cut for small businesses, not big corporations, to help them hire and expand now and provides an additional tax cut to any business that increases wages.

·         Second, it puts people back to work, including teachers, first responders and veterans coming back from Iraq and Afghanistan, and construction workers repairing crumbling bridges, roads and more than 35,000 public schools, with projects chosen by need and impact, not earmarks and politics.

·         Third, it helps out-of-work Americans by extending unemployment benefits to help them support their families while looking for work and reforming the system with training programs that build real skills, connect to real jobs and help the long-term unemployed.

·         Fourth, it puts more money in the pockets of working and middle class Americans by cutting in half the payroll tax that comes out of every worker's paycheck, saving families an average of $1,500 a year. And it removes the barriers that exist in the current federal refinancing program (HARP) to help more Americans refinance their mortgages at historically low rates, save money and stay in their homes.

The American Jobs Act is based on ideas supported by both Democrats and Republicans, and is fully paid for by closing corporate tax loopholes and by asking the wealthiest Americans to pay their fair share. It would have an immediate impact on job and economic growth, but Congress has to act now.

You can learn more about the American Jobs Act on Whitehouse.gov.

Over the next few days there are a number of ways for you to ask questions and engage with Administration officials about the American Jobs Act including Open for Questions live panels and Twitter Office Hours.

In fact, next week, I’ll be participating in my very first White House Office Hours on Twitter, so be sure to tune in and send me your questions using the hashtag #WHChat.

Sincerely,

David Plouffe

Senior Advisor to the President

P.S. After last night’s address, a few White House policy experts answered questions about the speech. Check out the video of the event at WhiteHouse.gov/JobsSpeechOFQ.

VIDEO: American Jobs Act: Get the Facts

By Colleen Curtis

This evening, the President addressed a joint session of Congress and presented the American Jobs Act, a comprehensive plan to put America back to work. It was created from a set of ideas supported by both Democrats and Republicans, and it acknowledges that if we are going to restore America's middle class, we need to rebuild the economy the American way, based on balance, fairness and the same set of rules for everyone from Wall Street to Main Street.

Viewers who tuned in to watch it live-streamed from whitehouse.gov/live got an enhanced experience, one that included real time graphic elements that explained the research and the facts that helped inform some of aspects of the American Jobs Act. And now you can watch it that way, too.

You can download the fact sheet here.

UPDATE: He's Making It Worse!

UPDATE: He's Making It Worse

THE TRUTH ABOUT THE DEBT DEAL: It’s Pretty Much Meaningless

By Zeke Miller

The "historic, bipartisan compromise" reached to raise the debt limit does not end the struggle to reign in the federal deficit — in fact, it pushes the most difficult decisions off into the future.

More surprising, the debt deal actually cuts almost nothing now--it just promises future cuts that may or may not materialize.

There are very few specific cuts in the deal — and the $1 trillion in immediate cuts are almost entirely constituted of caps on future spending. And those caps are not required to be honored by future congresses.

The "real" spending cuts to current programs will come out of a bipartisan committee of Representatives and Senators, which is charged with finding an additional $1.5 trillion in savings from the federal deficit.

But White House and Republican leaders appear split on exactly what the so-called "Super Committee" can do.

In a presentation to his caucus, Speaker of the House John Boehner said it would "be effectively...impossible for [the] Joint Committee to increase taxes," even though it could consider reforming the tax code... (Read on)

Source: Constitution Party

No, Your Money Isn't Safe

By Zach Foster
Best read with companion article No, We're Still Not Protected

The companion article stated:

"The truth is that, while there are a few more restrictions on what the clowns on Wall Street can do, Americans are not better off than they were a year ago before the magical everything-proof shield was signed into law.  Banking is still highly unstable in the country, and the banks still exist as entities only because they were artificially revived in the form of massive bailouts.  All across the political spectrum, Americans are angry that the massive bailouts ever happened, and they haven’t forgotten that this bailout, spearheaded by Treasury Secretary Tim Geithner (who was present at the appointment ceremony for the head of the CFPB), happened under President Obama’s watch and he failed to take action against it."

Banking will never be stable in America until the Federal Reserve, whose hands are in every cookie jar, from Chase and Wells Fargo to your community bank, is fully audited and eventually dissolved, and the farce of fractional reserve banking is done away with.

Fractional reserve banking is one of the key factors causing the Great Depression.  Many people don’t know this, but the amount of money printed on their bank account statement is NOT the amount of money that exists in their community bank vault.  The standard reserve requirement for larger banks set by the Federal Reserve is ten percent,[1] meaning out of every hundred dollars a person saves in the bank, only ten of those dollars actually have to exist in a vault.  This system is a bridge of thin ice, since theoretically only ten percent of a bank’s customers need to take out all of their money in order for the bank to run out of money and close down (the true meaning of bankruptcy).

Economist Murray Rothbard makes a compelling case that fractional reserve banking goes hand-in-hand with inflation,[2] since the only way to account for the ninety percent of a bank’s money that doesn’t exist is to hastily print paper money, and printing more money further devalues the American dollar (this is exactly why America needs to return to the gold standard[3]).

The image used is artwork by the author.  It was compiled from various images from Wikimedia Commons as well as text added by the author.

---

[1] http://www.federalreserve.gov/monetarypolicy/reservereq.htm

[2] Rothbard, Murray. “Take Money Back.”

[3] Paul, Ron. Gold, Peace, and Prosperity.  The Foundation for Rational Economics and Education. Pp. 31-32, 39

Obama Throws Good Money After Bad

Taxpayer-funded PR for Unsustainable CLASS Act

“We very much share the concerns that have been expressed that, as written into the law, the framework of the program was not sustainable.”

—Secretary Sebelius, 2/16/11

At a time when the federal government is running trillion-dollar deficits, the Obama Administration has proposed spending yet more taxpayer dollars to launch a PR campaign aimed at promoting the CLASS Act—a new Obamacare entitlement that even HHS Secretary Kathleen Sebelius admits is at risk of becoming “immediately insolvent.”

·         Non-partisan experts and actuaries have consistently warned that the program could become unsustainable without a massive taxpayer bailout.

·         The independent Medicare actuary concluded that there is a “very serious risk” of the CLASS Act becoming unsustainable, and the President’s own Fiscal Commission recommended that the “financially unsound” program be significantly reformed or repealed entirely.

·         Senate Budget Committee Chairman Kent Conrad famously called the program “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.”

·         Senators Shelby and Thune wrote last week to Secretary Sebelius to express concern that the Administration plans to “use federal resources on television ads in an effort to mislead Americans that the CLASS Act is fiscally sound.”

The Administration has provided no details about how it believes it can turn a totally unsustainable entitlement into a solvent program, yet it already has plans to spend more taxpayer funds for a PR campaign to promote the program. It’s just another sign that Obamacare will prove to be a budget-buster for the federal government.

Unbalanced Approach to Deficit Reduction

By Jason Furman

Democrats and Republicans agree that getting our fiscal house in order is one of the critical challenges facing America. To address it we are going to have to make tough choices, bringing to the table a commitment to examine every area of the budget and every loophole in the tax code without presumptively taking any of the options off the table. But it is critical that we not bring down our deficits and debt at the expense of economic growth, innovation and job creation, or place the greatest burden on older Americans and the most vulnerable. That is precisely what the House’s Cut, Cap and Balance plan would do – a proposal that White House Press Secretary Jay Carney described as “duck, dodge and dismantle.”

The House plan fails to achieve a balanced plan to reduce the deficit, which is precisely the approach that has worked successfully in America in the past and has recently been recommended by a number of different fiscal commissions.

Let’s start with the “cut” and “cap” portions of the bill.  These sections require spending cuts in 2012 and caps over the next decade identical to those in the House Budget Committee Chairman Paul Ryan’s plan., By House Republicans’ own design, achieving those spending levels would require cuts that would be harmful to the economic recovery in the short-term while also damaging our long-term competitiveness and placing a higher burden on seniors and the most vulnerable. To give a few examples:

•The bill would abruptly cut more than $100 billion in spending in the first year alone, a step that Congressional Budget Office Director Doug Elmendorf stated would “affect our projections for GDP growth over the next two years.”

•The House Budget Resolution plan would cut clean energy investments by 70 percent, infrastructure investments by a third, and education and training by 25 percent – cutting 320,000 children from Head Start and reducing aid for families trying to put their kids through college by hundreds, or even thousands of dollars.

•It would cut Medicaid by one-third over the decade, and by nearly 50% by 2030. This could, according to the Kaiser Family Foundation, result in 36 million people losing Medicaid coverage, including people with disabilities and seniors in nursing homes.  And that comes on top of the 17 million who would lose coverage due to repealing subsidies in the Affordable Care Act.

•And it would cut programs for the most vulnerable – for example, by food stamp benefits for a family of four by $1,760 per year or cut 8 million households from the program.

•Finally, the House Budget Resolution proposed to convert Medicare to a voucher program, increasing costs for Medicare beneficiaries by $6,400 a year beginning in 2021 – with those higher costs increasing over time.

But “Cut, Cap and Balance” doesn’t stop there. It also includes a requirement that to secure an increase in the debt limit necessary to avoid default – and a devastating impact on families and businesses – Congress must pass a constitutional amendment requiring a balanced budget. Moreover, it is an extreme version of a constitutional amendment that would cap government spending and require a two-thirds supermajority to cut tax loopholes or take other steps on revenue. The President has frequently made clear why he thinks a Balanced Budget Amendment is a misguided effort to absolve leaders in Washington of their responsibility for making tough choices. But it is important to understand what this requirement means when added on top of the cuts in the House Budget Resolution.

To start with, consider that at the end of the next decade, the House plan would still be $400 billion a year short of achieving a balanced budget. Unless Republicans are willing to entertain $3 to $4 trillion in additional revenues over the next decade, that means $400 billion a year would need to be cut beyond the House Budget Resolution.

And when you’ve already made such deep cuts to discretionary spending, Medicaid and other programs, it becomes difficult to imagine any credible ways to achieve those spending levels without including Social Security in the reductions and making substantially deeper reductions in Medicare.

So if the required spending cut were across the board, it would mean all programs, including Social Security and Medicare, would be cut by 10 percent by the end of the decade on top of the House Budget Resolution. If defense spending alone were exempted, it would mean that all other programs (again including Social Security and Medicare) would be cut by about 12 percent by the end of the decade on top of the House Budget Resolution. It would be possible to avoid cuts of this magnitude, but that would require dramatically deeper reductions than the one-third cut in Medicaid and infrastructure currently proposed in the House Budget Resolution.

We obviously don’t agree with this approach.  The President has proposed a comprehensive approach that ensures we live within our means and reduces the deficit by $4 trillion, while supporting economic growth and long-term job creation, protecting critical investments, and meeting the commitments made to provide economic security to Americans no matter their circumstances. We want to make significant cuts to government spending, including additional savings that come from further strengthening critical programs like Medicare, while protecting the recovery, strengthening the middle class and making the investments that will promote economic growth so folks feel confident in their futures and their children’s futures.

Representatives from both parties will continue to talk about reaching the largest deal possible.  The President is pushing everyone to come to the table, put politics aside, work through our differences and prove to the American people that we can still do big and difficult, but necessary things.

Jason Furman is the Principal Deputy Director of the National Economic Council.

Pending Free Trade Agreements Are Good for America’s Farmers and Ranchers

The three pending free trade agreements (FTAs) would greatly expand access for America’s agriculture producers in developing markets. Enacting the FTAs would create 18,000 new jobs in the agriculture sector alone.1 Unfortunately, three years after the agreements were negotiated, President Obama has yet to submit any of them to Congress. America’s farmers and ranchers continue to lose market share as the President and Senate Democrats further delay the agreements by insisting they be tied to spending increases.

Korea: Korea is the fifth largest market for U.S. agriculture products and accounted for $5.3 billion in U.S. agriculture exports in 2010. According to the U.S. International Trade Commission, U.S. agriculture exports would increase by approximately $2 billion to $4 billion if this trade agreement were enacted.2 In addition, implementing the U.S.-Korea FTA would create 9,000 new agriculture jobs in the United States.3 Other highlights include:

·         Elimination of Korea’s 40 percent tariff on beef in equal installments over a 15-year period. Beef exports to Korea would likely increase by as much as $1.8 billion.4

·         Elimination of the 25 percent tariff on 90 percent of pork products by 2016, and elimination of the 22.5 percent tariff on other pork products within 10 years.5

If the U.S.-Korea agreement is further delayed, U.S. agriculture producers will continue to lose market share to foreign competitors such as the E.U. The E.U.-Korea trade agreement, which would phase out 94 percent of Korea’s tariffs on E.U. products, took effect on July 1st.6

Colombia: Since the U.S.-Colombia FTA was negotiated in November 2006, U.S. agriculture exports to Colombia have dropped by 50 percent due to delays in implementing this agreement.7 Meanwhile, the Canada-Colombia trade agreement is scheduled to take effect on August 15, 2011, which will further reduce the already diminished U.S. share of the Colombian market.8

While most of Colombia’s agriculture exports to the U.S. already enter duty-free through the Andean Trade Preferences Act, most U.S. agriculture exports to Colombia face stiff tariffs. If the FTA were enacted, many of these tariffs would be immediately eliminated, and U.S. agriculture exports to Colombia could increase by $370 million per year.9 Other highlights include:

·         Immediate elimination of tariffs on 77 percent of agriculture exports to Colombia; and most other tariffs on agriculture exports will be reduced over a 15-year period.10

·         Immediate elimination of the 5 to 20 percent tariff on most vegetables, wheat, barley, and soybeans, plus a 12-year phase out of the maximum 25 percent tariff on corn.11

·         Immediate elimination of the 80 percent tariff on prime and choice cuts of beef, and a five-year phase out the 20 to 30 percent tariff on most pork products.12 Beef and pork exports to Colombia would increase by an estimated 46 percent and 72 percent, respectively.13

Panama: Enacting this agreement would result in $195 million in increased annual U.S. agriculture exports to Panama, which already account for over half of Panama’s agriculture import market.14 On average, a 15 percent tariff is currently applied to most U.S. agriculture exports to Panama while most of Panama’s exports to the U.S. enter duty-free.15 Other highlights include:

·         Immediate duty-free access for two-thirds of U.S. agriculture exports including high quality beef, soybeans, poultry products, most fresh fruits, and most processed foods.16

·         In general, most of the remaining tariffs would be phased out over 17 years.17

·         Immediate duty-free access for a set amount of corn, and elimination of the out-of-quota 40 percent tariff over 15 years.18

·         Elimination of the 90 percent rice tariff over 20 years.19

·         President Obama continues to delay these common-sense trade agreements for his own political gain, and America’s agriculture producers are paying the price.

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1 “Ag groups: Three pending free trade agreements need action,” Jennifer Latzke, High Plains Journal, http://goo.gl/sXb74.

2 “The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications,” Congressional Research Service, May 2, 2011, http://goo.gl/7LNzf.

3 Supra Note 1, http://goo.gl/sXb74.

4 Supra Note 2, http://goo.gl/7LNzf.

5 Ibid

6 “Pending Free Trade Agreements,” American Farm Bureau Federation, June 2011, http://goo.gl/xhN0H.

7 “AFBF Advocates Passing FTAs at World Trade Month Event,” American Farm Bureau Federation, May 24, 2011, http://www.fb.org/index.php?action=newsroom.news&year=2011&file=nr0524.html.

8 “As trade pact with US sits, Colombia looks to China, others,” Howard LaPranchi, Christian Science Monitor, June 18, 2011, http://goo.gl/TzVyf.

9 Supra Note 6, http://goo.gl/xhN0H.

10 “Fact Sheet: U.S.-Colombia Trade Promotion Agreement Overall Agriculture Fact Sheet,” United States Department of Agriculture (USDA), Foreign Agricultural Service, September 2009, http://goo.gl/RxiyK.

11 Ibid

12 “Trade Agreement Would Promote U.S. Exports and Colombian Civil Society,” Juan Carlos Hidalgo, Cato Institute, February 15, 2011, http://www.cato.org/pub_display.php?pub_id=12783.

13 Ibid

14 “Agriculture in Pending U.S. Free Trade Agreements with Colombia, Panama, and South Korea,” Congressional Research Service, February 14, 2011, http://goo.gl/qEP02.

15 “The Proposed U.S.-Panama Free Trade Agreement,” Congressional Research Service, May 23, 2011, http://goo.gl/i9E3s

16 Supra Note 14, http://goo.gl/qEP02.

17 Ibid

18 “U.S.-Panama Trade Promotion Agreement,” the White House, http://goo.gl/paE9Q.

19 Ibid