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September 2012 Archives

September 4, 2012

Liars, Damned Liars and Fact Checkers

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Just in time, conservatives in politics and the media (a much smaller tribe) have begun to push back against the "fact checking" outfits within media operations. These self-appointed judges assert objectivity when they often merely render opinions on the statements of political candidates. Last night on the Canadian Broadcast Corporation's "The National" news program, for example, a feature described all the "lies" that both U.S. parties are telling about each other. An example was the "lie" of Republicans that President Obama was alluding to businessmen's achievements when he declared "You didn't build that." It's just assumed that "fact checkers" are objective oracles. (As a side note, the CBC would be hard pressed to broadbrush its own country's political parties as "liars"; not quite that way. What the CBC does very well to seek out the DC and NY liberal media for its cues on covering U.S. politics.)

The proposition that President Obama never meant to minimize the role of entrepreneurs just happens to be the Democratic Party line, of course. But it doesn't wash. Even in context--or especially in context, as Charles Krauthammer has said--the President's meaning was plain. It would make no sense in reference only to infrastructure. (When you watch the Obama speech and hear his passion, he sure doesn't seem to be talking only about infrastructure!) Moreover, it is the same pitch that was pioneered by Mr. Obama's friend and ally, Elizabeth Warren. It's the new "progressive" way of trying to rob entrepreneurs and businessmen of their moral authority and to justify whatever regulatory controls and taxes the Elizabeth Warrens of the world may want to impose on them.

Don't agree with me, Mr. "fact checker"? Well, you are entitled to your opinion. But it's not your fact.

Continue reading "Liars, Damned Liars and Fact Checkers" »

September 5, 2012

Tax Hikes on "Rich" are Set; Truly Rich May Escape

The President is after the "rich", meaning, he says, the "millionaires and billionaires." But the tax increases that already are set to take place in January--unless a new President and a new Congress decide to reverse them--hit people who make $200,000 a year ($250,000 a couple). The truly rich--the millionaires and billionaires--have lots of legal and accounting advisors and will move their money to avoid taxation.

Here is what is coming (Source: Tax Policy Center, via Wall Street Journal, Laura Saunders, September 1, 2012):

* An end to this year's Social Security tax cut. It's now 4.2 percent for the employee share of payroll tax; it goes up to 6.2 percent.

* Top income tax rate goes up from 35 percent to 39.6 percent ($200,000 and over)

* New investment income tax of 3.8 percent is imposed to help pay for Obamacare

* Top rate on long term capital gains goes from 15 percent to 20 percent

* Top rate on qualified dividends goes from 15 percent to 39.6 percent

* Medicare tax (employee's portion) top goes from 1.45 percent to 2.35 percent

* Estate tax (the "death tax") and gift tax rate goes from 35 percent to 55 percent

Continue reading "Tax Hikes on "Rich" are Set; Truly Rich May Escape" »

Another Case of Voter Fraud

The editorialists who claim, contra recent court cases, that there is no evidence of voter fraud in the U.S., and hence no need for Voter ID, now have another example to choke down, this time in Arkansas. A state legislator is involved, and this time the U.S. Attorney's office is on the job.

September 6, 2012

2013: Middle Class, Watch Out

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The progressive assumption is that the rich are not paying their "fair share" and that if they do, all will be well. It's not so. The tax increases already set in law and slated to take effect next year--see blog post below--will find some high earners paying upwards of 60 to 65 percent of their salaries to government. But it won't begin to solve the worsening debt crisis. Indeed, as the Wall Street Journal points out today, if the tax rate were raised to 100 percent (confiscation, in other words), the government's slide into greater and greater debt would be slowed only slightly. The liberal Brookings-Urban Institute study group, the Tax Policy Center, acknowledges (quotes the Journal), "the infeasibility of achieving a high debt-reduction target simply by increasing top individual income tax rates."

That is from a liberal think tank, mind you.

The Obama Administration hopes to get a new mandate based on class warfare (not to mention gender warfare). If they do, they will have three options: 1) slash entitlement spending as well as defense spending; 2) raise taxes on the middle class (which also is the wrong thing to do in a struggling economy); and 3) print more and more money, until the world stops buying our debt and inflation explodes. This latter is like giving a patient more and more morphine to cope with pain until the treatment backfires and the patient dies.

Paul Ryan is being called an "extremist" and "draconian" by Democrats for charting a path to fiscal solvency. The same term was applied to Ronald Reagan this season in 1980. There is no Democratic budget proposal and there has been no US Budget adopted now for several years. We are adrift and calling it "Forward".

Photo Credit

Continue reading "2013: Middle Class, Watch Out" »

September 7, 2012

Bad News is the Good News is Misleading


Give credit where it's due. Slate, NPR and other mainstream media outlets acknowledge that the employment numbers today are not good news. Slate calls its a post-convention "hangover". That's because the slight downtick in official unemployment (to 8.1 percent) is made possible only by 368,000 people dropping out of the total number of people looking for work. They no longer are officially "unemployed," but they surely don't have jobs!

The "96,000" new jobs are only to be seen against this overall decline and not nearly enough to address what has become the country's deep structural unemployment. In such a market it is an increasingly hard time to be young. More money for college loans doesn't really help with that, does it?

So the bad news is that the good news is misleading. I guess the good news is that people are figuring it out.

China's Debt Bomb: Look Out Below!

The world has bought into the idea of China as an economy that just keeps growing at very high rates. This is supposed to be the axiomatic future. But Minxin Pei, Professor of Government at Claremont-McKenna College in California, has been following a development that doesn't seem to have registered yet in international circle: China's go-go economy may be gone-gone. The reason is the same that tanked the U.S. in 2005-2008: debt. In this case it's disguised bank debt amounting to trillions of dollars.

If the bomb goes off, the economic repercussions will be felt world-wide and could unsettle Chinese politics, as well.

Writing in The Diplomat Pei says that local and regional governments borrowed recklessly for glamorous projects (sound familiar?). But so did the private sector. Reports Pei, "Over-leveraged real estate developers, for example, are struggling to stay a step ahead of bankruptcy. The Chinese media has reported several instances of suicides of bankrupt real estate developers. Some bankrupt businessmen simply vanished. According to a story in the South China Morning Post in May this year, 47 business owners disappeared in 2011 to avoid repaying billions in bank loans."

But the biggest problem is the banks.

"In the last two years, the Chinese State Council has tried to deflate the real estate bubble by limiting bank loans to real estate developers. But banks can skirt such restrictions by ostensibly lending to each other, with the funds ultimately going to financially stretched real estate developers....On the balance sheets of Chinese banks, such loans are technically classified as claims on other financial institutions. According to a recent report in the Wall Street Journal, inter-bank loans today account for 43 percent of total outstanding loans, 70 percent higher than at the end of 2009.

"Disturbingly, none of these huge risks are reflected in the financial statements of Chinese banks."

One thing about financial disasters: they seem to take people by surprise.

September 9, 2012

Famous Words, Now and Then

"We are beginning to turn the corner."--Barack Obama

"Prosperity is just around the corner."--Herbert Hoover

From Irving Berlin, 1932 (slightly adjusted):

"President Obama says that now's the time to buy
So let's have another cup of coffee
And let's have another piece of pie."

September 10, 2012

Chicago Reopens Gov Union Issue


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Members of the Chicago Teachers Union make an average of $76,000 and have just rejected an offer of a 15 percent pay increase (over four years) and gone on strike. This in an economic slump. The latest unemployment rate for Cook County (Chicago) is 9.6 percent.

The strike does help underscore the difference between the government economy and the private sector economy that finances it. Currently, government unemployment is only 5.1 percent, the lowest among economic groups.

If you watched the Democratic Convention last week you noticed the frequency of government union T-Shirts among the delegates. Government employees unions are now the core financial and campaign constituency of the Democratic Party. They also are ruthless opponents of reform, and that is especially true in education. Gloria Romero, a former Democratic State Senator in California, now heads a chapter of Democrats for Education Reform. She became completely frustrated as a legislator when every idea she or anyone else proposed was opposed--successfully--by the California Teachers Association. Their power is unparalleled. California government? Declares Romero (interviewed by Allysia Finley), "There's no other way to say it politely. It's owned."

So, will the Chicago strike go to "mediation" and wind up with a happy "compromise" that gives the teachers even more? Will President Obama be seen riding to the rescue to make this happen, as Rush Limbaugh suspects?

Or will this example of government union power's excess be another wake-up moment for the general electorate? The issue (to say it yet again) is: "Government of the government, by the government, for the government."

Photo Credit

September 11, 2012

Sister Souljah Moment or Teaching Moment?

You won't find much coverage yet of the subterranean political currents in the Chicago teachers strike. To some news services, the pay issue and the financial hole Chicago is in, don't warrant reporting. However, observers at the Washington Post (in a city where similar stories have played out) are noticing, as are some in Chicago.

Beyond that, Rush Limbaugh is among those on the right suspecting that the strike is a set up so that the President can demonstrate to voters that he can control the unions, rather than vice versa. In effect, he'd have a "Sister Souljah Moment", a reference to Bill Clinton's distancing himself in the 092 campaign from a black extremist, though Limbaugh didn't use that term.

Or, in a contrary interpretation, the strike could be real. In Chicago the city government runs the schools and City Hall is deep in debt. Editorializes the normally liberal Chicago Tribune, "There. Is. No. More. Money." There isn't even money to pay for the 16 percent pay increase over four years ("320 million) that the City already has offered and the union has rejected.

Meanwhile, while the union is a huge political force, so are aroused parents.

Either way, it is a teaching moment, as it were, for Chicago and the country.

Essentially, as Charles Lane writes, the problem for Democrats is that their biggest financial support comes from government employee unions, especially teachers unions. To go against them normally is death. But there may be an exception in an election year when the public as a whole is interested, because voters also are very interested in education. Poor people, usually minorities in big cities, do not benefit from high teachers' salaries and benefits; they benefit from choice. All parents want accountability.

Now you have Paul Ryan siding with Mayor Rahm Emanuel, at least for the moment (until POTUS moves in to arrange a "compromise" or even gets the union to back down for a couple of months, until the election is over). This is causing consternation in the base. The alignment of right and left reformers, therefore, probably is temporary.

But in that window comes a chance to "teach".

Voter Fraud? What Voter Fraud?

A candidate for Congress from the Eastern Shore of Maryland turns out to have registered--and voted--in Florida as well as Maryland. She said she registered only to help a dear friend who was running for City Council in St. Petersburg and some local issues. Records show she also voted in general elections in both states. What a great deal!

September 12, 2012

Don't Seed the Clouds of War

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It's important in politics and public policy to think a couple of steps ahead. In the Middle East two worrisome developments are getting immediate attention. First, Iran is close enough to a nuclear bomb that the Israelis are getting close to an attack. President Obama is making clear that he does not support such an attack, although that position is couched in prevarications about timing. "Now" will never be the right time so far as this Administration is concerned.

The killings in Libya and the attacks on our diplomats there and in Cairo also inflame worries of further violence.

The response of the Republicans is going to be defense of Israel and demands that the President not apologize for free speech in America, even if it fuels militant Islamist passions.

Here's the problem with going much farther than that: Romney and Ryan need to leave their post-election options open.

We are in the midst of a presidential campaign of great intensity and unparalleled long duration. The emotions of our own citizenry in coming weeks can become volatile, if fickle. The emotion that events in the Middle East are most likely to excite is fear. Americans will want to stand with Israel and against attacks on our diplomats and ordinary citizens. But they may very well rally to a statement from the White House that the President is resisting conservative efforts to "start another war."

Americans don't want another war. They never do, actually. So if that is the question that comes to dominate the election the "peace" party will
win--overwhelmingly. Think 1916 when Woodrow Wilson's slogan was "He Kept Us Out of War," 1940 with FDR and 1964 when LBJ derided Barry Goldwater as a dangerous warmonger. That both Wilson and LBJ (one could add FDR in 1940) subsequently led a massive war effort is beside the point: the voting public doesn't see these developments in prospect. They see the positions of the candidates right now.

Consider this time in 1980 when Ronald Reagan was very careful about what he said in relation to the Iran hostage crisis. That was wise.

Republicans are more likely to stand by Israel and more likely to stand up to Islamist extremists. Their long term stance has been peace-through-security. But, like it or not, the security-through-peace position is going to look like the safer one between now and the November election. It will
take fastidious restraint to avoid looking like the war party. If the Republicans really do want their foreign policy to prevail long term, they first have to assure the electorate of their prudence. A conservative foreign policy has to be carefully, and non-politically, shaped.

Photo Credit

Greeks Flail for Funds

In a gambit comparable to a suddenly impoverished renter looking in the backs of desk drawers for loose coins, the Greek government is searching high and low--mostly low--for fresh sources of euros. It had the idea of endearing itself to the German citizens who oppose lending it more taxpayer cash by demanding that reparations be paid Greece for Nazi depredations in World War II. However, it turns out that the two governments handled that in 1946. Let's see, any other sixty five year old bills we could revive?

No, but then how about selling some long term leases for some Greek islands? Mykonos is not available, but there are many uninhabited islands. One might suspect that they also are islands without water or docking potential. However, Bloomberg gives a better report than that. All the available islands and islets are government-owned and the leases are for 50 years. Some sound rather nice--especially now, in late September when the Agean is still warm and calm!

September 14, 2012

Get a Grip on Riot News

Attacks on US embassies in Muslim countries continue to feature "Yes,but" arguments from American officials. Yes, the anti-Muslim movie is deplorable, but that does not excuse killing innocent people and destroying property. This is a weak argument in any similar situation and feeds, rather than starves, protest demonstrations and riots. Der Spiegel in Germany sees "Obama's Foreign Policy in Ruins." Hussain Haqqani, a former Pakistani ambassador to the US writing in the Wall Street Journal ("Manipulated Outrage and Misplaced Fury"), tries to explain that the West's apologies play into the hands of Islamists, who will always be able to find some insult to play up as an excuse for anti-Americanism.

There are limited consequences to the riots, anyhow. Let's get some perspective. To his credit, Richard Engel, correspondent of NBC, reporting from Cairo last night, had his camera show that the rioters occupy only a relatively small section of space, while nearby traffic flows as usual around Tahrir Square in the center of town, and that business and shopping go on pretty much as usual. In other words, a demonstration in Cairo, even if violent, is not a whole lot more significant than a demonstration in an American city. It simply seems bigger than it is because of a media coverage.

The events in the Middle East and the Administration's (and media's) reactions, do however reveal a deep flaw in American liberal thinking. If someone with a supposed grudge like Anders Breivik in Norway walks into a summer camp and starts shooting, do we rush first to see whether the man's grudge is something we should take seriously? Do we try to placate the marauder? Or do we condemn it in the strongest terms and demand justice for those attacked? You know the answer. Why then do we suddenly start acting like insecure, slightly guilty parties when our diplomats and other innocents are attacked?

Standing up to terrorism carries a cost. But not as big a cost as trying to temporize with terrorism. The Obama "soft power" approach really has revealed itself as a failure.

September 17, 2012

Ask Not for Whom the Tax Bill Tolls

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Charities will be hit hard in the year ahead as taxes go up on people making over $200,000 ($250,000 a couple), on people realizing capital gains from sales of equities and on estates of deceased persons. Charities also are beginning to notice that the tax law that allows grandparents to gift their grandchildren will change significantly in 2013.

The size of the estate tax exemption is scheduled to go down to $1 million. According to the IRS, the number of deceased persons whose estates will be subject to pay what conservatives call "the death tax" will rise from 8,600 (estimated for 2011) to 114,600.

If you think this is only "fair" you might start to consider who the disappointed heirs are. A whole lot of middle class or even poor people are hoping for inheritances to help them through their own retirement years. A good portion of their hopes presently are slated to be absorbed by the government.

The charities I know (including Discovery Institute!) are hoping that people will avoid the January 1 rush and donate money now while, for example, the capital gains tax is 15 percent rather than the 20 percent it is slated to reach in the new year.

Yes, Congress and the President, whoever he is, probably will relent on some of these slated increases, but you can't be sure. Instead, the "tax increases for the rich" are likely to be expanded down the income ladder as the budget deficits worsen. Since the Federal Income Tax first was adopted in 1913 the promise that only the rich will get hit tends to get shelved once an election is over. "Ask not for whom the tax bill tolls..."

Meanwhile, the huge American non-profit sector, which is full of liberal folk who probably will vote for candidates who pledge to tax only "the rich", may find that as charitable giving drops in the new year they have helped trap themselves.

Anti-U.S. Protests Expand to....U.S.

"The Only Solution is World Revolution" say the Occupy Wall Street revivals that marked the anniversary of last year's big, but desultory demonstrations. There surely is some oddity in a protest movement that has the support of many of the top elected leaders and enjoys magnificent coverage by government-funded organs (e.g., NPR).

Dr. Michael Egnor on Significance of ENCODE

"Egnorance" is the blog of the prominent neuroscientist and pediatric brain surgeon Michael Egnor of SUNY/Stonybrook. Among other things, Dr. Egnor is a fine rhetorician. He has challenged Darwinists to defend their Junk DNA contention after the ENCODE evidence recently published. Not many takers; the Darwinist camp is usually as chattering and clattering as a tree full of Bonobos, but not now.

Egnor renders an especially excellent account of Discovery Institute's well laid markers on this topic. His account of the recent article of James Shapiro about his own contributions to debunking Junk DNA is especially valuable.

"It's worth noting," Egnor write, "that Shapiro's co-author on the ENCODE-vindicated 2005 paper-- Rick von Sternberg-- is the intelligent design scientist who was hounded out of the Smithsonian Institute because he published, in his capacity as a journal editor, a review article by Stephen Meyer of the Discovery Institute on the origin of biological information."

Shapiro is not a proponent of intelligent design, so it's worth noting, too, his academic courage--a rare commodity. Sternberg, of course, is now a fellow of the Biologic Institute.

September 18, 2012

Romney's Sin, Unvarnished Honesty

Three "gaffes" that say more about the media and the White House than about Romney:

Romney criticized the US for immediately apologizing for the anti-Islam video and was attacked for doing so by the press and the White House. Never mind that the Administration, in the person of the Secretary of State, went on to apologize again and again later. The mainstream idea seems to be that the US government can try to teach crazed mobs about American freedoms by deploring the object of the mob's anger and then go on to denounce the mob's violence. The US approach at least seems backwards.

If anything, Romney should be criticizing as well the US government for its intimidation of the video-maker (the FBI visit based on his supposed violation of a parole provision, the requests that YouTube examine his film). Mobs are only encouraged by half-measures like that and sees them as a confession of complicity, while reasonable people in Muslim countries already are relatively indifferent and are going about their business as usual. Meanwhile, in this country gestures of intimidation suggest frightening exercises of arbitrary government power. It is something one might expect from Vladimir Putin's Russia. Of course the video on Islam may be trash (I haven't seen it) and the video-maker a fool. So what? It's not the job of government to police the free speech of fools and their trash or else we would have to close down half of Hollywood. It is the job of government to protect the First Amendment.

Continue reading "Romney's Sin, Unvarnished Honesty" »

Who Lost Egypt?

Mohamed Morsy is moving to consolidate power In Egypt for the Islamic Brotherhood and to confront Israel and the West. Caroline Glick has the best and fullest report yet on what Morsy actually is doing. A military dictatorship under Mubarak is now replaced by an Islamist dictatorship under Morsy, as Glick explains.

None of this is being reported adequately in the United States. If people are not in the street demonstrating, scaling walls and setting fires, our media lose interest. The current US Government meanwhile has its head in the sand of the desert. One or two developments that Glick describes might not alarm. But anyone who bothers to follow the lines of changes to their obvious conclusion, as Glick does, cannot help but realize that the Arab Spring has been mismanaged by the US.

Israel now is threatened more seriously than perhaps ever before. Its friends in the United States are divided. The US, meanwhile, is damaged tremendously by a smug, self-destructive energy policy that has prevented our independence from Mideast oil.

September 20, 2012

Gilder: Many Fat Cats on Dependency Rolls

Discovery co-founder George Gilder was on Lou Dobbs to say that real dependency in the United States is far greater than the 47 percent or so who do not pay income tax. It should include many crony capitalists and fat cats: the corrupted Wall Street banks and financial institutions who live off federal incentives and inducements, the legal class that depend on more and more federal regulations and rules to make their services necessary, the "education bureaucrats who feed on" ever expanding federal programs, the "green machine" (including farmers hooked on ethanol) and even Silicon valley venture capitalists who are seduced by federal industrial policy.

Not all these people vote their narrow self-interest as clients of government, of course, but neither will all the people who depend on more direct federal subsidies. What Gilder is trying to do is warn people that big government eventually saps the energy of a free people until they no longer are free, after all. They become what another thinker, C. S. Lewis, called, "willing slaves of the welfare state." As Gilder shows in Wealth and Poverty, the slaves can be found as much in board rooms as welfare lines.

September 21, 2012

Homespun Hoosier Wisdom--Take the Quiz

From Fort Wayne, Hoosier philosopher Howard Chapman offers another of his periodic surveys. You don't even have to answer the phone. Just take the quiz and add up your totals. Be careful; there is at least one trap.

September 24, 2012

Dodd-Frank Regs Suffocate Growth

When lawyers take over an economy--feeding off federal regulations and rules--you get a society afraid to innovate and, hence, to progress. Instead of holding businesses to account, heavy regulation inspires litigation and frightens investors. Even the "funny papers" are serious.

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Dodd-Frank is at least as big a regulatory burden as Obamacare, and at least as unpredictable in its applications. Arbitrary government is tyranny because anything you do may be judged illegal by regulators who have been handed vast powers that are only vaguely defined. What we have is something only a bit less, creeping authoritarianism.

Peter J. Wallison, at AEI, is the leading critic of Dodd-Frank. In a piece for The American Spectator he warns that anything less than wholesale repeal will leave Dodd-Frank as a dead weight on economic growth. When liberty is punished everyone gets hurt soon enough.

Now A Plurality of Christians in Africa

Many people probably imagine that Islam is a religion with powerful evangelizing strength. But it isn't true, at least in Africa. As of now, it is estimated that Christians make up 46 percent of population, while Muslims are 40 percent. The remainder are largely animists.

Maybe the reason that Islam is not doing better is its growing reputation for violence. Innocent people invariably are targeted, including fellow Muslims. In this way the extremists make the news, but not new converts, it would seem.

Of course, the public in the West might do well to understand that the riots and terrorism are not the voice of the Muslim "street", any more than Occupy demonstrators represent New York. Life goes on, even in cities with riots. It is not fair to judge all Muslims by the passions of the demonstrators, any more than to suppose that in the 20s and 30s the Ku Klux Klan spoke for Christians in America.

In any event, Islam needs better public relations these days, just as the US Government needs a better public relations program for dealing with Muslims overseas.

September 28, 2012

The Conservatives' Bioethicist

The term bioethicist is usually connected with an individual attached to a hospital or university who is useful to the management as someone to rationalize "pulling the plug" on sick people. The new Patient Payment Advisory Board of Obamacare, if the law is implemented, will be filled with such people.

However, there are a small number of traditional conservatives who are bioethicists and one of the most prominent is our own senior fellow, Wesley J. Smith. As of now he has a newly established blog spot, Human Exceptionalism, at National Review Online. He even put on a necktie for the occasion.

Wesley, a lawyer who once upon a time worked with Ralph Nader, has several books to his credit and a long history of testimony before legislative bodies on ethical issues. He keeps a busy national and international speaking schedule while operating from his home in Oakland, CA. He coined the term "human exceptionalism" to combat the idea (as he put it) that the human being is "just another animal in the jungle."

You will still see Wesley's articles, including the blog posts, at the Discovery Institute homepage (under "Articles by Fellows") and often here at Discovery News. Meantime, congratulations to Wesley and to his hosts at National Review for the new connection.

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Taxes Going Up, Up in France

The Socialist government of France is planning to raise taxes to 75 percent for the rich, while the opposition says that everyone will get hit soon enough.

"'France is headed into the wall," warned Bruno Le Maire of the main opposition UMP party. Former budget minister Valerie Pecresse claimed: "This budget means 100 percent of French workers will be paying higher taxes.'"

The public in France, unlike in the US, apparently understands the connection, and the popularity of the new government is sinking.

Sharp budget cuts will accompany the cuts. So France, where unemployment is now about 10 percent, is now fighting recession with higher taxes and budget cuts. They are going to show us how it is to go over the "fiscal cliff" so we can get ready to do the same.

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