Our Changing Globe » taxes

Twenty Questions Obama Needs To Answer

Michael Redbourn — Wed, 08 Feb 2012 10:59:57 +0000

Obamanomics vs. Reaganomics: Destroying the lies about trickle …

dancingczars.wordpress.com2/7/12

This entry was posted in Obamanomics vs. Reaganomics: Destroying the lies about trickle down economics and tagged conservative blog netowrk, Progressives are economic morons, Socialism doesn't, Trickle down works.

Another Record for Obamanomics | Wizbang

wizbangblog.com2/3/12

Another Record for Obamanomics. February 3, 2012 | Filed under Economics,Employment | Posted by Rodney Graves. And like all such records, it's not one that's doing the nation a damn bit of good.

President Obama has frequently justified his policies and judged their outcomes in terms of equity, justice and fairness.

All of which begs an obvious question,

How does our existing system and his own policy record stack up according to those criteria?

1) Is it fair that the richest 1% of Americans pay nearly 40% of all federal income taxes, and the richest 10% pay two-thirds of the tax?

2) Is it fair that the richest 10% of Americans shoulder a higher share of their country’s income tax burden than do the richest 10% in every other industrialized nation, including socialist Sweden?

3) Is it fair that American corporations pay the highest statutory corporate tax rate of all other industrialized nations but Japan, which cuts its rate on April 1?

4) Is it fair that President Obama sends his two daughters to elite private schools that are safer, better-run, and produce higher test scores than public schools in Washington, D.C. while millions of other families across America are denied that free choice and are forced to send their kids to second-rate schools?

5) Is it fair that Americans who build a family business, hire workers, reinvest and save their money—paying a lifetime of federal, state and local taxes often climbing into the millions of dollars must then pay an additional estate tax of 35% (and up to 55% when the law changes next year) when they die, rather than passing that money onto their loved ones?

6) Is it fair that Treasury Secretary Tim Geithner, former Democratic Senate Majority Leader Tom Daschle, former Ways and Means Chairman Charlie Rangel and other leading Democrats who preach tax fairness underpaid their own taxes?

7) Is it fair that after the first three years of Obamanomics that the poor are poorer, that the poverty rate is rising, that the middle class is losing income, and some 5.5 million fewer Americans have jobs today than in 2007?

8) Is it fair that roughly 88% of political contributions from supposedly impartial network television reporters, producers and other employees in 2008 went to Democrats?

9) Is it fair that the three counties with America’s highest median family income just happen to be located in the Washington, D.C., metro area?

10) Is it fair that wind, solar and ethanol producers get billions of dollars of subsidies each year and pay virtually no taxes, while the oil and gas industry which provides at least 10 times as much energy pays tens of billions of dollars of taxes while the president complains that it is "subsidized"?

11) Is it fair that those who work full-time jobs, and sometimes more than one in order to make ends meet have to pay taxes to support up to 99 weeks of unemployment benefits for those who don’t work?

12 Is it fair that those who took out responsible mortgages and pay them each month have to see their tax dollars used to subsidize those who acted recklessly, greedily and sometimes deceitfully in taking out mortgages they now can’t afford to repay?

13) Is it fair that thousands of workers won’t have jobs because the president sided with environmentalists and blocked the shovel-ready Keystone XL oil pipeline?

14) Is it fair that some of Mr. Obama’s largest campaign contributors received federal loan guarantees on their investments in renewable energy projects that went bust?

15) Is it fair that federal employees receive benefits that are nearly 50% higher than those of private-sector workers whose taxes pay their salaries, according to the Congressional Budget Office?

16) Is it fair that soon almost half the federal budget will take income from young working people and redistribute it to old non-working people, even though those over age 65 are already among the wealthiest Americans?

17) Is it fair that in 27 states workers can be compelled to join a union in order to keep their jobs?

18) Is it fair that nearly four out of 10 American households now pay no federal income tax at all, and is a number that has risen every year under Mr. Obama?

19) Is it fair that Boeing, which is a private company, was threatened by a federal agency when it sought to add jobs in a right-to-work state rather than in a forced-union state?

20) Is it fair that our kids and grandstands and great-grand-kids who never voted for Mr. Obama will have to pay off the $5 trillion of debt accumulated over the past four years, without any benefits to them?

What do you think? Was it fair?

How To Fix Food Stamp, Medicaid And Gov Housing Problems

Michael Redbourn — Tue, 06 Dec 2011 11:33:07 +0000

Free Democracy: Mr. Romney's Missing Details

freedemocracy.blogspot.com12/6/11

Here's a reminder: It would cut food stamps by $127 billion, which would remove millions of people from the rolls during a downturn and cut the benefits of those who remain. Nearly two-thirds of Mr. Ryan's cuts affect low-income programs like Pell grants, housing subsidies and Medicaid. That's never mentioned by Mr. Romney, who instead talks about big cuts to tiny programs that are wildly unpopular with the party base, like the national endowments, family planning …

Feds Raid Million Dollar Home of Welfare Recipient in Washington …

conservativebyte.com12/5/11

I was in line behind a family that probably was living like the one in the article as they paid for almost $400 worth of food with food stamps. They had some … This is why Medicare and Medicaid is in deep $hit. People abusing …

The following advice appeared in the Waco Tribune Herald on Nov 18, 2010

*I’d be happy to give a link to the article but only subscribers to the newspaper can view it.

It appeared under letters to the editor, and was written by a twenty one year old female.

It’s her future shes worried about and this is how she feels about the social welfare big government state that shes being forced to live in!

Fixing Social Security; Put me in charge of welfare, Medicare and housing grants!

The problems we face today are there because the people who work for a living are outnumbered by those Who vote for a living!

Put me in charge of food stamps. I’d get rid of Lone Star cards; no cash for Ding Dongs or Ho Ho’s, just money for 50-pound bags of rice and beans, blocks of cheese and all the powdered milk you can haul away. If you want steak and frozen pizza, then get a job.

Put me in charge of Medicaid. The first thing I’d do is to get women Norplant birth control implants or tubal ligations. Then, we’ll test recipients for drugs, alcohol, and nicotine and document all tattoos and piercings. If you want to reproduce or use drugs, alcohol, smoke or get tats and piercings, then get a job.

Put me in charge of government housing. Ever live in a military barracks? You will maintain our property in a clean and good state of repair. Your "home" will be subject to inspections anytime and possessions will be inventoried. If you want a plasma TV or Xbox 360, then get a job and your own place.

In addition, you will either present a check stub from a job each week or you will report to a "government" job. It may be cleaning the roadways of trash, painting and repairing public housing, whatever we find for you. We will sell your 22 inch rims and low profile tires and your blasting stereo and speakers and put that money toward the common good..

Before you write that I’ve violated someone’s rights, realize that all of the above is voluntary. If you want our money, accept our rules.. Before you say that this would be "demeaning" and ruin their "self esteem," consider that it wasn’t that long ago that taking someone else’s money for doing absolutely nothing was demeaning and lowered self esteem.

If we are expected to pay for other people’s mistakes w e should at least attempt to make them learn from their bad choices. The current system rewards them for continuing to make bad choices.

AND While you are on Govt subsistence, you no longer can VOTE! Yes that is correct. For you to vote would be a conflict of interest. You will voluntarily remove yourself from voting while you are receiving a Govt welfare check. If you want to vote, then get a job.

BTW – I personally think that the author of the book, "How To Get Food Stamps, Welfare And Other Benefits", should be put in stocks and pelted with fruit and vegetables by all those that work for a living!

Would Cain’s 999 Have Beeen A Good Thing?

Michael Redbourn — Sun, 16 Oct 2011 12:34:42 +0000

Herman Cain's 999 Plan Draws Praise, Skepticism – Finance – CBN …

Cain's 999 plan is part of what's propelled him to the front of the GOP field. Although the plan is resonating with voters, it's drawing criticism from economists.

Publish Date: 10/15/2011 2:00

http://www.cbn.com/cbnnews/finance/2011/October/Herman-Cains-999-Plan-Draws-Praise-Skepticism/

Why I Support Herman Cain For President – Forbes

Neon Tommy

Why I Support Herman Cain For President
Forbes
The author is a Forbes contributor. The opinions expressed are those of the writer. I have decided to support Herman Cain for president of the United States, and have joined his team of economic advisors. Central to my support are Cain's pro-growth …
Cain's 999 Plan A Payoff For Koch SupportLez Get Real
Interview with Presidential Candidate Herman CainRealClearPolitics
Cain's 9-9-9 Plan: A Step In The Right DirectionNeon Tommy
Patch.com -Daily Beast -OpEdNews
all 5,377 news articles »

Herman Cain Wants To Kill Our Tax Code!

Herman Caine is the only GOP presidential candidate that wants to do it, and he’s rising super fast in the opinion polls!

The 999 Plan Isn’t Perfect

But like they say,

"Good should never be the enemy of the perfect" – Voltaire

and Rep. Paul Ryan just gave the plan a thumbs-up!

Art Laffer agrees and says,

"It would be far, far better than the current system".

*Arthur Betz Laffer is an American economist who first gained prominence during the Reagan administration as a member of Reagan’s Economic Policy Advisory Board (1981–1989).

And Chris Chocola, the president of the free-market Club for Growth, calls it,

"A truly revolutionary tax reform that would amount to a massive job-creating tax cut on investments, savings and income".

What Is Caine’s 999 Plan?

A 9% income-tax rate.

A 9% value-added net sales tax rate on business.

And a 9% national sales tax overall.

The sales tax part has come under attack from both sides of the political spectrum with many conservatives worrying that it will start at 9% and gradually get raised, whilst a good number of Liberals oppose it because they say its regressivity will hurt middle- and low-income people.

* A regressive tax imposes a greater burden, relative to resources, on the poor than on the rich because there is an inverse relationship between the tax rate and the taxpayer’s ability to pay as measured by assets, consumption, or income.

Cain’s Rebuttal Of Sales Tax Criticism

Everybody below the poverty line will be exempt from the sales-tax and the sales of existing goods will be exempt.

The sales tax will pick up revenue and help to lower the rate for everybody, especially the middle class.

And Caine’s economic adviser, Rich Lowrie says that.

"The sales tax is a replacement tax, not an add-on tax like you’d find at the state level. This is a key point. All we are doing is pulling out taxes that are invisible. We’re cutting the rates. We’re putting them back in at lower rates".

Lowrie is referring to the payroll tax, which in the Cain plan will go from 15% to 9% which constitutes a net tax cut and a good deal more transparency regarding costs and prices that are embedded in the current code.

"The 9-9-9 plan will add $2 trillion to U.S. gross domestic product, create 6 million jobs, increase business investment by a third and lift wages by 10%. And if you fold all that growth together, federal revenues go up by 15%", said Lowrie,

Would It Work?

Such a gigantic drop in marginal tax rates for individuals, 35 to 9%, or to 18% including the sales tax, and for businesses also from 35 to 9% would supply an incredibly strong economy-wide growth incentive, and if you’re looking for proof, then you need go no further than the Harding-Coolidge-Mellon tax cuts of the 1920s, the John F. Kennedy tax cuts of the 1960s and the Ronald Reagan tax cuts of the 1980s.

Remember, too, that the Cain tax plan would eliminate the double-tax on saving and investment by removing capital gains, estates and dividends from the tax code.

Given the current economic malaise, which in large part can be traced to the weakened balance sheets and net worths of families suffering from the multi-year slump in stock prices and home values, increasing returns to saving and investment through a much lower marginal tax rate should boost asset values, and might be just what the doctor ordered.

As for businesses, not only would they get a globally super-competitive 9% tax rate, but they’d receive 100% expenses for new purchases of capital equipment.

Gary and Aldona Robbins who once worked at the treasury priced out the Cain plan on a static basis and discovered it to be revenue neutral.

And the models suggests a $26 trillion tax base yielding $2.3 trillion in revenue for a 9.1% overall rate.

No Federal Or State Tax But Just A Sales Tax

I’ve personally yet to have anybody to explain to me why simply having a sales tax instead of ALL the other taxes wouldn’t be fairer.

The rich would spend more than the poor and therefore pay more tax, and what could be simpler than that?!

Tax preparers understandably hate the idea of course because simply having just a sales tax would put around 100,000 out of work.

What Is Obama’s Vision For America?

Michael Redbourn — Sun, 02 Oct 2011 21:02:42 +0000

An “Act of War”: Obama’s Destruction of the U.S. Energy Industry …

Kevin Mooney tabulates the damage that the Obama administration is doing to the Gulf economy, and to the energy industry generally: Ten oil rigs have left the Gulf of Mexico since the Obama Administration imposed a …

Publish Date: 08/23/2011 22:10

http://mayrantandrave.com/2011/08/23/an-act-of-war-obamas-destruction-of-the-u-s-energy-industry/

Bob Chapman: Obama's Deliberate Destruction of America …

1 comment to Bob Chapman: Obama's Deliberate Destruction of America. David. October 1, 2011 at 9:41 am · Reply. I am going to have to agree with Chapman. I think the destruction of America has been a deliberate attempt. …

Publish Date: 10/01/2011 6:51

http://sgtreport.com/2011/09/bob-chapman-obamas-deliberate-destruction-of-america/

As promised, the Obama administration fundamentally transformed America!

America is now in serious decline.

Income is lower.

Unemployment is higher.

Jobs are fewer.

Government is much larger.

Federal spending is way up.

America’s global economic status is way down.

The world-view of our country and our economy is in the pits!

And perhaps worse still, hardly anyone sees any sign of economic recovery or improvement.

Let’s look at the Labor Department data on the number of Americans 16 and older unemployed for 52 weeks or more during the five most recent recessions:

1976 750,000

1982 1,600,000

1994 1,200,000

2004 1,100,000

2010 4,300,000

Total government spending averaged about 19% of gross domestic product from 1996 to 2007 and rose to about 21% in 2008 but in the three years of the Obama administration it soared to 25%.

Why Did It Happen?

The Obama administration is focused on its increasing control of health care, propping up labor unions, increasing taxes, and expanding the scope and size of government.

In the first 70 years of the 20th century, American and European economic growth increased together, but then the Europeans shifted toward socialism, and their growth lagged.

And America is rapidly moving toward the European model, and we are starting to see its detrimental impact.

President Obama’s recent spending and tax policy proposals would only make things worse.

He wants to increase the federal deficit by increasing spending and providing some targeted, but short term, payroll tax cuts.

And this is at a time when we need to bring the federal deficit down and fast!

Obama’s Plan

Although Obama’s plan would actually increase the deficit by $447 billion over the next year or two, Obama says his increase will be "paid for", and to do it, he’s proposed a series of permanent tax increases.

But America’s economy is already facing two significant tax increases.

The first will be the end of the Bush tax cuts in December 2012.

And because of ObamaCare, starting in 2013 taxpayers making more than $200,000 will pay an additional 3.8% on investment and interest income.

The Near End Of Giving To Charity?

The new Obama proposals include reduced itemized deductions allowed for any individuals earning more than $200,000 a year ($250,000 for married couples) and included in that proposal, is a government plan that would take some of the money that would have gone to charity and instead funnel it to federal government spending.

The Effect Of Tax Increases

Tax rate increases more often than not bring in reduced tax dollars!

The Cato Institute’s Alan Reynolds demonstrated in his recent Wall Street Journal piece that the 28% tax rate on long-term capital gains brought in $36.9 billion a year from 1987 to 1997, while the current 15% rate in 2004 to 2007 brought in $96.8 billion per year.

Did Obama Change His Tune?

Last December when the president extended the Bush tax cuts, he acknowledged that tax hikes both slow economic growth and deter job creation, something he seems to have forgotten!

The higher taxes on energy producers are particularly discouraging, given the importance of energy to our economic recovery and the administration’s continued clampdown on energy production.

Can It Get Any Worse?

Sadly, "Yes".

In another measure that is counterproductive to economic growth, the Obama plan includes extending benefits for the long-term unemployed, even though studies show that long term employment benefits raise the unemployment rate from 0.5 to 1.5 percentage points.

President Obama has said that:

"Everything in [his new] bill will be paid for", and that it "will not add to the deficit".

But it will be paid for in the future, and the president is effectively saying that we should add some more to the deficit now in return for promises of future spending.

The Bottom Line

None of the administration’s programs bode well for the good or for the future of America or its people.

American Enterprise Institute’s Director of economic policy Kevin Hassett said earlier this month:

"The Obama administration’s position throughout this recovery has been that the U.S. can have the highest corporate tax on earth, a big regulatory crackdown, and a vast expansion of labor-union power and still expect a positive jobs story because of cash-for-clunkers and green jobs. This jobs report indicates how much damage that view has done".

In the end, the newest Obama proposals are proof that his recent centrist posturing was just that, posturing.

The new proposals are a continuation of the old Obama New Party (read communist) policies, and they are policies that sadly have extended the recession, stifled economic growth, and will for some years to come, weaken America!

Can Obama Recover From His Massive Failures?

Michael Redbourn — Thu, 08 Sep 2011 09:49:14 +0000

At U.N., Obama faces problems on larger stage

By Laura MacInnis WASHINGTON (Reuters) – President Barack Obama, grappling with a poor economy and slumping approval ratings, faces problems on a larger stage this week at the United Nations, with challenges to his …

Publish Date: 09/19/2011 8:35

http://www.huffingtonpost.com/2011/09/19/at-un-obama-faces-prob_n_969141.html

RealClearPolitics – Obama: Failing the Lincoln Test

Obama: Failing the Lincoln Test. By Michael Gerson. WASHINGTON — During his recent speech to Congress, President Obama gave Republicans this ideological glove to the face: "We all remember Abraham Lincoln as the …

Publish Date: 09/13/2011 3:00

http://www.realclearpolitics.com/articles/2011/09/13/obama_failing_the_lincoln_test_111312.html

What President Obama Inherited

Obama inherited a deep recession and financial crisis resulting from problems that had been building for years and those responsible include:

Borrowers and lenders on Wall Street and Main Street.
The Federal Reserve.
Regulatory agencies.
Ratings agencies.
Different presidents and Congress.

What Obama Will Bequeath?

Huge deficits.
Massive interest payments which could ultimately destroy the Republic.
Higher inflation.
A weaker dollar.
Pressure for higher taxes.

What Exactly Did Obama Enact?

An $825 billion stimulus package.
The Public-Private Investment Partnership to buy toxic assets from the banks.
Cash for clunkers.
The home-buyers credit.
The auto bailouts.
Five versions of foreclosure relief.
Numerous lifelines to Fannie Mae and Freddie Mac.
Financial regulation and health-care reform.
Energy subsidies.

Which Succeeded?

The auto bailouts?!

Even though a rapid private bankruptcy was preferable and GM and Chrysler are not yet de-nationalized successes, we can I believe, mark this up as a success.

Which Failed?

The stimulus bill cost an astounding $280,000 per job which is over five times median pay, as reckoned by the administration’s inflated estimates of jobs "created or saved", and much more using more realistic estimates.
Cash for clunkers cost $3 billion, just to shift car sales forward a few months.
The Public-Private Investment Partnership, despite cheap federal loans, generated 3% of the $1 trillion claimed, and toxic assets are still hindering some financial institutions.
The Dodd-Frank financial reform law institutionalized "too big to fail" amid greater concentration of banking assets and mortgages in Fannie and Freddie.
The foreclosure relief program permanently modified only a small percentage of the four million mortgages the president promised.

The economic records set on Mr. Obama’s watch are historic and no corporate CEO could survive such a clear history of failure.

Under The Obama Administration Watch:

The US experienced the first downgrade of sovereign U.S. debt in American history.
Relative to GDP, it now has the highest federal spending in U.S. history with the exception of the peak years of World War II
The highest federal debt since just after World War II.
The fraction of the population working is the lowest since 1983 and long-term unemployment is by far the highest since the Great Depression.
Job growth during the first two years of recovery after a severe recession is the slowest in postwar history.
Home-ownership rate is the lowest since 1965 and foreclosures are at a post-Depression high.
The share of Americans paying income taxes is the lowest in the modern era, while dependency on government is the highest in U.S. history.

Can Or Will Obama Recover From The Catastrophes?

Based on his present ratings in the polls and the fact that the economy has little or no chance of improving before the elections, one would have to say, "No he will not recover!".

And to make a comeback even less likely is the likelihood that the Obama administration will try to deliver more of the same things that failed.

Just fourteen years ago Obama was an active member of the New Party (read Communist) and he didn’t quit; it got shut down by the courts. Meaning that there is no reasonable chance that he will switch to anything like a free market economy, soon or ever!

New Poll Says Obama’s Base Is Crumbling

Michael Redbourn — Tue, 26 Jul 2011 11:44:38 +0000

.: White House Document Dump on Friday Points the Finger at …

shutking.blogspot.com12/3/11

In 2010, Creamer led efforts to rally the Democratic base by demonizing Republicans and making wildly optimistic predictions of victory: Big Government also reported in May that Creamer, who worked for the Obama …

DownWithTyranny!: Does Obama Have A Base Problem– And Why His …

downwithtyranny.blogspot.com11/11/11

Yesterday Benjy Sarlin at TPM reported that the White House is insisting they don't have a base problem. In America, we know very well they do– and it's the same base problem they kept as many as half the Democrats and …

A new ABC News/Washington Post poll reveals a whole crop of revelations, and among them, there are strong indications that Obama’s liberal base is starting to crumble.

You can read the ABC News/Washington Post Poll, but before you do, here are some of the most important nuggets of information.

In spite the hundreds of billions of blown stimulus dollars, and almost as many upturn promises from Joe Biden,

82% of Americans still say their job market is struggling.

90% rate the economy negatively, including half who gave it the worst rating of "poor."

Are You Better Off Today Than Jan. 20, 2009?

A slim 15% claimed to be "getting ahead financially", half what it was in 2006.

Fully 27% said they’re falling behind financially and that’s up 6% since February.

A significant majority (54%) said that they’ve been forced to change their lifestyle significantly as a result of the economic times and 60% of them are angry, which is up from 44%.

More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base.

Liberal Support

Strong support among liberal Democrats for Obama’s jobs record has plummeted from 22% from 53% which is down below a third.

African Americans

And African Americans who still believe the president’s measures helped the economy has plunged from 77% to barely half that.

Job Approval

Obama’s overall job approval on the economy slid below 40% for the first time, with 57% disapproving.

And strong dis-approvers outnumbered approvers by better than two-to-one.

The By And By

A new Mitt Romney video is aimed directly at the core of Obama’s politcal base, young Americans who volunteered for him by the tens of thousands in 2008 and powered him to victory in state after state.

The Upshot

If joblessness disillusions enough of them, then the president will be in even deeper trouble than he is now.

What’s The Tax Debate All About?

Michael Redbourn — Tue, 19 Jul 2011 11:55:03 +0000

Payroll Tax Debate: The Truth Comes Out in the U.S. Senate

conservativedailynews.com12/2/11

On Thursday, Dec.1st the battle to extend the payroll tax holiday and unemployment insurance benefits reached new heights in the Senate, as not only did…

Tax debate over, Obama lands in Hawaii – TheHill.com

thehill.com12/24/11

White House pool reports suggest the president is in full vacation mode. Following a week of speculation about whether President Obama would be able to join his family in Hawaii for Christmas, or would be stuck in …

What’s going on right now is a battle between those in the Senate and the House that believe that more tax money is needed so that more can be spent, and those on the other side of the aisle, that don’t believe it!

Obama’s Anger

President Obama, who right now is the swagman for the more tax-wanters, can’t understand why the Republicans won’t join his crusade to add trillions of dollars, to the burden of the taxpayers.

And that’s trillions with a “t" and not billions with a “b”,

Will Rogers may never have met a man he didn’t like, but Obama has never met a tax he didn’t want to fondle, and he can’t give up his itch to cuddle these new trillions.

Will Roger obviously never met an agent

An AP (Associated Press) analysis suggests that adding trillions of dollars in new taxes will most affect small-business owners, and low, and middle-income families trying to reach for more prosperity.

* And AP leans left!

The Leftist Solution?

In his frantic push for more taxes Obama declares:

“We need to close tax loopholes for millionaires and billionaires, oil companies, hedge-fund managers and corporate jet owners".

“What we need to do is to have a balanced approach where everything is on the table".

"We need to take on spending in the tax code".

“You can’t reduce the deficit to the levels that it needs to be reduced without having some revenue in the mix".

In the same way that Marie Antoinette couldn’t understand why the poor wouldn’t eat cake when there was no bread, Obama can’t understand why a baron of Wall Street wouldn’t settle for a little Grumman or Falcon, even with a tax credit.

* Closing loopholes on those that use corporate jets would raise about one tenth of one percent of needed money!

What Happed To Euphemisms?

Obama, with his trillion-dollar “grand bargain", is now flailing about in frustration because the Republicans are refusing to use euphemisms, which is the preferred tongue of Capitol Hill.

To Obama’s chagrin, the Republicans obstinately continue to talk in Harry Truman English, and the Tea Partiers keep calling taxes, "taxes".

The Master Is Choking

Obama got to Washington, in part because he is a master of pulpit rhetoric, but now he’s choking on mixed metaphors:

“Pull off the Band-Aid. Eat our peas. Now’s the time to do it".

But euphemisms, however vague, cute or inexact, won’t work this time if the Republicans can resist an urge, which is deep within their DNA, to "fold in the clutch".

Taxes Are An Affliction

Some polls suggest that the majority of Americans want higher taxes, whereas others say that they don’t.

The left-wing polls suggest one opinion, and the right-wing ones another.

The majority of Americans might approve of higher taxes for other people of course, but the question that almost certainly went unasked in left-wing polls was, "Would YOU be happy to pay more tax?".

Thatcher And Palin

Many years ago, Margaret Thatcher astutely diagnosed the terminal ailment of all socialists:

“They always run out of other people’s money".

And Sarah Palin, who sets liberal teeth on edge with her gift of cutting colorfully to the chase, observed that:

"The Sugar Daddy has run out of money".

The Lines In The Sand

The Democrats are now crying that the Republicans must agree to tax increases or risk default, but that’s because the Democrats are unwilling to make the needed cuts in spending to prevent the default.

New York Times columnist David Brooks wrote that:

"Republicans no longer have a sense of moral decency and can’t accept the legitimacy of intellectual authorities".

But what he really meant was that taxpayers have finally got the tax-eaters’ number, and that the “intellectual authorities”, might as well get used to it.

Is America Going Bankrupt?

Michael Redbourn — Wed, 23 Feb 2011 21:00:48 +0000

The EU, US and UK Are Going Bankrupt, Not China | Culture of Life …

emsnews.wordpress.com11/17/11

But it didn't shift in the US favor, it shifted in favor of Asia! Now, Europe is seeing individual countries going bankrupt, one after another, in rapid succession. Greece already is bankrupt when they announced a 50% haircut on …

The Dollar Today Is Dead, The U.S. Bankrupt | Laitman.com

www.laitman.com10/30/11

Opinion: (Giulietto Chiesa, former Italian Politician and Member of the European Parliament): “We are at the beginning of the transition period, which has no.

You Don’t Believe The US Is Headed For Bankruptcy?

So Let’s put the debt into perspective!

And now take a look at President Barack Obama’s 2010 budget!

It shows a massive fiscal gap over the next seventy five years, the closure of which requires immediate tax increases, spending cuts, or some combination of both totaling 8% of gross domestic product, and to put 8% of America’s GDP in perspective, this year’s employee and employer payroll taxes for Social Security and Medicare will amount to just 5% of GDP.

And why are we only projecting seventy five years ahead? Probably because over the full long-term, we’ll need an extra 12%, not 8%, of GDP annually.

Seventy-five years might seem like a long enough time to plan ahead but it’s not, and if the Greenspan Commission, which “fixed” Social Security back in 1983, had focused on the true long term we wouldn’t be sitting here now with Social Security 26% under funded.

The Social Security trustees, at least learned a lesson and the 26% figure is now based on their infinite horizon fiscal-gap calculation.

And another reason we shouldn’t look just seventy five years ahead, is that the government’s cash flows, which are the difference between its annual taxes and non-interest spending, over any period of time, including the next seventy five years, aren’t well defined.

If you use different words to describe the receipts taken in and paid out each year by the government, you produce entirely different cash flows and an entirely different fiscal gap measured over any finite horizon.

Take this year’s payroll tax contributions.

Let’s call these transfers from workers to Uncle Sam “borrowing” by the government, rather than “payroll taxes”, since the money will be paid back as future benefits.

If the future payback isn’t in full however, meaning equal to principal plus interest, then we can call the difference a “retirement tax”.

And abracadabra!

With this change of words, our 2011 deficit of about 10% of GDP is boosted another five points to 15%.

The bottom line then, is that we need to look at the infinite-horizon fiscal gap not just for Social Security, but for the entire federal government and that analysis, based on the CBO’s (Congressional Budget Office’s) long-term alternative fiscal scenario, shows a mind numbing fiscal gap of $202 trillion!

And covering this gap requires coming up with the aforementioned 12% of GDP, forever.

But the Obama administration budget has seemingly fixed the problem!

The president’s 2012 budget, shows that most of our long- term fiscal problem has miraculously disappeared and the fiscal gap isn’t 12% of annual GDP or even 8%, it’s 1.8%.

How does it work?

In 2014 an Independent Payment Advisory Board will be established and will be charged with recommending cuts to Medicare and Medicaid providers when their costs grow too fast.

Hardly anyone expects the cuts to actually happen of course, because until now they’ve always been repealed, and Richard Foster, who is Medicare’s chief actuary certainly doesn’t believe they’ll happen.

Foster added this statement to the end of the report:

“The financial projections shown in this report for Medicare do not represent a reasonable expectation in either the short range, or the long range”.

I’m not sure whether censoring the fiscal gap is more dishonorable than fudging it, but what is sure, is that if nobody starts getting honest about it real soon, then it will be cheaper to light cigars with dollar bills than with matches.

Obama and the liberals believe more in Redistribution than they do in Growth!

Michael Redbourn — Sat, 30 Oct 2010 12:27:51 +0000

The Obama Plan to Redistribute Housing | Libertarian Party

www.lp.org10/29/11

First Obama tried to redistribute wealth before he was President, by leading the charge to force banks to make loans to lower income Americans who could not afford to own homes (through the Community Reinvestment Act). …

Applying Obama's “redistribution of wealth” to school grades …

usamericanfreedom.com11/19/11

That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said, “OK, we will have an experiment in this class on Obama's plan”. …

Obama and the liberals could perhaps have achieved both growth and redistribution, but they chose only the latter, and they will pay heavily for their error on Tuesday!

Will Obama change direction after the elections?

No He won’t!

During his election campaign Obama said:

“What people really want is fairness”.

“They want people paying their fair share of taxes”.

“They want that money allocated fairly”.

Redistribution Of Wealth

People thought it sounded good and they voted for him, but they didn’t know that he would immediately attempt redistribution of wealth, and he went for it full throttle in spite of the recession.

What the vast majority of Americans believe in however is economic growth, and they understand full well that the threat of having more and more money taken away as you get richer and richer is simply a demotivator.

The result, motivation went down, small businesses stopped hiring and unemployment went up and stayed up; and in some states it’s still getting worse.

Then Came ObamaCare

With motivation down, the Obama administration then committed another horrendous error of judgment – they rammed ObamaCare down a mostly unwilling nation’s throat.

Obamcare essentially subsidizes health insurance for low and middle-income groups and attempts to recover the cost by taxing high-earners even more, which in turn lowers motivation and causes people to hunker down instead of trying to grow their businesses.

And what makes it even worse is that low and moderate-income workers now feel no need to earn money because they can now maintain the same standard of living with even less effort.

Obama’s Response?

Seeing popularity wane both for him personally and for his policies Obama set out a stand and tried to sell the public his unwanted wares.

Expanding health care coverage was somehow going to somehow drive down costs.

Handouts to state and local governments became a stimulus package.

Climate change legislation became a “green jobs” bill, and so on.

When the voters didn’t buy his arguments his response was to tell them that, “They are confused and not thinking clearly” and that one statement will cost him dearly.

You don’t tell people that you want to vote for you that they are basically stupid if they don’t understand you, do you?

Harry Reid just said something equally stupid and it might cost him re-election in Nevada, “He saved the world economy!”.

Doesn’t he know that Oblamer is the One?!

Could Obama Have Played It Differently And Maybe Won?

Yes, he could have!

Obama could have embraced at least two policies that would have enhanced both equity and economic performance simultaneously, and some of them might well have bridged the ideological divide.

Fannie Mae and Freddie Mac.

Loan guarantees should not have been provided for Fannie and Freddie because they shifted risk from participants in real estate transactions to taxpayers, and the caused capital to flow into the industry under very favorable terms.

Creating the guarantees allowed mortgage lenders, realtors, homebuilders, developers, securities traders and others to reap enormous gains during the boom, only to later dump their losses on taxpayers during the ensuing bust.

Cutting off all federal support for Fannie and Freddie would have sent a completely different message.

It would not only have greatly enhanced equity, but would also have helped steer investment away from ever more conspicuous McMansions and into productive endeavors like building newer, more-efficient factories, all of which would have stimulated economic growth.

* “McMansion” is an originally pejorative term used to describe a large house, particularly in the United States, that is constructed using modern labor-saving techniques and materials

The Tax Code

Another area that was ripe for reform would have been the loophole-ridden tax code.

Today, the proliferation of carve-outs means that only around 40% of personal income is taxed!

The loopholes should have been removed as much as was possible and the tax base broadened, after which the Obama administration could have slashed rates, enhanced equity, and provided a huge stimulus to the economy.

Instead, the administration did exactly the opposite; it added even more loopholes and promised to raise rates!

Right now we have a situation where similarly situated families often face vastly different tax burdens depending on their ability to game the system, and it also means that investment is steered away from companies that are adept at building better products, to those with the knack for lobbying.

Will Obama Move The Goal Posts?

Obama was a member of the New Party (communist) just 13 years ago, and he was no teen.

Michelle is a Black separatist of the worst kind as her Princeton thesis shows.

Obama is on record as saying that he’d rather be a great one term President than an ineffectual two termer, so we can sadly expect him and Michelle to continue to try and force their socialist/communist on America!

Will The U.S. End Up Broke Like Greece?

Michael Redbourn — Wed, 14 Apr 2010 04:52:29 +0000

The Idea Is Not Nearly So Farfetched As It Sounds.

In Less Than 20 Years US Debt Could Exceed Its Income

Greece

Greece is so deep in debt and its economy is in such chaos that there are now national strikes, and violent street protests and its pensions are on the verge of collapse.

Why?

Because Greece owes so much money to other countries.

Greece’s economy is now so bad that it’s governement is having to beg for even more loans at even higher interest rates just to stay afloat.

The U.S.

The U.S. government’s present financial obligations will result in a national debt of around $20 trillion by the end of this decade and taxpayers will have to pay about $1 trillion a year, just to cover the interest.

So How Bad Is $20 Billion?

Bob Greenstein who works with the liberal leaning Center on Budget and Policy Priorities says,

"Our economy is much stronger, and our financial system is much stronger, but you know even if we experienced just a fraction of the problem of Greece’s, it would really be a very painful experience for us".

"If you wait ’till the crisis hits then your options may be more constrained and you may have to take action that’s more draconian and hits the average American in painful ways".

It’s true of course that the U.S. is much stronger, but it’s also true that the U.S. is headed down the same dangerous path and The Congressional Budget Office projects U.S. interest payments on our debt will quadruple over the next decade, becoming the largest single item in the budget.
Doug Holtz-Eakin, who is a former director of the Congressional Budget Office and was a campaign adviser to the 2008 presidential nominee Sen. John McCain, R-Ariz., notes that,

"In 2010 we’ll be paying $916 billion in interest alone. So we’re really borrowing just to pay interest and we are steadily getting to the point where we’re getting a new credit card just to pay off the old one".

Is there a point where foreign lenders will become less willing to lend to us to cover our debts unless interest rates go up a lot?

The answer is "Yes".

Moody’s, credit rating agency says that all nations face credit downgrades once interest payments eat up more than 10% of total revenues and says that even though the U.S. is stronger it’s credit rating will be downgraded when the interest that it owes consumes more than 14% of its revenues.

If President Obama’s most recent budget plans are carried out then the U.S. is predicted to cross that line in 2015 when the interest on its debt will equal 14.8%.

Could Debt Cause Violent Street Protests In The U.S. ?

The Moody’s report goes on to say that,

"Keeping the U.S.’s credit rating will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion. The severity of the crisis will force governments to make painful choices that expose weaknesses in society".

The U.S. is set to go even much further over the 14% line that Moody’s sets and by 2020 its interest payments are likely to be eating up 20% of its federal revenues and by 2025, interest payments, combined with the cost of Social Security and Medicare for the baby boomers, along with other entitlements, will eat up 100% of its federal revenues and
Brian Riedl of the Heritage Foundation says that,

"Right now entitlement spending, primarily Social Security, Medicare and Medicaid is nearly half the budget and it’s growing seven and 8% a year. Over the next 10 to 20 years it’s going to swallow up the entire budget. There will be no money left for defense, education, highways, anything; because the entire federal budget will go to Social Security, Medicare and Medicaid. This is simply an unsustainable course".

What Will Happen If Interest On Debt Equals Revenue?

At that point, the only available options would be to raise taxes dramatically and to cut benefits, neither of which would be used to add any services, but would be necessary just to pay the country’s creditors the interest on its debts.