Tuesday, June 28, 2011

Bathtubs, Bombers, and Basketballs

Here are some things to keep in mind during the unfolding Debt Ceiling Drama:

1. ALL TAXES ARE FLAT IN THE LONG RUN. You may have heard politicians say they want to raise taxes only on “The Rich”, or that 50% of Americans “Pay No Income Tax” at all. Those statements may be true in a political sense, but they are meaningless economically. Think of the total economy as a big bathtub: you can try to take water from only one end, but it will quickly even out after a period of turbulence. If your lawyer’s taxes go up, so will his rates. The same is true for corporations: If ExxonMobil’s taxes go up, you will pay more for gas. Any tax not levied on individuals at an equal rate will create turbulence and the further we get from flat taxes on individuals, the more turbulence we will create in the economic bathtub.

2. TAXES ARE EVEN HIGHER THAN YOU THINK. The rate for all taxes and regulations in the US - federal, state, and local - is currently 63.41%!* That’s right, you only get to keep about thirty seven cents of every dollar you earn! How could you not know this? The reason is Stealth Taxes. Stealth Taxes are everywhere. They are the B-2 Stealth Bombers in our tax code and are undetectable to a voter’s radar. Regulations, payroll taxes, corporate taxes, inflation, unfunded mandates, embedded taxes, and the cost of compliance are just some of the taxes stealthily bombing your economic freedom every day. Somehow though, you do sense this, but while 64% of voters think taxes are too high, only 13% of the political class agrees!**

3. THIS IS ALL POLITICS IN THE SHORT RUN, BUT IN THE LONG RUN ECONOMICS WILL RULE. Think of the laws of economics as you would the laws of physics. In this case, political maneuvers like bailouts, reckless spending, money printing, artificially low interest rates, and an unsustainable tax rate of 63% are like politicians trying to hold a basketball deeper and deeper underwater. These tactics may delay the inevitable for a time, but eventually that basketball will get loose and explode from the depths. When that happens, watch out!

*Source: Center for Fiscal Accountability
http://www.fiscalaccountability.org/?content=cogdteas10
**Source: Rasmussen Reports
http://www.rasmussenreports.com/public_content/business/taxes/april_2011/64_say_americans_are_overtaxed_political_class_disagrees

Tuesday, June 14, 2011

The Outsourced Presidency

Yesterday President Obama commented on Anthony Weiner’s 3 weeks of stunning moral depravity and offered this remarkable piece of leading-from-behind:  "if it was me, I'd resign".  But of course it’s not him, so he has effectively abdicated any leadership role and left it up to Mr. Weiner to decide his own fate.

So in Obama we have a president who has outsourced healthcare policy to Nancy Pelosi and Harry Reid. He has outsourced financial policy to Barney Frank and Chris Dodd. He has outsourced foreign policy to the UN and the Arab League. He has outsourced the deficit to Joe Biden. He has outsourced military intelligence to the Muslim countries. He has outsourced his economic policy to the Unions and the EPA. He has outsourced our jobs to the Chinese. He has outsourced our energy policy to OPEC. He has even tried to outsource his dismal record to his predecessor.

And now he has outsourced his moral standards to Rep. Anthony Weiner. This leaves plenty of time for golf, vacations, parties, and fund raising of course.

Saturday, June 11, 2011

Obama is Right!

President Obama commented on the weak economy this week and said;  "We didn't get into this mess overnight."  He ought to know, he's been working on this for almost 20 years.

Obama's work began in earnest as a Community Organizer and affiliate of ACORN (Association of Community Organizations for Reform Now) when he was fighting alongside them and eventually helped win the Clinton era basket of reforms which led directly to the Subprime Crash and Financial Meltdown of 2008.  ACORN and their affiliates were in the forefront of the fight to force banks to make bad loans to politically favored constituents who were otherwise unqualified to obtain mortgages.  Obama was there in the 90s agitating with ACORN against these bank lending standards and then for the taxpayers to essentially assume all the risks under a huge fraud called "Fannie Mae".

But his work was not done, not by a longshot.   How many realize that as a US Senator, Barack Obama sucked up tainted Fannie Mae money at a staggering rate which dwarfed any other politician?  How many voters realize that Obama was referred to as the "Senator from Fannie Mae"?  How many realize that the fraud known as Fannie Mae was virtually a monsterous slush fund for the Democrat Party?

Yes, Obama is right, it took years to create this mess.  He ought to know, he's been there since the beginning working hard at it. 

Wednesday, June 1, 2011

Wall Street Should Read This!

"Wall Street Baffled by Slowing Economy" ?   Maybe they should read this: The Irony of Keynes!
*This headline should have read, "Sycophantic Media Blindsided by Bad Economic Policies Blames Wall Street Myopia"!