Monday, August 30, 2010

The Sky Was Falling

Did you hear the latest on the oil spill? It's gone - the oil, I mean. They can't find any more oil in the Gulf, on beaches, on birds, or anywhere. Even the so-called "plume" of oil that was supposedly lurking deep down in the ocean somewhere can't be found. Nothing, no oil, it's all just gone. Shrimp fishing has resumed; everything is going back to the way it was.

This oil leak that was billed by hysterical alphabet networks as the worst ecological disaster ever has got to be the greatest none-event in decades. It's right up there with the Y2K computer meltdown that didn't happen.

You remember that one, don't you? The world as we know it was going to cease to function at midnight on Dec. 31,1999 when the date rolled over to DD/MM/00. This "end of the world" scare was going to happen as a result of all the computers in the world malfunctioning because they wouldn't be able to distinguish between 1900 and 2000 since they both end in 00. Airplanes would crash, banks would lose track of our money, all government functions would come to a grinding halt, etc., etc., etc. Then, year 2000 came, and everything went on as normal without a glitch. It was all "Chicken Little" hysteria.

The great Gulf oil spill was another one. As it turns out, almost nothing was affected.

Where are all the oil spill doom-sayers now? Have they apologized for their ignorance and promised to be more informed next time? Are they being laughed off of the public arena? No, they are off to the next scare, which has something to do with hungry bears in Yellowstone Park getting ready to eat people, I think.

Friday, August 20, 2010

Washington Could Learn From Richmond

When Bob McDonnell took office as Governor of Virginia in January, he inherited a large dollar state budget deficit. Now, a mere seven months later, the state closed out the 2010 fiscal year with a $220 million surplus! It only took the new Governor a mere seven months to fix Virginia’s budget deficit.

How did he do it? Well, he forced the state legislature to get serious about cutting spending. He made it clear that he would veto any budget bill that contained a tax increase. With the economy being what it is and many Virginians struggling financially, McDonnell felt that this is not the time to be increasing people’s taxes. With that option off the table, the legislature had to make hard choices about reducing spending to achieve a balanced budget as required by Virginia’s constitution. The legislature acted responsibly, and state dollar outgo was equated to dollar income without our tax burden being increased.

Meanwhile, in Washington, the White House raised its forecast for the 2011 budget deficit to $1.4 trillion. That’s just for one year; the total U.S. debt ceiling has been raised to $13 trillion. This is all borrowed money, mind you, which will have to be paid back some day.

The U.S. Constitution has no balanced budget provision, so Congress is free to spend more than it has, which it often does. Since Obama took office, deficit spending by the Federal government has gone on steroids.

We have seen a trillion dollar “stimulus”, auto company bailouts, TARP, bank bailouts, cash for clunkers, money being thrown at “green energy”, a remake of student lending that costs more, trillions to be spent on Obama-care, more money for unemployment payments, etc. And there are no signs that the spending in Washington is slowing; the latest episode is a $26 billion bailout to the teachers’ union and others.

You and I have to balance our monthly budget, or else eventually face some serious financial consequences. If our income goes down due to a job loss, pay cut, the poor economy, or any other reason, we have to cut expenses. Sure, we can live off of credit cards for awhile, but if you listen to Dave Ramsey, you know where that leads.

Congress doesn’t have to exhibit the same kind of financial discipline that ordinary Americans do. Congress can just spend, spend, spend with money it lends itself, and let future generations deal with the mess. Congress never goes bankrupt or finds itself talking to collection agencies. Congress just raises the debt ceiling. It’s as if you had a credit card that, whenever you hit the limit, you could just take a pencil, erase that number and write in a new, bigger number, and keep doing this until someday you hand the whole thing over to your children and grand-children.

And now, the very same Congressmen who have been spending money like drunken sailors for the last eighteen months, thereby running up the huge federal deficit, are now saying it’s time to balance the federal budget.

Now it’s time? Not when any of those spending bills were being passed; no, that was not the time to show budgetary restraint by voting against the spending. Now that huge deficits have been run up in Washington, now is the time to balance the budget.

This is like the Captain of the Titanic saying, as the ship goes down, that now we need to go slow and watch carefully for icebergs.

Here is why you are now hearing from the same people who ran up the federal debt to unprecedented levels that something has to be done about it. You will notice that none of these complicit Congressman are saying we have to cut federal spending to any significant degree, even though this out-of –control spending is what caused the deficit. They’re just saying that something has to be done about the deficit. And what might that something be? There are two keys to figuring it out.

The first key fact is that the so-called Bush tax cuts will expire at the end of this year, unless Congress acts to extend them. These were tax cuts passed during Bush’s first term that reduced tax rates for everyone plus reducing the tax on dividend income and capital gains. For political reasons, these tax cuts were put in place with an expiration date, which is Dec. 31of this year. Thus, Congress must act, or taxes on everyone will go up January 1. Some taxes, such as dividend income, will almost triple, regardless of income level.

The second key fact is that Congress has appointed a Deficit Reduction Commission to study the deficit problem and make recommendations on what to do about it. I predict that this commission will not recommend taking a meat cleaver to budget-busting federal spending programs or any such approach, although it may recommend token spending cuts here and there. This is because the commission’s membership is stacked such that it will, no doubt, recommend raising federal taxes significantly.

Some people are even speculating that a recommendation will be made for a federal Value Added Tax (VAT), European style, in addition to the federal income tax. A VAT is a tax imposed throughout the production cycle. For example, consider a wheat farmer. When he buys seed, he will pay a value-added tax on it. After he harvests and sells his crop to the bakery, a VAT will be paid on the grain. When the bakery sells the loaves of bread to the supermarket, a VAT will be paid. And when you buy a loaf of bread, you will pay a VAT.

Note that in both of these cases, the increased taxes will be on everyone, not just the “rich”.

And now for the final piece of the puzzle. Congress talks incessantly about making the “rich” and the “wealthy” pay their fair share, or about raising taxes only on the “wealthiest” people. Beware when you hear this talk. It’s what duplicitous politicians say when they want to lull you into a false sense of security. The dirty little secret of taxes is that the “wealthy” already pay most of the income tax. Data from the IRS shows the following:

Share of Income Tax Burden (2004)
Top 1% in income ------------- 35.6% of total federal income tax
Top 10% ------------- 67.6%
Top 50% ------------ 96.6%
Bottom 50% ------- 3.4%

Taxes on high income people can’t be raised enough to pay for the ballooning government budget deficits. You could take 100% of the income of the “wealthy” and it wouldn’t be enough. So taxes on the middle class are going to have to go up, unless there is a major change of course in Washington.

Anyone who doesn’t think big federal tax increases on the middle class are currently heading our way need only look at recent budget machinations in California.

In case you haven’t been following it (I do because I used to live there), California has been wrestling with a $40 billion deficit. They have gotten that down to $19.1 billion. The California Governor recently proposed cutting spending on welfare, child care, in-home care, and schools to finish balancing the budget. The California state legislature rejected that and came up with a complex tax scheme that includes a state income tax increase for all but the highest income tax bracket. You read that right; the California state legislature is considering a state income tax increase on everyone EXCEPT the wealthy. The reason given is that the state’s current tax structure excessively taxes the top bracket, adding to the volatility of revenue.

Keep in mind that California is truly the land of fruits and nuts, and its state legislature for the most part believes in socialist tax and spend state welfare policies to the extreme. Again, I know this because I lived there for years. If in California they have come to the realization that they can’t tax the rich enough to balance the state budget, and that they must instead increase taxes on the middle class, you know reality has set in.

Washington is coming to the same conclusion, they just don’t want to tell you. Congressmen still prattle on about taxing the wealthy, but reality is setting in. Hold on to your wallet; America’s spending chickens are coming home to roost.

Tuesday, August 10, 2010

An Interview With President Obama

I have been wanting to ask President Obama some questions for awhile now, so I recently called the White House and actually got through to him. Here is a summary of the interview.

Q: Mr. President, you promised to keep unemployment below 8%, yet it’s now stuck at around 9.5%. Your response to this situation has been to extend unemployment benefits. Unemployed people don’t need yet another government handout, they need a job. How does extending unemployment benefits create jobs?

A: We need to help these people get through these tough times. My administration is compassionate; we want to help people. These people lost their jobs through no fault of their own. They are worried about buying food and paying the rent. I can’t stand idly by without lending a helping hand. I want to help -----------------.

Q: Yes, but what about creating jobs?

A: I want to create jobs. I am the “jobs” President. We need more jobs. Jobs, jobs, jobs.

Q: If you want to create jobs, why did you shut down drilling in the Gulf of Mexico at an estimated cost of between 40,000 and 100,000 jobs in that region?

A: Well, uh, we must protect the environment. Did you see those birds covered with oil? There must have been - -- a lot of them. I can’t bear to see oily birds.

Q: Then why didn’t you accept help from other countries on day 1 instead of waiting so long, and why didn’t you let Bobby Jindal build those berms to keep the oil from reaching the beaches and the birds?

A: We had to make sure all of the paper work was done. Bobby needed to get those permits; bureaucrats need jobs too, you know.

Q: Well, since we’re back on the jobs issue, if you want to keep people employed, why did you take over Chrysler and General Motors and then force them to precipitously close thousands dealerships at a cost of hundreds of thousands of jobs?

A: We had a crisis on our hands. Swift action was needed; there was no time to worry about details.

Q: Hundreds of thousands of jobs being lost was a detail?

A: We have saved millions of jobs. I am the “jobs” President. Jobs, jobs, jobs.

Q: Now that the crisis is over, have those dealerships been re-established?

A: Umm, no, they’re all permanently out of business now.

Q: f you want to create jobs, why don’t you propose cutting taxes on businesses large and small so they will have more money to hire people?

A: We can’t let those fat cats keep that money. I’m for the little guy. The wealthy need to pay their fair share. I want to spread the wealth around.

Q: But cutting the corporate payroll tax would no doubt spur job growth.

A: We have saved millions of jobs. I am the “jobs” President. Jobs, jobs, jobs.

Q: Mr. President, let’s turn to the subject of taxes. Unless Congress acts, on January 1 the so-called “Bush tax cuts” will expire, thereby increasing taxes on every American who pays any Federal taxes, regardless of income level. What are your thoughts on this?

A: Letting tax cuts expire is not a tax increase; it’s the end of a tax reduction.

Q: So even though everyone will send more money to Washington, it’s not a tax increase?

A: We can’t let those fat cats keep all of that money. I’m for the little guy; I want to spread the wealth around.

Q: But that money is the taxpayers’ money that they have earned, it’s not the government’s money.

A: We need a level playing field. The government should take that extra money and use it to, to, uh, reduce the deficit.

Q: If the government wants to reduce the deficit, why doesn’t it just stop spending trillions of dollars of borrowed money?

A: We had an economic crisis that only government could solve. I needed to spend those trillions of dollars to save the economy.

Q: But the economy is still way down, and many experts say it will recover on its own. In fact, many experts say the massive deficit spending by the government is and will continue to be a drag on the economy. Furthermore, tax increases are the worst thing that government can do when the economy is struggling.

A: Well, uh, I brought the economy back from the brink, and we can’t let those fat cats keep all of that money. We need to spread it around.

Q: Moving along, you recently signed a financial reform bill that did nothing to address the root cause of the financial meltdown: Fannie May and Freddie Mac. Why is that?

A: We can’t let those fat cats on Wall Street go un-punished. Where did they get all of that money, anyway? I’m for the little guy; we need to bring those fat cats down to size.

Q: But then with Fannie and Freddie continuing to do business as usual, the economy is still vulnerable.

A: Fannie and Freddie are big, huge, government bureaucracies run by career politicians and political appointees. They will act appropriately, unlike those fat cats on Wall Street.

Q: Many people are predicting that the Democrats will suffer large losses in the November election. If that happens, will it be a reflection on your policies?

A: I have passed historic legislation that will remake the country. My policies are historic, I’m historic, everything is historic.

Q: But what if the people vote against it all in November?

A: I’m not up for re-election in November.

Q: Thank you Mr. President for taking time out of your busy schedule to talk to me.

A: You’re welcome; call any time.

Tuesday, August 3, 2010

Montgomery County Tea Party


We are beginning a permanent long term educational and activity oriented tea party group in Montgomery County, which is long overdue. If any of your supporters from Montgomery County are interested, could you send their email contact information.
Thanks so much.

Frank Symanoskie
If anyone in Montgomery County (Virginia) or nearby is interested, please contact Frank at
Jessee Ring