I find myself in an awkward position, one I thought I'd never experience.
I agree with Barack Obama on an issue.
Hillary Clinton and John McCain both think the government should suspend collecting federal gas taxes during the summer season. But both Barack Obama and I disagree with them. It would be foolish to do so as I believe it would have the effect of boosting gas usage rather than easing the burden upon the motoring public. This move would be yet another example of the Law of Unintended Consequences. It would also leave the government coffers with a bigger deficit than the one we're already seeing, unless of course Hillary's plan to tax the “windfall profits” of the oil companies were implemented. But that merely means that gas prices would remain the same. Only the location of where the tax was imposed would change. It's the old bait-and-switch ploy.
Gas hit $3.469 per gallon today here in the Lakes Region of New Hampshire, an increase of 34¢ since April 17th, or 11 percent in only 5 days.
ABC News reports that speculators are driving the cost of oil up at unheard of amounts, though even if they weren't involved in oil, the prices would still have gone up due to increasing demand from India and China.
Proof, as if we needed it, as the veracity of Thomas Sowell describing Sen. Barack Obama's ideas as old. Some have actually looked at his 1960's-era economic ideas, and it's government first, government last, government all the time.
Wasn't it Bill Clinton's 1995 State of the Union Address in which he said the era of big government is over? What a joke! The ruling elites want cheaper labor and bigger government and more regulation. It's the little guys who want freedom to compete and to live.
I'm reading Paul Edward Gottfried's Liberalism: Mass Democracy in the Managerial State (1999), a sort of thinking man's Jonah Goldberg's Liberal Fascism, and this struck me on Page 54:
As the economic historian Robert Higgs notes, moreover, the American government in the present century has expanded six times as much as economic growth.So when Obama says the government is underfunded, as thinks of public education (which has also seen dramatic increases in spending well above inflation over the last few decades), for example, he is factually and demonstrably false.
We've been right before in saying how the Republicans blew it with their profligate spending ways. It opens the door for Barack to walk through.
Russell Roberts, the great podcaster from the free market George Mason University economics department, links to Drew Carey's Reason.tv presentation of the middle class. Do you want to see it?
In a must-read NY Post op-ed, an economist looks behind the mortgage crisis and names names. Remember the lie in the 1990s that blacks were discriminated against in housing loans? The MSM quoted an absolutely bogus study that didn't look at the prospective lender's credit history, for example. Black economists like Thomas Sowell and Walter Williams were all over it. But bad ideas have consequences, and Stan Liebowitz writes how the Feds caused the problem by their New Deal-like meddling. (Sorry, I'm reading Amity Shlaes's wonderful book on the era, The Forgotten Man.)
A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.Damned if you do--predatory lending--damned if you don't: the 1992 Boston Federal Reserve study of "red lining" or "blacks discriminated by racist bank policies." Walter Williams writes:Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.
What about media stories charging banks with mortgage discrimination against blacks? The media presented the Boston Federal Reserve study as controlled and definitive. A followup study took into account significant differences in black/white net worth, credit histories, existing debts and the size of the loan sought as a percentage of the value of the property. When these factors were taken into consideration the racial difference in mortgage approvals virtually disappeared. When Alicia Munnell, author of the flawed, mediahyped story, was approach by a Forbes magazine writer, and confronted with her study's deficiencies, she responded, "I do not have evidence [of mortgage lending discrimination] . . . No one has evidence." Did you hear the media report that?Another example of MSM duplicity--this before the Internet--and government meddling causing more problems than it's fixed, if you ask me. Where's our Ronald Reagan in the Republican primary?
Edwin Feulner in the Washington Times writes of Social Security:
in just 10 years Social Security will start paying out more in benefits than it collects in taxes. And the shortfalls will soar quickly as more and more Baby Boomers retire, leaving fewer workers to pay into the system each year.I hear that Medicare is in even worse shape.
Of the candidates isn't only Fred Thompson, limping along, who has dealt forthrightly with this third rail of American politics?
BTW, Russell Roberts's podcasts are wonderful. Like me he's got four kids, favors Apple computers, and is pro free market. But he's a little more of a nerd--but not by much.
George Will looks at the anti-free trade leanings of the Democrats and, in the process, points out how we should remember that the stock market has predicted nine of the last three recessions.
Talkmeister Neal Boortz brings up a valid point. Referring to the pension of Delta pilots being passed off from the company onto the government--and, by extension, you and me--he brings up the truth that many of us plan the incidentals of life, while expecting others to pay for the truly important things. Like health care and retirement and education. So much for rugged individualism.
The sure way to avoid what is happening to these pilots, and what has happened to so many other American retirees, is to assume the responsibility and control of your own retirement planning from the very beginning. When you invest the money that you earn into your own retirement account ... no company can come along and say "Hey, times are rough. We're ending your pension program." You're self-reliant! You're immune from some third party's determination to raid and destroy your pension fund!My dad is encouraging me to invest into a Roth IRA. I'm almost forty. I need to do it. And I can't plan on that UPS pension, which is only funded 55 cents to the dollar. I'll have to eventually go into management. Their retirement is one of the few that's actually overfunded.Sadly, the people of this country just don't have this type of an independent streak. Minor decision, minor planning ... that's fine. Americans don't have any problem coping with the freedom to decide what to eat for dinner tonight, where to go on vacation, or what book to read. When it comes to the truly important issues: How to provide for my family's heath care, how to plan for and fund a retirement plan and how to educate my child ... it's always somebody else's job. Preferably the government.
Temporarily removed from the hammock and reading Dean Koontz's Frankenstein trilogy, I am refilling my merlot with the pewter wine glass from Wolfeboro. Or is it my pewter wine glass with the merlot?
Thought you might like this, evidence that welfare mommas aren't all named Queen Latifah.
Much to the chagrin of Democrats, it seems that yet again Arthur Laffer was right.
Many out there may not remember Arthur Laffer or the graph he created that bears his name – the Laffer Curve.
Basically, Laffer created a graph that shows the relationship between tax rates and tax revenue. Set the taxes too high or too low and the amount of tax revenue the government collects falls off. The trick is to figure out exactly where the along the curve tax rates happen to be and to adjust them accordingly to maximize the revenue.
When President Bush pushed through the tax cuts in 2003, he believed that the tax rates were on the wrong part of the curve, which meant that the government was taking too much out of the economy and, consequently, discouraging investment and the growth of the economy investment spurs.
Many of the congressional Democrats thought that taxes were too low and the only ones who would benefit from tax cuts would be the rich. It turns out they were wrong.
Yesterday's political flurry over the falling budget deficit shows that even Washington can't avoid the obvious forever: to wit, the gusher of revenues flowing into the Treasury in the wake of the 2003 tax cuts. The trend has been obvious for more than a year...but now it's so large that Republicans are trying to take credit while Democrats explain it away.
[...]
The real news, and where the policy credit belongs, is with the 2003 tax cuts. They've succeeded even beyond Art Laffer's dreams, if that's possible. In the nine quarters preceding that cut on dividend and capital gains rates and in marginal income-tax rates, economic growth averaged an annual 1.1%. In the 12 quarters--three full years--since the tax cut passed, growth has averaged a remarkable 4%. Monetary policy has also fueled this expansion, but the tax cuts were perfectly targeted to improve the incentives to take risks among businesses shell-shocked by the dot-com collapse, 9/11 and Sarbanes-Oxley.
This growth in turn has produced a record flood of tax revenues, just as the most ebullient supply-siders predicted. In the first nine months of fiscal 2006, tax revenues have climbed by $206 billion, or nearly 13%. As the Congressional Budget Office recently noted, "That increase represents the second-highest rate of growth for that nine-month period in the past 25 years"--exceeded only by the year before. For all of fiscal 2005, revenues rose by $274 billion, or 15%. We should add that CBO itself failed to anticipate this revenue boom. Maybe its economists should rethink their models.
It appears that some of the states in the US could learn from this lesson. One in particular needs to look at both its spending and tax policies: New Jersey.
Both the New Jersey legislature and the governor, John Corzine, have forgotten that ever increasing state spending and taxation does nothing more than discourage businesses and investment in those businesses. Residents have gotten tired of the ever increasing tax burden and are leaving, voting with their feet. Unless New Jersey can get its insatiable lust for spending other people's money under control, its economy is going to fold like a cheap suitcase in the rain.
All New Jersey has to do is look at the history of Massachusetts during the 70's and early 80's to see what fate awaits them. Back then unemployment was high, even higher than the rest of the country, which was in the throes of a deep recession at the time. Businesses were closing up shop and moving, many of them to the bordering states of New Hampshire and Vermont, where the tax burdens were a fraction of that in Taxachusetts. Other businesses just folded up, closing their doors for good. Whether it was because of the recession, the ever increasing state tax burden, or both, is still debated. In either case, the state was on the verge of economic ruin. It was then that the Powers-That-Be woke up and started the realize that they were a major contributing factor of the economic problems. The people also woke up and voted to take control away from the legislature and the special interests by passing two controversial ballot questions. The first, Question 2, also called “Prop 2 1/2”, cut property taxes to 2.5% of the assessed values. The second, Question 3, removed fiscal autonomy from the school systems. (It used to be that the school systems told the towns and cities how much money they wanted and the communities had to deliver. The idea was that the schools would then be adequately funded. However, what it became was a license to steal. Some towns were driven to the edge of bankruptcy because of fiscal autonomy.)
If New Jersey wants to solve their fiscal problems, best that they get around to looking at the examples of Massachusetts and the US Government, both good and bad.
What does the United States have in common with Lesotho, Papua New Guinea and Swaziland? You guessed it. No paid maternity leave as a national right. That's going to change at some point in the future. I'm in favor of it, crunchy con that I am.
It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. --Thomas JeffersonNo more so then with entitlements, which are simply unsustainable at promised benefit levels because of an aging population. Young American children today will grow up in a country, for example, in which the average age will be higher than it is now for the state of Florida. That's scary.
According to economists who created the Federal 2004 budget, America faces a fiscal gap of $51 trillion (the gap was $45 trillion before the Medicare prescription drug benefit.), or about $159,000 per American. The bulk of this liability is promised Medicare benefits. We can compare this to the current federal debt of $4 trillion, or about $14,300 per American.
Current retirees and the poor are lucky: they're getting their goodies now while the getting's good. For example, my mother-in-law has had several costly surgeries in the past two years all paid almost wholly by Medicare, including open-heart surgery and, more recently, a hip replacement. We're talking tens of thousands of dollars, at least. And she's just one of tens of thousands receiving similar levels of support. I doubt when I'm her age, less than two generations from now, I'll have it so good. The Baby Boomers are the bulge going through the snake that will cause benefits to decline sharply, taxes to go way up, and for inflation to return with a vengeance.
Gold, anyone?
And this book makes the obvious obvious--our biggest capital investment is our health.
But passing on the bill to our children is a cowardly avoidance of responsibility, and it goes against what Thomas Jefferson said about intergenerational decency.
Anything else? Apparently, we don't even produce much in the way of screws. Pure gidgets/widgets. Sad. (Read the reviewer.) So, so different from four or five generations ago. Where have all those jobs gone? Too much creative destruction.
Can an economy survive not making stuff? Sorry to sound like Paul Craig Roberts.
In the middle ages, serfs spent a third of their time working for their lord.
Now we have tax rates worse than that. When we work to discharge our taxes--the price we pay to keep the bureaucrats and the hangers-on content, not of civilization--we aren't working for ourselves or our families. Essentially, we're like an indentured servant.
I particularly think this should be emphasized every year. It's not a surprise there isn't more discontent: the automatic deduction does a marvelous job disguising how much we productive truly fork over.
Here's an excellent blog's discussion of it:
This is the time of year when my inbox fills up with articles about Tax Freedom Day. Because April 26 is the day of the year when Americans have worked long enough to pay off their collective tax burden and can now said to be working for themselves.According to the Tax Foundation, which calculates the date in the US, Americans have to work 77 days just to pay their federal taxes and another 39 days to pay their state and local taxes. Americans work longer to pay their taxes than to pay for food, clothing and shelter combined. Even so, the Democrats in Congress think that Americans are undertaxed.
This is not an apt analogy: comparing the Jews destined to die aboard the St Louis to passing the recent immigration sop to big business, wealthy, the far left, and the Catholic church (esp. Cardinal Mahoney of LA).
BTW, I have wondered why FDR isn't dealt with more harshly for his decision to abandon these poor people who had landed on the coast of Florida. Awful. And I believe he knew something about the Nazi death camps by then.
Mexico is exporting its poor to us. Cui bono? Big business and the wealthy, who pay lower greens fees at the country club and have the ultra cheap nanny to take care of the children and who have the landscapers taking care of the yard for a very, very reasonable price.
For the unskilled and low IQ--see the bustling comments section a couple of entries below--it spells wage depression. Reducing immigration is a winning issue politically and good economically for those on the left-hand side of the IQ bell curve.
Last year only two companies were prosecuted by the government for employing illegals, reaching its nadir from its downward spiral of prosecution and convictions. Odd, coming after 911.
So for security and economic and cultural considerations we need to dramatically curtail immigration into this country. Let the melting pot do its job for thirty or forty years before we begin the "boom-bust" cycle all over again.
We'll be hearing a lot about this for the next twenty years or so with the skewed sex balance of babies born in China and India. In the former 121 boys are born to every 100 girls, at least in one southern Chinese state.
Scarcity of girls is creating extra demand, as these traditional societies view boys as a blessing and girls as a burden. Doweries are often prohibitively expensive for subsistence farmers. Thus all the aborted female fetuses.
Now societal changes are taking place. Girls are now more in the driver's seat.
What are India and China going to do with all those bachelors? Typically, states kill them off in a war. Maybe the two most populous states--over one-third the world's population resides in those two countries--can have one. Such herds are dangerous. George Gilder taught me so.