aSide Order

And for your browsing pleasure, you can listen to WDAS-FM 105.3 in Philadelphia while on The Lunch Counter.

Scroll down and hit the play button.

And take it with you. Minimize it and/or open a new window and continue listening.

It’s not what it looks like. It’s a new pre-flight “ID check” done by a specially trained TSA K-9.


This is new technology. A skin gun.

Some E-Trade Baby commercials that didn’t make the cut.

 

Opportunity Knocking

The tornado frenzy that swept the South and Southeast makes the word destructive seem mild. Whole towns leveled, an uncounted number of people lost everything, including their lives.

It is hard to compare hurricane Ivan or Katrina to the tornadoes of the last couple days. Those hurricanes leveled or damaged homes, towns, and neighborhoods too. And the people responded. Contractors and companies from all over the United States came here and had years of work for thousands of people. The rebuilding effort created more jobs and economic activity than any other single event in the 31 years I’ve been here.

There’s no enjoyment in saying this, but this weather disaster has just opened up a lot of work for a lot of people willing to move. Trying to coördinate the rebuilding effort on the national level requires some leadership and ingenuity in putting a  lot of people back to work. A digital infrastructure like Twitter and Facebook already exists. On second thought, the Red Cross is already setup to assist. Contact them and go there. Or, go there then contact them. A  dot GOV website would be most helpful. And as always, don’t wait for the government to invite you. Pack your car or truck and head to where ever you want to work and live for the next few years. You know, it’s that whole ‘early bird’ thing.

And before you even think it, the answer is NO. That’s not government intrusion. That’s government doing one of the few things it is actually responsible for doing.

Can’t Spend Our Way Out, Not Like This

As luck would have it (what?), with the vote coming up whether or not to extend the debt ceiling again, a friend of mine asked me the following.

How about nursing the economy along with government programs for a while longer to get the economy up and running stronger, then phasing out some government activities?

The first thing that caused me to catch my breath was the thought that a government spending program would only last for a while. We would be in a lot better fiscal shape had we not been subject to politicians that want to take care of us in any way they can, tacking on one bureaucracy over another for vote keeping (and human wasting) legislation that we can no longer afford. Then there was the thought of  phasing out some government activities. Sorry but I don’t recall that ever happening. And our debt is so bad it is going to take more than some activities. I’m talking cabinet positions and the bureaucracy and price tag, both tangible and intangible, that goes with them. If the President were to ask me, I’d say the party is over.

But to my friend, I said the kind of nursing the government is doing to the economy is like throwing an anchor to a swimmer. The kind of nursing that we need is something that makes it easier for the private sector to do business. Stop interfering with the markets as though they can be controlled without killing them. To see how well markets respond to political machinations, check out the empty shelves in the super markets in Venezuela. The ‘stimulus’ programs, aside from adding trillions of dollars to our debt, did not really stimulate private sector businesses or jobs. IMHO, they were not meant to do that. Because what they did was to enlarge the government by increasing government jobs, and create a security blanket for labor unions.

The way out of this mess starts with going back to pre-stimulus levels of spending. Pick any year before 2009 and make that the baseline. Obama wants us to accept the current baseline to include all his stimulus spending. No way Jose.

Remember how great things were under the Clinton administration? We all managed to survive those years. And Bill had some fun in the oval office too. This debt is an anchor around not only us, but our grandchildren. It requires drastic measures. Let’s go back to 1995 levels. Let’s replace Obamacare with a private sector solution, like H.R. 3400 in the last (111th) congress. Let’s repeal Bush’s unsustainable prescription drug program, or replace it with something we can afford. Means testing for all such programs.

Got to do tax reform too. We don’t have this debt because we didn’t tax enough. We have this debt because we’re spending more than we’re taking in. Trillions more. The only tax proposal out there that acts to stimulate economic activity and fund the government is the FairTax. Do that. It is the kind of bold change that we need at this time. Well, other than voting the big spenders and statists out of office.

In short, any part of the above will remove the FUD factor, and people will be able to take risks again, create jobs, prosper, and we will start growing ourself out of debt.

Sen. Sherrod Brown, Govern By Ideology

This is rich. Sen. Sherrod Brown (D-Ohio) objects to Republicans wanting to link increasing the debt limit with a Balanced Budget Amendment. Says they are trying to “govern by ideology.”

OK, if not spending more than you have is an ideology, then it is the right one. I call that common sense. What is unusual is for a Democrat to intimate that spending more than you have is an ideology.

Senator Sherrod Brown (D-Ohio) recently made national headlines when he compared those of us who oppose unchecked union power to Adolph Hitler and Joseph Stalin.

Now, Sherrod Brown is attacking those of us who oppose raising the debt limit without passage of the Balanced Budget Amendment. He said we “want to govern by ideology.”

Obama’s Oily Rope-a-Dope, Part 2

This week’s weekly address was about the high gas prices and energy in general. President Obama says . . .

The truth is there is no silver bullet that can bring down gasoline prices right away.

And in his mind, a perfectly acceptable excuse for doing absolutely nothing to exploit our own fossil fuel resources or building more refineries or nuclear power plants like he said he was going to do last year.

And that means building a new generation of safe, clean nuclear power plants in this country. (Applause.) It means making tough decisions about opening new offshore areas for oil and gas development. (Applause.) It means continued investment in advanced biofuels and clean coal technologies.

[I]n order to sustain economic growth, produce jobs, and keep our businesses competitive, we’re going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy.

After four decades of doing nothing, we have forfeited the option of being an oil producer-seller and ensured our dependence on foreign countries as an oil purchaser. Something President Carter meant to fix when he created the Department of Energy. Look how well that turned out.

As usual, nothing that happens to us is Obama’s fault. The media will vouch for that. The answer from the empty suit is to investigate. Create a commission or ‘task force’ to investigate what someone else must be doing to us. He, and we, are always the victim. Taking responsibility is something that empty suits don’t do.

Let’s also consider the consequences that our huge debt and the Federal Reserve’s QE2 is having on the dollar. It is worth less, and heading south. That, all on its own, makes the cost of oil from overseas go up and is reflected at the pump.

The gougers and speculators bogeymen were investigated after Katrina. That proved nothing then and will be the same this time.

President Obama refuses to recognize that he has the power to lower gas and oil prices in four minutes if he were to say (and then actually do) that his new energy policy will include developing our own resources with the goal of making America the oil producer that it can be instead of being dependent on foreign sources for our energy survival.

But it’s cool for him to help Brazil’s oil industry. Just not our own.

In order to advance ‘alternative’ energy resources, it is his (and environmentalist’s) plan to choke this country and economy with his hands around the fossil and nuclear energy industries’ throat.  That he can’t advance both simultaneously like he said last year shows him for the empty-suit ideologue that he is.

Cutting subsidies is good as long as he also cuts the strings that were attached to them. But moving them elsewhere is not. As always, the free-market will make the investment when both science and economics dictate. The trouble is, a free-market economy to Obama is like a crucifix to a vampire.

The more distress he can cause to the economy and capitalism, the easier it becomes for him to ‘remake America’ into something that Europeans are now trying to get away from.

Happy Tax-The-Rich Day

That’s the mantra that the administration, the media, and close to half the country (who don’t pay income taxes) are saying.

So on this day, everyone needs to learn something about taxation. Like what happens to revenue when tax rates increase? What happens to revenue when tax rates decrease? And, how the tax code became a vehicle for spending programs.

Want More? Tax Less. Tax More? Get Less

That about sums up the one an only truism about taxation. That politicians become drunk with power once they have the ‘tax hammer’ in their hot little hand is another. But that is more of a moral issue than an economic one. I came across this publication from the U.S. Treasury called The History of the U.S. Tax System. It’s something that Treasury Secretary Timothy Geithner should read. As Congress and the Obama administration seem to be on a mad dash to tax us into prosperity and borrow our way out of debt, this piece from the Treasury Dept. should be required reading.

Lower marginal tax rates were ‘essential to a strong economy.’ Meddling with the system with that ‘tax hammer’ can make it worse.

The economic boom following the 1982 recession convinced many political leaders of both parties that lower marginal tax rates were essential to a strong economy, while the constant changing of the law instilled in policy makers an appreciation for the complexity of the tax system. Further, the debates during this period led to a general understanding of the distortions imposed on the economy, and the lost jobs and wages, arising from the many peculiarities in the definition of the tax base.

History demonstrates, whether you want to learn from it or not, that taxing business excessively, ‘over-reaching,’ leads to collapse.

The 1986 Tax Reform Act was roughly revenue neutral, that is, it was not intended to raise or lower taxes, but it shifted some of the tax burden from individuals to businesses. Much of the increase in the tax on business was the result of an increase in the tax on business capital formation. It achieved some simplifications for individuals through the elimination of such things as income averaging, the deduction for consumer interest, and the deduction for state and local sales taxes. But in many respects the Act greatly added to the complexity of business taxation, especially in the area of international taxation. Some of the over-reaching provisions of the Act also led to a downturn in the real estate markets which played a significant role in the subsequent collapse of the Savings and Loan industry.

The power trip, aka tax hammer, became addictive for the politicos. It never occurred to them to quit increasing government spending. Only how and where and what to raise taxes on.

Between 1986 and 1990 the Federal tax burden rose as a share of GDP from 17.5 to 18 percent. Despite this increase in the overall tax burden, persistent budget deficits due to even higher levels of government spending created near constant pressure to increase taxes. Thus, in 1990 the Congress enacted a significant tax increase featuring an increase in the top tax rate to 31 percent. Shortly after his election, President Clinton insisted on and the Congress enacted a second major tax increase in 1993 in which the top tax rate was raised to 36 percent and a 10 percent surcharge was added, leaving the effective top tax rate at 39.6 percent. Clearly, the trend toward lower marginal tax rates had been reversed, but, as it turns out, only temporarily.

The tax code becomes a vehicle for spending programs. Wielding the tax hammer for social engineering increases public debt. Lesson not learned here is that money doesn’t grow on trees and, stop increasing the spending. But it’s OK if you can use the tax code to buy votes. What? This is where the class envy/class warfare tactic, as connected to the tax code, was taken to a higher level.

The Taxpayer Relief Act of 1997 made additional changes to the tax code providing a modest tax cut. The centerpiece of the 1997 Act was a significant new tax benefit to certain families with children through the Per Child Tax credit. The truly significant feature of this tax relief, however, was that the credit was refundable for many lower-income families. That is, in many cases the family paid a “negative” income tax, or received a credit in excess of their pre-credit tax liability. Though the tax system had provided for individual tax credits before, such as the Earned Income Tax credit, the Per Child Tax credit began a new trend in federal tax policy. Previously tax relief was generally given in the form of lower tax rates or increased deductions or exemptions. The 1997 Act really launched the modern proliferation of individual tax credits and especially refundable credits that are in essence spending programs operating through the tax system.

“There’s no difference at all in terms of the effects on the federal deficit,” says Roberton Williams of the Tax Policy Center. “It’s perfectly equivalent. It’s just easier to say, ‘I cut your taxes’ as opposed to ‘I created a new federal program to send money to people.'”

Reducing taxes helped, not hurt, economic recovery.

The 2001 tax cut will provide additional strength to the economy in the coming years as more and more of its provisions are phased in, and indeed one argument for its enactment had always been as a form of insurance against an economic downturn. However, unbeknownst to the Bush Administration and the Congress, the economy was already in a downturn as the Act was being debated. Thankfully, the downturn was brief and shallow, but it is already clear that the tax cuts that were enacted and went into effect in 2001 played a significant role in supporting the economy, shortening the duration of the downturn, and preparing the economy for a robust recovery.

One can only hope that the next generation of political leaders will have learned something from the past and not repeat that which has failed before. Here’s hoping that the next chapter in The History of the U.S. Tax System describes unprecedented economic recovery after abolishing  the current income-based tax system and going to the consumption-based tax system called the FairTax.

Links: History of the U.S. Tax SystemThe Income Tax System Is Broken

 

Some Sign Holders Get The Boot

There was an article in the local paper (Pensacola News Journal, April 11) about the ‘sign holders.’ You’ve probably seen them in your city too. It was more a human interest story than anything political or requiring police action. It was exactly like the writer, syndicated columnist Mark O’Brien said, an example of making lemonade out of lemons in these tough economic times.

But later in the week, the light-hearted piece took a dark turn for the one-man entrepreneurs. On his blog, O’Brien wrote . . .

As a result of the article, City Hall got complaints and the men were told to get off the sidewalks.

According to Police Chief Chip Simmons, ‘complaints’ were received at the Police Department that a city ordinance was in violation and the men were told to leave. The violation was for ‘doing business on city property.’

Which begs the question, when does freedom of speech end and business begin? These guys were not doing business. They were holding signs. Prostitutes do business on the sidewalks.

O’Brien notes the inconsistency in enforcement. Long live the ‘going out of business’ sign holders, and the furniture company and ‘buy your gold’ sign holders, and the ‘homeless, please help’ sign holders. And the ‘buy my pizza,’ ‘file your tax return,’ and ‘save the ta-ta’s car wash’ cartoon characters and sign holders.

So the City of Pensacola decides to dump on those that can least afford it. Just where is the ACLU when you need them?

The Two Faces Of President Obama

President Obama finally came in front of a camera to address the American people about his budget. Or so we all thought. What we got was a campaign speech to kick-off his 2012 run for re-election. There were no specific plans to add to or counter the Ryan proposed 2012 budget. What there was were talking points, class warfare, age warfare, scaring seniors,  and scaring families with disabled children.

Once again, the President missed an opportunity to lead. Instead, his teleprompter was in campaign mode.

Headline reads “Obama: Cut spending, raise taxes on the wealthy.”

“We have to live within our means, reduce our deficit and get back on a path that will allow us to pay down our debt.”  That was after he passed an $800 billion stimulus package that was only designed to stimulate government jobs and save union jobs. And after he and congress rammed the un-Affordable Health Care Act down America’s collective throat. And after the national debt quadrupled to over $14 trillion dollars, unemployment jumped way over his promised 8%, and housing foreclosures are still going strong. It crossed my mind that he was rehearsing for a Saturday Night Live skit with his ‘we have to live within our means’ line.

Obama also wants to raise taxes by allowing Bush-era tax rates to expire for individuals making $200,000 or more a year and couples making $250,000 or more.

That was after, in December 2010, he said that increasing taxes would be counter productive to economic recovery. That was four months ago.

President Obama was all about ignoring the advice of the special debt commission. And saying about the Ryan plan that they (Republicans) want to “end Medicare as we know it,” he said, and to extend tax cuts for the wealthy while demanding 33 million seniors pay more for health care.

If we don’t ‘end Medicare as we know it,’ it will bankrupt the country all by itself. The same as Social Security will do all by itself if that is not overhauled to some sustainable level too. And when that happens, the only seniors that will have medical insurance or medical care will be the ones that can pay for it themselves. But that’s his story and he’s sticking to it. Not leading, but campaigning.

On the Ryan plan to reform Medicare, Obama vowed “That’s not right, and it’s not going to happen as long as I am president.”

What are the American people supposed to take from a comment like that? Sounds to me like he is committed to failure. Committed to his base instead of the health and welfare of the American people.