Category Archives: Economy

Economy, Fair Tax, Politics

FairTax Presented To Ways & Means Committee

1 Comment

Testimony of Karen Walby, Ph.D. Chief Economist Americans For Fair Taxation Before the House Committee on Ways and Means Hearing on Fundamental Tax Reform January 20, 2011.

It’s the first baby step towards real tax reform. There’s still a long long way to go for the grass-roots to gain some momentum. Pulling H.R. 25 out for a fair hearing is still a long way off. The politicos in Washington still seem hell-bent on bending the current tax code some more. Even to the extent of having a V.A.T. on top of the current income tax system, which would be doing a Kevorkian on the U.S. economy.

Link: http://bit.ly/hZHeuU

Economy, Florida, Pensacola, Politics

Obamacare Is Void, Lawless Administration Doesn’t Care

2 Comments

That’s the bottom line where Judge Roger Vinson’s opinion on the State of Florida v. U.S. Dept. of HHS is concerned. Judge Vinson of the United States District Court for the Northern District of Florida yesterday became the second federal judge to strike down Obamacare’s individual mandate.

Drawing on the precedent of the original Boston Tea Party was not only valid, but whether intentional or not, was a nice kick in the pants balls to the political Left that non-stop demonized the ‘tea party’ of today. Attaching a vulgar sexual act to them.  ? Maybe projecting what really turns them on.

Judge Vinson writes . . .

“It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place. If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain for it would be ‘difficult to perceive any limitation on federal power’ and we would have a Constitution in name only.”

Like Judge Henry Hudson of the United States District Court for the Eastern District of Virginia, Judge Vinson also found that Section 1501 of the act, which forces all Americans to buy government-approved health insurance policies, “falls outside the boundary of Congress’ Commerce Clause authority and cannot be reconciled with a limited government of enumerated powers.”

But then Judge Vinson went even further, concluding that “the individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit.” Accordingly, Vinson concluded: “Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void.” {emphasis added}

Judge Vinson further explained the problem with the mandate part of the bill.

For the reasons stated, I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one sixth of the national economy, and without doubt Congress has the power to reform and regulate this market. That has not been disputed in this case. The principal dispute has been about how Congress chose to exercise that power here.30

And to that point, Judge Vinson expounded on what is faulty with a federal mandate by using then Senator Barack Obama’s own words. Oh ya gotta love it. {Free cheesesteak for Judge Vinson.} Judge Vinson continues . . .

30 On this point, it should be emphasized that while the individual mandate was clearly “necessary and essential” to the Act as drafted, it is not “necessary and essential” to health care reform in general. It is undisputed that there are various other (Constitutional) ways to accomplish what Congress wanted to do. Indeed, I note that in 2008, then-Senator Obama supported a health care reform proposal that did not include an individual mandate because he was at that time strongly opposed to the idea, stating that “if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house.” See Interview on CNN’s American Morning, Feb. 5, 2008, transcript available at: http://transcripts.cnn.com/TRANSCRIPTS/0802/05/ltm.02.html.

{great research Judge}

Here is Obama’s quote in context. He was responding to Sen. Hillary Clinton’s idea of mandating health insurance . . .

OBAMA: Let’s break down what she really means by a mandate. What’s meant by a mandate is that the government is forcing people to buy health insurance and so she’s suggesting a parent is not going to buy health insurance for themselves if they can afford it. Now, my belief is that most parents will choose to get health care for themselves and we make it affordable.

Here’s the concern. If you haven’t made it affordable, how are you going to enforce a mandate. I mean, if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house. The reason they don’t buy a house is they don’t have the money. And so, our focus has been on reducing costs, making it available. I am confident if people have a chance to buy high-quality health care that is affordable, they will do so. That’s what our plan does and nobody disputes that.

Oh what a difference a couple years make.

Refusing to take NO for an answer the administration intends to ignore the Judges ruling that the legislation is VOID. Because the judge did “not order the government to stop implementing the law, a senior administration source said ‘implementation will proceed at pace.'” Legally speaking, when the legislation is considered VOID by the judiciary, the other branches have nothing to go on to proceed. They have to either appeal it or ask for a stay. Tomorrow, President Obama ought to request the senate to repeal the bill and start over. Don’t hold your breath for that to happen. Ignoring the ruling just highlights how lawless this administration is. It is the Chicago way. It’s what community organizers do.

Economy, Egypt, Energy, Media, Middle East, Organized Labor, Politics, United Nations

Fed Policy, Govt. Policy, Egypt Burns

Here’s a little ditty that the mainstream media won’t touch with a ten foot pole. That’s because the Obama administration, environmentists, and the Federal Reserve are not insignificant players in the rioting and unrest we are seeing in the Middle East, and in the rise in prices of foodstuffs around the world. WHAT you say?

For years now, the United Nations has been complaining that they can’t continue to feed all they need to for a lack of money caused by the rising food cost. This is a direct consequence of bio-fuel nonsense where the United States is using food (corn) to put in our gas tank. This causes all kinds of food to be more expensive. Not just for foodstuffs made from corn, but meat and poultry products because it is also food for the livestock.

Compounding that is the enormous spending of the Federal Reserve. The effect of that has contributed to the increase in food prices not only here but everywhere else in the world.

Chriss W. Street at Big Government writes . . .

QE2 money quickly drove up commodity food prices around the world. This price rise is barely noticeable to Americans who only spend 10% of their personal income on food for three meals a day; but the impact of food inflation is devastating the over half the world that spends approximately 50% of personal income on food for two meals a day. The 15% QE2 induced commodity food price increase has reduced the amount of food poor people can purchase by almost 1/3.

The riots and revolutionary activity burning down Tunisia, Yemen, and Egypt are about gut-level economics. Do you think Americans would riot and throwing out our government if we were forced to cut back to eating 1 1/3 meals a day? Once riots start people in cities hoard food to survive and becomes dangerous for farmers to transport food. This is exacerbates food shortages and drives prices even higher.

When you consider how lucky we are to live in the United States, where 10% of our income goes for food for three meals a day,  a rise in food prices is not as much of an issue as it is in other parts of the world like Egypt, where food consumes 50% of their income for two meals a day. Couple that with outrageously high unemployment while the ruling class lives the high life, and you have a powder keg in the making.

UPDATE 06:50:

As if there isn’t enough evidence of how government policies were accomplices in Egypt’s revolution, new evidence points to the role of labor unions and the American Left in orchestrating it:

For all the lack of clarity on where the Obama administration stands, one thing is becoming more and more clear: Signs are beginning to point more toward the likelihood that President Obama’s State Department, unions, as well as Left-leaning media corporations are more directly involved in helping to ignite the Mid-East turmoil than they are publicly admitting.

Economy, Politics

Today’s Special – Obamacare’s Impact On Doctors

You know what you’ve been told about Obamacare. That it will ‘bend the cost curve.’ Premiums will go down. It will not increase the national debt. In fact, it will reduce it.   You can keep your doctor. You can keep your health care plan. There won’t be longer waiting periods for treatment or rationing of health care. Health care will improve in all these areas. While at the same time over 30 million more Americans will have ‘health insurance.’ That’s right. Whether they want it or not. If not, you will pay a penalty. But now that Obamacare is in court, the ‘penalty’ is now called a tax.

What makes Obamacare even more incredible, is to believe it that it won’t have any negative effect on doctors. In fact, the prospect that there will be enough doctors in the health care industry to take care of existing patients, let alone 30 million more, is right out of the Twilight Zone. Or as then Senator Hillary Clinton (D-NY) said, would ‘require a suspension of disbelief.’

Isn’t it terrible that who is running the show is more important than patients getting the treatment and care they need? In this case, the ‘who’ is government. I came across a quote from Daniel Webster that pretty much sums up President Obama and his agenda for America.

“There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters.”

Below is a video of a Doctor in Atlanta and what burdens the government bureaucracy place on her practice. My question is, where are all the doctors for tomorrow going to come from? Why would they choose to subject themselves to such punishment when there are other industries that (so far) are not being controlled by or in the sights of Uncle Sam.  Oh no! Sights! A gun reference. Get over it.

Link: The Heritage Foundation

Economy, Florida

Your Bank Unmasked

Sometimes things just come along in a made-to-order fashion. Take for example PNJ columnist Mark O’Brien’s column entitled Florida Looking For New Money. Mark references this story where, responding to Gov. Rick Scott’s appeal for ideas to raise revenue, Rep. Irv Slosberg, D-Boca Raton introduced HB 313. A bill that would allow advertising space to be sold and displayed on state transportation property. Like ‘Geigo Turnpike’ or maybe even ‘Philly’s Cheesesteaks Highway.’

Having just gone through a vigirous campaing season, there is one thing still fresh in my mind when it comes to raising revenue in order to close Florida’s $3.6 Billion budget gap. It just escapes me why an answer so simple continues to be ignored by the ruling class. I contend, they’re looking in the wrong places.

Economist and former Florida independent gubernatorial candidate Dr. Farid Khavari shines the light on the banking system’s dirty little secret. Which is how banks can, and do, make money hand over fist on their depositors’ hard-earned money.

After you read how they do it, consider that we (the state of Florida and Florida’s taxpayers) can take advantage of this very same system to benefit the state and its residents, instead of Wall Street. It is done by reducing cost. Simply raising money by selling advertising or liquidating real estate does not have the long-term stimulus that reducing costs on everyone can have. All those who do not want to reduce your cost of living please raise your hand.

WHY ARE THE BANKS REQUIRING MINIMUM DEPOSITS?

Farid A. Khavari (Ph.D.) Economist

Certainly, give banks at least one big credit—they always find creative ways to extract money from their clients. We know and have heard a lot about these banks being bailed out, officers or high end corporate individuals receiving hefty bonuses, and of course the fees! Now, they are out on the hunt to get us again! Banks are now requiring minimum deposit amount, and/or accomplishing certain performances in terms of debit card purchases, having a CD or a savings account with them, as conditions for not paying fees! In clear terms: once a bank client subscribes to a package, the bank also offers to wave fees on certain services, which come with the particular package if they manage to meet the requirements of that particular package. In the past, these would have been free with no requirements for certain performances!

These requirements not only presents the epitome of all greed, but tops all other abusive practices—charging fees if a bank client account falls below the average minimum deposit requirement. This is absurd! In other words, banks want your money, but with conditions attached. If you fail to follow their specific requirements, then you would be required to pay penalties for utilizing your hard-earned money. It would be a dream if everyday businesses had that kind of leverage over their customers, but they don’t. The banks though had that leverage.

Granted, not all accounts the banks control are loaded with high deposit amounts. Many of them are in more turmoil that a bank needs. Which business in the world can claim to enjoy anything different—some accounts are without doubt clear headaches, but the overwhelming number of them are profitable, otherwise no business could last for too long. The same applies to the banks.

Surprising though, is that the majority of people that fall in the traps of banks. The banks justify the requirement for the minimum deposit due to the rising cost of entertaining the accounts, or the rising cost in general!

First of all, deposits are the lifeblood of banks, which makes it possible for them to come into existence and exist; without deposits, it is obvious no bank could exist. However, what make the banks prosper are these deposits, of which are lent out to borrowers! This lays the critical issue that not too many people are aware of dealing with banks. In most cases people think that banks exist from the difference between the amounts of interest collected through lending and paid out for the borrowed monies! This isn’t necessarily true. First of all, a bank pays non-significant amount of interest on a saving account much less on the deposits in a checking account. On the other hand, even if a bank pays interest on a deposit, they make at least over forty-five times more on interest than they payout on that amount! Here is an explanation. For example, when a bank receives a deposit of say, $100, it can and usually does lend out up to ten times by employing the “fractional reserve banking regulation,” which is legal, and is utilized by every bank in the United States. However, the banks pay only the interest on the $100, whereas collect interest on $1,000. It must be noted that the banks pay a much lower interest rate on deposits, presently, below 1% (one percent), but collects 4.5% on the $1,000.

($100 X 1% = $1 the bank pays, but collects, $1,000 X 4.50% = $45)

Now, let’s see how the minimum deposit requirement of $15,000 and monthly fee of $25 plays out for the bank and the clients:

According to this policy being increasingly utilized by banks, a $25 fee would be imposed, should the average monthly balance drop only one penny below $15,000. This apparently innocent measure would create a cash bonanza for the bank as the following calculation demonstrates.

Assume you keep an average of $15,000 in your account as demanded by your bank to avoid having to pay $25 fee. Using the “fractional reserve banking rules,” the bank would be lending out the amount of $15,000 ten times, which would be $150,000 ($15,000 X 10 times = $150,000).  Charging an interest rate of only 4.50%, which is being charged presently for mortgages, the bank would be making a whopping $6,750 interest annually, or, every month $562.50 on your money! Under this scheme the banks would be making over 45% (forty-five percent) interest on your $15,000 average balance in your account without even giving you a cent.

Do you have to worry about the high operation cost of the banks when they can make that kind of money with interest on your interest free deposit, yet penalizing you if you fail to assure them that amount?! Think about it!

We invite those banks, which do not use these kinds of abusive tactics and methods, to send us their names and contact information to make available to our readers.

Farid A. Khavari is author of nine books dealing with economics, banking, healthcare, energy, oil, environment, currency, and cost. For more information, please visit www.zerocosteconomy.com.

Copyright @ 2011 by Farid A. Khavari

Economy, Fair Tax, Florida, Politics

Majority Of States Join Suit Against Obamacare

Oh Happy Day! Twenty-six states have joined Florida in suing the federal government over Obamacare. That makes 27 states total.

The only answer to our debt problem, well there are more but this government-run health care is priority number one that has to go. To repeal and replace it is the road out of the economic ruin and the decimation of quality health care for our citizens.

Repeal it, the alternative already exists.

Continue reading Majority Of States Join Suit Against Obamacare →

Economy

National Debt And Our Gross Domestic Product

As an addendum to this post, Deficit Commission And Debt Ceiling Sleight Of Hand, below is a picture that ought to get your attention. It was a major factor in the mid-term elections. Believe it, or not.

No matter the spin about spending out there, our national debt has now surpassed, or on its way to soon surpass, our GDP. Put simply, we’re spending, and continue to spend, more than we make.

Anything wrong with this picture?

Economy, Fair Tax, Politics

FairTax H.R. 25 Introduced On First Day

25 Comments

Congressman Rob Woodall (R-GA7) introduced the FairTax on the first day in session. It is still called  H.R. 25. ? I thought it would be assigned a different number but, I guess not.

The FairTax effectively kills two birds with one stone. Make that three birds. 1) It will be an economic stimulus like no other in the world, without increasing our debt. 2) It will be totally progressive and will eliminate all taxation for the poor via the prebate. 3) No more filing tax returns, no need for the IRS. And because the FairTax will expand the tax base (the number of people currently paying taxes) from only working Americans to every person within the borders regardless of citizenship, the individual shared burden couldn’t be more ‘fair.’

The biggest advantage and stimulus will be evident with every paycheck you receive. Under the FairTax, your gross pay will be your net pay, exclusive of any state taxes of course. That’s because under the FairTax, all the federal income taxes you are currently paying will go away. The term ‘take home pay’ will be a thing of the past. You actually get to keep what you make. And you don’t need an accountant or tax lawyer to help get it for you.  How fair is that?

And one more, which will be the biggest obstacle to overcome, and explains why H.R. 25 never made it out of the Ways and Means Committee under Charlie Rangel (D-NY15). The FairTax would end the taxing power currently held by politicians in Washington, and shift that power back to the people. Taking the ‘tax hammer’ away from Washington means no more leveraging tax breaks for campaign contributions.

The other good news here is that it begins with 47  co-sponsors. That’s more than in previous sessions when first introduced. And, among the sponsors is a Democrat, Dan Boren [D-OK2]. That’s a first too.

Meanwhile, contact your representative and ask him or her to become a co-sponsor, if they are not already. Tell them you support it and want them to do likewise.

Use this link to easily find your congressman’s phone number ->  http://bit.ly/contactcongr

OR

Use this link to send them a quick email. -> http://bit.ly/ftcongress

“When They Feel the Heat, They Will See the Light” – Herman Cain

Link: to H.R. 25

Economy, Media

Good News, Jobless Claims Rise

In a nutshell, the propaganda wing of the West Wing is still saying ‘the economy is now on a sustainable growth path.’ New unemployment claims rose 18,000 last month. And the four-week average of unemployment claims is 410,750.

The number of people continuing to receive unemployment benefits fell by 47,000 to 4.1 million in the week ending Dec. 25, the department said. That doesn’t include millions of long-term unemployed who are receiving extended benefits from the federal government . . . {emphasis added}

and

Bad weather can also make it harder for laid-off workers to apply for benefits.

So I guess we can expect more. But hey

[A]pplications are far below their peak during the recession of 651,000, reached in March 2009.

All of which sort of belies the headline of the story. “Jobless claims rise, but positive trend intact; Economist: The jobs market, ‘the recovery’s caboose, is starting to catch up‘”

In their mind, the fact that there was only 410,750 new jobless claims last week is good news.

Considering the retail industry is reporting disappointing results in December, there isn’t going to be a whole lot of hiring going on any time soon. This is because the retail industry depends on the last 6 weeks of the year to turn the loss they carry all year into what they expect will be their year-ending profit. Thus the term Black Friday. This year, we had a Black Friday in name only, because if the ink is in the black, it isn’t to the point that any hiring will be going on until next Christmas season. Compounding the business climate is that fact that the FUD Factor is still alive and well. Another not insignificant condition that forces businesses take the cautious route.

Don’t worry, be happy.

Economy, Politics

Today’s Special – Thomas Sowell Interview

Peter Robinson at the Hoover Institution interviews Dr. Thomas Sowell, noted economist, historian, and philosopher on his new book ‘Basic Economics’ and today’s economic situation and why we are where we are.

The interview is chock full of food for thought.

Thanks to the Hoover Institution for producing this interview, Peter Robinson for asking the questions, and Dr. Sowell for sharing your genius and book, Basic Economics, with us.