Category: Economics

Let’s just tax the rich say the progressives. No one making less than $400,000 a year will see an increase in taxes. This bill costs zero!

1. The Tax Foundation says 21% of smokers earn less that $35,000 a year, the new excise tax on tobacco burden the lowest income earners 37 times as much as equivalent funds raised through income taxes. They also say as corporations pay more tax, they hire less, lower wage increases, reduce benefits. Teh middle class may not have a higher tax rate but their costs to live will go up.
2. “Fair Share” What the hell does that mean. 50% of the population pay NO income tax, ZERO. The myth that countries like Finland are the model neglects to point out their income and social security taxes are the same as or higher than ours. Most people pay taxes versus our current arrangement. The US has the most progressive tax system of the OECD countries. https://taxfoundation.org/scandinavian-countries-taxes-2021/
3. Zero? Depending on who you listen to the taxes raised don’t come close to covering the 5.5 trillion, not even close to 3.5 trillion. Does raising taxes affect the economy? Well sure they do, JFK began lowering taxes in the 60’s and the economy started a 50 year increased growth rate. When the economy doesn’t grow well, think of the EU versus the US, wages don’t go up, promotions are limited, investment is lower, new company creation is lower. How many times must we see countries who think government control is better than private enterprise fail to provide the citizen with a way out of poverty.

The progressives are lying to us. They want something for nothing and the power to control our lives, telling us what is good for us. Are there some good ideas in the bill, yes. Putting all the cost on the feds only grows the ineffective bureaucracy, we want more of the failed federal government control?  More uncontrolled borders? More waste?

The 3.5 trillion, or actually 5.5 trillion if if all programs are scored as continuing for 10 years, have many flaws. One of the main ones for me is the lack of connection to working, meaning you get money whether you work or not.

There are some folks not able to work. They deserve our assistance and compassion. We have seen what happens when the other folks get money from the government without the requirement to support themselves. As the economy has opened, businesses across the country are not able to hire workers, the monetary incentive to stay home is too high.

Some say everyone deserves a UBI. But if the UBI keeps folks at home, not contributing in whatever way they can, then the economy doesn’t grow fast enough to accommodate population increases from births and immigration. Thus, the old problem of spending other peoples’ money hits us, the money runs out.

Modern monetary theory says we can borrow as much as we want without consequences. I love theories. Unfortunately most go the way of the flat earth theory, no proof. History is filled with examples of economic theories that fail, sentencing the bulk of those upon whom they were enacted to penury, loss of freedom, etc. Except for the theorists, they seem to come out all right.

An example, Burlington College, run by Bernie Sanders wife. She had a great theory on how to breath life into the college. Well, her theory killed it.  https://www.nytimes.com/2019/06/21/us/politics/jane-omeara-sanders-burlington-college.html.

Susan Collins, the senator from Maine commented on the 5.5 trillion bill as not containing work requirements in a recent speech to the senate. The Democrats targeted her in the 2020 election to be defeated, spent tons of money and failed, the people of Maine felt she represented their views and resisted the effort. They were characterized with invectives similar to those our last president was criticized for by the progressives, hypocrites, uh yeah.

This is only one issue with this monstrosity coming from the progressives.

 

The $3.5 Trillion bill before Congress if full of well intentioned ideas (most not affordable or ensure if able, work), and a few weird ones. All the talk about “Tax the Rich” on AOC’s butt is silly, considering the dress is unaffordable by 99.9% of all women. How about a dress from Kohl’s instead.

Anyway, one of the demands is the elimination of the state and local taxes deduction proposed by those high state tax states. According to the Tax Policy Center, 57% of the benefits will go to the top 1% of earners. The average benefit to them is $35,000, the average to the rest of the beneficiaries is $37. (per editorial in WSJ 9/21/21).

I live in Alabama. As I resent those who say “I do not want to get a vaccine, it is my liberty.” It is your right, however, you impose your stupidity on me since my medical costs go up. Same thing with not wearing a helmet while motorcycling.

I do not want to subsidize high state taxes. Keep the SALT deduction limitation in place.

I love to see politicians squirm, on both sides, when they don’t want to compromise, or love their neighbor.

Peace

I just finished a book, “The Inclusive Economy; How to Bring Wealth to America’s Poor” by Michael Tanner. I recommend it as a tonic for the hyper-sensitive and accusatory political battle we seem to be in today. It has DATA! Data that compares various methods employed over the last 50 years in the noble attempt to reduce poverty in our great country.

Notice I said reduce. Poverty will be with us for the foreseeable future. It can be reduced but the author identifies five major pillars that must be addressed in order to do so.

He talks about the history of poverty reduction in the 20th century and the great progress made in the first half, but also about the stagnation in the second half through today. He talks about specific programs, their positives and negatives. Those first few chapters are instructive, at least they were to me.

He then talks about how both sides of the political spectrum need to re-evaluate historical perspectives in order to get us off this plateau and achieve further reduction of those in poverty.

He then lists the five pillars:

1. Reform the criminal justice system, end the war on drugs.
2. Reform education system and stop the slide of the U.S. in education outcomes.
3. Bring down the cost of housing.
4. Make it easier for the poor to bank, save, borrow and invest–and start businesses.
5. Increase economic growth and make it more inclusive.

We, both conservative and progressive, must admit the policies of the past 50 years have failed. We must cooperate if our citizens see a path to a better economic future. Personal freedom is a key to this goal.

I welcome your comments. We can create a society with a minimum of people in poverty if we agree to look at what works, love those who may disagree with us and not judge those in poverty.

Peter J Wallison’s book, “Hidden in Plain Sight: what really caused the world’s worst financial crisis and why it could happen again” was a fascinating read.

He is an eminent economist and member of the committee to investigate the 2008 crisis, https://en.wikipedia.org/wiki/Peter_J._Wallison.

Did the banks, mortgage companies, mortgage brokers contribute to the crisis? Without a doubt, yes. Were they totally responsible, absolutely not!

The role of government has been disregarded by the press and Congress. The private sector has had all the bad press, and they deserved some of it. But, Government deserves at least as much criticism, and both parties share in this criticism.

Government created the petri dish that this crisis grew in, as one of the leaders has admitted after retiring.  Barney Frank has admitted the policies to increase home ownership rates resulted in unintended consequences, the crisis of 2008, page 25…

If you read the book you cannot deny the conclusion, the data and evidence from those interviewed is overwhelming. Why is it not publicized, well, when the committee was formed by President Obama the makeup of the committee was not bi-partisan-chapter 3-eighty staff members total and one assigned to the republican members: six democrats and four republicans. Should it not have been half and half?

The lack of condemnation of government actions is infuriating to me. But the end of the book talks about this mess could happen again.

We are all entitled to our opinions, but not to our facts. This book is fact filled, please read, please contact your representative.

Investors Business Daily. 11/2/16.

Since 2009 229 major new rules have been imposed on business. A $107.7 billion increase in costs, meaning less new businesses.  Our new business generation rate has been going down for 20 years, under republicans and democrats.

Small business creates at least half the new jobs. Stop layering on cost!

Mr. Wolf died in late October, 2016, 92 years old, R.I.P.

He worked for the Rand Corporation for most of his career and called most things right; the strength of the Soviet economy-Japan’s inability to rule the world-the negative effects of the 2009 stimulus, and others.

How did he get it right, by analyzing data without a prejudice towards what he wanted it to say. We need more of that.

Opinions are worthless without data.

Globally lots of countries have, or are trying government stimulus to revive flagging economies. How’s that hope and change working for us?

Not too well. Japan has been trying for 25 years; China did more than we did after 2008, no help; Europe, ouch; Africa, more ouch; need I go on?

This is giving someone a fish rather than teaching them how to fish.

Reduce regulation, make it easier to open businesses, tax less, reduce the size and reach of government, ….  Yet a guy named Bevins of the Economic Policy Institute says we should spend even more. ( It is affiliated with the labor movement,^[3] and is usually described as presenting a liberal^[4] viewpoint on public policy issues; https://en.wikipedia.org/wiki/Economic_Policy_Institute)

Insanity, “Doing the same thing that hasn’t worked again expecting a different result.” QED

WSJ, 8/12/16, “The Housing Non-Crises”. an editorial.

The Census Bureau reported two weeks ago that home ownership peaked in 2004 at 69.2% and has continued to fall to a 51 year low. Many are lamenting about the continuing fall in that rate, the failure of the “American Dream.”

We know now that that rate was a bubble, caused by, government policies to pump ownership up (CRA, bank regulatory pressure, etc.) and markets fueling of the fire (unethical brokers, S&P ratings on bonds, investors wanting higher yields, etc.).

Research has shown that since 1890 the return on owning a home has been a cumulative zero, 0%, nada, nill, nothing!  Bonds and stocks are much better methods to build wealth.

Yet, the housing industry is powerful ( millions of jobs), and politicians like to use their power to fuel growth through home interest tax deduction, low down payment rules, mortgage guarantees from Fannie and Freddie, etc.

With the “solution” put in place after the bust, mortgages are tough to get, the “recovery” is the worst in history so wages aren’t growing, and who is blamed, well, all “those” people who always try to keep the middle class down of course.

We don’t blame the government folks who know better than we do about how to fix the problem.  Results matter, so far, the government is failing. Why is it bad to rent?  Well, it isn’t. You aren’t tied to a house if you want to move. You don’t have lots of costs, like insurance, repairs, etc. If you want to grow your wealth invest in vehicles that work to grow the economy.

So, the solution. Grow the economy by reducing the cost to open businesses so they can hire people, create demand for employees which drives up wages. That is proven to work. Have competitive tax rates to the rest of the world so that investment continues to flow into the U.S. versus go elsewhere. Ensure global trade is fair, millions of jobs depend on global trade.

Work together versus portray those who disagree with you as evil, love them and work out a compromise.

The Economist, July 23rd, 2016. The Americas section.

This article talks about the barriers to trade within Canadian provinces. Provincial governments act for various reasons to protect jobs in their geography to the point that importing product from the U.S., or from overseas is easier than buying the same product from within Canada.

Our lesson? Fair trade is good for us. We do need to be sure it is fair, but the two candidates for the presidency are both screaming about “protection.”

This is bad for the middle class. This is bad to form businesses to sell overseas. This is bad for wage growth.

Reduce regulation and costs so businesses can be formed and the energy and initiative of people can be released.

Being “provincial” is bad.