Sunday, November 21, 2010

Buffett Wants Rich toPay More

From Bloomberg by Juliann Neher, Buffett Tells ABC Rich Americans Should Be Paying `a Lot’ More in Taxes

Dear Mr. Buffett, If you are so interested in paying ‘a Lot’ more please go ahead and write a big check to the Unites States Treasury. I’m sure some bureaucrats will find a way to spend all you can give.

Here’s an idea for you, have all American’s pay the same percentage of their income. Thus eliminating the “social engineering” imposed on us by the tax code.

Friday, July 30, 2010

Quote of the Day

raising taxes is the enemy of controlling spending.

Mississippi Governor, Haley Barbour

Thursday, July 29, 2010

A History Lesson, Ignored!

Those that fail to learn from history, are doomed to repeat it. - Winston Churchill

From the American Spectator, by Peter Ferrara, The Timeless Principles of American Prosperity

Several times in the last 100 years, whenever the nation’s economic policies adhered to the timeless principles of economic growth and prosperity, our economy has boomed. When it has departed from those policies, it has fallen into stagnation, or worse.

America today once again desperately needs to return to the timeless principles of economic growth, to restore our traditional, world leading prosperity, and the American Dream. This should be the central argument and theme for this fall’s elections.

Supply-Side Economics, Ignored by Franklin Roosevelt, Ignored by Barack Obama

Last year, the Intercollegiate Studies Institute produced a brilliant, overlooked book that recounted the history of supply-side economics—Econoclasts: The Rebels Who Sparked the Supply-Side Revolution and Restored American Prosperity, by Brian Domitrovic. As explained in that book, the roots of supply-side economics go back to 1913, when the national income tax and the Fed were first adopted. “For restraining the institutions created that year—the income tax and the Federal Reserve—is the essence of supply-side thinking,” Domitrovic writes.

It didn’t take long for trouble to brew. The top tax rate of 7% soared to 77% by 1918. Moreover, the income tax, sold as a tax on the rich, began to apply at just $1,000 in income (equivalent to about $20,000 today). In addition, during World War I, the Fed essentially doubled the money supply relative to the economy. Inflation consequently soared by 84% over the 4 years from 1916 to 1919. The Fed then slammed on the brakes, draining 60% of the excess money, and throwing the economy into steep recession as a result. Unemployment soared to 12%, 50% higher than in any previous recession.

Warren Harding, newly elected President in 1920, appointed the enormously successful Pittsburgh banker Andrew Mellon Secretary of the Treasury, with the duty of fixing the economy. Mellon adopted what became the supply-side economic formula. He slashed the top income tax rate to 25%, and the bottom rate from 8% to 1%, increasing the income level to which it first applied by 50%. Moreover, Mellon led the Fed to stop the money supply drain, return interest rates to standard levels, and devote itself to stable prices. The Fed would look to market price levels, particularly commodities, including gold, for its guide.

The result was the Roaring ‘20s, the greatest boom in American history to that point, essentially beginning the modern American economy. Real output galloped, stock prices tripled, real wages advanced with productivity increases, and prices were stable. “It was in the twenties that Americans bought their first car, their first radio, made their first long distance telephone call, took their first vacation,” as Domitrovic quotes Richard Vedder and Lowell Galloway.

Supply Side Economics replaced by Keynesian Economics lead to the Great Depression

The Depression arose and worsened as America departed from these pro-growth policies. Instead of maintaining stable prices, the Fed allowed the money supply to decline precipitously, even while dollar demand was soaring as the world sought a stable store of value. This created ruinous deflation. Mellon’s tax rate policies were also ruinously reversed, with the top income tax rate raised first to 63%, and then to 79%, with the lower tax rates raised even more in percentage terms. The Smoot-Hawley tariff added another tax burden that killed international trade. President Roosevelt tried to restore prosperity with soaring Keynesian government spending and deficits, which failed miserably as the Depression dragged on for over 10 years. By 1933, unemployment was at 25%, and GDP was down 57% nominally, 22% in real terms.

Read the full article for the complete history of Supply Side Economics.

John Kennedy, Ronald Reagan, GW Bush all applied Supply Side Economics with great success yet the current occupant of the White House is doing the exact opposite and reaping disastrous results. Keynesian Economics practiced by the Democrats, exclusively, have never lead to prosperity and it won’t now.

If the Obama Administration would learn from our history America’s prosperity could be restored. Unfortunately when the Bush tax cuts expire we will face an economic downturn that will rival the Great Depression or worse.

Just remember as I pointed out previously, President Warren Harding faced a worse depression than the Great Depression and recovered the economy in one year using Supply Side Economics. It worked then, it can work now.

Wake up, America! It’s time to clean house! Democrats are unteachable and they have to go.

PS, It wouldn’t hurt to include some RINOS in that house cleaning as well

Wednesday, July 28, 2010

The Next Trillion-Dollar Bailout

From the Heritage Foundation, Ready for the Next Trillion-Dollar Bailout?

CLASS is a new long-term-care insurance program that was inserted into Obamacare so that Congress could raid its $70 billion surplus through 2020 to cover Obamacare’s initial deficits. Like the raided Social Security trust fund, future taxpayers will have to repay that $70 billion with interest when the program falls into deficit later.

“a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”

Thus, even Sen. Kent Conrad (D., N.D.) admits that Congress has enacted “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”

Just another reason Obamacare needs to be repealed, CLASS is another entitlement that America can’t afford.

Era of Government Controlled Economy

Comment to an article on David Rosenberg’s, YOU KNOW YOU ARE IN A DEPRESSION WHEN ... reader B9K9 NAILS the current economic condition.

Who knew laws would be abrogated, criminals rewarded and riches absconded? Who knew centuries old jurisprudence & Constitutional provisions would be discarded as mere inconveniences which were preventing rewarding cronies & political supporters?

dupes, rubes & dopes (um, that would be most of us), made the fatal mistake of bringing a knife to a gun-fight. Never, ever apply logic & fundamental reasoning skills in an environment where the thugs control all the cards.

I’ve learned my lesson - how many others have learned theirs?

That sums up the current environment well!

Friday, March 26, 2010

Unsustainable Debt!

The Washington Times - CBO report: Debt will rise to 90% of GDP

President Obama’s fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation’s economic output by 2020, the Congressional Budget Office reported Thursday.

‘The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020’

The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it’s headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO’s deficit estimates.

That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America’s debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.

Thursday, March 18, 2010

Moscow Drilling In The Gulf of Mexico

The Washington Times - Obama surrenders gulf oil to Moscow

The Obama administration is poised to ban offshore oil drilling on the outer continental shelf until 2012 or beyond. Meanwhile, Russia is making a bold strategic leap to begin drilling for oil in the Gulf of Mexico. While the United States attempts to shift gears to alternative fuels to battle the purported evils of carbon emissions, Russia will erect oil derricks off the Cuban coast

Offshore oil production makes economic sense. It creates jobs and helps fulfill America’s vast energy needs. It contributes to the gross domestic product and does not increase the trade deficit. Higher oil supply helps keep a lid on rising prices, and greater American production gives the United States more influence over the global market.

Drilling is also wildly popular with the public. A Pew Research Center poll from February showed 63 percent support for offshore drilling for oil and natural gas. Americans understand the fundamental points: The oil is there, and we need it. If we don’t drill it out, we have to buy it from other countries.

We have the means to become energy independent and choose not to do so due to the destructive policies of the Obama Administration.

At what point does the deliberate destruction of The United States rise to a level high enough to be called treason?

Too Big To Succeed, The Real Story

Freeman - Too Big to Succeed

Credit Default Swaps, explained.

Government to Blame.

One widely cited culprit for the 2008 financial crisis was a supposed decision by the U.S. government not to regulate a relatively new type of financial instrument known as a credit default swap (CDS). In fact, this so-called “failure to regulate” refers to regulations that prohibited public trading of these instruments, concentrated risk in a small number of large firms, and massively increased the probability of a financial disaster. To add to the irony, one of the government officials most responsible for these interventions, then-Federal Reserve Chairman Alan Greenspan, recently apologized for having had too much faith in the free market when he should have apologized for not having had enough.

In 1999 Brooksley Born, head of the Commodity Futures Trading Commission (CFTC), tried to bring CDSs under the regulatory umbrella of her agency. Born was stymied by Greenspan, Treasury Secretary Robert Rubin, and Securities and Exchange Commission Chairman Arthur Levitt. She eventually resigned and the dispute was effectively settled in 2000 by the passage of the Commodity Futures Modernization Act (CFMA), which prohibited the CFTC from any further examination of CDSs.

Read the rest here!

Coal to Gasoline at $30 a Barrel or Less

Energy Tribune - Texas Breakthrough on Coal to Gasoline

Globe and Mail - Texas university has eureka moment for coal-to-gas

scientists in Texas say they have found a way to convert coal into gasoline at a cost of less than $30 (U.S.) a barrel - with zero release of pollutants.

Researchers at the University of Texas at Arlington (UTA) announced last month that they have developed a clean way to turn the cheapest kind of coal - lignite, common in Texas - into synthetic crude. “We go from that [lignite coal] to this really nice liquid,” Brian Dennis, a member of the research team, said in describing the synthetic crude that can be refined into gasoline.

‘scientists in Texas say they have found a way to convert coal into gasoline at a cost of less than $30 (U.S.) a barrel - with zero release of pollutants.’

This is great news! Time to turn the 800 Billion Dollar faucet in the Middle East off. Time for the United States to become energy independent. NO EXCUSES!

Texas lignite coal sells for $18 a tonne. The coal conversion technology uses one tonne of coal to produce 1.5 barrels of crude oil. One barrel of crude produces 42 U.S. gallons of gasoline. In other words, $18 worth of coal yields 63 gallons of gasoline: 0.28 cents a gallon.

Tuesday, March 09, 2010

Obama Sets Sites on Recreational Fishing

ESPN - Culled Out

The Obama administration will accept no more public input for a federal strategy that could prohibit U.S. citizens from fishing the nation’s oceans, coastal areas, Great Lakes, and even inland waters.

This announcement comes at the time when the situation supposedly still is “fluid” and the Interagency Ocean Policy Task Force still hasn’t issued its final report on zoning uses of these waters.

‘Lubchenco and others in the administration have close ties to environmental groups who would like nothing better than to ban recreational angling.’

Led by NOAA’s Jane Lubchenco, the task force has shown no overt dislike of recreational angling, but its indifference to the economic, social and biological value of the sport has been deafening.

Additionally, Lubchenco and others in the administration have close ties to environmental groups who would like nothing better than to ban recreational angling. And evidence suggests that these organizations have been the engine behind the task force since before Obama issued a memo creating it last June.

In America there is an estimated 60 Million Anglers, (Sport Fishermen). Imagine the jobs lost if fishing across The United States was banned? Your rights taken away with the stroke of President Obama’s pen.

Saturday, January 30, 2010

Shenanigans’ Geithner the Fed and AIG

Bloomberg Secret Banking Cabal Emerges From AIG Shadows: David Reilly

The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system—apart from the matter of AIG’s bailout—deserves further congressional scrutiny.

Yet when unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil.

Heck of a business model. AIG takes huge risks and when thing are good they take their profit. When things go bad they are ‘too big to fail’ and get bailed out by the American taxpayer.

As Reilly says ‘our collective blood should boil.’

Tuesday, January 26, 2010

Quote of the Day

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.

Ludwig von Mises

Sunday, January 24, 2010

Obama Eyes IRAs and 401(k)s

Business Week - Retiree Annuities May Be Promoted by Obama Aides

Bloomberg - Americans Oppose Proposals to Limit 401(k)s, ICI Says

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are leading the effort.

According to the article, as of mid 2009 there was 3.6 trillion dollars in IRAs and 401(k)s. Thats a tempting sum to the Obama Administration and the Democrats when they are pilling up an unsustanable level of debt. They want to sieze it and convert it to annuities so that retires will receive “steady payment streams.”

Karl Denninger at The Market Ticker has a different take on this idea and it is rather ominous. 401k/IRA Screw Job Coming?

Let me tell you what this is - it is an attempt to prevent the collapse of the Treasury market!

Forcing people into Treasuries as an “annuity” is exactly what Social Security allegedly is.  Except that Treasury stole the money that was collected in FICA taxes and spent it!

Guess what?  They’ll do that here too - you’re going to “invest” in Treasuries which of course are effectively a CALL option on the future taxing ability of the government.

Read the rest of Karls article HERE

Let’s see if I understand this. The government takes your IRA / 401(k) and gives you an IOU. Then they pay you back in inflated dollars in equal monthly payments until you die. Haven’t they done this already with the generational ponzi scheme called Social Security?  I wonder if they have hired Bernie Madoff as a consultant?

Wednesday, December 16, 2009

SPEND, SPEND, SPEND!

CBS News - U.S. National Debt Tops Debt Limit

Reuters - House Dems plan short-term debt-limit hike

WASHINGTON, Dec 15 (Reuters) - The House of Representatives will vote on a short-term boost to the U.S. debt limit this week TO AVOID A GOVERNMENT DEFAULT and give lawmakers more time to try to cut the record federal deficit, House Democratic leader Steny Hoyer said on Tuesday.

READ - US GOVERNMENT ON VERGE OF DEFAULT ON IT’S DEBT

Scare Tactics

ABC News - President Obama: Federal Government ‘Will Go Bankrupt’ if Health Care Costs Are Not Reigned In

‘If we don’t pass it, here’s the guarantee….your premiums will go up, your employers are going to load up more costs on you,’ he said. ‘Potentially they’re going to drop your coverage, because they just can’t afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year.’

‘Eventually You Run Out Of Other People’s Money’ - Thatcher

The president said that the costs of Medicare and Medicaid are on an ‘unsustainable’ trajectory and if there is no action taken to bring them down, ‘the federal government will go bankrupt.’

Mr. President, you are a fool! It is not health care that is the problem it is the insatiable appetite of the Democrat Party to SPEND! The bill is coming due and you can’t pay it. Now, today the United States Of America may not be able to pay their debt. It’s directly your fault. Actually it IS your fault!

Sunday, December 13, 2009

Senator Dodd In Trouble

CBS - Chris Dodd in Trouble in Reelection Effort

Politico - Cook Political Report’s dire forecast for Dodd

Biden Is Clueless

Politico - Biden joins an uphill fight

Calling Dodd ‘the single-most gifted legislator in Congress, now that Teddy Kennedy’s gone,’ Biden praised him for chairing two committees in a national crisis. Biden said the consequences would have been ‘dire’ had Dodd failed.

Hey Joe, the consequences for our economy are “dire” because of Senator Dodd’s choice to look the other way. The industry he was supposed to regulate gave and recived special favors from Senator Dodd.

Examples from CBS;

close connections to leading bankers…. One such connection is to former Bear Stearns director Edward Downe Jr., who once shared a condo with Dodd. After Downe’s conviction for insider trading, Dodd leaned on President Clinton to pardon Downe at the end of his presidency.

Countrywide gave him “VIP” treatment in refinancing his home.

his role in the payment of bonuses to executives at AIG, the troubled firm that received a massive federal bailout.

Those are just examples given by CBS. If his role in the Mortgage and Banking crisis was properly investigated the list would be long, very long.

Term Limits

No worries! The people of Connecticut will be judge and jury in November.

Term limits from the ballot box, it’s a beautiful thing.