Recently in Taxes, Taxes, and More Taxes Category

As more than one blogger has noted, Romney's choice of Representative Paul Ryan as his running mate is one that will make Team Obama sweat, particularly in light of the fact that Ryan has been a pitbull in regards to the out-of-control spending perpetrated by Congress since 2007 and the Obama administration in particular since January 2009.

It doesn't help Team Obama that Congress hasn't passed a budget for 1,200 days and counting. And Obama's official term runs 1461 days.

Here's some sobering facts about it:

The last time the Senate passed a budget was on April 29, 2009.
The Outstanding Public Debt as of 11 Aug 2012 at 12:38:57 AM GMT is: $15,920,131,113,709.46
The estimated population of the United States is 313,295,427, so each citizen's share of this debt is $50,815.08
Obama's $3.6 trillion budget proposal was defeated this year in the House of Representatives by a vote of 414-0.
Obama's FY2012 budget was defeated last year in the Senate, by a vote of 97-0.
By 2050, the national debt is set to hit 344 percent of the Gross Domestic Product.
By around Election Day, the total debt of the United States will be $16,394,000,000,000.00 ($16.394 trillion).

The first point brought up overlooks the fact that the budget passed then was a carryover from the end of the Bush administration, due directly to the machinations of Nancy Pelosi and Harry Reid. The majority Democrat House and Senate delayed a vote on a budget they knew George W. Bush would have vetoed. Instead they relied on six months of continuing resolutions to keep the government funded until after Obama's election and inauguration. That is the major reason "Bush's" last budget was $600 billion in the red - it wasn't his budget, but Pelosi and Reid's.

It's also interesting to note that the last attempt to pass Obama's budget died without a single Democrat vote in favor in either the House or the Senate. Is it that they didn't like it any more than their Republican brethren or that they thought it would be easier to hide increasing deficit spending through the use of continuing resolutions? I'd like to believe they thought it was as much of a stinker as the GOP did. I'd like to. Really.

Should Romney and Ryan be elected to office, and with Ryan added to the ticket it seems to be more likely, I think we can expect the budget hammer to fall. No more trillion dollar plus deficits (we hope). No more "Let's tax the s**t out of the job makers!" No more unfunded mandates or multi-billion dollar government giveaways to industries incapable of standing on their own under any circumstances. No more interference in the energy markets. No more "the government knows best how to run the economy and your lives" BS.

Are Romney and Ryan the perfect candidates for the GOP? No, not by any means. But as we have to be reminded constantly, we can't let perfect be the enemy of good enough. Romney and Ryan are good enough.

Bill Whittle has another great video, this time dealing with "Going out of business". In this case he's not talking about a company or corporation, but...well, I'll let him tell it.


(H/T Instapundit)

Another California municipality has collapsed financially, with the city of Stockton filing for bankruptcy under Chapter 9.

This is merely the latest in a series of municipal bankruptcies plaguing the Golden State. Far too many of the municipalities believed the good times would never end and promised things to their citizens and employees based upon that belief. However reality has proved them wrong, the bills have come due, and their coffers are empty.

State finances aren't in any better shape, with a projected $16 billion budget deficit in the offing. Unfortunately, unlike the cities and towns in California, the state cannot declare bankruptcy, meaning the taxpayers (what's left of them) are obligated to pay off the state's deficiencies. But as the state assembly and the governor are learning the hard way, raising taxes any more than they already have will not raise more revenue because the state is already on the wrong side of the Laffer Curve. The last round of tax hikes caused revenues to fall, leaving the state even deeper in debt.

How they believe yet another round of tax hikes will solve their problem makes me wonder if there is anyone sane left in the upper echelons of state government. Unfortunately the answer appears to be 'no'.

On more than one occasion I have opined that farm subsidies are something that should end because they have outlived their usefulness. These days farm subsidies have nothing to do with helping the family farm survive but are more about unneededcorporate welfare for the agri-businesses, i.e. crony capitalism.

However, the farm lobby is powerful and doing away with something that benefits the agri-businesses will be difficult even though it would save the American taxpayers $22 billion directly, and untold millions or billions indirectly when consumers no longer have to pay artificially high prices for some foodstuffs.

Cronyism is the practice by which government officials provide preferential treatment (such as loans, subsidies or regulatory preferences) to handpicked firms or industries. It is a bipartisan practice, as we may once again find out if lawmakers reauthorize most of the farm bill currently moving through Congress. There is no justification for extending our current regime of agricultural subsidies -- a clear example of cronyism.

In 2012, the Department of Agriculture is projected to spend $22 billion on subsidy programs for farmers. Introduced in the 1930s to help struggling small family farms, the subsidies have become the poster child for government welfare for the affluent. Farm households have higher incomes, on average, than do nonfarm U.S. households.

Second, farm subsidies tend to flow toward the largest and wealthiest farm businesses. According to the Environmental Working Group database, in 2010, 10 percent of farms received 74 percent of all subsidies. These recipients are large commercial farms with more than $250,000 in sales and mostly produced crops tied to political interests. The Cato Institute's Tad DeHaven and Chris Edwards calculate that more than 90 percent of all farm subsidies go to farmers of just five crops -- corn, wheat, soybeans, rice and cotton. For every federal dollar spent on farm subsidies, 19 cents goes to small farms, 19 cents to intermediate (middle-income) farms and 62 cents to the largest commercial farms.

Other countries have ended farm subsidies and in the end everyone was better off without them, including the farms. The excuse "But we've always done it this way!" is lame. All subsidies do is distort the market by short-circuiting the free market feedback systems and give political power to both major parties because they can use them to reward their "friends" and punish their "enemies" by granting or denying them taxpayer dollars.

It's time to do away with that kind of foolishness and end yet another failed FDR-era policy.

The implosion of Detroit continues, with the city taking more actions to cut its costs even as revenues decline and more people leave the city seeking greener pastures. Their latest action: shutting off and/or removing half the street lights in the city. That ought to help the crime rate in the city...go up.

Detroit, whose 139 square miles contain 60 percent fewer residents than in 1950, will try to nudge them into a smaller living space by eliminating almost half its streetlights.

As it is, 40 percent of the 88,000 streetlights are broken and the city, whose finances are to be overseen by an appointed board, can't afford to fix them. Mayor Dave Bing's plan would create an authority to borrow $160 million to upgrade and reduce the number of streetlights to 46,000. Maintenance would be contracted out, saving the city $10 million a year.

When you have block after block of abandoned commercial buildings and homes, it makes no sense to waste money lighting streets where no one (except squatters) live. Of course many of those buildings and homes wouldn't be abandoned if decades of Progressive leadership hadn't driven the city into these dire straits. The city is a perfect example of the Thatcher Axiom: "The problem with socialism is that eventually you run out of other people's money." That certainly fits Detroit to a 'T'.

Detroit's dwindling income and property-tax revenue have required residents to endure unreliable buses and strained police services throughout the city. Because streetlights are basic to urban life, deciding what areas to illuminate will reshape the city, said Kirk Cheyfitz, co-founder of a project called Detroit143 -- named for the 139 square miles of land, plus water -- that publicizes neighborhood issues.

--snip--

Meantime, [Detroit Chief Operating Officer Chris] Brown said, the city will fix broken streetlights in certain places even as it discontinues such services as street and sidewalk repairs in "distressed" areas -- those with a high degree of blight and little or no commercial activity.

As Glenn Reynolds stated in his link to the story, it's like something right out of Atlas Shrugged or I Will Fear No Evil.

Much as cities in California have made mistakes when it comes to their finances, it appears here on the East Coast the city of New York is about to shoot itself in the foot, but in a different fashion.

While New York also has problems with its public employee unions, it's nowhere near the level seen elsewhere. Instead, the City Council is proposing rules that will help drive the last surviving industry out of the city - the financial industry.

For the life of me I can't figure out how making it too difficult and too expensive to remain in New York City is going to help the city's finances. Is it possible the City Council has been infected with the "California disease"? After all, California's state and local level governments have been doing their best to drive businesses out of business or out of state. They have succeeded. That's why California is in the fiscal mess it's in. And now New York City wants to do the same thing?

Yet in the wake of JP Morgan's massive losses last week and the continuing controversy surrounding the Wall Street bailouts, the New York City Council is debating a measure that would require city banks to publicly disclose their efforts at "socially responsible" banking.

--snip--

Many bankers, as well as Mayor Michael Bloomberg, have voiced their opposition to the new plans. The regulations, they say, would add another burdensome layer to the web of regulations that already exist at the federal and state levels. The Council, however, appears unmoved, and support of key council leaders...give it a fighting chance at making it into law.

If it does, its supporters on the Council will hail it as a major victory, but it will be a loss for the city as a whole. The financial industry is the one industry keeping the city alive, yet New York's blue politicians seem unconcerned about the risks of antagonizing their major cash cow.

This is the same attitude held by many politicians in California and we've seen how well that's worked out for them. The City Council doesn't seem to understand that the banks and other financial institutions will have no problem departing the city for greener pastures. As the post linked above states, Fortune 500 companies have been leaving New York for decades. Wall Street firms will have no problems following them to places with better business climates. And with today's telecommunications infrastructure, those greener pastures can be anywhere, even here in New Hampshire.

Every story we hear coming out of the once Golden State gives us more insight into the coming collapse of California. What's worse is the state government, including the legislature and the governor, is doing everything it can to hasten the process. How is it that it can't see the very actions it's been taking are only making things worse while those it chooses to ignore are the ones needed to set things back on the path to prosperity?

As more than one pundit has stated, California does not have a revenue problem but a spending problem. Even the once-and-again governor Jerry Brown knows the state is in a deep fiscal crisis, but his solution is raise taxes again. This after the last tax increase failed to raise the projected revenues, leaving the state with a $16 billion budget deficit. Whether he and the rest of the tax-and-spend Democrats realize it or not, they're on the wrong side of the Laffer Curve, meaning even if they continue to raise taxes, revenues will be well below projections. At this point the taxes have become punitive and outright confiscatory, punishing financial success. Once you start doing that people either stop trying or they leave. In the case of California, it's both. And it's not just those providing jobs who are packing up and leaving, so are many of the workers, including illegal immigrants. The net population change has shown more than 4 million more people have left California than have entered over the past 10 years. And this figure does not include the illegal immigrants, many whom are heading back home because there's no work to be had in the economic wasteland that is California.

Other states have been struggling with economic crises, including New Jersey. It is here where we see the difference in approaches taken to solve fiscal problems. Governor Chris Christie dove head first into the problem, understanding New Jersey's fiscal crisis was due to runaway government spending at all levels and overreaching public employee union demands. He went after both and managed to cut spending and dial back a lot of the union benefits that were unsustainable, particularly during this ongoing recession. As the piece linked above stated, "More states are realizing that the road to fiscal hell is paved with progressive intentions." Christie gets it. Brown does not.

There was also another thing Christie did that Brown did not: Canceled a multi-billion dollar commuter rail project between New Jersey and New York City that his state could not afford. He knew it for the money-wasting boondoggle it was and wanted nothing to do with it. Brown on the other hand, caved in to federal demands and decided to go ahead with a high-speed rail project that is doomed to fail before the first rail tie is laid down, committing California to billions upon billions of taxpayer dollars it doesn't have for a project no one (except the watermelon environmentalists) wants or needs. What use is a high-speed train to nowhere? (The initial stretches will be built out in economically depressed and less urban and suburban areas. Why would they need such a train when the only place it will take them is to another economically depressed area?)

Need more proof California is heading to an inevitable financial meltdown? Then look at the local level where municipalities are struggling to meet unrealistic demands from their public employees and the state. Here's an example:

A mere handful of people are left to hear the San Jose city manager offer the latest bleak financial news: the state of California was clawing back tens of millions of dollars more, and "140 employees have been separated from the city." (New times call for new euphemisms.) A pollster presents his finding that, no matter how the question is phrased, the citizens of San Jose are unlikely to approve any ballot measure that raises taxes. A numbers guy gets to his feet and explains that the investment returns in the city's pension plan are not likely to be anything near as high as was assumed. In addition to there not being enough money in this particular pot to begin with, the pot is failing to expand as fast as everyone had hoped, and so the gap between what the city's employees are entitled to and what will exist is even greater than previously imagined. The council then votes to postpone, for six weeks, a vote on whether to declare the city's budget a "public emergency," and thus to give to the mayor, Chuck Reed, new powers.

The relationship between the people and their money in California is such that you can pluck almost any city at random and enter a crisis. San Jose has the highest per capita income of any city in the United States, after New York. It has the highest credit rating of any city in California with a population over 250,000. It is one of the few cities in America with a triple-A rating from Moody's and Standard & Poor's, but only because its bondholders have the power to compel the city to levy a tax on property owners to pay off the bonds. The city itself is not all that far from being bankrupt.

--snip--

[Mayor Chuck Reed is] a Democrat, but at this point it doesn't much matter which party he belongs to, or what his ideological leanings are, or for that matter how popular he is with the people of San Jose. He's got a problem so big that it overwhelms ordinary politics: the city owes so much more money to its employees than it can afford to pay that it could cut its debts in half and still wind up broke. "I did a calculation of cost per public employee," he says as we settle in. "We're not as bad as Greece, I don't think."

We're not as bad as Greece. Not exactly an overwhelming vote of confidence from the mayor, is it? San Jose isn't the only municipality facing the same kind of crisis. It is, unfortunately, an all too common problem across the state.

Stockton is on the verge of bankruptcy. Vallejo's government is all but shut down after that city's bankruptcy in 2008, with police and fire departments gutted, a relocated city hall with few staff, and a general feeling of hopelessness.

Eighty percent of the city's budget--and the lion's share of the claims that had thrown it into bankruptcy--were wrapped up in the pay and benefits of public-safety workers. Relations between the police and the firefighters, on the one hand, and the citizens, on the other, were at historic lows. The public-safety workers thought that the city was out to screw them on their contracts; the citizenry thought that the public-safety workers were using fear as a tool to extort money from them.

Since the bankruptcy, the police and fire departments have been cut in half; some number of the citizens who came to [city manager] Phil Batchelor's office did so to say they no longer felt safe in their own homes. All other city services had been reduced effectively to zero. "Do you know that some cities actually pave their streets?" says Batchelor. "That's not here."

Is this is what is in store for other cities and towns in California? Yes, unless things change and the public employee unions either give up their over-the-top compensation (which has put municipalities into these dire fiscal straits) or are broken or decertified. Otherwise California has no chance at all.

I love the concept and have actually considered it for myself--if my wife were on board and if the pile of necessary money were available.

Reading this interesting Detroit Free Press story taught me there are large tax refunds--done under the wary eyes of the KGB, er, IRS--for those who successfully save all their receipts and file the mountains of required forms.

I've always envisioned a brother and a sister from India.

Evergreen Solar, a company formerly based in Devens, Massachusetts, filed for Chapter 11 bankruptcy, closed it's plant, and moved its production to China. To add insult to injury, now Evergreen wants permission from the court to walk away from it's plant in Massachusetts. This is after it had received over $31 million grants, tax, lease initiatives, and other considerations from Massachusetts.

The Bay State taxpayers pony up the cash for yet another "green" company, and in the end the company takes the money and its assets and heads to China. I figure $31 million is just the beginning. As one commenter opined:

It's always fun and easy to spend other people's money. Now the state can spend $20mil on investigating what happened, $30mil on lawyers pressing charges, and then lose the entire case.

That's really adding insult to injury. But then, it's the Obama Way. (See Solyndra.)

I've covered the decline of Detroit more than once, covering the various reasons for its precipitous fall from grace.

It's decline continues as the Democrat policymakers continue their experiment to create a socialist utopia. Too bad it's been failing and in such a spectacular fashion that it's impossible to hide. No amount of dissembling and sleight-of-hand can point observers away from the obvious: Detroit is dying and it's the fault of the Progressives who have been running the city for decades.

They have implemented just about every socialist program, regressive 'redistributionist" tax, and punitive business regulation on their wish list upon the city and its residents and the results are clear to see: Detroit has gone from the richest city in the US (per capita) to the second poorest. (Only Cleveland beat them out for that honor.) Detroit can stand as an example of what the rest of the nation will look like if Obama and the rest of the Progressives get their way. The socialist experiment has failed and no amount of window dressing can change that, no matter how hard the MSM tries.

I caught the end of tonight's World News on ABC. Since it was Friday their usual last feature is Person of the Week.

This week it was the three mayors of Los Angeles, Philadelphia, and Mesa, Arizona. What is it that moved ABC to select them as Persons of the Week? They want the federal government (specifically Congress) to stop dickering around and do something about America's crumbling roads. After all, the US used to be number one when it came to the quality of our highways and byways. But no longer. We now rate 20^th in the world behind Malaysia and Cypus.

"If they pass the surface transportation bill and America Fast Forward, it will allow us to accelerate the building of that 30-year project in a 10-year period of time, creating 166,000 jobs," Villaraigosa said. "These are the kinds of innovative things that the Congress has an opportunity to do that they haven't done up to now. ... Their failure to address the No. 1 issue in America, the jobs issue, is akin to the captain of the Concordia jumping off the ship before the passengers had been rescued. This Congress needs to get back on that ship and do their job."

I have to admit that I agree with these mayors that our highway system has been seriously neglected over the past few decades. Some states do an admirable job keeping their roads in good shape but they have to struggle to do it, sometimes sacrificing other infrastructure programs to keep the roads open.

But there's something I must point out that the mayors have conveniently forgotten: the ~$800 billion stimulus package put forth by President Obama in 2009. If every penny of that money had gone to fixing roads and other infrastructure they wouldn't have had to try to cajole Congress into dealing with the issue now. We would be almost 3 years into the 10 year rebuilding effort and plenty of people presently unemployed would be working. But no one mentions that out of the entire stimulus package less than 10% went to infrastructure, and not just roads. The rest of the stimulus went to expanding government and lining the pockets of Obama supporters.

Do we really want Congress to drop another trillion dollars on projects that won't do anything but waste taxpayer dollars we don't really have? If we're going to drop a bundle of tax money on roads, then the appropriations will need to be specifically targeted to each state and limited to use on roads only. No "bridges to nowhere", no side projects that have nothing to do with improving roads, and provisions to do away with the Bacon-Davis Act restrictions (saving tons of money in the process).

It seems yet another EU country is reconsidering its reliance upon the euro. This time around, it's France.

Not that France's economy was all that great before they switched from the franc to the euro. The issues with the euro has merely made it worse.

The French have growing reservations about the euro: 36% want to withdraw from the eurozone and go back to the franc, the old national currency; 4% have no opinion, which means that they don't warmly support the single European currency; 44% say it is a handicap in the present context of a world economic crisis; 45% say it doesn't serve the national interests of France; and a staggering 62% say it is damaging the average French family's standards of living and purchasing power.

With the economies of Portugal, Ireland, Italy, Greece, and Spain teetering on the edge due to steep sovereign debt with little means of paying it off. These nations are depending upon the rest of the EU and the IMF to bail them out even though some of them haven't managed to trim their government spending to sustainable levels. A bailout will only delay the inevitable, not prevent it.

As Cap'n Teach reminds us, no good deed goes unpunished. And so it is in regards to one of the biggest unintended consequences of more high fuel efficiency vehicles hitting the roads: dropping revenues from fuel taxes.

Another thing driving decreasing fuel consumption and fuel tax revenues is high fuel prices. This one-two punch has left both the federal and state governments scrambling to raise funds needed for road maintenance and construction.

So what is government to do about the revenue shortfall? Believe it or not, a per-mile tax is in the offing. No one has explained much about how it's going to work other than it will likely use GPS technology to track the miles driven by each vehicle.

Basically I have no problem with such a thing as long as the system only keeps track of the miles driven and not the routes taken or locations visited (the technology is easily modified to allow miles-only readouts). It smacks too much of Big Brother keeping track of where we go and when, something most of us feel uncomfortable about. There are already constitutionality questions about law enforcement using GPS trackers on suspects without warrants. This goes an order of magnitude beyond that.

Some don't like the idea at all, seeing as it means they'll be billed directly and in the open for their use of roads rather than the hidden fees they pay at the gas pump. Again I have no problem with this as long as the per-mile taxes lead to abolition of fuel taxes as they are applied now. Otherwise, no deal.

It is said the truly smart will learn from the harsh lessons of others' failures. I can say that one member of the WP clan is that smart, that being the youngest of the WP sisters. (As she says, she made her own mistakes while growing up that our parents never found out about.)

It would be great if the political class presently ruling the US was as smart as my youngest sister. Unfortunately they are not.

They see the economic meltdown occurring in the Euro-zone, yet refuse to learn the lessons countries like Portugal, Ireland, Italy, Greece, and Spain are teaching us, the primary one being that eventually you will run out of other people's money to fund all the wonderful social programs that have been used to bribe the electorate.

Italy is the latest to teeter on the brink of insolvency, and should it go over the edge it is quite likely it will pull the rest of the Euro-zone with it. Greece's default damaged the European economy yet it has only a fraction of the GDP of Italy. Should Italy default Europe will take an additional $2 trillion hit it cannot afford. Is it any wonder Germany is considering abandoning the Euro and going back to the mark? Can anyone deny that this problem has been driving the British public to demand a referendum about whether or not to remain in the EU? At least those two countries see the problem and realize they'll have to bankrupt themselves in a doomed effort to prop up economic policies from Brussels.

But too many of our own politicians at the state and federal level, regardless of party, seem oblivious to the fact that unless we make some drastic changes in how our federal government taxes and spends we will be headed down the same path. Labor leaders ignore the fact that neither businesses or taxpayers are a bottomless source of funds, shortchanging their own members by making promises no one can keep.

Should the US fail to put its financial/economic house in order, and right quick, it will pull the world economy down with it into a depression unlike any we've seen before.

Many reasons have been put forward to explain California's expanding fiscal disaster. Many have pointed to the California Assembly, a string of spendthrift governors, mandated spending due to voter initiatives, public employee unions, and, believe it or not, air pollution. But it all boils down to hubris.

But one of the biggest reasons has to be the the exploding and unsustainable level of spending at the local level, where safety services (police and fire departments) and the educational systems took up bigger and bigger portions of town and city budgets, particularly when it came to entitlements like pensions. It finally reached a breaking point when the national and state economies went into deep recession and tax revenues turned from a torrent to a trickle.

From 2002 to 2008, the states had piled up debts right alongside their citizens': their level of indebtedness, as a group, had almost doubled, and state spending had grown by two-thirds. In that time they had also systematically underfunded their pension plans and other future liabilities by a total of nearly $1.5 trillion. In response, perhaps, the pension money that they had set aside was invested in ever riskier assets. In 1980 only 23 percent of state pension money had been invested in the stock market; by 2008 the number had risen to 60 percent. To top it off, these pension funds were pretty much all assuming they could earn 8 percent on the money they had to invest, at a time when the Federal Reserve was promising to keep interest rates at zero. Toss in underfunded health-care plans, a reduction in federal dollars available to the states, and the depression in tax revenues caused by a soft economy, and you were looking at multi-trillion-dollar holes that could be dealt with in only one of two ways: massive cutbacks in public services or a default--or both. Whitney thought default unlikely, at least at the state level, because the state could bleed the cities of money to pay off its bonds. The cities were where the pain would be felt most intensely. "The scary thing about state treasurers," she said, "is that they don't know the financial situation in their own municipalities."

So demands from the state also added to the economic troubles facing the municipalities at a time when they had no spare funds to expend, adding an even greater burden on them and on the taxpayers supporting them. Another issue that hurt was the collapse of housing prices, meaning property tax revenues would oscillating, but with a downward trend, as tax rates fell behind the change in property values. Some property owners just stopped paying their taxes as they had no means of paying them or their mortgages as they saw their jobs disappear, and with them, their incomes. It was a "perfect storm" of economic problems that drove the municipalities and the state towards the fiscal brink. In California it was even worse because it is so dependent upon income taxes, one of the most volatile of taxes. Very high sales taxes also added to the burden, driving many people to cut back on their discretionary spending in an effort to keep their families clothed, housed, and fed. Revenues plunged even farther.

But California, at all levels, didn't seem to be willing or able to do the one thing that might have helped make ends meet - cut spending. We certainly haven't seen it at the state level, with the California Assembly making a lot of noise about cutting spending, but increasing it and a number of taxes at a time when neither will solve the problem.

And so the path to fiscal destruction is becoming steeper and the juggernaut that is default is picking up momentum. It seems such an unfitting end to a state that once held so much promise.

I sacrificed otherwise useful time and watched the President's speech to a joint session of Congress. Did I hear anything unexpected? Not really, except for...

"...pass this bill right away."

Claims that everything in his plan would be paid for rang hollow, particularly when he explained where the money would come from: thin air. The so-called "savings" from the debt-reduction boondoggle, really a reduction in the amount of money the government was going to spend that it didn't have, can in no way be considered as a means of paying for the American Jobs Act.

Unfortunately his speech sounded more like a campaign speech than a policy speech, slamming Congressional Republicans for being obstructionist. I think I would be obstructionist too if I knew the 'plan' the President has put forward won't work and will cost too much. (I think Obama defines 'obstructionist' as Republicans who won't do what he tells them to do.)

One thing that clued me in that Obama really doesn't understand why businesses hire was his plan to reduce taxes on small businesses, one cut mentioned being payroll taxes paid by employers, citing the tax reductions as a means to induce businesses to hire more employees. But businesses don't hire employees to get a tax break that won't cover the cost of hiring. Businesses hire when they need more people to meet increased demand for goods or services, period.

While I agreed with him that our infrastructure needs a serious overhaul, I believe it's too little too late. Stimulus 1.0 should have put almost all $878 billion towards infrastructure improvements, not the measly $55 billion actually spent on it. Stimulus 2.0 will be throwing more money we don't have after the original money we didn't have and I think it will have an even smaller effect, except for expanding the deficit.

On more than one occasion he made mention of fairness and fair play. Unfortunately I think his definition of those terms is far different from just about everyone else's. It has nothing to do with equal opportunity and everything to do with equal outcome. Unfortunately he will get his equal outcome if he gets his way, all of it bad.

I think it's about time I start drinking heavily....

One of the things said about blogging is that bloggers shouldn't apologize for not blogging. Normally I would agree with that, but not this time.

It isn't that I haven't had anything to write about (quite the contrary). It isn't that I've lost interest (I haven't). It's merely that life has intruded, leaving me with far less time to write anything worthwhile.

Over the past couple of weeks or so I have been getting home late, usually from some kind of meeting of a town committee or board, though once because I had to make an unexpected trip to the WP In-Laws to pick up BeezleBub and we didn't get back until 10:30PM. At that point I was just too darned tired to do anything but go to bed.

It's been these little things that have contributed to my lack of posting anything inciteful, witty, or outright offensive (at least offensive to the Left). I've resorted to borrowing heavily from humorous e-mails or Facebook postings to make sure this blog stays active. I'm going to have to do that one more time as I had yet another late evening. But at least this is educational in that it makes our nations' fiscal problem a little easier to understand.

Received via e-mail:

Federal Budget 101

The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so we created a breakdown of federal spending in simple terms. Let's put the 2011 federal budget into perspective:

U.S. income: $2,170,000,000,000

Federal budget: $3,820,000,000,000

New debt: $ 1,650,000,000,000

National debt: $14,271,000,000,000

Recent budget cut: $ 38,500,000,000 (about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Let's remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.

Total annual income for the Jones family: $21,700

Amount of money the Jones family spent: $38,200  

Amount of new debt added to the credit card: $16,500  

Outstanding balance on the credit card: $142,710

Amount cut from the budget: $385

So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $385 from its annual budget. What family would cut $385 of spending in order to solve $16,500 in deficit spending? 

It is a start, although hardly a solution. 

Now after years of this, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt). 

You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress. 

The root of the debt problem is that the voters typically do not send people to Congress to save money. They are sent there to bring home the bacon to their own home state. 

To effect budget change, we need to change the job description and give Congress new marching orders. 

It is awfully hard (but not impossible) to reverse course and tell the government to stop borrowing money from our children and spending it now. 

In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab. 

Yup. I'd say the above pretty much explains it in terms we can all understand.

The irony of this? I received this by way of the very liberal parent of a friend of mine. It's a shame she hasn't been able to integrate this little bit of education into her view.

This rant by a small business CEO tells it like it is, something the folks inside the Beltway no longer seem to understand. Do they really think "incentives" to hire will induce business to hire anyone? Businesses hire only when they need more people, not because the government provides some kind of lame incentive to do so.


If the government really wants to give businesses an incentive to hire, then maybe it should get the hell out of the way. Maybe government should stop sucking so much money out of the economy that there's less available to invest or to buy goods and services that create the demand for more jobs. Maybe rogue government agencies should be reined in before they do irreparable damage to the businesses that actually create the jobs.

Over the past year and a half I've listened to a large number of people disparaging the Tea party movement. Most of them have been card-carrying Democrats (or at least those with the belief they know how to spend my money better than I do). Others have been RINOs or part of the so-called "Establishment" Republicans.

The Tea party has been excoriated in the press, with the New York Times, the Washington Post, and a number of other media organs of the Left leading the way. Washington politicians and other Beltway insiders have derided the Tea party as "hobbits", "terrorists", "Nazis", "racists", "jack-booted thugs", and a whole host of other derogatory labels.

As the volume of hateful rhetoric aimed at the Tea party and its supporters has increased, it has made me and others realize that the groups making these accusations must be really getting nervous. As one commenter to this piece wrote, "If you're getting a lot of [flak], you must be over the target." And so it must be as the Tea party gains supporters throughout the country at a local, state, and national level because they're tired of being ignored by the Coastal elite and the Beltway intellectuals.

My most memorable run in with an unabashed Tea party hater took place at our business when one of our customers went on a rant about "those goddamn Tea partiers wanting to take everything away from us!" There was no way I could not respond, so I asked her where she'd gotten that idea. Apparently she'd read it in the paper, in this case the Boston Globe. (One must remember, the Globe is owned by the NYT and has the same editorial policies as its parent corporation.) I calmly informed her that if her opinion was based solely on what she'd read in the Globe, then she'd been misinformed and lied to. She saw the Tea party as a bunch of religious fundamentalists bent on depriving the poor, doing away with Social Security and Medicare, and undoing decades of civil rights advances. I had to remind her that many of the civil rights advances came from the GOP, not her sainted Democrats. I reminded her the KKK were primarily Southern Democrats, not Republicans. I reminded her it was the Democrats who started us down this path of unsustainable spending going all the way back to FDR. I reminded her that it was LBJ who decided his Great Society was the answer to all of our society's problems, that it had failed miserably, and that it was funded by stealing from the Social Security trust fund.. I reminder her it was the Democrat majorities in Congress going back to 2007 that multiplied the annual deficits to many times that of all of Dubya's deficits combined.

I gave her the URL for the Contract From America website which explains the Tea party platform, none of which deals with social issues she claims the Tea party is involved with. She wasn't interested. Instead she chose willful ignorance and adherence to libelous propaganda from those who do not have her best interests at heart.

Maybe she will care when the country is unable to pay its bills and all of the government support she is 'owed' ends because there's no money left to pay for it all. Maybe she will care when all "the rich" she's constantly complaining about are either driven into bankruptcy or flee with their wealth to friendly climes and no one is left to pay for everything she is owed.

But I'm not holding my breath.

UPDATE:It appears Senator John Kerry has decided to add fuel to the fire by expressing his opinion that the media should not give equal time to those "absolutely absurd notions" voiced by the Tea Party because their opinions "are not factual."

What a putz.

It's no secret I'm a fan of Ayn Rand's Fountainhead and Atlas Shrugged. In both I've seen far too many parallels to what's been happening in our country, particularly since 2007.

The seeds for our self-destruction were laid a long time ago and now, in some places, are bearing fruit. All one needs to do is look at the state of Illinois and the city of Detroit. Both illustrate exactly what Rand wrote about over 50 years ago.

As Dan Mitchell explains, plans for a number of Detroit neighborhoods outlined in a CNBC report sounded familiar.

But there was also something about this story that rang a bell. It took a few minutes, since I'm getting old and decrepit, but then I realized that "blighted areas" was an eerily familiar term. Didn't Ayn Rand use that term in one of her books?

Indeed, she did. Thanks to the miracle of Google Books, here is one of several passages in Atlas Shrugged that references Detroit--oops, I mean "blighted areas":

No railroad was mentioned by name in the speeches that preceded the voting. The speeches dealt only with the public welfare. It was said that while the public welfare was threatened by shortages of transportation, railroads were destroying each other through vicious competition, on "the brutal policy of dog-eat-dog." While there existed blighted areas where rail service had been discontinued, there existed at the same time large regions where two or more railroads were competing for a traffic barely sufficient for one. It was said that there were great opportunities for younger railroads in the blighted areas. While it was true that such areas offered little economic incentive at present, a public-spirited railroad, it was said, would undertake to provide transportation for the struggling inhabitants, since the prime purpose of a railroad was public service, not profit.

Fifty years ago, the book was viewed as a dystopian fantasy. Today, Greece, Illinois, and Detroit are making Ayn Rand seem like a prophet.

When I reread Atlas Shrugged a couple of years ago, the hairs on the back of my neck rose. Everything Rand had created in her novel was happening at that moment. (I have to admit I had little appreciation for the book when I read it the first time over 35 years ago. I guess history gives one a little more perspective.) Many of our present day "betters" are characters right out of the novel. What makes matters worse is that their ignorance of how the economy works is not so much a lack of exposure to it so much as willful ignorance on their part. They don't want to know how things work in the real world because they know better how to remake things into their version of utopia. Too bad they're wrong because their version of utopia is hell on earth for everyone else.

As mentioned earlier, all we have to do is look to Detroit to see how well that's all worked out. There are plenty of other examples of this just in the US alone, like Newark and Jersey City in New Jersey, and Gary, Indiana. If you need larger examples then states like Illinois, Michigan, New Jersey, and California should suffice. All are suffering under decades of enlightened rule by our betters (though New Jersey has a glimmer of hope in the form of Governor Chris Christie). If that isn't enough for you then look to Greece and Portugal to see how things have worked out there.

We see example after example after example of how our supposed "betters" are no such thing, being no better than what Rand called "looters" in Atlas Shrugged, for that's what they are.