Extending Jobless Benefits Doesn't Pay Off

Kudlow's 12 Step Path to Prosperity. I would add that the dollar shouldn't be linked to gold, but currency growth should not exceed GDP growth.

Obama, More Americans Want Smaller Government!

When exposed to the liberal media it would appear that the majority of Americans support paying higher taxes for bigger government and more social services. Rasmussen Reports apparently found 12 days ago that this was not the case with a telephone survey they conducted. 68% of Americans (+/- 3%) prefer smaller government. What is interesting to note is that 61% the political class wants more active government with more services and higher taxes. This is direct evidence that politicians are out of touch with the rest of America.

But, of course, this makes sense because overpaid politicians want more power and so they want government to grow. Then they tell us, 'oh we are broke, we need more of your money.' After they raise taxes, the cycle continues. Large government is a cancer for America.

Commentary

Some good commentary on SmartMoney.com for keeping taxes low.

The History of Entitlements

The Wall Street Journal published an article today titled, Obstacle to Deficit Cutting: A Nation on Entitlements . I would classify this as a must read. It is interesting to note that the Europeans have realized their entitlement model has failed and are starting to cut back on freebies, whereas America was late to the party and is just beginning to ramp them up. Also note how more and more of the tax burden is being pushed onto a small subset of the population.

Change

Quote Of The Year

The best quote that I have read all year is

The government should be the port of last call, not a universal entitlement for everybody, so it's a matter of using scarce resources in the most fair and equitable way.

Said by, Ruth Richardson, the former New Zealand Finance Minister.

The White House Puppet

The GOP opposes Obama's plan to buy votes by only raising taxes on high income earners. In Today's article, referring to White House Press Secretary Robert Gibbs:

Gibbs said the middle class should not be used as a political football by Republicans maneuvering to give tax cuts to wealthy taxpayers, who he said don't need the reductions. Republicans say paring taxes for the wealthy would encourage them and the businesses they operate to create jobs.

Of course, Democrats are using the same political maneuvering and trying to incite class warfare at every turn. But who the hell is he to say whether or not these people need their own money? This is the main problem that I have with liberals - they believe that your own money isn't yours.

The Tax 'Cuts'

First, I think it is time to retire the description of the "Bush tax cuts." The reduced tax brackets have been law for about 7 years now, so still referring to them as a "cut" is a little silly. When the law expires at the end of the year, the new tax brackets that will take effect will be correctly called a tax increase, because that is what will happen. Okay boys and girls, onto today's article:

So an article came out today where the House Republican leader, Boehner, today said he will support a law that keeps the tax rates for those earning under 200,000 the same and increases tax rates for those making over. The last paragraph says,

At a White House news conference Friday, Obama described the Republican proposal for a tax extension for the highest of earners as an effort "to give an average of $100,000 to millionaires."

What is Obama really saying here? What is this per year? Per decade? A lifetime? Because if yearly that would imply an annual salary of $3,333,333 and that would be a pretty large average salary. He certainly must not be talking about the median salary above that tax bracket. Also, he has repeatedly stated that he wants to raise taxes on those individuals earning over $200,000. Does Obama think that everybody who makes over $200,000 a year is a millionaire? I bet this is news to a lot of people.

And who are the millionaires in this country? Obama would have you believe they are only people on Wall Street bagging million dollar salaries. But Stanley's, "The Millionaire Next Door" provides some answers. Generally they are people in their 50s and 60s who have lived below their means, invested their earnings, and accumulated wealth over time. They probably had good jobs but most weren't making over $200,000 a year.

Oh and about all those Wall Streeters who are making $200-300,000 a year... to most people who live in smaller cities that sounds like a lot, but after the federal, state and local governments eat through half and then they pay 30,000 a year in rent, that only amounts to a good job equivalent for smaller cities. Think those making $85-100k a year. They've got bills too, and these people don't become millionaires overnight.

So who is getting the $100k Obama is talking about with this statement?

And really, who is doing the giving here? The government taking less of worker's own hard-earned money amounts to "giving" the worker money? Karl Marx and George Orwell would be very proud of Obama. He studied hard.

Health Insurance Rate Increase

Here's a good "I told ya so" moment. Health insurance premiums are going up for many people because of the extra benefits now required by law. The phrase, "There is no free lunch" is common to economists, but this concept has yet to be assimilated by Democrats, who apparenty think that you can legislate more benefits to Americans and those benefits will be costless.

An article worth reading. A couple of points include how Obamacare cuts medicare payments to doctors, and how federal employees already enjoy the benefit of being able to divert a portion of their social security taxes to a private account but Obama is against allowing ordinary Americans to do that.

And I'd like to mention about that bullshit promise of not raising taxes on anyone making under $250,000: he plans to raise the capital gains and dividend taxes. Duh! Not only 'rich' people own stocks!!

More false reasoning about tax cuts

Another Leonhardt article. Seriously, they need to stop publishing this guy: Tax Cuts That Make a Difference. I posted in the comments section:

Does more, eh? Where's your data? This is the problem with journalists who know nothing about economics, they just make stuff up without support. Whatever sounds good to them is what they will advocate.

Spending money is only good for the short term. Saving and investing leads to more consumption later. Like always, we face trade-offs. Advocating policy that leads to artificial spending now might make things feel better, but what do you think happens when those policies are lifted?

You think the cash for clunkers program was effective? All it did was transfer money from tax payers to the auto industries. It was a bailout, plain and simple. Just like the housing tax credits, all it did was move buying decisions around and cause the tax payer to lose. If a firm cannot earn a profit because they have promised too many benefits and cannot compete on the global economy, they should be allowed to meet their demise.

Once again Leonhardt fails to understand the concept of a control case. The economy was already on a downward spiral handed over from Clinton. What does Leonhardt expect, the tax cut takes effect and suddenly all problems are cured? No clearly things would take some time and also, what would have happened without the tax cuts? Also, you cite the 2001 cuts, but not the 2003 cuts which were stronger because they phased the tax cuts in at a faster rate (instead of the rates dropping in 2006, they dropped in 2003) and growth exploded the following quarters.

Also, I like how you provide invalid references (sarcasm). Also, you fail to understand that employment lags. The economy can start to do better but unemployment can lag for years, just like in this recession. A better metric is the GDP growth rate, and you will find that GDP grew strongly after his tax cut.

Taxes matter more than you think. Assuming all tax rates go up here: If I make 100k a year and my taxes go up an extra 3,000, do you think I don't feel that? And since my take home pay would be nearly 50k, that would represent 6% of my income. If I make 250,000 that is an extra 7,500, and that is on top of an extra progressive rate, so the actual increase in the tax burden is several percentage points higher.

Liberals like you love to tax away other people's money to spend on your socialist pet projects. You agree that taxes matter, but then downplay its importance with the caveat that follows. If taxes aren't that big of a deal, then why does the government spend so much time manipulating consumer behavior with the tax code (think cigarrette taxes, green rebates, mortgage deductions, etc.)? The tax cuts went disproportionately to high-income tax households because they pay more of their income in taxes! Why do liberals consistently rant about how the wealthly benefited the most from tax cuts.? If I am earning 100k and my taxes go down three percent (for example), I get three thousand dollars back. If Bob makes 10k and his taxes go down three percent, he gets 300 back. Is it really unfair that I got a larger dollar amount? No, especiallly since I was paying a lot more in taxes than Bob was in the first place!