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Saturday, November 20, 2010
Friday, November 19, 2010
Taxes
This may surprise some of you, but I do not believe in graduated taxes. In fact I don't believe the government should levy income tax at all (or estate- or death taxes). I don't think small businesses should carry the tax burden they do either(though they should pay a business tax). Have you ever tried working for yourself? The income taxes are twice as high. That is because, if you are employed, your employer matches most of the taxes you pay, so when you work for yourself, you pay your taxes and then you match them on behalf of your company. So, imagine the tax burden of having employees...now add to that paying health insurance for them which can be several hundred dollars per employee. Oi.
I do, however, believe that corporations and investments should be taxed. Why? For one, because corporations as an entity, and investment as an action, capitalize off of everyday Americans and the earnings are not a reflection of genuine labor. I may see this differently if labor and materials were paid a fair wage and products were sold with some cap on mark-ups to reflect a real cost and price.
...back to graduated taxes. Dems generally believe that rich people should be taxed more than poor people. Well, I already said I don't believe in income tax. Imagine that you are a businessman or women: you pay business taxes, you pay your employee's taxes, you pay your employees health insurance and then the government takes 35% more off the top. It is not equal, and it breeds animosity between classes.
I spoke to a rich, Democratic family, who asserted it their responsibility to pay more in taxes to help those less fortunate. That is nice, but it is not fair. Even if wealthy folks feel that way, or they do have some empathetic moral obligation to the less fortunate, the act of giving should not be forced upon them by the government. Might wealthy classes give more if they were not required to hand over 35% by force? In any case, wealthy Americans are often high profile in their communities, not giving would brand a person a Scrooge. On the other hand, giving would brand a wealthy person deserved of respect.
The way it is now, wealthy people give - and are called greedy anyway; and many Americans do not understand the values wealthy families bring to community.
I advocate a flat tax on consumption and minimal residential, state and federal taxes with local and state taxes being higher than Federal.. These for the purpose of providing 'public good'. Also: minimal taxes on non-corporate business, and relatively higher taxes for corporations, plus appropriate fees for extracting natural resources.
I should remark, that I in no way believe this to be a top priority for the nation any time soon, (especially in our current economic crisis) but ideals to be investigated and discussed.
What is public good? and The lost art of Community will be the subject of following blogs.
I do, however, believe that corporations and investments should be taxed. Why? For one, because corporations as an entity, and investment as an action, capitalize off of everyday Americans and the earnings are not a reflection of genuine labor. I may see this differently if labor and materials were paid a fair wage and products were sold with some cap on mark-ups to reflect a real cost and price.
...back to graduated taxes. Dems generally believe that rich people should be taxed more than poor people. Well, I already said I don't believe in income tax. Imagine that you are a businessman or women: you pay business taxes, you pay your employee's taxes, you pay your employees health insurance and then the government takes 35% more off the top. It is not equal, and it breeds animosity between classes.
I spoke to a rich, Democratic family, who asserted it their responsibility to pay more in taxes to help those less fortunate. That is nice, but it is not fair. Even if wealthy folks feel that way, or they do have some empathetic moral obligation to the less fortunate, the act of giving should not be forced upon them by the government. Might wealthy classes give more if they were not required to hand over 35% by force? In any case, wealthy Americans are often high profile in their communities, not giving would brand a person a Scrooge. On the other hand, giving would brand a wealthy person deserved of respect.
The way it is now, wealthy people give - and are called greedy anyway; and many Americans do not understand the values wealthy families bring to community.
I advocate a flat tax on consumption and minimal residential, state and federal taxes with local and state taxes being higher than Federal.. These for the purpose of providing 'public good'. Also: minimal taxes on non-corporate business, and relatively higher taxes for corporations, plus appropriate fees for extracting natural resources.
I should remark, that I in no way believe this to be a top priority for the nation any time soon, (especially in our current economic crisis) but ideals to be investigated and discussed.
What is public good? and The lost art of Community will be the subject of following blogs.
Thursday, November 18, 2010
Bond Market Crisis?
Conservatives wants to stop government spending, but the market needs demand. The Fed responded with monetary stimulus, injecting 6 billion into the economy by printing money and buying our own bonds. Now Greenspan, former head of the Fed, said publicly that increasing our deficit may drive investors away from the US bond market.
What does all of this mean?
First, does buying our own bonds increase our debt? Yes. We are basically borrowing from ourselves to pay ourselves back at a later date with interest.
Increasing our money supply decreases the value of our dollar. This is where the international community ties into our economy.
Remember the gold standard? That is gone, because the natural boom and bust cycle of economics needs some magic cheating power...that is monetary policy, the ability to raise or lower interest rates and control for inflation and deflation...HOPEFULLY preventing total economic collapse like the depression. (Unfortunately, history has not proven any safety net for global economic security).
The US has been lucky, because the rest of the world, since WWII, has thought of the US dollar as a universal safety net. Most global economic dealings are in US currency, and most economies keep their investments in US dollars- THROUGH THE BOND MARKET, because they expect that they can depend on the safety of their investments-that the US economy will always be okay-that they will get a good return on their investment. These countries are basically buying our debt and propping up our economy while we spend spend spend ourselves out of our wits.
Why is the US lucky again? Because, other countries cannot accrue such debt, they don't have others propping them up like rich aunts and uncles; and because most other countries deal and invest in US dollars THEY DO NOT WANT THE VALUE OF THE US DOLLAR TO GO DOWN, which means they will most likely want to invest in our debt, to keep the value of their investments up. Whew. Oh the tangled webs we weave.
So, what are the dangers of our ever increasing debt and monetary policy that decreases the value of the dollar? Simple- others won't want to invest in our bonds, and BOO! our economy collapses like a house of cards.
This is why we have such an affection toward China, they are our dearest lending Uncle. Woe to us if they decide to invest in the Euro.
What does all of this mean?
First, does buying our own bonds increase our debt? Yes. We are basically borrowing from ourselves to pay ourselves back at a later date with interest.
Increasing our money supply decreases the value of our dollar. This is where the international community ties into our economy.
Remember the gold standard? That is gone, because the natural boom and bust cycle of economics needs some magic cheating power...that is monetary policy, the ability to raise or lower interest rates and control for inflation and deflation...HOPEFULLY preventing total economic collapse like the depression. (Unfortunately, history has not proven any safety net for global economic security).
The US has been lucky, because the rest of the world, since WWII, has thought of the US dollar as a universal safety net. Most global economic dealings are in US currency, and most economies keep their investments in US dollars- THROUGH THE BOND MARKET, because they expect that they can depend on the safety of their investments-that the US economy will always be okay-that they will get a good return on their investment. These countries are basically buying our debt and propping up our economy while we spend spend spend ourselves out of our wits.
Why is the US lucky again? Because, other countries cannot accrue such debt, they don't have others propping them up like rich aunts and uncles; and because most other countries deal and invest in US dollars THEY DO NOT WANT THE VALUE OF THE US DOLLAR TO GO DOWN, which means they will most likely want to invest in our debt, to keep the value of their investments up. Whew. Oh the tangled webs we weave.
So, what are the dangers of our ever increasing debt and monetary policy that decreases the value of the dollar? Simple- others won't want to invest in our bonds, and BOO! our economy collapses like a house of cards.
This is why we have such an affection toward China, they are our dearest lending Uncle. Woe to us if they decide to invest in the Euro.
Wednesday, November 17, 2010
The 'New Republicans' Listening to the People
Mitch McConnell (R-Kentucky), says he's been protesting for the government to listen to the people for the past two years, and he's not going to stop now.
Really? Have the Republicans been listening to the people? I argue that they have just been playing a game of catch. They throw out soundbites through Fox News, Newsmax and other conservative media outlets, and then catch them back from the millions of people who listen to those outlets and think they are 'Fair and Balanced' news.
Are these the same Republicans whose credo is 'the people can't think for themselves...that's why they elect leaders'? I argue yes, but in disguise.
What is the result? Republicans new slogan- "Rein in spending and shrink the government." I haven't heard that from the Republicans before.
What is the consequence? Our congress is now about to embark on a major debate about shrinking the size of government and curbing spending. A great idea and quite an ideal, but this is not the ideal time for this micro-tuning of the government. Now, I know, our congressmen and women should be able to walk and chew gum at the same time, but....we have a lot of problems at odds with cleaning house right now. It's like trying to buff the floor before you clean up the spilled beer cans and pizza boxes.
Economically speaking, government spending is what is needed now to help ease us out of the recession...that is what has been easing us out so far.
The big argument against my point of view is Alan Greenspan's recent assessment that our debt is going to drive investors away from our bond market (which is what has been keeping the dollar afloat since the 1970's). That will be the subject of tomorrow's blog.
Really? Have the Republicans been listening to the people? I argue that they have just been playing a game of catch. They throw out soundbites through Fox News, Newsmax and other conservative media outlets, and then catch them back from the millions of people who listen to those outlets and think they are 'Fair and Balanced' news.
Are these the same Republicans whose credo is 'the people can't think for themselves...that's why they elect leaders'? I argue yes, but in disguise.
What is the result? Republicans new slogan- "Rein in spending and shrink the government." I haven't heard that from the Republicans before.
What is the consequence? Our congress is now about to embark on a major debate about shrinking the size of government and curbing spending. A great idea and quite an ideal, but this is not the ideal time for this micro-tuning of the government. Now, I know, our congressmen and women should be able to walk and chew gum at the same time, but....we have a lot of problems at odds with cleaning house right now. It's like trying to buff the floor before you clean up the spilled beer cans and pizza boxes.
Economically speaking, government spending is what is needed now to help ease us out of the recession...that is what has been easing us out so far.
The big argument against my point of view is Alan Greenspan's recent assessment that our debt is going to drive investors away from our bond market (which is what has been keeping the dollar afloat since the 1970's). That will be the subject of tomorrow's blog.
Tuesday, November 16, 2010
Rand Paul defends his comments on Face the Nation
Rand Paul on Face the Nation
Rand Paul corrected and apologized for two of his most widely criticized comments. Bob Schieffer, Face the Nation's host opened the topic by asking Rand Paul what he thinks the Federal Government is, or is supposed to be, considering his comment about the Obama administration putting so much pressure on BP to take responsibility for the oil spill. The comment from the Administration was made by Interior Secretary Ken Salazar, who said, "...our job is to keep the boot on the neck of" BP to ensure it meets its obligations."
Paul, in response, said that the Administration's pressure on BP was unAmerican. Paul's comment was widely seen to mean that government should stay out of corporate business- that government has no role in this disaster. To the contrary, Paul submitted to Face the Nation that he does think that BP should be help accountable to clean up the mess, but that the language Salazar used, specifically the 'boot on the neck' part, paints the government as the enemy of business and is too harsh for American politics.
I agree with this sentiment. After all, it is largely business that allows countries to maintain treasury. Dangerous, but true, and worth common respect.
The second comment, about mine accidents, Paul defended and apologized for. Coal mining is a large industry in Kentucky, but also a source of severe environmental degradation and health risks to workers and surrounding communities. After a tragic mine accident in Kentucky, where two coal miners were killed, Paul made this statement on Good Morning America, "We had a mining accident that was very tragic, but then we come in and it’s always someone’s fault. Maybe sometimes accidents happen." He apologized, admitting that saying 'accidents just happen' does not "make anyone feel better", but reasserted that, as a medical doctor, he knows there are certain risks to every activity, and "Sometimes accidents just happen." The trouble is, in the case of mine accidents, there are usually multiple lapses in safety regulations that lead to tragic deaths. Mining is part of big energy and has had corruptive forces on Capital Hill since they started digging into the mountains. Looks like coal may be one of Paul's corrupting influences. "I guess I'll learn to choose better words," Paul said, concluding the matter with Schieffer.
The program went on to ask Paul and colleague Charles Shumer, D-New York, what they can agree to in Obama's Deficit Reduction Commission report. In the spirit of compromise, Paul suggests that conservatives will have to reduce military spending and Democrats will have to reduce domestic spending. He eludes that military and entitlement spending are "exploding problems, getting worse as we speak."
This is definitely true.
However, Paul then goes on to say that he will endorse no new taxes, even a .10 increase in the gas tax, because the deficit should be reduced by cuts in spending and not increases in taxes. Paul wants to "decrease the inefficient sector of our economy" - the government, and keep as much money as possible in businesses.
I wonder if Paul is for eliminating tax cuts meant to spur business growth, or should businesses pay no taxes? When are taxes appropriate and how much? That is the question at the core of this matter. Paul also says he would not favor eliminating the Mortgage Interest Rate tax credit for homeowners, calling that tactic a tax increase. Following this logic, Paul would not support eliminating tax breaks for businesses to spur jobs. So, again, when is taxing and tax forgiveness appropriate? Once a tax break is given must it always remain permanent, because to re-inact the tax would be leveraging a tax increase? Things just aren't that simple, Tea Party Patriots. Paul goes on to endorse increasing the retirement age, but in a much shorter time frame than the Committee suggests, and decreasing government payrolls by 10%.
In a counterproductive closing comment Paul said he would compromise, "not where you increase taxes, but where you cut spending." Unfortunately, the Commission says that to shrink the government to 21% of GDP (which is one percent over where Paul wants it), cuts in spending must be accompanied by strategic tax increases.
Shumer, the Dem. spokesperson in this debate (and head of Dems messaging if Reid stays in leadership) would not make any specific comment on where he or Dems would agree to cut/tax, saying that making specific statements now undermines cooperation later. The existence of the bi-partisan deficit commission and their findings are enough of a signal to me that the Obama admin. is serious about decreasing the deficit in a bi-partisan fashion.
Rand Paul corrected and apologized for two of his most widely criticized comments. Bob Schieffer, Face the Nation's host opened the topic by asking Rand Paul what he thinks the Federal Government is, or is supposed to be, considering his comment about the Obama administration putting so much pressure on BP to take responsibility for the oil spill. The comment from the Administration was made by Interior Secretary Ken Salazar, who said, "...our job is to keep the boot on the neck of" BP to ensure it meets its obligations."
Paul, in response, said that the Administration's pressure on BP was unAmerican. Paul's comment was widely seen to mean that government should stay out of corporate business- that government has no role in this disaster. To the contrary, Paul submitted to Face the Nation that he does think that BP should be help accountable to clean up the mess, but that the language Salazar used, specifically the 'boot on the neck' part, paints the government as the enemy of business and is too harsh for American politics.
I agree with this sentiment. After all, it is largely business that allows countries to maintain treasury. Dangerous, but true, and worth common respect.
The second comment, about mine accidents, Paul defended and apologized for. Coal mining is a large industry in Kentucky, but also a source of severe environmental degradation and health risks to workers and surrounding communities. After a tragic mine accident in Kentucky, where two coal miners were killed, Paul made this statement on Good Morning America, "We had a mining accident that was very tragic, but then we come in and it’s always someone’s fault. Maybe sometimes accidents happen." He apologized, admitting that saying 'accidents just happen' does not "make anyone feel better", but reasserted that, as a medical doctor, he knows there are certain risks to every activity, and "Sometimes accidents just happen." The trouble is, in the case of mine accidents, there are usually multiple lapses in safety regulations that lead to tragic deaths. Mining is part of big energy and has had corruptive forces on Capital Hill since they started digging into the mountains. Looks like coal may be one of Paul's corrupting influences. "I guess I'll learn to choose better words," Paul said, concluding the matter with Schieffer.
The program went on to ask Paul and colleague Charles Shumer, D-New York, what they can agree to in Obama's Deficit Reduction Commission report. In the spirit of compromise, Paul suggests that conservatives will have to reduce military spending and Democrats will have to reduce domestic spending. He eludes that military and entitlement spending are "exploding problems, getting worse as we speak."
This is definitely true.
However, Paul then goes on to say that he will endorse no new taxes, even a .10 increase in the gas tax, because the deficit should be reduced by cuts in spending and not increases in taxes. Paul wants to "decrease the inefficient sector of our economy" - the government, and keep as much money as possible in businesses.
I wonder if Paul is for eliminating tax cuts meant to spur business growth, or should businesses pay no taxes? When are taxes appropriate and how much? That is the question at the core of this matter. Paul also says he would not favor eliminating the Mortgage Interest Rate tax credit for homeowners, calling that tactic a tax increase. Following this logic, Paul would not support eliminating tax breaks for businesses to spur jobs. So, again, when is taxing and tax forgiveness appropriate? Once a tax break is given must it always remain permanent, because to re-inact the tax would be leveraging a tax increase? Things just aren't that simple, Tea Party Patriots. Paul goes on to endorse increasing the retirement age, but in a much shorter time frame than the Committee suggests, and decreasing government payrolls by 10%.
In a counterproductive closing comment Paul said he would compromise, "not where you increase taxes, but where you cut spending." Unfortunately, the Commission says that to shrink the government to 21% of GDP (which is one percent over where Paul wants it), cuts in spending must be accompanied by strategic tax increases.
Shumer, the Dem. spokesperson in this debate (and head of Dems messaging if Reid stays in leadership) would not make any specific comment on where he or Dems would agree to cut/tax, saying that making specific statements now undermines cooperation later. The existence of the bi-partisan deficit commission and their findings are enough of a signal to me that the Obama admin. is serious about decreasing the deficit in a bi-partisan fashion.
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