Taxing Ideas

The Barry, in his press conference today, was sticking to his guns about the need to increase taxes in order to reduce our government's crippling deficits ... otherwise cancer research will disappear, weather forecasting would be crippled, no more food inspections, and our children won't get college scholarships.  Now he does have the bully pulpit and a nation full of fiscal dunces who are easily deluded by such demagoguery ... so such tried-and-true scare tactics are likely to work ... particularly when, in the latter part of July, many Americans start getting letters threatening to stop their Social Security checks and food stamps.

Now assuming that the Republicans will eventually have to blink and cave-in on tax increases in order to get meaningful government spending cuts (which somehow will never happen), I offer what might be acceptable (to me) "reductions in revenue spending" (the new Democrat euphemism for tax increases):

- Offer U.S. corporations a year-long opportunity to repatriate overseas profits at one-half our statutory corporate tax rate.
- Lock in the Bush tax cuts forever but then concurrently beef up the alternative minimum tax provisions in our tax code so that corporations, "millionaires and billionaires," and even ordinary taxpayers must effectively pay income taxes at no less than five percentage points below the statutory rate that would otherwise apply to their gross income.  Consequently, many of the tax loopholes (such as "It Pays to Work" and mortgage interest payments on McMansions) now utilized by such parties might lose much of their effectiveness.  And this would be the first step toward a flat tax (wherein across-the-board tax rates could then be reduced further).
- Eliminate the earned income tax credits entirely (essentially welfare payments through the tax system).
- Increase the upper ceiling on the income to which the FICA tax applies by say 20% and then have it automatically adjust upwards annually by our rate of inflation.
- Double co-pays for Medicaid and Medicare doctor visits (a backdoor tax)

I have no idea as to the amount of increased revenues that such provisions would engender, but I bet it would be substantial ... but not nearly enough to balance the budget.  Therefore, we need to talk about meaningful spending and entitlement cuts (haha) ...

Afterthought:  I was lucky enough to see Mark Halperin's original comment on Morning Joe this Thursday AM about The Barry's performance in yesterday's news conference.  After being egged on and assured that any scurrilous comment would be bleeped out (it wasn't), Halperin said that The Barry was being "a dick."  He later apologized and said he might have made a career-limiting quip.  I hope not ... he is my current left-leaning hero. 

Leading from Behind

The Barry and his handlers have coined a new political oxymoron: “leading from behind.” They have used it to excuse The Barry’s hiding under his oval-office desk regarding acknowledging our “kinetic actions” in Libya, pushing The Joe (Biden) out to negotiate our way out of the administration’s debt-ceiling impasse with Congress, tepidly defending the Pelosi/Reid health-care bill (which has been so inaptly named Obamacare) by granting multitudinous exemptions, and countless other leadership lapses.

The image that immediately comes to my mind is the picture of Michael Dukakis as a tank commander.

Elmer Fudd

In a generic poll by the Gallup organization, a Republican candidate would beat The Barry in 2012 by a 44% to 39% margin (see: Gallup Poll).  This corresponds to what Rush Limbaugh has been saying for many weeks ... that Elmer Fudd could beat Obama in the next election.  This realization has spurned a bit of franetic activity in the White House ... sending The Barry on thinly-disguised campaign trips.  One of the trips was to the Cree Corp. in Durham, North Carolina which makes LED replacement lightbulbs with the purpose to tout his green energy and job creation thrusts.  The only problem here is that Cree has relocated half of its manufacturing jobs to China.  The second trip was to Puerto Rico to pander to the Hispanic vote in the next election.  Again there was a rub in this Presidential grandstanding ... the jobless rate in Puerto Rico when The Barry took office was a little over 9% -- it is now 16.2% (see N.Y.Times).

Of course circumstances could change in the next 16 months, but, at the moment, Elmer looks like a shoe-in.

Another Mass Ass

Salvatore DiMasi, the former Speaker of the Massachusetts House of Representatives, has just been convicted on seven of nine felony counts of bribery and corruption (see: Another Mass Ass).  This is the third Speaker of the Massachusetts House in a row who has been convicted of a felony.  Repeat ... the third Speaker of the Massachusetts House in a row who has been convicted of a felony.  To me, this is not a surprise.  The government in this state is one-party (Democrat) politics which invites this kind of guttural behavior ... not just in our state legislature, but in many of our mayors, many of our governors, most of our representatives to the U.S. House and Senate, and even some from this state who have run for the Presidency. Most of these individuals are poltroons of the first order ... independent of how their public relations machines have (successfully) managed to paint them. 

Massachusetts has a culture of corruption that permeates to almost all corners of its political apparatus ... witness that the State House of Representatives overwhelmingly elected Sal DiMasi as its Speaker well after the particulars of his felony were in the open ... what an embarrassment!  And what is even worse is that this state is replete with intelligent, erudite voters who conveniently overlook this obvious decadence as soon as they enter the voting booth.  This I'll-scratch-your-back-etc. thinking will eventually destroy this state and may even help to destroy our nation.  What a pity that the state which produced that giant statesman who helped found this once-great nation, John Adams, has fed the metastasizing cancer that may eventually destroy it.

Grating

Obama on Weiner -- "I think he's embarrassed himself. He's acknowledged that. He's embarrassed his wife and his family. Ultimately, there's gonna be a decision for him and [h]is constituents. I can tell you that, if it was me, I would resign," (See AP Story)

Obviously the Harvard Law Review had lowered its subjunctive (and pronoun agreement) standards.

Cooking the COLA

My previous blog discussed the fact that monetary inflation seems the only way that our federal, state and local governments can dig their way out of their huge unfunded liability overhangs (see: Good News Bad News).  Now, this discussion left out one key (un)mitigating factor.  That is -- inflation cannot be used by the feds to solve these overhangs ... if cost-of-living-adjustments (COLAs) to these unfunded mandates (mainly Social Security payments) erase the discounted current-value erosion of these benefits.  But this is not happening currently for one key reason -- COLAs for the last two years have been zero, nada, zilch, the cipher (see: Social Security COLAs) and I predict they will continue being zero into the foreseeable future.  How can this be?  Certainly, large U.S. cost-of-living inflation is obvious to anyone who who goes to the grocery store or fills their gasoline tanks. 

Ah, the trick that AARP and the main-stream media have conveniently pushed to the side is that the way COLAs are calculated has been changed.  Instead of cost inflation, COLAs are now computed using wage inflation which, obviously during a severe recession, is essentially zero (or negative ... except, of course, in the public sector).  Although, this might be one way to reduce the extreme severity of this country's unfunded liability overhand, zero COLAs are not good for our senior citizens or anyone living on a fixed income.  Why no one is raising a Wisconsin-no-collective-bargaining-like hew and cry about this federal financial trickery is a little befuddling.  But then I'm generally always surprised by what raises populus passions and what doesn't in a country that gets its news from The Daily Show.

It might even be a good political move for Republicans to raise this issue a year from this September ... right before the next Presidential elections (even though it would be a bad fiscal move).

Good News, Bad News

There is an unfunded-mandate (Social Security, Medicare, etc.) overhang on our federal government of $61.6 trillion (see Unfunded Federal Mandates). This is extremely bad news.  However, I'm pretty sure that this is not the present value of this future debt.  If one assumes that the average span of this obligation is 30 years and then apply a discount rate of 4.185% (the current interest rate on 30-year government bonds), then the discounted present value of this obligation is $18.03 trillion.  Although this is not quite good news, it is a little closer to the rate of the United States' annual economic activity (now about $14.7 trillion).  What could be good news for our government would be that, if the rate on our 30-year bonds were to increase to 8% (due to greatly increased inflation), then the present value of federal obligations would be a more manageable $6.12 trillion. 

Of course, the bad news here is this almost $12 trillion difference would come right out of the hides of those to whom these mandates would be owed (mainly our children and grandchildren).  And if you think that our government would not take this easy route (runaway inflation) out of this unfunded-mandate conundrum, then you are naive enough to vote for The Barry again.

One more piece of bad news, the above $61.6 trillion figure does not include the unfunded mandates of all our states and municipalities.  UGH!

Afterthought: I think some wise-ass questioner in the Presidential debates in 2012 should ask the candidates what "discounted current value" is.  I'm certain Romney and many of the other Republican hopefuls would know the answer.  I somehow doubt if The Barry would.

Reprise

I did not have sexting with that woman ... not a single time.

A Cabal

Joe Biden

Employers added only 54,000 jobs in May, the lowest in many months  (see: Anemic Jobs Growth ).  This is obviously a right-wing conspiracy to embarrass The Barry and The Joe (our Jobs Czar) going into the 2012 elections.  Business's reticence to hire has nothing to do with Obamacare, the looming U.S. tax increases in 18 months, the inability of our feckless American politicians to deal with our debt crisis, and our growing government regulatory malevolence.  I think that The Barry needs to go on prime-time TV and tell the American public who the true culprits of this economic malaise are -- a cabal composed of our greedy oil companies, Israel, the Cambridge, MA police, FOX News, Dick Chaney, and global-warming deniers.  Then we will finally understand whom to blame.

Juxtaposition XXV



Chinese Junk





Congressional Junk