Fear Peddling, the Uninformed and Politics

Posted by PITHOCRATES - August 22nd, 2013

Politics 101

(Originally published February 28, 2013)

Che Guevara is the Left’s Favorite Marxist Hero

When you have nonsensical policies it can be difficult to advance them.  When you have policies that haven’t worked whenever they’ve been tried it can be difficult to advance them.  When you have policies that informed people reject it can be difficult to advance them.  When you have policies that will fundamentally change the country while taking the federal government closer to a monarchy it can be difficult to advance them.  Unless the masses are uninformed.  Or scared.

Fear.  It’s a good tool to advance bad policy.  Especially with an uninformed people.  When the antiestablishment hippies of the Sixties got tired of turning on, tuning in, dropping out and trying to overthrow the federal government through domestic terrorism (as groups like the Weather Underground tried) they changed tack.  These old hippies gave up their violent revolutionary ways.  Kept doing their drugs.  And started overthrowing the country from the inside.  By entering education.

If you’ve ever wondered how the nation started its turn left this is it.  These hippies began teaching our kids.  Filling their heads with revisionist history.  Attacking capitalism.  Lauding socialism.  And communism.  These people were, after all, the ones who started putting up posters of Che Guevara.  The guy who when in Cuba wanted the Soviets to nuke the United States.  A part of the Cuban Missile Crisis they don’t teach in our public schools.  For Che Guevara is the Left’s favorite Marxist hero.  Which is why today you see young and impressionable college students with posters of Che Guevara in their dorm rooms.  Or wearing t-shirts with his image.

Volcanic Eruptions Cool the Planet while burning Coal Warms the Planet

These old hippies hate capitalism.  So they teach our kids the evils of capitalism.  And the goodness of the federal government.  The very government they once tried to overthrow.  Now that federal government can only do good.  As long as liberal Democrats like them are in power.  And they use the federal government to go after their sworn enemy.  Capitalism.  Which is why our kids come home from school scared to death about global warming.  And grow up to be good liberals who hate capitalism.  Because capitalists cause global warming.  By putting profits before people.  And before the planet.

On February 15, 2013, a large meteoroid exploded in the sky over Russia.  Causing a lot of damage.  Shattered a lot of windows.  Set off a lot of car alarms.  And injured some 1200 people.  But it didn’t kill anyone.  Because it exploded some 20-30 miles above the ground.  Which was lucky for the people below.  For the energy in this 10 metric ton meteoroid was equivalent to a small nuclear bomb.  Had it landed intact in Moscow it may have destroyed that city.  Events like this are rare.  But a lot of meteoroids enter the earth’s atmosphere.  Most burn up.  But some pieces make it through to crash into the earth.

A large meteoroid impact may have caused the extinction of the dinosaurs.  But so far human civilization has escaped.  But it’s just been dumb luck.  For there is a lot of space junk up there hurling its way all over the universe.  Making a large meteoroid strike sometime in the future a very real possibility.  Meteoroids that can take out cities like a nuclear bomb.  Yet they don’t teach our kids this in school.  The Left isn’t pressing for some space-based defense force that could land on a meteoroid to attach rockets to try and steer it away from the earth.  Or even to detonate a nuclear device to try and push it off course.  No.  We hear nothing about this danger.  Yet they scare our kids about man-made global warming.  Teach them to hate coal.  Even though burning coal puts the same stuff into the atmosphere as an erupting volcano.  But volcanic eruptions cool the planet.  While burning coal warms the planet.

Fear is Good, Fear is Right, Fear works

So the whole global warming debate appears to be more politics than science.  But our impressionable kids hear this stuff and accept it as fact.  While they ignore a real threat.  Meteoroids.  So why do they scare our kids about global warming but not about a meteoroid crashing into the planet?  Because peddling fear about meteoroids doesn’t offer any political capital.  Not like putting the fear of God into our kids that global warming is killing the planet.  And forcing the polar bears to swim miles from shore because the Arctic is melting.  This fear offers political capital they can use to further regulate businesses.  And to attack capitalism.  Because only government can help the polar bears by preventing businesses from destroying the planet with all of their man-made global warming.

To the Left fear is good.  Fear is right.  Fear works.  Which is why they always turn to it whenever they are trying to pass bad policies that an informed people reject.  As we see in the sequester debate.  A modest decrease in the rate by which they will increase spending.  The federal government will spend more this year than they did last year.  Even with the sequester cuts.  But they put the fear of God into the uninformed that these ‘cuts’ will unleash Armageddon.  We’ll have no safe food to eat or clean water to drink.  Cops, firefighters and teachers will lose their jobs en masse.  Criminals will run free as prosecutors won’t be able to afford to bring them to justice.  We’ll vacate our border because we won’t be able to pay our border patrol.  People will suffer great delays at our airports because they will lay-off TSA agents and air traffic controllers.  And we’ll have to release people from prison because we won’t be able to afford to incarcerate them anymore.

None of its true.  But it sure sounds scary.  Like it will be the end of the world.  And to stop this all we have to do is raise taxes.  Hmmm.  Raise taxes?  Or die in the fiery pits of Hell?  Which one do you think the uninformed will choose?  Our young adults graduating from high school.  Those getting a liberal college education.  Those who get their news from The Daily Show.  Who are more interested in sex and drugs.  Based on the 2012 election.  Where they warned women that if they wanted continued access to birth control and abortion they had better vote Democrat.  And, of course, Washington and Colorado decriminalized marijuana.  So what are these people going to believe?  Whatever the people who put the fear of God into them about man-made global warming want them to believe.  And they will.  Because fear is good.  Fear is right.  Fear works.

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Fear Peddling, the Uninformed and Politics

Posted by PITHOCRATES - February 28th, 2013

Politics 101

Che Guevara is the Left’s Favorite Marxist Hero

When you have nonsensical policies it can be difficult to advance them.  When you have policies that haven’t worked whenever they’ve been tried it can be difficult to advance them.  When you have policies that informed people reject it can be difficult to advance them.  When you have policies that will fundamentally change the country while taking the federal government closer to a monarchy it can be difficult to advance them.  Unless the masses are uninformed.  Or scared.

Fear.  It’s a good tool to advance bad policy.  Especially with an uninformed people.  When the antiestablishment hippies of the Sixties got tired of turning on, tuning in, dropping out and trying to overthrow the federal government through domestic terrorism (as groups like the Weather Underground tried) they changed tack.  These old hippies gave up their violent revolutionary ways.  Kept doing their drugs.  And started overthrowing the country from the inside.  By entering education.

If you’ve ever wondered how the nation started its turn left this is it.  These hippies began teaching our kids.  Filling their heads with revisionist history.  Attacking capitalism.  Lauding socialism.  And communism.  These people were, after all, the ones who started putting up posters of Che Guevara.  The guy who when in Cuba wanted the Soviets to nuke the United States.  A part of the Cuban Missile Crisis they don’t teach in our public schools.  For Che Guevara is the Left’s favorite Marxist hero.  Which is why today you see young and impressionable college students with posters of Che Guevara in their dorm rooms.  Or wearing t-shirts with his image.

Volcanic Eruptions Cool the Planet while burning Coal Warms the Planet

These old hippies hate capitalism.  So they teach our kids the evils of capitalism.  And the goodness of the federal government.  The very government they once tried to overthrow.  Now that federal government can only do good.  As long as liberal Democrats like them are in power.  And they use the federal government to go after their sworn enemy.  Capitalism.  Which is why our kids come home from school scared to death about global warming.  And grow up to be good liberals who hate capitalism.  Because capitalists cause global warming.  By putting profits before people.  And before the planet.

On February 15, 2013, a large meteoroid exploded in the sky over Russia.  Causing a lot of damage.  Shattered a lot of windows.  Set off a lot of car alarms.  And injured some 1200 people.  But it didn’t kill anyone.  Because it exploded some 20-30 miles above the ground.  Which was lucky for the people below.  For the energy in this 10 metric ton meteoroid was equivalent to a small nuclear bomb.  Had it landed intact in Moscow it may have destroyed that city.  Events like this are rare.  But a lot of meteoroids enter the earth’s atmosphere.  Most burn up.  But some pieces make it through to crash into the earth.

A large meteoroid impact may have caused the extinction of the dinosaurs.  But so far human civilization has escaped.  But it’s just been dumb luck.  For there is a lot of space junk up there hurling its way all over the universe.  Making a large meteoroid strike sometime in the future a very real possibility.  Meteoroids that can take out cities like a nuclear bomb.  Yet they don’t teach our kids this in school.  The Left isn’t pressing for some space-based defense force that could land on a meteoroid to attach rockets to try and steer it away from the earth.  Or even to detonate a nuclear device to try and push it off course.  No.  We hear nothing about this danger.  Yet they scare our kids about man-made global warming.  Teach them to hate coal.  Even though burning coal puts the same stuff into the atmosphere as an erupting volcano.  But volcanic eruptions cool the planet.  While burning coal warms the planet.

Fear is Good, Fear is Right, Fear works

So the whole global warming debate appears to be more politics than science.  But our impressionable kids hear this stuff and accept it as fact.  While they ignore a real threat.  Meteoroids.  So why do they scare our kids about global warming but not about a meteoroid crashing into the planet?  Because peddling fear about meteoroids doesn’t offer any political capital.  Not like putting the fear of God into our kids that global warming is killing the planet.  And forcing the polar bears to swim miles from shore because the Arctic is melting.  This fear offers political capital they can use to further regulate businesses.  And to attack capitalism.  Because only government can help the polar bears by preventing businesses from destroying the planet with all of their man-made global warming.

To the Left fear is good.  Fear is right.  Fear works.  Which is why they always turn to it whenever they are trying to pass bad policies that an informed people reject.  As we see in the sequester debate.  A modest decrease in the rate by which they will increase spending.  The federal government will spend more this year than they did last year.  Even with the sequester cuts.  But they put the fear of God into the uninformed that these ‘cuts’ will unleash Armageddon.  We’ll have no safe food to eat or clean water to drink.  Cops, firefighters and teachers will lose their jobs en masse.  Criminals will run free as prosecutors won’t be able to afford to bring them to justice.  We’ll vacate our border because we won’t be able to pay our border patrol.  People will suffer great delays at our airports because they will lay-off TSA agents and air traffic controllers.  And we’ll have to release people from prison because we won’t be able to afford to incarcerate them anymore.

None of its true.  But it sure sounds scary.  Like it will be the end of the world.  And to stop this all we have to do is raise taxes.  Hmmm.  Raise taxes?  Or die in the fiery pits of Hell?  Which one do you think the uninformed will choose?  Our young adults graduating from high school.  Those getting a liberal college education.  Those who get their news from The Daily Show.  Who are more interested in sex and drugs.  Based on the 2012 election.  Where they warned women that if they wanted continued access to birth control and abortion they had better vote Democrat.  And, of course, Washington and Colorado decriminalized marijuana.  So what are these people going to believe?  Whatever the people who put the fear of God into them about man-made global warming want them to believe.  And they will.  Because fear is good.  Fear is right.  Fear works.

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Class Warfare

Posted by PITHOCRATES - January 3rd, 2013

Politics 101

Over 99.5% of all Rich People ARE paying Federal Income Taxes

President Obama won reelection by denigrating Mitt Romney.  He didn’t win by running on a successful record.  He did not win by running on a plan to pull the economy out of one of the worst recoveries in history.  No.  He won it by getting people to hate Mitt Romney.  And by getting people to hate Republicans.  Who they painted as evil rich people who want nothing more than tax cuts for the rich.  And to take away birth control and abortion so only rich people can have access to them.  As well as taking welfare benefits from the poor.  It’s called class warfare.  And it can be very effective.  For it won President Obama a second term despite a horrible first term by almost any metric you measure it.  At least based on the majority of the electorate that just believed the rich aren’t paying their fair share.  So let’s just see who is paying what (see Table 3.  Number of Individual Income Tax Returns, Income, Exemptions and Deductions, Tax, and Average Tax, by Size of Adjusted Gross Income, Tax Years 2001-2010).

The above chart shows who are NOT paying any federal income tax.  Approximately 40% of all taxpayers.  Are these the evil rich people like Mitt Romney?  And those rich Republicans?  No.  Contrary to the Left, it’s not the rich.  They’re paying their taxes.  It’s the poor and the middle class not paying their fair share.  Those earning $5,000 and less pay virtually no federal income taxes.  Over 80% of those earning from $5,000 to $13,000 pay no federal income taxes.  You have to get up to those earning $25,000 or more before more than half of that income group pays any federal income taxes.

We don’t see who actually pays the majority of federal income taxes until we get into the middle class.  Where those who DON’T pay any federal income taxes rapidly drop away.  Those at the low end of the middle class taking advantage of the tax code to maximize their tax credits and deductions (mortgage interest, energy tax credit, medical and dental Expenses, child and dependent care credit, etc.) to reduce their tax bill.  While those at the higher end of the middle class are likely small business owners suffering a business loss.  Or a personal or business bankruptcy.  Approximately 0.8% of those earning $100,000 – $200,000 pay no federal income taxes.  While less than half of one percent of those earning $200,000 or more pay no federal income taxes.  Perhaps this tiny sliver of income earners are not paying their fair share.  But one thing for certain is that over 99.5% of all rich people ARE paying federal income taxes.

Those earning $1,000,000 and more account for less than 1% of Tax Exemptions and Deductions

So are the rich taking advantage of the tax code to reduce their taxable income and federal tax bill?  We hear a lot about tax loopholes.  Those perfectly legal tax credits and deductions written into law by the United States Congress.  That both those on the Left and those on the Right take advantage of.  Yet those on the Left have convinced enough of the electorate that these legal credits and deductions are tax evasion.  And that only the rich on the Right are using these to evade paying their fair share.  So who is taking the biggest advantage of the tax code to reduce their tax bill?  In 2010 this totaled about $3 trillion.  Is this why those earning $100,000 or more paid no income tax?  For those few not paying any federal income tax?  Not exactly.  (The dollar amounts in the following charts are in thousands of dollars.)

In 2010 taxpayers claimed in total about $3 trillion in exemptions and deductions.  The deficit in 2010 was about $1.3 trillion dollars.  So perhaps this is the reason why we had a deficit in 2010.  This is what the Left would have us believe.  It’s those tax loopholes that the evil rich take advantage of to avoid paying their fair share of taxes.  The only problem with this is that it’s not the rich taking advantage of these tax loopholes.  It’s the poor and middle class.

Those earning $1,000 and less account for less than 1% of these exemptions and deductions.  Those earning $1,000,000 and more also account for less than 1% of these exemptions and deductions.  It’s those earning from $1,000 to $1,000,000 that are taking advantage of these tax loopholes.  Especially those earning from $50,000 to $200,000.  The only income groups claiming 10% or more of the nearly $3 trillion in exemptions and deductions claimed.  So not only are the evil rich paying federal income taxes whatever they claim as exemptions and deductions doesn’t even come close to what the poor and middle class are claiming.

Prosperous Economic Times brought about by Tax Cuts INCREASED Tax Revenues

These numbers don’t exactly support the claim that the rich aren’t paying their fair share.  They’re paying federal income taxes.  And what tax loopholes they exploit hardly makes a dent in the amount of tax revenue the IRS collects.  Which can only mean one of two things.  Either the poor and middle class need to pay more federal income taxes.  Or the federal government is just spending too much.  Well, as we just witnessed in the fiscal cliff debate, President Obama and the Left want to raise taxes.  Blaming the record Obama deficits on the Reagan and Bush tax cuts.  Their deal includes higher income tax rates on households earning $450,000 or more.  But NO spending cuts.  Which will be a problem.

In 2010 the total adjusted gross income totaled just over $8 trillion.  Most of which came from 4 income groups.  About a trillion each from those earning from $50,000 to $75,000, from $75,000 to $100,000 and from $200,000 to $500,000.  Those earning from $100,000 to $200,000 earned in total almost $2 trillion.  Which means the new higher tax rates aren’t going to bring in much new tax revenue.  Because they aren’t taxing the people with the money.  The middle class.  And with some additional spending instead of spending cuts the deficit will only grow larger.  So this whole fiscal cliff debate was nothing but theatre.  For it wasn’t about deficit reduction.  It was about politics.

The Left wants to destroy the Republican Party.  And to do that they need to turn prosperous economic times brought about by the tax cuts of the JFK, Reagan and Bush administrations into the source of all our problems.  Yes the economy boomed, goes the argument, but at what cost?  Massive deficits.  Deficits not brought about by tax cuts.  But by spending.  For those prosperous economic times brought about by tax cuts INCREASED tax revenues.  The deficits resulted from spending increases greater than the revenue increases.  But with a successful campaign of class warfare they have revised history.  Those deficits are now the result of the rich not paying their fair share.   Which helped them increase tax rates on the rich today.  Because the Left got everyone to hate the rich.  And the Republican Party.  Even though the rich are the only ones paying their fair share.  In fact, they’re paying more than their fair share.  But the majority of the electorate doesn’t know this.  Because of that successful campaign of class warfare.

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FT150: “The Left wants to extend tax hikes down to those earning $250,000 because there are just too few rich people to tax.” —Old Pithy

Posted by PITHOCRATES - December 29th, 2012

Fundamental Truth

If you Confiscated ALL Income from those Earning a Million+ it would be Less than HALF of the Average Obama Deficit

The fiscal cliff yadda yadda yadda the Democrats want to raise taxes and the Republicans’ mothers are whores.  That about summarizes the fiscal cliff negotiations.  The Democrats want to raise taxes.  The Republicans don’t because there is nothing that will kill off an economic recovery quicker than raising taxes.  And the Democrats are mean.  Calling the Republicans a lot of names.  And saying things about them that aren’t very nice.  So once again let’s look at the numbers to see what they say about federal income taxes.  The following numbers come from the IRS (see Table 3.  Number of Individual Income Tax Returns, Income, Exemptions and Deductions, Tax, and Average Tax, by Size of Adjusted Gross Income, Tax Years 2001-2010).

The Democrats keep saying that the Republicans want tax cuts for the rich paid for by the poor.  But according to these numbers that’s just not happening.  People who earned $15,000 or less paid 0.0% of all federal income taxes.  People who earned $30,000 or less paid less than 1% of all federal income taxes.  It’s the meaty center that paid the taxes.  Those who earned from $75,000 to $1 million submitted approximately 20.5% of all federal tax returns while they paid approximately 62.9% of all federal income taxes.

Now how about those rich people?  Those earning $1 million or more submitted approximately 0.19% of all tax returns.  Less than a quarter of one percent.  And yet they paid approximately 21.9% of all income taxes.  Is that fair?  At these high levels of income people pay basically the top marginal tax rate as only a very small fraction of their earnings falls outside this top rate.  So if we divide the total taxes paid by this 0.18% ($207 billion) by 0.35 (the 2010 top marginal tax rate) you get a total income of $590 billion.  So if you confiscated ALL of their earnings it would be less than HALF of the average Obama deficit ($1.324 trillion).  Meaning that it is IMPOSSIBLE to reduce the deficit with any tax rate on those earning $1 million or more.

The Rich may be paying Lower Tax Rates but they’re paying Far More Tax Dollars than most of Us

All right, so it won’t reduce the deficit.  But the Democrats say we must do this to be fair.  Meaning those earning more should pay more even if it’s only symbolic.  To punish success.  As if they’re not being punished already for their success.  We’ve all heard about Warren Buffet’s secretary paying a larger tax rate than he pays.  But talking percentages isn’t the same as talking dollars.  Because a small percentage on a much larger earnings amount will produce more tax revenue than a higher tax rate on a smaller earnings amount.  So let’s look at dollar amounts to see if the rich are paying their fair share.  Or whether we’re punishing them enough for their success.

The rich paid a smaller percentage of their earnings in taxes but paid far more in actual dollar amounts.  Which is the only thing that allows government to pay for things.  Dollars.  Let’s assume Warren Buffet’s secretary falls into the income range $50,000 to $75,000.  Who paid on average $4,310.92 in federal income taxes.  Now compare this to what rich people paid in income taxes.  Those earning from $1 million to $1.5 million paid on average $306,779 in federal income taxes.  Or more than 71 times what someone earning $50,000 to $75,000 paid.  Those earning $1,500,000 to $2,000,000 paid 102 times more than that lower income earner.  Those earning $2,000,000 to $5,000,000 paid 179 times more than that lower income earner.  Those earning $5,000,000 to $10,000,000 paid 407 times more than that lower income earner.  Those earning $10 million or more paid 1,389 times more than that lower income earner.

The rich may be paying lower tax rates but they’re paying far more tax dollars than most of us.  An inordinate amount.  If you look at it in terms of government services people consume (which is what taxes pay for) are those earning $10 million or more consuming 1,389 times the government services those earning $50,000 to $75,000 consume?  No.  If anything, they consume far less government services than most people.  Because they live the good life.  The good life their high earnings provide.  Being that the rich are paying far more than their fair share you can only conclude then that these excessive taxes are punitive.  To punish their success.

The only way to Achieve Real Deficit Reduction is to Increase Taxes on the Middle Class or Cut Spending

So what can we conclude?  The rich are paying more than their fair share of taxes.  The amount of tax dollars they’re paying could even qualify as being punitive.  As they are so great any further increase in rates on the rich is not likely to increase tax revenue.  First of all as they are already paying so much they will take every tax shelter advantage they can to minimize the further confiscation of their earnings.  But more important than that is that there are just so few rich people.  Even though the rich pay on average hundreds of times more in federal income taxes than that meaty center it’s the meaty center where most of the tax revenue comes from.  Because there are so many more people in the meaty center.  And by graphing the number of tax returns from each income bracket and the amount of tax revenue they pay we can understand why the Democrats are so adamant to raise taxes on those earning as little as $250,000.

The blue line (Series 1) is the number of tax returns filed in thousands of people for each income bracket (the left vertical axis).  The red line (Series 2) is the total tax revenue in millions of dollars each income bracket produces (the right vertical axis).  You can see the meaty center of tax revenue (from those earning $75,000 to $1 million).  And you can see the meaty center of those filing tax returns (form those earning $30,000 to $200,000).  As you can see the meaty center of tax filers and tax payers are not the same.  As the tax code shifts the tax burden onto the higher income earners.  And in this chart we can see why the Democrats want to increase tax rates on those earning $250,000 and more.

The drawback to progressive tax rates is that it shifts the tax burden onto fewer people.  Who must pay more in taxes than is their fair share.  And that worked for awhile until government grew so large.  But as our aging population has increased the costs of Medicare and Social Security (and soon Obamacare) there just aren’t enough rich people to tax to pay these soaring costs.  And they will have no choice but to shift the tax revenue graph to lower income people.  So they can capture more people (and incomes) under this graph.  Yes, they want to tax the rich more.  But only for the symbolism.  For once they’ve punished them by forcing them to pay their ‘fair’ share then they can raise tax rates on everyone else.  Which is the only way they have a snowball’s chance in hell of achieving real deficit reduction.  Increasing taxes on the middle class.  Well, that, or cutting spending.  Which could provide serious deficit reduction.  By shrinking the size of government. The very cause of those massive deficits.  And accumulated debt.  But shrinking government is, of course, crazy talk for those on the Left.  Who would rather let the country sink into insolvency before agreeing to that.

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FT146: “A Democrat promise to cut spending is as good as a promise from Lucy that she’ll let Charlie Brown kick that football.” —Old Pithy

Posted by PITHOCRATES - November 30th, 2012

Fundamental Truth

Tax and Spend Democrats have given us the Financial Crisis we call Taxmageddon or the Fiscal Cliff

Democrats like to spend money.  Earning the moniker tax and spend liberals/Democrats.  And what money they can’t tax away from the taxpayers they borrow.  And what they can’t borrow they print.  They beg, borrow, steal, tax and print as much money as they can.  Because they can never raise enough money to spend.

To help them in their insatiable appetite to spend they make spending promises that the state can never fulfill.  Creating one financial crisis after another.  Creating an urgency to raise taxes.  And debt limits.  Or else face bankruptcy.  And the inability for the U.S government to pay their debt obligations.  Lowering the U.S. sovereign debt rating.  Much like Standard and Poor’s did in 2011.  Something that we must avoid at all costs.  That is, something we must avoid from happening again at all costs.  And those costs are typically higher taxes and ever more debt.

Guess what?  We have another crisis.  It’s got a couple of names.  Taxmageddon.  And the fiscal cliff.  The expiration of the Bush tax cuts.  And massive spending cuts.  Because Democrats and Republicans couldn’t agree on a deal to reduce the deficit they agreed to sequestration.  Automatic spending cuts that will gut entitlements and defense spending.  All in a vain attempt to balance the budget.  Like politicians have been saying we must do for the last three decades or so.  But never do.  In fact our politicians have done the exact opposite.  They’ve increased spending.  So much so that we now are at a fiscal cliff.

Republicans are Hapless Sad Sacks when Negotiating a Spending Cut/New Tax Deal with Democrats

A recurring joke on the children’s cartoon Peanuts is how Lucy makes a fool of poor old Charlie Brown.  She continually promises to hold the football for him to kick.  Even though every other time she has promised this she pulled the ball away just before Charlie could kick it.  Sending him flying up into the air and falling flat on his back.  Making a fool of himself.  Bringing a big smile to Lucy’s face.  As it amuses her that Charlie is so foolish to fall for this trick time and again.  But she promises that this time he can trust her.  So she uses lies and manipulation to get Charlie to believe her.  And he goes running at that football.  Determined to finally kick it.  Only to have her pull the ball away again.  Sending him flying up into the air and falling flat on his back.  Again.

Sound familiar?  Kind of sounds like pretty much every spending cuts/tax deal ever brokered by the Democrats.  Who look at the Republicans with that ‘Lucy’ smile on their face.  Incredulous that they can get away by making the same old promises that they never keep.  Getting what they want, modest tax hikes now, in exchange for generous spending cuts later.  And just like that classic song in Stephen Sondheim’s A Little Night Music the Republicans keep asking when is later?  Just like poor Henrik.  Who epitomizes the Republicans when it comes to spending cut negotiations with Democrats.  Who are always told those spending cuts will come later.

Later…

When is later?

All you ever hear is “Later, Henrik, Henrik, later.”

Substitute ‘the Republicans’ for the sad sack ‘Henrik’ and this can be a song about Republicans.

How can I wait around for later?

I’ll be ninety on my deathbed

And the late, or, rather, later, Henrik Egerman.

Doesn’t anything begin?

Poor Henrik.  As hapless as Republicans in a spending cuts/new tax deal they negotiate with Democrats.

The Democrats look at the Republicans like they are all Charlie Brown

George Herbert Walker Bush made a deal with Democrats.  Even reneged on his famous ‘read my lips, no new taxes’ pledge.  He agreed to $1 in new taxes for every $2 in later spending cuts.  Those tax hikes were quick to go into law.  While we’re still waiting for those later spending cuts.  Ronald Reagan made even a grander deal with Democrats.  $3 in later spending cuts for every $1 in new taxes.  The Democrats were quick to enact those new taxes.  But we’re still waiting on those later spending cuts.  Reagan went to his deathbed at 93 still waiting for those later spending cuts.  He waited for later to come.  But later never came.  As promised later spending cuts never, ever, begin.

For when it comes to promised spending cuts Democrats are like Lucy.  With that snarky smile.  Making the same promises that they’ve made so many times before.  Promises they never keep.  And have no intention of ever to start keeping them.  Laughing to themselves that they can get Republicans time and again to believe their same empty promises.

They look at the Republicans like they are all Charlie Brown.  They have no respect for them.  They lie to them at will.  Say whatever it takes to get their way.  Making promises they have no intention of keeping.  Promising George H.W. Bush $2 in spending cuts for every $1 in new taxes.  Promising Ronald Reagan $3 in spending cuts for every $1 in new taxes.  Both lies.  And now President Obama is saying that any deal to avoid Taxmageddon or the fiscal cliff must include both spending cuts and new taxes.  As if they are not Lucy.  But we all know that they are Lucy.  For any deal including later spending cuts for new taxes will see the Republicans on their deathbed at 90 still waiting for the Democrats to deliver on those spending cuts.  And just when they think they will Lucy will pull that football away.  Again.  Making the Republicans look like fools once again.

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People sign Petitions to Secede from the United States following President Obama’s Reelection

Posted by PITHOCRATES - November 15th, 2012

Politics 101

Wealth Redistribution requires High Taxes to get the Wealth from those who Create It which reduces Economic Activity

President Obama’s reelection has left the nation bitterly divided.  President Obama won only 50% of the popular vote.  Down from 53% in 2008.  So the president has become less popular with the American people.  No surprise, really, with one of the worst economic recoveries in history.  Despite the trillions in new spending to stimulate economic activity.  Which didn’t stimulate economic activity.  People concerned about this anemic economy are in the other 50%.  Those who didn’t vote for keeping Obamacare law.  Those who didn’t vote for a massive increase in regulatory powers over the private sector economy.  Those who didn’t vote to raise taxes.  Those who didn’t vote for continued record deficits.

With every contentious election some people will say they will move out of the country if their candidate loses.  Few do.  Although some rich people are doing that now.  As they feel they have a bulls-eye on their back.  With the whole Occupy Wall Street thing.  The 99% against the 1%.  The clarion call to get the wealthy to pay their fare share.  Even though the top 10% income earners are already paying some 70% of all income taxes.  So no doubt the wealthy are concerned.  Wondering where this will all end.  Higher income tax rates?  A higher capital gains tax?  A wealth tax?  Confiscation of all earnings over a ‘fair’ amount?  Who knows?  The sad thing is that these things don’t really seem farfetched.  For there is an angry mob out there.  Stirred up by those on the far Left.  Who is telling them that the only reason why they don’t have everything they want in life is because these rich people have taken it away from them.  And that these oppressed should rise up and demand egalitarianism.  Wealth redistribution.  From those according to ability to those according to need.  Which they are.  Because it’s only fair.

Of course wealth redistribution requires high taxes to get the wealth from those who create it.  Higher taxes, though, are a drag on the economy.  And leads to higher unemployment.  So it’s just not the wealthy worried about where this advance of liberal, anti-business policies will end.  Up to 50% of the population voted in favor of the wealth creators creating wealth.  And jobs.  Something most of the people want.  As already high unemployment will only get worse with another 4 years of anti-business policies.  As well as leading this country closer to a European-style social democracy.  That economic system favored by European countries currently wallowing in a sovereign debt crisis that appears to have no end.

If the Nation broke down into Two Confederacies Steve Jobs would probably have moved to Conservative America

So people are concerned about the direction the country is going.  So concerned that there are actually secessionist movements popping up across the nation.  Where people are signing petitions to advance the secession of their state from the union.  For the growth of federal power has far exceeded the limits envisioned by the Founding Fathers.  And the federal government is only going to get bigger.  European big.  So big that even Alexander Hamilton would have joined his sworn enemy, Thomas Jefferson, in opposing this federal power grab.  For Jefferson’s greatest fear appears to be coming true.  The federal government has reduced the states to little more than federal districts of a consolidated federal nation.  Where all power is consolidating in Washington.  In the hands of a few people.  Who rule over the masses.  Much like a monarchy.  The kind the Founding Fathers fought against to win their independence.  Something this other 50% understands.  Which is helping fuel these secessionist movements.

So people in some states with a historical understanding of our Founding are concerned.  And they’re signing petitions for secession.  While the Left mocks them as whiny sore losers.  When they threaten to leave the union Jon Stewart on the Daily Show mocked them with a line from Willy Wonka & the Chocolate Factory:  Stop, don’t, come back.  That Gene Wilder delivered in a tone of voice that basically said, “Go and good riddance.”  Much to the delight of the Daily Show audience.  Not fully understanding what that would mean.  For it wouldn’t just mean that they would get a country of free health care, birth control, abortion, legal marijuana, gay marriage, open borders, etc.  The Liberal utopian dream.  No, succession would probably result in regional confederacies.  The Northeast, the Midwest and the West Coast would probably join together in a liberal confederacy (Liberal America) where they pass all their liberal policies.  While the remaining states would probably join together in a conservative confederacy (Conservative America).  Which would pose a great problem for the Liberal America.  How?  In a word, egalitarianism.

Business owners who oppose excessive regulations and taxes would probably pack up shop and move to Conservative America.  If they weren’t there already.  So you would have a net movement of businesses, and jobs, from Liberal America to Conservative America.  Where government policies are less anti-business.  Even the liberals would admit this would happen.  As they blame business for outsourcing jobs to foreign countries to escape the high cost of regulatory policies and taxes.  So businesses will move.  Leaving a reduced tax base behind.  Where fewer workers would be paying all those taxes to give everyone all of those free government benefits.  And the best and brightest of our entrepreneurs would head to Conservative America, too.  For they will go where it is easier to realize their dream.  If the nation broke apart into these two confederacies it would be highly probably that if he were alive Steve Jobs would move to Conservative America.  Just as he outsourced his manufacturing to more business-friendly China.  Don’t think this would happen?  Well, it would.  Because it has always happened in the past.

If America divides into Two Confederacies People will flee the Liberal Paradise for Jobs in Conservative America

At the end of World War II the German capital, Berlin, lay in Soviet occupied Germany.  What became East Germany.  Berlin, however, was occupied by the Soviets, the French, the British and the Americans.  Giving those living in Berlin access to the West.  As long as they got to the French, British or American sectors.  Which became a real sore spot for the Soviet Union.  Because East Berlin was a communist paradise.  Located in East Germany.  Also a communist paradise.  The height of egalitarianism where the state provided everything for the people.  It was everything the American Left wanted.  But nothing those living there wanted.  East Germans headed to Berlin en masse to escape to the West.  Especially the best and brightest.  It was a brain drain of the East.  So the Soviets did the only thing they could do.  They built the Berlin Wall.  To prevent their people from escaping their Communist paradise.

West Berlin bounced back after the war quickly.  Becoming a rich and exciting city to live in.  Because they had free market capitalism.  Providing a business-friendly environment.  That created jobs.   While across the Berlin Wall people were stuck in time.  In a dark and dreary existence.  Where they waited in line for their basic needs.  Often hungry.  And cold.  With nothing to look forward to.  For the government didn’t allow anyone to leave their paradise.  Why?  Because the few who did rarely went back.  So they worked.  And sat at home.  Dreaming of how to get past that wall.  To freedom.  And a better life.

If America divides into two confederacies people will flee the Liberal paradise.  For jobs in Conservative America.  Leaving Liberal America with a reduced tax base.  Making it harder to pay for all of those government benefits.  As the benefit-consumers will flock to Liberal America for all that free stuff.  But the people who pay for all of that free stuff will be going the other way.  So fewer people will be paying for more stuff.  Which, of course, will make it impossible to provide all of that free stuff.  Unless Liberal America also builds walls to keep their people from fleeing their utopia.  Keeping the wealth creators on their side of the wall.  So they can tax them.  To pay for their Liberal paradise.  Which will have a close resemblance to East Berlin.  So the liberals should be careful what they wish for.  For if these states secede life will get worse for those dependent on government benefits.  How worse?  Behind the Iron Curtain worse.

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Clinton Tax Rates, Japan’s Lost Decade, Irrational Exuberance, Dot-Com Bubble, EBT and Job-Creating Capital

Posted by PITHOCRATES - November 14th, 2012

History 101

The Economy of the Nineties boomed because of Japan’s Lost Decade and Irrational Exuberance

President Obama wants to raise taxes on the wealthy.  He wants to go back to the Clinton tax rates.  The economy was booming during the Clinton Nineties.  Better than it is now.  Tax rates were higher in the Nineties than they are now.  While the deficit is greater now than it was in the Nineties.  And the debt is greater than it was in the Nineties.  The conclusion?  Higher tax rates improve economic activity.  Produce smaller deficits.  And grow the debt at a slower rate.  At least, that’s what those who want to raise tax rates say.  The only problem with this is that there are reasons why the economy was booming in the Nineties.  And it didn’t have to do with tax rates.  But, instead, the Japanese.  And irrational exuberance.

The Japanese government partnered with business in the Eighties.  Corporations worked closely together for the good of the export economy.  And the national economy.  This was Japan Inc.  And the economy surged.  Fueled by low interest rates.  People in America worried about the Japanese buying American landmark assets with their fat profits.  An American magazine joked that America would become a wholly owned subsidiary of a Japanese corporation.  A Democrat presidential candidate said America was a fool for not doing what the Japanese were doing.  But the good times didn’t last.  That inflationary monetary policy caused a massive asset bubble.  And when it burst the Japanese suffered a deflationary spiral that last a decade or more.  Their Lost Decade.  This great contraction weakened America’s greatest economic competitor.  Greatly helping the US economy.

Also during the Nineties the Internet was coming of age.  In the Eighties there was the personal computer.  Silicon Valley.  And Microsoft.  A lot of investors were looking for the Microsoft of the Nineties.  No one knew who that was going to be.  But one thing everyone knew was that it was going to be a dot-com.  Investors poured money into dot-coms that didn’t have anything to sell.  Hence the irrational exuberance.  Dot-coms built great office buildings and technology corridors in cities.  New ‘Silicon Valleys’ were appearing across the country.  Kids went to college to learn how to make websites and set up ecommerce.  All these young kids filled these new dot-com buildings.  But when the investment money ran out these companies went bankrupt.  As they had no revenue.  Or anything to sell.  The dot-com bubble burst after Clinton’s Nineties.  Giving George W. Bush a bad recession at the beginning of his first term.  Also, President Clinton pressured lenders to qualify the unqualified for mortgages they couldn’t afford.  Starting a great real estate bubble.  That burst after Clinton’s Nineties.  Causing the subprime mortgage crisis about a decade later.

The Government taxes Small Business Owners as Rich People even though they’re not really Rich People

So there is more to the Nineties than those Clinton tax rates.  The Japanese gave them an able assist.  Then a lot of bad investing creating a lot of artificial economic activity that created a bubble.  That crashed into a recession.  Thanks to a lot of governmental interference in the private sector economy.  They kept interest rates artificially low.  And offered a lot of incentives to get those dot-coms to build in their cities.  Leaving cities with a lot of empty buildings, budget deficits, bloated public sector payrolls and no increase in tax revenue to pay for the additional infrastructure and services.  This is what the Clinton policies gave us.  Not sustained economic activity.  Or a budget surplus.  So going back to the Clinton tax rates is not likely to produce sustained economic activity.  Or a budget surplus.  Especially when President Obama has outspent Clinton over a trillion dollars a year.

So returning to the Clinton tax rates won’t help to reduce the deficit unless they return to the Clinton spending as well.  And that’s not likely to happen.  So what will the increase in tax rates do?  Well, we can get an idea by comparing the Clinton tax rates (1999) to the last tax rates we used (2011).  As they apply to a small business.  The following is an income statement for what could be a typical small business with about $1.8 million in annual sales revenue.

This is a very summarized income statement using some typical percentages for cost of sales and overhead.  This also assumes about $350,000 of debt on the company books.  Giving an interest expense of about $28 grand.  When you subtract all of these expenses from revenue you arrive at an earnings before taxes (EBT) of $358,016.73.  For many small business owners this EBT flows to their personal income tax return as personal income.  Which sounds like a lot.  But business owners will leave most of this money in their businesses.  So while the government taxes them as rich people they’re not really rich people.  For what the government doesn’t tax away will become retained earnings.  And reinvested back into their businesses.

Higher Taxes and Higher Regulatory Costs hurt Job Growth by taking away Job-Creating Capital from Businesses

All right, so let’s look at what the government would tax away.  Based on the 1999 tax rates.  And the 2011 tax rates.  Using the tax rates for married filing jointly we get the following income tax for each set of tax rates.

The 1999 tax brackets give an effective tax rate of 31.4%.  In 2011 that fell 4.7 points to 26.7%.  Which increased net profit from 13.7% in 1999 to 14.6%.  An increase of 0.93 points.  Not as big a change as in the income tax rate.  But it’s an additional $16,730.50 the small business would have to reinvest into the business.  Which could pay for a lot (even help pay their interest expense).  Especially over time.  In two years that’s about $33,461.  In five years that’s about $83,650.  In ten years that’s about $167,300.  That’s a lot of ‘free’ money the business could use to grow their business that they didn’t have to pay back.  But if we returned to the Clinton tax rates that’s money these businesses would no longer have to invest into their business.  Forcing them to pay to borrow money.  Adding additional interest expense.  And burdening the business with greater debt.  Which would be a disincentive to add additional costs.  Like creating new jobs and hiring people.

A lot of small business owners don’t pay themselves.  That is, they don’t get a paycheck like everyone else in their business.  Instead they distribute earnings from the business.  People think all business owners are rich.  But here’s something they don’t understand.  Even though they pay income taxes on their total business earnings they may only take a small percentage of their earnings out of the business.  In this example the married couple draws $75,000 a year to live on.  Even though they paid income taxes on $358,016.73.  Netting only $75,000 on these earnings would be like having 79.1% of your earnings withheld in taxes from your paycheck.  While these numbers vary among business owners this generally holds true.  They pay taxes on amounts far greater than what they take out of their business to live on.

If we go back to the Clinton tax rates it will reduce the amount of investment capital owners have to grow their business.  Which new regulations have already reduced by increasing costs.  With the unknowns of Obamacare basically freezing all new hiring.  As small business owners don’t know if the government will leave them enough money to grow their businesses.  Or even enough to maintain their current business operations.  Which is how higher taxes and higher regulatory costs hurt job growth.  By taking away job-creating capital from businesses.

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President Obama to Raise Taxes but it won’t Help our Budget Woes

Posted by PITHOCRATES - November 11th, 2012

Week in Review

It takes two things to make tax revenue.  Tax rates.  And economic activity.  For if you don’t have the economic activity it doesn’t matter what the tax rates are.  Because any given percentage of smaller amount of national income will be less than the same percentage of a larger amount of national income.  That is, higher incomes produce more tax revenue.  Not higher tax rates.  It’s simple arithmetic.  Something the Democrats talked a lot about in the recent campaign.  As if they understand this simple arithmetic.  Yet they don’t seem to understand that taxing a bigger pile of money produces more tax revenue that taxing a smaller pile of money (see Obama Wins 2012 Election: Why Your Taxes Are Going Up by Morgan Korn posted 11/7/2012 on Yahoo! Finance).

Obama has vowed to raise the top income tax rate for individuals to 39.6% and let the Bush-era tax breaks end for the highest income earners. The majority of Americans — those who are lower to middle class — could also see a 2% tax increase if Congress allows the temporary payroll tax holiday to expire at the end of the year…

Len Burman, a professor of public affairs at Syracuse University and a co-founder of the bipartisan Tax Policy Center, believes higher tax rates play just a small role in resolving the nation’s budget woes.

“In the long term [Obama] is going to need to raise taxes on more than just the rich,” Burman says in an interview with The Daily Ticker. “The budget problem isn’t going to be solved without broader-based tax increases, preferably done in the context of tax reform and also serious entitlement reform. We’re not going to be able to solve this on the tax side alone.”

After World War II our veterans came back home and started making babies.  Giving us the baby boom.  And the baby boomers.  Who entered the workforce about 20 years later.  Causing a boom in the tax base.  Resulting in a higher national income.  And higher tax revenues.  Which LBJ put to good use with his Great Society.  Giving us Medicare that cost a small fraction of our incomes in payroll taxes.  It was nothing in the grand scheme of things.  While the benefits were huge for our seniors.

So the welfare state exploded.  Thanks to that increasing tax base.  And those veterans making so many babies.  But then something happened in the Sixties.  Those baby boomers did not return the favor and continue the baby boom.  Instead opting to have fun instead.  Enter birth control.  And abortion.  Birthrates fell.  In time fewer people entered the workforce than left it.  Causing the population to age.  And the tax base to shrink.  All while those new entitlement programs continued to grow.  So fewer and fewer people paid for more and more entitlements.  A recipe for disaster.  A recipe for what we have today.  Entitlement spending obligations greater than the current tax base can afford.  And you can’t fix that with higher tax rates or new taxes.  You need a larger tax base (i.e., another baby boom).  Or entitlement reform.

It would take another 20 years for a new baby boom to produce new taxpayers.  So that leaves entitlement reform as our only choice.  And the only serious attempt to reform entitlements was roundly dismissed by the Democrats when Paul Ryan put his plan on the table.  Which was the only plan.  The only problem with the Ryan plan was that politicizing it would benefit the Democrats in the upcoming election.  So that’s what they did.  For winning elections trumps everything for Democrats.  Even saving Medicare.

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Australia taxes their Rich People far more than the US but it’s still Not Enough to Pay for their Welfare State

Posted by PITHOCRATES - November 10th, 2012

Week in Review

With President Obama’s reelection some are saying it is a mandate to raise taxes on the rich.  Because he said all along that he wanted to tax the rich more.  And he won reelection.  Ergo, ipso facto, mandate.  But we should be careful about raising taxes.  For it seems our government is always raising taxes.  Or demanding that we need to raise taxes.  So the question is where does all this tax-raising end?  A new carbon tax?  A GST?  Well, Australia has both.  Yet they’re still talking about raising taxes (see States to eye online shopping for GST boost – Sydney Morning Herald posted 11/10/2012 on Canberra Hub).

State treasurers will this week consider calls to cut the GST-free threshold for goods bought from overseas online stores, in an attempt to bolster flagging revenues from the tax.

Under current rules, products costing less than $1000 that are privately purchased from overseas are not subject to GST, sparking complaints domestic retailers face an uneven playing field.

State governments – which receive the revenue raised by the GST – also miss out on about $600 million a year due to the threshold, and this foregone revenue is projected to rise as online shopping takes off…

NSW Treasurer Mike Baird, who wants the GST-free threshold to $30, will raise the issue as a “key consideration” at the meeting, a spokeswoman for Mr Baird said…

The simplest way to resolve the situation was to require foreign retailers selling into Australia to charge GST, he said.

Mr Greiner has also called for a debate on raising the GST’s rate from 10 per cent or broadening its base, but this was ruled out on Monday by the Treasurer, Wayne Swan.

Australia’s top marginal tax rate is 45% on incomes over $180,001 ($187,021 US).  They tax companies at 30%.  And capital gains, after some discounting and adjustments, they tax as income.  Whereas in the US the top marginal tax rate is 35% on incomes over $388,350.  The corporate tax rate is 35%.  And a capital gains tax of 15%.  Apart from the higher corporate tax rate, the Australians tax individuals far higher in Australia than the US taxes their individuals.  And yet it’s still not enough.

On top of these higher tax rates are additional taxes.  Like the carbon tax.  And the goods and service tax (GST).  Which they are currently discussing ways of increasing to generate more tax revenue.  There’s an important lesson to learn here.  No matter how much government taxes their people it will never be enough.  For the unsustainable rising costs of a welfare state for an aging population will always exceed the tax revenue from an aging population.  Higher tax rates and new taxes are inevitable.  And for those states with national health care, cost cutting, longer wait times and service rationing are also inevitable.  Because however much they tax it will never be enough.

This is the future in America.  Because we’ve just added Obamacare even though we’re already suffering record budget deficits under the Obama administration.  And 4 years of anemic economic growth.  Which will only become more anemic with higher tax rates.  And new taxes.

The only way a state will ever pay for its welfare state is if they have a population that is getting younger such that there are always more people entering the workforce than leaving it.  Or by reducing the size of the welfare state to a size the current population growth rate can fund.  So the United States has two paths to solvency.  Start having a heck of a lot babies.  Or start slashing state benefits.  Or both.  Which would be a third option.  But the current option, increasing state spending with a declining birthrate, will not work.  No matter how much you tax rich people.

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The High Cost of National Health Care is causing the NHS to Close Hospitals in Wales

Posted by PITHOCRATES - September 29th, 2012

Week in Review

Proponents of Obamacare want a full-blown national health care system like the British NHS.  Because that’s the only way to guarantee quality health care for all Americans.  And not just those who can afford it.  The problem with the American system, they say, is the pursuit of profits.  Making money on people’s ill health.  Which is just wrong.  And immoral.  Only when they remove the profit incentive can the American health care system approach the British model.  And become a health care utopia.  Where they provide everything for everyone.  And no one ever has to worry about their health care needs (see South Wales hospital shake-up plans defended posted 9/27/2012 on BBC News Wales).

Health bosses have defended proposals to concentrate some specialist hospital services in south Wales in four or five locations.

The Conservatives and Plaid Cymru have expressed concerns that the plans could see key local health services downgraded or closed…

The current shape of NHS in south Wales is based on a model of district general hospitals developed in the 1960s.

But the health boards say that is unsuited to deal with modern pressures on the health service.

Centralising some services, such as high-level care for children and newborn babies, in fewer large hospitals would allow patients to get access to the best care around the clock, they said.

Unless, apparently, you live in south Wales.  Where that ‘everything for everyone’ turns out to be really, really expensive.  And the only way they can afford to pay for that is by making people travel further for their health care needs.  As they ration services to fewer larger hospitals.  That turns health care into an economies of scale, assembly line-like production model.  To maximize the health care services a shrinking number of doctors can provide.

Health Minister Lesley Griffiths said it was essential patients had safe, sustainable services as close to home as possible – and the status quo was not an option.

But the Conservatives said the plans would lead to the downgrading of hospitals, and blamed the Welsh government for failing to recruit enough doctors.

Andrew RT Davies, Tory leader in the assembly, told BBC Wales: “[The current system] is unsustainable because they are unable to find the clinicians to fill the rotas.

“It is my contention this is happening because the health service in Wales has been starved of cash, and the Welsh government, and Carwyn Jones as particular as first minister, has failed to fill the medical rosters by supporting the health boards in recruiting doctors into Wales.”

Starved for cash?  Has failed to fill the medical rosters?  Failed to recruit doctors to Wales?  Doesn’t sound much like a health care utopia to me.   Apparently that national health care system simply can’t afford to provide everything for everyone.  At least without making them travel awhile for their health care needs.

This is the future of Obamacare.  When you start providing everything for everyone costs rise.  And when costs rise you don’t have many options.  You can cut pay and benefits of your health care providers.  A major cost of any health care system.  But if you don’t pay doctors well it won’t encourage people to become doctors.  And let’s face it, it isn’t easy to be a doctor.  That’s why we pay doctors a lot.  To encourage them to do these hard jobs that so few of us are willing to do.

So you can only cut pay and benefits so far.  In fact the best you’ll probably be able to do is to decrease further pay increases.  So that leaves the only other alternative.  Rationing.  Closing hospitals and making people travel further for their health care needs.  Which the NHS is doing in Wales.  And Obamacare will be doing everywhere in the U.S.  Because costs are costs. Whatever the NHS goes through any other national health care system will go through.  So if they ration services Obamacare will ration services.

And, of course, Obamacare will raise taxes.  For awhile.  Until they can raise taxes no more.  Like the British can no longer do.  So the NHS is closing hospitals.  Like Obamacare will eventually do in the United States.  As Obamacare turns to the last cost saving measure.  Rationing.  Which will include those death panels.

Some health care utopia, huh?

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