Week in Review
The assassination of JFK ruined this country. Because it gave us LBJ and his liberal agenda (see If Kennedy lived: Imagining a different fate for JFK (and Johnson) 50 years later by Jeff Zeleny, Richard Coolidge and Jordyn Phelps posted 11/20/2013 on Yahoo! News).
Historian Jeff Greenfield imagines how history would have changed if Lee Harvey Oswald hadn’t been successful in firing a fatal shot to Kennedy 50 years ago. It’s the latest alternative history from Greenfield in his new book, “If Kennedy Lived: The First and Second Terms of President John F. Kennedy.”
Greenfield, who re-examined the political realities that were present prior to the assassination, told “The Fine Print” he believes that Kennedy’s survival would have likely meant the demise of then-Vice President Lyndon Johnson’s political career.
“The moment John Kennedy was shot, quite literally, LIFE Magazine — a very important medium back then — was launching a huge investigation into how this public servant had accumulated a $14 million net worth, and the answer wasn’t pretty,” Greenfield said of Johnson. “It had to do with radio and TV licenses, and something close to extortion.”
The investigation was halted once Kennedy died, Greenfield said, “Because it would’ve been too much of a shock to the system.” But in Greenfield’s alternate history, the investigation grows into a scandal for Johnson, and Kennedy ultimately replaces him in his second term.
So who gained the most with JFK’s assassination? Liberals. For in JFK’s December 14, 1962 speech to the Economic Club of New York he sounded more like Ronald Reagan than LBJ. Where he championed private spending, not government spending. He favored tax cuts over tax credits to stimulate the economy. He talked about increasing consumer spending via personal tax cuts. And using corporate and personal tax cuts to increase investment and profits. Yes, he talked about businesses making more profits. So they would hire more. Something no liberal would say.
Instead of the Ronald Reagan-like JFK we got one of the most corrupt politicians ever to become president. LBJ. According to LIFE Magazine. And the greatest explosion of the welfare state since the New Deal. The Great Society. Turning the U.S. away from capitalism and towards European-style social democracy.
This is the great tragedy of the JFK assassination. Thanks to that anti-capitalist, Cuba-loving, America-hating assassin who had once defected to the Soviet Union. A nation long admired by liberals since the day of Joseph Stalin. This is the great tragedy the leftist communist Lee Harvey Oswald gave us. Lee Harvey Oswald gave us LBJ, the Great Society and the rise of state-capitalism in the United States. Everything liberals want. And conservatives eschew. Making Lee Harvey Oswald the godfather of today’s American left.
Tags: capitalism, Communist, Cuba, Great Society, JFK, JFK assassination, Kennedy, LBJ, Lee Harvey Oswald, liberal, profits, Ronald Reagan, Soviet Union, tax cuts
Our Universities praise Government Intervention, Vilify Capitalism and Denigrate US History
I recently saw some students on television from our most prestigious universities. I won’t say who or where they were because it doesn’t matter. For they all pretty much think the same. There were liberal Democrats. And conservative Republicans. Young people. Just into their twenties. They spoke of economics, health care, free markets, investing in education, etc. Kids too young to have experienced life. In fact, most were still on their parent’s health insurance policies. But they knew everything there was to know. Particularly the liberal Democrats.
In college kids don’t know anything. That’s why they are there. So someone can tell them all those things they don’t know. The problem is this. The people telling them what to think have a liberal bias. It’s no secret. The teachers’ unions demand pay and benefit packages well beyond what most people can get in the private sector. The government let’s them gouge taxpayers. And in return they teach our kids in public schools to become Democrat voters. Then it’s on to college. Where the anti-capitalist hippies of the Sixties went on to become college professors. Who talked about the fairness in the former Soviet Union and the former East Germany. Where they put people before profits. Admiring their love of people. And hatred of profits. While glossing over on their oppressive police states, thought crimes, prisons for political dissidents, torture and wholesale executions.
These radical hippies took over higher education. And wrote the curriculum. Which praised government intervention into the free market economy. Vilified capitalism. And denigrated the United State’s role in history. Programming our children to hate whatever they hate. And to love what they love. Even when the facts get in the way. Which they can fix with a little history revisionism.
The Arts did Very Well during the Eighty thanks to the Generosity of Gainfully Employed People
They call the Eighties the decade of greed. While at the same time calling President Reagan’s economic policies a failure. Supply-side economics. Of the Austrian school. Everyone did well. Everyone made money. Which is why they were so materialistic. Because they had good-paying jobs that allowed them to be materialistic. Allowing them to buy Sony Walkmans and CD players. Which everyone had to have. Even though no one knew what they were before they hit the stores. Proving Say’s law.
Say’s law is a part of supply-side economics. In general it states that supply creates its own demand. No one was clamoring for Sony Walkmans or CD players in the Eighties. But when these companies explained how great they were all of a sudden we were demanding them. Supply created demand. Just as PC supply created PC demand. PCs were on the market long before they were in everyone’s home. It was a tough sell in the beginning. Because no one knew what they would use them for. But they have them now. Just like the Internet. For a generation who had just mastered the recording functions on their VCRs (video cassette recorders—what we used to record TV programs on before DVRs) the Internet was a confusing thing. And many said “thank you, but no thanks.” Then people began creating content and putting it on the World Wide Web. Today, people can’t live without their Internet connection. Again, supply created demand.
This is Say’s law in action. Supply creates demand. You make it easier for people to be creative and bring things to market and they will. Two ways to do this is to lower tax rates and reduce the regulatory climate. So people are more willing to take risks. Which they will do if there is sufficient reward for taking that risk. Reagan did both during the Eighties. The economy exploded. Everybody was working. The jobs were so good that we had money for material comforts. And generous donations. The arts did very well during the Eighties thanks to the generosity of gainfully employed people.
Obamacare will take Money from the Young and Healthy to pay for the Old and Sick
But this isn’t what they’re teaching in our universities. They say that Reagan did cut taxes and created an economic boom. But at what cost? For he had record deficits. Because of those tax cuts. Which is where that history revisionism comes in. Yes, he cut tax rates. And when he did tax receipts (actual money flowing into the treasury) nearly doubled. But our universities don’t teach that. As demonstrated whenever a liberal talks about Reaganomics. Instead they attack Reagan. Capitalism. And Republicans in general. Because they all believe that limited government is best. Which threatens a ruling class.
Our universities teach our kids the economics school that benefits the ruling class. By supporting an ever expanding government. Keynesian economics. Which has a proven track record of failure whenever we’ve tried it. John Maynard Keynes himself advised FDR during the Great Depression. FDR didn’t think much of Keynes. But he liked his idea about government spending during times of recession. Even though it only delayed the correction—and prolonged the recession—by interfering with market forces trying to correct market prices. Giving us the Great Depression. Keynesian economics also gave us the stagflation of the Seventies. Japan’s Lost Decade in the Nineties. The American dot-com bubble and recession in the Nineties/early 2000s. The 2008 subprime mortgage crisis. And the ongoing European sovereign debt crisis. All of these crises have their roots in Keynesian economics. The school of economics of the ruling class. But what do they teach in college? Free market capitalism is bad. And Keynesian economics is gospel.
These twenty somethings were anxious to show how smart they were. How in a mere 2-4 years of college they had learned everything there was to learn. And could regurgitate the party line. Rolling their eyes at the idiots around them. Laughing with all-knowing condescension. Praising President Obama. Obamacare. Believing that it will provide more for less. When nothing in the world works that way. More costs more. Yet they naïvely bleat what they were taught. These kids who haven’t opened up a letter from their private health insurer advising them that their premiums will rise by 50%, 75%, 100%, or more, to comply with Obamacare. Because it costs more to have more. And people now have to pay more even if they don’t want more. In particular young people. For Obamacare is a transfer program. Where Obamacare will take money from the young and healthy (like these college students once they graduate) to pay for the old and sick.
These kids, of course, blame the Republicans for the government shutdown. And that their concern for our deficits is silly. For they believe we don’t have a deficit problem. Yet the smaller Reagan deficits were the end of the world as we knew it. And they don’t have a problem with members of Congress and their staff getting subsidies to pay for their Obamacare. As paying for their Cadillac health care plans with their six-figure salaries would have been too much of a burden for them. And beneath them. So we should pity them while record numbers of Americans have disappeared from the labor force. Especially during the government shutdown. Where the grooms of the stool may not be there for them. Forcing the ruling class to wipe their own bottoms after they go potty.
This is what government and the political left is turning into. A ruling class. The very thing we fought our independence from. And they are getting away with this because they control education. And because they do they can revise history. And change their failures to successes. And change conservative successes to failures. All you need are fresh young minds to corrupt. And corrupt they do. These kids talk like they know everything. But they know nothing. Which is sad. For the children are our future. God help us.
Tags: anti-capitalist, capitalism, college, demand, education, Eighties, free market economy, government shutdown, Great Depression, higher education, hippies, history revisionism, Internet, Keynes, Keynesian, Keynesian economics, Liberal Democrats, materialistic, Obamacare, public schools, Reagan, recession, ruling class, Say's Law, supply, Supply creates demand, Supply-side economics, tax cuts
The Democrats’ idea of Bipartisanship is Republican Capitulation
It’s that time of the year again. Summer is winding down. The weather is starting to cool. The harvest is coming in. The stores are already stocking their shelves with Halloween decorations. Yes, it’s the end of the government’s fiscal year. The time the government will run out of money unless Congress passes a new budget. Or what passes for budgets these days. Continuing resolutions.
This that magical time of year when Republicans and Democrats come together to negotiate the government’s budget for the upcoming fiscal year. The give and take process where they sit down and work with each other. Civilly. Saying things like, “Yes, that is too costly. We need to spend less there.” And, “You’re right, that is important to the people and we should spend more there.” And the occasional, “I agree. That program is no longer needed and we can remove it from the budget entirely.”
I am, of course, lying. These are things that are rarely, if ever, said to each other. For when it comes to these budget battles it is always the same. The Republicans try to be responsible and cut spending. The Democrats then call them greedy corporate toady Nazis. The Republicans will then suffer a general emasculation and give the Democrats their spending hikes. And perhaps a tax hike or two. While asking them to please like them and invite them to the cool parties. And the Democrats will then commend the Republicans’ bipartisanship. What others would call capitulation. Happy that things are once again right in the world. With the Republicans once again the Democrats’ bitch.
Entitlement Spending creates a Permanent Underclass that keeps the Privileged Class in Power
John Emerich Edward Dalberg-Acton, known more simply as Lord Acton, said, “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” And boy was he on to something there. For something happens when some good conservatives go to Washington. They enter a world like no other. Nothing they could ever have dreamed of. A world that once belonged only to the nobility and the aristocracy. Those things Americans fought for their independence from. And here they are. After winning an election to rein in the kind of government spending that makes this living possible. And they say, “What, end all of this? Are you mad?”
So many cross over to the dark side. Sell their souls. Forsake their constituents. Do great dishonor to our Founding Fathers. All because they like the money and the power. Especially the power. Some resist. Those from the Tea Party seem more immune than most when it comes to the corrupting influences of Washington. But these people who stand on principle? Those who serve their constituents honorably? The left will fling every invective upon them. A figuratively flinging of excrement. To try to beat them down and break them. To get them, too, to forsake their constituents. And to join them as they drop trou and defecate on the Constitution. Figuratively, too, of course. At least I hope so.
So this is what makes the budget process so adversarial. You have those who are trying to do the right thing for the people. And those on the other side who want to corrupt these people. To get them to quit fighting against them and to join them. So they can maintain their privileged class. This is what all that entitlement spending is all about. It’s nothing but alms. To keep the people content enough so they don’t rise up. But not too content that they don’t fear that those greedy corporate toady Nazis may take away their meager alms. And once they get someone to think like that they have a voter for life.
There comes a Point when Raises in Tax Rates actually Reduce Tax Revenue
The key, then, is keeping people poor. For the whole privileged class thing those in Washington have doesn’t work unless they have poor people who need them. Which is why they spend so much time reminding the poor how much they need them. The Democrats in Congress. Who are always there fighting for them. Keeping their alms flowing. But also keeping them poor. Which a welfare state does well. Because if you have enough to subsist lethargy will do the rest and destroy the spirit. Getting the poor to accept their place as a permanent underclass. That needs a permanent privileged class taking care of them.
There is only one problem. This destroys lives. People in this permanent underclass may have gone on and done great things. They may have been doctors. They may have been engineers. They may have been entrepreneurs. But they will never be those things because the left sacrificed them to maintain their privileged class. Forever consigning them to the underclass. So the privileged class has someone to take care of. No matter how costly it gets to maintain this entitlement culture. No matter how great the deficits get. Or how great the national debt grows.
So there is another problem. As you convert taxpayers into tax-consumers you have to keep raising taxes on those remaining in the tax base. But as you raise tax rates you put the brakes on economic expansion. And with reduced economic activity there is reduced tax revenue. There comes a point when raises in tax rates actually reduce tax revenue. And we’ve passed that point. Which is why we have record deficits. A record national debt. And the worst economic recovery since that following the Great Depression. Because we are spending, taxing and regulating too much. Which is why uncorrupted conservatives want to cut taxes, defund Obamacare, roll back other costly regulations and reduce spending. Things the left bitterly opposes. For doing so means we don’t need them as much as they need us to need them.
So as the budget battle commences you will hear the usual refrain from the left. We can’t afford tax cuts. As they equate tax cuts with government spending. But we can always afford new government spending. So the left will call for bipartisanship. That is, capitulation. And eventually make the Republicans their bitch. Again. And increase the national debt. Again. Putting the nation on the path to bankruptcy. What the left considers a small price to pay to maintain their privileged class. As long as that bankruptcy comes after they’re dead and buried. After they enjoyed their time in the privileged class. Which is why the left is also less likely to believe in God and life after death. For it is easier to be bad when there is nothing to fear after a bad life.
Tags: alms, Bankruptcy, bipartisanship, budget, budget battle, capitulation, Congress, conservatives, cut spending, deficits, Democrats, government spending, Lord Acton, national debt, new spending, permanent underclass, poor, power corrupts, privileged class, Republicans, spending, tax cut, tax cuts, tax hike, tax rates, tax revenue, taxes, underclass, Washington
Week in Review
All we heard during the debt ceiling debate and the sequester debate from President Obama is that we must have a balanced approach. Tax hikes now. And spending cuts later. Which, of course, means no spending cuts. Ever. For why would they cut spending after they got their tax hikes? Too many Republicans got snookered by past Democrats on that false promise.
President Obama assures us that if we raise tax rates it will solve all of our problems. But if we cut spending that’s just stupid. Because government spending creates economic activity. According to the Keynesian economics playbook, at least. And President Obama is a Keynesian. In fact, he’s so much a Keynesian that some would even call him a socialist. But Keynesian economics hasn’t worked in America. It didn’t work in the 1970s. It gave us a dot-com bubble in the 1990s. And the beginning of the real estate bubble that burst into the subprime mortgage crisis in the 2000s. So we’ve tried Keynesian economics and it doesn’t work. And, as it turns out, Keynesian economics that borders on outright socialism doesn’t work either (see France signals shift to tax cuts in boost to business by AFP posted 9/1/2013 on France 24).
France’s Socialist government is hinting it may appease discontent at tax rises by putting more stress on spending cuts in its fight to control the budget and boost growth…
France has so far relied on tax hikes for about two-thirds of its fiscal adjustment. Most famously it hiked the tax rate to 75 percent on income above 1 million euros.
The reliance on tax hikes has also prompted warnings from the IMF and European Commission that it should focus more on cutting spending in order to avoid snuffing out the recovery…
France’s social welfare system is funded primarily by charges on labour, burdening businesses…
A threat to nationalise a French plant owned by steel giant Arcelor Mittal to protect jobs raised concerns among foreign businesses…
The latest purchasing managers surveys by Markit found that while business activity is picking up in the eurozone overall, it contracted at a faster rate in France this month.
Francois Hollande has been president since May 15, 2012. That’s about one year and three months. And in that time his socialist government raised taxes. But barely cut spending. Just as President Obama wants to do to reduce the U.S. budget deficit. Despite the fact that it doesn’t work. As France has proven.
The U.S. doesn’t have to try the President Obama way. The balanced approach. AKA, the all tax and no spending-cut approach. Because France has tried it in a grand way only to see it fail. It failed so badly that they’re talking about outright socialism. Nationalizing industry. Because the economic climate is so anti-business in France that there is no job creation. Because there is no business growth. Worse, the French economy is contracting. That’s right, while the rest of the Eurozone is seeing growth France’s economy is going deeper into recession. Because they’re doing what President Obama wants to do in the U.S.
It’s time we purge Keynesian economics from our governments for good. It is the source of all the great financial problems countries are having all around the world. All it does is empower those in power. Elevating them to elite positions. Where they enjoy a life of plenty and extreme comfort. While their people struggle to provide for their families. It’s time that we return to classical economics. Save our money and live frugally. Creating private investment capital from our savings via a sound banking system. Where bankers practice good lending practices without governments passing their risks onto the taxpayers. Which is what gave us the subprime mortgage crisis. And the worst recession since the Great Depression.
Finally, governments have to spend less. So we can cut tax rates. Providing the spark to ignite private investment. Which drives business expansion. And creates jobs. Which is what people want. So they can provide for their families. Not more benefits that the government can’t pay for. No matter how high the government taxes them.
Tags: anti-business in, balanced approach, budget deficit, deficit, France, Francois Hollande, Hollande, jobs, Keynesian, Keynesian economics, President Obama, socialism, socialist, spending cuts, tax cuts, tax hikes, tax rates
The Roaring Twenties gave us the Modern World and one of the Greatest Economic Booms in History
When the steam engine hit the American farm it increased farm production. By mechanizing the farm fewer farmers could farm more land. Allowing American farmers to produce bumper crops. Creating a boom in farm exports. Especially during World War I. As Europeans farmers exchanged their plows for rifles Europe had no one to grow their food. So even though the mechanization of the American farm caused crop prices to fall the increase in sales volume brought in more farm revenue. Life was good for the American farmer. For businesses manufacturing all of that mechanized farm equipment. And the banks making loans to farmers so they could mechanize their farms.
The1920 presidential election pitted a progressive Democrat against a conservative Republican. The progressive promised to raise tax rates to pay down the war debt. Andrew Mellon, Warren Harding’s treasury secretary, found that high tax rates were counterproductive. They actually reduced tax revenue. As wealthy people invested their money out of the country to avoid high tax rates. So when Harding won the election they cut tax rates. With no need to shelter their income the wealthy invested their money in the United States. Pouring their money into the domestic economy caused great economic activity. Great returns on investment. And great income tax revenue. The wealthy paid almost three times as much in tax revenue. While the tax burden on the poor fell. And the national debt fell by one third.
Harding died in office but Calvin Coolidge continued his policies. He slashed government spending along with those tax cuts. Pulling the government out of the private sector economy. And the private sector economy responded. Creating a lot of jobs. Unemployment fell to as low as 2%. And living standards soared. For everyone. Not just those in the unions. In fact, this general rise in living standards weakened the unions. For you didn’t need to belong to a union to live well. It was the beginning of the modern world. Brought about by a burst of innovation and manufacturing that lasted 8 years. One of the greatest economic booms in history. Henry Ford’s moving assembly line made the car affordable for the working man. Auto registrations rose from 9 million in 1921 to 23 million by 1929. An increase of 156%. And keeping pace with the auto manufacturers were their suppliers. Metal, steel, paint, lumber, leather, cotton, glass, rubber, etc. And especially the oil industry. That made lubricating oils and greases. And the gasoline that powered all of these cars. With so many jobs per capita income increased from $522 in 1921 to $716 in 1929. An increase of 37%. With people earning more home ownership soared. And this boom in economic activity didn’t end there.
Herbert Hoover thought Government could better Manage the Economy than Messy Laissez-Faire Free Market Forces
Electric utilities were bringing the new electric power to industrial users and private homes during the Twenties. Industry was using 300% more electric power than they were in 1899. And it changed home life. As electric clothes irons, vacuum cleaners, clothes washers, toasters and refrigerators became common household items by the end of the Twenties. Households that had a telephone increased by 51% during the Twenties. People were watching movies. And saw the first talkies in the Twenties. The radio also became a household fixture with some 7.5 million radio sets sold by 1928. The economy was booming. The middle class was expanding. Consumer prices fell due to increases in productivity giving people more disposable income than they ever had before. Causing an increase in consumer spending. Allowing 1 in 5 Americans to own a car. And increasing the number of people who could afford to fly from 40,000 in 1920 to 417,000 in 1930. An increase of 943%. So Americans were buying a lot. But they were also saving a lot. And investing. Some 28% of American families owned stock. Something once the exclusive privilege of the rich. Wage earners were even buying life insurance policies to provide for their families in the event of their death. Things were happening in the United States during the Twenties. And the innovation and economic tsunami coming out of America had those in Europe worried. So worried that they were discussing forming a United States of Europe to compete with the American system.
But all was not good. During the Twenties those Europeans traded their rifles back for plows. Reducing the export market for American farmers. And when European governments threw up tariffs on America farm goods that export market disappeared. Putting great surpluses into the American market. Causing crop prices to fall further. Crashing farm incomes. Making some farmers unable to service their debt for all of that mechanized equipment they financed. And when they defaulted on their loans en masse banks in the farming regions failed. And when they did the money supply contracted. The Federal Reserve made no effort to stop this contraction. Which had a cooling effect. Tapping the breaks on an expanding economy.
Coolidge chose not to run for a second term. His successor, Herbert Hoover, was a progressive Republican. And was everything Coolidge was not. Hoover favored a big government perfecting the country. He was a professional bureaucrat. He loved bureaucracies. And he loved paperwork and forms. Which he wanted to bury private business in. He thought the government could manage the economy better than messy laissez-faire free market forces. Those very forces that created the Roaring Twenties. He wanted to partner government with business. With the emphasis on government. (As president he increased the size of the Commerce Department and deepened its reach into the private sector economy.)
The Smoot-Hawley Tariff caused Investors to Dump their Stocks causing the Stock Market Crash of 1929
The Federal Reserve misjudged the stock market. They thought it was nothing but speculation. Citing radio maker RCA’s stock price’s meteoric rise. So the Fed tapped the breaks further to cool this ‘speculative’ fervor. Further contracting the money supply. But this wasn’t speculation. The rate of growth in radio sales actually was greater than the rate of growth in the stock price. Making it more likely that the stock was undervalued. Not overvalued. But the Fed went ahead and contracted the money supply anyway. Making it difficult for business to get funding for continued growth. Despite there still being people out there who hadn’t bought a car, a house, electric appliances or a radio yet. And wanted to.
In 1929 a new tariff bill was moving through Congressional committees. The Smoot-Hawley Tariff. Which would raise taxes on imports by up to 30%. Which would greatly increase the cost of business. Because most if not all of American manufacturing used some imported raw materials. Which would increase their selling prices. Making them less competitive. Worse, if the U.S. slapped tariffs on imports it was certain their trading partners would respond with some retaliatory tariffs. Which would just shut down their export markets. Much like those tariffs shut down the export markets for American farmers. Then in the autumn of 1929 the Smoot-Hawley Tariff passed critical votes in committee. Sending the tariff bill on its way to becoming law. This was not good news for investors.
It was all too much. The coming expansion of government regulation over the private sector economy. Higher taxes to pay for this bigger government. The contraction of the money supply. And then the Smoot-Hawley Tariff. Investors could read the writing on the wall. None of this would be good for business. It would just smother the economic growth of the Twenties. For if you increase businesses’ costs and decrease their markets you will slash their profits. Which will reduce the value of these companies. And reduce the value of their stock prices. As investors live by the adage of “buy low, sell high” they’d want to sell those stocks fast before the Smoot-Hawley Tariff sent their prices into a tailspin. Which they did. Causing a great selloff starting in October. That led to the Stock Market Crash of 1929.
Now contrast that with a true speculative bubble. The dot-com bubble. Where investors poured money into these dot-com companies eager to find the next Microsoft. Aided and abetted by the Federal Reserve that was keeping interest rates artificially low. To encourage all sorts of investment. Including ones driven by irrational exuberance. So investors were bidding those stock prices into the stratosphere. For companies that had no profits. For companies that didn’t have a product or service to sell. But these investors were looking with great anticipation at their future profits. Even though they really didn’t understand the Internet. They just knew that computers were involved. Which is what made Microsoft rich. Producing software to run on computers. And every investor was sure their dot-com was going to produce something to run on computers. Making that company rich. And their investors. But when the start-up capital ran out there were no earnings to replace it. And the speculative bubble burst beginning on March 11, 2000. And those highly overvalued stock prices began to fall back to earth. With the tech-laden NASDAQ losing 78% of its value before it was all over. Now THAT is a speculative bubble that the Federal Reserve should have tried to prevent. Not the economic boom of the Twenties where companies were building real things that real people were buying.
Tags: American farmer, Coolidge, crops prices, dot com bubble, dot.com, electric power, Federal Reserve, Harding, Hoover, jobs, living standards, mechanization, money supply, private sector economy, radio, Roaring Twenties, Smoot-Hawley Tariff, speculation, speculative bubble, stock, Stock Market Crash of 1929, stock price, stock prices, tariff, tax cuts, tax rates, tax revenue, Twenties
Democrats Quickly Politicized the Boston Marathon Bombings to attack Conservatives
What’s the difference between conservatives and liberals? Well, for one, they respond to horrific tragedies differently. Conservatives are sickened and saddened. While liberals salivate with a potential opportunity to blame conservatives for these horrific events. Which they are quick to do. Even before the dead are identified and laid to rest. As we can see in the Boston marathon bombings.
We don’t know anything yet. But the media has been reporting on what we don’t know 24 hours a day since the bombings. And on the day of the attack there have been those in the media already making the case that the bomber is possibly a ‘radical’ conservative. Because it happened on April 15. Tax Day. During the Patriots’ Day holiday in Boston. Not far from the anniversary of the fiery end of the Waco siege. Even someone in the media wrote that they were hoping that it was the actions of an angry white man. So it wouldn’t hurt the liberal political agenda. More gun control. And less restrictions on immigration. So if the bomber(s) entered the country illegally (i.e., they’re not angry white men) that could hurt their attempts at creating new Democrat voters by giving illegal immigrants amnesty.
Former Democrat Congressman Barney Frank was quick to politicize the bombings, too. He said the response of the first-responders proves the value of big government. For no tax cuts or limited government would have made the response any better. Another Democrat Congress person blamed the bombings on the sequester. The cut in federal spending allowed these bombers to detonate these two bombs. So on the one hand you have one Congress person saying how well the government handled the situation because we don’t have limited government or tax cuts while you have another saying the government was so weakened by the sequester that they were unable to stop these bombers. Positions on opposite ends of the spectrum. But with one thing in common. They both attack conservatives.
The Left Gleefully reports a Conservative Connection in any Horrible Act of Violence even when there is None
They blamed the massacre at Sandy Hook elementary school in Newtown, Connecticut, on radical gun-toting conservatives. Anxious to prove that the shooter was a card carrying member of some conservative organization. And were quite disappointed to find the shooter was just someone with mental health problems who the state should have institutionalized. Who lived in his mother’s basement playing violent video games and earning high-scores with high kill numbers. Some have even suggested that he was living in the fantasy world of the videogame when he started shooting. Scoring points with each kill. Reloading even before his magazines were empty (like during lulls in a videogame so you had a full magazine for the next shooting encounter). And killing himself before the cops could kill him, resetting his game points to zero. There are a lot of theories. But with his suicide we can’t know for sure his motive.
Nothing would have prevented this shooting other than locking him up in an institution while he was learning about past mass shootings. Planning his crime. And playing hours of video games in his basement. Adam Lanza was sick. He was mentally unsound. He had trouble interacting with people. And separating the real world from the fantasy world of his video gaming. But one thing he wasn’t was a radical conservative. But it didn’t stop the liberal Democrats from blaming the Sandy Hook massacre on a conservative gun culture. And using it to try and pass long-desired gun control legislation. Instead of addressing mental health problems. The cause of the Sandy Hook massacre. In fact, during the last few decades the Left has made it more difficult to commit someone who is a danger to society. And they exploded the use of drugs to treat a laundry list of childhood developmental problems. Such as drugging a generation of kids for having attention deficit disorder. Trusting in medication to make them safe and well behaved. Leaving dangerous people free to hurt people. Dangerous people like Adam Lanza.
Mental health problems are a main theme in many mass killings. Before Newtown there was the 2012 Aurora theater shooting. Where the shooter was a mentally sick individual. James Holmes. Who the state should have institutionalized. As soon as his name was released a person in the media reported he was a member of the Tea Party. Because he found a James Holmes in Aurora that was a member of the Tea Party. Which they gleefully reported so they could show this horrible act of violence was by some gun-toting conservative. Only it wasn’t THAT James Holmes. The Aurora shooter had no connection to conservative politics whatsoever.
When Emotions are Running High the Left can Pass Legislation they’ve never been able to Pass Before
In Tucson in 2011 Jared Loughner went on a shooting spree. Killing six. And shooting Representative Gabrielle Giffords in the head. The media immediately started blaming conservative Sarah Palin for inciting this rampage. Because she had a bulls-eye on her website showing certain Congressional districts in the cross hairs. Including Giffords’. But was Jared Loughner incited to his crime by Palin? No. For he wouldn’t have gone on her website. He was a registered Independent. He hated George W. Bush. He even believed that 9/11 was a government plot. And was a paranoid schizophrenic who abused drugs and alcohol.
Nidal Malik Hasan shot and killed 13 people and wounded 30 at Fort Hood in 2009. He was a major in the Army who had recently converted to Islam. Was in communication with Yemen-based cleric Anwar al-Awlaki who was a known security threat. And reportedly shouted what Islamist terrorists shout before they start killing. Allahu Akbar! Which translates to “God is great.” But instead of calling this an act of terrorism President Obama called it workplace violence. Because he was trying to wind down the War on Terror. So he could use that money to pay for Obamacare. And having an act of terrorism on a U.S Army post didn’t help with that agenda.
Seung-Hui Cho shot and killed 32 people and wounded 17 at Virginia Polytechnic Institute and State University in 2007. He also suffered from mental disorders going back to middle school. Who had problems similar to Adam Lanza. Something his college knew nothing about because of federal privacy laws. Laws that protected the individual by putting the public at risk. As an adult Cho chose to discontinue his therapy. And his behavior became similar to how James Holmes would later act when he was in college. Which is when the state probably should have committed him. After the shooting rampage the Left blamed easy access to guns as the cause of the shooting. Not their failed mental health policies.
One can see a general pattern. The Left likes having these atrocities happen. At least based on how they politicize these atrocities. And why do they politicize these atrocities? Because they can’t beat their political opponents in the arena of ideas. So they turn to character assaults. To destroy their political opponents. By trying to blame these atrocities on conservatives. And their cruel and unfeeling policies. That kill school children. And when emotions are running high they can pass legislation they’ve never been able to pass before. Like gun control. And they don’t run higher than when children die.
Tags: act of violence, Adam Lanza, angry white men, atrocities, Aurora, Boston marathon bombings, conservatives, Democrat, Fort Hood, gun control, gun culture, gun-toting conservatives, institutionalized, James Holmes, Jared Loughner, Liberal Democrats, liberals, limited government, mass killings, massacre, mental health problems, Newtown, political agenda, radical conservative, radical gun-toting conservatives, Sandy Hook, shooting spree, tax cuts, Tea Party, terrorism, Tucson, videogame
Government Helps the Poor by Keeping them Poor so they Remain Dependent on Government
Politicians lie. Everyone knows this. It’s a running joke in comedy movies and television programs. And a common plotline in dramas. Because politicians will say and promise anything to get elected. Which is their primary and only objective. Winning an election. And the needs and wants of the people are secondary. Things they can easily brush aside once ascending to elected office. Because they don’t really care about the people. At least, they don’t care for them as much as they care for themselves.
And once they’re in office the promises keep coming. To help them win the next election. And to keep the size of government growing. As well as the amount of taxes they collect. Which gives them wealth. And power. The ultimate goal in running for elected office. That’s why they sneer at the concept of limited government. And tax cuts. Because the less government we have the less wealth and power they enjoy. For if we really are the self-reliant people of the Founding what need do we have for an expanding government?
Of course the answer to that question is we would have little need for an expanding government. For we can earn our pay and take care of ourselves. And our families. The way Americans did before Woodrow Wilson, FDR, LBJ and Barack Obama. Men who do not like that independent spirit. And will use a host of arguments to condemn it. It’s not fair being their favorite. Because who can argue against being fair? So everything they do is about leveling the playing field. To make sure the rich pay their fair share. And to help the little guy. By making him dependent on government. And perpetually poor. So they will remain dependent on government. So they can keep taking care of these poor.
Government rarely chooses Tax-Cutting for Stimulus as Cutting Taxes doesn’t Increase the Size of Government
LBJ declared a War on Poverty. Justifying a huge increase in federal spending starting the Sixties. And after spending untold billions to eradicate poverty what did we get? Not much. We still have poverty. And the government spends more with each passing year to alleviate the suffering of the impoverished. But it never goes away. Poverty. And the government nurtures it. Protects it. By making it more attractive to stay on a meager government assistance instead of going to work. And building a career. Doing something you love. While leaving your mark on the world. Instead we get ever increasing federal spending. And a permanent underclass the government can be savior to. You see they don’t want to win the War on Poverty. Because if they win it then we won’t need them anymore.
The greatest killer of poverty is a job. People gainfully employed can provide themselves food, shelter, etc. They can have clean drinking water. And heat in the winter. It’s only the unemployed who look at food, shelter and heat as sought after luxuries. For people with jobs are those self-reliant people. Who provide tax dollars instead of consuming them. This is no secret. So it would follow that the best thing to do during a recession is to make it as easy as possible to create jobs. You do that by lowering taxes. And cutting regulations. Not by raising taxes. Or adding regulatory costs. And you sure don’t pass a quasi national health care plan like Obamacare.
Also, history has shown that Keynesian stimulus spending does not pull economies out of recession. If it did Ronald Reagan would not have won in a landslide against Jimmy Carter. And Europe would not be in a sovereign debt crisis. Keynesians know this. But they can’t pass up the opportunity to increase federal spending. So they promise lower unemployment rates and higher GDP numbers if only Congress does the right thing and “pass this stimulus bill.” And when it doesn’t work they have two predictable explanations. They didn’t spend enough. And that even they didn’t realize how bad their predecessor destroyed the economy. Calling the recession du jour the worst since the Great Depression. Covering their lies about ending the recession with statements like “things would have been worse if we didn’t act.” And though they didn’t reduce unemployment they’ll make incredulous claims like “we saved 800,000 jobs with this bold action.” Predictable. For their primary objective isn’t to end any recession. It is to exploit the crisis to advance their agenda. Basically, increasing the size of government. And we know this because there are two ways to put more money into people’s pockets to stimulate the economy. You can cut taxes so they have more money to spend. Or you can tax, borrow and print money so the government can spend more. Very rarely do they ever choose the tax-cutting route. Because the tax-cutting way works against their agenda of increasing the size of government.
Politicians Promise and Lie to the Young and Naïve to Advance a Political Agenda
And speaking of Obamacare President Obama promised the American people that if you liked your private health insurance plan you could keep it. And the cost of that health care plan would go down. Because they had a massive convoluted health care plan that was going to give health care to everyone. Increase the quality of health care from what it is now. And it was going to be less expensive. Which was a lie. Because you can’t have more of anything for less money. Life just doesn’t work that way. As they implement Obamacare its taxes and regulations are forcing business owners to push people from full-time to part-time. So they aren’t forced into providing mandated health insurance plans. Some even have no choice but to drop their health care coverage for all of their employees. Because their health care costs went up. Not down. And they’re predicting doctor shortages. Because the only cost savings they can get is by forcing people to work for less in the health care industry. So they’re leaving. Under Obamacare there will be higher costs, longer wait times, rationing, denial of services and lower quality. Everything they promised wouldn’t happen. And everything critics said would happen. So are the proponents of Obamacare just so utterly ignorant? Or were they lying through their teeth because they just wanted to take over one-sixth of the U.S. economy? With an agenda to increase the size of government one has to go with lying through their teeth.
President Obama blamed George W. Bush for the world hating America. When he became president he no longer projected American power. Instead he wanted to talk to our enemies. To negotiate with them. He even dropped words from official usage. Like the War on Terror. To make our enemies like us. Because people like people who aren’t bullies. And that was what George W. Bush was. A bully. So President Obama warmed up to the Islamic world. So the Islamic world would warm up to us. Even announcing withdrawals from Iraq and Afghanistan early in his administration. Ending the war on you-know-what. So he could use that money for Obamacare. Promising the American people the world would be a safer place. Even passing on an opportunity to help overthrow the government in Iran. America’s greatest enemy. Instead, he helped people overthrow a couple of our allies. Hosni Mubarak in Egypt. And Muammar Gaddafi in Libya. Who since the Iraq war had been an ally in the War on Terror. And the thanks for this new Islam-friendly American policy? They killed our ambassador in Benghazi along with three other Americans. Al Qaeda is now in Libya. And the Muslim Brotherhood is in Egypt. And it looks like al Qaeda is now in Syria. Another enemy of the United States the people were trying to overthrow that President Obama chose not to help. The Middle East may burn now. Making the world a more dangerous place. But the president got what he wanted. All that money we were spending overseas they can now spend at home. Rewarding friends and campaign contributors. As well as buying votes.
And now they are calling for tighter gun control measures. Greater background checks. And a national gun register. To protect the kids they say. So another Newtown massacre doesn’t happen. Even though they themselves will admit that every measure they proposed thus far would not have stopped the shooter at Newton. Aurora. Tucson. Virginia Tech. Or any other shooting where some mentally unsound person killed random strangers. These people didn’t kill because guns made them kill. They killed because they were sick. And we didn’t protect society by institutionalizing these people. The only thing we could have done to stop them once they started shooting we didn’t do. Having someone armed in these ‘gun-free’ zones. For these sick people shoot unarmed innocents until someone with a gun arrives on the scene to shoot back. So arming teachers may save children from another Newtown. While everything they proposed thus far will do absolutely nothing to prevent a future Newton. Yet they press for further restrictions on gun ownership. And if it won’t make children safer one wonders why they want to exploit these shootings to advance their anti-gun-ownership agenda. As they are interested in acquiring greater wealth and power one would have to assume it’s the power. Perhaps making them feel more all-powerful if they can actually nullify the Second Amendment.
So politicians promise and lie to advance an agenda. Which is why the young typically vote for those who promise and lie so much. The liberal Democrats. As the young are naïve and easy to lie to. While older people tend to vote Republican. For they are older. They have heard all of the promises and lies before. And they’re wiser. Which comes with age. Which is why the liberal Democrats get them while they’re young. For it’s hard to keep them once they gain knowledge and experience.
Tags: Al Qaeda, dependent on government, elected office, election, federal spending, George W. Bush, gun control, gun ownership, Health Care, Islamic world, Keynesian, Liberal Democrats, Newton, Obamacare, politicians, poverty, power, President Obama, promise, recession, regulations, self-reliant people, stimulus, tax cuts, war on poverty, War on Terror, wealth, wealth and power
LBJ was able to pass JFK’s Tax Cuts resulting in a Long Period of Economic Growth
The official unemployment rate is stuck around 8%. But if you count all the people who can’t find a full-time job the actual unemployment rate is closer to 14%. With every jobs report we hear the positive spin from the government about another down tic in the official unemployment rate. And the hundreds of thousands of new jobs created. But after three years or so of hearing these reports people start questioning the numbers. And the rosy spin. Because despite all the good news they tell us people are disappearing from the civilian labor force. Which is the only reason why the official unemployment rate is falling. Because they’re not counting a lot of unemployed people. So looking at the civilian labor force may be a better indicator of the health of the economy. Or better yet, the civilian labor force participation rate (CLFPR). Which is basically the percent of those who can work that are working. So let’s do that. Starting with the Fifties.
After World War II veterans went to college on the G.I. Bill. These new college graduates with degrees in science, engineering and business management entered the workforce in the Fifties. Helping the United States to develop new technologies. New industries. And a lot of new jobs. American wells were busy pumping domestic oil. Keeping gasoline cheap. Having escaped the damage of war the American economy exported to those countries that didn’t. And consumer spending took off. Thanks to the new advertising industry telling Americans about all the great things to buy. They bought houses and cars with borrowed money. And used the new credit card to spend even more money they didn’t have. Changing the American economy into a consumer-based economy. Making the Fifties one of the most prosperous times in U.S. history. Despite the Korean War. And the Cold War. Which was getting underway in a big way. There was a burst of inflation to help pay for the Korean War. When it ended they contracted the money supply to get rid of that inflation sending the economy into recession. But once the recession ended the economy took off with all that consumerism. Shown by the sharp rise in the CLFPR. To correspond with the very good economic times of the Fifties. Another monetary contraction happened in 1957 to tamp out some price inflation. With a corresponding fall in the CLFPR.
The Sixties started with another recession. After it ended, though, the CLFPR continued to fall. The recession was officially over but the economy was not doing well. The CLFPR fell for almost three years following the recession. Things were different from the Fifties. For one, a lot of those war-torn economies were up and running again. Providing some competition. Especially a little island nation by the name of Japan. Which one day would build all the televisions sold in America. It was because of this fall in economic activity that JFK started talking about tax cuts in 1963. Congress blocked his attempt to cut tax rates. But after his assassination LBJ was able to pass the Revenue Act of 1964. This lowered the top marginal tax rate from 91% to 70%. And lowered the corporate income tax from 52% to 48%. Among other favorable business measures. Resulting in a long period of economic growth. And a long upward trend in the CLFPR.
The Tax Cuts and Deregulation of the Eighties created one of the Longest Periods of Economic Growth
But following the Revenue Act of 1964 came the Great Society. The Vietnam War. And the Apollo moon program. All paid for with a huge surge in federal spending. Deficits began to grow. As the government struggled to pay for everything. And were unwilling to cut anything.
The economy fell into a mild recession in 1970. The CLFPR remained relatively flat. To meet their spending needs they started printing money. Devaluing the dollar. Still part of Bretton Woods the dollar was still pegged to gold at $35/ounce. That is, the U.S. agreed to exchange gold for dollars at $35/ounce. But as they devalued the dollar our trading partners no longer wanted to hold dollars. Because they were losing their purchasing power. They wanted the gold instead. So they began exchanging their dollars for gold. Causing a great outflow of gold from the U.S. Causing a problem for President Nixon. He didn’t want the U.S. to lose all of their gold reserves. But he didn’t want to cut any spending. Which meant he didn’t want to stop printing money. In fact, he wanted to print more money. And the easy way out of his dilemma was by doing the most irresponsible thing. He slammed the gold window shut in 1971. And refused to exchange gold for dollars anymore. And when he did there was no restriction to the amount of money they could print. And they printed it. A lot. Creating double-digit inflation before the Seventies were over. The inflation caused prices to rise. Which Nixon tried to prevent with wage and price controls. Causing a shortage of available rental property as people converted them into condos to get away from the rent control. Gasoline stations ran out of gas as people filled their tanks with below-market priced gas. And meat disappeared from grocery stores. Wage controls kept wages from keeping pace with inflation. So even though people had jobs they lost more and more purchasing power. Or simply found there was nothing to purchase. Throwing the economy into recession in 1973. After the recession the CLFPR grew throughout the remainder of the Seventies. But it wasn’t good growth. It was growth sustained with double-digit inflation. A bubble of artificial economic activity. That would have to crash. As all inflationary periods must crash.
In the Eighties Paul Volcker, Federal Reserve Chairman, raised interest rates to double digits to wring out the double-digit inflation from the economy. To restore people’s purchasing power. And return the nation to real economic growth. The tax cuts and deregulation of the Eighties created one of the longest sustained periods of economic growth in U.S. history. With one of the longest upward trends in the CLFPR ever. Indicating a growing economy. With more and more people who could work finding work. Proving that Reaganomics worked. And worked very well.
If JFK or Ronald Reagan were President Today we wouldn’t be seeing a Freefall of the CLFPR
But it wouldn’t last. Thanks to the government’s interference into the banking industry. They had set a maximum limit on interest rates S&Ls (and banks) could offer. When inflation took off people pulled their money from their savings accounts. Putting it in higher earning instruments. So they didn’t lose their savings to inflation. This bad banking policy begat more bad banking policy. They deregulated the S&Ls and banks. So they could do other things to make up for their lost savings business. And that other thing was primarily real estate. They borrowed short-term money to make long-term loans. Helping to create a housing bubble. And when they began to wring that inflation out of the economy interest rates rose. When those short-term loans came due they had to refinance them at higher interest rates. While the interest they were earning on those long-term loans remained the same. So their interest expense soon exceeded their interest income. Creating the savings and loan crisis. And a severe recession that ended the economic expansion of the Eighties. With a corresponding fall in the CLFPR.
Once the recession ended the CLFPR resumed a general upward growth. But not as good as it was in the Eighties. Also, it would turn out that much of the growth in the Nineties was artificial. Bill Clinton’s Policy Statement on Discrimination in Lending forced lenders to lower their lending requirements. And to qualify the unqualified. Which created a surge in subprime lending. And the beginning of a housing bubble. The Internet entered the economy in the Nineties. Just as the personal computer entered the economy in the Eighties. Making Bill Gates a very rich man. Investors were anxious to find the next Bill Gates. Taking advantage of those low interest rates creating that housing bubble. And poured money into dot-com start-ups. Companies that had no revenues. Or products to sell. Creating a dot-com bubble. And a surge in computer programming jobs. Also, as the century came to a close there was the Y2K scare. Creating another surge in computer programming jobs. To rewrite computer code. Changing 2-digit date codes (i.e., ’78) to 4-digit codes (i.e., 1978).
The Y2K scare proved to be greatly overblown. Which put a lot of computer programmers out of a job in January of 2000. And they wouldn’t find a dot-com job for the dot-com bubble burst in the same year they lost their Y2K job. Throwing the economy into recession in 2001. And then making everything worse came the terrorist attacks on 9/11. Prolonging the recession. As can be seen by the long decline in the CLFPR. Which leveled out after the Bush tax cuts. But then that housing bubble peaked in 2006. And burst in 2007 into the subprime mortgage crisis. Thanks to all those toxic mortgages Bill Clinton’s Policy Statement on Discrimination in Lending forced lenders to make. And because Fannie Mae and Freddie Mac bought these toxic mortgages and had Wall Street package them into collateralized debt obligations this crisis spread worldwide. Selling what they told unsuspecting investors were high yield, low risk investments. Because they were backed by the safest of all loans. Mortgages. What they failed to tell these investors was that these mortgages were not safe 30-year conventional mortgages. But highly risky subprime mortgages. In particular adjustable rate mortgages. Where the monthly payment would increase with an increase in interest rates. And that is what happened. And when it happened the unqualified could not afford the new monthly payment. And defaulted. Kicking off the Great Recession. And because President Obama was more interested in national health care than ending the Great Recession he didn’t cut taxes. Or cut regulations. Instead, he increased taxes and regulations. Making the current recovery one of the worst in U.S. history. As can be seen in the greatest decline in the CLFPR since the Great Depression. If you look at a continuous graph from 1950 to the present you can see just how bad the Obama economic policies are.
The JFK and Reagan tax cuts caused the greatest economic expansions. And the greatest rise in the CLFPR. Also, after most recessions there was a return to a growing CLFPR. Interestingly, the two times that didn’t happen are tied to Bill Clinton. Who created two of the greatest bubbles. The dot-com bubble in the Nineties. And the subprime mortgage bubble that was built in the Nineties and the 2000s. The growth was so artificial in building these bubbles that the CLFPR did not recover following the bursting of these bubbles. It might have following the dot-com bubble if the subprime mortgage crisis didn’t follow so soon after. The current recovery is so bad that it has taken the CLFPR back to levels we haven’t seen since the Seventies. Making the current recovery far worse than the official unemployment rate suggests. And far worse than the government is telling us. So why are they not telling us the truth about the economy? Because the government wants to raise taxes. And if the economy is improving there is no need for recession-ending tax cuts. So they say the economy is improving. As they hate tax cuts that much. Unlike Ronald Reagan. Or JFK. And if either of them were president today we wouldn’t be seeing a freefall of the CLFPR.
Tags: Bill Clinton, civilian labor force, civilian labor force participation rate, CLFPR, consumer spending, deregulation, dot com bubble, dot.com, double digit inflation, Eighties, Fifties, gold, Great Recession, housing bubble, inflation, interest rates, JFK, jobs, jobs report, LBJ, Nineties, Nixon, Policy Statement on Discrimination in Lending, purchasing power, Reagan, recession, Revenue Act of 1964, Ronald Reagan, savings, Seventies, sixties, subprime, subprime lending, subprime mortgage crisis, subprime mortgages, tax cuts, unemployment rate, Y2K
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.
Tags: Bush, Bush tax cuts, class warfare, deductions, deficit, deficit reduction, evil rich, evil rich people, fair share, fair share of taxes, federal income tax, fiscal cliff, hate the rich, income tax, IRS, middle class, Mitt Romney, paying their fair share, poor, poor and the middle class, President Obama, raise taxes, Reagan, Republicans, rich, rich people, spending, spending cuts, tax bill, tax code, tax credits, tax cuts, tax evasion, tax loopholes, tax revenue, taxable income
Week in Review
The fiscal cliff negotiations are all about deficit reduction. The Right wants to do it with spending cuts. The Left wants to do it with new taxes. So they can spend more. This is why they can’t reach an agreement. The Right wants to reduce the deficit. While the Left wants to increase spending. For benefits. For education. For investments in Green Energy. For infrastructure. For economic stimulus. Which will only increase the deficit. So the Democrats are not exactly sincere when they talk about deficit reduction. Which is why they can’t make a deal with the Republicans. Who are serious when they talk about deficit reduction.
Another reason why the Democrats want to spend so much money is that they are Keynesians. Who believe the government can bring an economy out of a recession with stimulus spending. Despite that failing every time we’ve tried it. In the United States in the Seventies. Again during the Obama administration. In the Eurozone. In Asia. Especially in Japan. Where they’ve been trying to stimulate themselves out of a recession since their Lost Decade. The Nineties (see Japan’s New Stimulus: The Race With China To The Bottom by Gordon G. Chang posted 12/30/2012 on Forbes).
The universal consensus is that the fall in manufacturing bolsters the case for Shinzo Abe’s plans to stimulate the economy. The new prime minister is pursuing a broad-based program of shocking Japan out of its fourth contraction since the turn of the century.
First, Abe is going to prime the pump in a big way…
Second, Abe is going to push the yen down to help struggling exporters…
Third, the just-installed prime minister is leaning on the Bank of Japan to open up the taps…
Markets may love Abe’s stimulus solutions, but they are at best short-term fixes. Tokyo, after all, has tried them all before with generally unsatisfactory results. What Japan needs is not another paved-over riverbed—past spending programs have resulted in useless infrastructure—but structural reform to increase the country’s competitiveness.
Tokyo’s political elite, unfortunately, has got hooked on the false notion that governments can create enduring prosperity. Two decades of recession and recession-like stagnation in Japan are proof that repeated government intervention in the economy does not in fact work.
If you keep trying to stimulate yourself out of a recession with Keynesian policies for over twenty years perhaps it’s time to give up on those failed policies. Of course to do that may require some spending and tax cuts. And you know how well that goes over with big government types. It’s why the Americans can’t make a deal to avoid the fiscal cliff. And why the Japanese are going to try more of the same failed policies of the past.
Another impetus for these bad policies decisions is what’s happening in China. Whose economy is much younger than Japan’s economy. So they don’t have years of failed Keynesian policies digging their economy into a deep hole. And because of that they’re going to go big. Their stimulus is going to include the building of cities. And that’s what the Japanese see. That, and the (one time) economic explosion of their export economy. Something they once had in Japan. And would love to have again. So they are going to follow China’s lead. Even though their economic expansion is pretty much at its end.
Although there has been a “recovery” beginning in October, it looks like the upturn is already running out of steam. China’s technocrats know they’re in trouble: they are apparently planning to increase the central government’s planned deficit for 2013 by 41% to 1.2 trillion yuan ($192 billion). At present, it is now slated to be only 850 billion yuan. Much of the shortfall is going toward an urbanization push next year. Last year, Beijing announced its intention to build 20 new cities a year in each of the following 20 years.
The two biggest economies in Asia are ailing at the same time, and both Beijing and Tokyo have decided that government intervention is the shortest path to long-term growth. Neither government’s program, however, looks viable. Unfortunately, both China and Japan are going down the wrong road at the same time.
This could help the U.S. economy. If they enacted spending cuts for their deficit reduction they could cut tax rates to spur the economy along. And make the U.S. competitiveness soar while Japan and China dig themselves into deeper holes. But the Americans, being the foolish Keynesians they are, are going to follow the Japanese and the Chinese into economic stagnation. And with President Obama’s reelection they will stay Keynesian. Drive over the fiscal cliff. And compete with the Japanese to see who can have more lost decades
Tags: Abe, Beijing, China, competitiveness, deficit, deficit reduction, Democrats, fiscal cliff, infrastructure, Japan, Keynesian policies, Keynesians, Left, lost decade, new taxes, recession, Republicans, Right, spending cuts, stimulus, stimulus spending, tax cuts, Tokyo
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