Moore finds talk easy, but math hard

Tea Partiers, Democrats and cookies

On the “real me” facebook, a “joke” is making the rounds:

‎”A public union employee, a tea party activist, and a CEO are sitting at a table with a plate of a dozen cookies in the middle of it. The CEO takes 11 of the cookies, turns to the tea partier and says, ‘Watch out for that union guy. He wants a piece of your cookie.”

I kind of doubt that the people who laugh at that “joke” would appreciate this truly brilliant piece of political satire:

How do we get out of this?

If the U.S. and our government were a business, we would already have been declared insolvent. Here’s why:

On our 2009 P/L (profit & loss) statement, our annual Federal expenditures amounted to about $3.5 trillion, against revenues (tax receipts) of $2.1 trillion. If history is guide, the $1.4 trillion gap between revenues and outlays will increase rather than decrease in subsequent years. Mind you, this is only at the Federal level…we haven’t included state and municipal financials, which add more black crepe to an already dismal picture.

How much could government revenues be expected to increase in order to plug this gap? The traditional conservative approach has been to grow the economy, using incentives: more growth = more profits = more tax revenues. The traditional Liberal/Left approach has been to increase taxes: more taxes = more government spending = more economic growth (!?).

In my view, we have traveled to a point far, far beyond these arguments: neither approach suffices.

The U.S. Gross Domestic Product (GDP), or “gross sales revenues”, is approximately $15 trillion.
If the U.S. operated as a business, national disposable income (meaning, after-tax income, or “net income” on the P/L statement) approximates $10 trillion, according to [].
This is the total money available to be recycled back into the economy by the private sector, either through direct purchases (income-stimulating reinvestments) or capital formation (savings and investments).
Now, to close the Federal revenue gap would in the most basic of terms require taking an additional $1.4 trillion (14%) -PLUS out of our national disposable income in the form of taxes. Why “plus”?
Because government isn’t efficient: any monies taken in by the Federal government are inevitably depleted as they cycle through various government agencies before they can reach their target.  Unlike electronic transfers between bank accounts, only a small fraction of tax receipts go to their intended target. The rest is lost through government overhead and waste (I repeat myself).Thus, it will take considerably more than $1.4 trillion in tax revenues to close a $1.4 trillion budget gap.
In response to the obvious question this raises: yes, we could borrow this, but all borrowing does is defer payment of this sum at a stiff price (i.e., interest).
Eventually, payments must come from disposable income.
Let’s consider the national balance sheet:

A first-rate article by Kevin Williamson in the National Review (June 21, 2010) catalogued our country’s debt obligations as follows:

1) National Debt – $14 trillion (Williamson argues that this is vastly understated due to “funny money” accounting by the government)

2) State and Local Debt – $2.5 trillion (which the Feds will ultimately absorb). According to some, we already face massive impending municipal bond failures.

3) Unfunded government worker pension funds (federal, state and local) – $3.0 trillion. In large part, these are “unfunded” because governments expropriated their assets by borrowed against them, my corrupted state of Illinois being a prime culprit. Directly or indirectly, this cost will eventually be absorbed by all taxpayers.

4) Unfunded liabilities for all of our nation’s “we care about you but want someone else to pay for it” programs  (i.e., Medi/Obamacare, “Pharmacare”, Medicaid and Social Security) – $106 trillion (using Present Value). According to Williamson, this is more-than twice the total private net worth of the U.S. Even if we all individually sold-off all of our belongings (assets), we still couldn’t cover these obligations.

So, in sum, we have a “business” (USA Inc.) with negative-$1.4 trillion in net revenues and a balance sheet debt of $125.5 trillion. Williamson adds in a few more odds and ends to round-up the value to $130 trillion. And we haven’t even touched corporate and consumer debt.
Hmmm…how about some perspective?
According to a McKinsey & Co. report, world financial assets in 2008 (prior to two subsequent years of asset deflation) totalled $178 trillion.

I’ve looked long and hard for this number because it is admittedly “fuzzy math”, but the best estimate that I could come up for the total estimated tangible asset (book) value of the United States economy is $188 trillion. These are, for the most part, non-liquid assets…they cannot be simply sold off for cash-in-hand.


In sum, USA, Inc. long ago exceeded its debt capacity.

As a bond holder of USA, Inc., would your next step be to:

a) invest in USA, Inc.

b) ask for a bankruptcy court to reorganize the corporation and restructure its debt obligations

c) liquidate and auction off its assets to cover its debt obligations to bond holders?

Ergo my conclusion: we are insolvent! There is no way that we will ever find the money to pay off these obligations. It just doesn’t exist, not within the U.S and not in the world economy. I anticipate option (b) — reorganization of debt. Of course, in this scenario, the shareholders (citizens, taxpayers) get left with crumbs (or “haircuts”, in financial parlance).

According to Democrat thinking processes, we should raise taxes. However, even doubling our total Federal, state and local tax receipts wouldn’t cover our income shortfall and debt service obligations, especially in the face of rising interest rates. Moreover, this  would crush the economy, ergo our ability to generate future tax revenues. It would kill the golden goose. In the meantime, the solution appears to be…print huge sums of money and get us into even more debt.

Looking at the Republican approach, growing the economy by lowering tax rates buys time, but I don’t see how we could possibly grow the economy enough to dig us out of this hole…or is my imagination too limited? Brazil’s economy grew about 10% last year, but then their starting base was much lower. Maybe Rep. Paul Ryan sees it differently.

Which leads me to the inescapable conclusion: the large majority of us will end up absorbing significant haircuts to our asset holdings as part of our inevitable national  and economic debt restructuring. My vote for the most likely targets of restructuring are: a) public employee pension funds; b) social security and Obamacare benefits; c) bond holders, via a national default a-la-Argentina…all inclusive. Bernanke’s QE2 movement  signals that massive inflation is already in the works.

Each of these steps spells disaster. In my view, it’s not a question of “if” but “when”.

So, as we begin this New Year, what are your ideas as to how we can climb out of this hole?

Do we invest Rep. Paul Ryan (R., Wis.) with dictatorial powers in order to implement his road map? Is that enough? (note: this is tongue-in-cheek, for those of you that don’t know me).

What do you think will happen if public employee pension fund obligations are shaved to 25% or less of current obligations? Do we become another UK, France or Greece and descend into anarchy? How do we prevent this from happening?

Many of us Bookworm Room aficionados, from comments gathered over the years, are either in retirement or seriously planning retirement….how will we / should we and others of our generation react to massive cuts in Social Security and ObamaCare? I note that some 25-30% of adults approaching retirement age have supposedly accrued virtually no retirement savings and individual net worth is likely to continue to decline in tandem with housing values. Plus, leading members of the Democrat regime have already made it known that it would like to strip me and thee of any anticipated inheritance incomes. What is to happen to them (us)?

What happens if the U.S. defaults on its bond obligations?

Or, am I all wet in my analysis? Although I do boast a corporate-finance-related degree, I do not pretend to be anything other than a hobby economist. Please, oh please, convince me that I am totally wrong in my analysis.

For balance, I do not think the prognosis is all doom and gloom, although I believe that we are in for a very rough ride. Our country faced similar difficulties early in our history and we got through them. I think the party is over, but I also think we have the wherewithal to climb out of the mess all of us have created, even if we cannot yet discern the way out. I am trying to understand how best to weather the storm.

Either way, please share your thoughts.

Forewarned is forearmed.

Something very, very weird is going on in Washington *UPDATED*

Are the wheels coming off the bus, or are we witnessing the most brilliant, and dangerous, political theater in our life times?

Here’s what it looked like a few days ago:  the President caved on maintaining the current tax rate, leaving Republicans triumphant.  In exchange, it seemed as if the Republicans were extending unemployment benefits, which is fiscally offensive (and socially dangerous), but survivable.  The President foll0wed that cave-in by holding a bizarre press conference, in which he likened Republicans to terrorists and hostage takers, and scolded his own base for living in a bubble.  Those of us who expected the usual peaceful platitudes of compromise were, to say the least, surprised.

The strangeness escalated when Democrats refused to go along with the President’s compromise on the tax plan.  There was talk from the Left of a primary challenge.  Primary challenges never bode well for the incumbent.

After this talk, Reid suddenly seemed to cave, and started drafting a bill that, rather than narrowly focusing on taxes and unemployment, threw bones to every liberal constituency out there, plus a dollop for the on-line gamblers (not that I have a problem with that last one, as you’ll see from my sidebar).

Next, Lawrence O’Donnell, of all people, pointed out that the whole focus on the “rich” when it came to letting the Bush tax cuts expire was a bunch of malarky.  The marginal rates for the top income earners will go up by less than 5% come January, which is a fairly small percentage of their overall taxes.  By contrast, unless the Dems act soon, the people in the lowest bracket, the 10% bracket, will see their taxes raised to 15%, which is a 50% increase in their overall tax bill.  Yikes!  It’s class warfare, but on an entirely different class than we thought.  Talk about misdirection.

Charles Krauthammer, who had smelled a rat early on, then announced in a widely quoted post that Obama had royally flim-flammed everyone, and mortally wounded the Republicans by wringing from the latter  a concession on the biggest stimulus ever:

Barack Obama won the great tax-cut showdown of 2010 — and House Democrats don’t have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years — which just happen to be the two years of the run-up to the next presidential election. This is a defeat?


While getting Republicans to boost his own reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, tea-party, this-time-we’re-serious persona of debt-averse fiscal responsibility.

And he gets all this in return for what? For a mere two-year postponement of a mere 4.6-point increase in marginal tax rates for upper incomes. And an estate-tax rate of 35 percent — it jumps insanely from zero to 55 percent on Jan. 1 — that is somewhat lower than what the Democrats wanted.

No, cries the Left: Obama violated a sacred principle. A 39.6 percent tax rate versus 35 percent is a principle? “This is the public-option debate all over again,” said Obama at his Tuesday news conference. He is right. The Left never understood that to nationalize health care there is no need for a public option because Obamacare turns the private insurers into public utilities. The Left is similarly clueless on the tax-cut deal: In exchange for temporarily forgoing a small rise in upper-income rates, Obama pulled out of a hat a massive new stimulus — what the Left has been begging for since the failure of Stimulus I, but was heretofore politically unattainable.

My friend and fellow blogger, Don Quixote (who, back in 2004, accurately predicted to me that Obama would be president one day), agrees with Krauthammer, although not for quite the same reason.  He says that Obama, by pitching a fit at the press conference, instead of offering the usual compromise platitudes, managed to plant himself in the middle between Republicans soaking the poor and Democrats soaking the rich.  Suddenly, he became the champion of the middle class.  He was reluctantly going along with maintaining the status quo, even though, to his chagrin, it would throw a bone to the evil rich.  To DQ, that was perfect class warfare theater, with Obama abandoning the poor to champion the middle class (at least for now).

It doesn’t end there, though, with Republicans suddenly wondering whether they’re as dumb as Krauthammer and Don Quixote make them look.  As I write this, Bernie Sanders, who was a recent liberal Facebook sensation with a speech castigating any attempt to reinstate the Bush tax rates, is actively filibustering any attempt to reinstate those rates.  Nor is Bernie doing one of those modern, pro forma, painless filibusters.  Instead, he’s doing it the old-fashioned, Jimmy Stewart way.  As the Anchoress says, this is a big deal:

I may not agree with him, but I applaud the man getting up and actually going through with a filibuster. After watching numerous drama-free, procedural “declared filibusters” through the latter part of Bush’s presidency–actions that really meant, “we’re just obstructing and going home”–Sanders is putting his money where his mouth is (or, rather, putting his mouth where the money is) and taking a stand.

I say good on him!

Those who are snarking about it, or bemusedly looking on, should beware: This is an extremely powerful optic. People who have no idea what Sanders is talking about will start cheering him for the sheer novelty of a filibuster. Those who have romantic memories of Jimmy Stewart reading the Constitution and Paul’s Epistle to the Corinthians on the Senate floor will confer that same romance upon Sanders’ efforts. The press, always ripe for “something new” and on board with Sanders’ politics, will talk up his courage to make such a “heroic” stand.

I’ll add that, if Krauthammer was right, and the Republicans were scammed, go Bernie!  He’s the only thing right now standing between us and Obama’s successful machinations.

And finally, to add to the surreal quality of it all, Obama seems to have turned the presidency back over to Bill Clinton, at least temporarily.  Drew, blogging at Ace, thinks that this is a sign that Obama is not up to the job, but I’m beginning to wonder.  There’s much more going on here than meets the eye, and it’s worth remembering, as both Krauthammer and Don Quixote did, that Obama made his way up through the street theater of Leftism.

We may be counting our chickens far in advance of their hatching if we blithely assume that Obama is giving up.  He’s a dirty fighter, but he’s definitely a fighter.

Cross-posted at Right Wing News

UPDATE:  Here’s the video.  It’s peculiar, to say the least, to see Obama play the henpecked husband, while Clinton cheerfully, and enthusiastically, waves him off to face his harridan of a wife:

UPDATE II:  The Christian Science Monitor agrees with DQ.

Taxes, government dependency and happiness

Two interesting things rolled across my desk today, interesting because they address the same topic — dependence on Big Government — but reach diametrically opposite conclusions.  The first is a Dennis Prager column that examines why American conservatives are happier than American liberals.  This isn’t just Dennis’ opinion, by the way.  Instead, several recent polls have shown that, on the whole, conservatives are happier people.

Dennis opines that the matter essentially boils down to a few key differences in outlook.  One is a sense of victimhood.  In America, those who turn to the government for succor are those who feel betrayed by the American system, whether because they’re blacks invested in the notion of racism, or people of any color feeling that they haven’t succeeded in the American system as they deserved.  Another is the notion of utopianism.  Liberals believe in perfectibility, and are constantly disappointed; conservatives recognize flaws, and are always thrilled to live in the society that best harnesses negative human traits and gives the most rein to positive traits.  Conservatives are also more generous — they give their money away to causes, rather than waiting for the government to take it.  That affects how they feel about their own contributions to societal good.

The other article that came to me, via a very Progressive facebook friend, is one by Thom Hartmann that argues in favor of huge taxes on the rich, with the assurance that, in Denmark, people are happy because they pay such high taxes, with the rich taking the greatest hit, but not feeling it, while everyone else gets cheap, high-quality government services.  It’s a very sophisticated argument, and often a correct one, about the differing effect taxes have on the rich and the poor.

As I understand it, Hartmann argument boils down to this.  The rich earn far more than they can ever spend.  This means that taxes affect only their non-discretionary income, not their discretionary income.  If they’re taxed more, they might save less, but it won’t affect the money they spend annually on both life’s necessities and its reasonable frivolities.  The non-rich, however, spend everything they earn after taxes.  If taxes are raised, they have less after-tax money to spend, which hurts them.  BUT (and this is the kicker), Hartmann contends that, invariably, the market adjusts so that, after a few years, the non-rich end up getting from their employers precisely the same amount in adjusted dollars to bring them to spending parity with their situation before the tax increase.

This means, says Hartmann that, if top marginal tax rates are increased, only the rich will suffer.  Everyone else will remain the same, except that the government will have hugely greater number of dollars at its disposal for free health care and education. Further, the less money the rich people have to throw around, the more stable the economy is, because it prevents bubbles.  This means that there is no great wealth creation, but there are no collapses either.

A large chunk of the article is concerned with trying to figure out why non-rich people are so stupid that they don’t want to tax the rich at a higher rate, considering that, in the long run, higher rates will leave non-rich people with pretty much the same amount of disposable income.  Scaife comes into all of this, of course, as does the Heritage Foundation, William Kristol, and the usual conservative suspects. I found that part of the article uninteresting.  When Hartmann got back to substance, he started making thought-provoking points again.

Thus, Hartmann asserts that, if you increase tax rates, government actually shrinks, which is what sensible conservatives should want.  I can’t summarize the argument adequately, so let me quote it here:

From 1985 until 2008, William A. Niskanen was the chairman of the Cato Institute, a libertarian think tank, and before 1985 he was chairman of Reagan’s Council of Economic Advisers and a key architect of Reaganomics. He figured out something that would explode Reagan’s head if he were still around. Looking at the 24-year period from 1981 to 2005, when the great experiment of cutting taxes (Reagan) then raising them (Bush Sr. and Clinton) then cutting them again (Bush Jr.) played out, Niskanen saw a clear trend: when taxes go up, government shrinks, and when taxes go down, government gets bigger.

Consider this: You have a clothing store and you offer a “50 percent off” sale on everything in the store. What happens? Sales go up. Do it for a few years and you’ll even need to hire more workers and move into a larger store because sales will continue to rise if you’re selling below cost. “But won’t the store go broke?” you may ask. Not if it’s able to borrow unlimited amounts of money and never—or at least not for 20 years or more—pay it back.

That’s what happens when we have unfunded tax cuts. Taxpayers get government services—from parks and schools to corporate welfare and crop subsidy payments—at a lower cost than they did before the tax cuts. And, like with anything else, lower cost translates into more demand.

This is why when Reagan cut taxes massively in the 1980s, he almost doubled the size of government: there was more demand for that “cheap government” because nobody was paying for it. And, of course, he ran up a massive debt in the process, but that was invisible because the Republican strategy, called “two Santa Clauses,” is to run up government debt when in office and spend the money to make the economy seem good, and then to scream about the debt and the deficit when Democrats come into office. So while Reagan and W were exploding our debt, there wasn’t a peep from the right or in the media; as soon as a Democrat was elected (Clinton and Obama), both the right-wingers and the corporate media became hysterical about the debt.

And when Clinton raised taxes so that people actually started paying the true cost of government (a balanced budget as in the years 1999 and 2000), they concluded that they didn’t need as many services, so government actually shrank—in terms of both cost and the number of federal employees.

As a non-economist, I have to admit that what Hartmann says makes a certain amount of superficial sense.  I suspect, though, that there’s more to it.  For example, Laffer’s curve may be involved.  That says that lower tax rates create greater wealth, which actually increases government revenue.  With greater government revenue, profligate politicians and greedy citizens have more to play with. The problem, then, isn’t the tax structure; it’s the boondoggles, and earmarks, and “other people’s money” syndrome that inevitably plagues an organization that lacks fiscal discipline.

My core problem with Hartmann’s whole premise, though, is that it works because his allusion to Denmark shows that what he really wants is a world in which the government is responsible for all income that’s not dedicated to life’s necessities.  Under the current American system, that “excess” money that the “rich” have floating around — the money that Hartmann thinks the government should take and redistribute — is money that goes to banks that lend it to future homeowners and entrepreneurs; it goes into businesses that hire people; and it goes into funding innovation that improves people’s lives.

Having wealth circulate in the marketplace increases the risks of a slap happy economy, but it also vastly increases the possibilities of life improvement.  It increases innovation and, yes, greed, which is a powerful motivator.  In the Scandinavian countries, which until recently had stunningly homogeneous populations, no defense budgets, and no sense of obligation to the rest of the world (which we, in the U.S., heavily fund), it’s easy to have a tight little loop of shiny, clean, teeny houses; lean, mean Danish modern furniture; health care for that homogeneous population; and an almost zero track record on innovations that improve life for most of the world’s population.

Hartmann envisions a world in which everyone is happy with a brightly colored Danish modern version of very little.  Hartmann also fails to take into account dynamic populations.  The Scandinavian countries worked so well for so long because they were populated by people with precisely the same values and precisely the same life habits, habits that happened to be particularly neat and self-disciplined.  The tremors are starting, though, as these same countries struggle to deal with newcomers who have nothing in common with this nice, neat, egalitarian very white world view.  The welfare scams, violence, polygamy, cultural incest, etc., that the Muslim populations are bringing to Denmark and Sweden, and other northern countries, are all going to place a very interesting burden on these happy little taxpayers who could always rely on each other for homogeneity and on Papa America for world stability.

Before being quite so smug, places such as Sweden and Denmark might want to cast a jaundiced eye on Holland and Britain and France, all of which started with less homogeneous populations than the northern countries; all of which have had a head start on the challenging task of incorporating Muslims into their closed world views; and two of which (Britain and France) actually had to set aside defense budgets.  Hartmann, too, might want to consider that America is Holland, Britain, France, etc., on speed when it comes to population diversity; constant immigration; and defense spending upon which the entire Western world has relied since 1942.

At bottom, I’d rather be a happy American iconoclast, living with a fairly low level of risk (heck, we’re not yet Argentina, Greece or Ireland) and wedded to the infinite possibilities of a dynamic economy that trusts the innovation and drive individuals, rather than coping with a government’s overarching static, inefficient bureaucracy.  I’d also rather be in a surging country that, better than any place in the world, incorporates incomers, even illegal ones, as opposed to a country that is, for the first time, has to deal with profound outsider disruptions to its cozy little system.  I’m happy here.  Not droned, not pacified, not opiated, but happy.

Cross-posted at Right Wing News

American taxpayers officially on the hook for a 1.7 mile tunnel in SF

I blogged earlier this week about the fact that San Francisco, which is broke, was trying to find $137 million so that the feds would provide it with almost $1 billion dollars in funds to build a 1.7 mile subway tunnel.  Federal money, of course, is your money.  This is not money belonging to beleaguered San Francisco taxpayers, who could move elsewhere if they no longer want to fund the madness.  This money — almost $1 billion — comes from you, the American taxpayer, no matter where you live.  There’s nowhere to run, and nowhere to hide.

Of course, had San Francisco been unable to find $137 million in its empty coffers, the feds would have kept the money to spend on some other boondoggle.  But we, the taxpayers, weren’t so lucky.  By hook and by crook, SF has located the cash:

San Francisco Mayor Gavin Newsom and transportation officials say they have found the $137 million the Municipal Transportation Agency needs to secure $942 million in federal funds for the Central Subway project.

Read more here.  And if you’re a Californian, I’m sure you’ll be happy to know that $106 million of that $137 million came from state bonds.  Oh, yeah!

Just so everyone is clear here, we’re talking about a $1.6 billion cost for a 1.7 mile stretch of subway — or, almost $100 million per every one-tenth of a mile to dig a long (and functional) hole in the ground.  Also, as I mentioned in my earlier post, all of this building and funding and boondoggling comes at a time when public transportation ridership in San Francisco is dropping.  Oh, yeah!

Cross-posted at Right Wing News

Your PC, supportive IRS at work

Many of us view the IRS with a certain amount of suspicion.  Being fair-minded people, we know that all societies need some mechanism to collect revenue to pay for basic government services (with the fault lying with Congress if those revenue demands are excessive).  We also know that our family and friends may work for it, and that they do so in an honorable capacity.

Nevertheless, there’s no getting past the fact that the IRS is a huge government bureaucracy that can, and will, destroy you if you cross it. It’s also unnerving that the current Congress is using the IRS, not just as a collection agency, but as a cudgel to force citizens to comply with coercive government policies that violate fundamental constitutional rights.

Given the IRS’s vast power, which Congress has recently put to a nefarious use, will it comfort you at all to know that the IRS has a touchie-feelie side?  How else to explain this email, which circulated to large numbers of IRS employees, before ultimately making its way to my inbox.

You can draw your own conclusions about what’s happening within the IRS.  I’ll just say that I view with suspicion any email that begins with a bathetic quotation from the execrable Jimmy Carter:

Sent: Friday, November 19, 2010 9:38 AM
To: ******
Subject: Creating a beautiful mosaic

We have become not a melting pot but a beautiful mosaic. Different people, different beliefs, different yearnings, different hopes, different dreams. – Jimmy Carter

I am constantly amazed by the contribution so many of you make to the IRS, your co-workers, and your communities through your memberships in any of more than a dozen IRS employee groups.

From the oldest organization, the Association for the Improvement of Minorities in the IRS, founded in 1969, to the newest group formed just this year, the Interactive Spiritual Partners for Internal Revenue Employees – these clubs work to fulfill significant missions. They typically serve their members and communities by supporting equal opportunities for all, while alerting leaders to trends and new issues. Most employee organizations meet regularly, raise funds to help fulfill their organization’s mission and assist within the community. Many groups offer scholarships and educate their members through local and national conferences, e-mail and social media.

***** and I thank all of you who improve your communities and help make the IRS the best place to work. You not only help others, you also learn new skills and meet people who can support you in your career. ***** and I know the value of employee groups because we often attend the national conferences and see the “magic” happen firsthand.

I encourage you to visit the Employee Organizations Web page. Ask questions, attend a meeting and join one – or more – groups. Be assured you can join any of them. Your political, ethnic or religious background is unimportant to these groups as long as you support their shared mission – to make the IRS employee “mosaic” even more beautiful to behold.

Cross-posted at Right Wing News

Happy Halloween with a comedy riff from Tim Slagle

This seemed timely, very timely:

Balancing the budget by cutting spending

In my life, if I’m running at a deficit, I cannot demand more money from my boss.  The only thing I can do is cut my spending.  In the world of government, which is running at a deficit, the fed demands more money from its boss (that would be, collectively, the taxpayers who are constrained by their employee’s believable threat to imprison them), and then increase spending.  It doesn’t have to be this way:

Backdoor Communism

The British government has proposed stealth communism:  all paychecks go to the government first, which then doles out to the wage earner whatever amount the government feels is the wage earner’s due.  Think about it.  As Pat Sajak wrote yesterday, withholding is bad enough, because it deprives the worker of a sense of ownership over that portion of the money he never sees.  Nevertheless, under the withholding system, the employee at least gets some money which he owns.  The British government, however, is proposing a system by which ownership of all wages lies with the government.  You can dress that up as efficiency, as the Brits are trying to do, but it sure looks like communism to me.

We’re in for a bumpy economic ride

Americans, if you still think elections don’t count, and that all that’s needed in the White House is a metrosexual beloved by the New York media, think again.  We are all going to be very deeply affected by the changes coming down the pike this January.  Higher taxes, hidden taxes, coercive taxes — you name it.  I think the message from the current Democratic government is a simple one:  bend over and take it.

All About Money

One of the things that I try to understand is the Great Divide between today’s Liberals and conservatives that has left us talking past one another on policy issues. Frankly, I have concluded that discussion with Liberals is often futile because we attribute different meanings to words and concepts.

One of those concepts, I suspect, has to do with “money”.  Let me throw the following proposition on the table for discussion:

Liberal /Lefties view “money” as a fixed, tangible quantity with intrinsic value, like gold coins, for example. Thus, the value of money is intrinsic to the lucre itself, be it coins or dollar notes. Conservatives, on the other hand, see “money” more abstractly as representing “created value”…as scrip or IOU on value created or received. As economists put it, money is a “medium of exchange” for value. So, for liberals, “money” is something tangible to that must be amassed by taking from someone else’s stash. For conservatives, “money” is something more abstract that must to be created (i.e. goods or services) directly (e.g., wages) or indirectly (e.g., inheritance) through the creation of “value”.

How might this color our perceptions of one another?

1) When people like Bill Gates amass a large quantity of money by creating products that many people wish to purchase, conservatives view Gates’ money as a reflection of the value that he created and contributed others. No hard feelings there – it’s a fair exchange. A Liberal/Lefty, however, sees only Gate’s amassed pot of lucre that appears disproportionately high compared to the lucre stored in other peoples’ pots. They see this imbalance as patently unfair, especially since this lucre was transferred from other peoples’ modest stashes into Bill Gates’ already whopping big stash: Bill has more, all of his customers have less.

2) When money is needed to achieve a desirable social or governmental goal, a conservative recognizes that such money needs to be generated somewhere to pay for this goal. This can only be done by either drawing down existing value (confiscating peoples’ lucre) or by creating new  ‘value” that can be taxed (i.e., growing the economy). A Liberal/Lefty doesn’t make this connection – they see the process simply as one of either redistributing the existing lucre from other peoples’ pots or creating new lucre by printing more money. The problem of printing new lucre, of course, is that it is still underwritten by a fixed quantity of value – expanding money supply representing a fixed value means that each dollar is worth less. We call that inflation.

I can’t tell you how many times Liberals have looked at me with puzzlement when I have asked where they expect to get the money for their favored social programs.

3) De-linking “money” from the process of wealth creation makes it easy for Liberal/Lefties to confuse using tax money to pay for unemployment checks, dance troupes or road repair as “economic stimulus”. You are, after all, taking lucre sitting idle in some peoples’ pots and putting that lucre into other peoples’ pockets to spend on purchases. Unfortunately, the fact is that such activities do not in themselves create new value. This cannot therefore “grow” the economy.

What do you think? Am I onto something? And, if so, what other aspects of the Great Divide does this help to explain? Does this help or hinder us in discussing our differences with the Liberal /Left?

Social Security withholdings as a tax, not a savings account *UPDATED*

I was complaining to Don Quixote today about the huge amount Mr. Bookworm and I pay in taxes, an amount that will only increase come January, when the Bush tax cuts expire.  I have, of course, a principled opposition to these high taxes.

I firmly believe that government does better when it skims a small amount off of a wealthy economy, than when it gouges an increasingly poor economy.  Nor can I be convinced that Keynsian economics are such that high taxes simply mean that it’s the government, rather than the marketplace, that redistributes wealth for everyone’s benefit.

Robbing Peter to pay Paul, and then having Paul hand some of that same money back to Peter (at great cost, mind you, because of the complicated procedures involved in both these transactions) is a closed system.  Add to that government’s inherent inefficiencies, the corruption that always arises from concentrating too much wealth in one place, and the lack of competition, and you have an economic sink hole, temporarily floated by my money.

Anyway, I was complaining to DQ, and I mentioned that I ended up paying something like 50% of my net income in taxes every year.  DQ thought that was very high, until we figured out that, unlike him, I was including the 15% self-employment withholding I’m forced to hand over to Social Security in my 50% calculation.  Said DQ, “That’s not a tax.”  I disagreed with him.

While I know that he’s technically correct that Social Security withholding is not a tax but is, instead, our beneficent government’s ostensibly holding my money for me to protect me in my old age, I don’t believe I’ll ever see the money again.  Social Security is not a lock box.  Instead, it’s just another government-managed Ponzi scheme and, worse, the government has raided it.

This money won’t come back to me.  As with all my taxes, it just vanishes into the government’s greedy, inefficient maw.

Oh, and by the way, I’m not the only one who sees SS withholding as yet another tax, as opposed to just another savings account over which, coincidentally, I have absolutely no control.

UPDATE: Much as I’m doing a complicated little dance in my brain, desperately trying to find an excuse for such a great misunderstanding, I can’t.  I just somehow took what DQ said and put my own gloss on it.  This is what DQ said:

Wow!  Much as I dearly love Bookworm, and as many wonderful conversations as we’ve had over the years, we can still miscommunicate in stunning fashion!  I would never, ever say that Social Security is not a tax.  Of course it is!  What I asked was whether Bookworm was including in her 50% the other expenses taken from her paycheck, such as PRIVATE retirement funds (IRAs & the like) and health insurance.  She assured me she was not.  I’m very sorry I did not make myself clearer.

Sometimes (too often for my liking) I can be a dope.  On the other hand, I love the discussion my misunderstanding sparked.  And while there’s no doubt that DQ is too smart to make the mistake I attributed to him, others certainly do.

The New York Times’ own wacky Tom Friedman *UPDATED*

This is the cozy mansion New York Times‘ columnist Tom Friedman calls home:


Judging by its size, it probably has a carbon footprint roughly equal to a small nation’s:

As the July edition of the Washingtonian Magazine notes, Friedman lives in “a palatial 11,400-square-foot house, now valued at $9.3 million, on a 7½-acre parcel just blocks from I-495 and Bethesda Country Club.” He “married into one of the 100 richest families in the country” – the Bucksbaums, whose real-estate Empire is valued at $2.7 billion.

Heating and cleaning the pool alone probably consume enough energy to power a factory.  The picture above is somewhat out of date, so things may have changed, but I’ll note that Friedman’s solar panels are, well, conspicuously absent.

All of which makes it screamingly funny when Friedman, after a first paragraph so profoundly ignorant its laughable (I’ll get back to it later), offers the following idea as a means for the Tea Partiers to gain the New York Times‘ seal of approval:

But should the Tea Partiers actually aspire to break out of that range, attract lots of young people and become something more than just entertainment for Fox News, I have a suggestion:

Become the Green Tea Party.

I’d be happy to design the T-shirt logo and write the manifesto. The logo is easy. It would show young Americans throwing barrels of oil imported from Venezuela and Saudi Arabia into Boston Harbor.

The manifesto is easy, too: “We, the Green Tea Party, believe that the most effective way to advance America’s national security and economic vitality would be to impose a $10 “Patriot Fee” on every barrel of imported oil, with all proceeds going to pay down our national debt.”

Friedman is right that America shouldn’t be dependent on foreign oil, but he seems to have forgotten that it’s his own party (and his own paper) that has made it virtually impossible for America (a) to drill, (b) to process oil shale or (c) to produce meaningful nuclear power.  Instead, he’s hooked his wagon to solar and wind energy, both of which are incapable of servicing America’s energy needs.  This means that Friedman wants to make us economically suffer by taxing us even more, without enabling us to have any viable energy alternatives.  (He also thinks a carbon tax is a hunky dory idea.)

A $10 a barrel tax  and a carbon tax may be irrelevant to a man living off of “one of the 100 richest families in the country,” but it will destroy America’s industry and, frankly, every thing else but for her wealthiest class.  In other words, Friedman has neatly spelled out the recipe for an economic meltdown similar to Zimbabwe’s and one that will leave the same outcome:  a poverty stricken nation, centered around a small, fabulously wealthy (and, inevitably, corrupt) ruling class.  We already know which niche Friedman has carved out for himself.

But really, what can one expect from a man who shows his profound ignorance and sneering disdain for America — not to mention his shallow intellectual dilettantism — in his very first paragraph.  (See, I promised I’d get back to it.) I usually wait until deep within my posts to sound this stupid:

I’ve been trying to understand the Tea Party Movement. Sounds like a lot of angry people who want to get the government out of their lives and cut both taxes and the deficit. Nothing wrong with that — although one does wonder where they were in the Bush years. Never mind. I’m sure like all such protest movements the Tea Partiers will get their 10 to 20 percent of the vote.

That paragraph has just got everything one would expect from someone living and work in the one of the ritziest, and most liberal, parts of the world.  In mere sentences, we get oozing condescension for the foolish, impenetrable masses; contempt for the anger that sees people taking to the street, Constitutions in hand, protesting a rapacious federal government; and, of course, the inevitable attack on George Bush.

As to that last point (“where the heck were they during the Bush presidency?”) I think this simple chart is a good starting point for explaining where these same frustrated (as opposed to angry) people were before Obama; or, more accurately, why they weren’t taking to the street to protest government overreach:


Need I say more?  No, I don’t think so.

UPDATE:  Turns out — no big shock here — that Friedman’s not the only green colored hypocrite.

Goldberg hits a home run (when talking taxes)

Obama may have been making a fool of himself with baseball, whether throwing a ball badly, misspeaking the name of an American institution, or refusing to admit that no, he didn’t know the team line-up, but Jonah Goldberg , distinguishing himself from Obama, hit a home run today.  Admittedly, the home run didn’t actually have anything to do with baseball, but it is an absolutely fantastic article about taxation — and one that ran in USA Today, which means a large audience:

A 100% tax rate would be tyrannical not just because you have a right to own what you create, but because the government would necessarily decide what you can and can’t have. Reasonable people can of course differ about where a tax rate becomes tyrannical, and we’re far from that line in historical terms. But any amount of taxation can be unjust if it is being used for bad reasons, is applied discriminatorily or if it’s taken without representation. (That’s how the American Revolution started, after all.)

Individual liberty is far from the only concern, either. The kind of country we want to be is deeply bound up in taxation. The Tax Foundation estimates that some 60% of American families already get more from the government than they pay in taxes (and the top 10% of earners pay more than 70% of the income taxes). If all of President Obama’s plans are enacted, that percentage will increase. We are heading toward being a country where instead of the people deciding how much money the government should have, the government decides how much money the people should have.

Only after they passed “ObamaCare” did Democrats clarify that this was one of their motives. ObamaCare’s appeal has less to do with saving money — which it won’t do — and more to do with spreading the wealth around. Senate Finance Committee Chairman Max Baucus, D-Mont., recently admitted that alleviating the “maldistribution of income in America” from the haves to the have-nots is one of the legislation’s real benefits.

Read the whole thing, please.  It goes a long way to explaining why the Tea Party is increasingly more popular than Obama.  People understand that taxes do not equal government wealth, but that they do equal individual servitude.

The morality lurking behind the taxes that fund government spending

Yesterday I wrote a long post about the fact that the abortion debate, at least on the pro-choice side, ignores social and medical advances that should make it a very different debate from the one that led to Roe v. Wade.  I think this is an important conversation, because of the fact that ObamaCare would have us pay for other people’s abortions.  Despite the fact that taxes triggered my post, they don’t figure into it.  The Anchoress, however, took the argument to the next logical point, and does discuss the nexus between taxes and abortion.

Another question I would like to see brought into the public square -and bear with me, for a moment, as I play Devil’s Advocate: if pro-life advocates (like me) object to their tax dollars being used to fund abortions under Obamacare (and I do), and if they want their objections to be seriously considered, then why shouldn’t those who are anti-war object to their tax dollars being used to fund the effort in Afghanistan and elsewhere in the multi-fronted war on terror?

Now, the argument will be made that a strong national defense is necessary to the survival of a nation, while legal abortions are not, strictly speaking, “necessary,” (except, for some, to the survival of a mother). But if the pro-lifers manage to keep their tax monies out of the reach of the abortion industry, they can expect to see a similar effort made about funding the “military-industrial complex.”

Although it will be very interesting to see under what sort of president, and what sort of congress, such arguments are made.

I urge you to read the rest of the Anchoress’ post, which is every bit as thoughtful and thought-provoking as the part I just quoted.

I would add to the Anchoress’ suggested rationale for funding war, but not abortion, the fact that, traditionally, America has distinguished individual freedoms (and, currently, abortion is one of them) from specific powers that have always been reserved for the state (such as the power to wage war against an enemy to the nation).  Just as we have never before used federal power to force people to buy a product from a third party vendor (which is what ObamaCare does), so too have we never before forced Americans to fund a neighbor who is exercising an individual freedom that we find morally objectionable.

Incidentally, Thoreau wrote his treatise on Civil Disobedience when he went to jail for refusing to pay taxes to support the 1848 war against Mexico.  The effort went nowhere, although his treatise entered history, because rich friends simply went ahead and paid the taxes for him.  I suspect that, ultimately, Thoreau’s is the correct answer.  If the government is truly spending your money in an intolerable way, one that makes you complicit in a crime that destroys your own moral standards, than you have to become disobedient, and stop paying your taxes.

So far, interestingly, none of us law abiding citizens have done that as a political statement.  Having the weight of the federal government bear down upon you and your family, stripping you of every material thing and threatening your individual freedom, is a very big price to pay to make a stand.  We keep thinking that, through the ballot box and the blog, we can make the change — and maybe we just can’t.

I wouldn’t care if Glenn Beck made tax mistakes

Just in case he actually runs for office, the Leftist media is already planning one line of attack against Glenn Beck.  They’re thinking that they can nail him on taxes, just as he went after so many Democrats who were found, wittingly or not, to have underpaid their taxes:

No one has been less forgiving than Glenn Beck when it comes to Democrats with tax problems. Not just the well-known ones like Treasury Secretary Timothy Geithner but also less serious ones such as Labor Secretary Hilda Solis, whose husband only recently paid off $6,400 in tax liens on his auto repair business, and Nancy Killefer, who withdrew her nomination to be White House chief performance officer, citing a $946.69 tax lien on her Washington home.

Their tax issues are just one indicator of “a culture of corruption among some of the left,” Beck declared just last month in a segment on his hugely popular Fox News television show, in which he branded Geithner, Killefer, Solis and a handful of other Obama nominees “tax cheats,” whom he wouldn’t trust “with my children, let alone my children’s future.”

Mocking the excuses offered by the nominees, Beck sarcastically intoned: “Oh, the tax thing, it was an accident. It was my husband’s fault. I didn’t do it, he did it. I didn’t mean to do it. I was just working hard for the people.”

So what to make, then, of the fact that Beck has had his own minor tax problems over the past few years?

As Beck evolved from a medium-market local radio personality to a one-man media empire with top-rated radio and television shows, best-selling books, a monthly magazine and a traveling one-man comedy tour, his production company, Mercury Radio Arts, has at times struggled to keep up with the heightened tax and filing demands accompanying his success.

The same article goes on to explain, at some length, the nature of Beck’s problems, and to point out that they parallel the problems many on the Left had in trying to comply with their tax obligations:  the tax code is so complicated, it’s hard to get it right.

And it’s that last little point that makes me think that I wouldn’t care, and most people wouldn’t care, if Glenn Beck ran (which I think is a bad idea for other reasons) and the Left tried to smear him with tax issues.  You see, what distinguishes Beck from the Left is that Beck, as a pro-individual, anti-government guy, he isn’t in favor of constantly increasing the tax burden on ordinary Americans.  Likewise, Beck, unlike Charles Rangel, isn’t writing the tax code.  Also, Beck, unlike Tim Geithner, isn’t being put in charge of America’s economy.  So yes, Beck has in common with Leftist politicians the fact that he too can’t figure out what the heck is going on tax-wise, but he parts ways with them in that he is neither a government employee, nor is he a big government maven.  Someone who works for the government, and wants to increase the tax burdens the government places on ordinary citizens, has a much, much higher duty than anyone else to get it right.

The law of unintended consequences

I don’t know if it’s a local, state or federal tax, but when I go into a restaurant that provides both eat-in and take-out services, I always order take-out, regardless of whether I plan to sit at one of their tables or hit the road.  Why?  Because the government imposes a tax on food that’s eaten on the premises.  I don’t know why.  But there you have it; that’s what the government does.  It’s common nowadays to sit at a restaurant and see people hunched over their foam containers at one table, while the unwary, paying a significant premium, sit at the next table eating off a plate.

What’s doubly funny about this stupid system is the fact that it ought to enrage the greenies.  You see, it creates vastly greater amounts of trash.  My plate doesn’t get rinsed and reused.  Instead, it goes straight into the garbage, expanding landfill use and requiring the constant creation of new disposable cups and plates.

My weekend, much of which was spent in San Francisco, has me thinking more than ever about government interference in day to day life, and all the costs, both obvious and hidden.  I’ve got a post slowly growing in my mind, but I don’t know how much I’ll be able to do with it.  I know I’m going to borrow heavily from the comments many of you left in my earlier post about the insanity that is San Francisco.

Steve Martin has a Tim Geithner premonition back in 1977

Yes, it is old news now that Tim Geithner and a whole lot of other Obama officials forgot to pay their taxes.  Nevertheless, when I heard this monologue that Steve Martin did on Saturday Night Live back in 1977, I just had to include it here.  It’s perfect:

You . . . can be a millionaire . . . and never pay taxes! You can be a millionaire . . . and never pay taxes! You say.. “Steve.. how can I be a millionaire . . . and never pay taxes?” First . . . get a million dollars. Now . . . you say, “Steve.. what do I say to the tax man when he comes to my door and says, ‘You . . . have never paid taxes’?” Two simple words. Two simple words in the English language: “I forgot!” How many times do we let ourselves get into terrible situations because we don’t say “I forgot”? Let’s say you’re on trial for armed robbery. You say to the judge, “I forgot armed robbery was illegal.” Let’s suppose he says back to you, “You have committed a foul crime. you have stolen hundreds and thousands of dollars from people at random, and you say, ‘I forgot’?” Two simple words: Excuuuuuse me!!”

Considering that most of our current administration officials are my age, give or take a few years, and therefore came of age during Martin’s comedic ascendency in the 1970s, I suspect they learned their lessons well.

Just a quick thought about the UC tuition hike

The UC regents voted for a steep increase in tuition.   Some have pointed to the unedifying spectacle of whining middle class students taking to the streets to protest the tuition increase, since they prefer to have California’s working class, most of whom will not attend the school, bear the financial burden.  Although I agree in principle about California’s spoiled brats, I’m not sure that’s the right argument for the UC problem.  The point of public education is that everyone pays so that some may benefit — on the theory that those who benefit will contribute to society for the benefit of all.  Of course, what we actually have in California is a punitive tax system that means that those who actually benefit, if they’re smart, promptly leave the state, taking their skills, education and tax dollars with them.  But still, the theory is that the tax payers get a secondary benefit from having an educated class within their midst.

The real problem, I think, is the UC system itself.  I’ll freely admit that I last attended a UC college more than two decades ago, but I’m assuming the situation then has gotten worse, not better.  With the exception of three hugely talented teachers who brought their subjects alive, my Berkeley professors could easily be lumped into a single descriptive class:  Except for the three mentioned, none could teach worth a damn — that is, those who bothered teaching at all, as opposed to handing the task off to grossly underpaid graduate students, many of whom had only a limited grasp of the English language.  The professors would read from yellowed notes, or waffle on in monotones, sucking the life out of everything.  Despite their manifest limitations, because they published (remember:  publish or perish), they were tenured, and their pathetic inability to teach was irrelevant.

The beauty of tenure was that they were paid sooooo well.  Professors didn’t live middle class lives — they lived upper middle class lives.  They had houses in the Berkeley hills with expansive views of the San Francisco Bay.  Their kitchens were cleaned by the Hispanic help and their gardens groomed by the Japanese.  The fact that so many of these professors were Marxists was irrelevant to these delightful living arrangements.

If one queried the lavish way in which these state employees lived, one was told that Berkeley, to keep its world standing, needed to compete with such private facilities as Harvard or Yale.  I don’t know about that, but I do know that many professors at City College in San Francisco were doing a much better job teaching.  At the same time I took a mind-numbing art history class at Berkeley, my mom took the identical class (at least in terms of subject matter) at City College.  My teacher was a mumbling, boring drag.  Her teacher was a dynamo, who brought the class to life.  Whenever I had time, I’d go to his class, not my own.  He wasn’t at a world class institution, but he was a world class teacher — and there were so many like him.  Unburdened by the cachet of Berkeley, and the “publish or perish” imperative, these people simply got down to the job of actually teaching.

Another problem with Berkeley and tuition is the absolute garbage being taught.  Should anybody be paid to teach, on the taxpayer’s dime, the politically correct effluvia that flows from the Gender Women’s Studies department:

The Department of Gender and Women’s Studies offers interdisciplinary perspectives on the formation of gender and its intersections with other relations of power, such as sexuality, race, class, nationality, religion, and age. Questions are addressed within the context of a transnational world and from perspectives as diverse as history, sociology, literary and cultural studies, postcolonial theory, science, new technology, and art.

The undergraduate program is designed to introduce students to women’s studies, focusing on gender as a category of analysis and on the workings of power in social and historical life. The department offers an introduction to feminist theory as well as more advanced courses that seek to expand capacities for critical reflection and analysis and to engage students with varied approaches to feminist scholarship. The curriculum draws students into interdisciplinary analysis of specific gender practices in areas such as feminism in a transnational world, the politics of representation, feminist science studies, women and work, women and film, gender and health, and the politics of childhood.

The department offers an undergraduate major and minor. It also houses an undergraduate minor in lesbian, gay, bisexual, and transgender studies, a program whose courses overlap productively with feminist and gender studies. Faculty in the department collaborate with an extensive group of extended faculty through the Designated Emphasis in Women, Gender and Sexuality, which provides graduate students across campus with a site for transdisciplinary learning and teaching. The department is now in the process of developing a Ph.D. Program in Transnational Studies of Women and Gender, which will involve faculty from a range of departments. The department fosters connections with scholars in feminist and sexuality studies throughout the campus by cross-listing courses, collaborating in research, and participating in the Gender Consortium, which links research and teaching units that focus on gender.

African Studies is equally bogus, functioning, not as a way for African-Americans to learn about their culture, but as an umbrella for Marxist theory. You don’t have to believe me.  You can convince yourself with a visit to the UC Berkeley African-Studies Events link.  Scroll down and click on “Robert Allen Celebrated: A 40th Anniversary Tribute to Black Awakening in Capitalist America.” I optimistically thought this would be a program about the benefits of capitalism for African-Americans (because I believe capitalism benefits all people, just as a rising tide lifts all boats). Silly me. At that link, you can hear audio files from the celebration. I know you’re hungering to hear about:

“Malcolm X and Robert Allen on Domestic (Neo-)Colonialism and Revolutionary Nationalism, and Black Awakenings as a seminal bridge between the ‘organic’ and ‘traditional’ intellectual traditions of activist-scholarship.”

or perhaps

“Colony Over-the-Rhine: Gentrification and Econocide.”

or even

“Social Justice and state crisis: Lessons for the future from the 1960s Black Liberation movement.”

This scholarship isn’t about enabling blacks, at taxpayer’s expense I might add, to advance in American society. Instead, it’s firmly intended s to keep blacks locked in the perpetual victim servitude of identity politics.

This kind of “academic material,” if I can dignify it with that title, is for hobbyists and obsessives, not for people nominally being educated for the benefit of (and at the expense of) the people of the State of California.  It’s equally easy to attack the other “politically correct” departments that populate the school, all providing the “mick” classes (i.e., Mickey Mouse or easy classes) that people with a high tolerance for BS will take, and that have absolutely nothing to do with a classical education of great thought, science, languages, history and, perhaps, world culture.

Students and taxpayers alike would benefit substantially if the UC system, rather than repeatedly imposing an ever greater burden on students and taxpayers alike, would actually examine its own flaws.  It should purge those who can’t teach (or at least stop pretending they’re teachers), and it should peel away the politically correct classes that weigh down the curriculum (at great expense) and focus on core education that benefits, not just the students, but the long-suffering people of California.

Here’s the way I would do it:  I would create a two tier UC system.  The bottom tier, primarily funded by taxpayers, would offer the same core curriculum that existed before the free speech movement, before Marxism and before political correctness ate away like a canker at the heart of the system.  This tier would focus on science, mathematics, history, languages, etc.  It would pretty much resurrect the 1958 (or thereabouts) catalog.  In this way, the state would still get the benefit of an educated class that, in theory, would then raise the whole tone of the state.

All other classes at UC would be a la carte, with students interested in them paying extra for the privilege of learning something outside of the core curriculum.  Those who want a basic education would get it.  Those who want more, would pay, either out of their parents pockets or, if they approached college as I did, by getting a job.  This approach would bring the marketplace into the mix, and allow the Regents, the state and the taxpayers see just how many people are actually willing to dig into their own pocket for “womyn’s studies” and Afro-centric Marxist victim classes.

Somehow, though, I think both taxpayers and students are going to be gouged in perpetuity in order to fund a significantly large group of Marxist professors intent on teaching identity politics papulum to our poor, vulnerable youth.

Using welfare to buy votes to maintain perpetual power

The Daily Mail has the data to prove what we all knew:  a political party that shifts the tax burden to less than 50% of the population, while leaving more than half the population dependent on government largesse, wins in perpetuity (or until the country implodes, whichever comes first).

Almost $3,000,000 in stimulus money goes to one of the richest towns in America *UPDATED*

The Marin IJ reports that almost $3,000,000 in stimulus money Americans will help the public school district in Ross, California:

Ross School has won the federal stimulus fund lottery.

School officials learned Friday they would receive a $2.85 million school construction bond tax credit as part of the federal stimulus bill – a credit Superintendent Tammy Murphy believes will save Ross taxpayers $5.4 million in interest.

“We were so fortunate. It’s just a wonderful story,” Murphy said. “This would have been a 25-year term for our bond. Now we’ll be able to pay it off in 15 years at zero to little interest. It’s just great.”


Because so many applied for the limited funds, the state Department of Education held a lottery Friday, choosing 43 school districts and county offices to receive the funds. The single-school Ross Elementary District, which is overhauling Ross School at a total cost of $39 million, was the only district in Marin County to apply for the program.

Ross was smart to apply for funding, and I certainly can’t blame it for being lucky enough to win a random lottery. However, I think that you, as a taxpayer, should know a little bit about Ross.

Ross, in Central Marin County, California, is a small and very pretty town, with a population of about 2,300 people.  The 2000 census reveals a little bit about that population.  It’s lily white; heavy on the stable, two parent homes (although rumor has it that wife-swapping is big in the town); and rich, really, really rich.  The median income for a family in Ross is around $102,000.  That median number doesn’t quite do justice to the wealth oozing out of Ross, since it’s brought down by the 5-6% of the population who are poor — elderly people living in decaying mansions and students living in squalid apartments (because the College of Marin is in neighboring, and even more wealthy, Kentfield).  A decade ago, Ross was the 20th richest town in America.  Indeed, some of the richest people I’ve ever met in my life, including the single richest person I’ve ever met in my life, live in Ross.  Here in Marin, its name is as synonymous with wealth as Kentfield, Belvedere and Tiburon, all of which are some of the richest communities in America.

What this means is that, even though the Ross School district is a public school that’s dependent on government funds, it also has an enormously wealth community shoring it up.  The public schools in Ross, Kentfield, and Bel-Tib don’t look like any public schools you’ve ever seen.  Thanks to generous support from families in the community, they have the same polished gloss that pricey private schools offer.  The only difference is that, unlike private schools, Marin public schools are in thrall to the wacky curriculum mandates perpetually emanating from Sacramento.  To give you an idea about the school’s high quality (despite those government diktats), I know several wealthy familes that, having looked at every private school within a 25 mile radius, concluded that their local public school was completely comparable, and would save them a tiresome commute.

Again, please understand that I don’t think the Ross School did anything wrong or that it should be forced to give the stimulus money back.  Its administration was intelligently proactive in seeking funding for a legitimate construction project, and it won the money fair and square.  Nevertheless, as a taxpayer being squeezed to death by an avaricious and incompetent government, I find it outrageous when I see my tax dollars go to one of the wealthiest communities in America.  That type of wealth distribution reflects a profound failure in the way in which the federal government, which takes my money essentially at gunpoint, is managing that same money.  It has nothing to do with stimulating the economy and everything to do with politics and bureaucracy as usual.  Stories such as this should elicit outrage from taxpayers, outrage directed not at the lucky fund recipients, but at the federal government itself.

UPDATE:  In a striking irony, today’s Marin IJ also reports about massive fund cuts to those in need:

Six years ago, Herschel Ferguson’s life took a devastating turn for the worse. The Santa Venetia resident, now 65, returned home from his San Francisco State internship, felt light-headed and passed out. He’d contracted acute disseminated encephalomyelitis and spent the next three months in the hospital, briefly slipped into a coma and lost feeling in his left arm. His memory often fails him.

Ever since, Ferguson has received 15 hours a week of assistance from a caregiver in his home through the In-Home Support Services program, which is funded by federal, state and county money and is facing a rash of cuts in the wake of the state budget deal reached last month. The cuts were supposed to have taken effect Sept. 1, but have been delayed indefinitely by the state.

“If it wasn’t for her, I wouldn’t be able to get through life,” Ferguson said of his caregiver. “It gives me an idea of what day it is when she comes. I couldn’t get along without her.”

The IHSS program pays caregivers to help low-income elderly and disabled people whose needs range from bathing and grooming to laundry, shopping and meal preparation. More than 1,600 Marin residents receive such services through the program, and a comparable number of people provide them, according to Kara Beuerman, acting program manager for adult and aging services with the county of Marin. Roughly 250 recipients face losing those services; another 200-300 people could see their service reduced.

Read more here.

UPDATE II:  As one of my friends commented, it’s staggering that the Department of Education was incapable of rousing itself to look at the various school district’s economic needs, as opposed to throwing things open to one giant, undifferentiated lottery.  Do you really want a government that is this lazy and unresponsive to be in charge of your health care?

President Obama breaking his tax promise

With his typical clarity, Karl Rove explains that it is impossible for President Obama to stick to his “no new taxes” promises if he continues on this ruinous path of government spending:

The campaign team is intent upon protecting a pledge driven by its 2008 campaign polls: Mr. Obama promised never to raise taxes on anyone making less than $250,000 a year to avoid being labeled a tax-and-spend liberal.

Even so, Mr. Obama has already broken his no-new-taxes pledge. On Feb. 4, Mr. Obama signed a $33 billion cigarette tax increase, which fell disproportionately on lower- and middle-income individuals. And the “cap and trade” energy bill, approved by the House on June 26, is a tax on anyone who owns a light switch, uses a car key, or has bought anything manufactured, shipped or sold in the U.S.

The House version of Mr. Obama’s health-care—excuse me, “health-insurance”—reform already has four taxes that will largely be paid by people making less than $250,000 a year. There’s $8.2 billion in taxes for using health savings accounts and other tax-free medical savings vehicles to purchase over-the-counter drugs. There’s an 8% tax on employers who don’t offer insurance: The Congressional Budget Office says workers in those businesses would pay the $163 billion cost via lost wages.

There’s a 2.5% “Tax on Individuals Without Acceptable Health Care Coverage” in the House bill that applies to people who either don’t have insurance or whose policies the government deems inadequate. Finally, there’s a $2 billion “Comparative Effectiveness Research Tax” on all private and “public option” insurance policies.

If some version of ObamaCare is passed, the president will break his tax pledge several more times while adding trillions to the deficit, dismantling the best elements of our health-care system and slashing Medicare by hundreds of billions of dollars.

Almost 20 years ago, that broken promise doomed George H.W. Bush to a one term presidency.  Will it do the same to Barack Hussein Obama?

Taxing realities

From the Wall Street Journal:

Democrats already plan to repeal the Bush tax cuts, but that won’t raise enough money. So they’re proposing an income tax surcharge on “the wealthy,” but that won’t raise enough either. Democrats have no choice but to soak the middle class because only they have enough money to finance the liberal dream of yoking the middle class to cradle-to-grave government entitlements.

Democrats have already taxed the middle class by raising cigarette taxes to pay for the children’s health-care expansion. They’re also teeing up average earners with their cap-and-tax energy bill. Mr. Obama had hoped that cap-and-tax would raise some $646 billion over a decade, but Democrats in the House had to give most of that away in bribes to business to pass their bill. To finance ObamaCare, they’re also proposing another 10-percentage-point increase in the payroll tax on firms and individuals that don’t purchase health insurance. But this won’t raise enough money either.

So waiting in the wings is the biggest middle-class tax increase of them all: a European-style value added tax, or VAT. This tax would apply to every level of production or service, and it is beloved by politicians in Europe because it raises so much money so easily without voters noticing. Ezekiel Emanuel, a White House aide and brother of Chief of Staff Rahm Emanuel, has advocated a 10% VAT to finance national health care. Look for a VAT to be one of the prominent options when Mr. Obama’s tax reform commission issues its report later this year.

The undeniable reality is that you can’t run a European-style welfare-entitlement state without European-style levels of taxation on the middle class (and eventually without low European-style growth and high jobless rates). It’s looking more and more like Mr. Obama’s no-middle-class-tax pledge was one of the greatest confidence tricks in American political history.

I lived in England under the VAT.  It’s a heinous tax that destroys individual wealth and, in a vicious spiral, leaves people ever more dependent on the government they’re financing.

All the problems with Democratic health care reform

In just three paragraphs, Charles Krauthammar explains all of the problems with the health care reform the President so desperately wants passed by August:

President Obama premised the need for reform on the claim that medical costs are destroying the economy. True. But now we learn — surprise! — that universal coverage increases costs. The congressional Democrats’ health-care plans, says the CBO, increase costs on the order of $1 trillion plus.

In response, the president retreated to a demand that any bill he sign be revenue-neutral. But that’s classic misdirection: If the fierce urgency of health-care reform is to radically reduce costs that are producing budget-destroying deficits, revenue neutrality (by definition) leaves us on precisely the same path to insolvency that Obama himself declares unsustainable.

The Democratic proposals are worse still. Because they do increase costs, revenue neutrality means countervailing tax increases. It’s not just that it is crazily anti-stimulatory to saddle a deeply depressed economy with an income tax surcharge that falls squarely on small business and the investor class. It’s that health-care reform ends up diverting for its own purposes a source of revenue that might otherwise be used to close the yawning structural budget deficit that is such a threat to the economy and to the dollar.

“Read my lips: No new taxes”

Do you remember the words in my post title?  I sure do, and I wasn’t even very politically aware then.  That was George Bush, Sr., making a promise to the American people:  “Read my lips:  No new taxes.”  He broke that promise.

It looks as if Barack Obama is readying himself to break that promise too.  More than that, he’s planning on breaking that promise in a mad rush to fix a fairly static situation (health care isn’t going anywhere between now and next year), and to embark upon a government funded system that will inevitably go bankrupty — and that’s despite taxing the middle class into oblivion.

George Bush was destroyed politically when he broke his promise.  Will Barack Obama also be destroyed?  And will he be destroyed, and his power base with him, before or after he causes irrevocable harm to America?

Speaking of Barack Obama’s self-destruction, I have a question for you.  We’ve all been anticipating the bloom coming off the Obama rose and I think that’s happening very swiftly right now.  What I’m having a hard time envisioning is the look of a powerless Obama presidency.

For the next two years, there will still be a Democratic majority in Congress, although I suspect the Blue Dogs will be the power brokers.  But what will Obama do?  Will he sell out America behind the scenes through back channel communications with bad regimes?  We know he won’t do a damn thing about Iran, but will he use his presidential powers to destroy Israel?  (And assuming he tries, will he be successful?  So far, he’s been unique amongst American presidents in uniting the fractious Israeli parties and people.  Maybe he’s a good thing for them, in a weird way.)  Will he learn and change on the job, becoming less ideological and more protective of the country in his charge?  Will he become an ineffectual lame duck half-way through his first term?

What do you see the future bringing?

Knowing when it’s time to quit

The cat’s out of the bag now, and it’s clear that the Democrats and Obama are planning on destroying small businesses in America.  This is no surprise, of course, given that small business — entrepreneurship, independence and individualism — is the antithesis of a government run marketplace:

In the middle of a recession and with rising unemployment, Democrats have been letting it leak that they want to raise U.S. tax rates higher than they’ve been in nearly 30 years in order to finance government health care.

Every detail isn’t known, but late last week Ways and Means Chairman Charlie Rangel disclosed that his draft bill would impose a “surtax” on individuals with adjusted gross income of more than $280,000 a year. This would hit job creators especially hard because more than six of every 10 who earn that much are small business owners, operators or investors, according to a 2007 Treasury study. That study also found that almost half of the income taxed at this highest rate is small business income from the more than 500,000 sole proprietorships and subchapter S corporations whose owners pay the individual rate.


Here’s the ugly income-tax math. First, Mr. Obama has promised to let the lower Bush tax rates expire after 2010. This would raise the top personal income tax rate to 39.6% from 35%, and the next rate to 36% from 33%. The Bush expiration would also phase out various tax deductions and exemptions, bringing the top marginal rate to as high as 41%.

Then add the Rangel Surtax of one percentage point, starting at $280,000 ($350,000 for couples), plus another percentage point at $400,000 ($500,000 for couples), rising to three points on more than $800,000 ($1 million) in 2011. But wait, there’s more. The surcharge could rise by two more percentage points in 2013 if health-care costs are larger than advertised — which is a near-certainty. Add all of this up and the top marginal tax rate would climb to 46%, which hasn’t been seen in the U.S. since the Reagan tax reform of 1986 cut the top rate to 28% from 50%.

States have also been raising their income tax rates, so in California and New York City the top rate would be around 58%. The Tax Foundation reports that at least half of all states would have combined state-federal tax rates of more than 50%.

Early retirement is look like a very good option for me right now.  It is true that as a self-employed person, if I work, I’ll still have more money if I work than if I don’t work.  After all, if I don’t work, I have no income at all, whereas if I do work, after state and federal taxes, I still manage to hold onto about 40% of my income. For me, though, hanging onto a mere 40% of my income (and I charge my clients top dollar in my field, which still isn’t much), may not be worth the personal stresses and the actual costs of carrying on my business.

I have to pay for my own equipment and my online legal library.  I also have to sustain the wear and tear on my own system as I deal with deadlines, nervous clients, dumb judges (they’re all liberals here), juggling work and family life, etc.  At a certain point, the return on my effort gets too small to justify the hassle.

If I were the sole breadwinner for my family, the math would be different.  I’d clean Grand Central Station out with a toothbrush to keep food in their mouths and a roof on their heads.  But I’m not in that situation, and I have a hard time justifying killing myself simply so that the government can fund the degradation of my health care system.

Hat tip:  Radio Patriot

Fool me once, shame on you….

In his most recent article at the Wall Street Journal, Karl Rove explains in great detail how Barack Obama told quite obvious lies about the stimulus numbers, only to pretend now that he didn’t really mean what he said.  (That’s the lying pattern I’ve told you about.)  The American people were good and fooled.  The question, of course, is whether they’re going to let themselves be fooled again into believing Obama’s health care numbers:

This fits a pattern. The administration consistently pledges unrealistic results that it later distances itself from. It has gotten away with it because the media haven’t asked many pointed questions. That may not last as the debate shifts to health care.

The Obama administration wants a government takeover of health care. To get it, it is promising to wring massive savings out of the health-care industry. And it has already started to make cost-savings promises.

For example, the administration strong-armed health-care providers into promising $2 trillion in health savings. It got pharmaceutical companies to promise to lower drug prices for seniors by $80 billion over 10 years. The administration also trotted out hospital executives to say that they would voluntarily save the government $150 billion over 10 years.

None of this comes near to being true. On the promised $2 trillion, everyone admits that the number isn’t built on anything specific — it’s an aspirational goal. On drug prices, a White House spokesman admitted that “These savings have not been identified at the moment.” It is speculative that these cuts will actually be made, when they would begin, or whether they would reduce government health-care spending.

A month ago, I would have said that a compliant media would simply spin things for Obama again, with a credulous American public going along and footing the bill for its own destruction.  Despite the fact that the media is still shilling for Obama, at least as to the little things, I’m not absolutely sure that media members (who also pay taxes) are as willing to shill for the bigger things.  Two signs that they might not are Obama’s increasingly (and steadily) negative polling numbers, and somewhat belated articles from the MSM admitting that his budget numbers don’t add up.  I’m not dancing jigs yet, especially with that “60” in the Senate, but I’m allowing a faint hope that the juggernaut might be slowing down.

Trying to stop the money flow to ACORN

Rep. Michele Bachmann has set up an online petition in which you can add your name to the list of people who want Congress to stop funneling money to ACORN.

A good primer on bad tax policy

It’s not just the video that’s good, it’s John Hindraker’s comment about Obama’s tax policies:

I think President Obama’s worst weakness is that he is ignorant, not only of economics as an academic discipline, but of business as it is commonly experienced and understood by those in the private sector. This lack of understanding promises to be an endless source of bad policy.

About those tea parties

Melissa Clouthier has a nice post about the tax freedom tea parties planned all over America for this coming Wednesday.  After addressing (and pretty much dismissing) some concern from those on the Right about the motivations behind the tea parties, she has this lovely paragraph about the worry from the Left:

I’m smelling more than a little jealousy, fear and loathing from my leftist brethren. Protests over the last eight years were nonsensical, anemic affairs with screaming meemees in pink T-shirts. Or they’re naked hot chicks for PETA. Or they’re naked bicyclers protesting war and Israel and the new world order. In short, the Leftists come across as unstable whack-jobs with no job and time to burn who had no purpose in life but their thinly veiled America-hate. Plus, they just don’t have many numbers.

One of the things I know people on the Right are worried about is the Left trying to make those on the Right appear like unstable whack-jobs, by appearing with signs demanding the death of gays or abortion providers or Muslims or whatever other ugly thought they can come up with as a smear on conservatives.

One of my friends has turned into a politico dynamo working on our San Francisco protest.  She’s sent out a couple of emails address both organizer concerns about infiltrators and providing information that should concern every American about taxes.  First, regarding the infiltrators:

If you see someone and they aren’t one of us, i.e., they’re wearing an ACORN t-shirt, they have a sign that says “Homophobe or Nazi” etc., they’re screaming certain things at us, they’re not wearing a tea bag pin, do the following:

1—as above, grab someone w/ a camera and keep your eve on them;

2—grab one of our “INFILTRAITOR” signs and go stand next to them, have someone take a picture and stick w/ that person for a while…it might agitate them enough to leave or relocate.

3—if you feel comfortable approaching them, you can tell them this and see if it has any impact:

“We have a permit that restricts this protest to matters of taxes and the budget and stimulus/bailouts. An anti-war or pro-abortion sign isn’t by law permitted at this protest. You will have to go somewhere else w/ this sign OR take one of ours or I will have to ask the police to escort you away.”

And regarding the actual reason for the protests, how about these tax statistics from Joseph Henchman, Director of State Projects, Tax Foundation, Washington, D.C.:

Tax Facts

¨ In 2005, the estimated time and money cost of complying with the federal Internal Revenue Code was 6 billion man-hours worth $265 billion.

¨ The code that year stood at 7 million words in 736 code sections, up from 718,000 words in 103 code sections in 1955. By contrast, the King James Bible has 788,280 words in 66 books, the Harry Potter series has just over 1 million words in 7 books, and the English translation of War and Peace has 560,000 words.

¨ In 2009, Americans worked 103 days of the year to pay for federal, state, and local taxes. This is more than the days worked for housing, food, and clothing (13 days) combined. Americans worked 38 days to pay income taxes, 27 days to pay Social Insurance taxes, 15 days to pay sales and excise taxes, 12 days to pay property taxes, 6 days to pay corporate income taxes, and 4 days to pay other taxes.

¨ In 2006, about one-third of all individual income tax returns (45.6 million) reclaimed every dollar of income tax withheld during the year.

¨ The form 1040 and instructions in 1913 was only 4 pages. In 2009, they are 94 pages.

¨ In tax year 2008, 154.3 million individual income tax returns were filed, resulting in government collections after refunds of $1.059 trillion.

¨ 61 percent of filers used a paid preparer.

¨ In tax year 2006, the “top 10 percent” began at $108,904 in adjusted gross income; the “top 1 percent” at $388,806 in adjusted gross income. 355,204 returns had more than $1 million in adjusted gross income.

¨ 62.8% of individual returns claim the standard deduction; 35.3% itemize.

¨ In 2005, 21.9 million returns claimed the Earned Income Tax Credit (EITC), which paid out $39.7 billion. 12.8 million returns checked the box to provide funds to the Presidential Election Campaign Fund. 48 taxpayers gave a total of $21,179 to reduce the national debt.

¨ 7 states have no state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Two other states, New Hampshire and Tennessee, tax capital income but not wage income.

¨ 5 states have no state sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.

¨ The first income tax was levied in 1404 in England. While the U.S. adopted a temporary income tax in 1862, it was not permanently enacted until 1913 after ratification of the Sixteenth Amendment.

¨ The 1913 income tax rates ranged from 1 percent to 7 percent on income over $500,000. The average annual income earned that year was $800.

Principles of Sound Tax Policy

¨ Simplicity. Administrative costs are a loss to society, and complicated taxation undermines voluntary compliance by creating incentives to shelter and disguise income.

¨ Transparency. Tax legislation should be based on sound legislative procedures and careful analysis. A good tax system requires informed taxpayers who understand how tax assessment, collection, and compliance works. There should be open hearings and revenue estimates should be fully explained and replicable.

¨ Neutrality. The fewer economic decisions that are made for tax reasons, the better. The primary purpose of taxes is to raise needed revenue, not to micromanage the economy. The tax system should not favor certain industries, activities, or products.

¨ Stability. When tax laws are in constant flux, long-range financial planning is difficult. Lawmakers should avoid enacting temporary tax laws, including tax holidays and amnesties.

¨ No Retroactivity. As a corollary to the principle of stability, taxpayers should rely with confidence on the law as it exists when contracts are signed and transactions made.

¨ Broad Bases and Low Rate. As a corollary to the principle of neutrality, lawmakers should avoid enacting targeted deductions, credits and exclusions. If such tax preferences are few, substantial revenue can be raised with low tax rates. Broad-based taxes can also produce relatively stable tax revenues from year to year.

Democrats in a nutshell

Mary Katharine Ham caught John Kerry finally admitting what Democrats fear most of all:  that people will take control over their own destinies, without the elite in government dictating how their hard earned money should be spent.  Perhaps if Kerry had ever held a real job and earned the money himself, he might have had a different attitude than the one she exposes:

Sen. John Kerry took to the Senate floor today to pace, rant, and raise his voice in a monotone simulation of human passion as he spoke up for the massive spending bill the Democrats want to pass today under the guise of “stimulus.”

During his speech, he addressed the argument made by fellow senators and many economists that tax cuts might be more helpful to stimulating the economy than long-term government spending. The American people are also coming around to that view, according to a recent CBS poll, which found only 22 percent of them favor more government spending over tax cuts as stimulus.

His argument against tax cuts for Americans during these hard economic times was illuminating:

I’ve supported many tax cuts over the years, and there are tax cuts in this proposal. But a tax cut is non-targeted.

If you put a tax cut into the hands of a business or family, there’s no guarantee that they’re going to invest that or invest it in America.

They’re free to go invest anywhere that they want if they choose to invest.

Indeed, people with their own hard-earned money in their own pockets are free to spend, save, invest, or not wherever they please. Kerry betrays the fear that haunts every good liberal— that the American people won’t spend their money on exactly what good liberals would spend it on. Good liberals must, therefore, advocate for forcibly relieving the American people of the better part of a trillion dollars of their own money to fund things like STD education, welfare programs, and water parks.

Senators like Kerry have placed their own ideological desires over the right of the American people to a clean stimulus bill without the long-term spending even Obama himself admits is in it.

You can read the rest of Ham’s scarily accurate post about Kerry and liberal elitism here.

Oh, to be in government

When I outspend my budget,* I have to make drastic cuts in my expenditures.  Sadly, I cannot march into my boss and announce that he must immediately give me a huge raise to cover the shortfall.  Fortunately for those in government, because they have the rare ability to boss around those who pay them, they can cover their shortfall, not by cutting waste (the government unions would never allow that), but by demanding a huge raise to cover the shortfall.  Hold on to your wallets, if you can, because 2009 is going to be a very costly year.


*Just kidding.  Because I’m (a) frugal (some would say cheap) and (b) lucky enough that both Mr. Bookworm and I have stable incomes, I never outspend my budget.