“Rise Above” Envy

I am not a rich person as defined by our current leadership in Washington, and while money is very important accumulating wealth is not a driving force in my life. Nevertheless, I was raised to admire but never envy the wealth of others. To never desire that which I have not earned, nor to enjoy benefits, goods, or services for which I have not paid. How did so many Americans lose that idea and, instead, come to think in profoundly opposite terms? In terms which divide us and create class envy and bitterness resulting in scores of people fully dependent upon the redistribution of others wealth, or the government directly.

There’s a discussion in all of this Rise Above rhetoric that seems to be missing. And it is a discussion of the fundamental morality of a viewpoint held by a large proportion of people who think of themselves as upstanding Americans while simultaneously believing that it’s right and proper to tax progressively more from people who they think can afford it. Or, from people arbitrarily defined as “rich” or “wealthy” to the extent that amounts they have earned beyond the arbitrary wealth boundary is deemed fundamentally not theirs, nevermind the fact they earned it. That those who think they need it, in fact have a claim to it. How did we get to this point in America where people are so envious of the earned wealth of others that they actually embrace the idea and empower the government to take more and more by force?

And they justify this scheme uttering empty words such as social justice – a concept devoid of any true sense of equity, or actual justice.

Have those who think this way ever considered the actual number of dollars so-called wealthy people pay in taxes? In many many cases very likely more (far more in the case of the “uber rich”) than they, themselves, earn in total – let alone what they might pay in taxes? Do they honestly think these arbitrarily defined so-called wealthy people are somehow not “paying their fair share” while they, who pay comparatively little or nothing, somehow are? On what basis, what moral code, do people operate that guides them to the conclusion that they have a right to enjoy products, services, or financial assistance at no cost to themselves? How do these people sleep at night knowing they use things and obtain services for which not only have they never paid a dime, but obscenely argue ought not pay a dime!

Here’s a thought to consider: ask not what can be taken at the proverbial point of a gun from other people just because they have it so that you can enjoy some unearned and undeserved reward. Rather, how about demanding less from our government and paying for what you do use and benefit from (something at least). And while you’re at it, rather than begrudging and vilifying the success of those who work hard, save, accumulate, and use wealth as they see fit for their own designs, why not hail them as heroes for their hard work and honest efforts!

In short, I appreciate and admire all this talk about Rising Above. However, if we’re going to rise above something why not rise above the petty social mentality of envy, demand less from government, and focus on our own business rather than our neighbor’s. That would truly be Rising Above; taxing the so-called rich more is neither moral nor a solution to any problem.

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S&P’s Warning: A “Catch-22”

If S&P has taken this long to issue a negative watch on The US Treasury’s ability to repay debt, what would it actually take for this rating agency to make good on its warning? This is the question no one wants to really discuss in the media. It’s as if people here in the U.S. actually think that folks all around the world don’t already see our situation for what it really is… and think they can keep it that way. Moreover, If the United States has gotten away with a AAA rating all the while incurring massive deficits, doing basically nothing to address the incredible imbalances in the government, one has to really wonder… Well, now that the S&P has finally come out of the closet on this let’s briefly explore further.

It’s pretty clear now what will happen, and we will see a package of three measures; two of which are totally and completely antithetical to everything the Tea Party supposedly ran upon (not to mention what the Republican Party ought to stand for). We already know that Paul Ryan stipulated an increase in the debt ceiling – he has no fundamental aversion to big government, notwithstanding his occasional rhetoric and appearances as a deficit hawk. If he did, he would not have already agreed to engage in the illegal/legal ceiling charade (not to mention his support for the bailouts). So, you have Ryan’s “extreme” plan on the one hand, and the Obama plan (hitting the snake oil train today) on the other with both plans not-so-tacitly assuming an increase in the debt ceiling. Everything else proceeds from here..

The package will be composed of cuts in the rate of growth in spending coupled with small and generally symbolic cuts in some government programs, a tax increase upon both the middle class and, especially, millionaires and billionaires (defined as anyone who earns over $250,000 (:>) ), and an increase in the debt ceiling (which will be illegal before it becomes legal). We will still have roughly 1/2 of the tax filers in this country not paying any federal income tax, while the percentage of total tax revenue coming from the aforementioned millionaires and billionaires will rise.

With this basic blue print of increased taxes, modest spending cuts, and an incresed debt ceiling, the Washington viewed expenditure equation will be “balanced.” How much will the ceiling ceiling be raised? That’s a great question, but last year they engaged in the illegal, then legal, debt ceiling increase charade by tacking on roughly an additional 2 trillion… Given our dire situation, the number I see is an increase in the range $2.5 to $5 trillion. Yes, I realize that is an extremely wide range. But given the differences in Ryan’s plan verses what Obama is trying to sell, the ceiling charade really is the variable here. And this is where Obama will be focusing, in fact he has already shown his hand on this by extending his time frame to 12 years, etc.. Once the ceiling charade is again revisited and adjusted up, the Treasury will then commence to sell this debt. And this is where we get back to the S&P, and will see whether it has even a modicum of follow-through.

For every dollar of additional debt authorized, a commensurate incremental decrease in our credit worthiness is justified – all other things being equal. Such an incremental decrease justifies an increase in the rate of interest others can demand due to an increased risk premium addition. To compensate, we must either increase revenue or decrease our expenditures. The increased revenue and/or decreased expenditures must account for both present commitments and provisioning for future obligations, adjusted for increases or decreases in the cost of our debt. As a general premise, if our expenditures are lowered, and our debt ceiling is kept at its present level, the credit worthiness component (risk premium) of the interest rate we pay will not rise (we maintain our AAA rating). Conversely, if the debt ceiling is raised, then our interest payments will also go up (we have a degraded rating).

It is my observation that interest on our debt (new and already issued) is going to be rising as folks around the world already see our sovereign debt as something other than AAA, so the stipulation to increase the debt ceiling coupled with spending cuts and increased taxes will, at best, be merely an attempt to keep the appearance that our boat will stay afloat (even though listing, with a gaping hole in its side). The increased debt, higher taxes, and modest spending cuts are merely a not-so-elegant rearrangement of the deck chairs in an attempt to refocus attention (ours and other would-be purchasers of our debt) away from the sinking end of the boat, and into the blue sky above.. This adjusting of the balance sheet premised upon MORE total debt to fund current and near term spending will require a higher interest rate to compensate would-be buyers of that new debt. And make no mistake about it, an increase in the debt repayments will result here because rational investors (foreign and domestic private investors) will demand it – and rightfully so. The S&P has essentially given them the green light to demand it merely by virtue of this warning announcement…

And therein lies the issue. If S&P has stated that that the U.S.’s sovereign debt credit rating is in a watch status, and such a watch actually has the potential for a consequence (a 1 in 3 chance of a downgrade), then they should, in view of what both sides in this debate have ALREADY stipulated, lower the U.S. rating immediately upon the agreements reached in this debate – regardless the formula. And the reason is that this whole budget matter is nothing more than a classic Catch-22; a logical paradox that occurs when a person, or a government in this case, wants something (the credit rating that implies confidence for debt buyers to buy at the lowest risk rate available) that can only be acquired by not being in that very situation (increasing total debt); therefore, the acquisition of this thing becomes logically impossible.

Folks, there is only one way out of this paradox. The aforementioned 2 out of 3 must be eliminated from the debate and the solution. The debt ceiling must not be raised under any circumstances, and taxes should actually be lowered across the board and applied to all tax filers. The only rational solution here is to simply cut spending, reform entitlements (meaning phase out Medicare and social security), and dramatically cut the defense budget. Sadly, this is not part of either the Ryan plan nor, of course, Obama’s. Any legislator who supports either plan is betraying the premise upon which they were elected. Tea Party elected members for sure, and any so-called fiscal conservatives. Anyone who suggests, such as Paul Ryan, that the game begins with a continuation of the ceiling charade is not to be taken fully seriously in this matter. The solutions that are now on the table are non-solutions, and the S&P, if it is to have any credibility at all in the future, must lower the U.S. credit rating immediately after the votes on this budget issue are cast – regardless the outcome.

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Lance, I Will Not Sign Your Petition (Part 2)

**continued from Part I**

THE PLEA AND ITS IMPLICATIONS

If I am going to sign up and state, as Lance Armstrong (and many others) asks, that congress mandate “no American should be denied health care coverage (aka health insurance),” does this not mean whomever is providing that coverage is morally (let alone legally) compelled and obligated to give it to me? Or, in the least, to provide it to me for far less than the amount of benefits I am about to either demand or receive? Under what moral code is it right to use force to compel others to sell any product or service to individuals or groups with whom they would otherwise choose not to trade? Or, compel others not receiving the benefits-in fact, not benefitting in any tangible way-to pay far and above amounts needed for their own insurance so that those who do not have it can obtain it at essentially zero cost?

Similarly, if I sign up and state, again, as Armstrong asks: “no American should lose their health care coverage (aka health insurance) due to changes in health or employment,” what exactly does that mean, and where does one get the moral authority to implement such an idea? Does it not imply that whomever provides health insurance (or health services) ought to be legally obligated (again, by force) to give me insurance or medical care regardless of how I may have lived my life, the risks I have undertaken, the unhealthy life I may have led?

The implications here are that society will be acknowledging that anything goes as far as your lifestyle is concerned, and you need not worry as someone else (society) will be paying for the consequences of your lifestyle choices. As a society, we would be compelled by force to tacitly approve of any and all modes of living – condoning a whole host of behaviors that we currently find abhorrent and would never subsidize or purposefully promote by removing the financial component of such behavior’s health risk.. Read the rest of this entry »

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Lance, I Will Not Sign Your Petition (Part 1)

Lance Armstrong has an email petition going around the internet, perhaps you have seen it.

He states that:

“Too many cancer survivors today are denied new coverage or have their current coverage revoked when they need it most. This is inexcusable and must change. We demand that any healthcare reform bill passed by Congress address these urgent problems and include the following:

No American should be denied health insurance coverage because of pre-existing conditions.

No American should lose their insurance due to changes in health or employment.

Maybe you have jumped on board and signed your acknowledgement and agreement, perhaps you have not. Notwithstanding my deep admiration for Lance Armstrong, I for one have not, and will not, sign.

In what follows, three parts in total, I hope to explain fully why.

Today is October 5th, 2009, and this date is special as it vividly reminds me of the summer of 1970-the last summer my father and I fished together, the last tournament I caddied for him in local tournaments, the last summer where he would join my scout troop on outings. That summer also marked my first trip to see a PGA Tournament: The U.S. Open at Hazeltine National. We were a golfing family, and for my dad and I to walk together in Arnie’s Army, marvel at the power and finesse of Jack Nicklaus, and witness a fiesty European beat them both while munching Hazeltine’s famous hot dogs on a warm summer day was more than just fun and special. It was a great day.. And such is my last vivid memory of my father.

Read the rest of this entry »

GM and Government Schools

I have an answer to the question posed byAndrew Napolitano, look to a model already fully in place: government monopolized education.

The question posed by Judge Napolitano in part 3 of yesterday’s Freedom Watch was, what will happen when people choose not to buy GM cars and, instead, choose to buy higher quality Fords? Or Subarus, or Nissans, etc? The judge is correct that they will tilt the playing field as time goes by, but what these market interventionists will eventually do is either tax companies who are not owned by the government much further so that they have to raise their prices (making the cheap and tawdry GM products more appealing to the mentally lowest common denominators in society), OR simply do what has been done in education – it is the obvious route.

How would that manifest? Well, in the socialistic, altruistic, minds of these tinkerers it isn’t fair that some people can buy an expensive SUV (think high quality private education or home school) or souped up sports car while many others have no car at all. Worse still is the very idea that manufacturing a “green” car results in a product that is too expensive for most to consider purchasing. Everyone is entitled, it is a basic right, so they will say, to the essential need of individual (and green) transportation – green cars will be an essential need and a right. And the government car company, Green Goverment Motors (GGM), will be the primary supplier. Oh, you’ll be able to buy a Ford or a Subaru, but you will pay a huge transportation tax (essential need #4 tax – think school portion of your property tax) whether you buy a GGM auto or not.

Cars, since they are a basic need, will be given out free to people who comply with the No Driver Left Behind Act (already in the works, authored by Barney Frank) – and GGM will become the largest cesspool of socialist planning on the face of the earth…

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Read My Lips …

h/t to Brietbart

picture-archive-527

“I can make a firm pledge,” Obama said in Dover, N.H., on Sept. 12, 2008. “Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

He repeatedly vowed “you will not see any of your taxes increase one single dime.”

Now in office, Obama, who stopped smoking but has admitted he slips now and then, signed a law raising the tobacco tax nearly 62 cents on a pack of cigarettes, to $1.01. Other tobacco products saw similarly steep increases.

Apparently, what constitutes a tax increase is merely in the eye of the recipient…

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Eventually We Have To Do The Right Thing

Personally, I find MSNBC to be an abomination. However, this interview between Peter Schiff, Joe Scarborough, Mike Barnacle, and the lovely Mika Brzezinski (along with another character whom I do not recognize) was spot on. Peter lays out a clinical discussion and explanation of where we have come, what we should do, and why, eventually, we will have to do it.

Of course, to the capitalist-minded amongst us and, particularly, those out here who may have taken my admonition to study Dr. Reisman’s 1000 page opus, Capitalism, none of what Peter argues is honestly debatable or unrecognized. Schiff’s commentary regarding Keynes is tart, bold, BUT precise.

Peter speaks rather quickly, so let me briefly point out the four key points he states are necessary to right the economy and thereby not send us down the bubble path once again – only to face a far far more devastating outcome.

1. Contract government at all levels: Federal, State, and Local.

2. Restore sound money (this implies a modern metal standard, or in the least allowing a metal to compete with fiat currency).

3. Higher, not lower, interest rates are needed immediately. The effect of this will incentivize savings relative to consumption because of the interest returns relative to other investments and, especially, consumption.

4. Allow companies to fail and thereby deal directly with the consequences of the fundamental actions that brought about the failures, particularly Federal Reserve policy.

h/t to Lew Rockwell

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