Saturday, November 13, 2010

Nothing Sure But Debt and Taxes

In tough economic times, nothing is more important than presidential leadership, intelligence, and decisive policy-making. Unfortunately, as Barack Obama continues to demonstrate, we're currently stuck getting "none of the above."

The alleged president is currently meeting with world economic leaders, who are hugely steamed that Mr. Obama is deliberately devaluing our nation's currency to try to increase the sale of goods to foreign countries and reduce the real value of money owed to lender nations like China. And, oh yeah, it also reduces the value of every dollar bill that Americans have tucked into savings accounts, retirement accounts, or (since 2008) mattresses.

This follows hard on the heels of Mr. Obama's botched trade mission to South Korea, in which he made certain demands which the South Koreans were unprepared to meet because they hadn't been informed ahead of time, and so couldn't study the repercussions of the proposed U.S. policy. Oops!

Meanwhile, there seems to be a meaningful communications gap between the president (in Seoul) and his Whitehouse staff. David Axelrod announced that Mr. Obama would drop his demand to raise taxes on small businesses and the wealthy...but now, the president is denying this and saying that the matter must still be debated. But, um, not now...because he's out of the country.

Which means that in an economy which is begging for any kind of direction or certainty, the president has assured that not a single American knows what his tax rate will be just 7 weeks from now. Nor does any business...which is why they're afraid to hire, afraid to buy equipment, and afraid of this president.

There is, however, an upside to Barack Obama's indecisiveness. Because when he does make a firm's predictably wrong.



John the Econ said...

There simply can be no significant "recovery" until those (who are left) in the free market are convinced that the government is done meddling in the economy, and can form and execute cogent business plans. This simply isn't possible when the short and long term costs of capital, labor, and taxes are wildly fluctuating unknowns.

But like I've said here before, I'm not sure that this president even wants a "recovery". 2% growth, 10% unemployment, and now inflation is the best we can expect.

When America's first true Socialist/Marxist president gets lectured by the socialist and communist states of the world that his economic agenda is simply too radical, you simply have to shake your head and wonder.

Meanwhile, he's going full-steam-ahead to screw those who still honestly believe that only "the top" are going to be paying higher taxes. Purposely inflating the currency is a tax that not only hits absolutely everyone, but hits the "poor" and middle class absolutely the hardest. But Obmama and the Progressives know that most of them are too economically illiterate to ever figure that one out, for now anyway.

Anonymous said...

The simple fact is this. This clown has been a moron since the day the left wing socialist democrat elected the fool, however what we are now faced with due to their bad judgement is a 12T debt that has to be paid for, so anyone that gets in will be hated; since there will have to be cuts to many program WITHOUT raising taxes. This is going to be a chore since the left wing parasite on the dole are the onew who AWAYS vote for those who will not take their free rides on the back of the America tax payer away. IMHO, I they should NOT raise taxes at all but again reduce them however I'd cut ALL those who are on welfare, stop all medical to those without insurance, deport all illegal aliens by midnight tonight, employ contractors to take out all gang banger,all non-essenial programs would be abolished, but there would be no increase cost to the American tax payer. Then I would make it so the government could never spend more then they had CASH to pay for. If they can't run the government of a fixed balanced budget, then get rid of those who can't do their job.

Suzy said...

Anonymous for President!

Stilton Jarlsberg said...

John the Econ- Very well put. And as you point out, one has to wonder if this state of affairs isn't Obama's actual goal.

Anonymous- The only way to save this country from the staggering debt is by making huge cuts (many of which you listed above) which will be very unpopular with the electorate. For example, as much as we hate to think of all the money we've personally poured into Social Security over the years, we'd support the program being cut in its entirety - for everyone - along with an announcement that all the money in the "lockbox" was stolen years ago by politicians in both parties. It's gone. Vanished. The program is not simply "pining for the fjords" - it's dead.

But who will have the political courage to do this - and to live with the very visible repercussions?

Suzy said...

Unfortunately the country has been brainwashed to believe that some of these social programs are some sort of "unalienable right" and it would be nearly impossible to get the people back to self-support and self-reliance, which is the way it should be.

Its possible though...families taking care of families and raising a new generation of self-reliant people who can rise up and make the country profitable again.

Won't happen.

Stilton Jarlsberg said...

Suzy- Good points! And one of the things that Americans need to relearn is that they aren't entitled to any "unalienable right" which costs someone else money. And that will mean huge societal changes.

And while you say it "won't happen," we think that it will - not because politicians will enact the needed laws and make the needed cuts, but because Americans will be forced into relearning self-reliance when the current system collapses...which could be any time now.

Anonymous said...

for what it's worth ..... I see it as a form of conflict of interest for those getting a government paycheck (that covers welfare, too) to be allowed to vote. rather than vote for the good of the country, those people will tend to vote (almost 'en bloc') for the party which will increase their pay/benefits.

moronpolitics said...

What hurts investment is uncertainty. If the government said there would be a 20K cash charge for each and every new hire business put on, but that all other tax programs would stay exactly as is for the next 5 years HIRING WOULD BEGIN IMMEDIATELY. Companies pay several times that to head hunters all the time.

Stilton Jarlsberg said...

moronpolitics- The "uncertainty" factor is huge. Because apart from playing games with taxes, or trying to get rid of entitlements, the biggest potential savior of the economy would be a growing business climate with more employment - sometimes called "growing the pie." And it's that uncertainty you've mentioned that is keeping that from even potentially happening. If businesses can't plan for specifics, then the only responsible thing they can do is plan for the worst. Which, in turn, causes the worst to happen.

John the Econ said...

I'd be more than happy to surrender any claim on the money I've had taken from me to be poured into the black hole that is "Social Security" if it meant that I would no longer be made to "contribute" to it. The 15% of my income that is taken in the name of receiving a negative rate of return after inflation could be much better invested on my own.

The only "certainty" of investing now is that there are hundreds-of-thousands if not millions of statists looking for ways to loot me with the state's help. Until we restore rule of law to protect individuals from the looters, we will continue our slide to banana-state status.

Anonymous said...

It's been mentioned before that anyone whose sole source of income is the government shouldn't be permitted to vote. I go along with that most definitely!!


Suzy said...

It would be an interesting experiment to make a flat tax across the board...and then anyone not paying taxes would not be allowed to vote. That would mean no illegals and nobody finding loopholes. Everyone pitches in (flat tax) so everyone helps vote.

Stilton Jarlsberg said...

John the Econ- I suspect you must be self-employed to be paying that rate (the same as your own humble Stilton, who has paid the "double" self-employed rate forever). And I, too, would kiss Social Security goodbye if A) I wouldn't have to pay into it anymore and B) it was cut off for everyone, not just those of us who have paid our share and also tried to save for the future.

Anonymous & Suzy- It's fascinating to think about the limits that could or should be put on voting. It used to be that only property owners could vote. Robert Heinlein suggested that only people who had served in the military should be able to vote.

The egalitarian free-for-all we currently have is clearly not working, because too many "Peters" are voting to rob "Paul." And we're not sure what the best replacement would be, but we like the idea of stripping the vote from anyone who either doesn't pay taxes, or whose primary source of income is the government (which includes politicians, federal, and state workers).

Judges, including brand new Supreme Court justices (ahem) recuse themselves when there's a conflict of interest; anyone who is living off the government has such a conflict, and should be excluded from the decision making.

irjsiq said...

"We The People", since we have the most to lose by and with continued Washington D.C. continuing mismanagement, must begin to 'wean' ourselves away from Washington D.C.!
Government knows only Spend! Not Save!!
Wall Street has forgotten it's purpose, which is/was "To Facilitate the Growth of Wealth"; not, as seems the current Wall Street Axiom: That ALL the 'Bucks' STOPS in Wall Street; and Stay in Wall Street!"
"We The Peoples" Washington D.C. representatives, adding Billions and Billions of Dollars from "We The People" to Wall Street's already 'munificent coffers'!

Roy J Stewart,
Phoenix AZ

P.S. I would Accept a 20% reduction in my Social Security Check IF My 20% is matched by "We The Peoples'" elected office holders in Washington D.C.; reducing their 'self-voted' Pay and Pensions by at least 20%!
Roy J

Angry Hoosier Dad said...

I've read all the above comments and all I can say is: Obama's so smart and clean and articulate. Isn't that enough for you bunch of racist haters? Now shut up and get back in line. Serfdom is this way.

John the Econ said...

Stilton, from the economists point-of-view, everybody pays the 15% rate. Wage earners are only fooled into thinking they are only paying 7%, just as they are fooled into thinking that an employer paying for their health insurance is "free". The employer considers the half that he/she pays as part of the benefits that make up the total cost of employing an individual.