The economy is in shambles, unemployment is at a twenty-six year high, the stock market fluctuates wildly with every new headline and Congressional approval is at its lowest point in decades. So why doesn’t the Federal government appear to “get it”? Since Barack Obama took office, there isn’t one thing that his administration or this Congress has done that makes sense in these difficult times. People are baffled as to why Democrats are still pressing for healthcare and climate legislation that would be difficult for a healthy economy to absorb and that is counterintuitive to any meaningful action that should be taken in a distressed economy.
The Republican’s claimed a victory in the recent gubernatorial races in New Jersey and Virginia when if fact, they have no right to that claim. The latest polls indicate that neither Party has gained favor with the American people and the grass roots have adopted a “throw the bums out” attitude that will permeate the political landscape in 2010. Chris Christie and Robert McDonnell did not win because they were Republicans; they won because even though they had both held political jobs in the past, their most recent positions were as US Attorney for Chris Christie and as Virginia Attorney General for Robert McDonnell, which effectively distanced them from the body politic.
Neither the Bush nor the Obama Stimulus plans have yielded measurable results even though both had taken different directions. The Bush administration issued payments directly to taxpayers to stimulate the consumer market while the Obama plan targeted Cities and States to boost public work projects. While the payments were directed at different segments of the economy they both had the same result, or lack of results, because the private and public sectors have something sadly in common. They are both in debt up to their eyeballs. The stimulus money received by taxpayers had been used for the most part, to pay off old debt. Credit cards and other consumer debt was what was most on the mind of the recipients. Similarly, the Obama payments to States and Cities went largely to close budget gaps created by shrinking tax revenues. That is why the administration had to shift their measure of success from job creation to how many jobs were saved, something that no one believes because it is impossible to prove.
Worse yet, is that the Federal Reserve began printing money equal to the amount of the Stimulus bill in spite of promises that they would not monetize the debt. That has already caused a 17% devaluation of the dollar that has many of our foreign creditors deeply concerned as American debt continues to rise. Candidate Obama spoke harshly about the $460 billion dollar Bush budget deficit while President Obama, proposed and passed a $3.6 trillion dollar budget which has ballooned his budget deficit to a record breaking $1.4 trillion dollars. Americans are well aware that this insanity cannot continue yet that epiphany somehow has not yet reached the collective consciousness of the members of Congress.
The President and the Democrats in Congress continue to push legislation for both healthcare reform and the climate that will place incredible strains on an already suffering economy. The employer mandates and taxes threatened by these two bills has placed the job market in a stall as employers wait to see what they will have to face before they will commit to anything that may increase their liabilities. It is in fact, the Federal government that has created this recession. The collapse of the banking industry has its roots in the Clinton administration when banks were forced under penalty of law to make high risk loans to low income families to bring “fairness” to home ownership. These loans would eventually fail just as the banking industry warned they would and now the Fed is punishing banks for engaging in risky business practices.
The fact is that the government can only create jobs by reducing the tax burden on business and by getting out of the way of the people that actually create the jobs. The Federal government is charged with regulating interstate commerce however, the definition of “regulation” at the time of the drafting of our Constitution was not to license, tax or control business, it was to “make regular” the interaction so that business dealings were uniform across state lines. While none would argue the need to extend regulatory control to insure public safety, every other regulation and tax placed on business has been little more than an impediment to the economic engine that drives this nation.
Healthcare reform promises an 8% payroll tax and a millionaire’s tax of an additional 5% to pay for portions of this massive government takeover of the healthcare industry. This has had the net effect of a nation-wide hiring freeze until businesses are sure the bill is dead and they are safe. Ironically, just as the Fed created the banking crisis, they also created the healthcare crisis. It is Federal prohibitions that prevent healthcare insurers from competing across state lines and that his strangled competition. The Fed also prevents small business from enjoying the same tax breaks for providing healthcare that large companies do. Could that be because large companies are unionized and in many cases, it is the unions that create the healthcare group and are paid to administrate it? We know that unions pay an awful lot of money to political parties and candidates; the same parties and candidates that keep the restrictions on healthcare in place. Those restrictions keep the cost of insurance high and make unions and union healthcare plans look very attractive to non-union workers.
The cost of healthcare insurance is also deeply affected by the reimbursement rate of Medicare and Medicaid to healthcare providers. Medicare reimbursement for services is between 70% and 80% of the billed amount. Medicaid is even lower. As hospitals and doctors struggle with the government induced shortages, those costs are eventually shifted to patients with private insurance as their budget issues force prices even higher. As insurance sees higher costs, they must raise premiums. The insurance company profits Democrats quote only seem high because they represent the accumulated profits of a multitrillion dollar industry. The bottom line for healthcare insurance companies are actually around 3% which is hardly considered a windfall in anyone’s book.
The frightening part is that the top 1% of income earners that Obama keeps targeting are actually wealthy enough that they really don’t have to play the redistribution game if they don’t want to. Stocks sales are volatile but hardly robust as once again, potential investors are waiting to see how much of their money they will actually get to keep. They could easily retire very comfortably on what they have and move to a country where the weather is pleasant, the dollar is stronger and the political winds aren’t blowing at hurricane force against them. We are already seeing a “tax exodus” from New York, New Jersey and California as the rate of taxation rises on the “wealthy”. If they would leave a State, is it really inconceivable that they would leave the nation if our fiscal policies towards the wealthy continue to turn from pestilent to confiscatory? If they do, who would the “top 1%” be then?
We are at a crossroads in American culture. The so-called progressive tax structure has created a condition where 47% of the people in this country pay no taxes at all. A portion of that 47% actually receive an “earned income credit” which is nothing more than the forced payment of money from one group of Americans to another and many have no idea where this money comes from other than the government. The Democrats have spent nearly the last hundred years pitting the poor against the wealthy in this country and our immigration policies see to it that the poor in this nation continue to grow in number. Once the number of taxpayers drop below 50%, the poor will have the political might to keep those in power that will finish their work of emptying the treasury to subsidize ever growing portions of the population, eventually forcing our nation into socialism or worse.
Paul
The Republican’s claimed a victory in the recent gubernatorial races in New Jersey and Virginia when if fact, they have no right to that claim. The latest polls indicate that neither Party has gained favor with the American people and the grass roots have adopted a “throw the bums out” attitude that will permeate the political landscape in 2010. Chris Christie and Robert McDonnell did not win because they were Republicans; they won because even though they had both held political jobs in the past, their most recent positions were as US Attorney for Chris Christie and as Virginia Attorney General for Robert McDonnell, which effectively distanced them from the body politic.
Neither the Bush nor the Obama Stimulus plans have yielded measurable results even though both had taken different directions. The Bush administration issued payments directly to taxpayers to stimulate the consumer market while the Obama plan targeted Cities and States to boost public work projects. While the payments were directed at different segments of the economy they both had the same result, or lack of results, because the private and public sectors have something sadly in common. They are both in debt up to their eyeballs. The stimulus money received by taxpayers had been used for the most part, to pay off old debt. Credit cards and other consumer debt was what was most on the mind of the recipients. Similarly, the Obama payments to States and Cities went largely to close budget gaps created by shrinking tax revenues. That is why the administration had to shift their measure of success from job creation to how many jobs were saved, something that no one believes because it is impossible to prove.
Worse yet, is that the Federal Reserve began printing money equal to the amount of the Stimulus bill in spite of promises that they would not monetize the debt. That has already caused a 17% devaluation of the dollar that has many of our foreign creditors deeply concerned as American debt continues to rise. Candidate Obama spoke harshly about the $460 billion dollar Bush budget deficit while President Obama, proposed and passed a $3.6 trillion dollar budget which has ballooned his budget deficit to a record breaking $1.4 trillion dollars. Americans are well aware that this insanity cannot continue yet that epiphany somehow has not yet reached the collective consciousness of the members of Congress.
The President and the Democrats in Congress continue to push legislation for both healthcare reform and the climate that will place incredible strains on an already suffering economy. The employer mandates and taxes threatened by these two bills has placed the job market in a stall as employers wait to see what they will have to face before they will commit to anything that may increase their liabilities. It is in fact, the Federal government that has created this recession. The collapse of the banking industry has its roots in the Clinton administration when banks were forced under penalty of law to make high risk loans to low income families to bring “fairness” to home ownership. These loans would eventually fail just as the banking industry warned they would and now the Fed is punishing banks for engaging in risky business practices.
The fact is that the government can only create jobs by reducing the tax burden on business and by getting out of the way of the people that actually create the jobs. The Federal government is charged with regulating interstate commerce however, the definition of “regulation” at the time of the drafting of our Constitution was not to license, tax or control business, it was to “make regular” the interaction so that business dealings were uniform across state lines. While none would argue the need to extend regulatory control to insure public safety, every other regulation and tax placed on business has been little more than an impediment to the economic engine that drives this nation.
Healthcare reform promises an 8% payroll tax and a millionaire’s tax of an additional 5% to pay for portions of this massive government takeover of the healthcare industry. This has had the net effect of a nation-wide hiring freeze until businesses are sure the bill is dead and they are safe. Ironically, just as the Fed created the banking crisis, they also created the healthcare crisis. It is Federal prohibitions that prevent healthcare insurers from competing across state lines and that his strangled competition. The Fed also prevents small business from enjoying the same tax breaks for providing healthcare that large companies do. Could that be because large companies are unionized and in many cases, it is the unions that create the healthcare group and are paid to administrate it? We know that unions pay an awful lot of money to political parties and candidates; the same parties and candidates that keep the restrictions on healthcare in place. Those restrictions keep the cost of insurance high and make unions and union healthcare plans look very attractive to non-union workers.
The cost of healthcare insurance is also deeply affected by the reimbursement rate of Medicare and Medicaid to healthcare providers. Medicare reimbursement for services is between 70% and 80% of the billed amount. Medicaid is even lower. As hospitals and doctors struggle with the government induced shortages, those costs are eventually shifted to patients with private insurance as their budget issues force prices even higher. As insurance sees higher costs, they must raise premiums. The insurance company profits Democrats quote only seem high because they represent the accumulated profits of a multitrillion dollar industry. The bottom line for healthcare insurance companies are actually around 3% which is hardly considered a windfall in anyone’s book.
The frightening part is that the top 1% of income earners that Obama keeps targeting are actually wealthy enough that they really don’t have to play the redistribution game if they don’t want to. Stocks sales are volatile but hardly robust as once again, potential investors are waiting to see how much of their money they will actually get to keep. They could easily retire very comfortably on what they have and move to a country where the weather is pleasant, the dollar is stronger and the political winds aren’t blowing at hurricane force against them. We are already seeing a “tax exodus” from New York, New Jersey and California as the rate of taxation rises on the “wealthy”. If they would leave a State, is it really inconceivable that they would leave the nation if our fiscal policies towards the wealthy continue to turn from pestilent to confiscatory? If they do, who would the “top 1%” be then?
We are at a crossroads in American culture. The so-called progressive tax structure has created a condition where 47% of the people in this country pay no taxes at all. A portion of that 47% actually receive an “earned income credit” which is nothing more than the forced payment of money from one group of Americans to another and many have no idea where this money comes from other than the government. The Democrats have spent nearly the last hundred years pitting the poor against the wealthy in this country and our immigration policies see to it that the poor in this nation continue to grow in number. Once the number of taxpayers drop below 50%, the poor will have the political might to keep those in power that will finish their work of emptying the treasury to subsidize ever growing portions of the population, eventually forcing our nation into socialism or worse.
Paul
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