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August 2010 Archives

August 1, 2010

Tax Increases vs. Spending Cuts

As the WaPo and the Grey Lady blur into sameness, here's this lead editorial from yesterday's WaPo about our dire financial condition:

"Under the realistic budget scenario, to keep the debt to GDP ratio stable over the next 25 years would require immediate and permanent tax increases or spending cuts of about 5 percent of GDP. That is a significant amount, equivalent to about one-fifth of all non-interest government spending this year."

Today's NY Times' lead editorial on the same topic is decidedly anti-Republican, but concludes thusly:

"[T]here is no way to fix the nation’s fiscal crisis without higher taxes now and in the future — and cuts in entitlement programs down the road."

So here's a little civics quiz: Given the choice between a cut in government spending equal to 5% of GDP or tax increases of the same magnitude, which do you think Congress will choose...?

When the Government Runs a Business, Part III

The lead editorial in today's WaPo entitled, "Low Voltage" is carping about the massive government subsidies steering folks toward electric cars, specifically that electric cars will be a drop in the energy bucket and a windfall to the rich to boot.

Aside from the fact that Uncle Sam put up some $150 million to create some 350 jobs (you do the math), the rush to electric cars ignores two basic facts:

First, you can't un-do the law of supply and demand. If by some miracle the country switched to electric cars, then the price of gas would plummet and the price of electricity would soar. This, of course, would send people stampeding back to gas-powered cars.

Second, where do people think the electricity comes from that will power all these electric cars? From coal-powered plants, of course. So while enviros' consciences may be clear as they quietly putter down the highway in the slow lane, praying that the battery lasts 'til the next outlet, they will likely leave a carbon footprint behind that that wold exceed even Al Gore's.

As the Obama Administration continues its social engineering - chasing the latest "it" technology - they should keep in mind that when it comes to energy, there's no free lunch - or free ride.

August 2, 2010

Alvin Lee on the Tax Cuts

The debate over Obama's and the Dems' planned tax increases on the 50% of those who are still paying taxes reminds one of that great policy mind and tax expert, Alvin Lee of Ten Years After.

In "I'd Love to Change the World," he wrote:

"Tax the rich, feed the poor, 'til there are no rich no more."

Arthur Laffer, in a great Wall Street Journal op-ed today - quotes JFK as saying,

"Tax reduction thus sets off a process that can bring gains for everyone, gains won by marshalling resources that would otherwise stand idle—workers without jobs and farm and factory capacity without markets. Yet many taxpayers seemed prepared to deny the nation the fruits of tax reduction because they question the financial soundness of reducing taxes when the federal budget is already in deficit. Let me make clear why, in today's economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarged the federal deficit—why reducing taxes is the best way open to us to increase revenues." (Emphasis mine)

Says Laffer, "Anyone who is familiar with the historical data available from the IRS knows full well that raising income tax rates on the top 1% of income earners will most likely reduce the direct tax receipts from the now higher taxed income."

These tables showing tax receipts, would seem to support Laffer's view, as the years 2005-2008 show the highest tax receipts.

Peter Morici, in today's Baltimore Sun, adds, "Raising taxes now would kill the economic recovery, push unemployment well above 10 percent and boot the real problem, runaway spending, to President Obama's successor." Morici asks, "Why do we want to discourage successful people from keeping their wealth in the U.S. and creating jobs?"

Add to this today's AP story, "As spending by wealthy weakens, so does economy," and anyone who cares about the health of our fragile economy should be worried about the prospect of Obama's tax-raising scheme.

Don't believe me? Ask Alvin Lee.

Newsweek Chooses the Future, Sells to 91 year-old Man

Buffeted by declining readership and advertising dollars - and generally being seen as a lefty organ - Newsweek was put on the block by its owner, the Washington Post. After a protracted process, the news broke tonight that he WaPo has picked 91 year-old Sidney Harman, husband of Rep. Jane Harman (D-CA), as the winning bidder for the big prize. (Who the hell was the other bidder, Methuselah?)

What better way to show that they are geared to a long horizon, to many, many years of future growth than by picking a nonagenarian to take the helm? While the new media world mints new 20-something millionaires by the day, the WaPo went retro on us, thumbed their collective noses at youth and picked a guy who's been collecting Social Security since Mark Zuckerberg was in diapers. A darned risky pick, but one sure to bring in the centenarians by the score.

Bravo, WaPo!

August 5, 2010

Who on earth could vote against Kagan? Ask Obama

As Elena Kagan is confirmed as the fourth woman to serve on the court (the greatest President, a Republican, nominated the first), Obama has been fond of condemning Republicans -- and even Democrats - who are posed to vote against her, expressing bewilderment and outrage. Yet Obama, in one of the few controversial votes he took during his brief turn in the Senate, managed to vote against both John Roberts and Samuel Alito. But the press likes to give him a pass on all that.

So the next time Obama expresses surprise or indignation over how anyone could vote against a Supreme Court nominee, maybe someone should ask him to shed light on it, as he was in the minority that did exactly that.

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About August 2010

This page contains all entries posted to Pat Cleary.com in August 2010. They are listed from oldest to newest.

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