The Folly Of The Fiscal Cliff

Fiscal Cliff Grand Bargain Creative Commons Photo credit DonkeyHotey The Folly of the Fiscal Cliff

Americans have been exposed to a plethora of misinformation, prevarication, and spin artfully concocted by the Obama administration and its more-than-compliant media accomplices in the last four years. They have changed the Ten Commandments into the Ten Suggestions and the United States Constitution into a guideline to follow if it suits the agenda. America is so far gone and beyond repair that nothing happens in Washington unless it benefits the Democrat Party in general or the Obama regime specifically. Never before in our 238-year history as a representative republic have we been so polarized and divided.

Economic laws and mathematical axioms have been rendered meaningless as if gravity only exists if Barack Obama says it exists. He might have actually believed his own rhetoric when he said he could stop the rise of the oceans and heal the planet. Malignant. narcissistic. pathological behavior creates delusions such as a god-complex that actually creates its own reality. There is no longer right or wrong; only the moral relativism of the one in control matters. And Barack Obama is still in control of this country for four more years, if we survive that long.

The biggest folly going on in Washington D. C. right now is the sudden urgency to avoid the “fiscal cliff” by raising taxes on ‘those fortunate few’ who are most able to afford it, as the esteemed Senator Majority Leader Harry Reid keeps reminding us. O.K., Harry, we’ll take you at your word (although I can’t really tell you why) and tax the upper 1% of earners at a 99% tax rate for anything over $250,000. That would raise about $80 billion a year — enough to last about 8 days the way these spendthrifts are throwing it away. What do we do for the other 357 days of the year?

Two points: 1) Why don’t we ever hear about spending cuts and only hear about tax increases disguised by code-words like ‘revenue enhancement’? 2) How many people making $250k are going to keep working if they get taxed at 99%? Hint: Read Atlas Shrugged by Ayn Rand if you don’t know the answer. Soon, all the producers in this country are going to be going on strike. The moochers and the looters are going to have the wagon they are riding on pulled out from under them.

There is so much misinformation about economics. Either the Onion had it right when they listed “The 100 Worst Senators” in one of their typically sarcastic columns, or we are getting our legs urinated on by politicians who are then telling us it is raining. Or both. The Washington politicians are either unanimously, incompetent, or disingenuous (or perhaps a little of each.)

Where should a little Washington D. C. Economics 101 as it relates to the fiscal cliff begin? Let’s begin with the  chapter on the Laffer Curve. For those uninitiated, Art Laffer was sitting at a table discussing taxes and tax rates during the Reagan era when he wrote a graph on a napkin that became an economic axiom.

Picture a big “U” laying sideways with the two open ends on the left side of the graph. The vertical axis represents the tax rates, from zero at the bottom to 100% at the top. The horizontal axis represents the amount collected by the government, with zero at the left (or the intersection of the axes). The maximum tax collected begins to diminish at approximately a 50% tax rate because people are not going to work their butts off and then send most of their earnings to Washington, DC when the tax rates get too high. Somehow, this escapes the politicians, who either don’t know, don’t care, or just enjoy using the heavy hand of socialism to extract as much as they can from the private sector and call it “social justice” or “fairness.”

Next, in his excellent “Economics in One Lesson” (originally published in 1946), Henry Hazlitt dedicates his first lesson applied to Frederic Bastiat’s broken window fallacy, first described in 1850. This theory explains why high taxes, government subsidies, tariffs on imports, and so-called “stimulus programs” such as the American Recovery and Reinvestment Act of 2009 (an $831 billion boondoggle and payoff to cronies and selected democrat faves) are pure sophistry. They sound good but actually make the economy worse when the unintended consequences kick in.

In the broken window fallacy, a hoodlum heaves a brick through the window of a baker’s shop. The shopkeeper furiously chases the vandal but doesn’t catch him. After the initial shock, there comes a reflection by those in the gathering crowd that through the misfortune, at least the glazier can increase his business by fixing the broken glass. Say it costs $250 to fix. That will provide much needed income for the glazier; and in turn, he can share it with other merchants and vendors. This can go on and on. It seems like an additional $250 was put into the economy and recirculated many times. That money would not have been there if the window had remained intact. Was the little hoodlum a public benefactor instead of a menace? Not so fast. Because he has to dip into his savings to fix the window, the shopkeeper can no longer afford to purchase the suit he was going to buy from the local tailor. And the tailor had planned on using some of that money to buy groceries and other items. Thus, the grocer and the other vendors were also victims of the hoodlum by virtue of their lost income.

How is this relevant to today and the government? Contrary to popular belief, the government has no money of its own. To get it, either the government must take money away from individuals in the private sector, print it and thereby devalue the fiat money, or borrow it by selling bonds or treasury bills, which then pushes out the responsibility to pay it back onto future generations. Those are the only options — tax it, print it, or borrow it. The bad news is that those options are all destructive to the economy. And what, you might ask, is positive to the economy?

To the entrepreneurs and risk-takers, those who understand economic realities, the magic word that benefits the broader society is simply – profits. Public works jobs might also create jobs, but at the detriment of the taxpayers. And who do you think would be most judicious with the money: the job creators or the government?

How is all this related to the “fiscal cliff folly”? How much good is going to be done to society by taking more from the ‘makers’ and redistributing it to the ‘takers’? If tax rates are raised, where is the net benefit: the private or public sector? And if it is the public sector, what are the unintended consequences?  These questions need to be answered.

America does not have a tax problem; it has a spending problem. Flatten and lower the tax rates, cut out the loopholes, and watch the economy take off again. Put that together with massive spending cuts, done by eliminating or sunsetting everything that is not ‘enumerated’ in the Constitution as a federal government responsibility; and there will be a quick, possibly even deep recession for a couple quarters followed by something that happened during the 1980’s under Reagan. Jobs, prosperity, and wealth creation. Profits. Tax revenue. Growth. Wealth is a good thing – as long as it is in the private sector and not the government sector.

Next up are some ideas on spending that will make the fiscal cliff folly even more avoidable and how using an axe instead of a scalpel on the federal budget is the right way to proceed. That budget, incidently, has been AWOL and non-existent for 4 years. I’ll close with the wise words of my mentor, Jim Rohn: “We need lots of powerful long-range goals to help us past our short-term obstacles.”


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Can America Handle The Truth?

Obama Truth Slips Away SC Can America Handle The Truth?

The United States of America is at a tipping point. It is past time we are told the truth and begin to solve the problems. The time for false hopes, hugs, and feel-good can-kicking is over. The talk is all about the ‘fiscal cliff’ and whether or not we can figure out a bipartisan solution to the economic realities that are going to happen sooner rather than later. The Benghazi scandal and the true motives of abandoning our own brave Americans in a time of need are undergoing a huge whitewash. The number of Americans on food stamps is at a record-breaking high of nearly 50 million and growing. The number of Americans who are un- or under-employed is now at 23 million, and the statistics are always shaded to favor those in power. When ObamaCare kicks in fully beginning now (after the election – how convenient), it will be exposed as the most dishonest 2700 pages of bull excrement that has ever been passed by our Congress; and that is a very challenging order. That bill alone will send us off into fiscal collapse. But can America handle the real truth, the whole truth, and nothing but the truth?

If the phony stimulus and fiat money counterfeiting schemes by Helicopter Ben Bernanke and his equally culpable cronies at the Fed were not allowed to influence the GDP, we would realize that we have been in a depression (not even a recession) for the last four years. Reality check: we have been lied to about the severity of our economic situation. Both parties are culpable. We have been serially deceived and now-addled dopers addicted to the drug of debt heaped on future generations. We cannot continue to borrow our way out of debt any more than a person can drink themselves sober. Yet, we continue to ignore reality. The truth, unlike the political agendas of all politicians, has no agenda. It is what it is. And yet we are continually bombarded with misleading data from the ruling class and their compliant hacks in the media. This is simple high school math, not politics. When exponential spending is happening faster than revenue growth, a fiscal dead-end is just around the next curve in the road. Reality also is what it is.

Americans are polarized and divided as never before in the 236 year history of our republic. We are now the Blue States and the Red States, contrary to Barack Obama’s promise to the country as he stood before us in Chicago’s Grant Park and accepted the majority decision of the electorate who chose him to be our 44th president. For a brief moment in time, even those of us who did not vote for him listened and hoped as his words attempted to bring us all together as Americans. Remember how he told us he would stop the ocean’s rise and heal the planet? Remember how he portrayed himself as the great uniter of all people?

“There is not a liberal America and a conservative America. There is a United States of America. There is not a black America and a white America, a Latino America, an Asian America; there is a United States of America. “I don’t want to pit Red America against Blue America. I want to be the president of the United States of America.”

Those words have been shown to be only meaningless hollow political rhetoric, something we have become accustomed to so often in the last four years. Yet, somehow this radical revolutionary has managed to convince over half the electorate that he deserves another four years to ‘fundamentally transform’ the country. He never intended to unite us; he intended to force upon us his vision of social justice and collective salvation. His vision of America is the exact opposite of our founders and the authors of the Constitution. He hides the truth because if it were exposed, he wouldn’t get 30% of the vote. He is a pathological prevaricator because that is the only way he can survive.

For those who don’t understand the true meaning of his coded phrases, let me translate. He doesn’t believe in the American Dream we have always strived for since this country was founded back in 1776. He doesn’t believe in life, liberty, or anyone’s pursuit of happiness except his own. Some of the useful dupes who keep passing out when he speaks eventually will learn those lessons the hard way. That includes anyone and everyone he will throw under the bus to retain his power and control over us. The casualty list is mounting. Ask Rev. Wright. He believes not in American values of liberty, free-markets, and Judeo-Christian principles, but rather in the iron fist of fascist totalitarian rule with secular, statist motives. Our enemies are his friends. Our friends are his enemy. Ask the Israelis, who rejected him by over 85%. He is out to change the world. He truly believes he is the messiah.

Barry Soetoro, Barack Obama II, Harrison J. Bounel , or whatever his real name, is continuing his scam – the biggest hoax in the history of the world – pretending to be one of us. Everybody in a position of authority knows – he knows, Congress knows, the Supreme Court knows, and at least a large majority of America knows – that he is not who he says he is. They all know he is not constitutionally eligible to be POTUS. It is impossible. Either he is not a ‘natural born’ citizen (one born on sovereign soil of TWO citizen parents, according to the definition by a unanimous Supreme Court decision in Minor v. Happersett), or he has lied about his biological father and created a fictitious character with the name Barack Hussein Obama. He is a composite, just like his girlfriends in the book he took credit for authoring, “Dreams From My Father”.

His Social Security number (#042-68-4425), the one he has used since his high school years in Hawaii and most recently used to obtain financing on the Chicago home on Greenwood Avenue, is also fraudulent. He and Michelle are no longer listed as the owners of that property on the tax roles. His amended tax returns have changed, and they have removed the deduction for mortgage interest. In fact, both he and Michelle have multiple aliases, addresses, and Social Security numbers. How can that be? The SSN he has been using since he was in Hawaii during his high school years does not even pass the country’s E-Verify system and comes back flagged and illegitimate. It was taken out in Connecticut, not Hawaii. His birth certificate is a known hoax. It was created by a computer, not a typewriter and is not to be found in a microfilm file located in Honolulu. Hawaii officials are complicit in the hoax. So far, only Sheriff Joe Arpaio and his Cold Case Posse have gotten the farthest to verify suspicions and uncover facts about the entire constructed faux-identity despite roadblocks at every turn. Whatever the truth (and yes, it will eventually come out), it is not the scenario presented by the illegitimate usurper smiling and sitting in our Oval Office with his feet up on the Resolute Desk.

Are Americans ready to face the truth? Have we had enough of the lies and spin and prevarication? Is fiscal sanity and bipartisanship even possible today? Can we even save this mortally wounded republic? As we watch the White House evade the truth by changing the subject and not answering the big questions about responsibility, we know we are in the midst of a huge whitewash and cover-up. As we search for the truth about what happened on September 11th in Benghazi, Libya, we do know one thing for a fact: whatever really happened on that eventful night when we needlessly lost 4 brave Americans is not the way the White House and the administration keeps dribbling it out. It is always that way with this White House. Change the subject. Attack the messenger. Spin the malleable dupes. The truth is not in them.

What really happened in Benghazi brings me back to the stark vision of Jack Nicholson’s portrayal of Colonel Nathan R. Jessep in the movie “A Few Good Men”. After finally being pinned down in the court scene and exposed as the person who ordered the ‘Code Red’ that cost the life of a marine entrusted to guard the compound in Cuba, Col. Jessep says he had to keep the truth covered up because people could otherwise not handle it. When mortal humans, regardless of their position of authority, exceed the rule of law and make their own rules, it always ends badly. The reality of life imitates the fiction of the movies. Unfortunately, the reality of Barack Obama is not a movie or a fictional Tom Clancy, Vince Flynn, or Brad Thor thriller. It only seems like it.

When we finally learn all the details of that tragic night in Benghazi, our man-child president will be exposed. Only he could order the troops to stand down and leave behind American treasure in the form of the four brave casualties of the terrorist attack on the CIA compound. Americans don’t leave their brave soldiers behind. In Somalia, we went back for two dead bodies. During 9/11, the NYPD and NYFD ran up into the buildings, not out of the buildings.

We are going to learn more about running guns to America’s enemies, and it will make Obama’s part in the Fast and Furious scandal and subsequent cover-up look minor in comparison. We are going to learn about the possibilities of treason and sedition at the highest levels. America is going to learn the truth about Barack H. Obama. We cannot only handle it, but we must have it before we can heal and move forward. Americans, as long as they acknowledge that they have God’s will that continues to guide them with Divine Providence, will never fail. John 8:32 says that we shall know the truth and the truth shall set (keep) us free. The fiscal cliff is the next challenge, but first we must face the stark realities. Justice must be done, and crimes must be adjudicated. It is not going to end well for those who defy the truth.

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