Karl Marx Preached "Fairness" Too

By Alan Caruba

My father was a Certified Public Accountant and dinner time throughout my youth was filled with horror stories about the Internal Revenue Service (IRS) as he struggled to keep up with a tax code that just kept growing.

According to Nina Olsen, the National Taxpayer Advocate for the IRS who heads a staff of 2,000, the American tax system is “a huge convoluted mess.” Despite efforts to determine its length, it is variously estimated to be between 65,000 and 70,000 pages. “We looked at how many changes in the tax law (that) had occurred in the last year alone,” said Olsen, “it was something like 579 changes.” No one can keep up with that volume of changes, not even Ms. Olsen’s office.

As this is being written, President Obama is dominating the news cycle with his message of tax “fairness”, attacking men like Mitt Romney, the presumptive Republican candidate, for being wealthy and citing men like Warren Buffett and other millionaires and multi-millionaires who say they should pay more. It is a longtime populist, progressive message and it is a false message.

Chris Edwards who studies tax policy at the Cato Institute, a libertarian think tank, says, “What happens when you raise taxes for higher-income people; they reduce their productive activities—like working and investing and starting businesses—and they increase their unproductive activities—like tax avoidance and tax evasion. So governments really shoot themselves in the foot if they raise rates too much.”

If it were not for “taxation without representation” Americans might still be “subjects” of the British Empire because, as any school child can tell you, the Revolution was fought over this issue and was kicked off in earnest by the Boston Tea Party when a tax on tea enraged the citizens of that time. There were, in fact, some ten other tea parties in the colonies.

The United States has the dubious honor of having the highest tax rate on corporations in the world. And some people still cannot understand why U.S. corporations are shipping jobs overseas and foreign corporations are reluctant to set up U.S. headquarters here.

In a recent opinion in The Wall Street Journal, Amity Shales, a former WSJ reporter and now the director of a George W. Bush Institute project on national economic growth, wrote that “The trouble is that lawmakers (especially at the federal level) insist on discussing fax reform in terms of fairness. Tax competition earns a mention from time to time, but only a mention.” She pointed out, as have others, that “states with no income tax grow faster than those with high income taxes.”

By framing the tax debate in terms of fairness and attacking Mitt Romney’s wealth, President Obama is pandering to his greatest constituency—the stupid among us. He was elected on the basis of a lot of gauzy, vague promises of hope and change, and with the adoring support of the mainstream media.

Obama’s problem is not about fairness or taxes. His problem is 13.9 million unemployed Americans, not counting those who are not looking for work or those working part-time jobs just to make ends meet. As a recent commentary on EconomicCollapse.com pointed out, “The number of unemployed Americans is larger than the entire population of Greece.”

The onerous, insane growth of the regulation industry at all levels of government is crushing the economy. “The U.S. national debt has increased by more than four trillion dollars since Barack Obama took office” and, with the aid of a Democrat-controlled Congress for the first two years of his term, he increased the national debt more than all the presidents combined from Washington to Clinton.

Believing that taxing rich people will close the gap is unbelievably stupid. As a Wall Street Journal editorial pointed out on April 10th, “The Obama Treasury’s own numbers confirm that the tax (on the wealthy) would raise at most $5 billion a year—or less than 0.5% of the $1.2 trillion fiscal 2012 budget deficit and over the next decade a mere 0.1% of the $45-43 trillion the federal government will spend.”

There is an alternative. It’s called the “Fair Tax” and you can learn more about it by visiting the website of the National Taxpayers Union.

By bleeding jobs through an insane tax system, a federal tax code filled with loopholes that even the IRS cannot keep up with, the highest corporate tax in the world, an idiotic immigration policy toward illegal aliens, and a burden on the fortunate few that still have jobs the United States is digging itself into financial collapse.

The federal government is broke. The states are broke. And with the advent of $4 and $5 gas pump prices—thanks to Obama’s anti-energy policies—the rest of us are getting more broke.

President Obama’s blather about “fairness” is straight out of Karl Marx’s “Das Kapital” and the Communist Manifesto with their emphasis the redistribution of wealth and the end of private property.

© Alan Caruba, 2012.

What Debt? Obama's Insane Spending Binge!

By Alan Caruba

There’s a reason that President Obama wants to increase taxes. His administration cannot spend your money fast enough.

A visit on Tuesday morning to the websites of various federal departments reveals that this administration can find an excuse to spend millions on anything. Here’s a quick tour.

In the wake of the Solyndra scandal in which taxpayers were, in the words of Investor Business Daily, “put on the hook for at least the first $75 million if the company should default and with “a minimum of five green firms going bankrupt” the U.S. Department of Energy, on September 13, announced a $1.2 billion loan guarantee to Mojave Solar LLC for the development of the Mojave Solar Project.

On the same day, the U.S. Department of Transportation (DOT) announced a $32.5 million grant “to finalize expansion plan of Boston’s South Station” for the purpose of expanding and enhancing the historic station on the grounds that it estimates a “50 percent increase in high-speed intercity passenger rail travel in the coming years.” And we all know how accurate estimates are, eh?

Three days later, the DOT provided $22 million to the Maryland Department of Transportation for a study of replacement options for the Susquehanna River Bridge on Amtrak’s Northeast Corridor from Boston to Washington, D.C. Why not spend the money on actually replacing the bridge? On September 19, DOT awarded $25 million to the city of Charlotte, N.C. for a streetcar line “to improve access to jobs, housing, and schools.” Why money from other States should gift Charlotte with a streetcar line when the nation has a $14 trillion debt might have something to do with the fact that the Democratic Party National Convention will be held there in 2012.

In the midst of a recession that officially does not exist, the U.S. Department of Housing and Urban Affairs (HUD), on September 15, announced $93 million in grants to 39 local projects “to conduct a wide range of activities intended to protect children and families from potentially dangerous lead-based paint and other home health and safety hazards.” HUD estimates there are “nearly 7,000 high-risk homes” because “providing healthy and safe homes for families and children is a priority.” Keep in mind that lead-based paint was banned for residential use in 1978, more than three decades ago.

On September 15, the U.S. Department of Health & Human Services announced awards totaling $10 million “to aid 129 organizations across the country that would like to become community health centers. The funds came from the Affordable Care Act, but at the same time Obamacare cuts billions from Medicare, reducing payments to hospitals and to individual physicians providing care to America’s growing population of the elderly. Go figure.

At the Department of Commerce, on August 30, they were celebrating a $2.9 million “investment to expand access to capital for area small businesses and entrepreneurs.” One of them was a new $75.6 million Convention Complex in Cedar Rapids, Iowa that broke ground that day and we all know how many conventions Cedar Rapids hosts.

On September 14, the Department of Agriculture announced that taxpayers are now on the hook for loans to 27 rural electric cooperative utilities. DOA made $603 million in loans to help electric utilities "upgrade, expand, maintain and replace rural America’s electric infrastructure."

This is the same administration whose Environmental Protection Agency is waging war on coal-fired utilities and mining (coal provides 50% of all electricity in America). On September 16, USDA announced funding for more than 500 projects to boost renewable energy production (wind and solar) despite the fact that this represents just over 2% of all the electricity produced and companies producing solar panels are declaring bankruptcy on a weekly basis these days.

Secretary Tom Vilsack also noted that USDA Rural Development “is providing $35 million to finance smart grid technologies such as advanced metering infrastructure.” The problem with smart grids is that, if the utility thinks you’re using too much electricity to cool your home or business in the heat of summer, it can reduce the amount you receive. Same goes for warming it in the winter.

Not to be outdone, the U.S. Department of the Interior announced in late August that it was making more than $53 million in grants to 17 states “to support conservation planning and acquisition of vital habitat for threatened and endangered fish, wildlife, and plants.” The Endangered Species Act has been one of the greatest failures in U.S. history and responsible for thwarting billions in development. This money is intended to remove yet more landmass from development, all in the name of obscure species and plants.

On September 14 the Department of Justice announced grants totaling $118.4 million to “enhance public safety in Indian Country.” The money went to tribal governments. Apparently the Apaches are on the warpath again. Over the last two years, DOJ spent $121 million on conferences.

This doesn’t even take into consideration the money flowing from the Departments of Defense, Education, Veteran Affairs, and Homeland Security. It is in fact just a quick overview of the funding the Obama administration is spending while 14 million Americans are trying to find a job and others struggle to pay their mortgage or put their children through college.

It is a look at a government grown so large and so profligate that its credit rating was recently reduced and our President is on the campaign trail telling Americans they must pay more taxes despite the fact that 40% pay no taxes and “millionaires and billionaires” pay 70% of taxes collected. It’s the same government that wants to impose a 1% tax on all banking transactions, the deposits and withdrawals of your money!

Tea Party, anyone?

© Alan Caruba, 2011

The Boy President

By Alan Caruba

Any parent or teacher who has tried to hold a conversation with a self-centered, petulant child or teenager knows how frustrating it is to try to get beyond the “I want it and you won’t give it to me” stage. This is the point at which we, the Republican leadership, and others in Congress have arrived with a little boy named Barack Obama.

I know he’s going to turn fifty soon. I know he is married and the father of two girls. I know that outwardly he is an adult, but the “inner child” of Obama has always been on display because it is also the outer child. No need to tick off the evidence of self-indulgence in a job that provides limousines, helicopters, and jet planes, along with all the other perks for the man in the Oval Office bubble.

This may explain why Obama appears to be so detached from the reality of the current financial crisis. All presidents inherit problems from the previous administration and in 2009 no one is suggesting the financial stability of the nation was not challenged.

Here, though, is the problem. After a failed “stimulus” program, after an obscene increase in the nation’s debt, and after the imposition of Obamacare, this president has been in full retreat from virtually every policy he enunciated when taking office. The lone exception has been a relentless attack on the provision of energy to fuel an economy in freefall. The Environmental Protection Agency has become his engine of destruction.

Reality is closing in on President Obama and he still thinks that staged events like his “Twitter” conference will let him escape. Intended to appeal to younger voters, it was impossible to not notice how inarticulate Obama is and how he falls back constantly on trite phrases about “millionaires and billionaires”, “corporate jets”, and the disparity between the rich, the middle class, and the poor.

His abiding theme has been “fairness”, but life is not fair. You don’t get to choose to be born into wealth or poverty. You don’t get to choose your race. Your family’s genetic history may include being prone to cancer or heart attacks. What we can influence, however, is how hard we study in school, whether we choose a vocation or profession, work hard toward acquiring it, and most of all, our attitude about ourselves and others.

The contempt the Boy President feels toward taxpayers is evident in the boldfaced lies he tells about the current tax system, the fact that reducing tax rates actually increases government revenues, and the obvious fact that the federal government is spending too much money.

The nation that delivered itself into his hands was one devoted to profligate spending. In June, the Institute for Truth in Accounting (IFTA) announced the completion of a comprehensive study of all fifty state’s assets and liabilities, including pension and retirement obligations.

Founder and CEO of the Institute, Sheila Weinberg, stated that, “If the governors and legislatures had truly balanced each state’s budget, no taxpayer’s financial burden would exist.” This is an issue of truth versus the razzle-dazzle needed to justify the demands from public service unions that have burdened taxpayers.

“A state budget is not balanced if past costs, including those for employee’s retirement benefits, are pushed into the future.” Only four states, Nebraska, North Dakota, Utah and Wyoming, have assets available to pay their debt and obligations.

The U.S. is, we’re told, $14.2 trillion in debt, but this figure likely involves financial obfuscation and is likely far worse if one looks too closely. Others say that the U.S. collects enough revenue to pay off its debts and suggest that the “ceiling”, constantly increased over the years, is largely a piece of political theatricality.

When it comes to who actually pays taxes in America, there is ample evidence that, as of April 15th of this year, nearly half of all Americans would have paid no federal income tax because they owed none under the present tax code. Obama’s demands for fairness look odd under such circumstances.

According to the Tax Policy Center, a nonpartisan research group, Americans who earn less than $30,000, those who are elderly, and those who are single with children paid no income tax. Not owing federal income tax is not the same as not paying any taxes. Workers are subject to payroll taxes for Social Security and Medicare programs. In addition, they pay a wide range of sales taxes as anyone who has checked their telephone bill or filled up their gas tank can testify. A plethora of hidden taxes cut into the income of even the poorest among us.

In 2007, writing in The American, a journal of the American Enterprise Institute, Stephen Moore laid out the facts. Then as now, “a big portion of the federal income tax burden is shouldered by a small group of the very richest Americans. The wealthiest one percent of the population earns 19 percent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab.”

The Bush tax cuts resulted in “more investment, more hiring by businesses, and a stronger stock market,” said Moore.

The Boy President’s demands for more revenues to spend on more federal programs are baseless and his past performance to date has been disastrous.

Fox News analysis and commentator, Brit Hume, recently said, “This President is in as full of a political retreat as this town has seen in many years. He was elected to fix the economy, but people think he and his party have failed and have exploded the nation’s debt in the process.”

The Republican leadership, if it is to have any hope of defeating him in 2012, must now press its advantage and exact, not just short-term compromises, but major reductions in what passes for a Democrat budget…if such a thing even exists.

In the present crisis, Republicans have as much at stake as the Boy President and, indeed, the entire nation.

Obama, increasingly desperate and spasmodically lying to everyone, needs to be driven from office like Frankenstein fleeing from the villagers with their pitchforks and torches.

© Alan Caruba, 2011

Raising Taxes is a Very Old, Very Bad Idea

By Alan Caruba

The absurdity of raising taxes in the midst of a recession that increasingly looks and feels like a depression only underscores the Democrat’s historic and failed policies from the past; the same ones they continue to push these days.

In “New Deal or Raw Deal? How FDR’s Economic Legacy has Damaged America”, historian Burton Folsom, Jr., examined the many ways the Great Depression was prolonged and deepened. In his first week in office, Roosevelt took America off the gold standard and “issued an executive order, under penalty of a fine or a prison term, forcing Americans to surrender all their gold to the U.S. government in return for paper dollars.”

Today, in an era of economic uncertainty, the television airwaves are filled with advertisements to buy gold.

Roosevelt was all about high taxation while portraying himself as a friend of the people and an enemy of “economic royalists”, by which he meant business, industry, banks and Wall Street. Historians and economists point to FDR’s tax policies for the failure of the nation to recover from the Great Depression. By 1936, the new tax rate started at 5% on low income taxpayers and skyrocketed to 79% on top incomes.

The Great Depression began in October 1929 when the stock market crashed. A year later my older brother was born. Our father was a Certified Public Accountant, a profession people need in good times and bad. The experience of the Depression left an indelible impression on both my parents.

My Father never bought any stock. His biggest investment was the home he bought in 1942 in a posh New Jersey suburb. My Mother used to tell me of the large bill they ran up at the butcher’s during the Depression. World War Two imposed strict rationing because food and other items were scarce. In all the years after the war our refrigerator was always kept filled with food. Those memories imprint themselves on people.

I don’t think there is much historical or institutional memory left in America. The educational system, the media, and what passes for news these days has erased “the way it was” for most Americans in that era. Only the senior citizens and their children recall it. The nation, however, is repeating all the previous errors.

It is difficult to believe that the nation is on the brink of financial collapse, but it is.

Not surprisingly President Obama and the Democratic Party want to tax more, particularly “the rich.” Efforts to cut spending and reduce the size of a bloated federal government are fought by Democrats even if cutting a few billion is a teaspoon in an ocean of debt

Robert Williams of the Tax Policy Institute was interviewed on an April 14th National Public Radio program. Using 2009 as his baseline, he pointed out that “about 47 percent of Americans will not pay any federal income tax for 2009.” They included families with children, the elderly, low income households, and those who benefit from all the deductions, credits, and exemptions in the income tax.

People with incomes over $500,000, said Williams, represent about 24% of tax revenues collected and those earning a bit above $100,000 represent about 56% of all income and pay about 70% of all taxes. “About 75% to 80% of us pay more payroll tax than income tax.” Taxing the rich instead of instituting a fair tax, based on consumption, is a very bad idea.

In a collection of essays from his popular blog, The Daily Reckoning, Bill Bonner’s latest book “Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas” provides a wealth of insight regarding the way the Federal Reserve and other central bankers have created financial havoc since 1913.

Writing in February 2011, Bonner said, “Probably the most remarkable proposition of the whole decade came into focus in the past six months. It was the idea that the Fed could spur a recovery by creating money out of thin air.” This is what is meant when you hear the term “quantitative easing.”

QE, by November 2010, had added $2.3 trillion to the nation’s monetary supply. Fed Chairman Ben Bernanke, a reputed expert on the Great Depression, added three times as many dollars to America’s core money supply as all the Treasury secretaries and Fed chairmen who came before him put together!


There is and always has been only one way money retains confidence and that is by manufacturing and selling goods and services. Therein lies true value, not the idiocy of simply printing dollars.

“In 1913,” notes Bonner, “the dollar was worth about the same thing it had been worth 100 years before. Now, almost a hundred years later, it is worth only three cents.”

Bonner noted that “The Great Depression may have been an accident, but the debasement of the dollar certainly was not. It was a matter of policy...The gold standard stood in the way; it was abandoned like a bad neighborhood”; a policy completed under President Nixon in 1971.

Writing on July 30, 2010, Bonner said, “Mainstream opinion is contradicted by the facts. Fewer people are employed today in the United States than when the stimulus program began. Sales are down. Growth is failing. Credit is contracting. Even hairstylists and cab drivers know something is wrong.”

John Maynard Keynes: the economist whose theories FDR and other administrations have based their policies upon, “thought consumer spending was the key to prosperity; he saw savings as a threat. He had it backward. Consumer spending is made possible by savings, investment, and hard work—not the other way around.”

“We remind readers,” Bonner wrote in 2003, well before the 2008 financial crisis, “when the Fed creates money out of thin air, it does not create any corresponding wealth. The world’s supply of services or swimming pools does not magically increase when Ben Bernanke turns up the dial on the printing press. What it does is create an illusion of wealth.”

That illusion, that nightmare is now understood by a majority of Americans who also understand that the President they elected in 2008 has been focused on expanding government ownership and control of vast elements of the economy from General Motors to AIG to the nation’s health system.

And now the President wants to raise taxes. It is as if nothing was learned from the Great Depression, from the entire history of the New Deal, and from the collapse of the communist Soviet Union in 1991.

© Alan Caruba, 2011

The Great 'Climate Change' Taxpayer Rip-Off of 2011

By Alan Caruba

Unless I am seriously mistaken or misinformed, the rate of unemployment in the U.S. remains high and the foreclosure rate on homes is approaching the level of the Depression years. Two major bond rating companies, Moody’s and Standard and Poor’s just warned that, if the federal government doesn’t stop spending and borrowing, America’s Triple-A highest ranking will be down-graded.

Along with all the other things in the federal budget wish list for 2011 are millions to be spent on climate change.

It helps to understand how obscene this is if you pause to consider (1) there is not one damn thing anyone can do about climate change, (2) climate change has been researched and studied since the late 1980s, enough to fill an entire wing of the Congressional Library to hold all the reports, and (3) the only climate change Americans really need to know about is what the weather will be tomorrow.

With a tip of the hat to Climatequotes.com and the American Association for the Advancement of Science’s (AAAS) report on “research development, fiscal year 2011”, let me share just a few of the ways the Obama administration intends to squander your money.

The magic number is $2,481,000,000 and it represents specific amounts devoted to "climate change" research or other programs requested for the 2011 budgets by an alphabet soup of federal agencies that include the Environmental Protection Agency, NASA, Department of Energy (DOE), National Oceanic and Atmospheric Administration (NOAA), National Science Foundation (NSF), Department of the Interior (DOI), and the Department of Agriculture (DOA).

The figures cited all come from chapter 15 of the AAAS report and you can access it via Climatequotes.com

NOAA’s total budget request is for $5.6 billion, an increase of 17%. It intends to devote $437 million for climate research funding, an increase of $77 million over last year.

Over at the National Science Foundation (NSF), its budget of $7.4 billion (that’s a lot of science!) includes a request for $480 million for Atmospheric and Earth Sciences, $765.5 million for NSF’s Science, Engineering and Education for Sustainability program and $19 million for a joint program with DOE “to promote education in clean energy research. An additional $10 million would fund “Climate Change Education” in the nation’s schools. It’s not education, it’s indoctrination.

The Department of Energy which currently is projecting that permits for deepwater drilling in the Gulf of Mexico won’t be forthcoming until, maybe, June. DOE seems oblivious to the fact that the price of oil is set to hit $100 a barrel and higher costs will hit everyone driving anything using gasoline or diesel fuel. Fuel oil prices will rise and any business that uses oil or anything made with oil will be forced to raise its prices. In short, everything.

DOE, however, is in no hurry and, of course, the Obama administration is dead set against ANWR or off-shore exploration and extraction of the BILLIONS of barrels of crude oil projected to exist.

However, DOE is set to receive $28.4 billion in 2011 and that includes $4.6 billion for research and development in its Office of Science and $2.4 billion for energy research and development. Its Office of Biological and Environmental Research is devoted to atmospheric science, including “climate modeling”, which would be allocated $627 million. Last time I checked, oil, coal, and natural gas were not found in the “atmosphere”, but rather were extracted from deep within the Earth.

The entire global warming hoax was and is based on “climate modeling”, all of which consistently found that the Earth was warming at an alarming rate. Except that the Earth is NOT warming. It has been cooling since 1998. And DOE intends to waste $627 million on more modeling. It is worth noting that the most sophisticated models of the National Weather Bureau still cannot predict with any confidence what the weather—not the climate—will be next week.

The Environmental Protection Agency, gearing up to regulate all utilities that produce carbon dioxide and all other industries that do the same, has zero authorization to do so under the Clean Air Act. It is CO2 that is designated by the warmists as the chief culprit for the global warming that is NOT happening.

Despite this, EPA has requested $169 million “to reduce greenhouse gas emissions”, with $43.5 million in new funding for “regulatory efforts to reduce greenhouse gas emissions” through the Clean Air Act. And it wants $22 million for its Global Change Research Program. It is time to shut down this rogue agency before it totally destroys the economy.

Even the Department of Agriculture wants $159 million for “climate change research”, an increase of 42% and $179 million for renewable energy, to “help farmers.” Farmers are heavy users of fossil fuels to operate the machinery needed to till, plant, and harvest crops. They need reliable energy, not "renewable" energy.

The Recovery Act of 2009 has managed to blow more than $600 million on climate change research and billions on greenhouse gas mitigation.

This is just the tip of the ‘climate change’ rip-off in terms of billions wasted or soon to be wasted on “research” that can only be deemed an obscene diversion of taxpayer money that will not benefit a single taxpayer, generate any new jobs except for those in government agencies, and further bankrupt a bankrupted nation about to have its credit rating reduced.

The “scientists”, “regulators”, and “administrators” feasting off this federal largess should be handed a shovel to earn a living on one of those “shovel ready” projects we were told about.

Beyond that, if Congress was really intent on cutting back on spending, they could begin by defunding or shutting down the Environmental Protection Agency, the Department of Energy, and all the other federal grifters with their snouts rooting around in the climate change trough.

© Alan Caruba, 2011

The Democrat's Demolition Derby

By Alan Caruba

It is incomprehensible that the Democrats who control the House and the Senate adjourned without extending the Bush tax cuts. If they had extended them by even a year, businesses large and small across the nation would have been able to make plans for 2011.

The only thing we know for sure as Election Day approaches is that, absent an extension of the lowered rates on personal income, capital gains, dividends, and estate taxes, on January 1st everyone will see their taxes go UP!

Here’s how it works out:

The 10% bracket rises to an expanded 15%

The 25% bracket rises to 28%

The 28% bracket rises to 31%

The 33% bracket rises to 36%

The 35% bracket rises to 39.6%

Taxes will increase on marriage and family. The "marriage penalty" (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples as opposed to the single level. The dependent care and adoption tax credits will be cut.

The “death tax” on estates will return and it will punish those who want to pass their family business or farm to their children.

In a recent article in The Heartland Institute’s Budget & Tax News, Alyssa Carducci noted that “Nationally, the typical middle-income family, which has a medium income of $63,366, would see its federal income tax burden increase by $1,540 if the tax cuts expire, according to an analysis by the Tax Foundation.”

If Democrats, led by President Obama, really cared about Americans they would not have engaged in an orgy of lawmaking like Obamacare. Six months after its passage, we are beginning to learn the bad news that Democrats did not discuss prior to passing it. As Speaker Pelosi said, “Let’s just pass it and find out what’s in it afterwards.” We’re finding that healthcare will be more costly and less available.

We have been informed that the recession is over, but it is not over. Not if you give any thought to the high unemployment rates, the number of defaulted mortgages by homeowners, and most other ways we calculate such things.

Phil Gramm, a former U.S. Senator from Texas and former professor of economics at Texas A&M University, wrote a commentary published in a recent edition of The Wall Street Journal. It was titled “Echoes of the Great Depression.” I have previously written about the fact that Democrats who have controlled Congress since 2006 have embraced the same bad policies that prolonged the 1930’s Great Depression for a decade.

“During the average recovery since World War II,” wrote Gramm, “gross domestic product (GDP) surpassed the pre-recession high five quarters after the recession began. It has never taken long than sever quarters. Yet, today, after 11 quarters, GDP is still below what it was in the fourth quarter of 2007.”

Graham noted that, if you look around the world, other nations have rebounded from the financial crisis that broke in October 2008, all-too-conveniently just before Americans went to the polls to vote.

“Today’s lagging growth and persistent high unemployment are reminiscent of the 1930s, perhaps because in no other period of American history has our government followed policies as similar to those of the Great Depression era,” wrote Gramm.

There is virtually no program or decision the Obama administration has made that has contributed to an improvement in the economy. TARP and other measures were initiated under Bush and much of it has been repaid. The Obama “stimulus” bills are generally regarded as a failure.

A very long list of White House and congressional decisions could be provided, but they all add up to taking more and more money from taxpayers at a time when infusing the economy with consumer purchasing is the single best way to get the economy going again.

I will make a prediction that, following the midterm elections, when the many defeated Democrats return to the so-called lame duck Congress, they will retaliate by passing Cap-and-Trade and a host of other legislation the vast majority of voters oppose. Obamacare was just a taste of their utter contempt and their takeover of one-sixth of the nation’s economy.

Their objective is not to save the economy or ease the burden on taxpayers. It is just the opposite. It is a demolition derby.

© Alan Caruba, 2010

Spendthrift Nation

By Alan Caruba

My late Father was a Certified Public Accountant. I am sure he must have wondered if I had been switched in the hospital with another baby who could actually add and subtract, do multiplication and fractions. I have always been a dismal failure with figures, but my older brother who also was a CPA, more than made up for this while I went on to make my living in the world as a writer.

Knowing my lack of skill with numbers, I long ago devised a weekly ledger in which I post expenses relative to my professional and personal life. Every Saturday I get out my calculator, add the new totals, and can tell you that thus far this year I have spent $74.93 on postage, paid AARP $535.60, and that my rent and my auto lease are by far my largest expenses.

So imagine how I and millions of my fellow Americans must feel about a president and a Congress that appear to be stark raving insane when it comes to spending the money they take in as taxes and then borrowing gobs more in order to keep spending?

Socialism gave us our present problems in the form of “entitlement” programs and neither Democrats nor Republicans have been able to resist adding new ones. A new government report from actuaries for Medicare and Medicare on the cost of Obamacare reveals that medical costs will skyrocket rising $389 billion in 10 years.

In my home State of New Jersey, we finally elected a Governor who understands that doing this is nuts. Chris Christie is demanding all manner of cuts in the budget to the distress of elected officials and education flunkies throughout the State who just want to keep on borrowing and spending. He has told the public service unions that the party is over and they are none too happy about it.

Meanwhile, back at the White House, the president of the Service Employees International Union (SEIU) brags, “We spent a fortune to elect Barack Obama--$60.7 million to be exact.” Well, thank you, Andy Stern.

And, while we’re thanking those that caused the 2008 financial crisis, thank you Fannie Mae and Freddie Mac, neither of which Obama mentioned in his recent smack-down to Wall Street. And thank the Congress for creating these entities in the name of “social justice.” The financial crisis, brought about by government entities, required banks and mortgage lending firms to provide loans with no down payment to people who could not afford them. These programs are still in effect.

It takes brass cojones to blame Wall Street for trying to make a dollar by following the rules!

President Obama is a virtual wrecking ball to the American economy.

Barely eight percent of his cabinet members have ever held a “real” job in the private sector. Those vaunted economists advising him are all loons. Several of his first choices for cabinet positions turned out to be tax cheats! And one of them, Tim Geithner, is now the Secretary of the Treasury!

Even someone as arithmetically challenged as myself understands that something is terribly wrong when, in 2009, Americans paid $915 billion in income taxes and the federal government spent $3.5 trillion by borrowing the remainder.

According to the Tax Policy Center, in 2009 just under half of all U.S. households (71 million) will not pay any federal income tax. Now add in the eroding tax base as millions more become jobless. Many of the jobs going to other nations will never return.

As this is written, the U.S. debt comes to $7.5 trillion dollars. Just two years ago the federal deficit was about one-tenth of what it is today.

Please, please, please do not listen to or believe the lies about the economy and jobs coming out of the government these days. There are lots of other sources for business news. In the 1930s, during the Great Depression, fifteen percent of workers were unemployed. At 10.7 percent, we are closing in on that.

The government spent like crazy in the 1930s, too. Only the onset of World War Two in 1941 brought an end to a ten-year-long economic nightmare. You have to go back to the end of World War Two for a comparable level of national debt!

Despite blowing billions in a “stimulus” bill, there were no “saved” jobs, only the usual civil service ones as the money was spread around to the States. There will be no “green” jobs to replace those lost as the nation’s primary sources of energy are attacked.

The sensible people in the Tea Party movement know they are in danger of being dragged over the cliff by the hardcore twenty percent of morons, otherwise known as the Democrat Party base, who think that the government will always provide housing, hospitalization, retirement funds, and a full gas tank in everyone’s car.

© Alan Caruba, 2010

Tax Day--April 15-- is Coming

Why You're Broke

By Alan Caruba

While it is incontestably true that a lot of people took out mortgage loans they could not afford to replay, it is just as true that they were encouraged to do so because banks were required by federal law to make these bad loans. Bankers even gave them an acronym, “Ninja” loans as in “No Income, No Job, No Assets.”

The result was the government created “housing bubble” that was coupled with the Federal Reserves’ policy of keeping interest rates so low that many were tempted to borrow beyond their means. When the financial crisis struck, these loans were called “toxic assets” requiring billions in taxpayer money to bail out the same banks forced to make them. Mortgage loan companies were not so fortunate.

Consistent with that government inspired economic disaster, however, has been the many ways federal and state governments have found to tax Americans directly and indirectly. A new book, “Bankrupting Joe the Taxpayer”, by D.J. Golio ($24.95/$16.95, Authorhouse, hard and softcover) reveals how taxation and irrational government spending has reached the present point and offers suggestions how to correct it.

A classic example of hidden taxes can be found in your telephone bill. This month mine was $63.00, but $14.00 of it was taxes, so my actual cost was less than $50. This occurs again every time I fill up my gas tank or pay my utility bill. For example, in 2007 the estimated take by states alone in gasoline taxes exceeded $50 billion.

The combined average of all taxes loaded into the price per gallon is approximately 56.4 cents. Fill up with twenty gallons and you’ve paid average federal and state taxes of more than $11.00! And the government has the nerve to call oil companies “greedy.”

One might be inclined to say that this money, if applied to highway and bridge repairs, was worth it, except that these repairs are often ignored by politicians who find that such expenditures are not sexy enough to garner reelection, so we end up with roads filled with potholes and, as occurred not long ago, a bridge collapse. Civil engineers have been warning about these failures for decades.

The gasoline tax is known as an excise tax and Golio points out that they have been around for more than 200 years and are older than income, estate, and gift taxes. They were initially imposed to finance wars.

In 1913, the income tax was introduced and, if the politicians could restrain themselves from spending every cent collected, government might not now be borrowing and, at the same time, raising its debt ceiling. Moreover, the nation might not be on the verge of losing its triple-A rating!

Federal and state governments have found ingenious ways to apply excise taxes. They include, in addition to gasoline and utility taxes, telephone services such as pre-paid phone cards, subscriber line charges, directory listings, WATS services, and long-distance toll charges, among others.

There are taxes on domestic and international air travel, wagering, occupation taxes covering importers and manufactures, firearms and ammunition, oil and chemicals, vaccines, and coal production sales.

As Americans are learning, the definition of “rich” now includes approximately 117 million households. In 2007, one group representing 28% of households that earned between $0 and $25,000 paid no income taxes, but received tax refunds in the form of credits such as earned income and child care. The federal government considers you to be wealthy if you earned $53,000 this year. About 25% of all tax filers fall into this category.

Golio is a Certified Public Accountant with an Masters degree in taxation. He has taught at the college level and knows the present tax system inside and out. He also knows that federal and state governments have long been spending beyond their means and places much of the blame for today’s high rates on the public employee unions that have negotiated huge pension programs well beyond those in the private sector.

These and other compensation, such as healthcare, cost taxpayers millions of dollars in the form of property and other local taxes as states and communities bludgeon homeowners to pay for generous contracts. Despite a failing educational system, teachers and administrators continue to enjoy exceptional terms.

That is why states also impose alcohol taxes, inheritance and estate (death) taxes, tobacco taxes, parking taxes, hotel occupancy taxes, leased vehicle gross receipts taxes, severance taxes in states fortunate enough to have natural resources, in addition to the aforementioned telecommunications and utilities taxes.

In 2008, forty-six states and the District of Columbia collected corporate income taxes and forty-four states and Washington, D.C., collected individual personal income taxes for the privilege of living there.

Entitlement programs like Social Security and Medicare, both of which could be addressed by private savings and insurance programs, are rapidly reaching insolvency which one might suppose was a strong argument against allowing the government to engage in their provision; particularly since Congress has dipped into the Social Security fund to pay for its endless pork-ridden spending programs.

And, of course, the Obama administration is currently engaged in trying to strip a trillion dollars out of Medicare and to sign up millions more so-called uninsured persons, many of whom are younger citizens, 20 to 40, who see no need to self-insure. If the Medicare “reform” passes, they will be hit up for thousands from their personal income.

It is, however, a matter of law that no one can be turned away and denied medical care at any hospital in the nation.

Americans are vaguely aware that illegal immigration adds enormous costs to the nation’s healthcare, education, and law enforcement functions, but right now in Congress, yet another “amnesty” bill has been introduced, virtually ensuring that millions more will enter the nation illegally in anticipation of a swift path to citizenship. It is a very bad idea.

Current costs associated with illegal immigration range upward to more than $636 billion. Meanwhile, some $235.8 billion is wired to Mexico and Latin America every year by those who have illegally entered the nation. There are 389,000 illegals incarcerated in our prisons and approximately 699,000 who are fugitives!

The real problem, however, in addition to federal spending, are the state legislatures that have abandoned all reason when it comes to spending. There are states like California and New Jersey that are, simply stated, broke.

The fact that the Obama administration has increased the national debt and appears indifferent to public protests against its Medicare “reform” and proposed new taxes on all energy use in the form of “Cap-and-Trade” suggests that it is either infantile or determined to bankrupt the entire nation.

The sad part is that Golio and many others are well aware of what must be done to correct and avoid the horror of America becoming another Zimbabwe, but many Americans have concluded they are powerless to stop it.

The Economic Recovery Fantasy

By Alan Caruba

I freely confess that I regard it as a triumph if I can balance my checkbook. My Father was a Certified Public Accountant and surely despaired of his second son (the first became a CPA!) who had no head for numbers.

Like most Americans, though, I find it laughable, if not outright mockery, when the White House and the lapdog media tell me that the nation is now recovering from the recession. The media, as just one example, is bleeding thousands of jobs that are not likely to ever return.

What I do know is that, as of November 1st, 115 banks have failed this year. They represented combined assets of $19.5 billion at the end of September. Most have been gobbled up by larger banks. In 1989, at the height of the savings and loan crisis, the FDIC closed 534 banks or about ten a week.

Rep. Ron Paul, a Republican congressman from Texas, flatly says, “A false recovery is under way. I am reminded of the outlook in 1930 when the experts were certain that the worst of the Depression was over and that recovery was just around the corner. Instead, the interventionist policies of Hoover and Roosevelt caused the Depression to worsen, and the Dow Jones Industrial average did not recover to 1929 levels until 1954.”

It took ten years and a World War for America to dig out of the Great Depression.

The President’s economic team, Christina Romer, Peter Orszag, Larry Summers, Timothy Geithner, and Jared Bernstein scare the heck out of me.

I would much rather have Ben Stein running Treasury and Larry Kudlow overseeing the national economy.

The waste of billions of taxpayer dollars in the bilious “stimulus” bill was the ultimate wet dream of legislators, the opportunity to tap the treasury for every “pork” project they had been promising the voters.

Far worse, however, is the healthcare “reform”, if passed. As reported recently in the Weekly Standard, Medicare fraud now costs Americans an estimated $60 billion a year. Compare that with the annual $8 billion in profits of all the private insurance companies combined!

The Pelosi-Reid bill is Medicare on steroids, but the yet unanswered question is this: If Congress can require you to buy insurance even if you don’t want to, what else can you be compelled to do?

Christiana Romer recently testified before Congress that the stimulus bill has accomplished little at this point. The abortive “Cash for Clunkers” program has been calculated to have actually cost the government six times the rebate whose effect lasted all of a month.

Meanwhile, when its treasury notes are not bought by foreign investors, the nation buys its own debt, a scheme that is impossible to maintain. I do not loan money to myself. I either save it or spend it.

Congress should be reducing taxes—the U.S. tax rate on corporations is among the highest in the world—and taking steps to relieve the tax burden on small businesses which are the heart of employment and the economy in general.

Congress is also getting ready to raise the cost of energy for every American family and enterprise with the hideous “cap-and-trade” bill.

Energy in America has long been one of the most affordable elements of the economy, but the Obama administration is throwing billions at the least productive elements called “clean energy”, solar and wind, while declaring war on coal that provides just over half of all the electricity we use every day.

The figures cited for unemployment are a bad joke. Officially set at 9.5 percent, it is actually likely to be closer to 14 percent, about the same amount as during the Great Depression of the 1930s.

Everyone is aware that the economy is not recovering. It is reflected in reduced inventories. It is reflected in continued layoffs. It is reflected in retail advertisements offering two-for-one deals. It is reflected in less consumer spending. On Halloween, my local mall already had a big Christmas tree on display.

I find it insulting that the government is eager to give money to people defaulting on their mortgages because they couldn’t afford them when the government was pressuring mortgage lenders to make them.

I find it insulting to be told about jobs “created or saved” by the White House when this is a pure fantasy. Only private enterprise creates real jobs. Government jobs add nothing to the economy except another layer of bureaucracy. What America needs is productivity.

I find it insulting to be told that the recession is over when it is just taking a breather before the mounting debt from White House initiatives overwhelms us all, rising unemployment continues, and senseless legislation is still in the pipeline.

None of this is good news, but it is, at least, the real news.

Signs of U.S. Decline

By Alan Caruba

Let me begin by saying I am not an economist, but I have had a rather unique “education” in the way American’s make a living, thanks to a long career as a public relations counselor working with corporations, trade associations, and others across a broad band of manufacturing and other activities, including agricultural.

My working philosophy was that, if I could understand what they were doing, anyone else could as well. Along the way I learned that farming has got to be one of the hardest ways to make a living. It is just dawn to dusk work. Next to that is manufacturing anything.

So, naturally, when Business Week magazine asked on its cover, “Can the future be built in America? Inside the U.S. Manufacturing Crisis”, it caught my eye. As Pete Engardio, the reporter, put it “The good news is that the U.S. is at or near the cutting edge in most of the emerging product areas,” particularly high tech, the bad news is that “Unless the U.S. can magically resurrect its manufacturing base, the good-paying jobs from these breakthroughs will be offshore.”

The irony is that the high tech breakthroughs were paid for with billions of U.S. taxpayer dollars that funded research at federal and university science labs, going back to the 1960s when the new products were just in the idea stage.

The numbers, too, tell the story. “In 2000 the U.S. exported $29 billion more high-tech products than it imported”, but “by 2007 that had turned into a $54 billion trade deficit.”
This is attributed to “two decades of unconstrained out-sourcing to Asia” that has “hallowed out much of America’s base of suppliers, factory managers, and skilled technicians.”

Not mentioned in the article is the way America’s schools have since the 1960s been turning out students with poor math and science skills, along with writing and reading skills. The average freshman college student spends time in “remedial” courses for things earlier generations routinely learned. Add to that the crushing costs of a college education and you have a recipe for a dumbed down and debt-ridden work force.

While we’re being told that the recession is “technically” over and jobs are a “lagging indicator” of recovery, my own worst suspicions are that jobs in general are going to be lagging for a long time to come, especially the skilled ones that nations like China and India are developing with rigorous educational systems.

“Nations in Asia and Europe aggressively court strategic high-tech industries with generous tax breaks, cash grants, cheap credit, low-cost utilities, and speedy regulatory approval.”

“By comparison, the U.S. has been indifferent to manufacturing; even when tax breaks are factored in.” Philosophically, the Obama administration appears to regard both Wall Street and corporations as an enemy that must be subdued with greater and greater regulatory oversight.

The fact that the existing oversight agencies failed in their duties does not seem to be understood. That’s why ponzi schemer, Bernie Madoff, and others were able to get away with it for years.

“Also, it can take two years to obtain all the environmental, health, and safety permits for a modern electronics plant—a lifetime in the tech world.” It’s a lifetime in any business enterprise. The U.S. manufacturing base may be the most heavily regulated segment of society of any nation with which we must compete.

Consider, too, the guiding philosophy of the Obama administration. Anything that contributes to the provision of energy is bad. Coal mines, bad. Offshore oil and natural gas drilling, bad. Anything, too, that uses energy is bad.

America’s auto manufacturers (the federal government and the unions now own General Motors and Chrysler) are being told they must get more mileage out of a gallon of gas, forcing them to modify automobiles in ways that simply make them more dangerous to drive.

In response to a survey by Deloitte Research and the Manufacturing Institute, U.S. executives said they believe that America’s competitiveness will decline further by 2012. An overhaul of the corporate tax code would be a good place to begin to reverse that. U.S. corporations pay higher taxes than just about anywhere else in the world!

These and other indicators are signs of decline in what used to be the greatest economy the world had ever seen. Other nations have watched and learned the lessons we have forgotten or reject. They are going to eat our lunch.

So now we know what "Change" means

Your Easy Guide to Democrat Health Reform

This chart, presented by GOP leaders, identifies at least 31 new federal programs, agencies, and mandates that accompany the unprecedented government takeover of health care in America.

House Republican leader, John Boehner (R-OH) said, "This isn't reform; it's a recipe for disaster that will lead to higher health care costs, lower quality, rationed care, and bureaucrats making medical decisions instead of doctors and patients..."

"This new maze of government bureacracy will be funded by a new small business tax that will cost more American jobs."

If you like Big Government, you will love Democrat health reform.

One last thing. DON'T GET SICK!

The Taking of America

By Alan Caruba

The United States homeland has rarely been invaded. The British tried to subdue the colonists for seven years until they finally gave up and went home. We became a sovereign nation. They came back in 1812 and the lesson we learned from that was to spend money in order to have a decent army and navy available.

The Japanese bombed Hawaii’s Pearl Harbor in 1941, but other than putting some troops on a few Aleutian Islands, they didn’t get close to the mainland.

Today, however, America is being taken prisoner from within. Leading the attack is Barack Hussein Obama who won an American Idol campaign against the worst GOP candidate since Bob Dole.

Both Obama and John McCain agreed that global warming was a threat. Both agreed that we need to extend amnesty to another couple of million more people who snuck into the country illegally. The primary difference was that McCain was a patriot who had fought and suffered for his nation. Obama’s disdain for America is just below the surface.

The first three months of Obama’s administration have been a dazzling display of how the new President has been everywhere all the time, especially on television, on the covers of magazines, and of course dominating what is left of the front pages of daily newspapers. It has been Obama! Obama! Obama! 24/7.

His “apology” tours are a turn-off to Americans, generations of whom have sacrificed money and lives to protect many living in the very nations Obama has visited. His overtures to both Iran and Cuba have been dismissed.

He has proven to be an extraordinarily divisive leader and one whom even his strongest advocates have begun to doubt for his failure to represent a nation that sees itself as inherently good, as founded in the best values of freedom and liberty.

In concert with a Democrat controlled Congress led by Speaker Nancy Pelosi and Senate Majority Leader Harry Read, Americans have been saddled with more spending and a greater level of debt than all previous 43 Presidents combined. There is no way these trillions of dollars can ever be paid back and Obama knows it.

He also knows or at least thinks that most Americans are so stupid they will roll over for all of this and just let it happened. He’s wrong.

The “Tea Parties” on Tax Day, April 15, are just the tip of the iceberg. Easily a million Americans turned out for anywhere from 700 to 850 events from coast to coast and they are not going to go away.

On July 4th, Americans by the millions should flood into Washington, D.C. and let the White House and Congress know that they’re “mad as hell and aren’t going to take it any more.”

They should be prepared to come back as often as necessary, but most especially they need to being organizing to turn out enough votes to take political control of Congress away from the Democrats. The Republicans need to become more than a rear guard resistance movement and needs a new generation of candidates to unseat Democrats.

That will be the first step in shutting down the Obama Express, a political bulldozer that is burying the America that men fought and died for through many wars and for which both men and women now serve in our Armed Forces in nations and on oceans around the world.

Unless you haven’t been paying attention, all that TARP money that banks were forced to take is going to be converted into shares giving the government voting power over how those banks are run. The government is not supposed to be in the banking business. It is supposed to regulate it, not own and operate it.

This week, Sen. John Kerry (D-Mass) and Rep. John Conyers (D-Mich) will hold meetings to “find ways to help the struggling newspaper industry.” Watch out! If the government decides the best way to do that is to purchase an interest in major newspaper chains, America will return to the bad old days of the Nazis in Germany and the Soviet regime in Russia.

There are a number of bills introduced in the U.S. Senate (#773 and #778) that would grant the White House sweeping new powers to access private online data, regulate the cyber security industry, and to shut down Internet traffic during a declared “emergency.”

If Americans can’t be weakened financially enough by the insane spending and borrowing that Congress has engaged in, it has one more way to suck what little money you have left out of your pocket.

Congress will hold hearings on the Environmental Protection Agency’s finding that carbon dioxide is “harmful” to everyone’s health and, as the by-product of all energy use, must be regulated with a “cap-and-trade” program that will require industries and businesses of every description to buy “carbon credits” in order to operate. Billions will flow into the government’s coffers and the price of everything will rise for consumers.

And it is all based on a lie called “global warming.” Carbon dioxide plays no role in so-called climate change. The climate is always in a state of change and the current one is a cooling, not warming of the planet.

Americans are now adrift in a shrinking lifeboat on a sea of lies. The taking of America is occurring with every passing day that Obama is in office and the Democrat-controlled Congress is in session.

And you wonder why ordinary Americans are buying guns and ammunition in record amounts?

An administration filled with tax cheats and environmentalist loonies, and a Congress filled with people fully engaged in lining their own pockets poses the greatest threat this nation has ever faced.

My New Boots and the Economy

By Alan Caruba

I bought a new pair of boots today. This particular pair is made from soft leather that is casual in appearance and extremely comfortable. Though born and bred in New Jersey, I have worn cowboy boots since the 1960s. I attribute it to spending too many Saturday matinees watching cowboy movies.

Truth is, I had been looking to buy a new pair the replace the rather beat-up pair I have worn for a while, but the catalog just a few months ago was asking about $125.00 for the particular ones I wanted. Then, a few weeks ago it was asking $70.00 for them. And this morning the email offer cited a price of $50.00.

The economy is playing sheer havoc with folks who make things for a living. The news this morning is that holiday retail sales have been as bad as they have been in decades. You have to go back to 1959 to equal the low level of sales.

When I graduated from the University of Miami (FL) in 1959 and completed my military service two years later, jobs were plentiful and, as a journalist, I covered a lot of civil rights marches and such. Then the Vietnam War began to require a lot more young soldiers. History is messy and filled with wars that get young men killed because old men make serious errors of judgment.

People with a little spare cash are picking up some real bargains these days, but mostly consumers are beginning to do something they have not done in a very long time. They are either not buying stuff or buying a lot less stuff. That’s what people do when it occurs to them that the economy is in the toilet.

In a consumer society that is bad news for people who make and sell real stuff for a living. The flip side is that you can now buy a home for something approximating its actual value instead of the inflated prices of the last few years. .And you can get some very good terms on your mortgage. Time was you couldn’t get one unless you could put down at least twenty percent of a home’s price, but when those prudent mortgage loan standards went out the window so did the economy.

It didn’t help that the federal government via some truly bad “social justice” legislation was putting intense pressure on banks and mortgage loan firms to lend money to people who could not ever afford to pay them back. Now foreclosures are going to play social havoc in the same places the government thought it was helping.

I have a friend my age who has been on Wall Street for a very long time. I asked him this morning if all those people who were “bundling mortgage-backed assets” and other fancy securities knew that it was all a scam that had to go bad at some point. He said yes. He avoided them and advised his clients to avoid them.

There’s a very real difference between a new pair of boots and some gussied-up security whose value is going to disappear in thin air. You can put on a pair of boots and wear them for years. You cannot recover the value of something that never really had a value except for the folks trading them as fast as they could. Those folks made a lot of money, but they never made anything real like a pair of boots.

The new administration, we’re told, is ready to let loose a huge “stimulus package” to “jumpstart” the economy. The level of U.S. indebtedness is going to skyrocket, but the folks in Congress don’t seem to understand that the government cannot just keep printing money without turning the U.S. dollar into a Zimbabwe note for one billion dollars that won’t even buy a loaf of bread.

The level of lobbying to get a piece of this new government pie is going to be intense. In time we will learn of a slew of idiotic projects that skimmed off the federal largess. It always happens. As I recall, the last stimulus package did nothing at all for the economy.

It never seems to occur to Congress to dump the ponderous U.S. Tax Code and write a new, fairer one.

It never seems to occur to Congress to pare back the monstrous tangle of regulations that drive up the cost of doing business or anything else in America.

And it surely will not occur to Congress to not raise taxes at the very time when people need to hold onto every dollar they earn.

I expect Congress and state governments to start taxing everything. I mean everything! Tolls will go up. The price of public transit will rise. The poor will get poorer. The middle class will shrink. The number of bank heists will increase.

Cutting programs, laying off civil servants, and renegotiating pension plans, et cetera, just never occurs to most governors and legislators.

I’m pleased that I waited for the price of my new boots to decrease, but I feel sorry for the boot manufacturer and for his employees. It’s not their fault the U.S. economy is in trouble. We know whose fault it is, don’t we?

The IRS Will be Hiring

By Alan Caruba

If Barack Obama is elected, the Internal Revenue Service had better double its workforce because the amount of cheating on tax returns will rival Italy’s.

The scariest thing about the final debate between the candidates is that both appear to be utterly oblivious to the way the Stock Market dropped 700 points on Wednesday after a brief rally the day before.

Hearing either candidate talk about spending billions to fix this or that was surreal. I don’t even know how deep in debt the nation is at this writing, but I am of the view that we don’t have billions to “fix” education, health care, or anything else. Of course, John McCain did talk about taking an axe to the budget and Barack Obama did talk about using a scalpel, but who’s kidding who here?

Any budget cutting would be an improvement over the last eight years of George W. Bush’s failure to veto any spending bill Congress, controlled by Republicans until 2006, sent his way. Only after a Democrat epiphany did W actually wield the veto in the name of fiscal prudence. By then it was too late and talk of $700 billion bailouts filled the air.

It is essential to remember that the current crisis is entirely the creation of Democrats. Starting with Roosevelt’s New Deal programs, exacerbated by Jimmy Carter’s and Bill Clinton’s exploitation of Fannie Mae and Freddy Mac, ignored by congressional oversight, the Democrats own this one.

It’s no comfort that Speaker Nancy Pelosi cannot wait to get the House to enact a bushel of new spending bills. The Senate historically has been a break on the short-term Representatives (two years versus the Senate’s six year terms) who, when not devoting most of their day raising money for reelection, spend the rest of it on, well, spending the public treasury for various pet projects and special interests.

Congress seems to exist in some parallel universe that has no connection to the rest of the nation. Its disconnect can be seen in the way, since Jimmy Carter was in office, Congress has actively worked against any exploration or extraction of the nation’s oil, natural gas, and coal reserves. It imposed “windfall taxes” and other restrictions until now there are only three oil companies of any size, mostly due to mergers. Now Congress apparently hates coal, too.

Then there was the creation of the Department of Education, contrary to the Constitution that excludes federal involvement by not mentioning it. It effectively has nationalized the education system with a one-size-fits-all policy that totally ignores the fact that different children in different places learn at different rates. The failure of urban schools has less to do with the enormous amounts of money spent per pupil than the crime-infested, jobless streets they must walk to get to school. It’s not like their parents don’t want better schools. They do. The grip of the teacher’s unions makes that nearly impossible.

I could list other government programs, but the point is they all cost a lot of money and a lot of that money is just totally wasted. For example, the government has a host of idiotic programs involving “climate change” when no government on Earth can do a thing about the climate. Likewise, the only reason to maintain a “space” program is to hoist spy and communications satellites into position. Explore Mars? Are you kidding me?

John McCain and the Republicans are right about cutting taxes. If that doesn’t happen, this Recession I assume we’re in, will turn into a full-fledged Depression just like 1929. At that point, we won’t be able to borrow money from China, Japan, and elsewhere. At that point, it won’t matter who’s in Congress or the White House because they created the problem.

Leaving New Jersey in Droves

By Alan Caruba

Why do I pick on New Jersey? Because it’s so easy and because I was born, raised, and have lived here for most of my life. It is home to some really wonderful people, but it is home to fewer and fewer of them.

A study by two Rutgers economists, James Hughes and Joseph Seneca, reveals that people are abandoning the Garden State at a rate three times higher than just five years ago.

“Census Bureau data reveal a sharp downturn in New Jersey’s population growth in the 2002-06 period and a sharp upturn in the number of people leaving the state,” the two wrote in a commentary published by the largest circulation daily, The Star-Ledger. On its front page, it published an article with the headline, “Jerseyans leave at alarming rate.” New Jersey has the distinction of joining California, Louisiana, and New York as having more people leaving than arriving or just staying.

Comparing these four states is dicey at best. After 2005’s Hurricane Katrina, a lot of Louisianans didn’t even have a home to which to return. The Hurricane, possibly the worst in U.S. history, decimated a big chunk of that state, along with parts of Mississippi.
No homes and no jobs was a good reason for that migration. As for California, the reasons for leaving are so vast as to require a book. Unchecked migration of illegal aliens comes to mind. A failure to anticipate and provide adequate energy generation and enough environmental regulations to drive any business elsewhere come to mind. New York? Well, it elected Hillary Clinton its Senator and has a Governor who wants to give illegal aliens driver’s licenses. Enough said.

A Monmouth University/Gannett polling institute announced in mid-October that a poll they conducted revealed that, “49% of New Jersey adults would like to move out of the state at some point, compared to 44% who would prefer to live out their lives here, and 7% are unsure. Moreover, 51% of those who want to leave the state say they are in fact very likely to make good on that wish. Another 36% say they are somewhat likely to eventually leave New Jersey and 10% are not too or not at all likely.”

The reasons even the Sopranos are thinking of moving to North Carolina or Florida are easy to understand. New Jersey has the highest property taxes in the nation. We have one of the highest sales taxes as well. It costs more to buy auto insurance here than anywhere else. It has had, with the exception of Christie Whitman, one Democrat after another running the state. Whitman borrowed more debt to add to that created by other administrations. She left the job of Governor to head the Environmental Protection Agency. President Bush fired her. She is rumored to be up for the lead in the sequel to the movie, “Clueless.”

By April 2007, the state’s debt ranked it fourth among all other states. It closed out 2006 with $33.7 billion in public debt. It has been among the most indebted states since 1998. One would think our legislators might take some lesson from this, but you would be wrong. Only California, New York, and Massachusetts ranked higher.

This is a state that elected Democrat Jim Florio Governor (1990 to 1994) who immediately raised taxes and almost as immediately was defeated for a second term, replaced by Republican Whitman. This is a state that elected Democrat James McGreevy Governor only to watch him resign (with his wife at his side) for placing his alleged lover, an Israeli citizen, in a high paying state homeland security job. It turned out that McGreevy was gay. Who knew?

Now the state is run by Governor Jon Corzine, a Democrat gazillionaire who was bored after having bought the job of U.S. Senator, so he bought the job of Governor. He’s been in hot water ever since it became known he was giving lavish gifts to his ex-girlfriend and her family members. The fact that she also heads up the state’s largest union of civil servants adds a bit of drama to the revelations. Were legislators surprised to learn in July that they have an unfunded bill of about $69 billion for the health insurance they promised to current and future public retirees? Answer: Yes, probably.

Add into this mix a state Supreme Court that cannot interpret the state constitution that it forbids any other element of the state government but the legislature to initiate spending of any kind. Instead, these robed savants saddled the state with billions in the name of “the children” by requiring a school construction program that transfers money to urban and Democrat-controlled districts from suburban districts. The court has ordered free preschools for 3 and 4 year olds in urban districts even though the state constitution requires schooling only for those ages 5 through 18. Apparently a lot of people in those suburban districts are leaving.

This is also the same state that passed a Highlands Water Protection and Planning Act that instantly destroyed the value of homes and farmlands in a 1,300 square-mile region. As noted in a December Star-Ledger editorial, “Development controls are so sweeping that perhaps less than 20 percent of land in the region is left available for construction, even in the half of the region lawmakers had targeted for future growth.” Killing all growth in a huge swath of the state’s northwestern counties is yet another reason people are leaving.

The result of all of this spectacular stupidity is a projected state income and sales tax loss of $539 million in 2005. “Based on 2006 population out-migration data, the tax losses are estimated to have increased to $680 million in 2006.”

There is, of course, an astonishingly high rate of corruption among our elected leaders of every description; yet another reason for people to head for the exits.

If you tax people to a point where being middle-class is meaningless and punishable, they will leave for places where they are not regarded as a cash cow to be milked for public servants and social programs, and somewhere their children and grandchildren are not expected to pick up the bill. New Jerseyeans are deciding to leave in droves.