By Paul N. Marston from www.marstonchronicles.info. I have always thought that any President of the United States of either party, no matter how much I disagreed with his policies, had the best interest of his country and his fellow citizens at heart. He might be going about it the wrong way in my opinion, but there is no way that he would deliberately make life worse for his fellow Americans. Strangely enough, it was an episode in a television series that caused me to change my mind. My wife and I never watch television because we cannot stand the mind numbing insipid commercials we would be subject to if we did. We watch last year's programs that we enjoy on a rented DVD minus the commercials instead.
Thus it was that we watched this week an episode of Criminal Minds called "Coda" that was broadcast last February. During this program I suddenly became absolutely furious as I called our current president every foul name I could think of because I knew what I was seeing was all his fault and his fault alone. It was not that a couple in Louisiana had been kidnapped leaving their autistic son alone that set me off but what the screen was showing had happened to this town in Southern Louisiana instead. This couple was at risk because unlike anyone else in this town they had managed to get a measly $42,000 loan when no one else could do that. This was so unusual that most everybody knew they had gotten this loan and it pushed one desperate man who was losing everything to do something he would ordinarily never think of doing.
This episode was fiction but the economic situation it was depicting is tragically true. What made me so furious was that all this economic misery could be so easily solved by you, Mr. President. The entire Gulf Coast has lost hundreds of thousands of jobs and it is solely your doing, Mr. President. While I know how devastating this has been to the Gulf Coast intellectually, seeing a dramatization of the effects of it really brought it all home. Mr. President, how dare you let these Americans suffer needlessly? Yes, there was an unfortunate oil spill in the Gulf of Mexico. It has been plugged and in spite of numerous scare stories in the mass media, the damage to the environment has not been catastrophic. You and your appointees totally overreacted and shut down all drilling in the area and have refused to issue all but a handful of permits since. You have done this even in the face of a court order telling you not to do this. Mr. President, how dare you defy a federal court order and put all these people out of work?
All you have to do to fix this is to issue an executive order and tell your Secretaries of Energy and Interior to quit stalling and start issuing permits. You do not need the co-operation of those "obstructionist" Republicans in the House to do this. Indeed, they would be happy to co-operate on this particular subject. You are the obstructionist here and not them. Mr. President, how dare you continue to drag your feet and keep thousands of Americans out of work? What about that pipeline from Canada that would bring in much needed revenue and thousands of jobs? You could get this approved all by yourself by just telling your appointees to do it.
In order to protect some damn little fish that nobody but a bunch of wacko environmentalists gives a damn about, you have allowed hundreds of thousands of acres of the best farmland in America lie fallow. This has caused an economic disaster in the counties containing this land where unemployment is pushing 40%. A lot of these idled workers are Hispanics that you profess to be so concerned about. Mr. President, how dare you leave these Hispanics literally high and dry? With a stroke of a pen you could fix this and yet you cannot be bothered. You seem to be perfectly content to let Americans suffer because of your ritualistic commitment to the environment. Only an idiot fouls his own nest and we all want to see an improved environment but the environment is already greatly improved from 40 years ago. We should not rest on our laurels but there is no need to be so environmentally conscious that you are willing to let millions of Americans lose their jobs all because of one species here and there that is just not all that important in the overall scheme of things.
You and your ilk make fun of hidebound fundamentalists who believe that every word in the Bible is literally true and therefore the Universe was created in 7007 BC in spite of all the evidence to the contrary. Yet you are equally hidebound in thinking that wind and solar power are the answers to our energy needs now when all the evidence says that we are decades away from that happening if ever. In the meantime we need fossil fuels to keep us going. Instead of encouraging more exploration for fossil fuels here at home, you are content to force us to send billions of dollars to countries that hate our guts to buy their fossil fuels. Those billions could stay right here in our economy and provide much needed jobs. Mr. President, how dare you deliberately put us at such a security risk?
There are many people who think you are a closet Muslim and have been foisted off on us by some cabal who is intent on destroying this country and everything it stands for. Ordinarily these people would be totally dismissed as wild theory conspiracists. The only reason they have any traction with this idea is because of your behavior, Mr. President. They say that if their theory is incorrect why is it that everything you do seems to be deliberately chosen to make matters worse for America and Americans? A President who was determined to destroy America would do exactly what you are doing so even if you are not deliberately trying to destroy America, you might as well be in their opinion.
Right now most American businesses and especially the finance industry are sitting on trillions of dollars and not investing in new businesses and expanding old ones all because of you. They are not willing to hire any new employees because you demonize business at every turn. Rightly or wrongly, they believe that you are out to make their life miserable. That being the case, they are simply waiting your term of office out in hopes that you will be defeated and your successor will let them get back to the business of making all Americans more prosperous. Mr. President, how dare you do everything in your power to inhibit business and cause them to stop hiring people who are desperate to find a job?
In addition to your counterproductive economic policies you seem to be fomenting further divisions among Americans along racial and class lines. Anyone who opposes you is a racist yet blacks are only one out of eight Americans so how did you ever get elected without tremendous white support? When you and your supporters are not calling your opponents racists, you are accusing them of being willing to let people die and let murder and rape run rampant when they refuse to throw more money into your redistribute the wealth schemes. Mr. President, how dare you deliberately foster divisions among people you supposedly represent?
All one has to do is read the news to see you in constant campaign mode and never doing anything to help put Americans back to work. All you seem to care about is getting your sorry ass re-elected. Do you even care about your fellow Americans anymore if you ever did? Maybe you do care but it sure does not look like it given your actions. Mr. President, how dare you let us all suffer why you, your family and your cronies are riding high on our dime? You might not be suffering but we sure are. I suggest you get busy doing things to encourage businesses to put Americans back to work instead of beating up on them. We can't afford to wait until we can elect someone else who will do something to ease our suffering.
Mr. President, How Dare You...
Redistributing the Wealth
cross posted from MarstonChronicles.info One only has to look around to see that some people have a great deal of wealth and some people are desperately poor. Is this fair? After all, the wealthy have more money than they can ever use so why not take some of their excess money and give it to the poor who need it so much? Since the wealthy clearly do not give enough to charity, why not harness the power of the federal government to force a more equitable distribution of the wealth? Before we can answer that question we need to determine why some people have more money than other people in the first place. In order to justify seizing this "excess" wealth which Obama thinks should be making more than $250,000 a year, we need to determine that the wealthy came by their wealth unjustly. We need to determine that they stole it directly or indirectly by taking unfair advantage of other people. Most of all we need to determine that everyone is equally talented at making money as everyone else. If the explanation is that for the most part, the wealthy simply are better at managing money than poor people then even if we take their excess money and give it to the poor, in a relatively short period of time, the more talented people at making money will soon be the wealthy people again and the poor people will revert to being poor once they have spent the money the government gave them and be no better off than they were before. This in turn forces us to look at the uneven distribution of talent in general among our population. Some people are more athletically talented than others and make the big leagues. Others are better singers, dancers, mathematicians, etc. Unlike money, we cannot force an even redistribution of those kinds of talents. You are either good at something or you are not. Granted you can practice and become better at most things but some people just seem to be more gifted than others at just about anything you care to name. The only way to adjust for this uneven distribution is to deliberately handicap the more talented by playing favorites with the less talented. We see this in things like little leagues and even admission to colleges where everyone gets a chance to play regardless of their talent. The technical name for this attempt to force an even distribution of talent is egalitarianism. The uneven distribution of talent we see in the real world must be compensated for in the name of simple fairness or justice. Everyone should be just as good as everyone else at everything. The question then is how this well this tendency towards egalitarianism works in the real world. A simple example will suffice to determine this. Some people are more talented at doing schoolwork than others. It may be that they are smarter or work harder or are driven just to be good at everything. Other people may be lazy or simply just not motivated enough to be good at schoolwork in addition to perhaps being less talented at doing it in the first place. Still this is manifestly unfair so let's see how we can adjust for this in practice. A new teacher comes into the classroom who is determined to right this manifest wrong. Since everyone should be equal to everyone else, he gives a "C" grade to everyone regardless of how good or how poorly a student performs. It does not take a doctorate in psychology to figure out what the effects of such a policy will have. The good students think to themselves that they busted their butts to get a good grade and all they got was a "C" so what is the point of continuing to put in the extra effort? They promptly stop trying to make an extra effort. The poor students see that they got a "C" when inside their heads they know they did not deserve it. Since they know they will get a "C" anyway, why bother to try at all? It will come as no surprise to any student of human behavior, when standardized tests are given to this class of students; they will score abysmally compared to classes with teachers who are not committed to the doctrine of egalitarianism. All that happens under egalitarianism is that everybody is much worse off than before. There simply is no workable way to use some system to "force" a correction for the uneven distribution of talent. This simple fact of life is why capitalism always wins out over communism, socialism, etc. because it employs a system of rewards and punishment to provide incentives for outstanding achievement. Communism and socialism do not provide such incentives so everyone is encouraged to "goof off" since there is no incentive to do more than just enough to get by. This can be made even worse by introducing a system where no one can be fired for poor work performance. In such a system, productivity goes out the window. This then brings us back to the question of whether money making ability is a talent that is also unequally distributed or not. There seems no reason to assume that it is any different from any other talent and that some people have a "knack" for making money and others do not. That being the case how will taxing the rich to force them to give to the poor work out any better than giving everybody a "C" in a classroom? Why should the rich bother to bust their butts to start up new businesses or expand their old ones using the capital they have accumulated when the government is going to confiscate everything over a certain amount of money per person? Their incentive to put their money to work to make still more money is destroyed. All that happens is that everyone is worse off or poorer than they were before. Are you better off now than you were a few years ago? Most of us are not. Could it be that Obama's policies have discouraged the wealthy from creating more wealth for everyone and that is why everyone but the rich are worse off than ever? Capitalism works best when the government is no more than a referee to insure that reasonable rules for fair play are enforced. Whenever it gets into the business of meddling with the mechanics of the economy in the interests of enforcing equality, it just makes a mess out of everything. Government then is in the business of picking winners and losers. Not surprisingly, the winners always turn out to be those individuals and entities that support whoever is running the government. All that happens is that crony capitalism runs wild as businesses figure out that there is money to be made by playing the game that those in power want to play by any means necessary. This distortion of the free marketplace causes a recovery from an economic downturn to be very anemic at best or even drives it back into another recession. Government always screws up everything it touches. It simply is the nature of the beast. Government is an evil. It may be a necessary evil but it is still an evil. It will always pick winners and losers because it is run by humans who want to harness the power of government to reward their friends and punish their enemies. Unlike capitalism that rewards achievers, all government does is reward ass kissers and such people are seldom wealth producers for anyone but themselves. When capitalism works freely, it spreads wealth around to everyone, It does not spread it evenly because it rewards risk takers and producers and not just somebody who has a buddy in the government. The other problem with government micromanaging everything is that it makes our decisions for us with a one size fits all mentality. All this does besides making us poorer is that we become less free as well. We are no longer in charge of our own lives because government elitists who think they are smarter than everyone else but themselves are making all of our decisions for us in the belief that we are too stupid to make them for ourselves. The fact that their policies are attempting to right "supposed" wrongs that cannot be fixed in the real world, this will not turn out well except for them. The rest of us will just get screwed, blued and tattooed and that we submit is exactly what is happening.
How Much Economic Trouble is the U. S. In?
Everyone knows that the United States government spends far more than it takes in. Indeed, it has been doing that for all but a few years since 1930. Since it has been doing that pretty much all along, why get all that bothered about it at this late date? It would appear that the furor is being caused by the mounting size of this deficit spending in recent years under both political parties. At some point we might reach a point where the government is in so far in over its financial head that it is bankrupt in all but name but there is no bankrupcy court to appeal to. The question is then: are we there yet? Believe it or not, the answer to that question is neatly compiled in one table provided by that very same government via the Bureau of Economic Analysis in the Commerce Department. That table, number 2.6, is entitled Personal Income and its Disposition, Monthly. That one table gives you all the figures you need to assess where the government is at financially in relation to the people of this country. We have pulled out the critical parts of the data in table 2.6 into the table below. Please do not be deterred by the size of this table and all those numbers. Anyone with an eighth grade education can easily understand what this table tells us and how important it is that everyone understand the implications of what it shows. The critical part you need to digest is provided by the last two columns in the table. The column marked PRIV CAP shows how much money is made by private individuals in this country divided by our population to provide the per capita private earnings. When this figure increases, the average American is better off and when it decreases, we are worse off. The last column shows the the net financial effect that the government has on us because it is the total money coming in from private individuals and going out to them divided by our population. When the figure is negative, every man, woman and child is providing the government the figure shown each year to run the government. Obviously it should never be a positive figure because that would mean we are not providing any money to run the government but rather instead it is borrowing money to send money to us on top of the expense of running the government. Except for those last two columns, the other columns with money figures are in billions of dollars. The problem with the figures in the government table is that they are not adjusted for inflation, but there are figures at the bottom of the table to allow one to do that. We have done that for you in our table. The reason that it is critical to do that is because there is no way to tell if the government or we the people are better off or worse off than previously without making that adjustment. If you get a $5 a week raise but you are spending more than $5 a week more for groceries and gasoline than you were previously, then you are actually worse off in spite of the raise you got. Using the ratio of current dollars to 2005 dollars allows us to adjust all of the other figures in table 2.6 to 2005 dollars so we are not comparing apples to oranges. The population figures in the last line of table 2.6 allow us to calculate any figure to a per capita amount so we can see whether the average American is better off or not compared to a previous time. Indeed, we can do that for the government itself as well to see how much we are receiving from the government in benefits and paying to it in taxes and contributions to things like Social Security and Medicare. In line 1 of table 2.6 is the combined total income of all of us as individuals in billions of dollars on a month by month basis and that is in the column marked PERS INC in our table adjusted to 2005 dollars. Part of our income is from the government itself in the form of social security, medicare, unemployment benefits, etc. This amount is provided on line 14 in table 2.6 and is in the column marked TRANS, That is because the government calls the direct benefits it provides to us current personal transfer receipts. The amount we contribute to entitlement programs is found on line 20 in table 2.6 and is shown in the column marked CONTR. Likewise, line 21 gives the total amount we pay in taxes and is in the column marked TAXES in our table. The next column is a figure not provided directly by table 2.6 but is calculated by subtracting the transfers and adding back in our contributions to government benefit programs. We call this PRIV INC since this represents what our total income would be without the government having these benefit programs. We would not be receiving things like social security or Medicare nor contributing to them either. The next column gives us a figure of what effect the government has on us because it is the transfers to us minus the contributions and taxes we pay. Since it costs money to run the government, part of our income should go to the government to keep it going and hence be a negative figure to our own income. We might add that the sum of the private income per capita and the net government action is the total per capita income in 2005 dollars and it should and does agree with the figure provided in line 32 of table 2.6 plus or minus some minor rounding of amounts. Two things immediately jump out at you from this table. One is that the government benefits (transfers) are way more than our contributions to these programs and as you go down the table towards the more recent months, you will see that it is getting progressively worse. That in a nutshell is why social security is going broke. You will notice that the contributions suddenly drop quite a bit starting in 2011. That is because the two political parties decided to "forgive" part of the social security receipts for all of 2011. Hardly a peep was heard in opposition to this idea but it does mean that social security will go broke that much sooner. The second conclusion is the most startling and most unbelievable fact from our table found in that last column. At the top of the table back in 2005 through 2007, every one of us, including children, was ponying up between $1,855 and $2,340 to run the government and pay for all those entitlement program benefits some of us get. Suddenly that figure crashes in the middle of 2008 to less than half of that figure in June of 2008. By the first of 2009, this figure is down to $666 apiece. By April, it is down to pocket change. Starting in May of 2009, the figure goes positive and has been that way ever since. In the last two years, the average American has effectively not contributed one dime to run the government or pay for those entitlement programs. On the contrary, the government is sending some of us a lot of money because it is averages out to as much as $513 on an annualized basis for every last man, woman and child in the United States. How can this be you ask? Taxes have not actually been lowered because all they did was extend the Bush tax cuts already in place last December. Remember all of those give away programs where the government actually sent most of us a check? How about cash for clunkers and the first time homebuyer's credits at $8,000 per pop? Of course, programs like unemployment benefits and food stamps are running up the costs of all of those benefit programs just as tax collections are dropping due to an economy in the toilet as well. So how well did all those programs handing out goodies to some of us, but not all of us, work? Look at the private income per capita column to find out. That figure peaked at $35,113 in December of 2007. It dropped steadily down until it bottomed out at $32,342 in March of 2010. At the peak, we were sending the government $2,263 apiece per year and managing quite well. At the bottom, the government was sending each of us $421 on the average every year. In other words, our own average private income dropped from $35,113 to $32,342 for a loss of $2,771. The government went from taking in $2,263 to putting out $421 for a total turnaround of $2,684 in loss of income and outlays per person. The government attempted to make up for the loss of income by sending back all of the money we sent it and a whole bunch more. While that is no way to run a railroad, let alone a government, one can argue that the economic conditions justified these emergency measures. However, private income per capita has been increasing for over a year now but the government is still pouring out $485 in borrowed money to each of us on the average. The private income per capita has increased to $32,891 for a gain of $549. At the very least, the government needs to stop sending us money and start collecting some once again. We can begin by repealing the "forgiving" of part of the withholding taxes. The table shows us that contributions have dropped from $911 billion to $823 billion while the private income has actually started falling again from $32,925 to $32,891 during the same time. Clearly, this is not stimulating anything. We also need to repeal all of the special benefit programs added to "help" the struggling economy. The money is not being spread anywhere near equally. Car buyers and home buyers got huge special benefits and the rest of us got zilch. Not only that but when these programs stopped, they dried up both markets for months as the potential pool of buyers was dried up as all of those who could buy, did so while the getting was good. When is the government ever going to learn that it is doing more harm than good and by the time it gets around to applying a band-aid, the wound is already starting to heal?
YEAR MON PERS INC TRANS CONTR TAXES PRIVATE GOVT PRIV CAP GOVT CAP 2005 03 10,365.9 1,503.21 869.62 1,181.77 9,732.3 -548.18 32,947.6 -1,855.79 2005 06 10,509.8 1,516.11 873.61 1,209.95 9,867.3 -567.45 33,328.6 -1,916.66 2005 09 10,490.3 1,506.95 869.64 1,217.00 9,852.9 -579.69 33,192.9 -1,952.87 2005 12 10,660.2 1,510.10 875.62 1,248.31 10,025.7 -613.83 33,695.4 -2,063.02 2006 03 10,878.3 1,546.08 901.62 1,306.47 10,233.8 -662.01 34,322.1 -2,220.24 2006 06 10,954.9 1,570.41 861.69 1,306.84 10,276.1 -628.12 34,383.7 -2,101.67 2006 09 11,021.9 1,572.42 893.46 1,320.06 10,342.9 -641.10 34,511.5 -2,139.17 2006 12 11,187.5 1,596.22 907.33 1,366.01 10,498.6 -677.12 34,942.1 -2,253.63 2007 03 11,251.0 1,628.63 912.33 1405.68 10,534.7 -689.38 34,982.9 -2,289.24 2007 06 11,263.8 1,612.61 907.13 1,411.90 10,558.3 -706.42 34,976.2 -2,340.13 2007 09 11,331.5 1,634.35 907.22 1,417.51 10,604.4 -690.38 35,035.4 -2,280.91 2007 12 11,392.1 1,650.32 911.48 1,425.68 10,653.3 -686.84 35,113.3 -2,263.83 2008 03 11,401.1 1,668.54 915.28 1,424.71 10,647.8 -671.45 35,024.3 -2,208.62 2008 06 11,404.9 1,806.52 899.98 1,221.43 10,498.4 -314.89 34,457.3 -1,033.52 2008 09 11,293.3 1,716.60 897.11 1,343.54 10,473.8 -524.05 34,292.0 -1,715.77 2008 12 11,354.0 1,797.74 901.17 1,311.79 10,457.8 -415.52 34,163.9 -1,357.43 2009 01 11,247.1 1,846.59 896.42 1,254.20 10,297.0 -204.03 33,616.7 -666.10 2009 02 11,136.1 1,861.25 887.82 1,121.66 10,162.7 -148.23 33,157.6 -483.62 2009 03 11,119.8 1,898.35 886.91 1,085.82 10,108.3 -74.38 32,959.7 -242.52 2009 04 11,160.2 1,917.88 892.77 1,033.30 10,135.1 -8.19 33,025.6 -26.68 2009 05 11,330.2 2,075.84 896.05 1,022.13 10,150.4 157.66 33,053.0 513.39 2009 06 11,156.2 1,962.14 889.91 1,011.73 10,083.9 60.50 32,812.1 196.86 2009 07 11,111.7 1,956.83 886.49 1,017.29 10,041.3 53.05 32,648.1 172.48 2009 08 11,102.2 1969.22 886.61 1,021.77 10,019.6 60.84 32,550.6 197.65 2009 09 11,083.1 1,984.44 883.75 1,018.45 9,982.4 82.24 32,403.3 266.95 2009 10 11,060.6 1,969.50 883.21 1,014.54 9,974.3 71.75 32,352.2 232.72 2009 11 11,089.8 1,980.72 884.46 1,012.97 9,993.5 83.29 32,391.1 269.96 2009 12 11,128.5 1,999.85 882.81 1,010.37 10,011.5 106.67 32,427.6 345.50 2010 01 11,121.7 2,011.21 890.95 1,022.53 10,001.4 97.73 32,374.4 316.34 2010 02 11,129.1 2,017.32 890.08 1,022.59 10,001.9 104.65 32,356.1 338.54 2010 03 11,158.6 2,045.74 891.01 1,024.40 10,003.8 130.33 32,342.2 421.35 2010 04 11,242.3 2,053.22 899.13 1,030.21 10,088.2 123.88 32,594.2 400.24 2010 05 11,301.2 2,060.81 905.24 1,038.61 10,145.6 116.96 32,757.7 377.63 2010 06 11,321.6 2,070.92 906.35 1,040.06 10,157.0 124.51 32,770.2 401.71 2010 07 11,318.4 2,068.51 908.08 1,055.07 10,158.0 105.36 32,748.2 339.66 2010 08 11,351.7 2,098.86 909.73 1,060.81 10,162.6 128.32 32,736.1 413.35 2010 09 11,341.5 2,087.58 910.02 1,065.68 10,163.9 111.88 32,713.9 360.10 2010 10 11,379.7 2,091.47 912.60 1,076.83 10,200.9 102.04 32,807.9 328.17 2010 11 11,403.6 2,097.62 911.96 1,079.75 10,217.9 105.91 32,839.3 340.18 2010 12 11,428.5 2,096.45 911.62 1,083.64 10,243.7 101.19 32,901.3 325.00 2011 01 11,520.9 2,088.64 824.68 1,127.99 10,257.0 135.97 32,925.5 436.47 2011 02 11,520.9 2,085.60 824.24 1,126.57 10,259.6 134.79 32,915.3 432.44 2011 03 11,534.0 2,099.08 823.32 1,124.26 10258.2 151.50 32,891.2 485.75
Here is How Taxing the Rich Works
The idea here is that the rich have more money than they know what to do with so why not raise taxes on them so the government will have more money to spend on programs to help people who struggling to survive? You need to know how the rich live and what they do with their money so you can see how this works. Believe us when we tell you that the rich do not hide much of their money in a wall safe in their master bedroom. They have three choices of what to do with their money. They can spend it, put in a bank and let it collect interest or they can invest it and hope to get a good return on their investment.
If they spend it that means they have had to pay for the goods or services they bought and they have to pay sales taxes on what they bought. Whichever company supplied the good or service along with their employees then gets the money. All that does is make whoever runs that company richer after he pays his employees. The rich could put their money in a bank so the bank would have money to loan to people but then banks only loan to people who have excellent credit and that sure does not include us who are struggling to survive. Even if they will lend to us, their interest rate is so high we can never pay the bank off so who needs this total ripoff anyway?
The third thing they can do is invest their money and get even richer by demanding control over whomever they are are willing to provide their money. Even though some of that money will be used to build new buildings and machines and another company has to supply the materials and labor to build the buildings and make the machines, only a small part of that money will go to pay their employees. The people running the construction companies and manufacturing companies will keep most of the money and get even richer. What little trickles down to us from those companies in the form of wages does not begin to make up for the huge profits that goes to the company executives and to the rich people who buy stock in those companies. Yes, we do own stock in companies through our 401(k) accounts but these bastards always manipulate the stock market so we never get ahead anyway.
Now you can see how taxing the rich works because it takes their money away from them before they can use it for any of those things that only the rich can do. Now the money goes to the government so they can use it to give to people who are struggling and do not have a job or have a lousy job that does not pay enough for them to live on decently. Of course, this does make us somewhat dependent on the government for our survival but it is free money. Naturally since the government is dispensing this money it will have to set some rules about who gets this money and what we do with it. But since we decide who runs the government this is not a problem. We still get this free money and so putting up with some bureaucrats telling us what to do is no big deal.
Naturally the folks running the government expect you to vote for them so they can keep finding more ways to tax rich people so they will have more money to give us. Of course, a fair amount of this money will have to go to government employees so they can make more laws and set rules and regulations to make sure we spend the money they have given us properly. Now you know enough about politicians to now that another bunch of that tax money will go to grease the palms of their buddies who have made substantial contributions to their re-election campaign. But hey, that is the way the system works so you can get the money from the rich who do not deserve it and do not need it. So maybe only half of that money ever finds it into the pockets of those who are not rich but something is better than nothing.
Now you can see the advantages of taxing the rich. They do not need all that money to spend, put in banks to loan folks and invest in businesses to make still more money. Of course, if they do not do that with their money there will not be enough money available to borrow from banks or to lend to new businesses to hire more employees. This is also not that big a deal because the government can just print more money to give to companies so they will do that. That way the young people who just got out of school and need a job can find one. Your kids who now need a job or your friend who got laid off can find work eventually as soon as the government dispenses that newly printed money and those new companies get those buildings built and the machines bought. Now the poor people who did get the money can go down to Wal-Mart and spend the money to buy some things that they could not afford before. Of course, those goods were made in China so only the employees at the Wal-Mart and the fat cats who run it got paid.
That is not a problem since your kids and the laid off friend can always go down and get a job at Wal-Mart until the government figures out how to get all that new money spent. Of course, Wal-Mart jobs do not pay very well but we can fix that by unionizing Wal-Mart and make it pay better wages. That will raise the prices at Wal-Mart but we can take care of that by raising the taxes on the rich some more. So now you see what a good deal it is to just make the rich give most of their money to the government so we can get our half of it. There is a small downside to this though in that who would want to get rich if the government is going to take away most of the money they make over $250,000 a year? Unfortunately there will not be much encouragement for people to work hard and get rich so the government can take most of their money away from them to give to us. We can solve that easily by raising taxes higher on those that are already rich.
Think of how much better it will be to not have to work so hard for a living or even to work at all and let the rich take care of the rest of us. That way we do not have to worry about unemployment because we can just go on welfare. Of course, with fewer people working, fewer people will be paying taxes so we will have to change our definition of who is rich to those making more than $100,000 a year so there will be more rich people to tax. Eventually we will have to get down to those people making more than $40,000 before we take most of their money away from them above that amount in taxes. Oops, people making only $40,000 a year are not rich; they are the middle class. Something has gone wrong with this idea.
It sounds like the rich are getting poorer but we are not getting richer. Instead our taxes are going up so anything we have gained is going to people who are poorer than we are. How are we better off with this plan in the long run? Gee, maybe it is better to let the rich people keep most of their money so there will be money to lend and create decent paying jobs with good wages. Damn, maybe socking it to the rich does not work so well after all. How about that? Then why are President Obama and the Democrats in Congress proposing that we do this? Damned if we know; you will have to ask them to explain how this works out so well. We must be missing something on how us poor folks can get ahead under this scheme of theirs.
The Sky is Really Falling
From The Marston Chronicles
In 45 years of being heavily involved in politics, we have never seen anything like this. Having been hammered for two elections, the Republican Party was totally on the ropes with only 40 Senate seats and 178 House seats. This is down from 55 Senate seats and 232 House seats in just four years. Now just 15 months later, the Republicans are poised to regain control of both houses in Congress in November. We are projecting a 58 seat gain in the House which would give them four more seats than they lost in the last two elections. We were projecting only a 44 seat gain just three weeks ago.
The Senate has been considered totally out of reach by everyone, ourselves included, until the election of Scott Brown in Massachusetts. The reverberations of that election are still striking every nook and cranny of the American political world. Races that would have been considered totally hopeless are now in play. Since there were only 19 Democrat held seats in play, how could the Republicans possibly expect to pick up 11 more to regain control of the Senate? The seats in Hawaii, Vermont and Schumers's seat in New York were and still are totally out of reach.
Who would believe that the Republicans would have a snowball's chance in hell of picking up 11 of the remaining 16 seats? On top of this, three more seats in Connecticut, Maryland and Oregon are really long shots even now. For example, Senator Wyden in Oregon does not even have a Republican opponent and his seat is the best bet of the three. So that left the Republicans with having to pick up 11 of the remaining 13 seats to regain control. They have already picked up the Massachusetts seat with the election of Scott Brown so now they need 10 of 12 seats. You could have gotten odds of 100 to 1 that the Republicans could not do that. If we were in Las Vegas right now and had some money to spare, we sure would be placing a bet that the Republicans would regain control of both houses of Congress in November.
If you look at our table of vulnerable Democrat held seats in the Senate, you will see the latest polls for each seat where they have been taken so far. In those 12 seats, a possible or actual Republican candidate is ahead in 9 of them. This simply cannot be happening and since it is, the sky must really be falling. Of course, there are some problems in three of these good chance seats in that Pataki in New York, Thompson in Wisconsin and Rossi in Washington have not committed to run yet. Even unannounced, they are ahead of Gillibrand, Feingold and Murray. This is totally unbelievable. If these three run and the election were held today, there would be a tie in the Senate and Vice-President Biden would be casting the tie breaking vote for the Democrats.
But wait, we are not done yet. Let's look at the other three seats left out of the 12: Illinois, California and Indiana. We will not know about Illinois until a poll is taken after today's primary. In California, Boxer is only ahead of Campbell by 4 points and Bayh is only ahead of Hostettler by 3 in Indiana. It is entirely possible that the Republicans could pick up all 12 seats and that is just totally unreal. Things like this just do not happen in politics but then Republicans do not get elected in Massachusetts, the most Democrat state in the union, to fill a seat once held by two Kennedy brothers either.
How could this be happening? The only plausible answer is that there is a massive rejection by the voting public of the agenda being pushed by the Democrat trifecta of Obama, Reid and Pelosi. Trying to jam health care reform down our throats, trying terrorists as common criminals and spending money like a whole carrier full of drunken sailors on Uncle Sam's credit card is ringing up a massive no sale for the Democrats. No one likes rejection but the worst thing you can do is to pretend it is not happening. That is definitely whistling past the graveyard. In this case, the graveyard is where the far left agenda of the trifecta is being buried right now. The Democrats need to "straighten up and fly right", so to speak, or suffer the most disastrous defeat in the history of modern politics.
A Proposal That Will Actually Create Jobs
From The Marston Chronicles
We have all watched in disbelief as the Obama administration has thrown over a trillion dollars at stimulating the economy and stemming the continual loss of jobs. Never has so much been spent to accomplish so little except to line the pockets of the special interests. You would think that even the economic illiterates could figure out that in order to create jobs, you need to give businesses a reason to start hiring. Threatening them with new taxes by letting the Bush tax cuts expire, cap and trade, and further regulation will definitely not do that; in fact, it will only encourage them to lay off more people.
There is a very simple way to encourage businesses to start hiring people right away. It does not require a whole new bureaucracy to administer it or to send money to anyone. All it requires is to design a simple form that businesses can fill out with the name, address, social security numbers and wages of all new hires or rehires. What will encourage businesses to do that? It is because the federal government will subsidize a portion of the wages of these hires and not be sending the business a check either. Businesses know that the inefficient federal government will not get them a check in a timely fashion as the cash for clunkers program made very clear.
What kind of a subsidy would be required? The business agrees to keep the new hire employed for a full year and to replace any new hire that leaves for any reason for the balance of the one year contract. The government will agree to pay 100% of the gross wages of the new hire for the first month. The second month, it will pay 90% of the gross wages. Each month after that it will decrease the subsidy by 10% until the subsidy stops after the tenth month. Simple isn't it? This is not rocket science, people, it is just common sense which seems to be sorely lacking in government these days.
How does the business get paid the subsidy? It doesn't. It subtracts the amount of the subsidy from the payroll taxes the business deducts from all its employees' wages and sends in the reduced amount. The form is attached to the paperwork filed showing the payroll taxes that are being paid. The business gets to keep the the subsidy immediately by not sending in all of the payroll taxes like it is required to do. There is no muss, no fuss and minimal paperwork. Instead of having to cut a check for the subsidy with all of the effort and bureaucracy required, the government just collects less in taxes in the first place. Now would businesses go for this program? You had better believe they would.
You now are going to tell me that this is way too expensive. Like a trillion dollars wasted to no real effect was too expensive? Instead of another stimulus bill that will not work, how about this idea? You can just use the rest of the previous stimulus money to pay for this program since it will only be wasted on any other approach. How many jobs will be created the minute a bill enacting this program passes? As many as the government is willing to subsidize. Let's say that the average wage of a new hire will be $10 an hour. For an average work month of 176 hours, that is $1,760 the first month, $1,584 the second, etc. until it becomes $176 in the tenth month. This is a total subsidy of $9,680 per new hire (or rehire). Let's call it an even $10,000 to keep the math simple. You create 100 jobs for each million spent. That comes to 100,000 jobs for each billion spent. If this program had been in place in stead of the stimulus bill, we could have created 10,000,000 jobs at a cost of $100 billion.
Since we spent a trillion to no avail, we could have gotten by with a tenth of that and have a solid economy to boot. There would have been no need for bailouts that did nothing for working Americans. It would have saved a fortune in unemployment compensation and food stamps. Starting in the eleventh month, the government would start collecting payroll taxes on another 10 million employees and not be in the bind it is now. Best of all, these jobs would put us back at full employment in a very short time. The state and local governments would be collecting sales taxes on all the money being spent by another 10 million employed people and not be in the bind they are in now. This is not a welfare program, it is an investment in America's future. Why does the government have to do things the hard and ineffective way?
Does this simple idea ring a bell with you? Fine. Spread the word through the internet and flood the halls of Congress with demands that the government enact this program. This is not a Republican program or a Democrat program. This can be the American people's program. The sooner this is done, the sooner we will all be better off and so will our country.
Economic Outlook for 2010
While the ever mounting huge debt that the federal government is piling up is the most serious long term problem, the job market is the most serious problem facing us now. The economy has shed 7,156,000 jobs in 2008 and 2009. On top of that, another 125,000 people enter the job market each month. So the economy needs to create another 125,000 jobs each month just to keep unemployment steady. What can we expect from the economy in job creation once it recovers? The average number of jobs created in 2004-2006 was just under 187,000 a month. Since 125,000 are needed just to keep up, that only leaves 62,000 jobs a month to start making a dent in those 7,156,000 jobs lost. At that rate, it would take over nine years just to get back where we started at the beginning of 2008.
While the preliminary figures for November 2009 show only 11,000 jobs lost, that is still a far cry from the 125,000 jobs created per month just to keep up. Not only was the income from all those jobs lost not available to circulate through the economy, but the taxes on those wages and the sales taxes on what those wages bought was lost as well. As a result, most governments at all levels are running deeply in the red. In particular, the social security and Medicare taxes on those wages were lost so that payments out exceeded the taxes in for the first time in history.
This of course exacerbates the the long term debt problem. How are we ever going to pay off the $12,157,000,000,000 debt at the federal level alone? You can go to www.usdebtclock.org and watch in real time how fast the debt is piling up. It also shows official unemployment at 15,412,125 and actual unemployment is estimated at 26,470,024. You will be truly shocked. That same web site shows that each person is on the hook for $39,437 apiece to pay off this debt. Since the per capita income in the United States is $27,466, each of us would have to work 17.23 months and give every dime to the federal government to pay off the debt. Since we have to have food, clothing and shelter, how long would it really take?
The point of all of these dry statistics is that the economic outlook for 2010 and years to come totally sucks. So what do we do about this dire situation? Just plain common sense tells you that the federal government should not only not commit to any new expenditures and but start cutting the existing ones as well. That would seem to indicate that a new system of national health care would be a non-starter. So why then is it even being considered let alone being jammed down our throats against the majority's will? Apparently all 60 Democrat Senators are so busy with their social engineering that economic facts are totally lost on them.
Most of us are not very happy with the Republican Party either since it has not taken any serious steps to control spending when it was in power. Still since every last Republican Senator voted against the health care bill, that says that they at least have some economic sense. What choice do we have but to vote in more Republicans? The problem with that is that it will take a year for us to do that and in the meantime, we are going down the tubes as a country. What we need to do to cut back on this fiscal insanity is to replace one of those 60 Democrat Senators with a Republican right away and not a year from now.
It just so happens that we have a chance to do that on January 19th. All we have to do is do whatever it takes to get Scott Brown elected in the special election in Massachusetts. While only voters in Massachusetts can do that, we can help them do what is needed by doing whatever it takes to get Scott Brown elected no matter wherever we live. Please go to www.brownforussenator.com and donate your time and money to help our country avoid insolvency. After looking at the figures above how can we justify not helping Scott?
We Cannot Just Say No
If those of us who are opposed to the current administration and Congress let those same folks ingrain the idea in the body politic that we are merely obstructionist, we are doomed. To just say no is to say we support the status quo and are convinced that since nothing is broken, nothing needs fixing. There are many things in America that are broken and need fixing and everyone should agree on that. The argument is over how to fix what is broken.
Liberals think that the government can fix all these broken things if we will just give them the authority to do so. The rest of us know better because what has government ever done right? History shows that government screws up everything it touches beyond all reason and belief. Civil servants have no vested interest in getting things right. They are only interested in covering their asses so they can keep their position at the public trough. Individuals and competitive profit making business have a vested interest in getting it right.
We need a forum for our proposals on how to fix what is broken. General principles can be done easily such as the ones at: PUMA Coalition Positions. The problem is that philosophical positions are not grabbers with the general voting public as opposed to political activists. To convince the non-activists to join us requires that we have specific solutions to solve known problems. We are going to take a stab at offering some fairly radical ideas on providing these fixes in the order that they are important to the American People as delineated by Rasmussen Reports.
These are: Gov't Ethics/Corruption, Economy, Health Care, Nat'l Security/War on Terror, Social Security, Taxes, Education, Immigration, War in Iraq and Abortion. Each of these problems is laid out along with our proposed solutions at www.marstonchronicles.info
What Makes Obama Tick?
We have been watching the actions of President Obama trying to figure out what really motivates him. We did not support him for the Presidency, not because he was black or even a Democrat, but rather because his previous history indicated that he was not really supportive of the America we know and love. Still when he did get elected, we looked at the bright side and felt that at least we had proved that skin color was no longer a barrier to political advancement in this country. There is no way he could have gotten elected without a great number of white votes so we felt that at least white guilt would be a thing of the past and race relations in this country would improve. No such luck.
We slowly began developing a theory that could explain his actions. For a minute let's just assume that an individual who was raised as a Muslim in the most Muslim country in the world and attended Muslim schools also retained this childhood conditioning. Let's further assume that this person moved to the United States and eventually became President. What would a true Muslim do in such a case? He could not admit to being a Muslim so he would have to be ostensibly a Christian. Does this explain why Obama could be a member of a church with a rabid race baiting minister and not be bothered about it even when his mother was white?
What kind of politics would such a person be attracted to? Wouldn't he pick associates no matter how horrendous their background and who actually hate this non-Muslim country? Wouldn't he be attracted to a politics that was the most dangerous to the United States? Wouldn't he surround himself with people most likely to accept a black person and actually push him based on his race? Wouldn't such a person resort to dirty tricks to eliminate political opponents, even those who had supported him in the past? Is it just some coincidence that most of Obama's opponents were forced out of his races giving him a free ride?
Wouldn't he campaign as a person who strongly favors a "help the oppressed minorities and adopt a message of peace and good will towards all mankind" while pushing the hope that he could right all of the evils in this world? But is that what he would do when he actually got elected President? Obviously not. The first thing a closet Muslim would do is totally ignore the gays who overwhelming supported him because his Muslim beliefs caused him to think that they should really be executed. The next thing he would do is slowly and steadily pull the rug out from underneath Israel and ignore the American Jews who overwhelming supported him because he really hates them.
In foreign policy matters, he would be a total wuss. He would encourage anyone who is opposed to the United States by letting him know that he will not stand in their way if they make quiet but still overt moves against our interests. He would make nice with the most dangerous Muslim countries like Iran. Since Muslims are not particularly interested in democracy, he would quietly support dictators of all sorts such as Castro, Chavez, and their like. He would alienate our allies and slowly but surely strip them of any defense against Muslim aggression. He would bow to a Muslim king and give a speech on and in the Middle East to let Muslim leaders know they had a friend in the White House without being so obvious that anyone one not on the right wing would protest.
While campaigning on the idea that Afghanistan was where the real war should be waged, once elected he would do nothing to support it and stall as long as possible on military requests for assistance. In the end, he would do nothing so that the Taliban could win and give not only the United States but also give its NATO allies a black eye. After that betrayal, why would the West be interested in combating terrorism? He would even rename the War on Terrorism to further trivialize the effort.
He would push programs that would devastate the economic welfare of this country by running up massive deficits. He would favor laws that profess to do something about global warming but would actually make the current recession much worse. He would push for more expensive entitlement programs that would inevitably bankrupt this country. He would keep pushing these programs even when a rising opposition caused his poll numbers to go into free fall. Such a person would not care about political damage to himself or members of his party or getting them or himself re-elected because he would need to do as much damage as fast as possible. Does any of this ring a bell? We just cannot come up with any other theory that explains all of Obama's actions. We greatly fear that Obama is a Muslim wolf in Christian sheep's clothing. We truly hope we are wrong but we do not think we are.
See http://www.resistnet.com/profiles/blogs/islams-stats-from-the-cia comment number three for Obama's sister's confirmation of this theory.
We Will All Go Down Together
From The Marston Chronicles
We have watched with amusement as we read comments from our World News section here on The Marston Chronicles. Several snide news articles and comments have been made about how the American economy has slid into recession. Usually they accuse us of spending money like drunken sailors not just at the governmental level but at the personal level as well. One must wonder just what they think has been keeping their own mostly socialistic economies afloat lo these many years.
Now that the American consumers have reacted to the layoffs, credit crunch and home price deflation by being more frugal in their purchases, they are buying far fewer foreign imports. No more American tourists on a fling in foreign lands. The end result has been that other countries are feeling the economic pinch far worse than the United States is. Just what made these folks think that we could crash and burn economically and that they would still be peachy keen?
Here is just a sample of how wrong they have been:
China’s economic downturn has cost the jobs of 20 million rural migrants, prompting a call from the Communist Party’s security chief for efforts to calm possible unrest.
O2/03/09: Hundreds of British workers walked off the job Monday, part of a rising tide of industrial unrest sweeping Europe as the continent's economic downturn worsens.
02/03/09: Greek farmers demanding more aid from the government are the latest to protest in the European nation, as the ruling party’s popularity slides.
01/31/09 NY Times: Protesters held demonstrations throughout Russia on Saturday, offering largely subdued, but pointed criticism of the government’s economic policies as the country continues to sink deeper into an economic morass.
NPR.org, January 30, 2009 · As the global economic downturn sinks in, some people in Europe are expressing their economic pain in the form of strikes and protests.
Jan. 29, 2009: More than 1 million protesters took part, with tens of thousands of youths, retirees and unemployed people marching across towns and cities, police said.
This is a link to an Iceland news broadcast (in Icelandic) that shows just how tense the situation in Iceland is becoming. It appears that Olafur Orn Klemensson (and associate), an economist at the Central Bank of Iceland pushed protesters.
An outstanding and frequently updated blog about the Iceland economic crisis by a native Icelander. Chock full of videos and information about the current state of economic affairs in Iceland. This blog is a must read!
N.Y. Times Article: Riots broke out once again in the Baltic states on Friday, this time in the Lithuanian capital, Vilnius, where a group of 7,000 gathered to protest planned economic austerity measures.
N.Y. Times Jan 14, 2009: Violent protests over political grievances and mounting economic woes shook the Latvian capital, Riga, late Tuesday, leaving around 25 people injured and leading to 106 arrests.
Ariz. police say they are prepared as War College warns military must prep for unrest; IMF warns of economic riots
Obamulus Economics and Its Fallacies
Recently, President-elect Obama has openly reversed the course of Ronald Reagan's "government is the problem" and even Bill Clinton's "the era of big government is over." He has given us insight into his short-fuse plan for government intervention into the economy based upon huge deficit spending. All the while, trying to garner support from voters in a campaign style message relying on the prediction of catastrophic economic failure and spreading panic.
In a speech given at George Mason University, the President-elect stated, "Unless Congress acts within the next few weeks on his economic stimulus package, he said, "Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."
Banking on his own popularity and the American people's fears about the economy, Obama, is gambling that these two factors will open the door for his $1 trillion stimulus package. According to Rasmussen Reports, 54% of voters believe a government economic recovery plan is needed.
Bloomberg.com reports that David Axlerod, Obama’s chief political adviser, and Jim Margolis, his campaign media adviser, are busy shaping up the verbiage that will assist in the passing of the stimulus package. After researching focus groups they determined using words like "recovery" and "investment" will make the overtly expensive and expansive package even more palatable to voters.
The Obama team has even prepped the battle field much like they did during the campaign, relying on virtually the same tactics and strategies. However, his actual plan for short fused "stimulation" of the economy leaves much to be desired. Banking on an infant industry like green-tech, infrastructure rebuilds, expansion of 600,000 government jobs, limited tax rebates, insane spending, etc. is hardly the course for real economic recovery. In fact it will only exacerbate the problem.
Congressional Quarterly reports, via the Congressional Budget Office, that the deficit for FY 2008 is already at $1.2 trillion, this does not include Obama's plan for spending another trillion or so. It is hard to fathom his claim that simply doing nothing will create a worse debacle than a $2.2 trillion deficit for FY 2009. In effect, this will create another bubble of sorts, only it will be made up of government spending and borrowing which will inevitably burst. What will happen when the only entity which the private sector and taxpayers can turn to has collapsed? How will engaging in the most massive spending flurry for a problem, that is no where near as bad as the Great Depression, solve this?
The jobless rates for December have just been released and now we are sitting at 7.2% unemployment rate, nationally. Obama has gone form promising 2 million new jobs, to creating 3 million jobs, to saving the jobs he was once going to create. John Ward of the Washington Times does some simple arithmetic which puts things in perspective, at our present rate it is more than likely we will reach 5 million jobs lost. We are still gain 2 million unemployed Americans if his plan even works. Just shifting your talking points in a speech to match the days problems isn't solving the issue.
None of his ideas, or more correctly the ideas of his economic advisers, deal with the problems at hand; misguided government monetary policy and financial regulation -which created the wrong incentives-mismanagement of government-sponsored enterprises, and enabling of the government by the American people. The government needs to clean up the mess which they helped create, while the constituency needs to understand it is going to have to tighten its belt while things get better. A shifting in the paradigm of financial thought within the government, as well as the everyday population, is the first step.
There are a myriad of ideas, that have been presented, which tackle our economic crisis. From the CATO Institute, cut the "payroll tax," or at least lower it, for employees and employers for two years. This without a doubt will increase our present deficit, but, it would allow the recovery to happen more quickly. Severely cut our "corporate tax rate," this would be one incentive for companies to move or stay in the US, creating more jobs in the long term. Simply reinforce investor's confidence by having Mr Obama state that he will not raise the "capital-gains tax," and again, maybe even look a lowering it. This would help market confidence return and spur investments.
Right now banks are withholding money and not giving out credit to businesses or individuals. However, they are expecting these same people to pay down their debt. When this happens it forces a contraction of the economy. By leaving money in the hands of consumers and business, you circumvent this from happening. The Heritage Institute's, Center for Data Analysis, predicts that through massive tax cuts and incentives we would, "Increase employment by a half million jobs in 2009 and by a million jobs in 2010, and create 3.6 million jobs over the period 2009 through 2012."
We have to remember that the government does not create jobs nor does it correct economic downturn. What it does do is get in the way by increasing its sphere of control and mismanagement, exacerbating already existing problems. The economy, if allowed, will correct itself and fostering an environment of risk taking, investing, and savings is what will bring us through. Not wanton and irresponsible government spending.
China, America's Economic Drug
After a decade or so of rampant American consumerism and deficit spending, while relying on the Chinese to bankroll it. The stale reality of what it costs just maybe coming home to roost here in the United States.
The problem has been very simple, America has engaged in a gluttony of buying cheap Chinese manufactured products. Thus generating a huge profit return for the Chinese government. Then in turn, they would finance the US government's deficit spending, using manufacturing profits, by buying up billions worth of government bonds and government mortgage backed securities. (Total invested by China so far, $1,000,000,000,000.) This massive investment allowed interest rates to be lowered to such a point to fuel the aggressive housing purchases which led up to the mortgage crisis.
From the New York Times article,Chinese Savings Helped Inflate American Bubble ,NYTimes-Chinese leaders chose to park the bulk of that in safe securities backed by the American government, including Treasury bonds and the debt of Fannie Mae and Freddie Mac, which had implicit government backing.
The Chinese were able to keep their products at all time lows by refusing to allow the value of their currency to be affected by the market. There was no moderation of their manufacturing potential, which allowed them to horde their profits. Americans, in the meantime, were exercising their right to spend. Americans were buying up every product with "Made in China" stamped on the back of it, funding the Chinese loans to US government in the form of profits. Simply put, frugality versus consumption.NYTimes-China tied itself even more tightly to the United States than did Japan. In 1995, it devalued its currency and set a firm exchange rate of roughly 8.3 to the dollar, a level that remained fixed for a decade.
Now that we are in the process of spending $700 billion TARP fund and getting ready to acquire almost $ 1 trillion more debt for an Obama stimulus package. Guess who is waiting in the wings to loan us the capital?
However, as Americans are revisiting the "old-fashion" ideas of frugality and spend-thriftiness the demand for foreign products are slowing. Taking into account China's own addiction and dependency on American consumption, the result for them may be as equally harmful.
NYTimes-The Treasury is conducting more auctions than ever to finance its $700 billion bailout of the banks. Still more will be needed to pay for the incoming Obama administration’s stimulus package. The United States, economists say, will depend on the Chinese to keep buying that debt, perpetuating the American habit.
From Bloomberg.com,Bloomberg.com-The world’s fourth-largest economy grew at the slowest pace in five years in the third quarter as a global recession cut demand for exports and companies reduced output. Overcapacity in almost all industries and “unprecedented” drops in some commodity prices may hurt profits further, Li Yizhong, head of the nation’s industry regulator, said this month.
This recession is a unprecedented opportunity for America to let the free-market work in its favor. By re-industrializing, the United States can return to its own reliance on Stateside profits to finance its needs. Also, enticing some foreign investment back into the country, however, creating an environment in which there is equitable trade between partners, not rivals.
