Fiscal Insanity

The Fiscal Cliff, Taxes, Math and the End of the Road

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The above video by Bill Whittle from 2011 illustrates how deep in the hole we are when it comes to annual deficits.  The idea of the Obama administration that the Bush tax cuts must expire for “the rich” earning over 250K (In Chicago that would be a cop and his schoolteacher wife.) has everything to do with politics and almost nothing to do with deficit reduction.  Here is why.

If you abolished all of the Bush tax cuts for “the rich” earning over 250K a year, and assuming they did not come up with ways to legally avoid the additional tax by deferring income,  the Treasury, further making the rash assumption that increasing taxes does not have any negative impact on the economy, would receive about 70 billion dollars in additional taxes, according to the Congressional Budget Office.  This year our deficit is approximately 1.1 trillion dollars.  If we eliminate the Bush tax cuts for all taxpayers, the increase in taxes would be about 370 billion, according to the CBO, assuming, rashly, that increasing taxes on the middle class would not have a negative impact on the economy and swell the ranks of people qualifying for “freebies” from Uncle Sucker. Continue reading

Lessons For America From the European Fiscal Meltdown

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Another fine econ 101 video from the Center for Freedom and Prosperity.   This video exlores the lessons that America can learn from the current European fiscal and debt crisis.

The lessons are very simple:

1.  Higher taxes lead to higher government expenditure and not reduction of government debt.

2.  A value added tax is a recipe for run-away government expenditure.

3.   A welfare state breeds dependency.

4.   Fiscal reform and reduction of government expenditure is impossible once more people are living off the government than are paying taxes to support the government.

5.   Bailouts do not work. Continue reading

Buchanan: Right Moving Away From Bush II Foreign Policy

Pat Buchanan seems to think the political right is shifting away from Bush II foreign policy. This seems, at best, politically delusional. He rests much of his presumption on the victory of Ron Paul in the pre-2012 GOP presidential nomination straw poll. The poll itself has already been dismissed by the pundits as a non-indicator of the future of the Republican Party.

But what of Buchanan’s other points? How do the so-called budget hawk fiscal conservatives justify budget-busting spending on their foreign policy views? Secondly, how and why is this growing American imperialism good for our country? Continue reading

Political Doublethink…Again.

The epidemics of amnesia, Alzheimer’s, schizophrenia, self-hypnosis, and intellectual doublethink are on the rise in Washington—rising faster, by the calculation of some spectators, than our national debt.

It goes without question that there are things on record some would prefer to forget or never have mentioned again. Republican lawmakers, influenced by political expediency or historical confusion, presented themselves in the latter part of this year as the champions of Medicare. The glaring absurdity of GOP Medicare scare-tactics somehow passed under the radar of the majority of critics, who most certainly had their eyes fixed on the Democrats.

Just recently Senator Hatch (R-Utah) decided that he would not let the year close without displaying one more case of Republican intellectual doublethink—one so incredible that is absolutely mind-boggling to the habitual political observer who realizes that the GOP is going to ride to victory in 2010 not just on the failures of Democratic leadership, but on the sweeping epidemic of American political amnesia. Continue reading

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