tax cuts

Ok, Republicans, we’ve handed you command of the Congress and bolstered our numbers in the Senate as well. You cloaked yourselves in the language and the trappings of our patriotic movement. By doing so, Republicans knew full well that we, the ‘Tea-Party’ Patriots, the Constitutional Conservative movement was, and is, sweeping the nation even as this is written. The price of our support was not conditional, it was adherence to conservative principles, and unfortunately we are already witnessing some disturbing symptoms of weakness in the leadership.

John Boehner speaks at a December 2 press conference

So, you’re going to come to us and convince us that spending another 250 billion dollars is somehow going to translate to lowering a deficit that, were it a reactor, would be bleeding lethal radiation? The end result will be the same if we, you and I, don’t stop it.

Boehner announced on Friday that he and his new Congress would sacrifice for the sake of the people and cut their budgets 5%. Are you ready for a what?!! Moment? John, do you have a clue? Do you realize that the only way out of this mess is to push for permanent tax cuts, to start hacking and slashing non-essential, government multiple redundant bureaucracies. Other than defense and security, there’s absolutely no bureau, or bureaux, that couldn’t be slashed by 50% or more.

You need to push for an up or down vote on the tax issue. What’s going to be readily apparent to you ‘Conservative’ Republicans is that we trust you more than we trust the DeMarxists, which is to say, not at all. We have the conservative cavalry coming into the battle as a New Year gift to the progressives (let’s see how many different words we can find for communist).

John, we really want you to be successful… but any more appointments like your last two and we may have to reevaluate your commitment to the conservative cause, and perhaps your leadership of the House, at that. Let’s get this right. We’re going to have this one shot at it. If you Republicans can’t hack it, move aside, because we the people can.

Semper Vigilans, Semper Fidelis

© Skip MacLure 2010

The DeMarxists are flipping out over what they see as Obama’s sell out to the Republicans. Some are threatening a primary challenge… others are less reactionary, but still bitterly critical of their erstwhile Anointed One.

Mary Landrieu - Not as friendly with Obama as in this 2009 photo.

Obama got nowhere with his mealy-mouthed assurances, saying these ‘tax cuts’ for the rich would not stand… and ‘we’ll fight this battle again in two years’. Sure you will Bub, and you’ll get the same result. What we are witnessing is the most dramatic political shipwreck in modern history. It makes Nixon and Watergate look like the panty-raid it was.

It’s really sort of fun watching them, these far left nutcases all trying to out-nutcase themselves in lining up to chastise their leader. They haven’t gotten around to blaming this on George Bush or Sarah Palin yet, but they will.

The Dream Act has become a nightmare. Poor old Harry just can’t get a word in edgewise these days. Republican RINOs and Democrats that are up for election this next cycle are walking around like they’re doing pin the tail on the donkey… only they’re the donkeys. Harry can’t herd his cats… and there’s plenty in the DeMarxist Senate that are up for re-election this cycle, also.

These folks are ready and willing to break party discipline in a New York heartbeat if they think it may soften what’s coming down the pike in 2012. Doesn’t bode well for Harry’s numbers in the Senate now, does it?

Semper Vigilans, Semper Fidelis

© Skip MacLure 2010

Obama got rolled. He even sweetened the deal for Conservative Republicans with a proposed 2.5% reduction in withholding for the next year. What’s most important though is that American business can take a deep breath and at least look forward to two years of certainty. Maybe the engine of small business can generate a few jobs.

It means that we’ll have this fight to do over, but we’ll have the House and the huge advantage of the influence and power of the Tea Party patriots. We’ll have to hold our conservative warriors’ noses to the grindstone… and along the way we can remind the RINOs just who’s watching them and that we can, and will, oppose and defeat them. Give them something to think about, in any case.

Conservatives are perforce frowning about the extension of unemployment benefits for another thirteen months, saying that a total of three years unemployment is tantamount to institutionalized welfare, à la Europe. And some conservatives are even more irritated about the inclusion of some giveaways to people who don’t even pay taxes. Call it earned income or whatever, it’s an annual welfare goody bag paid out of our taxes.

The spin will trumpet a success for Obama, calling it bi-partisan compromise and all the usual garbage that the leftist press regurgitates. Obama’s back was against the wall and for the Conservatives the positioning couldn’t have been better. If he (Obama) had let the Bush tax cuts expire, the resultant economic carnage would have been more than even Obama is willing to face.

With his presidency hanging by a thread, he’s going to have to tread really lightly. As it is, the country is blaming him and his cabal of leftist activists for everything that’s gone on in the last two years. And they’re right. Obama’s whole presidency has degenerated to the point where all that they have is their failed ideology. You could see the bitterness on Obama’s face, you could hear the undercurrent of anger in his voice.

He does not like it when the people speak. American freedom and the spirit of a free people are diametrically opposed to everything Obama and the DeMarxists stand for. Hey, Obama… get used to it.

Semper Vigilans, Semper Fidelis

© Skip MacLure 2010

by  Lance Thompson

Many people I respect believe that conservatives cannot appeal to a majority of voters simply by saying “no” to the socialist agenda now guiding our government.  They say we must have an alternate positive plan, rather than simply obstructing the rush to totalitarianism.  I disagree.

A train headed for a washed-out bridge benefits immensely from anything that safely halts its headlong rush toward destruction.  If the passengers realize the danger, they would also perceive the value of halting forward progress.

But for those who require a positive plan, one is available and easily understood.  As so many profound ideas these days, it comes from the source of much modern wisdom–half-hour network comedy classics.  In the NBC series Seinfeld, the character of George Castanza suffered week after week from the results of his chronically poor judgment–lost jobs, broken relationships, public humiliation and personal embarrassment.  In one episode, George realizes that the source of his troubles is his own warped instinct to always make the wrong decision.  He further decides that he will, from that moment on, always do exactly the opposite what his instincts tell him to do.  Instantly, he finds success and happiness — all because he decided to “do the opposite.”

This is the positive alternative conservatives have been looking for.  Obama spends trillions of dollars we don’t have, and plunges the nation into debt we can never repay.  Saying no to this is certainly sane and responsible, but doing the opposite would be even better.  Instead of increasing spending, how about reducing it?  Would reducing spending play well with the electorate?   In a recent poll, Californians faced with a massive state deficit preferred the solution of reducing spending to raising taxes by a 3 to 1 margin.

Obama has abandoned long-time allies to their fates by canceling defense programs and dismissing vital relationships, gone hat in hand to our sworn enemies to apologize for America’s foreign policy, and demonstrated tolerance for outrages committed by rogue regimes.  Certainly ceasing these self-defeating behaviors would be a positive step.  But how much better to do the opposite–install missile defense systems in Poland because it strengthens a stalwart ally, support Israel in defending itself against terrorists on all sides and a nuclear-ready Iran, acknowledge and strengthen our special relationship with the United Kingdom, and show pride in and demand respect for the sacrifices generations of Americans have made to defend freedom and liberty throughout the world.

Obama has vastly increased government control of private industry.  The current executive branch is now in the executive suites of banks and lending institutions, automobile manufacturers, and soon health care providers.  Obama has bought a majority share of Chrysler with taxpayer money, then handed it over to union bosses.  Clearly, simply saying no to all of this Marxist nationalization of private industry would be a demonstration of sanity.  But doing the opposite would qualify as insightful and visionary.   Allow the ruthlessly fair free market to pick winners and losers rather than government bureaucrats.  If companies cannot compete, then they must fail and make room for those that offer what the public wants.  Artificially propping up inefficient companies rewards incompetence and punishes competitors who are actually doing things correctly.  Taking government out of private industry energizes, enables and encourages investment, innovation and success. 

Obama promises to raise taxes on the rich, on businesses, on the most successful entities in our society and economy.  This is a policy that, again, punishes success.  Not punishing success, and refusing to raise taxes, is a definite improvement.  But doing the opposite–reducing taxes on successful individuals and enterprises–is infinitely better.  Encourage and reward success with lower taxes, and we shall certainly have more of it.  Our economy will expand, employment will grow, revenues will increase, just as it did under Ronald Reagan, and in response to George W. Bush’s tax cuts.

I do not agree with those who say conservatives cannot simply be the Party of No.  A few administrations ago, “Just say no” was First Lady Nancy Reagan’s advice to kids to avoid drugs.  It was widely ridiculed by the Left and the media.  Yet drug abuse undeniably begins voluntarily, which requires an affirmative response, not to mention a substantial investment.  Just saying “no” when drugs are offered effectively eliminates the problem.

But for those who believe conservatives need a specific plan to counter the tide of socialism sweeping across the country, the solution is clear and simple.  Take any policy of the current administration and the Democrat-controlled Congress and just do the opposite.  In every case, such a course will result in greater success, expanded liberty, and a brighter future for Americans.

On the other hand, continuing in the current direction will result in America becoming a pitiful minor character in a show about nothing.

This is a repost of an entry I wrote for QandO a few days ago. I'm reposting it here, for a different audience to get a look at it.

It is a lengthy think piece, and it may be completely off base. But the fundamental point I think we should be looking at is this: We are, quite possibly, watching the collapse of the Post-WWII global financial system. The first collapse in the 1930s saw off the Gold Standard. This collapse will probably see off the concept of government-backed fiat currencies.

So, what happens then?

Reps should be pushing Tax Cuts first, immediately.  With separate debates and considerations for all other major spending programs.  People know what they would do with 'more money' -- whatever helps them the most, right now (including better preparation for the future).

The best help for the banks: huge Tax Cuts, now, for people and companies, so that there can be more savings flowing into the banks while at the same time reducing the indebtedness of people and firms. It's insane that an argument against Tax Cuts is that not enough will be spent, because too much will be saved -- while at the same time arguing for special gov't cash to go into the banks

The Atlantic's Rober Barro interview had him pushing tax cuts for the income effect, and the incentive effect.  Barro specifically doesn't like shovelling money at people.

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But I do.  The country is better off if the gov't shovels money at people, now, and let's them decide how to spend it, or save it.  The stimulus is going to have gov't decide, and gov't be full of corruption and waste.

What is curious is that Barro does admit the Financial System has a problem, and sort of supports the gov't helping out that problem.  But I see two obvious options, a) direct gov't bailout to banks, and b) indirect support for banks by REDUCING personal debt.

 Tax cuts now, giving folks more cash, will result in many of them saving / paying off their credit card debt.  This is good, even if it's not immediate stimulus.  It means the long term indebtedness of the taxpayer goes down. AND it helps the banks, by them having fewer loans outstanding / more savings (tier 1 capital).

More recently, Tyler lists

#1, but we need Pre-Packaged Chapter 11 bankruptcy for ALL the Big Banks with toxic assets they've poisoned themselves with.  Bankruptcy, not nationalization.The 40% share of corporate profits being made in 2006 by the financial industry was Ponzi scheme betting on bets made by betters who didn't know they were betting -- except everybody knew "house prices never go down".Like not needing newspapers, the internet means the future USA doesn't need nearly as many bankers for taking saver's cash and allocating it to good production / distribution / service businesses.The growth of 'finance' was huge mal-investment; even worse than over-building residential houses.The best help for the banks: huge Tax Cuts, now, for people and companies, so that there can be more savings flowing into the banks while at the same time reducing the indebtedness of people and firms.It's insane that an argument against Tax Cuts is that not enough will be spent, because too much will be saved -- while at the same time arguing for special gov't cash to go into the banks.

 Greg Mankiw has been following and participating in this debate as well, and notes that Keynes favored a cut in SS payroll taxes in bad times.

Tyler Cowen of Marginal Revolution notes how the pro-stimulus folks are much bigger on insulting the critics, than in producing evidence that stimulus will work.

 There are also theories of TARP evolution which are amusing.

The banks ARE insolvent. We need Pre-Packaged Chapter 11 bankruptcy for ALL the Big Banks with toxic assets they've poisoned themselves with. Bankruptcy, not nationalization. The 40% share of corporate profits being made in 2006 by the financial industry was Ponzi scheme betting on bets made by betters who didn't know they were betting -- except everybody knew "house prices never go down".

Like not needing newspapers, the internet means the future USA doesn't need nearly as many bankers for taking saver's cash and allocating it to good production / distribution / service businesses.

The growth of 'finance' was huge mal-investment; even worse than over-building residential houses.

The best help for the banks: huge Tax Cuts, now, for people and companies, so that there can be more savings flowing into the banks while at the same time reducing the indebtedness of people and firms.

It's insane that an argument against Tax Cuts is that not enough will be spent, because too much will be saved -- while at the same time arguing for special gov't cash to go into the banks.

Tax Holiday, or Payroll Tax Cuts would, over the current and next month, current and next quarter, and even over the whole year, be a better policy than the gov't spending stimulus.

One key measure of any anti-depression policy should be the % of the total policy $ that is spent in the immediate time period (month, quarter, year).  Via Fabius Maximus, one anti-tax cut article analyzes the 2008 tax rebate: “The Economic Outlook and Stimulus Options”, Mark Zandi ( Chief Economist of Moody’s Economy.com), Senate Budget Committee, 19 November 2008 (see  Table #1 on page 10.)

The point is that the Dems want to argue that Tax Cuts aren't good enough for stimulating the economy, relative to some other alternatives like more for Food Stamps and extending Unemployment Benefits (which Reps should support in these times).

My point is that, using the same measure of effectiveness, Payroll Tax Holiday is far, far better than what Obama has.  And the difference should be estimated and publicized.

The MAIN problem is that Republicans want workers to decide how to spend any stimulus, and Dems want elite, tax-cheaters to decide. 

This is also clear in the comments to Matthew Yglesias reasonable discussion of The Paradox of Thrift.  However, the main idea seems to be to oppose Tax cuts ... because they support too much savings.

Personal consumption will help the economy now -- personal savings will help allow the future economy to grow, as would reduced debt.

Paying later for gov't directed half-mal-investment will certainly reduce growth later.

There are huge problems in the economy right now, it is politically required (by voters, the boss) that gov't do something.

Big temporary deficits, thru a Big Tax Cut (Tax holiday), is what Reps should be proposing.  The money should not be borrowed, it should be printed, created by fiat.

Which, usually, would cause inflation.  But not now.  The tax holiday should continue until employment is positive for a month or a quarter.

The argument against tax cuts/ rebates is that they are not efficient enough, because many folk do not spend the extra, but save it.  Only spening 17-33%, for instance.

This is double silly bogus.  First, for the mid and long term, reducing household debt is great, and will mean more growth in the future.  Second, as compared to other programs, like the pork-stimulus, tax cuts increase cash for people FAST.  Most of the pork won't be paid for in the first month, nor even quarter; nor even year 2009!

The big Bush/ Rep failure was failure to reduce spending in the post-tax cut 'good years'. 

But the real failure is that of voters.  Voters have been consistently voting for spending more of Other People's Money, which is always less efficient and more wasteful than spending one's one money.

(Via Fiscal Irresponsibility)

Rep leaders must attack the culture of irresponsible greed--greed for spending & controlling Other People's Money.

In fact, it's the OPM that the voter is addicted to, and which must stop.  Only then can gov't realistically reduce spending, when voters accept it.

Could it be that the truth about the porkulus bill is actually getting out?  Rasmussen reports that public support for the "economic stimulus bill" a.k.a. the Generational Theft Act of 2009 is slipping.  Of course support falls predictably along partisan lines, but the mushy middle is starting to oppose it as well. Here is the key quote:

However, support among unaffiliated voters has fallen. A week ago, unaffiliateds were evenly divided on the plan, with 37% in favor and 36% opposed. Now, 50% of unaffiliated voters oppose the plan while only 27% favor it.

It seems that people were initially supportive of the plan because they were gripped with fear, demanding that government "do something", and because they thought the plan would actually be, you know, fiscal stimulus.  Now that the truth is emerging that the plan is really nothing more than Democratic Party giveaways, people aren't liking it so much.

Furthermore, people are starting to warm up to the idea of tax-cuts-as-stimulus.  To wit:

While support for the plan has slipped, support for a recovery plan that includes only tax cuts - like the one proposed by House Republicans - has grown during the past week. Forty-three percent (43%) of voters support that approach while 39% are opposed. Though the topline numbers are virtually the same as support for the president’s plan, the partisan demographics are distinctly different. Republicans solidly support a tax-cutting recovery plan while Democrats are solidly opposed. Forty-eight percent (48%) of unaffiliated voters like the idea while 33% do not.

And:

Voters continue to soundly reject a recovery plan that includes only new government spending without any tax cuts. Just 15% support such a plan while 70% are opposed.

My faith in the people is slowly being renewed. 

And, this is coming on top of a poll from last week showing that people are nervous about the avalanche of spending that is sure to come.

Senate Republicans have to stand strong against this monstrosity.  There is nothing politically to be gained by compromising and going along with it.  Stick to your guns and force a vote on the Republican tax cut stimulus proposal.

"Obama Won't Compromise on Tax Cuts"

These would be the "tax cuts" that aren't really tax cuts, but transfer payments.  And why won't he compromise?  Because he's now suddenly worried about the deficit!  What a guy.

(h/t AoSHQ)