If you're like me you are tired of both the Republicans and the Democrats. Washington D.C. seems increasingly out of touch. But it is a lot easier for national media companies to cover the politics of D.C. than it is to cover state politics, so we get fed a consistent media diet of national politics. But the United States is a huge country made up of diverse people, so the idea that one central group can form solutions that work for all of us is flawed in the extreme.
Our founding fathers new this, even when we only had 13 states, and they took steps to limit federal powers. The main proponents of such views were called Federalists (which is now ironic), and I feel we need to return to some of primary ideas, like making sure states have the ability to effect their own populations.
Living in Texas, I am appalled at the idea of supporting federal decisions that may very well hurt our state. And being one of the few states that gives more money to the federal government than it receives, Texas is in a different position than say, Michigan. Now, Detroit residents may not want state responsibility to be enhanced much, as their city's problems are beyond the reach of any single state, but how responsible should I be for their poor local decisions?
The popular slogan "Think Globally, Act Locally" should be applied immediately to politics. The alternative, hoping that Washington D.C. comes to the rescue, has proven to be about as successful as trying to win the lottery.
Tuesday, June 30, 2009
Friday, June 26, 2009
Global Warming Cools Off
As Washington debates the importance of Cap & Trade the rest of the world is moving on. In fact, as more scientists come out against global warming theories, the new question isn't "How do we limit fossil fuels?" but rather "Is global warming based on science or fear?"
Here's an excerpt from a great WSJ article (click here for the entire article):
The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. -- 13 times the number who authored the U.N.'s 2007 climate summary for policymakers. Joanne Simpson, the world's first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak "frankly" of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming "the worst scientific scandal in history." Norway's Ivar Giaever, Nobel Prize winner for physics, decries it as the "new religion." A group of 54 noted physicists, led by Princeton's Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists' open letter.)
With the science being openly called into question by a new round of respected researchers, can we really afford a new tax program? My guess is that the people struggling to find work would tell us all "NO!"
This is where the rubber meets the road. Voting for climate change legislation is going to making business more expensive, and those new expenses will be passed on to consumers through price raises. In our current economy, that means slower recovery and less jobs, plain and simple.
So which is more important? Do you want cheaper business or more fossil fuel regulations aimed at protecting the earth? It's time to decide.
Here's an excerpt from a great WSJ article (click here for the entire article):
The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. -- 13 times the number who authored the U.N.'s 2007 climate summary for policymakers. Joanne Simpson, the world's first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak "frankly" of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming "the worst scientific scandal in history." Norway's Ivar Giaever, Nobel Prize winner for physics, decries it as the "new religion." A group of 54 noted physicists, led by Princeton's Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists' open letter.)
With the science being openly called into question by a new round of respected researchers, can we really afford a new tax program? My guess is that the people struggling to find work would tell us all "NO!"
This is where the rubber meets the road. Voting for climate change legislation is going to making business more expensive, and those new expenses will be passed on to consumers through price raises. In our current economy, that means slower recovery and less jobs, plain and simple.
So which is more important? Do you want cheaper business or more fossil fuel regulations aimed at protecting the earth? It's time to decide.
Tuesday, June 23, 2009
The Honeymoon is Over
President Obama has a tough job. Being the leader of the free world may come with some cool perks, but nobody wants his job at this moment. Maybe not even him.
To deal with our economic crisis the president has pushed bailout payments and guarantees that exceed $9 trillion. With interest expense on the debt, we basically spent our entire GDP in 12 months. Not good. Especially since we haven't seen much benefit from it. Unemployment is still over 10%, the auto companies still suck, the banks still aren't lending, and housing prices continue to fall.
Foreign affairs aren't much better. Although Iraq seems to have calmed down lately, Iran is shooting protesters in the streets while North Korea is testing nukes and missiles. It seems that our plan to "extend an open hand" has been poorly received. In fact, foreign leaders seem to be pushing the limits, almost daring the president Obama to do something.
An now the president wants to reform health care. He warns that the system is broken and in a state of emergency. But spending yet another $1 trillion doesn't seem like such a good idea to a public tired of government spending that seems to produce few results. And we surely don't want to see tax increases for the middle class to pay for this reform. What happened to the campaign promise of cutting taxes for 95% of us?!
The media may still be in awe of their liberal hero, but the rest of us are looking for results. We need a plan to deal with our huge new national debt. We need to know what the plan is for rogue nuclear countries like North Korea and Iran. We need the government spending to stop. We need, dare I say, "change we can believe in." I wonder what the votes would be today if they were to be re-cast?
To deal with our economic crisis the president has pushed bailout payments and guarantees that exceed $9 trillion. With interest expense on the debt, we basically spent our entire GDP in 12 months. Not good. Especially since we haven't seen much benefit from it. Unemployment is still over 10%, the auto companies still suck, the banks still aren't lending, and housing prices continue to fall.
Foreign affairs aren't much better. Although Iraq seems to have calmed down lately, Iran is shooting protesters in the streets while North Korea is testing nukes and missiles. It seems that our plan to "extend an open hand" has been poorly received. In fact, foreign leaders seem to be pushing the limits, almost daring the president Obama to do something.
An now the president wants to reform health care. He warns that the system is broken and in a state of emergency. But spending yet another $1 trillion doesn't seem like such a good idea to a public tired of government spending that seems to produce few results. And we surely don't want to see tax increases for the middle class to pay for this reform. What happened to the campaign promise of cutting taxes for 95% of us?!
The media may still be in awe of their liberal hero, but the rest of us are looking for results. We need a plan to deal with our huge new national debt. We need to know what the plan is for rogue nuclear countries like North Korea and Iran. We need the government spending to stop. We need, dare I say, "change we can believe in." I wonder what the votes would be today if they were to be re-cast?
Wednesday, June 17, 2009
ABC News Still Covering Obama Campaign
President Obama has taken public appearances to a new level never before seen at the White House, and it is starting to upset even the most liberal of supporters. Check out this Bill Maher piece aired a 2 days ago on HBO, I was captivated and stunned and thoroughly entertained...
http://www.youtube.com/watch?v=HWulnfog20c
And yet it continues...
On June 24th ABC News will be hosting a live show from the White House, featuring President Obama as he extols the virtues of his health care reform plans. There will be no dissenting views, there will be no debate. And just like that a new political media tool is invented, the presidential infomercial. And just when we thought there couldn't be any more campaigning!
The Republican party has been denied any presence in the program, despite requests. Which brings up a good question - should the Democratic Party be required to pay for this TV time? Without allowing equal time to opposing parties, I am inclined to believe that this is really a sales presentation (infomercial), and I fail to see how that qualifies as news. Isn't the news supposed to be unbiased reporting of facts and events? The Drudge Report broke this news, and have even printed the Republican complaint...
http://www.drudgereport.com/flashaot.htm
(Thanks to Clay for bringing up this topic, I appreciate the help.)
http://www.youtube.com/watch?v=HWulnfog20c
And yet it continues...
On June 24th ABC News will be hosting a live show from the White House, featuring President Obama as he extols the virtues of his health care reform plans. There will be no dissenting views, there will be no debate. And just like that a new political media tool is invented, the presidential infomercial. And just when we thought there couldn't be any more campaigning!
The Republican party has been denied any presence in the program, despite requests. Which brings up a good question - should the Democratic Party be required to pay for this TV time? Without allowing equal time to opposing parties, I am inclined to believe that this is really a sales presentation (infomercial), and I fail to see how that qualifies as news. Isn't the news supposed to be unbiased reporting of facts and events? The Drudge Report broke this news, and have even printed the Republican complaint...
http://www.drudgereport.com/flashaot.htm
(Thanks to Clay for bringing up this topic, I appreciate the help.)
Monday, June 15, 2009
July To Be Most Expensive Month Ever!
In the next six weeks the Obama administration will attempt to pass sweeping health care reform before the August legislative break. If they succeed it will mean higher taxes have been passed to pay for the reform. If they fail health care reform may not happen during this president's tenure. Either case is expensive.
The Rock-
In order to pay for the additional $1.2 trillion in government health care programs that the administration is proposing, there will have to be either more debt or more taxes. More debt is a poor option; the bailout programs have already maxxed out our national credit line. More taxes are a political problem, as it will be nearly impossible to raise enough money to fund the program without taxing the middle class. Raising middle class taxes would break Obama's campaign promise of tax cuts for 95% of Americans. Ouch.
The Hard Place-
On the other hand, if health care reform fails to pass before the August break, there is a good chance that it will be a dead issue for Obama's current term. This might sound like a victory to some Obama haters that would love to see him fail, but ultimately the high cost of medical care growing in the same fashion that it has over the last decade will cost us all a lot of money.
So here we sit, in between a rock and a hard place. The hard truth is in front of us: health care reform will require higher taxes for all but the poorest tax payers. Everyone making over $50,000 (as a family) stands to see higher taxes bills, from hundreds to thousands of dollars per year.
One Example:
-A family of 4 claims $110,000 of income (all together)
-The effective tax rate this family pays is 21%, or $23,100 per year
-This family gets health benefits from one employer
-The employer-paid benefits cost $1,600 per month (young, child-bearing family rates)
-$1,600 per month times twelve months equals $19,200 per year
-If these health benefits are to be taxed at the same rate as income, the additional tax burden would be equal to their tax rate times the benefits they receive, or 21% * $19,200, which equals $4,032 in new taxes.
A family making $110,000 is by no means rich. They work hard to pay their bills and pray that they don't get laid off. They have small savings, and pour everything they make into their children. Giving them a $4,032 tax increase ($336 per month) will not sound like a solution, it will sound like a burden, which it is. Middle class families will be the ones caught in the rocky hard place, battered by waves of taxes, unable to afford the lobbying effort it would require to reverse the new laws.
Middle class families, if taxed at the newly proposed rate, will turn on Democrats in a big way in the next elections. It is time to learn how badly this administration wants health care reform.
The Rock-
In order to pay for the additional $1.2 trillion in government health care programs that the administration is proposing, there will have to be either more debt or more taxes. More debt is a poor option; the bailout programs have already maxxed out our national credit line. More taxes are a political problem, as it will be nearly impossible to raise enough money to fund the program without taxing the middle class. Raising middle class taxes would break Obama's campaign promise of tax cuts for 95% of Americans. Ouch.
The Hard Place-
On the other hand, if health care reform fails to pass before the August break, there is a good chance that it will be a dead issue for Obama's current term. This might sound like a victory to some Obama haters that would love to see him fail, but ultimately the high cost of medical care growing in the same fashion that it has over the last decade will cost us all a lot of money.
So here we sit, in between a rock and a hard place. The hard truth is in front of us: health care reform will require higher taxes for all but the poorest tax payers. Everyone making over $50,000 (as a family) stands to see higher taxes bills, from hundreds to thousands of dollars per year.
One Example:
-A family of 4 claims $110,000 of income (all together)
-The effective tax rate this family pays is 21%, or $23,100 per year
-This family gets health benefits from one employer
-The employer-paid benefits cost $1,600 per month (young, child-bearing family rates)
-$1,600 per month times twelve months equals $19,200 per year
-If these health benefits are to be taxed at the same rate as income, the additional tax burden would be equal to their tax rate times the benefits they receive, or 21% * $19,200, which equals $4,032 in new taxes.
A family making $110,000 is by no means rich. They work hard to pay their bills and pray that they don't get laid off. They have small savings, and pour everything they make into their children. Giving them a $4,032 tax increase ($336 per month) will not sound like a solution, it will sound like a burden, which it is. Middle class families will be the ones caught in the rocky hard place, battered by waves of taxes, unable to afford the lobbying effort it would require to reverse the new laws.
Middle class families, if taxed at the newly proposed rate, will turn on Democrats in a big way in the next elections. It is time to learn how badly this administration wants health care reform.
Friday, June 12, 2009
The Cost of Safety
In a struggling economy many of us yearn for a safe harbor, and some are asking the government to provide such safety. But can we afford it?
In doing a standard cost benefit analysis of a problem the key question is whether or not an expense is worth the benefit that it may provide. For example:
Let's say that there is a 1% chance that my $20,000 car might be stolen. So 1% times $20,000 means that the estimated losses are equal to $200. This means that if I can spend less than $200 to protect my car from theft, it might just be worth it. But if the a car security system would cost me $500, then there just isn't enough benefit to cover the expense.
The same analysis can be used for big decisions as well. Let's imagine that there is a 30% chance that the economy will melt down if large banks were allowed to fail. This economic problem, if it occurred, would impact the amount of income that banks add to our national GDP (which is $13.84 trillion). Estimating that banks add up to 30% of our GDP, we could figure that a bank failure could lead to the loss of up to $4.15 trillion (30% * $13.8). But there is only a 30% chance that such an event would occur, so the real risk is 30% times the possible loss ($4.15 trillion), or $1.24 trillion. So in such a case, we should only be willing to spend $1.24 trillion to insure such a risk.
That math may be boring, but there is a fairly interesting point. The U.S. GDP is $13.84 trillion. If we lost everything in one year the most we could lose is $13.84 trillion, and the chances of that are effectively zero! So why are we willing to spend over $8.5 trillion to stop the economic crisis? $8.5 trillion is more than the cost of all U.S. wars ever fought! (see http://www.nowpublic.com/world/wall-street-bailout-so-far-exceeds-total-cost-all-us-wars)
The math doesn't add up, but the interest expense on the debt does. This is catastrophic in terms of the burden it places on taxpayers. It's time to say no every single budget increase.
In doing a standard cost benefit analysis of a problem the key question is whether or not an expense is worth the benefit that it may provide. For example:
Let's say that there is a 1% chance that my $20,000 car might be stolen. So 1% times $20,000 means that the estimated losses are equal to $200. This means that if I can spend less than $200 to protect my car from theft, it might just be worth it. But if the a car security system would cost me $500, then there just isn't enough benefit to cover the expense.
The same analysis can be used for big decisions as well. Let's imagine that there is a 30% chance that the economy will melt down if large banks were allowed to fail. This economic problem, if it occurred, would impact the amount of income that banks add to our national GDP (which is $13.84 trillion). Estimating that banks add up to 30% of our GDP, we could figure that a bank failure could lead to the loss of up to $4.15 trillion (30% * $13.8). But there is only a 30% chance that such an event would occur, so the real risk is 30% times the possible loss ($4.15 trillion), or $1.24 trillion. So in such a case, we should only be willing to spend $1.24 trillion to insure such a risk.
That math may be boring, but there is a fairly interesting point. The U.S. GDP is $13.84 trillion. If we lost everything in one year the most we could lose is $13.84 trillion, and the chances of that are effectively zero! So why are we willing to spend over $8.5 trillion to stop the economic crisis? $8.5 trillion is more than the cost of all U.S. wars ever fought! (see http://www.nowpublic.com/world/wall-street-bailout-so-far-exceeds-total-cost-all-us-wars)
The math doesn't add up, but the interest expense on the debt does. This is catastrophic in terms of the burden it places on taxpayers. It's time to say no every single budget increase.
Wednesday, June 10, 2009
Please Save Us... Fiat?
So here's the situation:
1) We are a huge car company (Chrysler) that is hemorrhaging cash so badly that the president of the United States has stepped in to help.
2) People don't really like our cars due to a reputation for poor quality.
3) We've almost spent all of our bailout money, and we need a plan.
And the solution is...
Wait for it...
FIAT!!
That's right, Fiat.
It really is a perfect match. Both have poor quality reputations. Both are looked down on by car buyers. Both have corrupt leadership. It's a match made in heaven. I mean, be honest, doesn't the idea of owning a sparkling new Fiat sound even worse than owning a spanking new Chrysler? Ha! That's called progress!
Who thinks this crap up? It what bizarro world does this sound like a plan to build a stronger car company that will protect American jobs? The Italians won't help us - they'll hang us. And we made it easy for them.
If relying on the Italians to save us is the best plan we have, then I am afraid that our government is failing to admit how truly desparate the situation is. This move stinks of confusion, denial, and (soon) regret.
The cure is turning out to be worse than the disease.
1) We are a huge car company (Chrysler) that is hemorrhaging cash so badly that the president of the United States has stepped in to help.
2) People don't really like our cars due to a reputation for poor quality.
3) We've almost spent all of our bailout money, and we need a plan.
And the solution is...
Wait for it...
FIAT!!
That's right, Fiat.
It really is a perfect match. Both have poor quality reputations. Both are looked down on by car buyers. Both have corrupt leadership. It's a match made in heaven. I mean, be honest, doesn't the idea of owning a sparkling new Fiat sound even worse than owning a spanking new Chrysler? Ha! That's called progress!
Who thinks this crap up? It what bizarro world does this sound like a plan to build a stronger car company that will protect American jobs? The Italians won't help us - they'll hang us. And we made it easy for them.
If relying on the Italians to save us is the best plan we have, then I am afraid that our government is failing to admit how truly desparate the situation is. This move stinks of confusion, denial, and (soon) regret.
The cure is turning out to be worse than the disease.
Monday, June 8, 2009
Could We Actually Increase Offshoring of Jobs?
The current administration is in a pinch. It seems our national income is far less than our national spending rate. So we find ourselves in the unfriendly position of needing to raise money. And unfortunately, the government must raise taxes in order to raise this money.
One of the main tax targets has been large U.S. corporations. The Obama administration wants to close a $190 billion loophole law that allows U.S. corporations to shift profits to overseas subsidiaries and pay the local government taxes instead of U.S. taxes. For instance, if Microsoft shows that a bunch of it's software sales are booked though an Irish subsidiary, then Microsoft pays taxes to Ireland on that revenue (which has a much lower tax rate than we do), and effectively dodges U.S. tax rates for those sales dollars.
At first look the plan to close this tax loophole sounds like a great idea. Nobody will lose any sleep over the idea of big companies making less money, and we are all very suspicious of their ability to screw us with high priced legal teams and government lobbyists. So when the president says he wants to tax Microsoft most people say "Go right ahead!"
But wait just a minute. Microsoft has been very upfront about how it will react if this tax rule is changed. Stevel Ballmer, the CEO of Microsoft, says that such a change would encourage Microsoft to move people and jobs overseas. “It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.” (for the full Ballmer article click here)
DOH!! So we change the tax law in an effort to get more taxes and actually end up chasing jobs overseas and collecting less tax revenue?! That's not the plan! Seems to me that the cure may be more dangerous than the illness if we don't slow down and think very carefully about what we do next.
On the flip side, Ireland is all for this tax law change. So I guess you could say that we are making great strides towards improving our international reputation...
One of the main tax targets has been large U.S. corporations. The Obama administration wants to close a $190 billion loophole law that allows U.S. corporations to shift profits to overseas subsidiaries and pay the local government taxes instead of U.S. taxes. For instance, if Microsoft shows that a bunch of it's software sales are booked though an Irish subsidiary, then Microsoft pays taxes to Ireland on that revenue (which has a much lower tax rate than we do), and effectively dodges U.S. tax rates for those sales dollars.
At first look the plan to close this tax loophole sounds like a great idea. Nobody will lose any sleep over the idea of big companies making less money, and we are all very suspicious of their ability to screw us with high priced legal teams and government lobbyists. So when the president says he wants to tax Microsoft most people say "Go right ahead!"
But wait just a minute. Microsoft has been very upfront about how it will react if this tax rule is changed. Stevel Ballmer, the CEO of Microsoft, says that such a change would encourage Microsoft to move people and jobs overseas. “It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.” (for the full Ballmer article click here)
DOH!! So we change the tax law in an effort to get more taxes and actually end up chasing jobs overseas and collecting less tax revenue?! That's not the plan! Seems to me that the cure may be more dangerous than the illness if we don't slow down and think very carefully about what we do next.
On the flip side, Ireland is all for this tax law change. So I guess you could say that we are making great strides towards improving our international reputation...
Friday, June 5, 2009
Where Obama Will Spend His Political Capital?
President Obama came into office with a big agenda. He wanted to end the Iraq war, introduce a Cap & Trade environmental reform program, reform health care, cut taxes on all but the wealthiest among us, and stimulate alternative energy production. His message of hope and change was powerful enough to make it a real possibility that such major changes could take place. But then the economy fell apart.
In the face of an economy that was imploding on multiple levels, our president chose to start spending government money. He sent money to bail out the auto industry, the first wave of home foreclosures, the financial industry, the insurance industry, and the construction industry. Each of these bailout plans had a huge price tag associated with it, and when summed up that magical number has passed $10 trillion. (Just in case you are in doubt about these numbers, check out the national debt clock at http://www.usdebtclock.org/, it promises to blow your mind.)
The bailout money has not had time to work yet, so the results are difficult to predict. We may have seen the worst and are beginning a long, slow climb out of trouble. On the other hand, we may be experiencing a suckers' rally that will drop us off a cliff. No one knows for sure. But what we do know for sure is how much debt the U.S. has taken on in this attempt to mend the economy. And just like any other entity capable of taking on debt, the U.S. government will have to pay up.
In the background we have seen the Cap & Trade legislation die a slow and quiet death. Both political parties saw it as a new tax, and killed it in short order. This created a new problem for our president. You see, the Cap & Trade tax was supposed to pay for the new health care reforms, and now there is no money for health care. So the president has been forced to take a new angle on the problem, saying that health care reform is important enough to justify even more government debt. The administration is in a mad rush to pass such reform in the next 8 months before "other issues" become primary.
These "other issues" that are about to become the primary focus are charging at the Obama administration like a mad bull; tax increases for all. That's right, everyone, the rich and the poor, are going to have to deal with higher taxes very soon. There is simply no way around it. The basic truth is that taxation must be equal to the amount of government spending, there is no other way for a government to fund itself (apart from printing money, which we are trying as well). So taxes must be raised in order to cover the trillions of dollars of bailout expenditures. Period.
Explaining these tax increases will require every bit of political capital president Obama has. His reforms will suffer. His agenda will change. And all the while, taxes will increase. Taxes on beer, cigarettes, income, real estate, sales, vehicles, fuel, food, health care, telecommunications, mail, charitable donations, savings, investments, clothes, and on and on and on and on...
Paying up will be painful, and could very well cost president Obama the office he recently won. At the end of the day there just aren't enough "wealthy" citizens to cover the tab, and everyone else who has been promised a tax break may struggle with the reality that our economic crisis is something we must all pay off for years to come. The very real political danger that our president faces is the notion that the change he brougth us is a change towards higher taxes, and that is not a platform that gets a politician re-elected.
In the face of an economy that was imploding on multiple levels, our president chose to start spending government money. He sent money to bail out the auto industry, the first wave of home foreclosures, the financial industry, the insurance industry, and the construction industry. Each of these bailout plans had a huge price tag associated with it, and when summed up that magical number has passed $10 trillion. (Just in case you are in doubt about these numbers, check out the national debt clock at http://www.usdebtclock.org/, it promises to blow your mind.)
The bailout money has not had time to work yet, so the results are difficult to predict. We may have seen the worst and are beginning a long, slow climb out of trouble. On the other hand, we may be experiencing a suckers' rally that will drop us off a cliff. No one knows for sure. But what we do know for sure is how much debt the U.S. has taken on in this attempt to mend the economy. And just like any other entity capable of taking on debt, the U.S. government will have to pay up.
In the background we have seen the Cap & Trade legislation die a slow and quiet death. Both political parties saw it as a new tax, and killed it in short order. This created a new problem for our president. You see, the Cap & Trade tax was supposed to pay for the new health care reforms, and now there is no money for health care. So the president has been forced to take a new angle on the problem, saying that health care reform is important enough to justify even more government debt. The administration is in a mad rush to pass such reform in the next 8 months before "other issues" become primary.
These "other issues" that are about to become the primary focus are charging at the Obama administration like a mad bull; tax increases for all. That's right, everyone, the rich and the poor, are going to have to deal with higher taxes very soon. There is simply no way around it. The basic truth is that taxation must be equal to the amount of government spending, there is no other way for a government to fund itself (apart from printing money, which we are trying as well). So taxes must be raised in order to cover the trillions of dollars of bailout expenditures. Period.
Explaining these tax increases will require every bit of political capital president Obama has. His reforms will suffer. His agenda will change. And all the while, taxes will increase. Taxes on beer, cigarettes, income, real estate, sales, vehicles, fuel, food, health care, telecommunications, mail, charitable donations, savings, investments, clothes, and on and on and on and on...
Paying up will be painful, and could very well cost president Obama the office he recently won. At the end of the day there just aren't enough "wealthy" citizens to cover the tab, and everyone else who has been promised a tax break may struggle with the reality that our economic crisis is something we must all pay off for years to come. The very real political danger that our president faces is the notion that the change he brougth us is a change towards higher taxes, and that is not a platform that gets a politician re-elected.
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