The Cliff Part 5

This is like a daytime soap opera, but who is the bad guy?  Is there a good guy?  All we know for certain is that neither side seems to want to appear to have lost this.  And as a result, we will go over the cliff.

But what does that mean?  On January 1st will you actually notice anything different?  Probably not.  It will take time for the changes to be noticed.  Maybe on the first paycheck some might notice, but most won't feel it until next year.  Which is what the players, or as we tagged them in other posts, the royals, are depending on.  Most people, probably 60% or more do not pay close attention to the news, and they probably don't know we are going over the cliff.  However, when they do their taxes next year and realize they are not getting a refund, or even worse they have to pay additional taxes, that's when most will feel it. 

These tax payers also help support the economy.  The economy is weak now, while technically not in recession, it hard to tell from Main Street that it is not.  Tax refunds are what these tax payers use to buy some larger thing to improve their lives.  Maybe a appliance, or furniture, perhaps a new computer or other electronics or a car.  When they do not get a refund two things will happen:  They will be mad, and they will not have the funds to buy what they intended.  This is a direct impact on our economy.  The royals should know this.  So are they oblivious to the economic facts, or do they just not care?

I believe it is the latter, there has been a total disregard of the economy as political goals are discussed.  President Obama even went on vacation.  The power play is for the next Congressional elections.  That is why the plan advanced by Nancy Pelosi and forwarded by John Boehner is rejected at the White House, Conservatives in the House, and by Harry Reid in the Senate.  How much more bi partisan can you get?  The leading Liberal, former Speaker, and the some what Conservative current Speaker.  No one, in either party is willing to support it. 

We go off the cliff, and in a year, if the economy is not bustling, we go back into recession, or worse depression.  The Republicans will blame the Democrats and the Democrats will blame the Republicans.  But Republicans have a track record of losing the blame game, ever since the Great Depression of the 1930's.  The Progressive Liberals know this, why else would they gamble their power base through inactivity?  Is it their hope that the economy will collapse?  Then they can install their vision of utopia?  Who knows, but history suggests that that may be it.  Are we prepared for another Utopian experiment?  It didn't work for the Soviet Union, it is problematic in China, if you even want to call China a Utopian experiment.  It isn't working for Greece or most of the rest of Europe.  It didn't work on this continent either.

Whoa... on this continent?  Yes indeed.  Socialist Utopia was tried here.  Read the Mayflower compact.  And that was written centuries before Karl Marx.  It wasn't until the Pilgrim society was amended offering people control over their productivity that the colonies began to thrive, the first harvest after this in commemorated each year in November, it's called Thanksgiving.  Taking away the individuals ability to control their own destiny, also saps them of their productivity.  Without a challenge, why bother?  Without individual productivity, the Soviets built concrete boxes and generations of families lived together in small apartments.  Without individual productivity, Soviet grocery stores were near empty most of the time.  Without individual productivity, China's forced labor is forced to plead for help with messages in the product they make.  Without individual productivity, riots happen in Greece.  The European Union is thrown into chaos.  The world struggles to feed all the people. 

Are we even seeing some of the results now?  People feeling helpless so they shoot up a school.  And in China, with gun control, hack up a school or run down students.  Shots at a movie theater.  A neighborhood blown up.  Occupy Wall Street.  The Tea Party.  With the exception of the Tea Party, each of the mentioned events were violent and deadly.  Why would we want that?  I believe We the People don't, but they the royals really don't care how they achieve their goals.  As long as their power and wealth improves, they will do what they think expedient.

It's 2 years until we have a chance to register displeasure, so what can we do?  We need to write, email, call, telegram the royals with our displeasure now.  The thought of losing their power base may be enough to stall the impending power grab past the next election.  Short of that happening, be sure you defend the 2nd Amendment to the Constitution so we don't get treated like the Chinese of Tianemen Square or the souls who perished in Soviet Gulags, or the minorities in Nazi controlled areas of Europe.  The list goes on and on, even to crucifixions by the Romans in occupied territories at the time of Christ.  And please, some one tell me the definition of "fair share".

Stay tuned to this channel for more exciting episodes of The Cliff!

The Cliff Part 4

So in the 10 days since our last post, neither side seems to be giving.  The President continues to take his tax the 'rich' approach, and Mr. Boehner is trying to save as much of the current tax rates as possible.

Back earlier this year, Nancy Pelosi, the previous speaker of the House, and the Democratic leader in the House, suggested a plan in a letter to Speaker Boehner.  In that letter she proposed holding current rates for all tax payers under $1 million.  Her verbiage said that the Democrats want the 'rich' to pay their fair share.

Mr. Boehner's last proposal was identical to the one proposed by Leader Pelosi earlier this year.  To which the Leader said:  “It’s a tactic, but it’s not a serious proposal,” and the President's response was by White House spokesman Jay Carney who said Plan B idea would not meet Obama’s top priority of protecting middle-income earners.  “The Speaker’s ‘Plan B’ approach doesn’t meet this test because it can’t pass the Senate, and therefore will not protect middle class families, and does little to address our fiscal challenges with zero spending cuts,” Carney said.

The last post here was critical of both sides.  Even when one side half hearted proposes a plan identical to one proposed by the other side, it is rejected.  Face it friends, we ARE going off the cliff, it's what the politicians royals want.  They do NOT want to do their job, they do NOT want to be the one who cuts a program, even though any sane person with a minimal economics understanding knows that we can not continue spending with no plan to repay the debt.

That takes us back to the previous post.  The royals in Washington, will party while the economy burns.  This is a similar scenario that cost the King of France his head, as well as the heads of his wife and court.  It is a similar scenario to what cost the King of England a big chunk of his North American holdings.  It is what brought down the former Soviet Union.  Do I need to go on? 

Shortly after the election in November, succession petitions started cropping up on the White House petition site.  I found it daring that potential rebels would actually put there names on a site controlled by the government, can you say black list?  All wars are fought over primarily economic reasons.  WWII was fought because of the punishing reparations placed on Germany.  Could we be witnessing the very beginning of the Second American Civil War?  I sincerely hope not.

And is exactly why We the People need to take radical actions.  My Grandfather was a staunch Democrat, I know staunch Republicans, what we have in Washington is not working.  Third parties don't seem to be the answer, none have been able to crack the stranglehold of the two major parties.  So what I propose is that in the next election, we vote.  In primaries vote for opponents to the incumbent, cross party lines if you need to.  In the general election, vote against the incumbent, regardless of their party, or your party affiliation.  If enough lose their jobs, and by the way don't feel sorry for them, they will be taken care of for the rest of their lives, they made sure of it, perhaps just perhaps the message will be delivered to the ruling royals, We the People want sanity in government.

Advertisment

Those royals were sent to Washington by their constituents, and then were indoctrinated by party leadership and vote like sheep along party lines.  Then they come back to us, and say look what I got for you, like that new federal building? or I didn't do that, or the one I really liked last election:  I'm proud to ranked number 50 in the Senate.  Of course her state is quite red, and she supported at least half of the Progressives proposals, including the Health Care Act, demonstrating her disregard of the voters.  Most no longer represent us.  So we need to clean the House, and the Senate.  If this plan works, in the next congressional elections the house will change to Democrat control and the Senate to Republican control.  But the most important thing is new leadership will emerge.  Then maybe we can focus on the things that really matter to the majority of the people, jobs and economic opportunity, instead of gay marriage, free cell phone, food stamps, and tax the 'rich' (and I would still love a definition of rich).

The Cliff Part 3

Three weeks left.  Neither side is blinking.  Do they just not care?  Does the President want to go over, as some suggest?  Are Boehner and friends in Congress being too intransigent?  How can we know?  Actually we may never know.  All of Washington, and I do mean ALL, is being driven by money and special interests.  We the People have no voice any more in our capitol.  Our media only reports what they feel like reporting.  There is no digging to get a 'juicy' story.  They seem to be in lock step with the royals (modern day politicians).  The problem seems to be systemic.

And this is all about economics?  It is primarily two systems of economics battling it out.  It is about a redistribution system, going up against a capitalist system.  So let's take a moment to look at both, then perhaps discover a course of action.

The redistributionist, sometimes called Liberals, or Progressives, or Socialist, or Left wing, or what ever they change to next, believe that the only fair way for society is if all economic out come is balanced.  The State should control the means of production, and dole out resources in areas where they feel it needs to be.  Can you remember the stimulus?  That money was doled out, and who got it?  Those companies with connections in DC.  And those who had connections with those doling it out got the bulk of the money, which then was funneled back as campaign donations.  Because the President is Democrat, companies like Solyndra and GM received the hand outs.  And these handouts were just adding to the debt.  And for it, we got bankruptcies.  How is that helping a child eat or Grandma get affordable health care?  And no jobs to boot.

The Capitalists, Conservatives, Neo Cons or what ever they are calling themselves, one would think, would be protective of capital.  Not entirely true, because if this were the case they would be negotiating to take uncertainty out of the market, giving capital a chance to work more productively.  Some say that the Capitalists are being played by the President.  I do not believe that to be the case.  The Bush administration would have been favored by the Capitalists, and yet we had TARP.  A different group, but still picking winners, a job neither side does well.  Just think AIG, which today I heard was trying to sell their airplane leasing business to the Chinese.

Throughout my lifetime, it has seemingly made less difference which party is in power.  They no longer look at the United States as a sovereign nation they are sworn to protect.  They all, and again I mean ALL, seem to be in it for the power and prestige.  And a fair percentage to get rich.  Think about it.  The Presidents salary is $400,000 a year.  Yet between President Obama, and Mitt Romney they spent over $2,000,000,000 to win the election.  Four years of salary is $1,600,000, grant it a tidy sum, but it hardly warrants spending $1,000,000,000 to get it.  So why would they spend so much?  And I would suggest if we lowered the salary to $0 there would still be a fight to be President.  Bill Clinton wasn't particularly rich, but in retirement he lives pretty well.  A big house in New York, travel, an office staff, I imagine George Washington is turning over in his grave.  This is not to pick on President Clinton, I'm sure the other modern presidents have done well too, look at the big libraries.

Because our government has strayed so far from the Constitution, the job means money and power.  The same applies to serving in Congress.  A member of Congress makes $174,000; leadership slightly more.  It is not the salary, but rather the ability to cut deals that enrich themselves, their families, and their friends.  I have come to the opinion they they don't give a hoot about their constituents.  That is sad.  To win a seat in Congress is like winning the lottery.  But winning is less about qualifications, and more about networking.  Charlie Crist announced he was a Democrat, after being the Republican Governor of Florida, that makes my point doesn't it, they really don't care, as long as they win.  It is NOT a philosophical battle going on, rather it is an economic battle; not our economics, but theirs.

Where I see sanity is in the people.  While I might disagree with Washington State's legalization of marijuana, they voted yes.  Now what happens?  The politicians are writing regulations, and figuring ways to tax it.  Most new jobs in this time of economic stress are government.  More and more common people are just not looking for work any more, that is why the unemployment rate reported on the news is going down, not because of the strength of the economy.  And this is hurting Main Street, the Mom & Pop businesses, even mid level business; and that sucks the will out of producers.  They, the politicians, are coming after your money, regardless if you're rich, poor, or middle class.

So what can or should we do?  Thomas Jefferson, the original Democrat, said a little revolution is a good thing.  Now, I do not believe we should take up arms against government.  Ours can be a peaceful revolt through the ballot box.  At the very least, vote against incumbents.  And past that, consider running for office.  I'm serious, if the ballot has multiple choices instead of one or two, the chances of taking money out of the equation is greater.  It would be much too hard to run a negative campaign against 10 people, than it is to run one against one opponent.  At that point maybe we would hear legitimate campaigns on just what will be done if you win, not what bad things your opponent will do if elected.  There might even be coalitions developed, moderating the extreme views we have now.

The Health Care law that was the crowned jewel of the President's first term, does little to help those in need of health care, but it has so far generated 159 pages of IRS regulations.  Is that health care, or a money grab by those in power?  We need to take money out of government, and by that I'm not talking salaries.  If government is put on a short leash, and are required to follow the Constitution, then this ridiculous spending can stop, the current political class WILL NOT do this, not now, not ever.  No matter their party affiliation.

The 'Cliff' - Part 2

This was more than I expected when I started the cliff part one.  In that blog I said there was a couple things we could do, and went on to discuss mainly one, the issue of taxation and whether it should go up or what is fair.  Now I would like to turn our attention to a second discussion, which no one seems to be having:  Spending Cuts.

Spending cuts is another way to deal with our financial crisis, but it is a little more difficult because the dollars spent here do affect peoples lives.  Or do they?

The Federal budget has several sections to it.  One section, called discretionary spending, are the things like defense, foreign aid, or anything that is not 'locked' in place.  Discretionary spending is 40% of the budget.  Defense appropriations are discretionary.  Mandatory spending is spending that has been set by law.  Mandatory spending includes things like Social Security, Medicare, Medicaid, and other programs generally considered 'entitlements'.  And mandatory spending accounts for over 60% of the budget.  And this is where laws would have to be modified to accomplish cuts.  This is also the area that would bring the lobbyists down on Congress en masse.  And it is spending we as a country must tackle in order to put our fiscal house in order.

Interest on the national debt is a mandatory spending item, it goes to our character as a nation.  The only way to reduce interest expense is to lower the debt.  Nothing currently being presented in Washington has any debt reduction.  Balancing the budget does not necessarily reduce the debt.  Past Congresses have spent money they didn't have, that is debt.  The debt has been accumulating primarily since the last world war.  To put things in perspective, lets look at a typical family.  They can deficit spend by using credit cards, but they then have interest to pay on those cards.  If they continue to overspend then eventually the interest eats up their entire paycheck, that is bankruptcy.

Congress has used the credit card for too long.  Some people are not capable of wise use of credit, Congress is one of them.  There is not one program we can 'cut' that will solve our problem.  Defense could be eliminated and there is still a problem, foreign aid dropped to zero and still there is a problem.  That problem is that Congress, and this is both sides, is drunk with spending money. 

To illustrate this, we need no more than to look at history.  In 1992 Bill Clinton was elected.  The electorate was so disillusioned with his performance, and that of his party in Congress, that they changed the whole shape of Congress in 1994.  For the first time since the New Deal, the House and Senate were controlled by Republicans.  With Republicans being considered the 'conservative' party, one would think that the debt would have shrunk.  It did not, it did slow down as surpluses were run in the budgets, but over all debt grew.  The Republican Congress, like previous Democrat Congresses, found that spending money was fun. 

Up until the early 1900s, there was no debt problem at the federal level.  And there are times when running a deficit is good, and required.  It is when there is no intention to ever pay that debt off that Congress becomes in my book criminal.  We hear all the time about how much each person owes as their part of the debt, problem is that blame is never assigned to those who run up the debt.  To personalize this, if I went wild with the credit cards similar to Congress, my wife would have me committed and the cards burned.  But Congress never seems to get blamed for spending too much, only for spending too little.  Until that changes, which may be never, the really big problem in the room will not go away.

So what is the solution?  I have ideas, but there are probably many more.  The thing is, will the solutions ever get to Washington.