It is the holiday season of 2010 and the best-selling gifts are those that are "connected." The Internet has become woven into our personal fabric to a greater extent. We are able to communicate our preferences in more ways than before.
Meanwhile, elected officials are busy implementing our preferences in new legislation on a daily basis. The way they receive information about our preferences is like this: They tell us their preferences and we elect them or we elect somebody else. Handshaking and baby-kissing are not the main tools, but what we have is no less antiquated. Perhaps it is time to re-evaluate what we really have on our hands.
11/28/2010
Anybody Remember Ronald Reagan?
Reagan took the voters aside on TV and explained things. Like the progressive tax. This is the idea where taxes are progressively higher, the more money you make. It's easy to tax the rich because it doesn't affect voters now. But add inflation and your income goes up, so does your marginal tax rate. This country is going to need runaway inflation just to break even and get the deficit under control and when that happens, a lot more people will be in the "tax the rich" tax bracket. Only they'll be in the middle class.
It's easy to vote for "tax the rich" when inflation is low. But low inflation cannot be sustained with these costs.
"Tax the rich" has three major problems:
It's easy to vote for "tax the rich" when inflation is low. But low inflation cannot be sustained with these costs.
"Tax the rich" has three major problems:
- One form of it is "Tax the corporations". This really taxes everybody, since in order to maintain adequate profit margins, these corporations immediately must raise prices to cover these costs. It equates to taxing everybody. By taking in more money, the rich corporations are momentarily richer (until they pay taxes) while the poor get poorer (paying more).
- What does taxing rich individuals do? Does it kill the incentive to be industrious, encouraging more people to give up the American Dream and settle to the bottom of the food chain? Or does it encourage the wealthy to yank more wealth from the companies, taking it away from the little guy? I'd say it does both to different individuals. And thus helps create an ever growing disparity between rich and poor.
- The long term effect is the progressive tax, where more people eventually get taxed at the higher rate.
The Tea Party Must Not Grow Too Quickly
The problem with Obama is he was untested. He had less work experience than I would hire into the company where I work. And believe me, the jobs here are not as important.
In software development, you build your project in steps. Write a small piece of code and test it. Continue adding to it. When it's small, it is easy to find bugs and alter the entire architecture, change the structure before it grows too large.
Starting a new job is much the same: You start with a filing system and how to track reminders and action items. Before long, you realize the types of problems are different than the way you organized things. For example, if you created five folders, four are nearly empty while all the work seems to end up in the fifth one. You need to restructure.
Without a track record, it was easy for Obama to chisel out the right position against lame McCain. But without a track record, we had very little idea of what he would do in office or how well he would work. One plus: He had a very effective campaign team. If this was anything like the presidental administration to follow, we could look foreward to a great Presidency. But it wasn't. We didn't elect the campaign team. The lesson is this: Look for a track record before you commit too much too an unknown candidate. The same is true of the entire Tea Party. It has to be tested in degrees, honed, improved and fine-tuned before we hand the reigns entirely over to them. But if the ideas are sound, this is a juggernaut that cannot be stopped. The current administration has no chance to do the same.
In software development, you build your project in steps. Write a small piece of code and test it. Continue adding to it. When it's small, it is easy to find bugs and alter the entire architecture, change the structure before it grows too large.
Starting a new job is much the same: You start with a filing system and how to track reminders and action items. Before long, you realize the types of problems are different than the way you organized things. For example, if you created five folders, four are nearly empty while all the work seems to end up in the fifth one. You need to restructure.
Without a track record, it was easy for Obama to chisel out the right position against lame McCain. But without a track record, we had very little idea of what he would do in office or how well he would work. One plus: He had a very effective campaign team. If this was anything like the presidental administration to follow, we could look foreward to a great Presidency. But it wasn't. We didn't elect the campaign team. The lesson is this: Look for a track record before you commit too much too an unknown candidate. The same is true of the entire Tea Party. It has to be tested in degrees, honed, improved and fine-tuned before we hand the reigns entirely over to them. But if the ideas are sound, this is a juggernaut that cannot be stopped. The current administration has no chance to do the same.
Republicans and Democrats want more Poor People
Republicans want to keep the minimum wage low. They want to court big business. What pattern is emerging? They don't seem to care about the little guy.
Democrats want to tax more and give more to poor people. They win if they can amass more voters that can receive more in terms of benefits, entitlements and other programs than they pay in taxes. These voters are poor. Geez, is it any surprise they are courting illegal immigrants? A ready flock of millions of voters with much to gain and who are very poor: These are voters they can keep.
It seems we have a fundamental problem. A sweetheart deal between both parties and against the little guy.
Democrats want to tax more and give more to poor people. They win if they can amass more voters that can receive more in terms of benefits, entitlements and other programs than they pay in taxes. These voters are poor. Geez, is it any surprise they are courting illegal immigrants? A ready flock of millions of voters with much to gain and who are very poor: These are voters they can keep.
It seems we have a fundamental problem. A sweetheart deal between both parties and against the little guy.
Congress Fighting to keep the Bush Tax Cuts. Gimme a Break!
We know what happens with tax increases: Spending increases. It pushes the spending problem down the road a bit more. Only if we stop the tax increases do we force ourselves to face the real problem of spiralling spending.
Let's say we allow more tax increases. What happens? We push the tax freeze down the road a bit. Yes, eventually, we reach the time when we can pay no more and we have to force ourselves to face the problem.
Back to the Bush tax cuts. A big show in Congress is taking place: Will we get it or won't we? Let's put it this way: This is something we already had. This is Congress at their very best. And they are working (maybe) to keep it the same. In effect, to do nothing. And they'll tout it as a big victory, a handout for the little guy. C'mon. This was ours, it's not yours, don't act like you're doing us any favors! Just do a job.
Let's say we allow more tax increases. What happens? We push the tax freeze down the road a bit. Yes, eventually, we reach the time when we can pay no more and we have to force ourselves to face the problem.
Back to the Bush tax cuts. A big show in Congress is taking place: Will we get it or won't we? Let's put it this way: This is something we already had. This is Congress at their very best. And they are working (maybe) to keep it the same. In effect, to do nothing. And they'll tout it as a big victory, a handout for the little guy. C'mon. This was ours, it's not yours, don't act like you're doing us any favors! Just do a job.
The Solution to the Nation's Growing Deficit: Destroy All Wealth
By now, everybody has seen we cannot cut government programs to cut spending. The leaders don't even give the idea lip service, perhaps because of an us and them mentality: Government workers protect their own. We can't raise taxes too much longer, we would soon reach a tipping point where it is better not to work than work. And we can't have inflation to shrink the size of these programs: The government workers get cost of living increases, so their costs rise in lockstep with inflation.
There is only one solution left. Spend more than we take in, build a huge deficit. Then introduce runaway inflation later after the income was earned and before cost of living increases kicked in. Inflation will devalue the deficit, making it be paid with cheaper dollars. Easy money. No difficult votes.
Here's an example. You have 100% inflation. Everybody's wages double but so to the prices of goods. Everybody's taxes double too (assuming a fair tax rate). This means the deficit is halved in constant dollars.
A policy of continual inflationary doublings will erase any size deficit. The problem is that it also erases personal wealth, savings and retirement plans. The idea that we can plan for our own retirement is put into question as any amount of personal wealth is eventually erased. And it again makes us dependent on government retirement support, such as social security, which has its own problems.
There is only one solution left. Spend more than we take in, build a huge deficit. Then introduce runaway inflation later after the income was earned and before cost of living increases kicked in. Inflation will devalue the deficit, making it be paid with cheaper dollars. Easy money. No difficult votes.
Here's an example. You have 100% inflation. Everybody's wages double but so to the prices of goods. Everybody's taxes double too (assuming a fair tax rate). This means the deficit is halved in constant dollars.
A policy of continual inflationary doublings will erase any size deficit. The problem is that it also erases personal wealth, savings and retirement plans. The idea that we can plan for our own retirement is put into question as any amount of personal wealth is eventually erased. And it again makes us dependent on government retirement support, such as social security, which has its own problems.
Higher taxes equals Destruction of the American Family
When people spend half their wages paying taxes, it takes two people to make what one person without takes would have taken home. Is it any wonder that more and more households have both parents working? How does that affect the family unit?
For one thing, it means day care and babysitting: Someone else is taking care of the kids. I guarantee no matter who they are and what morals they may have, the values these stand-ins are instilling in the children are not all what those parents would approve of if they were there. And so the kids are not being raised the way the parents would have if they were there.
Our children are curious creatures: We share values and understanding on many things. By extension, we assume that we share similar views on things not yet experienced. Such as when we send a child off to college, we think they will strike a balance between work and play while avoiding risky behavior. But many do not. At younger and younger ages, the problem is more pronouced: The chance of the child straying from parental values increases. It is now legal to leave a latchkey kid at home alone at age 8. Is this a good idea? No. Is it necessary in all too many cases? Yes, due to economic reasons.
And what happens to the tax money collected by the government? Much of it goes to welfare, with a special emphasis on single parents. It started out as a magnanimous gesture to help those in the greatest need. But it has grown and evolved to encourage mothers to stay single in order to maximize their benefits. In other words, they are paid better to have a broken family.
Just as a beaten child grows up to be a child beater, a broken family begets more broken families. All of this has a disorganizing effect: Individuals are less likely to be brought up in a nurturing environment, less likely to rise in terms of self-sufficiency and more likely to be poor, leading to even more of the same in the next generation.
For one thing, it means day care and babysitting: Someone else is taking care of the kids. I guarantee no matter who they are and what morals they may have, the values these stand-ins are instilling in the children are not all what those parents would approve of if they were there. And so the kids are not being raised the way the parents would have if they were there.
Our children are curious creatures: We share values and understanding on many things. By extension, we assume that we share similar views on things not yet experienced. Such as when we send a child off to college, we think they will strike a balance between work and play while avoiding risky behavior. But many do not. At younger and younger ages, the problem is more pronouced: The chance of the child straying from parental values increases. It is now legal to leave a latchkey kid at home alone at age 8. Is this a good idea? No. Is it necessary in all too many cases? Yes, due to economic reasons.
And what happens to the tax money collected by the government? Much of it goes to welfare, with a special emphasis on single parents. It started out as a magnanimous gesture to help those in the greatest need. But it has grown and evolved to encourage mothers to stay single in order to maximize their benefits. In other words, they are paid better to have a broken family.
Just as a beaten child grows up to be a child beater, a broken family begets more broken families. All of this has a disorganizing effect: Individuals are less likely to be brought up in a nurturing environment, less likely to rise in terms of self-sufficiency and more likely to be poor, leading to even more of the same in the next generation.
The Gov spends $1.41 for every $1.00 it takes in. Do you know what that Means?
They used to say that we worked for the government every year from January 1 to the middle of May, around 135 days. During those days, every penny went to pay taxes of all kinds. The rest of the year was all ours.
Now the government spends 1.41 times more than it takes in. If we were to keep up with those expenses, we would have to work 1.41 x 135 days = 190 days, 55 more days working just to pay their growing expenses.
190 days is 6.3 months, almost the middle of July. What that means is a significant point has been crossed: We are now well past 50% point, where more than half our time is spent working for someone else, the other half working for ourselves.
Now the government spends 1.41 times more than it takes in. If we were to keep up with those expenses, we would have to work 1.41 x 135 days = 190 days, 55 more days working just to pay their growing expenses.
190 days is 6.3 months, almost the middle of July. What that means is a significant point has been crossed: We are now well past 50% point, where more than half our time is spent working for someone else, the other half working for ourselves.
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