Rep. Boehner Advocates Changes to Social Security

John Boehner (R-OH) recently stated his position on increasing the age at which people can claim Social Security benefits.

"A Republican-held Congress might look to raise the retirement age to 70, House Minority Leader John Boehner (R-Ohio) suggested Monday.

Boehner, the top Republican lawmaker in the House, said raising the retirement age by five years, indexing benefits to the rate of inflation and means-testing benefits would make the massive entitlement program more solvent.

"We're all living a lot longer than anyone ever expected," Boehner said in a meeting with the editors of the Pittsburgh Tribune-Review. "And I think that raising the retirement age — going out 20 years, so you're not affecting anyone close to retirement — and eventually getting the retirement age to 70 is a step that needs to be taken."

Of course, increasing the age at which people are eligible to begin receiving money from the social security system does not "raise the retirement age". People are still free to retire at whatever age they want, but they'll need to rely on their own private funds, private or state pensions or family members to support themselves at least until age 70.

In any event, Boehner is completely right. At the time Social Security was created, the average lifespan was 63. It is now 77 and growing.

Boehner's suggestions about raising the age at which benefits can be claimed and means-testing the receipt of those benefits are just a couple of the changes that should be made, so that Social Security is not a drain on the finances of this country in the coming years.

Venezuela Steals Property Owned by US Firms

Hugo Chavez apparently has a thing for oil rigs owned by US firms.

“Venezuela's legislature has voted to nationalize 11 oil rigs owned by the US firm Helmerich & Payne. The rigs, located in Monagas, Anzoategui and Zulia states, will be taken over by state oil giant Petroleos de Venezuela (PDVSA), the official news agency AVN said.

PDVSA had asked the legislature controlled by supporters of leftist President Hugo Chavez to take over the rigs after the US firm declined to negotiate a new service contract, unlike 32 other foreign firms. The oil giant is South America's top oil producer.

Since 2007 Caracas has nationalized companies in industries from oil to utilities, to telecoms, cement, steel and banking.”

The US government is duty-bound to protect the property interests of this US company. No, President Obama, the response should NOT be to invade or otherwise bomb Venezuela into submission.

Nonetheless, the US response should be firm and decisive. Fittingly enough, it turns out that PDVSA actually owns 100% of the CITGO service stations located in the US.

Unless the Venezuelan government backs down, the US response should be turning over to Helmerich & Payne sufficient ownership interest in the US-based CITGO service stations in order to compensate them for this loss. However, since as a drilling firm Helmerich & Payne is likely not interested in operating gas stations, they should be free to sell them to another firm that already has this line of business, in exchange for cash.

New York Senate Fiddles...

New York City residents in recent years have made a burgeoning business out of offering their apartments for rent on a short-term basis to out-of-towners for the latter to use for a mini-vacation.

However, the New York State Senate is now considering a bill that would outright ban people living in New York City from using Craigslist and similar sites from doing just that.

"This week, writes Budget Travel, "New York state senators vote on a bill that would make it illegal for any homeowner or renter to sublet for less than a month. The new law would be a blanket ban on short-term rentals no matter how ethical the renter is. (It's always been illegal to violate co-op leases and condominium bylaws.)"

Maybe the Senators are looking for a reason to not focus on the state's gigantic, exploding $9 billion plus budget deficit.

The state is quickly sinking into a fiscal hellhole, and instead of coming up with growth-oriented policies (for example - cut the state sales tax, slash the individual tax rate, waive certain rules and regulations for newly-formed businesses, etc.) the best that state lawmakers can do is to make it even more unlikely that a budget-conscious traveler will actually want to visit New York City.

Given the complete reluctance on the part of New York state lawmakers to make difficult choices on how much the government attempts to raise in the form of taxes and how much of that amount it should spend, its challenging fiscal times will continue and only get worse from here.

McChrystal, Petraeus...Who Cares?

As Senate starts the confirmation hearings for General David Petraeus as a replacement for the intemperate General Stanley McChrystal, his overall mission in Afghanistan comes into focus.

"In some ways, the hearing will echo much of what Petraeus told the Senate and House armed-services committees recently, as nervous lawmakers sought his calm demeanor to soothe their own heebie-jeebies over a war that increasingly seems bogged down. Senator Carl Levin, the Michigan Democrat who chairs the Senate panel, said Monday that it is likely to zero in on two key questions: How firm is President Obama's July 2011 date to begin withdrawing U.S. troops from Afghanistan, and why isn't the Afghan military doing more to defeat the Taliban?"

Instead of asking whether we can possibly start to withdraw troops at some point next year (and by "withdraw", we're probably talking the same, slow process that have seen American troops "withdraw" from Korea following the Korean War over half a century ago) Americans should be asking why our military is still in Afghanistan right now at all. Now the longest-running war in US history, the fight in Afghanistan has rolled on for years without much visible progress.

Afghanistan is still economically dependent on drug sales, Taliban warlords still control a good part of the country and people there are still openly hostile to Western society.

If we're concerned that upon leaving the Taliban will return to complete power and provide Al Qaeda with a safe haven to conduct their nefarious operations, well they're already currently able to operate with impunity from the badlands of Pakistan.

Besides, the true key to defeating Al Qaeda has never been about meeting them on an open battle field and obliterating them, but rather scaling back our overly-aggressive foreign policy we have adopted over the past 70 years in which we interfere in foreign elections and politics, and occupy countries on a whim.

President Obama Open to Spending Cuts?

President Obama yesterday announced his intention to call the Republican's "bluff" on out-of-control deficit spending.

"President Barack Obama held a press conference at the conclusion of the G 20 Summit in Toronto this evening, and the highlight came at the very end when he called out the GOP rhetoric on the deficit. Obama said, “I hope some of these folks hollering about deficit and debt step up, because I am calling their bluff.

The President continued and later blasted the Republicans and called out the GOP rhetoric, “I’m doing because I said I was going to do it and it’s the right thing to do, and people should learn that lesson about me, because next year when I start presenting some very difficult choices to the country, I hope people who are hollering about deficits and debt start stepping up, because I’m calling their bluff and we’ll see how much of that, how much of the political arguments they’re making right now are real and how much of it was just policies.”

If he's being honest, well then I can't wait for that debate to fire up!

There's practically no spending cut the President can propose that any person worried about exploding federal deficits and ridiculous amounts of public debt should object to.

Social security? Among the potential solutions are to raise the retirement age, means-test, and decrease promised future benefits.

Military? Slash it. Big-time. This might be the opportunity to pull US troops out of most of the 140-odd countries that we find ourselves today. Return it to its original mission of protecting the US proper, not our trade partners.

Medicare? This is a tough one. Any reasonable forecast of future spending associated with Medicare demonstrates that its costs will very soon completely dwarf the taxes paid in to it. I'm open to any and all ideas on this, but my initial thinking is colored by the idea that at some point medical care that Person A desires but expects Person B to pay for has to be rationed in a very meaningful manner.

President Obama signaling that he's open to spending cuts presents an outstanding lead-in for deficit hawks to shape the debate and provide their own ideas on how spending should be cut in a way that enables us to not only balance our budget as a nation, but begin to repay the debt that we foolishly took on over the past 40 years.

Paul Krugman for OMB? Don't Make Me Laugh...

Now that Peter Orszag has announced his pending resignation from the government's Office of Management and Budget (OMB), the popular blog Baseline Scenario has started to lobby for Paul Krugman to be nominated for the position. Krugman, of course, is the Left's favorite economics writer (for the New York Times), as well as a professor at Princeton.

"But for the OMB position, the dynamic of a hearing would be terrific for the president’s specific agenda and broader messages. Krugman, of course, is the leading advocate for continued (or increased) fiscal stimulus. This is exactly President Obama’s message to the G20 this weekend.

Plus, when Republicans push back against Krugman on this issue, he will let them have it full blast on fiscal policy during the Bush administration. Krugman has, again and again, been an outspoken critic of the Bush era fiscal policy. He has precise chapter and verse on where the Bush team went off the deep fiscal edge."

If the goal is to make the Obama Administration look even more ridiculous than it already does today, then Obama couldn't possibly make a better nomination.

Krugman is a shrill partisan for the Left, who thinks that excessive "Keynesian" government spending should unabated.

So the plan is for Krugman to let the Republicans have it "full blast" for policies during the Bush administration? I guess it's not just the military that likes to fight the last war.

There was a period of time when the American public would at least be open to the idea of Obama suggesting that the current economic predicament is something he inherited from former President Bush. Those days are over.

As evidenced by the Senate's recent reluctance to pass a "Tax Extenders" bill that would have modestly increased our national debt, the American public is slowly but surely starting to clue-in that excessive government spending in the form of bailouts and over-regulation (healthcare, financial "reform", etc.) are what's killing this economy.

So make Paul Krugman the feckless head of OMB. It will be the equivalent of stringing him up as a pinata for everyone to take a swing at, with no risk of any kind of retaliation.

A Case Against The Estate Tax

Professor Robert Michaelsen, an accounting professor at the University of North Texas, earlier this week penned an article in Tax Analysts (subscription required) in which he defended the reestablishment of the federal estate tax.

He starts out the article with the canard that "it is assumed that a progressive tax is desirable".

"With a progressive tax, the tax rate increases as the base increases. In most discussions, however, income is used instead of the base. The argument as to whether a tax should be progressive will never be settled, because it depends on value judgments. In this article, it is assumed that a progressive tax is desirable. This position is based on the diminishing marginal utility of money -- that is, the next dollar of income is more valuable to someone with a lower income because that dollar will often be used to provide the necessities of life. Some conservatives have claimed that taxing dead rich people is immoral. It is even more immoral to tax live poor people, who need the money for food, housing, and other necessities."

Well, we're just getting started and Professor Michaelsen has already lost me. Why should we assume "that a progressive tax is desirable"? One of the lies that the American people have been fed and continue to believe in is that our current tax-and-spend policies can be continued if we can simply stick “the other guy” with the bill. In other words, as long as someone else is forced to pay the tax, then I can keep on benefiting from government services, without paying the freight. Eliminating the “progressive” nature of the tax rules would go a long ways towards eliminating that mindset.

“Opponents of the estate tax argue that it is double taxation: Income is subject to the income tax when it is received and added to a person's wealth and then taxed again when the wealth is taxed by the estate tax. There are two things wrong with this proposition. First, studies show that more than 50 percent of the wealth taxed by the estate tax will never be subject to the income tax. Unrealized appreciation in assets taxed in the estate were not subject to the income tax of the decedent and will not be taxed to the heirs because of the step-up in basis at the time of death.”

Actually, due to the Bush tax cuts in 2001, there will be no estate tax levied in 2010. Assets received by heirs from these estates will receive a “carryover” basis (i.e., not be stepped up to fair market value), meaning that when those same assets are later sold, the heirs will pay tax on the appreciation in these assets. Why does Professor Michaelsen consider that to be some sort of miscarriage of justice?

“Given that the proposed exemption is now $ 7 million per couple, the threat to family businesses should be substantially less. Even if the threat to family businesses were to become substantial, the estate tax could be revised so that it exempts those businesses.”

The tax laws should not be administered by people of a like-mind with Professor Michaelsen, who believe they should somehow be able to “exempt” certain estates and not others. By deigning to decide who gets favorable treatment and who doesn’t, the entire tax system is then set up to be manipulated by special interests seeking special favors. Better to have uniform treatment, rather than arbitrarily deciding who is “in” and who is “out”.

“The wealthy benefit from the social investment in scientific research, subsidized education, infrastructure, stability, the freedom to accumulate great wealth, and other public goods provided by government. The estate tax allows society to recover some of its investment. The elimination of the tax will help change America from a meritocracy to an aristocracy of inherited privilege and wealth.”

All of the favorable attributes listed above by Professor Michaelsen are reasons that we have an income tax, and in no way support an estate tax or another additional tax.

“It is immoral to repeal the estate tax, giving about $ 60 billion a year to heirs while cutting after-school programs, Medicare, Medicaid, food stamps, Third World child vaccinations, prosecution of polluters, and infrastructure maintenance -- to name a few of the cuts proposed by those who favor repeal of the estate tax.”

Professor Michaelsen’s last argument provides us with a false dichotomy, in which he claims that if the nation “gives” (i.e., in non-government-speak, he means “if we allow people to retain their own property”) heirs $60 billion, then we can’t fund certain entitlements and other socialist do-gooder nonsense.

In point of fact, there’s no reason a reasonable allowance for social programs can’t be funded through an income tax or other tax-raising measures undertaken by the government. Suggesting that we have to rely on the estate tax to provide funds for these projects is illogical.

For once I'd like to see big-government types like Professor Michaelsen voluntarily disclose how much additional taxes they have paid, over and above what they are required to pay under today's laws. If having the government take people's money and spend on various social programs is such a great idea, then certainly people like him should be more than willing to go above and beyond what's merely required.

Democrats Propose Spending Cuts!?!

Although not generally known for being in favor of limiting the size of the federal government, to their credit liberal Democratic lawmakers are becoming increasingly boisterous about reducing the Pentagon's budget.

"A growing number of centrist Democrats say they’re open to trimming Pentagon spending in the face of record budget deficits and mounting public debt.

Liberal Democrats for years have called for cuts to the massive defense budget to no avail. Even after Democrats regained control of Congress in 2007, their few attempts at reining in defense spending have proven futile, partly because of opposition from centrist Democrats hawkish on defense issues.

Now that opposition is softening amid rising concern about the nation's fiscal future and the fact that defense makes up more than half the country’s discretionary spending.

“We are going to have to adopt the philosophy that nothing can be off the table,” said Rep. Walt Minnick (D-Idaho), one of the first members of the class of 2008 to be admitted into the Blue Dog Coalition. “And that is increasingly becoming the dominant view of the Blue Dogs.”

I fully support a massive decrease to our defense budget (off the top of my head, a 75% cut sounds about right), and believe these lawmakers have it at least half right (although I'm sure if pressed they would admit a preference to taking the "savings" and spending it on yet another social program that would unfortunately create a host of unintended and unhelpful consequences, just like most of them).

What exactly are our troops doing in 150 countries, other than just our own? We all know what they're doing - they are propping up failed regimes, training local governments in the latest counter-insurgency techniques, inexplicably lingering around decades after World War II and the Korean War ended, and generally wasting US taxpayer money.

US troops should all be based here in the US, providing for our own national defense.

If all of tin-pot dictators around the world want to use US firepower and know-how to protect their own rear-ends, then let them hire Blackwater or some other private outfit and pay the going rate, and not rely on the US taxpayer to pay the bills for them.

Unemployment Benefits Extension Looks Unlikely

The US Senate has been grappling for weeks over a bill sent to it by the US House which, among other things, provides for an extension of unemployment benefits.

"A Republican filibuster appears increasingly likely to kill long-sought legislation extending jobless benefits and a host of other spending and tax measures, despite a new round of cuts to the measure Wednesday that reduced its deficit impact even further.

Failure to pass the bill would mean about 200,000 jobless people a week would lose benefits that average more than $300 a week because they would be unable to reapply for additional tiers of benefits enacted since 2008. Governors denied help with their budget woes are likely to lay off tens of thousands of state workers."

Government-provided unemployment benefits are a mixed bag. Although a (rather weak) argument can perhaps be made that providing these benefits is a proper role of a federal government, it's undeniable that these same benefits should be fairly short-lived and have a declining pay-out ratio to those receiving them. In addition, there should be a means-test employed as well, so those that have assets that could be sold to provide an income aren't provided a stipend from the government when one is not clearly needed.

Back to the issue currently before Congress though - continuing to extend these same benefits sends the wrong message to the recipients - that the government, not themselves, are responsible for their own well-being.

It's time for all Americans to grow up and realize that, given the state of our national finances, there's no such thing as a free lunch. A proper role of a legitimate government is not to redistribute income and property from one group to another. If one group believes another is worthy of their charity, they will freely and willingly give to that other group or person.

Obama to EU: Don't Even Think About Balancing That Budget

President Obama has time and time again demonstrated that he simply does not care what his current tax and spend economic policies auger for future generations. Now he is openly encouraging Europeans to similarly act recklessly.

"President Obama wants to slow Europe's headlong rush to austerity. But right now he looks like little more than a speed bump for the cutback crowd.

Obama has sought to use the upcoming meeting of the Group of 20 global finance ministers in Canada this weekend as a rallying cry for more fiscal stimulus. He argues that cutting government spending now risks undermining a fragile recovery in debt-soaked Western economies."

So the whole key to solving our current economic predicament is to have the government print and spend more money? Really, it's that simple!?! Taken to its logical conclusion, Communist Russia should have ended up the wealthiest place on earth. But it didn't quite work out that way.

President Obama is simply the most recent of a long list of governmental do-gooders that think that they know better where to spend people's money than those same people do.

So now we're left with a situation where the federal government is bailing out this industry and that industry, and the overall enconomy is still in shambles with nothing to show for that entire effort except for a lot of extra debt that will have to be repaid, one way or another, by future generations.

Once again, Americans are subjected to being ruled by a band of thugs who never seem to grasp the reality that national prosperity is not remotely built upon a platform of taxation and government spending.

Until Americans rise up and shrug off this thieving pack of fools in the November elections, expect more and more "helpful programs" to emerge as politicians attempt to buy off enough votes to hopefully remain in office for another term.

Mortgage Modification Program a Major Failure

The Obama Administration's efforts to overcome the free market and prop up the US housing market has not worked out as planned. Recent reports suggest that 1/3 of the 1.24 million that enrolled in the program over the last year have already dropped out.

"The Obama administration's flagship effort to help people in danger of losing their homes is falling flat.

More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That exceeds the number of people who have managed to have their loan payments reduced to help them keep their homes.

Last month alone,155,000 borrowers left the program -- bringing the total to 436,000 who have dropped out since it began in March 2009.

About 340,000 homeowners have received permanent loan modifications and are making payments on time."

The mortgage modification program generally reduces the interest rate and extends the repayment term of the mortgage. Banks that are in the program in turn receive taxpayer-funded incentives to participate.

Of course, this recent news did not stop delusional bureaucrats from crowing about the many successes of the program.

"Administration officials said their work on several fronts has helped stabilize the housing market. Besides the foreclosure-prevention plan, they cited government efforts to provide money for home loans, push down mortgage rates and provide a federal tax credit for buyers.

"There's no question that today's housing market is in significantly better shape than anyone predicted 18 months ago," said Shaun Donovan, President Barack Obama's housing secretary.

People in the mortgage modification program are those that made horrible mistakes in buying bigger and more expensive houses than they should have. As difficult as it is for someone to admit a mistake, these people would be much better off by either walking away from their over-leveraged home completely or not making any more payments until their loan balance is below the current value of the house.

For now, it is safe to say that even with all of the "incentives" and "tax credits" being given out in order to stabilize housing prices, the Obama Administration's efforts to prop up the housing market are destined to completely fail and will only succeed in increasing the monstrous government debt that future generations of Americans are being saddled with.

New Jersey Nixes Tax on Millionaires

In a sign that the popularity of Governor Christie with New Jersey voters may be forcing legislators in New Jersey to pay attention and act more fiscally responsible, lawmakers in the Garden State have conceded they don't have votes to override his veto of a substantial tax increase from earlier this year.

"New Jersey Democratic legislators on Monday failed to gather enough votes to extend a tax on millionaires that would have been used to provide property tax relief for senior citizens and the disabled.

Democrats wanted to override Republican Governor Chris Christie's veto of the plan but were unable to get any Republicans to join them to muster the two-thirds majority needed in the state Assembly.

The Democrats had wanted to reimpose a one-year, 10.75 percent tax on income above $1 million that would have hit 16,000 people, some of them likely to work as financial professionals just across the Hudson River in New York."

It's a shame that it takes a veto by the governor to stop lawmakers from imposing a draconian tax on the most productive members of society.

What lawmakers should actually be doing is cutting personal and corporate tax rates to encourage more people and businesses from neighboring states to move to New Jersey.

Yes, providing help to senior citizens and the disabled is certainly a noble cause. But if finding money for this cause was important enough, lawmakers could easily come up with the funds for those initiatives if they were willing to cut spending on their sacred cows - the public unions that have extorted money from the public for year and given lavishly to their campaigns in exchange.

Is Obama Spending Too Much Time On the Links?

Recent reports and opinions suggest that President Obama has in general been spending far too much time on the golf course since taking office, and in particular since the BP oil spill.

"Taking a page from conservative bloggers, the Republican National Committee has released an ad criticizing President Obama for playing six rounds of golf in the first 58 days of the massive BP oil spill. The ad — asking, "What took so long?" — suggests Obama put off meeting with BP so he could spend time on the course. Is it fair to accuse Obama of putting leisure first, and the disaster second?

Count me among those in the minority who think that the more time that President Obama spends on the golf course, the better!

Who needs him in the White House, dreaming up new taxes and regulations to further paralyze the American economy?

The US needs a figure-head President, not an activist that is constantly looking for ways to waste people's hard-earned money on yet another failed social project.

With his birthday coming up on August 4th, if you really care about the fate of this country, you'll send him some golf gear as a present that will serve to reinforce his love for the game and get him out on the greens even more often!

Government Workers are Endangered?

A CNNMONEY.com article laments the fact that even workers for the government are losing their jobs these days.

"Once upon a time, there was job security in a government job.

That's no longer the case. The layoff ax has hit public sector payrolls with force as states wrestle with massive budget shortfalls. Since August 2008, some 231,000 state and local government jobs have disappeared -- 22,000 last month alone," according to federal data.

The majority of the cuts are on the local level, which at 14.4 million workers is nearly three times the size of the state workforce. Plus, unlike at the federal level, most of these cuts come from the ranks of teachers, cops, firefighters and social service workers.

And more pain is coming down the pike. Some 19 states say they plan to implement layoffs to narrow budget gaps, according to a recent survey."

The increasing percentage of workers employed by government has been an increasing drain on the overall economy for years, since the salaries of government workers are generally paid by the taxes of those that work in the private sectors.

Since the payroll of the federal and state governments needs to be dramatically scaled back in order for the economy of this country to recover, headlines such as these suggest that, at least on some levels, the economy may be heading in the right direction.

The Flip Side of the Offshore Drilling Ban

The US government has instituted a six month ban on deepwater offshore water drilling in response to the BP oil spill, which will have its own ramifications.

"President Barack Obama's six-month moratorium on deepwater drilling in the Gulf has sent shudders across the coast's offshore oil industry — where no one knows just how extensive or long-lasting the damage to jobs may be.

Louisiana has long been indebted to the oil industry. Its thousands of good-paying jobs — offshore workers frequently earn $50,000 a year or more — counterbalance the low-wage tourism industry in the state's southern tier of parishes.

But that changed — at least temporarily — after the oil rig exploded in the Gulf of Mexico, spewing the black gold into the waters. Now, many of those who counted on making it in the oil patch are out stumping for jobs."

Given the excessively high unemployment rate in the US and the fact that a lot of other drillers have been insisting that BP has been using rogue practices in their drilling (i.e., the risk of another giant oil spill is not as great as the government suggests), the drilling ban will only further depress the economy, increase the unemployment rate and increase our budget deficits as claims for unemployment payments increase.

Why the Frustration with Obama's Reaction to Oil Spill?

Americans are increasingly frustrated with President Obama's reaction to the Gulf oil spill, according to a recent poll.

"Americans have become just as dissatisfied with President Barack Obama's work on the Gulf oil spill as they were with his predecessor's handling of Hurricane Katrina, according to an Associated Press-GfK poll released Tuesday.

Even so, the catastrophe appears not to have taken a toll on how Americans view the president overall. Obama's approval rating remained steady in the poll and he is more popular than President George W. Bush was two months after the hurricane.

Still, Obama and his administration have struggled to contain the environmental disaster in the Gulf and now, it seems, to convince people that the government is acting effectively."

Besides using his bully pulpit to influence British Petroleum to act quickly, it's unclear what Americans want President Obama to do. We still are a nation of laws, so President Obama can't just seize British Petroleum's assets and re-route them to those whose livelihoods were most affected by the spill.

The finances of the country are in massive disarray, so there's not a pot of money lying around that he can siphon off of to give to those that are impacted.

In fact, the expectation of immediate Presidential action in matters such as this are such that they risk turning the President into an all-powerful King, one who makes ill-conceived, unconstitutional decisions affecting everyone on a moment's notice, depending on how the political winds are blowing.

Until British Petroleum is held fully accountable, all Americans should pitch in to the clean-up efforts where possible, donate to relief agencies and generally not act as helpless victims that couldn't possibly do anything for themselves.

Undiscovered Mineral Wealth in Afghanistan?

Those noted geologists that work for the US military recently announced their "discovery" of trillions of dollars worth of minerals in Afghanistan.

"The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe."

There should be no dispute that Afghanistan likely has huge veins of minerals. However, having minerals and actually be able to mine those same minerals and bring them to market (over exceedingly tough terrain that is nowhere near a port for shipment to a smelter) in an economic manner are two different things.

In short, it could be completely true that Afghanistan does in fact possess a trillion dollars worth of metals. But if it costs a trillion dollars (or more) to pull those same metals out of the ground and sell them, then they will remain in the ground for ever more.

It's telling that the US released no geological studies or feasibility reports when announcing their "discovery". A similar move by a micro-cap company listed on an exchange in the US would likely draw an immediate rebuke from the SEC.

The announcement from the US government is so hokey that one can't help but wonder what the ulterior motive is for the release of this information.

Perhaps it's this: if Afghanistan can be shown to have a viable post-war economic future, then maybe the American people can in effect be asked to continue to put up with it and continue to pay for it out of their tax dollars for just a little while longer until the military can sort things out just enough for us to declare victory and exit.

Dems Offer Up Half-Baked Ideas to End Recession

Politicians from each camp are increasingly throwing around ideas of tax cuts and spending initiatives that will put the economy on the road to recovery.

However, some of the proposals are more dubious than others.

Take President Obama's proposal (please!) for the federal government to provide $50 billion to the states to avoid layoff's of state workers.

"President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid "massive layoffs of teachers, police and firefighters" and to support the still-fragile economic recovery."

His proposal ignores the fact that the only reason the recovery is "still-fragile" is because the federal government continues to manipulate the market through bailouts and guarantees. In addition, the $50 billion he requests is patently ridiculous, as there is no reason that the already overpaid (compared to similarly-skilled private workers) state workers can't accept pay cuts or furloughs as a measure to avoid layoffs.

Or how about Congressman James Clyburn's (D-SC) recent call for the Republicans to stop demanding "tax cuts, tax cuts, tax cuts".

"House Majority Whip James Clyburn (D-S.C.) charged Sunday that Republicans need to stop talking about cutting taxes and "look to the future with a little more compassion and bipartisanship."

Clyburn and House Republican Conference Chairman Mike Pence (Ind.) were asked on CNN's "State of the Union" about the three-page letter President Barack Obama sent to congressional leaders Saturday, saying that the extension of tax cuts and spending programs was critically needed to keep the economy from sliding "backwards."

Pence said that the administration was "groping for some economic policy" and called for "immediate, across-the-board tax relief."

Clearly Clyburn's call for "compassion" and "bipartisanship" is political-speak for "continued overspending on irrelevant and unnecessary federal programs" and "robbing from future generations in order to make political pay-off's today". His call to further the failed policies of the past prove that anything he says regarding the economy (or anything else for that matter) can be safely ignored.

On the other hand, although Republicans have shown a remarkable lack of backbone in allowing unchecked federal spending over the past 40 years, Pence's suggestion that tax cuts be the springboard for economic recovery is partly on target. If he coupled that with a call for a 30% cut in federal spending (that could easily be accomplished on a number of programs), then we'd really be on the verge of a significant, long-lasting economic recovery.

Russia's War on Drugs

It's not just the US that fights a War on Drugs. Russia too feels the need to mobilize its military and police forces to prevent the use of certain narcotics by its residents.

Like the US, it feels that neighboring countries aren't quite doing enough to prevent its residents from acquiring and using their drug of choice.

"On the international stage, Russia's Afghan heroin issue has become the country's favorite crusade, and has allowed Russia to enter a global debate about Afghanistan that had previously left it on the sidelines. Its basic point is a reasonable one: NATO has fueled drug production by refusing to destroy Afghan poppy fields, which it stopped doing last year in the hope of winning the support of opium farmers. Perhaps less reasonable is Russia's belief that its heroin problem is caused not by its porous borders or its abysmal treatment of addiction (methadone therapy is illegal in Russia) but by NATO's policy on drugs in Afghanistan. Yet that is what Russian officials contend, and this week they embarked on a campaign of coordinated fuming over the issue."

What Russian (and US) officials often fail to take into account is that people denied the use of one foreign-grown drug (heroin) will often turn to another home-grown drug (marijuana, etc.). In fact, attempting to stop people from harming themselves is generally an exercise in futility.

By forcing neighboring countries whose own citizens don't use drugs to fight their war for them, Russian (and US) officials often destabilize local politics and creates a narco-military ruling elite that unsurprisingly makes life much worse for all residents.

The efforts of Russian and US politicians would be much better directed at legalizing and taxing drugs that are used in their country, and directly allocating the new-found tax revenue towards prevention and addiction treatment. In addition, scaling back the military and policy powers from their current futile task of circumventing drug smuggling will also free up a lot of other resources that can be used to pay down debt or reduce the current deficit.

The Trouble With Democracy...

After years of over-spending and over-taxing by New York State politicians and with new reports indicating that Governor Paterson may shutdown state government in a dispute with other state-level Democratic lawmakers, surely residents there are looking for a change to the failed policies of the past, and are embracing a fresh start with polices focused on reasonable tax rates and balanced budgets?

Uhhh, no.

A recent survey poll indicates that residents in parts of New York are unsurprisingly in favor of increasing taxes on "millionaires" in order to retain the current unsustainable funding of education.

"The [New York State United Teachers] union surveyed voters in three swing districts and asked them whether they would be more or less likely to vote for their representatives if they supported a millionaire's tax as a way to avert deep education cuts.

In all three districts, voters by a 37-18 point margin said they'd be more apt to support their lawmakers if they moved to raise taxes for the wealthy if it meant saving their schools from budget cuts.

Two temporary income tax hikes were included in the survey: An additional 1 percent for those earning more than $1 million and 2 percent for incomes over $5 million.

The state's top income tax bracket is 8.97 percent so the rate cited in the survey would go up to 9.97 and 10.97 percent respectively."

So once again, voters indicate their willingness to address massive and systemic overspending by government by raising taxes. Their willingness would be a bit more noble if they were actually agreeing and willing to raise taxes on themselves. But what is actually occurring here is that survey responders are indicating agreement with raising taxes on the "other guy", not themselves.

Hence, the problem with popular democracy. A well-worn summary of the issue is as follows:

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the Public Treasury. From that moment on, the majority always votes for the candidate promising the most benefits from the Public Treasury with the result that a democracy always collapses over loose fiscal policy always followed by dictatorship." (Author unknown, at least to this scribe)

The solution to this issue, which rears itself not just in New York state but in other states and at the federal level, are Constitutional amendments limiting the amount of income that can be taken in the form of an income tax and requiring an annual balanced budget.

Until such time, productive members of society will increasingly see themselves as a target by the less-productive and non-productive members of society, who seek the property of the former to live beyond their own means.

Democrats Seeking Oil Tax Increase Mislead Public

Democrats in the House and Senate that are opportunistically seeking to increase the federal tax on a barrel of oil from 8 cents to 41 cents are deceiving the public when they suggest that the money raised will be set aside to fund future oil spill clean-ups.

"The proposed fee increase has become the latest weapon in the political war over oil, as lawmakers made the plan symbolic of larger congressional election-year themes. Republican senators said that the fee hike, which would raise an estimated $15 billion over 10 years, would help pay for a host of programs that Democrats are championing.

The dispute is helping to stall an emergency spending bill that would revive expired unemployment benefits, provide money for summer jobs for at-risk youths and pay for other programs. The oil fee would help reduce the bill's potential deficit spending to about $78.6 billion over 10 years."

It is undeniably true that this proposed tax hike is being used by Democrats to fund their spending objectives, and is not being set aside at all. In addition, you can rest assured that oil companies will ultimately pass the tax increase along to American consumers in the form of higher prices.

So now we have a tax increase proposal (like most others) that rest on two lies: that the tax is being imposed on some giant corporation (and not the American public) and that the money raised will actually be set aside for use in fixing the problem the tax is nominally supposed to address.

The American public would be a whole lot better off if Congress actively sought ways to reduce their intervention in the marketplace, not to increase it.

Americans Still Giving Record Amounts To Charity, Despite Recession

Proponents of libertarianism have long advocated a return to emphasizing charitable, private giving in order to meet the truly deserving social needs of this great country, instead of mandated "giving" in the form of taxes.

Americans have more than met the call, and a recent AP story indicates that despite the recession, Americans are still giving record amounts. From the gist of the article, however, one would almost conclude that charitable giving had dried up.

"Charitable giving fell by 3.6 percent last year as Americans continued to struggle with the recession, though some philanthropic experts feared the decrease could have been much worse given the economic downturn, according to an authoritative annual survey released Wednesday.

Americans donated $303.75 billion during 2009, the second-worst year since 1956, when the Giving USA Foundation started conducting its surveys. The worst year was 1974, when giving fell an inflation-adjusted 5.5 percent. However, 2009 also was the third-straight year giving reached more than $300 billion." (emphasis added)

So, yes, charitable giving was technically down (slightly) from 2008, but with the unemployment rate continuously skyrocketing during the 2009 year, that is hardly a surprise. But calling 2009 the "second worst year since 1956" is plainly ridiculous, and points only to the decline in giving year over year.

The fact that Americans continue to give in record amounts (over $300 billion) is what is telling.

Keep in mind that this charitable giving is in addition to the massive amounts of taxes forced on taxpayers that are then funneled to various social causes by the government.

A 2007 AP article points that the US gives twice as much the next most generous country (the United Kingdom). But even that statistic is skewed, as it is based on giving as a percentage of GDP. In absolute dollars then, the amount of giving by Americans is much, much higher than the overall giving by the British.

All of this private giving should give comfort to many that the true needs of this country can be met by private donors, and we do not need an overarching government stealing our money in order to fund "needs" that they deem to be necessary.

Switzerland Backs Out Of Tax Secrecy Deal with US

In a fascinating development that one can only hope means that Switzerland actually wants to retain its status as a sovereign state and not just be a satellite country of the US, Swiss lawmakers have rejected a proposed settlement that would have seen Swiss banks turn over information on US clients to the US Internal Revenue Service.

"Switzerland's efforts to calm a banking furor hit a major setback Tuesday as nationalist and left-wing lawmakers blocked a treaty with the United States that would have allowed UBS to hand over thousands more files on its American clients to U.S. tax authorities.

The Swiss government and Washington had painstakingly crafted the treaty last August to resolve a long-standing dispute over the bank's alleged role in aiding tax evasion but 104 lawmakers in Switzerland's lower house voted against the deal Tuesday, compared to 76 in favor. Sixteen lawmakers abstained.

The government had urged lawmakers to approve the deal to avert harm to the Swiss economy, which is heavily dependent on the country's banking industry."

This blog does not advocate tax evasion, so being in favor of the squashing of this deal should not be viewed as approving of any American being able to dodge one's rightful US tax obligations.

However, it's high-time that the US stop bullying other countries around the world (militarily, economically, etc.) and in that vein, it's just outstanding that Switzerland finally came to their senses and rejected this one-way agreement.

Switzerland has long been viewed (and celebrated) as an independent, neutral 3rd party, where people could take refuge in their longstanding bank secrecy laws to overcome confiscation attempts in their home countries. This had been jeopardized by seemingly cowing to the US demand that the Swiss act as US tax agents.

The notion that parts of the Swiss government had tried to sell this deal on the basis that failing to enact it would "harm" the Swiss economy is ridiculous. In fact, signing the deal would likely have caused by far the most damage, as a lot of their current clients would have picked up and left, knowing that the reason for being in Switzerland (an undying devotion to secrecy) was over.

So let's celebrate the fact that one of the tiniest countries in the world has stood up to the US, and in doing so, has retained a major piece of their own heritage.

Update: the Swiss parliament has now shamefully ratified the deal, making its passage much more likely.

Connecticut Circles the Toilet

Connecticut has joined many other states that have attempted to fund their budget deficits with debt issuances, and that consequently have had their ratings downgraded.

"Connecticut, the state with the highest tax-supported debt, had its bond rating lowered one level to AA by Fitch Ratings as it prepares to borrow money to cover a budget deficit for a second straight year.

Connecticut is preparing to borrow $956 million to close a budget gap in the fiscal year beginning July 1, after borrowing money last year to cover a deficit of $947.6 million, the analysts said. Lawmakers also chose to draw down the state’s rainy-day fund and raise the top income tax for residents after tax collections fell almost 15 percent in the year ending June 30, 2009, according to Fitch."

Now, we all know that just because a ratings agency such as Fitch decides to take action doesn't mean much. All three of the big ratings agencies (S&P, Moody's and Fitch) were woefully late in making any meaningful downgrades on the ill-fated investment banks and basically mis-rated much of the mortgage-backed securities market.

Nonetheless, it's telling that Connecticut is now viewed as crossing some sort of abyss. Why legislators there can't simply find some spending programs to cut in order to maintain a balanced budget is beyond me.

It's simply outrageous that there are no (save Ron Paul, and perhaps Chris Christie, governor of New Jersey) politicians at the federal or state that are willing to stand up and do the right thing - which is, to not issue more debt that has to be repaid by future generations from higher-than-necessary taxation.

We can only hope that the November elections are the chance for right-thinking Americans to correct the direction of this country on many levels.

Free Health Care a Recipe for Insolvency

Although President Obama and his lackeys in Congress recently jammed through a Health Care bill that will nominally require all Americans to purchase health care insurance, the reality is that the federal government will continue to subsidize the premiums for a substantial percentage of the "insured" and the overall costs to the insurance companies and those that are paying their own premiums will skyrocket.

The problem, of course, is that people who have a medical ailment of any kind, will expect that all treatments and prescriptions are explored to return their health to a more optimal condition. These treatments and prescriptions obviously will be very expensive, and will lead to all sorts of fiscal issues for our country.

On a related note, an AP story this morning supports the idea that a lot of money spent on health care is currently being wasted.

"More medical care won't necessarily make you healthier — it may make you sicker. It's an idea that technology-loving Americans find hard to believe.

Anywhere from one-fifth to nearly one-third of the tests and treatments we get are estimated to be unnecessary, and avoidable care is costly in more ways than the bill: It may lead to dangerous side effects."

Practitioners preaching education for patients are quick to point out that they are not talking about limiting patient choices.

"This is not, I repeat not, rationing," said Dr. Steven Weinberger of the American College of Physicians, which this summer begins publishing recommendations on overused tests, starting with low back pain.

It's trying to strike a balance, to provide appropriate care rather than the most care. Rare are patients who recognize they've crossed that line.

There's no talk of watching one's diet and engaging in moderate, life-long exercise however, which are the two best things that people can do to maintain optimal health throughout their lives.

Forcing some people (through taxes, subsidies, etc.) to pay for another's health care is probably the main reason the US is quickly approaching fiscal doom.

Once people figure out that they can have all kinds of tests and medications prescribed for themselves and another person has to pay for it, expect demand for the former to increase substantially (even from its already-high level), and for the federal budget deficit and public debt to explode.

CA Lawmakers Move to Shut Down Municipal Bankruptcies

California lawmakers are moving to deny the ability of cities and municipalities to file for bankruptcy, which would otherwise cleanse them of the bloated union contracts that have moved them deep into the red over the past decade.

"A bill that clamps down on municipal bankruptcy filings is headed for Gov. Schwarzenegger's desk, which is bad news for Los Angeles and other cash-strapped California cities.

It the governor signs Assembly Bill 155, it would place a hurdle in the path of filing for Chapter 9 municipal bankruptcy. The bill stipulates that a city may only file for bankruptcy with the approval of the California Debt Investment Advisory Commission, which provides information on debt to public agencies."

Of course, lawmakers are attempting to mischaracterize their efforts as simply an attempt to protect the public!

"California's taxpayers who rely on public safety, senior, park and library services, as well as those who own and operate businesses in our communities, deserve every effort that state and local government can make to avoid the long-term devastation of bankruptcy," the bill says.

Bankruptcy is simply a means to reorganize and eliminate burdensome liabilities. As a result, any city that files for bankruptcy could and would be able to continue fulfilling the same day-to-day activities that they were doing prior to the filing.

This latest action by legislators is simply an undisguised effort by California public unions to prevent their bloated, overly-generous retirement benefits from being scaled back in bankruptcy. Considering they were never fairly approved by the California public anyway, the effort to scale them back is reasonable on many fronts.

European Unions Increasingly Desperate

In a sign that unions in Europe are beginning to understand that politicians and taxpayers in general are on to their racket and are seeking to clamp down on public spending, the unions are now making unpersuasive arguments that decreased spending on them will negatively affect their national economies.

"Almost all 27 EU nations are trying to curb spending and reduce debt to contain a financial crisis that threatens Europe's currency union and has sent stocks — and the euro — sliding in recent weeks.

Monks expressed his fears after attending a meeting between workers' representatives, Europe's major employer federation and EU Commission President Jose Manuel Barroso.

He said he'd asked for the talks "out of despair and alarm at the prospects for growth in Europe as all countries, not just those in distress, move to cut their budgets, move to reduce public expenditure."

"We're seeing cut, cut, cut in all the countries simultaneously which is what they did in 1931 and that caused the Great Depression," he told the Associated Press. "The cost will be in jobs, the cost will be in pay levels for people in the public services in particular, and pensions."

Exorbitant state spending in Europe is the problem and is one of the primary reasons that most of their economies are currently in the tank. Drastically scaling back public spending is the solution. It's as simple as that. This point holds true in the US as well.

Yes, there will be pain and dislocation as public employees, who are used to being vastly overpaid at the expense of productive members of society, have to find more creative ways to earn a living.

Nonetheless, states that are only now imposing austerity measures should not back away from those plans due to complaining by those who feel the pain the most. In the long run, scaling back the role of government, and the amount of money spent by government, is in the best interest of their economies.

States Continue Profligate Spending

Despite an inability to print money like the federal government, combined spending by all 50 states is expected to increase significantly next year.

"Governors' recommended budgets called for a 3.6% increase in spending - the first after a record two years of declines, according to the report, which was conducted with the National Association of State Budget Officers."

This proposed spending increase is scheduled to occur in the face of spiraling budget deficits and anemic tax receipts.

"Tax revenues are expected to climb to $495.8 billion in fiscal 2011, up from $477.4 billion the previous year but down from the $541.5 billion collected in fiscal 2008."

This compares to combined state spending that is over $635 billion, which points to massive deficits at the state level that will have to be repaid by future generations. All in all, a typical immoral act that should be blamed not just on legislators, but also, and more appropriately, the people that voted them into office to vote this way.

As the budget deficits increase, states should consider selling assets off to repay the debt, and will hopefully learn a very valuable lesson in the process. Any bids on Yosemite National Park?

Obama Vows to Waste More Taxpayer Money on "Green" Energy

President Obama announced today that the US government should support "clean energy", while dropping tax subsidies given to the oil and gas industry.

"Seeking opportunity in a crisis, Obama argued for action in Congress as crews struggled into a seventh week to contain BP's mangled oil well in the Gulf of Mexico. He urged lawmakers to shift the tax-break money toward clean-energy research and approve a major energy bill, now stalled in the Senate, that would slap a price on carbon emissions.

"Our continued dependence on fossil fuels will jeopardize our national security," he declared. "It will smother our planet. And it will continue to put our economy and our environment at risk."

I couldn't agree more with him that subsidies given to oil and gas companies should cease. However, the solution is not to redirect that same taxpayer money to "green" energy companies.

The government should not be in the business of deciding winners and losers in the energy business, but rather should stay out of the way and certainly should not steal the money of hard-working Americans (via the income tax) to subsidize investors in energy companies.

If the "green" energy pioneers are willing to embrace the free market and ultimately convince Americans to buy their product (through superior performance of conventional energy, lower prices, etc.), then all the reward and inducement they need will be evident as profits flow in. On the other hand, if they're not able to create a viable market for their product, then that's all the evidence needed that they weren't worthy of any support in the first place.

FTC Proposes Taxpayer Bailout of Mainstream Media

As if the loss of market share by the mainstream media wasn't a good thing in its entirety, the Federal Trade Commission is apparently getting a little misty-eyed and is suggesting that perhaps a little bailout money might make things right.

Jeff Jarvis, at BusinessInsider.com, does a great job describing and lampooning their efforts.

"The Federal Trade Commission has been nosing around how to save journalism and in its just-posted "staff discussion draft" on “potential policy recommendations to support the reinvention of journalism,” it makes its bias clear: The FTC defines journalism as what newspapers do and aligns itself with protecting the old power structure of media.

The document, like good government work, does a superb job of trying very hard to say very little. From its hearings and research, the staff outlines proposals I find frightening, but many of them as politically absurd as they are impossible — e.g., what I’ll dub the iPad tax to put a 5% surcharge on consumer electronics to raise $4 billion for public funding of news — and the document doesn’t endorse them."

The last thing the federal government needs to do is burden Americans with more borrowing and more taxes, in order to subsidize a mismanaged, unprofitable dinosaur that market forces are already taking care of. We've already been down this road with General Motors, AIG, etc.

Of a much greater concern is the fact that the unelected hacks at the FTC are even suggesting that a possible solution for reviving the dying newspaper industry is to increase taxes on consumers across the US.

Although one might not fault the FTC for thinking that just one more, copycat tax-raising proposal being floated would not be considered out-of-bounds, proposals to raise taxes should certainly not be the knee-jerk reaction of a government wing that otherwise has no power to tax.