House Votes to Remove Oil Spill Liability Cap

In an important step towards requiring oil companies to properly manage their risk, the House voted to lift the arbitrary $75m cap that oil companies currently face for oil spill costs.

"The House of Representatives passed legislation Friday which would lift the current $75 million liability cap for oil spills while imposing new safety standards for offshore drilling.

The Senate has yet to act, however, so the prospects for final oil spill and energy legislation are unclear.

The measure was pushed by House Democratic leaders as part of the congressional reaction to the BP oil disaster in the Gulf of Mexico. Top Republicans have opposed the measure, arguing that it will further damage an already-reeling Gulf region economy."

Even though the damage to the Gulf of Mexico that resulted from BP's oil spill a few months ago appears to be contained and may have been oversold to being with, it still makes sense for this bill to ultimately pass, be signed by the President, and become law.

If an oil company wants to reap the fruits of drilling for and finding a new oil and gas field offshore, then they must be willing to assume the full economic risk of the drilling going awry.

That's just pure capitalism, where participants should bear the full benefits and burdens of their activities.

The current artificial $75m ceiling on the liability from an oil spill encourages the short-cutting of safety and environmental stewardship. Currently, taxpayers are in effect on the hook for any costs that exceed the cap, unless (like in BP's case) companies voluntarily agree to pay costs that exceed that cap.

If an oil company wants to drill offshore, they should either have the liquid funds necessary to pay for any resulting clean-up, contract with an insurance company that would provide the necessary clean-up in case of a spill, or simply take the risk that they could lose the company to creditors if things really go wrong.

Obama Celebrates One Year Anniversary of General Motors Bailout

President Obama today touted the federal government's $60 billion bailout of General Motors last year, even stating the federal government will "recoup" its investment.

"A year after the government's big auto-industry bailouts, President Barack Obama on Friday trumpeted increased car sales and progress on battery-powered vehicles as a beacon of success in his administration's battle to revive a hurting U.S. economy. But his upbeat assessment can't mask daunting challenges for U.S. automakers and painfully high unemployment.

Touring Chrysler and General Motors assembly plants, Obama argued that his administration's unpopular $60 billion bailout of the two companies — essentially government-funded forced bankruptcies — was paying off. Clear evidence that he sees an opening to appeal to recession-weary voters, Obama will continue to press the same case next week when he tours the Chicago plant where Ford Motor Co. builds the Taurus sedan and plans to assemble a new Explorer sport utility vehicle.

Few disagree that the intervention helped keep the firms afloat.

Obama and fellow Democrats are eager to seize on the auto industry story, framing it as a success before the fall congressional elections.

At Chrysler's Jefferson North plant, which recently added about 1,100 workers for a second shift, the president told employees, to loud cheers, "you are proving the naysayers wrong."

In contrast to the President's words, there never was a sound economic reason to bailout the US auto industry (and specifically General Motors and Chrysler).

If the rationale for the bailout was "jobs", the ratio of jobs saved as compared to the amount used to "pay" for retaining those jobs is at a ridiculously low level.

The fact is, the auto bailout was never about jobs, as opposed to politics. The President and Congress in effect borrowed tens of billions of dollars in order to salvage the union jobs that exist within the auto companies and to protect and reward the Democrats' key voting base.

The federal government should immediately sell its stake in both GM and Chrysler to private buyers, immediately recognize the loss that they are going to have to take eventually anyway, and put ownership of the companies back in the private hands that it belongs.

Why Isn't Tax Policy Being Used to Reduce Unemployment?

The national unemployment rate has been stubbornly high for the last two years, generally around 10%. This is much higher than it was in the preceding years, when anything even near 6% seemed way too high.

And it is now widely being accepted as the new "normal" far too easily by those in power.

"The United States will suffer high unemployment for some time as it slowly recovers from the deep recession that ended in 2009, a former second in command at the Federal Reserve said on Wednesday.

"I see a very slow, uneven recovery. It will not be fast enough to put a dent in the painfully high unemployment rate for some time," Roger Ferguson, the Federal Reserve's vice chairman from 1999 to 2006, told Reuters after a speech in Cambridge, Massachusetts.

Ferguson's prepared remarks at a National Bureau of Economic Research event focused on the fragile state of Americans' retirement savings and the concerns it poses for policymakers.

"For too many people, financial security that lasts a lifetime is beyond their reach," said Ferguson, now chief executive at the financial services company TIAA-CREF."

With the Democrats now in charge at all levels of the federal government, their pathetic and weak response to the recent economic crisis has mainly been to increase the amount of federal welfare provided to those out of work (in the form of extended unemployment benefits), as opposed to creating real incentives for employers to hire more employees and for helping foster an economic environment where entrepreneurs start businesses and hire more people.

It's time for those in power to use tax policy to lead the way.

This would include tried and true methods of incentivizing businesses and entrepreneurs through lower business and personal tax rates, to be matched by reduced spending by the federal government.

Let's stop treating the currently unemployed as permanently unemployed, give people a real reason to hire again and get the economy moving again.

Have Charles Rangel Do the Perp Walk

Readers are well familiar with the prosecutor tactic of having a prominent person accused of a crime do the so-called "perp walk". This is where the person accused of a crime is paraded off to police headquarters in full view of swarms of photographers, and is intended to not just embarrass the accused, but also to subtly sway public opinion about the person's guilt.

Given the economic harm that Charles Rangel (and his tax-and-spend cronies) has inflicted on the American public over the years, as well as his disregard for the very same tax laws that he was in charge of overseeing, he would make an ideal candidate for a "perp walk" based on some recent, and some old, allegations being made against him in the context of a "Congressional ethics" investigation (now there's an oxymoron if I've ever heard one).

"A House investigative committee last week approved multiple alleged violations against Rangel. People familiar with charges, who were not authorized to be quoted, said they related in part, to:

- Rangel's use of official stationery to raise money for the Charles B. Rangel Center for Public Service at City College of New York.

- His use of four rent-subsidized apartment units in New York City.

- Rangel's failure to report income as required on his annual financial disclosure forms. The committee had investigated his failure to report income from the lawmaker's rental unit at the Punta Cana Yacht Club in the Dominican Republic. Rangel also belatedly disclosed between $239,000 and $831,000 in investment assets.

- His failure to pay taxes on all his income from the resort unit.

- A possible role in preserving a tax shelter for an oil drilling company, Nabors Industries, whose chief executive donated money to the Rangel Center while Ways and Means considered the loophole legislation."

Any other prominent person charged with the crimes that Rangel is accused of would be hauled off to jail and be awaiting trial. There's no reason he shouldn't be treated the same.

Rangel is a cancer, a danger to freedom-loving Americans (consider his proposal to require young Americans to complete 2 years of "public service") and should be tried and convicted of the tax evasion he currently stands accused of.

It would send a tremendous message to other legislators that they are not above the law, and that ordinary Americans now stand ready to hold them accountable for their deeds.

Senator Kerry = Benedict Arnold?

Senator John Kerry (D-MA), who in the past has denounced companies that seek to minimize their corporate tax bills, has apparently done some soul-searching and determined that he too doesn't wish to overpay his own taxes.

"Sen. John Kerry, who has repeatedly voted to raise taxes while in Congress, dodged a whopping six-figure state tax bill on his new multimillion-dollar yacht by mooring her in Newport, R.I.

Isabel - Kerry’s luxe, 76-foot New Zealand-built Friendship sloop with an Edwardian-style, glossy varnished teak interior, two VIP main cabins and a pilothouse fitted with a wet bar and cold wine storage - was designed by Rhode Island boat designer Ted Fontaine.

But instead of berthing the vessel in Nantucket, where the senator summers with the missus, Teresa Heinz, Isabel’s hailing port is listed as “Newport” on her stern.

Could the reason be that the Ocean State repealed its Boat Sales and Use Tax back in 1993, making the tiny state to the south a haven - like the Cayman Islands, Bermuda and Nassau - for tax-skirting luxury yacht owners?"

Of course, no one should begrudge another person the opportunity to arrange his affairs in order to lawfully and legally minimize his own tax obligations.

However, Senator Kerry has a long history of publicly excoriating companies who try to do the same. His prior histrionics though were likely only for political gain, as his supporters and voters in Massachusetts expected him to act in that manner.

When it comes time to spend his own money however, Senator Kerry is just like the rest of us, probably more so than he'd care to admit.

Leaked Pentagon Files Prove Afghan War is a Massive Waste of Taxpayer Money

The recent unauthorized release of confidential military information regarding the war in Afghanistan is being denounced by the White House, even as it shows that the war is not going well at all, the US military has unfortunately engaged in scandalous actions and the objectives of the war are not remotely being met.

"A whistleblower leaked tens of thousands of secret military files on the Afghan war Monday, documenting the deaths of innocent civilians and how Pakistan's spy agency secretly supports the Taliban.

The leaks prompted a furious reaction from the White House, saying they put the lives of soldiers at risk, but the man behind the revelations said the controversy vindicated the decision to break cover.

In all, some 92,000 documents dating back to 2004 were released by the whistleblowers' website Wikileaks to the New York Times, Britain's Guardian newspaper and Germany's Der Spiegel news weekly.

They carry allegations that Iran is providing money and arms to Taliban insurgents, and details how widespread corruption is hampering a war now in its ninth year.

The New York Times said the archive illustrated "in mosaic detail why, after the United States has spent almost 300 billion dollars on the war, the Taliban are stronger than at any time since 2001" while the Guardian said the files painted "a devastating portrait of the failing war."

The White House response is almost Orwellian, as it objects to the release of this information on the grounds that it will "put soldier's lives at risk".

Actually, what is putting American soldier's lives at risk is the decision by that same White House to continue to wage this pointless, budget-draining war in the first place.

It's always curious when an objection is lodged related to the release of otherwise private information and that objection does not allege that the leaked information is false, misleading or otherwise untrue. Here, there's no apparent reason that the American public, which, you know, is actually paying for this war, has been denied access to this now-leaked information. The person that leaked this information deserves our praise for his courage and willingness to show that the Emporer has no clothes!

It will be interesting to see how the mainstream media plays this release. In my humble view, the release of this information is as potentially troubling to the Obama Administration as the release of the so-called Pentagon Papers was to the Nixon Administration during the Vietnam War.

Of course, unlike President Nixon, President Obama has many supporters in the mainstream media, so they may choose to protect him by whitewashing this story. Time will tell.

There is no disputing, however, the fact the leak of this information demonstrates once again that the American military is over-taxed in its overseas combat entanglements and stirs up more trouble in its overseas antics than it is able to fix by being overseas in the first place.

Time to bring the boys home for good and reduce our military spending dramatically.

Geithner Favors Letting Tax Cuts Expire

Treasury Secretary Timothy Geithner today said that the Administration is in favor of allowing the Bush tax cuts to expire for the wealthiest of Americans:.

"Treasury Secretary Tim Geithner said that allowing tax cuts for the wealthy to expire would be "the responsible thing to do."

This is the last year for the tax cuts enacted under President George W. Bush. Republicans have generally favored extending all of them. While Democrats are divided on the issue, President Barack Obama has favored allowing the expiration of cuts he says have applied to the wealthiest people.

"It's responsible to let the tax cuts expire that just go to 2 percent to 3 percent of Americans, the highest earning Americans," Geithner told ABC's "This Week" in an interview broadcast Sunday.

Doing so would show the world that the U.S. is "willing as a country now to start to make some progress" reducing long-term budget deficits, he said.

Geithner said he does not believe that higher taxes for those high earners will hurt economic growth."

It's difficult to know where to start with such idiocy.

1) Allowing tax cuts to expire "would be the responsible thing to do": What would actually be "responsible" is if the US government actually were to acknowledge that it was broke and will not remotely have sufficient funds to meet its future Social Security or Medicare obligations, nor pay-off its existing liabilities. Then we could have an honest debate as a country about what to do next. Continuing to pretend that we're not broke is the "irresponsible" thing to do.

2) Allowing tax cuts to expire demonstrates that the federal government is willing to "start to make some progress reducing long-term budget deficits": The Democrats have never, ever had any realistic plan to balance the budget, or even come close to doing that. The closest they came was when President Clinton was in office, but he was backed by a Republican-controlled Congress, so that doesn't count. Their meal-ticket voters are those that demand more and more "freebies" from the government, so don't count on them actually fighting this trend.

3) Allowing tax cuts to expire will not "hurt economic growth": is raising taxes on the most-productive Americans in the midst of a recession supposed to be the Democrat's idea of stimulus? Of course this will hurt the economy. Taking money from the most productive members of society and having a band of elected thugs divvy it up is not exactly the most efficient way for society to allocate scarce resources.

Timothy Geithner is a tax-evading mouthpiece who needs to be removed from his position and replaced by someone with actual real-world experience.

Better yet, Americans should throw the whole lot out of office before they permanently ruin this country.

Super Rich Americans Favor the Estate Tax

As Congress debates whether to extend the current estate tax exemption or replace it with a relatively-low exemption threshold that is coupled with tax rates on amounts that exceed the threshold, super-rich Americans are coming out of the woodwork to demand that the estate tax be re-instituted.

"Some high-profile, high net-worth folks on Wednesday called on Congress to impose a "strong" estate tax going forward.

"Our country is on an unsustainable fiscal path. [Revenue from an estate tax can] fund deficit reduction, additional public investment, or added assistance to those affected by the economic crisis," said Robert Rubin, who served as Treasury secretary during the Clinton administration and more recently as chairman of Citigroup.

Moreover, Rubin added, "our nation has always held itself out as a meritocracy and a land of opportunity, and an estate tax helps avoid accumulation of inherited economic and political power that is antithetical to this historical vision of our society."

Rubin was joined by former hedge fund manager Julian Robertson, Walt Disney's grand-niece Abigail Disney and AFL-CIO president Richard Trumka on a call organized by liberal group United for a Fair Economy."

These super-rich people would have us believe they are acting in a totally selfless manner, in that they are willing to reinstitute an estate tax that surely will hit them harder than other Americans.

But is that the proper lense with which to view their actions? I say it's not.

Perhaps these people can disclose how much estate tax they anticipate paying at the rates they are espousing?

My conclusion is that they don't anticipate paying much estate tax at all, since they will form (or have already formed) trusts to leave property to heirs or will leave much of what they have to their own private foundations, which they hope will continue their legacy long after they are in the grave. Either one of these actions will leave crumbs for the tax man.

In the meantime, the saps that don't have the means or the will (non pun intended) to take these actions will be left holding the estate tax "bag".

There is simply no moral reason to have an estate tax. People should be free to give money to whomever they choose, without the taxman stepping in to get his cut.

Federal Government to Prevent "Improper Payments"

In yet another sign that the federal government is an over funded, grotesquely wasteful bureaucracy, President Obama announced that he has signed legislation which has the aim of reducing the $100 billion plus of "improper" payments made each year.

"Federal agencies would have to redouble their efforts to identify and recover billions of dollars lost annually to wasteful spending under a bill President Barack Obama was signing into law Thursday.

He also was expected to announce a goal of reducing improper payments by $50 billion by 2012.

With the federal debt and people's worries about government red ink mounting, the bill marked the latest effort by the Obama administration to get a tighter handle on Washington spending.

Improper payments — from outright fraud to checks issued to the wrong person or for the wrong amount because of a typo — reached a high of nearly $110 billion last year, according to the White House. Federal auditors found that millions of dollars in benefits went to dead people, fugitives or others not eligible for them.

Key elements of the bill will require more agencies to report waste and to produce audited, corrective action plans with targets to reduce the errors that lead to such improper payments. The bill also requires all agencies that spend more than $1 million to conduct recovery audits on their programs."

How much more of a sign do we need that the government simply wastes the money it extracts from the populace? This bill doesn't even address wasteful payments made by the government, just payments made in error.

And by seeking to reduce the amount of annual improper payments only by roughly half, the federal government is signaling that it is either ok with the remaining amount of waste or is acknowledging that it is powerless to prevent a staggering amount of waste from occurring.

Is it possible that at least some of these apparently unauditable and unknown "improper payments" are knowingly made by federal employees to their friends or cronies? I think so.

How many for-profit businesses have a problem with "improper payments" on a scale of anything remotely like this? None that I'm aware of. Even if they did, they would fix this issue post-haste, and not settle for resolving only 50% of the problem.

This is simply another reason to de-fund the federal government, since the funds it claims from ordinary citizens as tax revenue are either wasted on programs that shouldn't exist in the first place, are otherwise improperly paid to people that aren't owed what they receive, or are simply being stolen outright.

$500 Million of Additional Foreign Aid to Pakistan?!?

The Obama Administration has announced that Pakistan has been granted $500m of additional foreign aid which will be used to pay for various non-military causes and to combat "rampant anti-Americanism".

"Secretary of State Hillary Clinton on Monday unveiled $500 million worth of civilian aid projects for key ally Pakistan, in an attempt to counter rampant anti-Americanism in the country by reaching out to the population with tangible help.

The aim of the projects was to show that the U.S. relationship "goes far beyond security," and they ranged from restoring a historical fort to boosting mango exports. The money is part of the $1.5 billion a year pledged to Pakistan under the Kerry-Lugar bill, named for Sens. John Kerry, D- Mass, and Richard Lugar, R- Ind, the chairman and ranking member, respectively, of the Senate Foreign Relations Committee. It represents a tripling of U.S. civilian aid to the country.

Since 2001, Pakistanis have complained that the United States was using their country for U.S. security aims alone, with all benefits going to Pakistan's dominant military apparatus. The Obama administration says it's determined to change that perception."

The US should not be bribing the Pakistani people in order to sway their negative opinion about our current military policies. Instead, the U.S. should shut down the Afghanistan war and get out of Pakistan altogether.

It's preposterous, naive and foolish to think that simply by paying for a few public works projects (assuming this foreign "aid" doesn't immediately get siphoned off by the entrenched government and get sent to a private bank account in Switzerland) the Pakistani people will warmly embrace the active role we demand of them in the Afghanistan War.

Let's just end the war, declare victory, bring the troops home and separate them from armed service and dedicate the tax dollars no longer used in that needless and useless military endeavor towards reducing our public debt.

On the other hand, with skyrocketing budget deficits now measured in the trillions of dollars, it perhaps might be easy to think of any spending item that numbers in the millions as being "inconsequential".

However, these items all add up and if Congress were serious about corralling its out-of-control spending, they must focus on reigning in all areas of government spending.

Top Republicans Struggle to Articulate Spending Cut Ideas

Republicans have long tried to play it both ways fiscally speaking. They are publicly and loudly in favor of tax cuts, and are also publicly and loudly in favor of reducing federal spending.

However, ask them to name exactly which federal programs or spending that they'd like to see cut, and they suddenly clam up.

An appearance by a multitude of Senate Republican leaders on Meet the Press this Sunday confirmed that Republicans' inability to propose specific spending cuts unfortunately continues.

"Democrats are gleefully passing around a video clip of Rep. Pete Sessions' (R-Tex.) appearance on "Meet The Press" this Sunday, and for good reason. Pressed repeatedly by host David Gregory to explain exactly what the GOP would do to cut the deficit -- should it regain congressional power -- the National Republican Congressional Committee chair stammered and offered platitudes:

"We need to live within our means."

"We need to make sure we read the bills."

"We are going to balance the budget, we should live within our means and we should read the bills and work with the American people."

"We need to make sure that as we look at all that we are spending in Washington D.C."

"We have to empower the free enterprise system."

Really, how hard is it to propose cutting something, anything?

I can rattle off at least 10 programs that could be cut or outright eliminated, without thinking too hard about it (Homeland Security, TSA, Departments of Agriculture and Education can all be eliminated, while spending on Social Security, the Department of Defense, Medicare, foreign aid, etc. can all be scaled back, dramatically in some cases).

The issue for Republicans of course is that they perceive that American voters in general are similarly in favor of cutting federal spending, but not at the expense of "their" programs. Hence, the solution of being in favor of cutting spending in general, but without going into specifics.

Given the fiscal state of America, I think now is the right time for the Republican Party to be honest with ordinary Americans, and either state that they are not in favor of cutting any federal spending (and deal with the political fallout that follows) or that they are in favor of cutting spending and spell out exactly what program they are in favor of cutting or eliminating (and deal with the political fallout that follows).

It's time for politicians (both Republicans and Democrats) to grow up, fully appreciate the fiscal predicament we find ourselves in as a country, and fully and clearly state what they intend to do about it.

Cities Starting to Out-source Non-Core Activities

In a trend well worth watching due to the insolvency of many states, cities and municipalities across the country, government outsourcing of non-core activities is increasingly occurring.

"Faced with a $118 million budget deficit, the city of San Jose, Calif., recently decided it could no longer afford its own janitors. So the city's budget called for dropping its custodial staff and hiring outside contractors to clean its city hall and airport, saving about $4 million.

To keep all its swimming pools open and staffed, the city is replacing some city workers with contractors.

"These are cases where the question is being asked, 'Is this a core service at the city level?' " said Michelle McGurk, senior policy adviser to the San Jose mayor.

After years of whittling staff and cutting back on services, towns and cities are now outsourcing some of the most basic functions of local government, from policing to trash collection. Services that cities can no longer afford to provide are being contracted to private vendors, counties or even neighboring towns."

The budget deficits of states such as New York, California and Illinois, and cities such as New York City, San Diego and Newark have long been chronicled. Many of the states and cities that have the biggest budget deficits are still not acting on the issue in a timely and forceful manner.

The Wall Street Journal article cited above shows that many governments are however starting to grasp the severity of the issue. Those that do get "it" are starting to focus on one key area: compensation of government employees.

You see, employment by the government was long-viewed as a fairly undesirable destination, due to its low-pay and relatively modest pension/post-retirement benefits. However, that has changed dramatically in recent years.

In recent years, government unions have won significant concessions in terms of pay increases and pension increases. The cost of funding these obligations has out-stripped the ability of state and city governments to raise taxes to pay for them.

Now that the ability to afford over-paid, unionized government workers has dissolved, smart governments are either looking to renegotiate those contracts (dramatically scaling back promised benefits in the meantime) or, barring that, outsourcing most of the services it used to provide itself.

There is no reason governments shouldn't be seeking to outsource as much as possible, getting the best deal for its citizens in the process. It's a trend that's well worth continuing, and offers probably the best and perhaps the only way for states and cities to fend off insolvency.

Can We Call It a Tax Now Since No One is Paying Attention?!?

The Obama Administration finds itself in court defending the recently-enacted healthcare legislation, on the basis that it amounts to a tax! This of course comes after months of denying that very same thing in public pronouncements leading up to the passage of the legislation.

"When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

Under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes."

It goes without saying to most readers that politicians are lying, hypocritical and duplicitous. All of those traits are on display here in embarrassing detail.

Whether the penalty that arises for failure to purchase the requisite amount of health insurance is a "tax" or simply a "penalty" is ultimately for the courts to decide. From my standpoint, I don't know that the difference is altogether that important.

The real issue is whether this tax or penalty is constitutional. As the Obama Administration readies for battle in court, it's worth keeping in mind that the federal government's allowable activities are expressly limited by the Constitution. Therefore, it will be no surprise if ultimately this legislation is thrown out on the basis of being unconstitutional and in violation of the 16th Amendment.

Should Congress Let the Bush Tax Cuts Expire?

There is a growing debate about whether Congress should allow the so-called Bush tax cuts, which were originally enacted in 2001 with a 10 year sunset provision, to expire at the end of 2010 or extend them.

"Though the tax cuts passed by Congress with the encouragement of former President George W. Bush are often described as a boon for the wealthy, the changes passed in 2001 and 2003 lowered taxes for every income bracket.

Democrats have pledged to shield middle-class taxpayers from the Dec. 31 expiration though no action has been taken yet. Democratic leaders reportedly have suggested holding off taking up extending the cuts until after the November election and a report released by President Obama's debt commission."

Alan Greenspan, the alleged "Maestro" whose loose monetary policies while head of the Federal Reserve created one asset bubble after another, weighed in to say that the tax cuts should be allowed to expire in order to fix the deficit. Considering his track record on economic decisions, his "wisdom" can be safely ignored.

There is no question that the tax cuts at all levels should be extended. An extension for all Americans can be defended on at least two grounds.

1. With the country in the midst of economic recession, why would taking more money out of the pockets of Americans (by in effect raising taxes) be helpful to our economy? The federal government is certainly not suffering from a lack of money to spend.

2. The federal government already takes out a healthy-sized piece of the economic pie in the form of taxes. There's no reason this should increase, and any attention now being given to the budget deficit should be directed at creating a fix borne out of spending cuts, not tax hikes.

NAACP Disingenously Attacks the Tea Party

The NAACP recently repudiated certain "racist" elements within the Tea Party, and called on Tea Party leaders to disassociate themselves from those same elements.

"Leaders of the country's largest civil rights organization accused tea party activists on Tuesday of tolerating bigotry and approved a resolution condemning racism within the political movement.

The resolution was adopted during the annual convention in Kansas City of the National Association for the Advancement of Colored People, spokesman Chris Fleming said. Local tea party organizers disputed claims of racism and called on the NAACP to withdraw the resolution."

Not satisfied with with making those baseless allegations, the NAACP then follows with the bromide that the Tea Party apparently "welcomes" white supremacists into their midst.

"We felt the time had come to stand up and say, 'It's time for the tea party to be responsible members of this democracy and make sure they don't tolerate bigots or bigotry among their members,'" NAACP President Ben Jealous said ahead of the debate. "We don't have a problem with the tea party's existence. We have an issue with their acceptance and welcoming of white supremacists into their organizations."

These straw man allegations are, of course, completely unfounded and the NAACP never bothers to offer any type of support or evidence to back up these wild and outrageous claims.

In fact, their latest attempt at rabble-rousing was so poorly conceived that Jesse Jackson and Al Sharpton are actually distancing themselves from it!

The NAACP's attack should be seen as a pitiful and desperate attempt by an increasingly irrelevant organization to stem the tide of limited government that the Tea Party advocates. The NAACP and its members are on the receiving end of a lot of government largess, and any threat to that gravy train is taken seriously by them.

The NAACP's efforts would be better used sticking to its original purpose of trying to make a positive difference in the lives of their members and the black community, rather than seeking to undermine the desire for freedom and liberty demanded by an increasing percentage of the American people.

Obama Fiscal Commission Already Treading Water

The Fiscal Commission (headed up by former Senator (R-WY) Alan Simpson and former Clinton White House staffer Erskine Bowles) is reporting a deep divide among their members and is calling into question their ability to unanimously agree to the measures needed to overcome the giant budget deficit we face as a country.

"The co-chairmen of President Obama's debt and deficit commission offered an ominous assessment of the nation's fiscal future here Sunday, calling current budgetary trends a cancer "that will destroy the country from within" unless checked by tough action in Washington.

"There are many who hope we fail," Simpson said at the closing session of the National Governors Association annual meeting. He called the 18-member commission "good people with deep, deep differences" who know the odds of success "are rather harrowing."

The commission leaders said that, at present, federal revenue is fully consumed by three programs: Social Security, Medicare and Medicaid. "The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans -- the whole rest of the discretionary budget is being financed by China and other countries," Simpson said.

"We can't grow our way out of this," Bowles said. "We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can't tax our way out. . . . The reality is we've got to do exactly what you all do every day as governors. We've got to cut spending or increase revenues or do some combination of that."

Bowles is dancing around what should be the primary mission of the Commission, which should be recommending spending cuts and not tax increases.

The federal government budget has expanded massively since 2000. Bringing federal spending back in line with the amount of spending undertaken in the year 2000 would go a long way towards reigning in the current budget deficit.

The Commission appointees and members of Congress know that tax increases will stifle investment and savings, and would not improve the outlook for jobs.

The choice for the Fiscal Commission is simple. Once they stop thinking of ways to provide cover for Congressional Democrats by proposing tax increases, they can get down to the real business of ending the budget deficit through spending cuts.

Latest NYC Tax Grab Chases Rush Away

Radio personality Rush Limbaugh recently announced he was packing his bags and leaving New York City in a dispute over taxes.

My first question is, who knew Rush Limbaugh maintained a home in one of the highest-taxed, most liberal cities in the world?

The second question is, why did it take Rush this long to realize that the city would eventually make a run at him and his money (as it has long done to other successful and wealthy people)?

"Rush Limbaugh is vetoing New York City taxes –literally by selling his posh residence there.

The state had imposed a so-called “millionaires' tax” on wealthy residents to help cut a huge budget deficit, which Limbaugh said punished "“the achievers for the mistakes ... on the part of a bunch of corrupt politicians."

Higher-incomed New York City residents can expect to pay more than half their pay in income taxes.

Already the city and state impose an additional 12 percent, on top of the highest federal tax bracket, set to hit 39 percent at the end of this year.

On his personal and investment income Limbaugh likely had to pay New York state and city taxes for only the days he resided in the Big Apple. In recent years, however, New York tax authorities have aggressively sought to fully tax the income from media personalities who live outside the state but who broadcast via a signal from New York."

It's almost besides the point that the technical merits of the city's attempt to tax 100% of his personal and investment income (i.e., because his radio show is technically broadcast from NYC via a signal), despite residing in NYC only a few days a years, is incredibly weak.

There never will be "enough" tax revenue for cities like New York and others, because they will spend every nickel they receive, and borrow billions more in unrepayable debt, to spend on wasteful and destructive social programs that should not have been funded in the first place.

Ultimately, the people of NYC that have elected the tax-and-spend legislators are the ones who are responsible for the inhospitable business environment that exists in NYC, and are the ones who need to rethink the type of person and policies that they want representing themselves.

Democrat-controlled House in Jeopardy?

President Obama's spokesman Robert Gibbs said over the weekend that the Democratic Party's control of the US House of Representative may be lost following elections in November.

"President Barack Obama's party could lose its House majority in this fall's elections, his spokesman said Sunday, perhaps trying to jolt Democratic voters with the specter of GOP lawmakers rolling back White House policies.

"I think there's no doubt there are enough seats in play that could cause Republicans to gain control. There's no doubt about that," press secretary Robert Gibbs told NBC's "Meet the Press."

Democrats now hold a 255-178 edge in the House, with two vacancies in the 435-member chamber. Anywhere from 40 to perhaps 60 House seats could be competitive by the fall. Republicans would need to take back about 40 seats to slip into the majority, placing the current GOP leader, Ohio Rep. John Boehner, in line to replace Rep. Nancy Pelosi, D-Calif., as speaker."

Let's face it. Democrats deserve to get slaughtered in the upcoming elections. At some point, they have to be held accountable by the American people for the economic mess we find ourselves in.

Unemployment has staggered up to 10% on their watch, and has stubbornly stayed in that range. Democratic policies have been designed to "preserve jobs" at the expense of creating a hospitable environment of low taxes and overall low governmental interference in business.

Not to mention their decades-long approach of rewarding their supporters with government largess or boondoggles, which has only expanded our public debt.

Their legacy of constantly expanding the reach and cost of government is precisely why as a country we are in this economic bind we find ourselves in.

Although dramatically restricting the ability of government to meddle in our lives is ultimately the correct way to put the country back on the road to prosperity and freedom, booting Democrats from office come November would be an excellent start.

Consensus Growing to Raise Social Security Eligibility Age?

Even discussing the possibility of changing any benefits associated with Social Security has long been thought of as the "third rail" of politics.

However, more and more politicians and commentators are beginning to signal that the age of "retirement" at which people are eligible for Social Security benefits may have to be increased from 65 to 70.

"Young Americans might not get full Social Security retirement benefits until they reach age 70 if some trial balloons that prominent lawmakers of both parties are floating become law.

No one who's slated to receive benefits in the next decade or two is likely to be affected, but there's a gentle, growing and unusually bipartisan push to raise the retirement age for full Social Security benefits for people born in the 1960s and after.

The suggestions are being taken seriously after decades when they were politically impossible because officials — and, increasingly, their constituents — are confronting the inescapable challenge of the nation's enormous debt.

Social Security was created in 1935 with a retirement age of 65, but since then life expectancy at that age has increased by about six years, according to the National Center for Health Statistics ."

Of course any change in the age of entitlement to Social Security benefits would have to be phased in to some degree.

Considering that the original "retirement age" for Social Security was the same as the average life span, this change would bring the eligibility age back in line with our expanding life spans.

But this change is just one of several to the Social Security system that will ultimately be necessary (means testing for recipients may eventually be needed) considering the precarious standing of Social Security's finances (which comes about primarily because of the declining ratio of worker to retiree) and the US budget deficit and spiraling public debt in general, but for now this would be a good start.

LeBron James Decision Influenced by Taxes?

There is a theory making the rounds that one of the factors that influenced LeBron James' decision to sign with the Miami Heat over his hometown Cleveland Cavaliers is the amount of state-level taxes he would pay on his income.

"While sports reporters have sought agents and teammates for the inside scoop on where NBA superstar free agent LeBron James will sign, there’s another person who may know The King’s next move: his accountant.

In a July 1 blog post, the New York Post warned that “dysfunctional lawmakers in Albany” could cost the state a chance to bring the coveted athlete to New York.

“If LeBron James goes to the Miami Heat instead of the [New York] Knicks, blame our dysfunctional lawmakers in Albany, who have saddled top-earning New Yorkers with the highest state and city income taxes in the nation, soon to be 12.85 percent on top of the IRS bite,” the Post said.

The tax savings for James in Miami over New York City would be staggering, according to the Post’s analysis.

“On a five-year contract worth $96 million -- what he'd get from the Knicks or the Heat -- LeBron would pay $12.34 million in New York taxes.” Florida has no state income tax."

Of course, LeBron James reportedly passed up more money in salary just to join the Miami Heat (compared to what Cleveland and the New York Knicks were prepared to pay him), so his personal tax surely wasn't the entire reason or even the main reason for signing with Miami.

And while it is true that Florida imposes no state-level income tax on individuals, roughly half of his games in the upcoming NBA season will be played out of state, meaning the income he generates from playing in professional basketball games in other states that do have an income tax will be subject to state-level tax in those state. However, all in all figure roughly half his salary will be free of state income tax.

Consequently, it's very likely that the ability to save money in taxes had some bearing on LeBron's decision on which team to sign with and at least in part offset the "discount" he had to give Miami in order to be able to sign with them.

Which goes to show that, at the margin, the amount of taxes that one has to pay clearly affects the choices that individuals make in deciding when and what to buy and invest in, which is a lesson that many politicians conveniently ignore.

China Gives Pass To Congress

China recently passed up a "golden" opportunity to browbeat the US Congress in to reigning in federal spending and in effect stop forcing the Federal Reserve to monetize the US debt.

"China on Wednesday ruled out the "nuclear" option of dumping its vast holdings of U.S. Treasury securities but called on Washington to be a responsible guardian of the dollar.

In the third in a series of statements explaining its work to the Chinese public, the State Administration of Foreign Exchange sought to allay concerns in the outside world that arise whenever Beijing shifts its holdings of U.S. government debt.

"Any increase or decrease in our holdings of U.S. Treasuries is a normal investment operation," SAFE, the arm of the central bank that manages China's official currency reserves, said.

It said it constantly adjusts its portfolio to maximimise returns, and any changes to its U.S. Treasury portfolio should be seen in that light and not interpreted politically.

In a series of questions and answers posted on its website, www.safe.gov.cn, SAFE asked rhetorically whether China would use its $2.45 trillion stockpile of reserves, the world's largest, as a "nuclear weapon".

SAFE said such concerns were completely unwarranted."

Exercising the "nuclear option" would probably do as much harm to China, at least in the short term, as it would to the US. That is because selling its enormous reserve of US Treasuries would flood the market, causing their overall value to plummet.

However, a plummeting value ultimately to zero is the long-term fate of US Treasuries anyway.

As a result, China would have been better served demanding that Congress get its fiscal house in order and stop running budget deficits, so as to protect its investment in the Treasuries that it currently holds.

Michael Steele Is Right

Michael Steele, current and soon-to-be-former Chairman of the Republican National Committee, recently stated his position that the Afghanistan war should now be considered President Obama's fight and should be judged accordingly.

"Keep in mind again, federal candidates, this was a war of Obama's choosing. This is not something the United States had actively prosecuted or wanted to engage in," Steele said. "If he's such a student of history, has he not understood that you know that's the one thing you don't do, is engage in a land war in Afghanistan? All right, because everyone who has tried, over a thousand years of history, has failed. And there are reasons for that."

Now technically Steele may have been remiss in not pointing out that the Afghanistan war was started under President Bush.

However, the point that I believe Michael Steele is making is that each President has the option at the outset of their administration to decide whether they support and wish to continue the decisions of prior Administrations or not.

President Obama did not just support the Afghanistan war, he advocated prosecuting it much more aggressively than President Bush had been.

As a result, President Obama now "owns" the war that we continue to unnecessarily squander massive amounts of taxpayer money on.

Germany Fiscal Policy Provides A Great Example For The US

Germany recently announced that their government would be implementing a plan to cut spending but not raise taxes, in an initiative aimed at balancing their books.

"Germany’s cabinet is poised this week to approve a 2011 budget as part of a four-year programme of public spending cuts meant to serve as an example to other European governments without jeopardising the country’s increasingly robust economic recovery.

Briefing papers for Wednesday’s cabinet meeting, released by Berlin on Sunday, argue that by curbing spending – rather than increasing taxes – the €80bn ($100.3bn, £66bn) savings programme would differ “fundamentally” from previous fiscal squeezes and offer “noticeable, better growth possibilities”.

The comments appeared aimed at heading off international criticism that German fiscal austerity would hit Europe’s growth prospects."

This is in stark contrast to the US, where President Obama spent last week in Toronto urging fellow members of the G20 to continue running up budget deficits in order to create "growth".

It should be obvious to the reader that all spending by the government simply displaces either current or future private spending, because government spending involves taking money from private individuals (in the form of taxes) that would otherwise be spent or saved (and later spent, by those taking loans from banks).

Higher taxes and more spending are simply a means for the government to gain more control over the economy and, indirectly, our own personal lives without creating an appreciable difference in the overall economy or our own collective well-being.

Germany's approach here is the correct one, which demonstrates why it's been the stalwart of the EU since the latter's formation. Cutting spending and keeping taxes in check are a much better recipe for economic success than increasing spending and taxes, and will likely allow Germany to emerge from the economic recession in much better shape than its competitors.

On the other hand, it's ironic and yet sad and pathetic that just days before the 4th of July, which of course a couple hundred years ago saw the overthrow of a tyrannical government by the people of America, President Obama is out lecturing other countries that the path forward is for governments of the world to exercise even more state-control over their "subjects".

Where Have All The Jobs Gone?

A CNNMoney.com article suggests that 7.9 million jobs have been lost in the recession and are gone forever. Americans patiently waiting for an economic recovery should be asking themselves when this madness will stop.

"The recession killed off 7.9 million jobs. It's increasingly likely that many will never come back.

The government jobs report issued Friday shows that businesses have slowed their pace of hiring to a relative trickle.

"The job losses during the Great Recession were so off the chart, that even though we've gained about 600,000 private sector jobs back, we've got nearly 8 million jobs to go," said Lakshman Achuthan, managing director of Economic Cycle Research Institute."

At some point, in order get the economy rolling again, the government has to unshackle business people by reducing taxes and putting a halt to their current pastime of demagoguing business persons (if Congress were half as critical of their own actions as they are of the average business person, they'd be holding subcommittee hearings into their own missteps pretty much every day).

It's simply not acceptable that a national economy that until recently sported an unemployment rate under 5% now features an unemployment rate hovering around 10% (which would be even higher than that if the people who have grown frustrated from searching for a job and have given up were actually counted in that statistic).

A reduction in the corporate tax rate to 20%, changing the tax code to permanently allow the immediate expensing of all business equipment and property acquired, extending the Bush individual tax cuts another 10 years, AND paying for all these changes with a commensurate reduction in federal government spending would have this economy rolling again in no time.

For those wondering what aspects of federal government spending could possibly be cut, the defense budget would be a wonderful place to start, followed by changes to social security system (increasing retirement age, means testing, etc.), eliminating or dramatically scaling-back unnecessary or redundant federal departments (Education, Agriculture, etc.) and surely a lot of other areas.

Continuing to mire in a job-less recession is increasingly looking like a political decision by those who want the government to continue spending money it does not have, while the people who truly can kick-start the economy (yes, business people) and put people back to work are hamstrung by an onerous business environment.

City of Maywood Lays Off All Government Workers

Maywood, California, a small bedroom community just outside of Los Angeles, may soon be viewed as the poster child for how to deal with the budget deficits faced by states and municipalities across the country.

"Tiny Maywood, Calif., laid off every single one of its city employees on Wednesday.

But that doesn't mean the city is closing up shop. City Hall will still be open, as will Maywood's park and recreation center. Police will continue to patrol the streets.

They just won't be staffed by Maywood employees. The city can't have any staff because it can't get liability or worker's compensation insurance for them. Maywood's carrier, the California Joint Powers Insurance Authority, dropped it earlier this month in part because of several police-related claims.

Instead of declaring bankruptcy, Maywood officials decided to outsource all city functions. The Los Angeles County Sheriff's Department will patrol the streets, while the neighboring city of Bell will cover other city functions, such as staffing City Hall.

Maywood already relies on contract workers and outsources many city services. The director of parks and recreation, for instance, is a contractor, and the city's lights, landscaping and street sweeping are handled by private companies. Los Angeles County maintains the library and fire department."

It is notable that Maywood is making this change not necessarily to slash costs but rather due to its inability to obtain insurance coverage at an agreeable price. Seems that the local police force has been a little, ahem, overzealous in enforcing the law.

The massive budget deficits that have occurred at the state level are largely due to excessive pay and benefits that have been lavished on state workers. And it's no surprise why this has been the case. Public employee unions tend to vote as a block, so any state lawmaker who wants to be reelected knows he or she has to make nice with the union.

The big upside for state governments across the nation is that fixing the pay scale and the cost of service they provide goes a long way towards fixing the budget deficits.

From my perspective, there does not seem to be a reasonable objection to Maywood's move.

Public employees across the country have so completely overreached in recent years in demanding significant pay increases and outsized pensions, that any cries about the dislocation this wholesale change will cause should fall on deaf ears.

To the extent that society has an interest in ensuring a particular service is provided, it does not follow then that the government itself has to perform that service. Contracted labor is just another means of providing the service, and because the labor can be purchased in a competitive process from potentially multiple providers, as opposed to a single entrenched bureaucracy, it should reduce the overall costs and in effect give a tax cut to the citizens that ultimately have to fund these costs.

The Poor Aren't Who We Thought They Were

Nationally syndicated columnist Walter Williams recently penned an article in which he outlines certain facts concerning "the poor" in America, which makes the case that they are not quite as down-and-out as portrayed by some.

"- Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage and a porch or patio.
- Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
- Only 6 percent of poor households are overcrowded; two-thirds have more than two rooms per person.
- The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
- Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
- Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
- Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
- Eighty-nine percent own microwave ovens, more than half have a stereo, and a more than a third have an automatic dishwasher."

This should not be read to suggest that there are not those in America that face grinding poverty, and that assistance should not be provided to them by charitable-minded Americans.

However, it's pretty clear that the conditions that define one as being poor in America are quite different than what is applied in most countries around the world.

The poor in America may not have all of the possessions and lifestyle of their higher-income counterparts, but the bottom line is many of them are doing just fine, despite being labeled as "poor".

Consequently, when one hears calls for relaxing lending standards so that the less able among us can afford the American dream, when one hears a politician call for more taxes so that state-funded social spending can be increased to help those that are less well-off, bear in mind that many of the so-called "poor" don't need the assistance that is being provided to them.

Of course, many of those that are calling for more government intervention in the lives of those that are less well-off in this country are simply using the plight of "the poor" as a stalking horse to accomplish other political goals.