Monthly Archives: December 2011

Politicizing the Payroll Tax Cut

The debate over a two percent reduction to the payroll tax rate is mind-numbing.  The ruling class acts like petulant children who can’t play nice in the sand box.  The ruling class once again uses the tax code to divide and conquer the people to satisfy their personal ambitions. 

Let’s put this into context.  Assume an average annual income of $50,000 a year, a two month extension amounts to $167 which is just over $19 per week.  What does $19 buy you?  It buys about 6 gallons of gas, or 4 Chiptole burritos, or 2 large pepperoni pizzas for the family. 

It baffles me that both political parties and the lemmings in the main stream media focus on this issue as though it is the overarching issue of the day.  The country is $15 trillion in debt.  The government hasn’t passed a budget in over 900 days.  Annual deficits routinely exceed $1 trillion.  Unfunded entitlement liabilities exceed $100 trillion.  The ruling class just passed a law that can detain American citizens indefinitely and without trial.  Yet, the focus is on a two-month temporary tax cut that will not change the standard of living for a single person. 

The moral and philosophical aspect of this tax cut is even more disturbing than the inane debate.  The tax cut represents a systemic problem germane to the tax code.  The Lords of the Potomac use the tax code for personal political benefit.  Individuals as well as special interests want to preserve their tax break, credit, or subsidy.  Unfortunately, too many individuals vote for the candidate that promises them the most in return.  A certain quid-pro-quo exists where large swaths of society pay no federal income taxes and/or receive certain benefits in exchange for their votes.  Likewise, too many companies receive preferential treatment in the tax code or subsidies for certain activities and in return those companies, trade groups/associations, unions, or political action committees contribute to campaign coffers.  

Moreover, the tax code is used as political fodder to divide Americans.  We often hear how the rich don’t pay their fair share, or there are tax breaks for this industry or that industry.  The ruling class use envy and jealousy to appeal to the worst part of human nature in order to divide the people.  Elected officials act despicably when they attempt to turn one person against another because one earns more than the other.  Government attempts to legitimize the redistribution of property according to their personal preferences.  Government punishes the person that earns more by taking more of their property and redistributing that property to special interests and others in society.  Likewise, government rewards the person that earns less by giving them property they have no rightful claim to.  

The ruling class makes scapegoats out of the top 1% of income earners and demonizes companies that use tax breaks that the ruling class enacted in the first place.  Conveniently, the ruling class forgets that nearly 50% of all federal income tax filers pay no federal income tax.   This issue has nothing to do with being fair.  The issue has everything to do with partisan politics, campaign fundraising, and getting re-elected to office.  In short, it is merely about keeping the status quo.

Remarkably, the ruling class and their sycophants in the media ignore that government is arguing over property earned by the citizens.  The government treats the money as though they have a rightful claim to it.  Somehow, it is only through the good graces, compassion, and benevolence of the ruling class that allows hard-working citizen to keep an extra $19 of their own money.  The Lords of the Potomac bellow “Kneel before us and beg for your money”.  The Lords continue, “Come closer for these crumbs of bread as you are subservient to us.  Kiss the hand that feeds you these crumbs.  And, don’t forget to vote for us in the next election.” 

This act, played over and over again in the cesspool that is Washington D.C., reminds me of something Sam Adams once said, “If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom, go from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that you were our countrymen!” 

Too many Americans crouch down and lick the hands which feed them.  By participating in this system, the people enable government to act as a proxy for them and engage in the legal plunder of those that produce; to punish achievement and success.  The law’s intent was to protect individual rights, liberties, and property.  The government has stood the law on its head and now uses coercion and the threat of fines and imprisonment to steal from one segment of the population. 

If the ruling class truly cared about the middle class keeping more of their own hard-earned money there are dozens of other actions government could undertake.  One example is the elimination of corporate income taxes.  Corporate taxes are an expense which is passed on to the consumer in the final cost of a product.  Another example is a flat tax applied to all income and is paid on every dollar earned.  Lastly, why limit the payroll tax cut to 2%?  Why not eliminate it entirely so the middle class worker can keep an additional 4.2% of his hard-earned money?  

The simple truth is the ruling class doesn’t care about the middle class or any other part of society.  The ruling class intervenes in every aspect of our daily lives and the economy as an excuse to pursue their own ambition and avarice at the expense of society.  The 2% temporary payroll tax reduction is another opportunity for the ruling class to politicize an issue for their own benefit.  The ruling class would have it no other way.  This is just another example of the mind-numbing stupidity and insanity that is Washington, D.C.

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A Lesson from Mom this Election Cycle

To our detriment, citizens choose their elected officials based upon superficial knowledge, party designation, or the cult-of-personality.  Debate formats that convey little useful information reveals the citizens thinking process as they await a “gotcha” moment, a new bumper sticker slogan, or the most creative tweet.  Our current Occupier-in-Chief is a prime example of a candidate, elected to the highest office in the land, where citizens judged him with little knowledge or understanding of the man. 

My mother taught me certain lessons as a child.  One of the more important lessons was never judge a book by its cover.  Some teachers also conveyed the same message to me in school.  I presume many people were taught the same lesson along the road to adulthood.  The moral of the lesson is judging a book based on the cover is superficial as you can’t make an informed judgment without reading and understanding the book.  

Martin Luther King, Jr’s 1963, “I Have a Dream Speech” conveyed the same lesson when King said, “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”  King’s message was not to judge people by the random event of skin pigmentation, rather to understand the character of the person if you are to make an informed judgment.  King applied mom’s lesson to how people should judge others; according to their character and substance. 

Unfortunately, adults have conveniently forgotten this simple life lesson and, for the most part, disregard the lesson entirely when choosing a candidate for public office.  Candidates for public office can not be judged merely on appearances, party designation, or the mass media propaganda used to create an idolized and heroic public image. 

If character and substance matter, how should citizens judge candidates for public office?  There are numerous, wildly varied answers to this question.  However, there is one essential set of criteria citizens should apply when evaluating candidates; to judge all candidates through the lens of the Constitution.  

The first act every elected official engages in is to swear an oath to uphold the Constitution of theUnited States.  It seems logical and rational to judge candidates against the very document, the very principles to which they swore an oath to uphold.  Fidelity to the oath all elected officials swears upon is a barometer of their character. 

If citizens disregard the Constitution as the basis for rational evaluation they subscribe to a government of unlimited, arbitrary powers and unlimited submission to the ruling class.  Under these conditions the Constitution is irrelevant and worthless as it would be diminished to nothing more than words scribbled on old, crumbled parchment. 

When citizens judge candidates and elected officials through the lens of the Constitution it affords citizens the opportunity to develop a deep knowledge of the candidate’s commitment to our governing principles.  An enumerated list of criteria is: 

1)      The Constitution established a Republic (not a Democracy), the Rule of Law rather than the Rule of Man, and federalism.

2)      The people, through their states, established a federal government with few and limited powers.  See Federalist Papers #45

3)      All other powers and rights not delegated or enumerated are reserved to the states or the people.  See ninth and tenth amendments.

4)      Congress is limited to the powers delegated in Article I Section VIII of the Constitution.

5)      Horizontal checks and balances exist amongst the three branches of government, and vertical checks and balances exist between the several states and the federal government.

6)      The federal government is only supreme in powers that are explicitly federal, and all statutory laws passed by the federal government must be made in pursuance of the Constitution.  Statutory laws not passed in pursuance of the Constitution are null and void, and of no effect.  See previous article on AT here.

7)      Only a properly ratified amendment can change the meaning of the Constitution.  Supreme Court rulings do not and can not change the states’ original understanding at the time of ratification.  

Some citizens vote for the candidate promising to delivery something the citizen wants or needs.  A few examples are government provided health care, environmental regulation, preferential treatment in the tax code, etc.  Votes are cast based upon the real or perceived benefits the voter wants from their candidate regardless of the constitutionality of the program. 

The Constitution is an all or nothing proposition.  You either revere the Constitution or you reject it.  The Constitution is not a cafeteria plan where citizens may pick and choose a-la-carte style which parts of the Constitution they support and which parts they ignore.  Citizens support intrusive government with the power to act arbitrarily by voting for candidates espousing programs that are extra-constitutional. 

Both Republicans and Democrats routinely and repeatedly violate the Constitution.  The Republican presidential candidates propose ideas and programs that violate the Constitution with the exception of Ron Paul and, perhaps, Gary Johnson.   Moreover, Tea Party members that advocate limited government mean their version of limited government, not constitutionally limited government.  

I know too many people that consider themselves Tea Party members and talk about constitutionally limited government, yet they plan on supporting candidates like Romney, Gingrich, or Huntsman.  These three candidates are big government, establishment candidates.  Santorum and Bachmann have destroyed the concept of federalism and the tenth amendment in statements they’ve made about states not having the right to do wrong.  First, right and wrong are moral judgments not constitutional judgments.  Secondly, any level of government has the power to do wrong.  It’s just the extent of the damage inflicted that changes based upon what level of government does wrong.  

The yardstick candidates must measure themselves and their policies against is the Constitution not their personal opinion on what is morally right or wrong, or what is good or desirable.  An act, such as government provided health care, may be “good”, but good doesn’t imply the government was delegated the power to act upon it.  If government does not have the constitutional authority to act it is irrelevant whether government provided health care is good or bad, or morally right or wrong.  Therefore, it is imperative that voters judge candidates and elected officials through the lens of the Constitution.  Otherwise, the voters are judging the candidates against their own personal preferences and criteria and not the Constitution. 

Mom always said you should judge a book by reading it, not by its cover.  Dr. King said you should judge a person based on his character, not by his skin color.  We the people should judge candidates for elected office through the lens of the Constitution.

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Obama Revealed his True Goal

On Tuesday, President Obama delivered a speech in Kansas (or is that Texas) where he revealed his true goal; totalitarianism.  Journalist Henry Hazlitt said “Totalitarianism in its final form is the doctrine that the government, the state, must exercise total control over the individual.”

A transcript of the full speech can be found here.   Two excerpts are included below.

Now just as there was in Teddy Roosevelt’s time there is a certain crowd in Washington who for the last few decades have said lets respond to this economic challenge with the same old tune.  The market will take care of everything, they tell us.  If we just cut more regulations and more cut more taxes – especially for the wealthy — our economy will grow stronger. [snip] 

Now, it’s a simple theory. And we have to admit, its one that speaks to our rugged individualism and our healthy skepticism to too much government. That’s in America’s DNA.  And that theory fits well on a bumper sticker.  But here’s the problem:  it doesn’t work.  It has never worked. 

Let’s parse Obama’s words.  In the first sentence, Obama places blame on the crowd in Washington who has responded to the economic situation with the same old tune.  Obama implies several decades of deficit spending, unsustainable national debt, more entitlement programs, more government control over the economy, and more government intervention in our lives has not worked.  I agree wholeheartedly!  But that’s not the message Obama attempts to convey.  Not to mention, Obama has been part of the “crowd in Washington” the past seven years. 

However, in the next two sentences, Obama places blame on the markets and tax cuts as the primary cause of the country’s economic woes.  Obama continues by acknowledging individualism and self-reliance but reveals that individual liberty and skepticism of government are nothing more than a cliché; a bumper sticker slogan or a tweet.  

Obama concludes that free market capitalism, individual liberty, and self-reliance have never worked. There it is in black and white for all Americans to understand.  Undoubtedly, if free markets and liberty have never worked Obama implies a new governing philosophy and economic approach is necessary.  

Individual Liberty and Self-Reliance

If individuals are not self-reliant then who will they be reliant upon to sustain their lives?  Under what conditions must individuals subsist to receive the sustenance required to maintain their lives.  Individuals must be made dependent on others to simply live.  Who will provide the food, shelter, clothing, and other goods and services people need or want?  

Life is the right of all rights.  Man’s responsibility for his life requires him to employ his physical or intellectual abilities to produce.  The product of his efforts is his property.  Property rights are the implementation of man’s economic liberty to sustain his own life.  

Obama believes your property — what you earn and produce — belongs to the government, and government arbitrarily determines how much of your property you can keep.  If it is morally wrong for one person to steal property from another then, collectively, it is morally wrong for the government to confiscate your property and redistribute it to preferential special interests or others in society.  Under the guise of compassion and benevolence an all powerful, centralized government believes it can discern fairly from whom they take and to whom they give.  

Free Market Capitalism

The country has not functioned in a truly free market economy for one hundred years or more.  The economy can best be described as a mixed economy; some capitalism mixed with central government economic planning and control over the banking system.  Obama believes a mixed economy has failed.  Yet, Obama overlooks what proponents see as the benefits of a mixed economy; a capitalist society with socialist economic government control providing everything for society. Precisely, where does Obama intend to take the country economically if a mixed economic model doesn’t work?  

Certainly, Obama doesn’t espouse a return to free markets and more individual liberty, and Obama blames the current mixed economy model for the country’s woes; therefore it is rational to conclude Obama wants to further consolidate the power of the central planners, banking cartel, and the government to the detriment of free markets, liberty, and personal responsibility.  

In a free market economy two parties voluntary agree to exchange a good or service to their mutual benefit.  In a free market system market participants determine supply and demand, prices, wages, interest rates, imports and exports, and production and consumption.  Today, the majority of these economic activities are directly controlled by the banking cartel and the government, or heavily influenced and regulated therefore perverting and retarding free market activity. 

The money supply, interest rates, borrowing, inflation, credit, liquidity, and unemployment are primarily controlled or heavily influenced and regulated by the government and/or the Federal Reserve.  Historically, production and growth occurred through savings and balance sheet equity.  Savers were rewarded and businesses invested/expanded through savings and through the equity on their balance sheets.  

In today’s perverse economic model savers are punished by low interest rates established by the Federal Reserve as a result of $15 trillion of debt service.  After accounting for inflation and currency debasement, savers lose 4-6% annually on their savings. Meanwhile businesses expand through credit from banks by taking more debt onto their balance sheets. Banks extend credit to businesses and individuals through fractional reserve lending policies resulting in systemic leverage and risk through demand for future dollars. Today, GDP growth is dependent upon credit/debt expansion rather than increases in productive output. 

The Federal Reserve debases the currency and uses Federal Reserve Notes with less purchasing power to sustain the profligate spending, debt, and interest due on the debt.  The debt is denominated in the same currency that wealth/stored purchasing power is denominated in.  We know from experience the government and the banking system will do everything in their power to keep the current system afloat.  They will always sacrifice the currency to save the system.  This means our store of purchasing power will degrade if not evaporate through government action. It is politically expedient for the government and the Federal Reserve to inflate.  

Conclusion

Life, liberty, and property rights are first principles enshrined in the Declaration of Independence and protected by the Constitution.  An article by George Handlery summarizes the Founders and Framers view. 

The Founders and Framers had confidence in the common man and recognized man has the capacity to govern himself.  This ability to reason qualified man to improve his personal condition as well as the welfare of his peers. 

The Founders and Framers reasoned that man was able to express his enlightened, reasoned-governed interests and to find the means best suited to accomplish this.  Therefore, man was able to exist as a self-directed and autonomous individual. 

Obama’s speech expressed fundamental beliefs antithetical to the country’s founding principles.  Obama does not believe man is enlightened or reasoned, nor does he believe individuals are capable of finding the means to sustain themselves.  Obama believes government is responsible for your individual sustenance.  

An inherent conflict arises from Obama’s beliefs.  That is, if man is not capable of self-governance and self-direction then what qualifies man to govern or direct others?  Obama’s governing philosophy is premised upon this contradiction. 

Moreover, Obama’s speech exposes his true goal; to increase government control over the economy and individual liberty. 

That is totalitarianism in a nutshell.

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Can the Tea Party and Occupy Agree on Anything

Disenchanted citizens are asserting their independence as the traditional two party system fails repeatedly to resolve problems and act within the limits placed upon government by the people and the states.  The two party system maintains the status quo within certain limits set forth by the ruling class and the main stream media to constrain acceptable political thought within the boundaries of Hillary Clinton on one side and Mitch McConnell on the other. 

Two primary schools of thought persist.  One promotes a powerful, centralized national government with few limits on power.  The other promotes a slightly less powerful national government with moderate limits on power.  Neither promotes constitutionally limited government.  In short, this describes the differences between the Democrat and Republican Party and the range bound thoughts promoted by the ruling class and the main stream media. 

Innately, both the Tea Party and the Occupy movement know something has going terribly awry.  While there are vast political and philosophical differences between the two movements they have some common ground; a genesis based in fear, frustration, and helplessness.  The continuation of a one size fits all governance paradigm works only when your guy or Party is in power.  Otherwise, the Party in power is generally sticking it to the other side.  The constant thrashing back and forth between the Party in power and who is sticking it to whom never ceases.  Over the past eighty years history has demonstrated government constantly grows larger, more coercive, and more intrusive.  That is the nature of the beast. 

Depending on the Party in power the vast expanse of national government intrusion and dominion exercised over the people, in nearly all aspects of life and liberty, creates animosity, jealousy, and envy amongst the people.  The ruling class intentionally creates and promotes an environment where people are divided and pitted against one another on the basis of race, religion, wealth, national security, social issues, etc.

Ultimately, power is consolidated through the political vortex in Washington D.C. and the Party in power continues its business as usual crusade.  This is our political reality.  The electorates “just get our guy in” mentality and things will improve miraculously is naive and foolhardy.  This is precisely where the ruling class wants us serfs to live; within their definitions of governance which guarantees the status quo.  This ensures the ruling class remains in power. 

Over the past thirty years the country has experienced every combination of Republican and Democrat President and Congress in power.  Yet, the national debt has grown from $1 trillion in 1981 to $15 trillion in 2011.  Depending on which numbers you believe, unfunded entitlement liabilities are $58 trillion to $120 trillion.  Annual deficits routinely exceed $1 trillion.  Nearly 50% of all federal income tax returns filed in 2009 had no income tax liability.  Approximately 48% of American households receive some form of government assistance.  The Social Security trust fund was raided years ago and only paper IOUs exist today.  The country has been involved in two undeclared wars for ten years, and the President unilaterally involved the U.S. in Libya. 

Major financial institutions, including the Federal Reserve, are in bed with the national government.  Through government intervention banks are bailed out and moral hazard is reduced or eliminated.  The TARP Act and the Dodd-Frank  Bill protects the banking system at our expense.  Risk is socialized while rewards are privatized.  The government’s message to banks is take more risk for a greater reward and if your gamble fails the people will bail you out.  This is akin to gambling in a casino.  Which game would you play if one game with lower risk and lower rewards has 2:1 odds and another game with greater risk and greater rewards has 5:1 odds knowing that if you lost everything someone would bail you out?  Financial institutions take greater risks because government reduced/eliminated moral hazard under the guise of Too Big Too Fail. 

Fortunately, there is a solution that allows people with diverse political and philosophical views to live without forcing their ideology upon others.  The framers called it federalism.  

Ultimately, the choice comes down to centralized rule where a one size fits all solution is applied to all fifty states, or decentralized rule where the federal government is constitutionally limited and the states and the people retain the majority of powers.  Federalism affords diverse people the opportunity to freely choose a state that more closely adheres to their political and philosophical views.  For instance, those in favor of government provided health care, housing, welfare, etc. and higher taxes to support those programs may choose to live in Massachusetts.  Likewise, those in favor of individual responsibility, liberty, freedom, etc. and lower taxes may choose to live in Oklahoma.  

Federalism recognizes diversity in people as well as diversity in states.  A centralized, powerful national government cannot provide a one size fits all solution while allowing diverse people to choose freely where to live.   Opponents of federalism argue states can do wrong; therefore we need a centralized, powerful government to ensure states act appropriately.  Obviously, any level of government can do wrong but the difference is how extensively that wrong applies to the people.  If the federal government acts wrongly everybody may suffer.  However, if one, two, or ten states act wrongly people in other states are unaffected and people can still vote with their feet and move to another state. 

Moreover, states can more easily and rapidly experiment with different solutions.  Some states may legalize marijuana while others may not.  Some states may have stricter gun control laws (assuming they don’t violate State constitutions) while others may have no gun control laws.  States that implement higher tax rates and less competitive business environments are less likely to attract business, whereas states with lower tax rates and more competitive business environments would attract business.  This natural competition amongst the fifty states provides a certain check and balance ensuring states don’t become tyrannical or anarchical.  

The Tea Party and the Occupy movement can find a common solution without compromising their political and philosophical views if both sides can agree not to impose their views on the other side via a one size fits all, centralized, powerful national government.  Obviously, those that insist upon a collectivist utopia forced upon the masses would be unwilling to accept the premises of federalism.  However, some in the Occupy movement and most in the Tea Party movement would accept federalism as a solution. 

You can hope for change to your heart’s content, but real change requires real change, not sophomoric change. The “just get our guy in” mentality is sophomoric change.

A return to federalism is real change.

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