Today one of the largest debates is taking place in our nation's history. How to correct our deficit and ultimately our national debt. (Deficit is the yearly debt that the United States government racks up, the national debt is all those years added up through the years).
Today there are two main arguments. One group is for major spending cuts(conservative Republicans, libertarians, those in the so called "tea party") the other group is for bringing in more revenue through higher taxation (liberals and most democrats). Those who are for bi-partisan negotioting will go for a little of both(this is probably what will come about). The sad fact is that this argument is stupid to have considering the argument has been going on for years(in fact at least since 1920) and there is irrefutable proof that both can be accomplished by cutting spending and you can also raise revenues by yes LOWERING TAX RATES.
Economist Thomas Sowell writes that most would think a liberal democrat once made this statement: ""It is incredible that a system of taxation which permits a man with an income of $1,000,000 a year to pay not one cent to his Government should remain unaltered." In fact the man that made this statement was the Secretary of the Treasury under the conservative republican president Calvin Coolidge.
Andrew Mellon made this statement because he knew that at higher prices people buy and invest less. When taxes are high on something, capital will not fly towards those things that are being taxed so highly. Therefore one might consider lowering these rates which will lead to an increase capital investment and in fact an increase revenue from those taxes. Lets look at the facts to back up this claim:
In 1916 there were 206 people who reported making over one million dollars according to the IRS. Five years later under liberal democrat Woodrow Wilson, there were only 21 people reporting making that much money. Why? tax rates on the rich skyrocketed. But then Congress later passed the tax cuts that Andrew Mellon was asking for and by 1925, there were once again 207 people reporting an income of a million dollars or more. So what had happened during that time when all the sudden millionaires disappeared?
Those rich people had put their money towards tax-exempt securities like local and state bonds. Sowell goes on to say that Mellon argued for two things. To get rid of those tax-exempt securities and to also lower the tax rates. He succeeded in only the latter after a long debate, just as we are having again today. Yes they used the "tax cuts for the rich" argument even years ago. This is not a new phenomenon. Some more facts:
In 1924 the federal government collected $50 million dollars in capital gains taxes. In 1925 that amount reached over $100 million dollars. When taxes were lowered, it made more sense to invest money in the economy because you got to keep more of the money you made, than to invest it in the tax-exempt securities that do not lead to economic expansion. Expansion that eventually leads to these increases in tax revenues. And as for those "rich" people in the top income bracket, they paid 30% of all taxes in 1920 but paid 65% of all taxes by 1929 after those "tax cuts for the rich". The reality is, there were more rich people that came about paying taxes and the already existing rich were investing money into the economy that allowed for this and thus they too were now paying into the nation's tax revenues.
All this was then replayed again under JFK, Reagan, and Bush 43 administrations. Some can bring about statistics that show a strong economy even with high taxes. But this proves nothing other than the economy can still grow to some extent even with high taxes. I will not argue with that. Its easy to use that argument when prosperity unforeseen does not exist. In other words, we cannot know whether at lower taxes the economy would have even been stronger during those "strong" periods.
What is easy to judge is economic theory and science that makes sense. People will invest more when they can keep more of their return on investment. That common sense knowledge in itself should be enough. But if not the before mentioned evidence provided for nearly a century should be more than enough evidence that tax cuts work.
Cut spending and lower taxes!!
Friday, June 24, 2011
Tuesday, June 14, 2011
a painful truth...that could lessen the long term pain
No doubt it would be hard for a person such as Paris Hilton who is born into riches to have to give up that life for a life of struggle or responsibility. But this is the unfortunate thing that is going to have to take place nationwide to fix our coming financial collapse (as opposed to the financial meltdown we are currently facing). Individuals who are use to nice handouts will soon have to face the fact that those handouts are no longer feasible.
According to the most recent census, "around 80 percent of Americans 65 and older own their own homes compared to 43 percent under 35. Twenty-three million households, or 37 percent of all homeowners, own their homes free and clear, and most of these are seniors aged 65 and older. According to the Federal Reserve Board's 2007 "Survey of Consumer Finances," the median net worth of people 65 and over is $232,000, those under 35 years have a net worth of $12,000 and for those 35-44, it's $87,000." (Economist Walter Williams)
Naturally older people have accumulated more wealth than younger people. This is for good reason-they have had longer to do so. The question is why would our federal government's soon to be largest single expenditure program be a program that subsidizes of this wealthiest group of American's healthcare-Medicare.
Obviously not all senior citizens are rich but if the median net worth is 232,000 then half of senior citizens have at least that much. Currently those people's healthcare (medicare) is subsidized by taxpayers(yes some of it was their own taxes but someone living decades after retirement, receives far more money back than they ever paid into the program). Why not allow that senior citizen to make a deal with a financial institution(bank) to relinquish their home to the bank at the end of her life for a large lump sum of cash up front that will allow that senior citizen to live the rest of his/her/their life off the thousands of dollars he/she/they are worth. At death the bank comes into complete ownership of those belongings that were agreed upon. Anything she does not have to give up in order to get that lump sum of cash, will still be passed on to his/her/their heirs.
Currently heirs to these people greatly benefit. When Senior Citizens die their belongings go to their kids or benificiary. For years, taxpayers pay for much of their retirement(Social Security) and for their healthcare(Medicare). These people may not have the cash on them to pay for their own healthcare. But their accumulated wealth is plenty to pay for these services for the rest of their lives. With the above program our taxes could be lowered, and taxpayers would not subsidize the wealthiest amongst us. Some citizens would still need assistance. I would support a state by state approach to handle this. But for most Senior Citizens, they would have plenty enough to pay for these services.
Instead a tax payer supported program that is going broke and bankrupting our nation is used with no serious change in sight. Why? Probably because only 50% or less of young people vote while 70% of seniors vote. Since this distruction will not take place until these seniors and politicians are dead, why committ political suicide and consider fixing a serious destructive program with a system like the simple description above?
According to the most recent census, "around 80 percent of Americans 65 and older own their own homes compared to 43 percent under 35. Twenty-three million households, or 37 percent of all homeowners, own their homes free and clear, and most of these are seniors aged 65 and older. According to the Federal Reserve Board's 2007 "Survey of Consumer Finances," the median net worth of people 65 and over is $232,000, those under 35 years have a net worth of $12,000 and for those 35-44, it's $87,000." (Economist Walter Williams)
Naturally older people have accumulated more wealth than younger people. This is for good reason-they have had longer to do so. The question is why would our federal government's soon to be largest single expenditure program be a program that subsidizes of this wealthiest group of American's healthcare-Medicare.
Obviously not all senior citizens are rich but if the median net worth is 232,000 then half of senior citizens have at least that much. Currently those people's healthcare (medicare) is subsidized by taxpayers(yes some of it was their own taxes but someone living decades after retirement, receives far more money back than they ever paid into the program). Why not allow that senior citizen to make a deal with a financial institution(bank) to relinquish their home to the bank at the end of her life for a large lump sum of cash up front that will allow that senior citizen to live the rest of his/her/their life off the thousands of dollars he/she/they are worth. At death the bank comes into complete ownership of those belongings that were agreed upon. Anything she does not have to give up in order to get that lump sum of cash, will still be passed on to his/her/their heirs.
Currently heirs to these people greatly benefit. When Senior Citizens die their belongings go to their kids or benificiary. For years, taxpayers pay for much of their retirement(Social Security) and for their healthcare(Medicare). These people may not have the cash on them to pay for their own healthcare. But their accumulated wealth is plenty to pay for these services for the rest of their lives. With the above program our taxes could be lowered, and taxpayers would not subsidize the wealthiest amongst us. Some citizens would still need assistance. I would support a state by state approach to handle this. But for most Senior Citizens, they would have plenty enough to pay for these services.
Instead a tax payer supported program that is going broke and bankrupting our nation is used with no serious change in sight. Why? Probably because only 50% or less of young people vote while 70% of seniors vote. Since this distruction will not take place until these seniors and politicians are dead, why committ political suicide and consider fixing a serious destructive program with a system like the simple description above?
Sunday, June 5, 2011
Tunica and beyond
Friday afternoon shortly after lunch time, my and a friend left for Tunica. A trip that in the past has always resulted in success (financially) and in terms of entertainment and fun. This trip was however much different.
After arriving Friday I went to play poker for hours straight. For those who know me well, they know that I play a tight but aggressive poker style. However it does take me a few hours to become comfortable enough to truly be aggressive. Tight-aggressive is also the style that most poker pros (those who make a living off poker, obviously putting down the belief that it is a game of pure luck) use. This time however my luck was not in my favor. Playing for up to 5 hours and only getting around 15-20 playable hands. I struggled to get anything going. I profited a grand total of 20 dollars during that 5 hour period. Keep in mind this is a trip of 6 1/2 hours. Not worth it up to this point.
After playing, me and Justin left to go to a local gas station. When we returned to my Trailblazer the vehicle would not start. It is over 90 degrees and about 2AM local time. Tunica has no real business that is open at this time. The closes Wal-Mart is 45 minutes away. I had no idea what was wrong with the vehicle. We believed it was a battery issue. We were correct. Luckily for us there was a kind good hearted slender black Gentlemen that saved our lives. He tested his battery on my vehicle and confirmed it was in fact the battery. My truck started no problem. As long as it keeps running I could drive to Wal-Mart and get a new battery and install it at roughly 3:30 AM. But the car died before even pulling out. This man then offered to drive us 45 minutes to the nearest Wal-Mart to buy a battery! I know of very few people who would have been willing to do this.
Roughly 2 hours later we returned to the gas station at around 4:30. New battery worked, we drove back to the Goldstrike Casino/Hotel and slept that night. I got a wonderful 4 hours of good sleep. The next morning we awoke and drove around to banks to go to the ATM. Justin's card was not working despite having plenty of money in his checking account. While out we stopped at one last gas station to try that ATM machine. As we are getting out of my car I see first hand the hardest T-Bone collision I have ever seen! A small white car hit an SUV causing it to roll over in the middle of the street! I thought for sure this was an injury resulting in serious injury. To the contrary the safety of those big gas using American SUV's that destroy the environment (according to some odd people) once again saved two people's lives. This type of accident would usually do me little harm but functioning on 4 hours of sleep over the past 30 was not the best thing for my soul.
We drove back to the Casino where we had little money. I knew Justin of course was good for it so I got money out of the ATM instead for us to use. I continued to play cards for another 4-5 hours. What was the result? More terrible cards! Finally on one of my last 6 hands I got pocket JJ and ended up rivering quad JJ's. This put me up 90 dollars for a grand total profit of $110 over about 10 hours of playing poker. In the past I had averaged winning about $700 in each of the past trips.
This profit paid for half of my battery trouble as we did pay the man for his great help to us. There were other misfortunes that are not to be posted publicly. But last night driving home on 4 hours of sleep over the past 42 was not easy. I bought coffee that poured out onto Justin, blistering his butt. Finally returned home this morning around 3:30 local time.
Tunica is a place of surprises. I have always had pleasant surprises. This trip did not have many. But the most pleasant surprise I have ever had from a stranger came from a slender, older, black gentleman in the middle of the night who blessed our hearts by driving us 45 min two ways to get a battery that he then installed for us. this man was truly a blessing on a trip that was not much of a blessing in any other fashion. thank you sir!!!
After arriving Friday I went to play poker for hours straight. For those who know me well, they know that I play a tight but aggressive poker style. However it does take me a few hours to become comfortable enough to truly be aggressive. Tight-aggressive is also the style that most poker pros (those who make a living off poker, obviously putting down the belief that it is a game of pure luck) use. This time however my luck was not in my favor. Playing for up to 5 hours and only getting around 15-20 playable hands. I struggled to get anything going. I profited a grand total of 20 dollars during that 5 hour period. Keep in mind this is a trip of 6 1/2 hours. Not worth it up to this point.
After playing, me and Justin left to go to a local gas station. When we returned to my Trailblazer the vehicle would not start. It is over 90 degrees and about 2AM local time. Tunica has no real business that is open at this time. The closes Wal-Mart is 45 minutes away. I had no idea what was wrong with the vehicle. We believed it was a battery issue. We were correct. Luckily for us there was a kind good hearted slender black Gentlemen that saved our lives. He tested his battery on my vehicle and confirmed it was in fact the battery. My truck started no problem. As long as it keeps running I could drive to Wal-Mart and get a new battery and install it at roughly 3:30 AM. But the car died before even pulling out. This man then offered to drive us 45 minutes to the nearest Wal-Mart to buy a battery! I know of very few people who would have been willing to do this.
Roughly 2 hours later we returned to the gas station at around 4:30. New battery worked, we drove back to the Goldstrike Casino/Hotel and slept that night. I got a wonderful 4 hours of good sleep. The next morning we awoke and drove around to banks to go to the ATM. Justin's card was not working despite having plenty of money in his checking account. While out we stopped at one last gas station to try that ATM machine. As we are getting out of my car I see first hand the hardest T-Bone collision I have ever seen! A small white car hit an SUV causing it to roll over in the middle of the street! I thought for sure this was an injury resulting in serious injury. To the contrary the safety of those big gas using American SUV's that destroy the environment (according to some odd people) once again saved two people's lives. This type of accident would usually do me little harm but functioning on 4 hours of sleep over the past 30 was not the best thing for my soul.
We drove back to the Casino where we had little money. I knew Justin of course was good for it so I got money out of the ATM instead for us to use. I continued to play cards for another 4-5 hours. What was the result? More terrible cards! Finally on one of my last 6 hands I got pocket JJ and ended up rivering quad JJ's. This put me up 90 dollars for a grand total profit of $110 over about 10 hours of playing poker. In the past I had averaged winning about $700 in each of the past trips.
This profit paid for half of my battery trouble as we did pay the man for his great help to us. There were other misfortunes that are not to be posted publicly. But last night driving home on 4 hours of sleep over the past 42 was not easy. I bought coffee that poured out onto Justin, blistering his butt. Finally returned home this morning around 3:30 local time.
Tunica is a place of surprises. I have always had pleasant surprises. This trip did not have many. But the most pleasant surprise I have ever had from a stranger came from a slender, older, black gentleman in the middle of the night who blessed our hearts by driving us 45 min two ways to get a battery that he then installed for us. this man was truly a blessing on a trip that was not much of a blessing in any other fashion. thank you sir!!!
Wednesday, June 1, 2011
Government's power
Is it more dangerous to do something stupid or is it more dangerous to have a government which restricts your right to do that stupid thing? I believe the second is far more dangerous.
I have listed in many blog entries where government involvement in our lives based on good intentions has led to dire consequences. Government is primarily responsible for unemployment amongst individuals, especially young people, the housing meltdown and current economic turmoil, and even the Great Depression. It is responsible for so much more but I digress. Because of these historical facts, the latter is far more dangerous in my humble opinion.
I believe it to be stupid to not buckle your seat belt while driving a car. I believe almost all studies show that the chances of someone surviving a wreck with their seat belt on is is far greater than it not being on. But as a libertarian I also defend to the utmost the right for stupid people to choose not to wear their seat belts while driving their own cars. Its their body and lives.
Drive a motorcycle on the highway without a helmet? That is more stupid than not buckling up. But it is even more ridiculous and stupid for the government to force an individual to wear a helmet to protect his/her own head and health. What power delegated from the constitution gives the government that kind of power?
I believe smoking is harmful to a person's health. but to charge an excess "sin" tax on cigarettes and alcohol is more harmful because it adds to the growing power of government. The government has no right to infringe upon my desire to put tobacco in my own body. The government does not own my body. This is also why I support the legalization of Marijuana.
Government has gone even further. They do not allow restaurants that are owned by individuals to allow people to smoke in those establishments. This is insane in that the owner of his/her own business should have the right to allow any activity as long as it does not harm other individuals private property by force. In other words if I am allowed to choose not to eat at the establishment because the owner allows smoking, they should be allowed to go elsewhere and the owner should be allowed to function as he/she pleases.
The government also wants to restrict the amount of Salt (Sodium) restaurants put in their food. The fact that the government has to control our diets is now becoming a huge issue. I should be able to eat where and what I want without the government restricting my right to do so. If a store wants to add salt to their food to make it taste better, I have the right to go elsewhere if I believe it to be harmful. That is what the market is for.
Many of you who are my "conservative" friends might argue that these laws "protect" individuals and are not truly that harmful. But that is exactly the problem. These simple measures lead to more harmful measures. An economist I read made the perfect example: It can start out simple: Less sodium in our foods bought from businesses. Then parents who like turkey with more sodium will buy more sodium. As with cigarettes, salt containers will have to have warning signs put on them. Then if that does not work there will be a "Sin" tax put on the purchase of salt. Then parents who want to adopt children will have to pass a health screenings that does blood work to make sure you do not use too much salt and break the law. On and on we go until one day we say "how did we get here?
What if a vegetarian gets elected and says no more meat to be served in grocery stores or restaurants? What then my conservative friends? They will argue that it is harmful to your body as well as these animals. Should government have the power to restrict that?
Stupidity is a choice and should be allowed. Not allowing that choice it is the height of stupidity! Not to mention unconstitutional
I have listed in many blog entries where government involvement in our lives based on good intentions has led to dire consequences. Government is primarily responsible for unemployment amongst individuals, especially young people, the housing meltdown and current economic turmoil, and even the Great Depression. It is responsible for so much more but I digress. Because of these historical facts, the latter is far more dangerous in my humble opinion.
I believe it to be stupid to not buckle your seat belt while driving a car. I believe almost all studies show that the chances of someone surviving a wreck with their seat belt on is is far greater than it not being on. But as a libertarian I also defend to the utmost the right for stupid people to choose not to wear their seat belts while driving their own cars. Its their body and lives.
Drive a motorcycle on the highway without a helmet? That is more stupid than not buckling up. But it is even more ridiculous and stupid for the government to force an individual to wear a helmet to protect his/her own head and health. What power delegated from the constitution gives the government that kind of power?
I believe smoking is harmful to a person's health. but to charge an excess "sin" tax on cigarettes and alcohol is more harmful because it adds to the growing power of government. The government has no right to infringe upon my desire to put tobacco in my own body. The government does not own my body. This is also why I support the legalization of Marijuana.
Government has gone even further. They do not allow restaurants that are owned by individuals to allow people to smoke in those establishments. This is insane in that the owner of his/her own business should have the right to allow any activity as long as it does not harm other individuals private property by force. In other words if I am allowed to choose not to eat at the establishment because the owner allows smoking, they should be allowed to go elsewhere and the owner should be allowed to function as he/she pleases.
The government also wants to restrict the amount of Salt (Sodium) restaurants put in their food. The fact that the government has to control our diets is now becoming a huge issue. I should be able to eat where and what I want without the government restricting my right to do so. If a store wants to add salt to their food to make it taste better, I have the right to go elsewhere if I believe it to be harmful. That is what the market is for.
Many of you who are my "conservative" friends might argue that these laws "protect" individuals and are not truly that harmful. But that is exactly the problem. These simple measures lead to more harmful measures. An economist I read made the perfect example: It can start out simple: Less sodium in our foods bought from businesses. Then parents who like turkey with more sodium will buy more sodium. As with cigarettes, salt containers will have to have warning signs put on them. Then if that does not work there will be a "Sin" tax put on the purchase of salt. Then parents who want to adopt children will have to pass a health screenings that does blood work to make sure you do not use too much salt and break the law. On and on we go until one day we say "how did we get here?
What if a vegetarian gets elected and says no more meat to be served in grocery stores or restaurants? What then my conservative friends? They will argue that it is harmful to your body as well as these animals. Should government have the power to restrict that?
Stupidity is a choice and should be allowed. Not allowing that choice it is the height of stupidity! Not to mention unconstitutional
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