This year the Congress at the urging of President Obama rushed through a voluminous stimulus bill which cost taxpayers a whopping $787 billion dollars. The bill contained almost 9,000 earmarks. You know those pet projects that senators and members of the House slip into bills to bring money home to their states and districts, essentially buying our votes with our tax dollars. The rest of the bill was essentially government spending on schools, roads, bridges and other infrastructure. There was nothing in the bill to stimulate the private sector, especially small businesses.

Most of the jobs in this country, between 66%-75%, are created by small businesses. But the stimulus bill is creating government projects, which will employ a relatively small number of people, mostly union workers, temporarily. If the stimulus was really supposed to help pull us out of the recession and put people back to work on a sustainable basis, it would be in the form of payroll tax cuts for small businesses so they could reinvest in their companies and employ more people. It would also be in the form of a withholding tax cut, putting more money in every worker’s paycheck immediately. The Democrats are engaging in class warfare to get the public to buy into this government-spending plan. They paint the business owner as the bad guy and then instead of cutting small business taxes, they actually raise them. But most small business owners are entrepreneurs. They are our friends and neighbors. They aren’t rich they don’t have a yacht, a mansion, or a string of polo ponies. They’re regular folks, that had an idea or a dream and through hard work, long hours and usually by risking their own money, or home, they built a business and along the way, they’ve been employing people both directly and indirectly. They’re paying their taxes, their utilities, rent and payroll. They are living the American dream and acting as the engine of our economy. If we punish them for their success by saying they have to give even more, then they can’t reinvest in their companies to grow them and they can’t put even more people to work. Business in America is already taxed at the highest rate of any nation on Earth. Why are we surprised that American jobs are being outsourced in this environment?

It’s a cliché but it’s true. If you give a man a fish, he’ll eat for a day. If you teach a man to fish, he’ll eat for a lifetime. The same applies to stimulating the economy. If you give a person a job on a make work government project, that person will work and take home a salary, until the project is done or the stimulus money dries up and the job goes away. If instead you create an environment for small business and entrepreneurship to grow and thrive, you’ll create millions of sustainable, long-term jobs that will give people the ability to growth of the economy. Because workers that are confident they’ll have a job in a year are far more likely to spend their money than a person who thinks they’ll only be employed for a few months. We need people to spend their wages in order for the economy to flourish. Should there be government investment in our nation’s infrastructure, much of which is crumbling before our eyes? Should we update our schools? Of course, but it should have been part of a comprehensive plan to get the real engine of the economy, the private sector, going too.

Steven Rosenblum

Who Works For Who?

June 23, 2009

The economic turmoil we’re currently enduring, the sub-prime mortgage problems, the widespread foreclosures, etc. were caused by the government. It was the ‘Community Reinvestment Act’ that encouraged the banks to give artificially low rates to people that couldn’t possibly repay their loans. It was Congressman Barney Frank that blocked attempts by Senator McCain and President Bush to reign in Fannie and Freddie. It was interference by the Federal Government, all in the name of “fairness,” that brought us to where we were last year.

Then the Federal Government, led by George W. Bush and Treasury Secretary Paulson, decided they would fix the problem that the government created in the first place, by using our tax dollars to bailout banks and supposedly the people that never should have been given loans in the first place. We were told the sky was falling. We were told that if we did nothing things would get far worse.

To the credit of the public, we knew this was a bad idea and we spoke out loudly. We said “NO”. Initially, the House of Representatives didn’t pass the first TARP, but under political pressure they did pass an even bigger TARP the second time around. They defied the people they work for. But despite the TARP, foreclosures continued and the government got into the banking business.

Next came bailouts for the auto industry. Again, the public said “NO”. We knew that picking winners and losers isn’t the job of the Federal Government, in fact it’s unconstitutional. If in a free market society if a company fails, then it files for Chapter 7 or Chapter 11 Bankruptcy. But again, the President, the Treasury Secretary and the Congress ignored us and did what they wanted. The result? GM and Chrysler not only went into bankruptcy (after tens of billions of taxpayer money went down the drain), but the UAW and the Federal Government became the major owners of the company. Oh and in the process, the President of the United States intimidated the secured bond holders of Chrysler into taking pennies on the dollar and made them the bad guys in the media and court of public opinion. When did it become wrong in this country to expect contracts to be honored and for investors to want to make a profit?

After Obama’s inauguration he called for more TARP money and a $787 billion “stimulus” package. Despite continued opposition from the public the TARP 2 was passed and the largest spending bill in our nation’s history was passed, without a single member of Congress reading it. In addition, the bill was mostly pet projects, pork barrel spending and very little to actually stimulate the private sector. The so-called stimulus has only stimulated the growth of the Federal Government and a rise in the unemployment rate. In fact the President said that without the stimulus the unemployment rate would go over 8%. Well guess what? With the “stimulus” the unemployment rate is at 9.4%. The only place that unemployment is down is in Washington, DC.

I keep hearing the President telling us that the problem is the unscrupulous bankers, the evil bond holders, the CEO’s of the automakers, etc. No mention of labor unions that demanded unsustainable benefits for current and retired employees. This president vilifies anyone in the private sector that is in the way of his agenda. His agenda unfortunately is to grow the Federal Government and give it powers that the Constitution does NOT grant it.

It is not intelligent or logical to conclude that the incompetent, bureaucratic and politically motivated people that got us into this mess are going get us out of it. In fact it’s foolish to think that’s even their intention. All signs are that what the President and his liberal allies in the House and Senate want, is to take and keep tremendous and unprecedented power for the government and themselves. They can’t really believe that spending trillions of dollars, that they’re borrowing since we don’t have it, is going to get us out of this recession, can they? Apparently they do believe that the public is stupid enough to buy that idea though.

The bottom line is the very people that got this nation into this economic trouble are only making it worse and are ignoring, no defying the people they’re supposed to represent. The good news is we don’t have to take it. Despite what they seem to think, they work for US! We can take back the US House and Senate, one seat at a time. From the grassroots, we the people can select the candidates that will represent us. We need to throw the bums out. There are a select few currently serving in Congress that understand that the people are the bosses and the members of Congress are our employees. People like Rep. Thaddeus McCotter and Rep. Michele Bachmann are standing up for us. But they are sorely outnumbered. They need us to send reinforcements.

Write your US Senators and member of the House. Write to the President. Write letters to the editor of your local newspapers too. Let them all know, we’ve had enough. We want the out of control spending and unprecedented government growth to stop, now. We want them to listen to their bosses, or we will fire them. This isn’t about parties, since both parties are guilty of ignoring us. This is about right and wrong. This about the Constitution.

Steven Rosenblum

In a related story, fiscal conservatives believe in balanced budgets (this is why the current conservative movement should abandon its love affair with Ronald Reagan, he of the unacceptable peacetime budget deficits). Individuals, businesses and the government should not spend money they don’t have. Fiscal conservatives reject the notion that short-term budget deficits are a necessary policy tool to fight recessions. Government borrowing reduces the amount of capital available to individuals and businesses, prolonging and deepening recessions. If government prints money rather than borrows it, it devalues the currency, creates inflation and forces individuals to work harder to maintain the same standard of living. It would also be wise for the federal government to balance the budget and use some of the surplus to pay down systematically the national debt. Morally responsible policy would require the generations responsible for much of the debt to bear the burden of paying it back.

 

Fiscal conservatives should push the federal government to adopt a policy of sound money. The balanced budgets mentioned above are the foundation. The Federal Reserve should drop its dual-goals of low inflation and full employment. The Federal Reserve should maintain a base interest rate that is higher than the rate of inflation. Abandoning reckless free trade agreements in favor of trade policies that better protect US citizens and workers would help reduce the trade deficit and buoy the value of the currency. When the US was at the height of its economic hegemony, it had trade rivals, not trade partners. The US should not fear a trade war. It has won in those in the past, and with the right policies, it will win them in the future. A return to the gold standard would be the ultimate sound money step. However, fiscal conservatives need not be ideologically pure on this issue if they can achieve implementation of the aforementioned policies.

 

Fiscal conservatives should fight to eliminate GSEs, or government sponsored entities. GSEs such as Fannie Mae and Freddie Mac essentially insure investors against the risk of loss. Unfortunately, subsidizing mediocrity and providing safety nets for failure encourages more of both. In addition, the process of creative destruction that is vital to the prosperity of any nation is interrupted or derailed.

 

Other ideas fiscal conservatives should consider supporting are the decriminalization of marijuana (tens of billions of dollars wasted fighting this “threat”), a non-interventionist foreign policy that includes bringing our troops stationed overseas home (empire maintenance is threatening to bankrupt and collapse us, as it did to the Persians, Greeks, the Romans, the Holy Romans and the British), eliminating farm subsidies and the phasing out of Social Security (retirement is not a right, and it is probably an outdated 20th century phenomenon, anyway). Fiscal conservatives should push for legislation that supports the production of energy from all sources, including (especially) nuclear, oil, oil shale, natural gas, coal, hydroelectricity, wind and solar. The US can and should be the world leader in energy production. Fiscal conservatives should become production-huggers who stand up to tree-huggers and cloud-worshippers.

 

The fight ahead will be difficult and the opponents will be tough and determined. For the future of this country, fiscal conservatives have to win this argument. The long term alternative is likely learning Chinese and professing allegiance to the People’s Republic.

 

Jason Moss

George W. Bush and then-Treasury Secretary Henry Paulson engineered the $700 billion corporate welfare program known as TARP, the largest upward transfer of wealth in our nation’s history. GWB presided over the largest expansion of government in our nation’s history since the one over which LBJ presided. This expansion of government included increased federal involvement in education (No Child Left Behind) and health care (growth of Medicare and Medicaid). GWB opened a two-front war, championed the outdated expansion of NATO, increased foreign aid to unprecedented levels (including the most aid ever sent to Africa, even as that continent continues to devolve into a diseased, corrupted, war-torn, terrorist-harboring disaster) and failed to enforce our borders, allowing millions of illegal immigrants to undermine our nation’s workers. Despite record federal tax revenues, GWB signed into law budgets that ran the largest deficits in history (apparently all that spending did not include an allocation for an ink cartridge for George’s veto pen). GWB, at least tacitly, endorsed a cheap money policy that debased the value of the dollar, making it harder for working citizens to save and encouraged further crass and needless consumption. Sadly, the list continues. Predictably, the economy capitulated.

 

Even more predictably, the mainstream media and the useful idiots on the left (namely young Democrats, Hollywood, “academics” and deadbeats drunk on entitlements) “logically” concluded that not only had conservatism failed, but that it was directly responsible for the nation’s current economic mess (if one doesn’t believe this, he or she should read every Thomas Frank column in the Wall Street Journal). Thanks to GWB’s incompetence, conservatism got discredited during an era in which liberalism ran amok (with any luck, President Obama’s apparent incompetence will do the same work discrediting liberalism, though one suspects all of Obama’s failures will be blamed on Dick Cheney and/or Rush Limbaugh; more on that in a future blog).

 

Believe it or not, the purpose of this blog is not to bash GWB (one expects that writers far more talented than this column’s author will write 40-volume encyclopedic odes to his incompetence) because it is obvious to all literate people that Congress, on both sides of the isle, was completely complicit. Complicit as well were the voters who failed to hold congressional RINOs accountable for their profligacy (one could blame Democratic voters as well, but experience indicates that not much is to be expected from Democrats). The purpose herein is to inform Let’s Get Loud of the difficulty of the task ahead (after all, GWB was supposed to be “one of us”). However, the task will be easier if fiscal conservatives can first define fiscal conservatism and then unify the message as they seek to spread it.

 

Begin with the basics. Though this is not news to anyone, fiscal conservatism starts with a belief in low taxes. Taxes on businesses should be drastically lowered or eliminated. As many already know, businesses pass on their taxes in the form of lower dividend payouts to investors, higher prices to customers and fewer jobs/lower wages to workers. In this calculus, the workers bear the brunt of the burden as businesses are loathe to injure investors and alienate customers. In addition, the capital gains tax should be eliminated. If it is not eliminated, it should be indexed for inflation. Not indexing capital gains taxes for inflation allows the federal government to steal wealth through manipulation of the money supply (and manipulate and steal it will). A massive, pro-growth tax cut in the federal marginal income tax rate on earned income would help as well. This blogger endorses scrapping the income tax system in favor of a consumption-based tax system, but is not dogmatic about it. Point being, tax rates and the method of taxation are central to fiscal conservatism.

 

The other side of low taxes is a small federal government and strong states rights. Fiscal conservatives believe that the states are Petri dishes of policy development for the greater republic. States should use policy to compete for talented residents and capital. May the best states prosper and the worst states adjust policy accordingly.

 

Jason Moss

Dear Senator whatchamacallit (paste in your senator/representative’s name)

I heard today that President Obama is seeking the ability to take over companies that MIGHT fail.

It doesn’t matter that he only wants this power over companies “like” AIG – this is a travesty!

Please do your part to restore the free market to the United States and to help rebuild the independent spirit that built this nation.

We do not need more bail-outs, we do not need more assistance going to stop foreclosures on loans to people who never should have had them in the first place, and we most definitely do not need to increase the tax burden on people who are paying taxes.

The best thing you can do for this country, and for your constituents (who put you in office) would be to vote no on anything that detracts from the free market, detracts from capitalism in this country, or infringes on the freedoms of people in this country.

To this point, the Obama regime has grown the deficit by over 9 trillion dollars (more than 11 trillion according to the CBO) – that is more than $100,000 for each man, woman and child in this country. If you stop and think about it for a few minutes, there are people living in houses that cost less than one person’s tax burden, and whole households can live for 2 years or more on that amount.

Please look at any bill coming to you as if you were making less than $20/hour and you have to support a family on what your government leaves you.

Thank you

Charlie Grett

Too Big To Fail?

March 27, 2009

The premise that led to the bailouts and the TARP programs was that the companies the government was helping were “too big to fail”. Armed with that assumption, the Bush Administration led by Secretary Paulson began what has become an ongoing cycle of fear mongering, bailouts and scandals, costing the American Taxpayers literally trillions of dollars. The Obama Administration, aided and abetted by the Democrats in Congress has only compounded the problem with out of control spending and new taxes. These are debts and deficits that our children and grandchildren will have to work to repay.

But are these companies really too big to fail? If so, why were they allowed to get so big that their failure could so damage the nation’s economy?

Since we’re talking about “bailouts” let’s use the analogy of a sinking ship. Even if the ship is as large and expensive as an oil tanker, at some point, if it’s apparent that no amount of pumping (or bailing out) can save the ship, they let it sink and accept the loses.

That’s what has to happen to GM, Chrysler and any banks or insurance companies, including AIG, that can’t survive in the free market. They need to file for Chapter 11 and restructure themselves and their contracts. If they can’t then they have to file for Chapter 7. Will there be short-term pain? Yes, but compared to the long-term burden we’re placing on future generations, it’s a small price to pay and it’s the right thing to do. It’s the principled thing to do.

If in fact any of these companies is truly too big to fail then Congress is at fault for not using anti-trust laws to break up that company in the name of competition and national security.

I don’t believe any company is too big to fail in a capitalist, free market society. The government shouldn’t be in the business of deciding winners and losers in the United States of America.

Steven Rosenblum

Financial Child Abuse

March 16, 2009

Syndicated columnist Mark Steyn published an article last week that says what many conservatives have been saying for years. And yes, we were even saying it when George W. Bush was president.

In the last 40 years, Baby Boomers, with an enabling hand from “the Greatest Generation”, have stuck our children and our grandchildren with a tremendous, almost insurmountable debt, in order to pay for our lifestyle. A lifestyle we wanted but couldn’t afford. So to get it, we borrowed from the future; our children’s future.

We have committed financial child abuse on the young of our country. When did we stop trying to make our children’s lives better than ours and start trying to make our lives better than our children’s?

Does the name Lyndon Johnson and the Great Society ring a bell?

To quote Mark Steyn’s piece: “This is the biggest generational transfer of wealth in the history of the world. If you’re an 18-year-old middle-class hopeychanger, look at the way your parents and grandparents live: It’s not going to be like that for you. You’re going to have a smaller house, and a smaller car – if not a basement flat and a bus ticket. You didn’t get us into this catastrophe. But you’re going to be stuck with the tab, just like the Germans got stuck with paying reparations for the catastrophe of the First World War. True, the Germans were actually in the war, whereas in the current crisis you guys were just goofing around at school, dozing through Diversity Studies and hoping to ace Anger Management class. But tough. That’s the way it goes.”

Jack Furnari

The PH Balance Of Taxes

March 13, 2009

Who can figure out the tax system of our country?  I can’t.  In fact, most I.R.S. agents don’t even know it in its entirety.  Let me fill you in on a little secret… the government likes it that way.  They made it impossible to understand on purpose.  Why?  So that they can take more of your money without you even knowing it.  But, what the government fails to recognize is that the current tax system oozes with cracks and inefficiencies.  As a result, the government is missing out on billions of our dollars.  So, in effect, the crazy plan the government put into place in order to capitalize on the amount of tax money they take from us is the same plan that prohibits them from being able to hold onto all of it.  Only in America.

As a businessman, I know that the key to stroking any deal is when both parties are presented with the opportunity to gain something.  So, I propose we help the government maximize on the amount of money they make from us.  WHAT?!? WHY WOULD ANY CONSERVATIVE SAY SUCH A THING????  Before you all freak out, allow me to explain.

As we all know, every time we get our paychecks it comes to us after the government has taken out our various taxes.  For demonstration purposes, let’s suppose $100 comes out of every paycheck for taxes.  That $100 represents 100% of the total amount of taxes that come out of every paycheck.  That 100% is then sent to the federal treasury and they do whatever it is that they do with it and we live and balance our lives based upon never seeing that money.

Well, what if every time our taxes are taken out of our paychecks instead of the entire 100% going directly into the federal treasury only 90% went in and the remaining 10% didn’t go back into your paycheck or your pockets but it was instead automatically deposited into a private investment account that was already set up in your name.  And what if there was a restriction placed upon this investment account that stipulated you could only use the money to 1) buy a home as a residence 2) open a retirement account 3) start a business or 4) invest on Wall St.

Over time, this 10% that get’s redirected with every paycheck is earning interest and compounding on top of itself.  Depending upon your tax bracket, most tax payers would have a fairly substantial amount of money built up in there in just a few years time.   Think about it, if within 20 years 60% of tax payers in America were home owners and/or had a retirement account and/or owned a business and/or were invested, would that or would that not be good for our economy?  It would.  And when the economy is good, is that or is that not good for the value of our currency?  It is.  And when our currency is strong, does that or does that not encourage foreign investment into our country? It does.  And when all of this is going on, would that or would that not create more revenue for the federal treasury? It would.  And by the way, the last time I checked, if you own a home you have to pay property taxes.  If you have a retirement account, you have to pay taxes on the assets at time of distribution.  If you own a business, you pay taxes and if you are invested you pay taxes on the assets as income. 

And so, we have in fact, created more tax revenue streams for our government than what currently exists while, at the exact same time, more American tax dollars are being put to work for American tax payers and our own tax money is financing our own personal investments.  Everybody wins!

I call it the “PH Balance” because it’s strong enough for the government but PH balanced just for you.

Paul M. Harvey

In the world of business, bottom lines are financed by revenue streams that feed into the system.  Businesses go to great lengths to maximize each revenue stream, that a particluar client may throw off, to its fullest and squeeze every ounce of revenue from it.  However, there is only so much revenue that can be squeezed from any given stream.  As a result, if a business hopes to continue to grow their revenues, they have to create new revenue streams that feed the business.  These new revenue streams could come from any number of different ways but the most common is by creating a new product or service and then selling it to the client as an add-on to all of the things the client may already be buying from the business.

This is, in fact, the only real way to create new revenue and grow a business because if a business were, instead, to decide that rather than offering and selling new products and services they could just simply take a lump sum of money from one area of their business and move it into another area of their business and then show that transaction as a profit, rather than as a transfer of funds, they would indeed be fooling themselves and providing a false sense of growth.  In fact, there have been many examples in the news over the past 10 years of major companies doing exactly that.  And rather than it resulting in new revenues, it ended up resulting in corruption scandals that brankrupt the company, left people unemployed and put the individuals who came up with the idea in jail.

So now we look at what’s going on in our economy and how the government is reacting to fix the economy and I don’t see a whole lot of difference between the illustration I mentioned above and what the government is currently doing.  It’s not rocket science folks!  If you need money, then create a new revenue stream.  One of the first that comes to mind is oil.  We have our own oil reserves yet we buy oil from terrorist nations and dicatorships. 

The price of oil is not based upon the supply and demand for it that currently exists, it is based upon what speculators think the future supply and demand for it will be.  As a result, the very minute you pass a law that allows American oil companies to drill for our own oil, the price of oil on the world market will go down because the future speculative supply would go up as America decides to become a major player.  Then, the minute a drill actually goes into the ground, the price goes down again and the minute oil is actually extracted, the price goes down yet again.

So if the price of oil is based upon future supply and demand, then doesn’t that mean that we could sell oil contracts to our allies in advance of actually having the oil available because we speculate that we will have a supply of oil available in the future?  Yes it does.  And as a result, you have immediately created a new revenue stream that is feeding into America, not to mention the thousands to millions of jobs that would be created, which will finance all of our endeavors as a nation and immediately fix our current economic mess.

I used oil merely as an example to support an overall idea.  I understand that oil is a hot button for a lot of people and so I invite you to substitute “oil” with any other commodity that we are not currently producing ourselves and you will see that the math still works out. Or would you rather just continue to borrow and spend money that we don’t actually have?

When you need money, create a new revenue stream.  What a concept.  In fact, it’s genius!

– Paul M. Harvey

Or… Just Set It On Fire

February 18, 2009

Hey black pot… have you met kettle?

If all of the financial “experts,” economists, politicians, lenders, creditors, mortgage brokers, underwriters, title companies, banks, etc. generally agree that the single biggest reason for the current economic mess was because a bunch of people took out loans to buy more house than they would otherwise be able to afford, hoping that by the time the variable interest rates kicked in they would either 1) have the income to pay for it or 2) have flipped the house for profit…….

And at the exact same time this was going on, banks and lending institutions actually approved these loans at 100% financing without any proof of income or collateral to support the loan knowing full well that there was a better than average chance these people would never be able to pay off their loans……..

Then how is it possible that anyone actually believes that the solution to this problem is for the government (ie: home buyer) to take out a loan at 100% financing without any collateral to support it from countries like China (ie: lending institution) and use this money to buy more projects (ie: house) than we would otherwise be able to afford, in an attempt to blunt a recession and hope that by the time that payment for this bill (ie: variable interest rate) comes due we will either 1) have the money to pay for it or 2) have created enough jobs and products for sale so that the value of our dollar will appreciate against the Chinese yen? 

Seriously, am I the only one who sees the irony of this plan?  My prediction: utter failure (I hope I’m wrong.)

Here’s a better idea….  why not just take a pile of money and set it on fire?  At least that way you could fight off inflation because there would be less dollar bills in circulation.

– Paul M. Harvey