Economics Lesson for President Obama and Congress
Simple Economics for Obama and Congress
As a young writer and recent college graduate, I am certainly not a millionaire or billionaire that the President, Congress, and the media seem to demonize. Every time I turn on the radio, watch television, read the newspaper, or talk to Democrats, I hear the same sentiment that these rich can and should pay more Taxes than the rest of the country. However, the logic behind wanting to increase taxes on the wealthy is severely flawed making the President look more like Robin Hood instead of a strong, intelligent leader of the free world.
Here are a few of the mistakes of Obama, Congress, the media, and Democrats in general regarding the need to raise taxes, demonize the productive members of society, and insult the intelligence of us citizens.
1) Tax increases based on incomes $250,000+ were the first mistake of Obama and Congress. Mainly this is a problem because most small businesses fall into this general income bracket, but also because a family of 4+ people making $250,000+ will have their taxes skyrocket severely compromising the well being of those middle class families. This cap reduces the incentive for families and small businesses to earn more than $250,000 through expansion or hard work. No one wants to take extra risk in their professional life to earn more money if they cannot keep all that they net after their hard work and sacrifice.
2) WARREN BUFFET DOES NOT SPEAK FOR ALL PEOPLE MAKING $250,000+! Pardon the entire previous statement in caps, but it is a very important point to make. Warren Buffet is the second richest man on the planet and counts his net worth in billions of dollars approaching trillions of dollars in fact. This man makes more money in one hour then most of us make in a year, and he has the audacity to state that entities making $250,000+ should gladly fork over more money in the form of higher taxes to a corrupt government. Much like the rantings of "The Mad Hatter" from Alice in Wonderland or the famous Marie Antoinette "Let them eat cake" moment, Buffet's crazy rambling, which does not reflect the views of anyone but himself, makes me sad that the Oracle from Omaha is slowly losing his grip on reality and losing the magic that inspired millions to become entrepreneurs in the first place. If Buffet really wants to pay more in taxes, he should put his money where his mouth is and write up a giant check to hand directly to the President. Why hasn't he done this you may ask? Because he just wants YOU to pay higher taxes, and he will not practice what he preaches.
Additionally, Buffet mentioned that his secretary pays a larger percentage of her income in taxes then he does. He stated that he pays 30% on his capital gains tax while she pays 35%, and he uses this as a cornerstone to his argument. What this crook failed to mention was that he funnels the money through his corporation first and has the income taxed to his company. So rather than paying the taxes himself, he decides to cheat by passing the majority of the tax burden to his company and consumers. If you factor in what he pays in taxes as an individual plus what his corporation pays on that same money (due to his sneaky accounting), then the money gets taxed nearly 65%, which is much more than what his secretary is taxed.
3) Most people have a notion that "the rich can pay more because they make more". While it is true that they can pay more, there are three problems with this myopic concept.
a) First, the top 1% of the wealthy in the nation pay 71% of the total tax revenues in the nation. This fact in addition to the fact that the top 10% of the wealthy in the nation pay 85% of the taxes in the nation and that 51% of the nation pays ZERO PERCENT (0%) of the total tax revenue means that the rich are already paying an overwhelming amount of the tax burden already and there is a MAJORITY of the population not paying any taxes but still enjoying all of the benefits of public roads, schools, services, etc. This is definitely unacceptable, and I think it is funny that Democrats want equality in everything except paying taxes to support their own failed policies. The hundreds of public figures like Congressmen, President Obama, and tv anchors that fail to pay their taxes properly (despite how [un]intentionally), yet get on their soap boxes in public forums to talk about "shared sacrifice" are truly insane and hypocritical.
b) Rich people and successful companies are the source of NEW JOBS and INNOVATION through research, exploration, development, and investment. If you overtax or increase taxes on an individual or corporation, then that entity has less money to invest in the company or even their own families. Less money means that they cannot afford to hire new people, keep some of the current employees, or even obtain the basic necessities for economic viability or for family members to live comfortably.This would further exacerbate the current innovation and economic stagnation and significantly decrease the quality of living just to pay for reckless federal spending.
c) The debt and deficits of the nation currently surpass the TOTAL GDP of the US. This is a staggering fact and one that needs to be understood in proper perspective. Hypothetically, let's say that the Democrats and Obama get their wish and they raise taxes without any restrictions. If they took 100% of everything that every person in the nation (including the rich and those currently not paying taxes), then the government still COULD NOT PAY BACK all of the money it owes. President Obama in his first year in office spent more than former President Bush in his ENTIRE EIGHT YEARS including wartime spending, and President Obama has SPENT MORE THAN EVERY PREVIOUS PRESIDENT COMBINED (adjusted for inflation of course).
4) Government will not ever be efficient or effective while attempting to solve any problem. The Federal Reserve keeps printing money, which leads to inflation and devaluation of the US dollar. This means that the money you work so hard to obtain is worthless compared to what it was even just a few decades ago. The government doing this is an insult to your efforts and intelligence because they are expecting you to work for monopoly money. For any skeptics out there, tell me one government run agency that is effective and efficient. It surely is not the USPS because the post office will be broke by the end of the month; it is not the housing market because their companies Fannie Mae and Freddie Mac gave all the sub-prime mortgages that crashed the economy; it is not social security, medicare, or medicaid because all of those programs are going broke and not paying doctors and future generations like they were intended to do; and it certainly is not subsidizing college education through student loans and constantly driving up the cost of education. So please tell me one government run anything that has produced wholly positive results while being cautious of the LAW OF UNINTENDED CONSEQUENCES (discussed at length in another hub of mine).
The second that the gold standard was removed as a way to back up the currency (Thanks Nixon [insert expletive here]), the value of the dollar has shrunken substantially. RICH politicians with top notch healthcare plans tell doctors how to practice and patients what insurance and care they are allowed to pursue; RICH politicians send their kids to private school to get fantastic educations while they mandate that your children can only go to the public school closest to them; RICH politicians waste HUNDREDS of MILLIONS of dollars on their own campaigns when most struggle to pay their bills; RICH politicians WASTE taxpayer dollars on their ridiculous spending sprees because they do not want to risk any of their own money on those terrible ideas; and RICH politicians VOTE TO INCREASE THEIR OWN SALARIES AND BENEFITS while forcing doctors and productive members of society to be paid less for all of their good efforts.
5) One of the reasons that colonial America rebelled against Britain was because of the exorbitant taxes and no representation in Parliament. Today we have a similar situation where taxes are through the roof to pay for projects, which mostly waste money, and half of the Congressmen and even the President do not represent the views of the majority of Americans or frankly do not have the best interest of the country in mind. Now, I AM NOT ADVOCATING ANY TYPE OF REBELLION OR ACTION OF VIOLENCE REMINISCENT OF THE REVOLUTIONARY WAR! I do want people to show their dissatisfaction with the current system by utilizing all of the ways possible to contact, persuade, or remove the bad leaders in office on election day by voting for a representative, who truly embodies your values and honors his word. It is very important to make a difference in your community on the local and national level.
Here are a few of the mistakes of Obama, Congress, the media, and Democrats in general regarding the need to raise taxes, demonize the productive members of society, and insult the intelligence of us citizens.
1) Tax increases based on incomes $250,000+ were the first mistake of Obama and Congress. Mainly this is a problem because most small businesses fall into this general income bracket, but also because a family of 4+ people making $250,000+ will have their taxes skyrocket severely compromising the well being of those middle class families. This cap reduces the incentive for families and small businesses to earn more than $250,000 through expansion or hard work. No one wants to take extra risk in their professional life to earn more money if they cannot keep all that they net after their hard work and sacrifice.
2) WARREN BUFFET DOES NOT SPEAK FOR ALL PEOPLE MAKING $250,000+! Pardon the entire previous statement in caps, but it is a very important point to make. Warren Buffet is the second richest man on the planet and counts his net worth in billions of dollars approaching trillions of dollars in fact. This man makes more money in one hour then most of us make in a year, and he has the audacity to state that entities making $250,000+ should gladly fork over more money in the form of higher taxes to a corrupt government. Much like the rantings of "The Mad Hatter" from Alice in Wonderland or the famous Marie Antoinette "Let them eat cake" moment, Buffet's crazy rambling, which does not reflect the views of anyone but himself, makes me sad that the Oracle from Omaha is slowly losing his grip on reality and losing the magic that inspired millions to become entrepreneurs in the first place. If Buffet really wants to pay more in taxes, he should put his money where his mouth is and write up a giant check to hand directly to the President. Why hasn't he done this you may ask? Because he just wants YOU to pay higher taxes, and he will not practice what he preaches.
Additionally, Buffet mentioned that his secretary pays a larger percentage of her income in taxes then he does. He stated that he pays 30% on his capital gains tax while she pays 35%, and he uses this as a cornerstone to his argument. What this crook failed to mention was that he funnels the money through his corporation first and has the income taxed to his company. So rather than paying the taxes himself, he decides to cheat by passing the majority of the tax burden to his company and consumers. If you factor in what he pays in taxes as an individual plus what his corporation pays on that same money (due to his sneaky accounting), then the money gets taxed nearly 65%, which is much more than what his secretary is taxed.
3) Most people have a notion that "the rich can pay more because they make more". While it is true that they can pay more, there are three problems with this myopic concept.
a) First, the top 1% of the wealthy in the nation pay 71% of the total tax revenues in the nation. This fact in addition to the fact that the top 10% of the wealthy in the nation pay 85% of the taxes in the nation and that 51% of the nation pays ZERO PERCENT (0%) of the total tax revenue means that the rich are already paying an overwhelming amount of the tax burden already and there is a MAJORITY of the population not paying any taxes but still enjoying all of the benefits of public roads, schools, services, etc. This is definitely unacceptable, and I think it is funny that Democrats want equality in everything except paying taxes to support their own failed policies. The hundreds of public figures like Congressmen, President Obama, and tv anchors that fail to pay their taxes properly (despite how [un]intentionally), yet get on their soap boxes in public forums to talk about "shared sacrifice" are truly insane and hypocritical.
b) Rich people and successful companies are the source of NEW JOBS and INNOVATION through research, exploration, development, and investment. If you overtax or increase taxes on an individual or corporation, then that entity has less money to invest in the company or even their own families. Less money means that they cannot afford to hire new people, keep some of the current employees, or even obtain the basic necessities for economic viability or for family members to live comfortably.This would further exacerbate the current innovation and economic stagnation and significantly decrease the quality of living just to pay for reckless federal spending.
c) The debt and deficits of the nation currently surpass the TOTAL GDP of the US. This is a staggering fact and one that needs to be understood in proper perspective. Hypothetically, let's say that the Democrats and Obama get their wish and they raise taxes without any restrictions. If they took 100% of everything that every person in the nation (including the rich and those currently not paying taxes), then the government still COULD NOT PAY BACK all of the money it owes. President Obama in his first year in office spent more than former President Bush in his ENTIRE EIGHT YEARS including wartime spending, and President Obama has SPENT MORE THAN EVERY PREVIOUS PRESIDENT COMBINED (adjusted for inflation of course).
4) Government will not ever be efficient or effective while attempting to solve any problem. The Federal Reserve keeps printing money, which leads to inflation and devaluation of the US dollar. This means that the money you work so hard to obtain is worthless compared to what it was even just a few decades ago. The government doing this is an insult to your efforts and intelligence because they are expecting you to work for monopoly money. For any skeptics out there, tell me one government run agency that is effective and efficient. It surely is not the USPS because the post office will be broke by the end of the month; it is not the housing market because their companies Fannie Mae and Freddie Mac gave all the sub-prime mortgages that crashed the economy; it is not social security, medicare, or medicaid because all of those programs are going broke and not paying doctors and future generations like they were intended to do; and it certainly is not subsidizing college education through student loans and constantly driving up the cost of education. So please tell me one government run anything that has produced wholly positive results while being cautious of the LAW OF UNINTENDED CONSEQUENCES (discussed at length in another hub of mine).
The second that the gold standard was removed as a way to back up the currency (Thanks Nixon [insert expletive here]), the value of the dollar has shrunken substantially. RICH politicians with top notch healthcare plans tell doctors how to practice and patients what insurance and care they are allowed to pursue; RICH politicians send their kids to private school to get fantastic educations while they mandate that your children can only go to the public school closest to them; RICH politicians waste HUNDREDS of MILLIONS of dollars on their own campaigns when most struggle to pay their bills; RICH politicians WASTE taxpayer dollars on their ridiculous spending sprees because they do not want to risk any of their own money on those terrible ideas; and RICH politicians VOTE TO INCREASE THEIR OWN SALARIES AND BENEFITS while forcing doctors and productive members of society to be paid less for all of their good efforts.
5) One of the reasons that colonial America rebelled against Britain was because of the exorbitant taxes and no representation in Parliament. Today we have a similar situation where taxes are through the roof to pay for projects, which mostly waste money, and half of the Congressmen and even the President do not represent the views of the majority of Americans or frankly do not have the best interest of the country in mind. Now, I AM NOT ADVOCATING ANY TYPE OF REBELLION OR ACTION OF VIOLENCE REMINISCENT OF THE REVOLUTIONARY WAR! I do want people to show their dissatisfaction with the current system by utilizing all of the ways possible to contact, persuade, or remove the bad leaders in office on election day by voting for a representative, who truly embodies your values and honors his word. It is very important to make a difference in your community on the local and national level.
Solutions for Bad Obamanomics
In an effort to address the issues listed above, I will address each issue with a corresponding solution.
1) Decrease taxes is the solution to the first issue. Sound a little crazy? Not at all. If the government kept individual tax rates current, thus making the Bush tax cuts permanent, they can lower taxes for individuals and give them more money to support themselves and families. I would go even further to suggest that there be a 0% corporate tax rate to create incentive for companies to come back to America. These companies coming back to America would bring countless jobs back to the US, make the US a major manufacturer and exporter on the world stage, and jump start the stagnant economy. Even if this was temporary for five years and then the corporate tax rate went up to 15%, the US would still be a much more competitive environment than the rest of the world and would reap all of the benefits of the repatriated money and companies.
2) Warren Buffet should be dismissed as the old, delusional, and out of touch lunatic that he has become. Sure he has been important in the past and once was even a shining example of the power of capitalism and freedom of being able to spend your hard earned money way better than the government. But he is now a sad person putting his own blue dog Democrat values above common sense and the capitalism in the US that allowed him to make his fortune.
3a) A fair tax of 15% for individuals and corporations (after the five year grace period I discussed in solution [1]) would increase revenues exponentially while truly allowing for shared sacrifice among all members of society.
3b) This would also free up a huge amount of capital for expansion, innovation, and investment in corporations and their workers. In a coordinated effort alongside regulation reduction, this could make the US economy successful beyond our wildest dreams.
3c) This is VERY IMPORTANT! The government has to think like the doctors that they aim to penalize through the Obama Healthcare Bill. Triage is the most important concept in treating patients, and the US is in critical condition. The first step is to stop the bleeding via making substantial spending cuts in all areas including entitlements. The Congressional Budget Office, which is non-partisan, found $200 billion in repetitive or truly unnecessary agencies alone, has deemed the Healthcare Bill as much more expensive than suggested and costing Americans much more for care, and even presented Congress with shocking raw data on the inevitable bankruptcy of the country and social security due to reckless spending. If an immature teenager spends recklessly on their parents' credit card, their parents take the card away, cut it up, freeze it in a block of ice, and even force the irresponsible person to repay the money spent. Now replace teenager with elected officials and parents with constituents, and that is exactly what this nation should do.
4) Rely on the private sector to increase competition and quality while decreasing price. That is economics 101, and companies always follow the "law of unintended consequences" because they want to produce great products and services without having to deal with any customer complaints, injury, or legal liability. I do not know if it is realistic to go back on the gold standard, but we should do that if possible. The Federal Reserve should be abolished because a central bank is the biggest threat to the well being of the United States according to founding father THOMAS JEFFERSON! Finally, to stop the out of control and out of touch Congress we must limit the number of terms they can serve. By doing this, it will force them to actually live under the laws and regulations they create and force them to make better choices. Congress can also have greater incentive to actually represent their constituents and the best interests of the nation if the constituents of that elected official have the power to vote to approve or deny a pay raise for their Congressmen.
5) Although I hinted at the solution in this discussion, there is one big twist. READ AND LEARN from history books and writings of the founding fathers. Those who do not know history are doomed to repeat it, and I fear that ignorance about the ideas and actions of the founding fathers alongside the causes of the great depression are causing all of the current economic turmoil. Thomas Jefferson also stated that currency is simply paper that can be recreated as much as desired by man whereas gold contains true value because it cannot ever be recreated by man. He and all of the anti-federalists were simply brilliant and can teach us all valuable lessons even today. The second part of the solution is to peacefully protest, contact your Congressmen, and then vote them out of office if the refuse to listen.
On a personal note, I would consider diversifying your investments to hold about 20% of your net in precious metals, 10% in a currency other than the US dollar, and put as much as you can afford to save into a Roth IRA. This is simply what I am doing to ensure that I can weather any type of turn in the economy despite my optimism and desire for the US economy to thrive once again.
1) Decrease taxes is the solution to the first issue. Sound a little crazy? Not at all. If the government kept individual tax rates current, thus making the Bush tax cuts permanent, they can lower taxes for individuals and give them more money to support themselves and families. I would go even further to suggest that there be a 0% corporate tax rate to create incentive for companies to come back to America. These companies coming back to America would bring countless jobs back to the US, make the US a major manufacturer and exporter on the world stage, and jump start the stagnant economy. Even if this was temporary for five years and then the corporate tax rate went up to 15%, the US would still be a much more competitive environment than the rest of the world and would reap all of the benefits of the repatriated money and companies.
2) Warren Buffet should be dismissed as the old, delusional, and out of touch lunatic that he has become. Sure he has been important in the past and once was even a shining example of the power of capitalism and freedom of being able to spend your hard earned money way better than the government. But he is now a sad person putting his own blue dog Democrat values above common sense and the capitalism in the US that allowed him to make his fortune.
3a) A fair tax of 15% for individuals and corporations (after the five year grace period I discussed in solution [1]) would increase revenues exponentially while truly allowing for shared sacrifice among all members of society.
3b) This would also free up a huge amount of capital for expansion, innovation, and investment in corporations and their workers. In a coordinated effort alongside regulation reduction, this could make the US economy successful beyond our wildest dreams.
3c) This is VERY IMPORTANT! The government has to think like the doctors that they aim to penalize through the Obama Healthcare Bill. Triage is the most important concept in treating patients, and the US is in critical condition. The first step is to stop the bleeding via making substantial spending cuts in all areas including entitlements. The Congressional Budget Office, which is non-partisan, found $200 billion in repetitive or truly unnecessary agencies alone, has deemed the Healthcare Bill as much more expensive than suggested and costing Americans much more for care, and even presented Congress with shocking raw data on the inevitable bankruptcy of the country and social security due to reckless spending. If an immature teenager spends recklessly on their parents' credit card, their parents take the card away, cut it up, freeze it in a block of ice, and even force the irresponsible person to repay the money spent. Now replace teenager with elected officials and parents with constituents, and that is exactly what this nation should do.
4) Rely on the private sector to increase competition and quality while decreasing price. That is economics 101, and companies always follow the "law of unintended consequences" because they want to produce great products and services without having to deal with any customer complaints, injury, or legal liability. I do not know if it is realistic to go back on the gold standard, but we should do that if possible. The Federal Reserve should be abolished because a central bank is the biggest threat to the well being of the United States according to founding father THOMAS JEFFERSON! Finally, to stop the out of control and out of touch Congress we must limit the number of terms they can serve. By doing this, it will force them to actually live under the laws and regulations they create and force them to make better choices. Congress can also have greater incentive to actually represent their constituents and the best interests of the nation if the constituents of that elected official have the power to vote to approve or deny a pay raise for their Congressmen.
5) Although I hinted at the solution in this discussion, there is one big twist. READ AND LEARN from history books and writings of the founding fathers. Those who do not know history are doomed to repeat it, and I fear that ignorance about the ideas and actions of the founding fathers alongside the causes of the great depression are causing all of the current economic turmoil. Thomas Jefferson also stated that currency is simply paper that can be recreated as much as desired by man whereas gold contains true value because it cannot ever be recreated by man. He and all of the anti-federalists were simply brilliant and can teach us all valuable lessons even today. The second part of the solution is to peacefully protest, contact your Congressmen, and then vote them out of office if the refuse to listen.
On a personal note, I would consider diversifying your investments to hold about 20% of your net in precious metals, 10% in a currency other than the US dollar, and put as much as you can afford to save into a Roth IRA. This is simply what I am doing to ensure that I can weather any type of turn in the economy despite my optimism and desire for the US economy to thrive once again.
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