About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Tuesday, August 28, 2012

The Income Tax System Explained in Beer

Thanks to a long time subscriber for sending us the example below of how our income tax system works – using ten men who want to pay their beer bill the way we pay our income taxes.
 
The Income Tax System Explained in Beer
 
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our income taxes, it would go something like this…
 
The first four men (the lowest income earners) would pay nothing
The fifth would pay $1
The sixth would pay $3
The seventh would pay $7
The eighth would pay $12
The ninth would pay $18
The tenth man (the highest income earner) would pay $59
So, that's what they decided to do.
 
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20.″  Drinks for the ten men would now cost just $80.
 
The group still wanted to pay their bill the way we pay our income taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share?
 
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
 
So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the income tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
 
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
 
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
 
"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man,"but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that is how our income tax system works. The people who already pay the highest income taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
 
 

Friday, August 24, 2012

The Best Of Times Video

Thanks to two long time subscribers & former co-workers for sending this video that is a lot of fun.   It shows the best of times for many of us.
 
 
 
 

Monday, August 20, 2012

Two Visions Of America

"I want to congratulate Mr. Ryan.  I know him, I welcome him to the race.  He is a decent man, he is a family man, he is an articulate spokesman for Gov. Romney's vision, but it is a vision that I fundamentally disagree with."  BO
 
"...we won't replace our founding principles, we will reapply them."  Paul Ryan on August 11, 2012 during his acceptance speech to be the VP nominee of the GOP
 
 
A comparison of the above two quotes & a look @ the above bar graph clearly shows the fundamental difference between BO/Biden & Romney/Ryan.  The bar graph displays the essence of BO's government-dependent vision.  It shows the increase of 13-million Americans receiving some form of federal welfare during the first two & one half years of BO's presidency.  Ryan's vision of reapplying our founding principles will reverse this trend – by definition.
 
The good news for most of us is that BO can no longer hide behind false or misleading statements about his record because Ryan's addition to Mitt's ticket forces BO to discuss the issues – the question is do enough people care about the issues or do they prefer to be a statistic on the bar graph? 
 
Start by asking yourself how many people represented on the bar graph will vote against BO. The majority of these people are not interested in any of the numerous substantive reasons why BO should not be reelected – they will discount, ignore, or not care about any intellectual or substantive discussion Ryan presents so they can reelect BO thereby ensuring their own meager pitiful subsistence continues.  Our best bet is if most of them don't vote @ all – but we are working against a community organizer par excellence & if he ever gets these large numbers of people organized the country will change overnight instead of gradually or incrementally as BO has had to accept in his first term.
 
A very dear friend offered an example of what we can do to fight the numbers problem described above when she called to let me know that her sister & niece visited her recently.  She knows that both of them intend to vote for BO so the last day of their visit she started questioning them about the wisdom of this choice & plans to continue this discussion now that she has put some doubt in their minds.  She also wanted me to know she is having similar discussions with people in the senior citizen community where she lives.  She also does similar good work for America @ the local level.
 
Another subscriber in another state let me know that her family is not very happy with their local candidates so I suggested that she support any of the candidates highlighted on this blog over the past several months.  Contact Jim DeMint (202-224-6121) for Senate candidates or Rob Woodall (770-963-2420)  for House candidates – both have their own list of people across the country who could use support.
 
If we all are not finding & changing the votes of two & preferably three people who plan to vote for statist candidates we may be in trouble just based on the raw numbers.
 
Twice in the last six presidential elections the voting age population exceeded the actual number of voters by over 100-million people (in 2008 it was 75-million people) – source author Andy Andrews.
 
The electorate (60% of the voting age population who votes) is very evenly split but BO has an advantage in that he has a larger target in trying to pick off more of the aforementioned 75-million non voters. 
 
Look @ the other graph above entitled Federal Government Dependence Spending Now Higher Than Disposable Income to see how that momentum has been going – as if the title of the graph doesn't tell you.
 
 
 
 
 
 
 
 
 
 
 
 

Friday, August 17, 2012

A Warm-Up ToThe Ryan-Biden Vice Presidential Debate

For those who can't wait for the Ryan-Biden VP debate check out this exchange between Ryan & BO in February 2010.  I particularly enjoyed both BO's ability to multitask as he listened to Ryan's detailed presentation & had a consultation with an unnamed woman & Biden finding something in the presentation to write a note about.
 
 
 
 
 
 
 
 

Tuesday, August 14, 2012

A Remembrance Of VJ Day

 
The above world famous photo shows a sailor (& really a nation) celebrating in Times Square in NYC the announcement of VJ Day – August 14, 1945.
 
Thanks to a long time subscriber to RTE for sending this link of a video that brings back for some & presents for most of us the feeling of our country @ the end of WWII.
 
 
 
 

Sunday, August 12, 2012

Responses - With Paul Ryan We Have A Chance

Thanks for all of the wonderful responses to the subject message like "Doug - keep up the exceptional posts and keep the pressure on!"
 
Below are four responses of interest. 
 
The first response shows an understanding that Paul Ryan's record is not one of total fiscal responsibility as Mitt would like you to believe & the RTE posts over the past two years have documented with actual House votes.  The Ryan pick provides the chance to defeat BO because of Ryan's supposed (though not totally true) fiscally responsible reputation that will act as the discussion & debate point of the Republican position compared to BO's government dependent envisioned society position.  BO will not only accept Ryan's reputed fiscal bonafides but will actually promote their notability because he believes he has a winning hand going against them, whether they are true or not, & that he will nail free enterprise in America shut forever – it is this contrast that is key for the nation & our futures.  The major point of substance for us is what happens if Mitt & Ryan win?  Will they deliver or is it all rhetoric with us getting a few tweaks the first few months of 2013? 
 
The second response has the Ryan selection in the right proportion.
 
The third response discusses the presidential beauty contest that has bothered Neal Boortz for yearsaka the likeability issue.
 
The fourth response from the Historian goes around the horn – first proving & then disproving the same premise.
 
---Response #1---
 
Mitt Needs a 'Willie Horton' like Commercial

Thanks Doug for explaining that Paul Ryan is far from a true conservative; nevertheless the Democrats and media are lying about him and his budget in overdrive and calling him an extreme right wing conservative.

BO is lying about both left and right. BO's lie about Mitt causing a woman to die from cancer is the number 1 LOW ever in American politics! Her husband worked for a Bain company after Mitt left in 1998. The woman had her own health insurance. In 2006, she was not feeling well and was diagnosed with cancer and died quickly while Mitt was in his 2nd year as Governor. This is 100% outrageous!

The Republicans must expose BO as the Marxist radical that he is. Republicans must not fear being truthful but controversial. A 'Willie Horton' like commercial can accomplish this. Here is a 'warm up' commercial -- http://economics501.wordpress.com/2012/08/10/commercial-t/  that I created and sent to Mitt, Monica Crowley, and Dick Morris. It pictures BO as a Marxist scholar in U of Chicago teaching a course how to destroy capitalism. It also pictures Acorn demonstrators rioting on a bank CEO's lawn demanding loans for people with ZERO % down. This was something BO trained many in. BO thus had a major role in creating the 2008 Great Recession and its aftermath – not George Bush!

Expect an enhanced version of this commercial soon as my 13 year old daughter is enhancing it with voice and video and special effects.

Other ones upcoming will be:
1 – BO building a New Top 1% comprised of BO czars and operatives (a modern Politburo)
2 – BO policies leading to Greece , Spain, Italy, Portugal like economic collapse with commercials displaying intense riots with a final question: do you want this in the USA?
3 – Michele Obama responding with a "SHHH" when someone commended her on the "stimulus" addressing economic growth. The "SHHH" as argued by IBD recently was to keep quiet about the real objective of the stimulus – shift available capital from the private economy to public to starve capitalism because BO wants to level the world playing field (bring the U.S. down) – well covered in Ed Klein's "Amateur' book about BO.
 
---Response #2---
 
I was so excited when I saw the subject heading....in spite of Ryan's clouded fiscal responsibility reputation, we must cling to the hope that he will be the fire that we need to prevent us from going down the tube!
 
---Response #3---
 
Hi Doug - In my opinion, Ryan brings to the table likeability. He is young, dynamic, eager, and charismatic. You can be the most conservative or liberal candidate in the field if they don't like you you'll never win. Ryan completely complements Romney. When it comes to picking a president, you and I part company. I believe people vote for who they like regardless of their record.

RTE - Oh I think the likeability aspect is very important – almost as important as how much government welfare is promised & delivered by a candidate. On both of these issues BO is the winner.
 
---Response #4 – The Historian---
 
Doug, You wrote a very good article..But I have to say, Romney-Ryan ticket will lose. Why??

Ticket heavy on conservative views...I notice whenever a party is top heavy with conservative views or liberal views - they lose elections.

I remember democrats having Stevenson running for President, who was very liberal - lost election. Also Humphrey running for office, also very liberal democrat- lost election

The American people do not want candidate top heavy in their views - But there are exceptions in life - this might be one of them with Romney-Ryan winning.

 
 
 

With Paul Ryan We Have A Chance

"Now we have a chance" was the message a long time contributor to these messages called to Carol as she stood in line @ the local grocery store on Saturday afternoon.  No "hi" or "bye" or mention of Paul Ryan by name but Carol told me she knew what he meant & so did everyone else who overheard the greeting.
 
In just a few short hours the Ryan announcement as Mitt's VP running mate has changed the direction of last night's blog message that was only surpassed in gloom by Laura Ingraham saying if the election were held today (Friday) that BO would win.  By 9:00 AM Saturday there was hope that wouldn't be so.
 
But long time readers of these messages will remember that there has always been a cloud over Ryan's supposed fiscal responsibility reputation.  For instance on July 28, 2011 – long before Ryan was thought of as a VP candidate I wrote "Now if Paul Ryan is the most fiscally responsible Member of Congress allowed to present a plan to lead us out of our current fiscal problems it is definitely news to Jeff Dyberg who let us know back in April that Rep. Ryan voted for TARP, felt the free market had failed when he chose to replace it with bureaucratic central planning (against competition) by supporting the taxpayer bailout of GM & Chrysler, voted for the 2008 Bush Stimulus bill, supported ethanol subsidies agreeing with the December 2010 tax deal with BO, & has also voted to support the confiscatory tax on AIG bonuses."  I also reported some Ryan votes that went against control of the debt ceiling & the CR & against his own budget re student loan interest rates.  In essence Ryan kicked the can down the road on many occasions.  Hardly a Jeff Flake or Jim DeMint.
 
Although I don't agree with all of it because it is too timid Ryan's budget plan has been the most courageous proposal in years.  It contains one of the true ways to properly modify Medicare & changes the mindset of this country for the better. Since it passed the House (not the Senate) in April, 2011 Mr. Ryan has been booed @ his own town hall meetings.  Ryan's budget plan of April, 2011  – generally regarded as the most fiscally responsible budget presented - would still increase the national debt by some $5 trillion over the next 10 years and continue $400 billion annual budget deficits through at least 2021.  Nearly all of the deficit reduction in the Ryan plan starts years from now. Ryan would cut only $80 billion from the cumulative deficit total for FYs 2012 & 2013 - the original collective Republican campaign promise in 2010 was for a $100 billon spending cut for what I thought was calendar year 2011 not $80 billion for the next two year total. Ryan's figures also rely upon continued favorable to the government interest rates for financing the U.S. debt. Interest rates have been at artificially manipulated (by the Fed) historic lows that have devastated seniors' CD interest income way too long. A rise of one percent in the interest rate in financing the national debt would mean an extra $140 billion in spending that is not accounted for in the Ryan budget - such figure would be added to the national debt.
 
We can make no mistake that the Ryan solution for Medicare of subsidized "premium support" will preserve Medicare for decades – I have heartily endorsed this as one of the four solutions to solving our economic problems.  I have presented the graph showing the curve bending down several times & it is key to our future & our grandchildren's future but it requires today's seniors 55 and over daring great enough to chance premium support will not affect them & people under 55 starting to adapt to the new system.  If they do we have a chance to solve the current seemingly intractable Medicare entitlement problem that by itself will doom America if nothing is done to correct it.
 
So what is the chance that Ryan brings to America?  More than any other short list VP candidate it gives Mitt a chance to speak out continuously in favor of Ryan's reputed fiscally responsible ways so that there could never be a greater contrast between the principles of limited government, personal responsibility, & free enterprise & BO's four year communistic onslaught against these values where BO tries to capture people's dependence thereby depriving the world of so much talent.
 
BO still has a 43% job approval rating meaning 43% favor the redistribution of wealth rather than the creation of wealth as described in Death of Democracy. In other words these 43% of the people are not interested in any of the numerous substantive reasons BO should not be reelected – they will discount any intellectual or substantive discussion Ryan presents to ensure their own meager pitiful subsistence continues.
 
In looking up all of the facts presented hereinbefore I came across the following - "Doug - How can we get seniors to realize that by rejecting the proposed reforms to SS & Medicare they will lose it all? I rely on my SS check each month but I understand that if nothing is done, it will not be there in 3, 4 or 5 years. The right reform needs to be done to these programs if that is to be avoided. The message must be depoliticized and made clear to seniors so they can stop falling for the scare tactics that are being used in Congress. The message has to be made in clear language that even the least literate person can understand. I know from personal experience that many of them don't have the ability to grasp all the intricacies of government programs. It is not going to be easy to convince them, but it must be done."
 
This is what we are hoping Ryan can lead Mitt to do between now & November 6 but way more importantly follow up on in 2013 if he really believes it.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Friday, August 10, 2012

The Stake We Have In Economic Freedom

In watching the O'Reilly Factor Thursday night I @ first thought the program was a repeat since the talking points memo that Bill opened the program with sounded identical to one I highlighted on this blog about two weeks ago.  It seems that 100-million people now receiving some kind of federal welfare has awakened Bill to the principles of Death Of Democracy – something that readers of these messages have known about for over a decade when the figures were much less compelling.
 
Bill wrote "Under President Obama the USA has greatly increased social welfare programs. The President will tell you that's because of the bad recession, but we've gone through bad recessions before. More than 100-million Americans are now receiving some kind of federal welfare, and that does not count Social Security or Medicare. In 2000, 34-million Americans were on Medicaid; now the number is 54-million. In 2000, 17-million of us received food stamps; today that number is an astronomical 45-million Americans. Some Americans need help, no question about it, but what President Obama does not want to articulate is that there is a shift in how many Americans see themselves. It used to be that self-reliance ruled, but now many of us feel we are entitled to free stuff because it's not really our fault if we're not prospering. There is a tremendous sense of entitlement among some Americans who simply have not succeeded. President Obama is encouraging that mindset by putting out a narrative that says wealthy Americans and business people are not paying their 'fair share,' even though all the stats show that the affluent pay the vast majority of federal taxes. In France, the new Socialist president wants to tax the affluent at a rate of 75% so he can dole the money out to French citizens who don't have very much, thereby ensuring their permanent support. Do you see a difference between the French Socialist strategy and what the Democratic Party wants in the USA? I don't."
 
Later in the O'Reilly program it was pointed out that new stats indicate that more than one-third of immigrant households receive some form of welfare. Lou Dobbs pointed out that "We have 15-million people in the country that we didn't invite and most of them don't have high school educations. We know these are people who will be dependent on welfare for many years to come. We also have a failing education system and this administration has not been able to create the same level of jobs as four years ago. Obama is not just the 'food stamp president,' he is the 'Social Security Disability president as well."
 
Looking @ the other side of the coin & following up on the recent postings re how to create value producing jobs & the significance (or lack thereof) of unemployment statistics please click on this link of a video of Suffolk University Economics Professor Ben Powell explaining the relevant principles described in the ladder metaphor I presented.  Many of you will remember Professor Powell was a frequent guest on the best TV show in recent memory before FBN unexpectedly & abruptly took it off the air last winter– Freedom Watch with Judge Napolitano.  What a treasure it would have been to have the Judge on the air every night during the SC ObamaCare hearings.
 
In the same light thanks to our SC businessman for sending us this link of a video that he received from his local Tea Party that indicates the countries with the most economic freedom in the world today.  The WSJ publishes the current list every January & it is disheartening to learn that America is not only not #1 but has fallen to #10.  Ask yourself - if our economic freedom continues to fall, will it not affect our quality of life?
 
Lastly, click on this link that shows how U.S. households have lost 75% of their wealth in the last decade when evaluated & compared to commodities like oil & gold – two commodities that have held a steady relationship to each other over the decades.
 
All of the above types of deterioration have happened to nations throughout history when the people have not had the sense to spend even a few minutes a day thinking about what was happening to them – let alone determining what they could do about what they didn't like.
 
Both new Fox News & CNN polls show how the above welfare stats & the federal largess relate to the November presidential election.  Forty nine percent of registered voters are for Obama, 40% for Romney, a 9-point gap in the Fox poll. Included in that 49% has to be almost everybody getting welfare payments – just waiting to go up as BO organizes & controls more of the growing dependent class.  This possible (& to me really probable) election result is the Death Of Democracy & significant change to our way of life that will negatively affect virtually everyone who is breathing who reads these messages.  I know Mitt is struggling receiving money following the Republican primaries to fight back but this election is starting to have the same stink to it that the Dole & McCain campaigns had.
 
 

Wednesday, August 8, 2012

Response - The Unemployment Stats Don't Begin To Reveal The Problem

Below is an extremely thoughtful & insightful response to the subject message.  The writer obviously not only knows why I entitled the message "The Unemployment Stats Don't Begin To Reveal The Problem" but also explains in detail what I meant by the term "spending down their assets" when referring to how the 23 million underemployed people & their families in the nation are making ends meet.
 
What we have is an older generation who created wealth, a younger generation spending it down, & the unanswered question of whether or not the next generation can rebuild it?
 
---Response---
 

Hi Doug - Thirty years ago we lived and died by manufacturing data - today it's insignificant. I am starting to entertain the theory that unemployment numbers are also insignificant. Realizing this theory runs counter to contemporary thinking lets peek behind the curtain at some facts. The Romney Camp cannot get traction with unemployment - it's like trying to use manufacturing data as a campaign tool - its old school. We are approaching 50% of America's population receiving income from a source outside the traditional 8 to 5 job routine. This 50% receives monies from pensions, Social Security, disability, welfare, investments, inheritances, trust funds, and self-pensioned. Moreover, the greatest transfer of wealth is taking place at this very moment and will continue for the next 15 years as the World War II generation passes away leaving their wealth to their children. Additionally, Baby Boomers are retiring at record numbers which will also continue for the next 15 years. Many companies are laying off their senior workers who collect unemployment for two years and subsequently retire. This technique skews the unemployment data. We are a mature and wealthy country with 80% of us owning our homes. As with manufacturing data, the above wealth facts, leaves few Americans, outside the news media, concerned with unemployment data. Since the country is seemingly deft to unemployment information, in my opinion, Romney will need to dig deeper into his tool chest otherwise he will pass into history as a final jeopardy question.

Monday, August 6, 2012

The Unemployment Stats Don't Begin To Reveal The Problem

While I waited for the DOL to release the official July unemployment numbers on Friday I never could have guessed that BO's economic adviser Alan Krueger would be giving us a lesson later in the day re terms from my analytical chemistry class like "precision, accuracy, number, digit, & significant figures." 
 
Krueger made the point that the July unemployment rate really is not the 8.3% the BLS reported but rather is 8.254% up from 8.217% in June.  The term "essentially unchanged" was used – this term may not be as complimentary as BO's administration thinks.
 
Caring absolutely nothing about innocent unsuspecting hard-trying people's lives BO spun all of the job stats in his constant attempt to gain reelection to conclude "that means that we've now created 4.5 million over the last 29 months and 1.1 million new jobs so far this year."
 
Of course the truth is BO hasn't created any value producing jobs @ all & neither has any politician.  The economy is so weak that in July 150,000 people left the work force to live off of their savings for awhile & 45,000 more people joined the ranks of those looking for work but cannot find any.  Do you know any of these people?  I do.

Thanks to a subscriber of RTE who alerted me to the following graph that shows a more realistic analysis of the job stats done by IBD.

IBD found that since BO took office 7.5 million people have left the workforce meaning there are no net "job gains" under BO's total time in office.  IBD made the above graph to show a more realistic picture of the unemployment condition in America based on holding the labor force participation rate constant @ 65.7% (where it was when BO took office) & projecting how many jobs have been destroyed in coming to the current 64.3% labor force participation rate.  The labor force participation rate is the percentage of the potential labor force population which actually belongs to the labor force.  This analysis resulted in an 11.0% unemployment rate to compare against the official 8.3% rate.

Even more dramatic to me is the 15.0% underemployment rate (the most comprehensive measure of labor unemployment) that includes the 12.9 million Americans who are looking for work but cannot find it (because it is not there per BO's design) plus discouraged workers (2.5 million) who have given up looking for work because they believe no jobs are available & their continued search would be futile & are therefore spending down their assets to live on plus those who are working part time (8.2 million) but really prefer full time work & therefore are also spending down their assets to maintain their standard of living. 

But lets not be fooled by unemployment statistics regardless of how bad they really are because a job is not the job we remember or expect unless it provides a salary with a living wage not to mention healthcare insurance & a pension be it defined benefit or defined contribution.  Seeing this type of job creation may very well be a thing of the past for much of our population & the dreadful unemployment stats don't even mention it.  Instead job applications flood fast food restaurants so we can serve burgers to one another (or more fashionably chicken sandwiches @ CFA).

To set our sail straight we have to begin with the idea that not only doesn't government (be it Mitt or BO) create jobs but that no businessman or entrepreneur goes into business with the idea of creating jobs.  In fact creating jobs is the last thing they want to do. 

The way to maximize the creation of value producing jobs that increases our standard of living is for the government to stop its constant intervention & interference in the economy (this is the stimulus they can provide) & unleash entrepreneurs & innovators in a true free enterprise system - which is far from what we have had in a long time. BO's policies not only don't maximize the chance for creating such jobs, they don't even minimize it - they virtually eliminate the possibility of any such jobs being produced. And of course this is by design.
 
To understand how value producing jobs are created think of the world economy as a ladder - a metaphor presented to me by Professor Robert Carbaugh of Central Washington University. The U.S. is currently on the top rung & developing nations with low tech labor intensive jobs are on the bottom rungs. The other countries are in between. All countries try to climb to the next rung. This works well if the topmost countries create new industries & products, thus adding another rung to the ladder like when we replaced horse drawn carriages that used buggy whips with cars. Older industries can move overseas while new jobs are generated @ home. It is when innovation stalls @ the highest rung that the portion of Americans near the bottom of the income distribution must compete with workers in developing countries. This is what we are facing today as far too many Americans are poorly educated with skills so limited that no employer can use them. It is only through constant brainwashing that the government will take care of you that would allow someone to become so ill-prepared to support themselves that they are now competing with third world people who make pennies a day.

 

Thursday, August 2, 2012

FairTax Question & Answer


An anonymous RTE reader from the internet sent the following question after Googling & listening to FairTax Radio Program - March 7, 2012.


Question - Doug -- In your years of advocating the FairTax, how much legitimate criticism of the FairTax have you heard and what do you feel are the strongest arguments against the FairTax? 

Answer – The first thing I always point out in answering this type of question is that the FairTax is the result of a $22 million study done over a three to four year period in which Americans for Fair Taxation selected a group of non-partisan economists who provided economic papers responding to the results of numerous focus groups.  The FairTax is the result of this work – a system that will be easy to understand, fair, transparent, & friendly to economic growth.  Because of this starting point & the quality of the people (both economic & legal) who participated in the economic study &/or wrote the actual legislation I believe there are no legitimate criticisms of the FairTax.  As I'm sure the questioner noticed on the March 7 radio broadcast former NJ Assembly Speaker Chuck Haitian played the devil's advocate to a fault before ultimately being won over by the end of the program.

The great majority of people who become FairTax advocates start by reading The FairTax Book by Neal Boortz & former Congressman John Linder.  With re to arguments against the FairTax the aforementioned two authors specifically wrote a second book – FairTax: The Truth Answering the Critics – to answer & dispel lies that were intentionally circulated to mislead about the FairTax.

I recommend that you read both of these books as well as The FairTax Solution by Ken Hoagland.  Also check out www.FairTax.org as well as the section of this blog under The FairTax where there are about 25 postings from the FairTax basics to the most esoteric topics including many links to audios & videos.

If you are like me your study will conclude that the FairTax offers a solution to our economic problems that when implemented will bring fairness & prosperity back to our country & its citizens.  I believe that HR-25, The FairTax Act of 2011, is the most important piece of legislation for America in our lifetimes.

The FairTax does not tax our productivity like the income tax does.  It taxes both personal and government consumption of new goods and services in the U.S.  It doesn't tax what goes into the economy but rather what comes out of it.

The FairTax reverses the idea that our earnings first belong to the government & then, whatever is left, to us after withholding. Earnings under the FairTax belong first to the citizen in that our paychecks & pensions are received free of federal taxes - this turns every consumer into a concerned taxpaying stake holder.  If you work, save, or invest you do not pay the FairTax – The FairTax Plan is a nonpartisan proposal that replaces all federal taxes on individual & business income, as well as payroll, estate, & capital gains taxes with a 23% (tax inclusive) national consumption tax on both personal & government consumption of new goods and all services in the U.S.  The FairTax taxes only the final consumer or user in the U.S. of new goods & services meaning essentially it taxes retail sales & government consumption. 

The FairTax includes a cash prebate that ensures no American pays federal taxes on their spending for essential goods & services up to the poverty level.  The prebate equals 4% of the FairTax 23% rate meaning that if there was no prebate the FairTax rate would be 19%.

Under the FairTax all of our products for export will travel overseas with no tax component - unlike now when a significant tax component is in every product that leaves our borders. This is one of the features of the FairTax that will help bring manufacturing jobs & plants back to America - the free market capitalistic system unfettered by government regulations & taxes. The American economy is screaming for the FairTax.

Please do your own study & you will find that the above is just the beginning of the benefits the FairTax brings to America. Along the way if you have any questions please ask me. If anyone wants to learn the economic principles & benefits of the FairTax I will not be the reason that you don’t.