Posts Tagged ‘2012 election’

The Politics of the “Fiscal Cliff”

ThePoliticsOfTheFiscalCliff  <– PDF version

So the elections are finally over and our illustrious federal officials now turn their attention to the so-called “fiscal cliff”.  At issue here is whether the Bush-era tax cuts will expire, along with the Social Security withholding reduction enacted in 2010 as a temporary stimulus measure.  The “fiscal cliff” came about per an interim agreement reached last year, as a result of the debt-ceiling escalation in Aug 2011 and the subsequent failure of Congress to come to a consensus on a fiscal policy.  The idea behind the interim agreement was simple: impose across-the-board spending cuts of $1 trillion over ten years and let the Bush-era tax cuts expire on 1 Jan 2013 unless a long-term fiscal policy is enacted.  The $1 trillion in spending cuts, spread over ten years, result in $100 billion in cuts every year, split approximately equally between defense and non-defense.  This was regarded by its designers as so abhorrent that it would provide sufficient motivation for Congress and the President to actually make a deal.  But the negotiations since the election have not been going too well; and of course both sides are busy blaming each other.

I will review the situation, and show how the Republicans, contrary to conventional wisdom, actually hold all the cards here.  First, a few undisputed facts:

1.  The President campaigned successfully on two notions: that tax rates must go up for the wealthy, and must come down for the middle class.  He has said the marginal rates on the wealthy should go back to the 1990’s; in other words, from 35% now to 39.4% as they were in theClintonera.

2.  If the “fiscal cliff” occurs, tax rates will go up for both the wealthy and the middle class.

3.  The long-term fiscal problem of the nation cannot be solved by spending cuts alone, nor by tax increases alone; a combination of the two is necessary (i.e., a comprehensive package).

4.  The history of past “comprehensive” reforms, as enacted under Reagan and Bush, Sr., shows that the Democrats always insist on tax increases immediately, with a promise of spending cuts in the distant future.  Of course, politicians being who they are, those cuts never happen.  It is safe to say that no Democrat in Congress will ever vote for any bill that actually cuts spending in the near term unless he is forced to do so.

5.  No Democratic President will sign a bill that results in immediate spending cuts, unless he is forced to do so (like Bill Clinton).

6.  If anything bad happens to the economy, the propaganda wing of the Democratic Party (i.e., CNN, CBS, ABC, NBC, and PBS; plus the major newspapers led by The New York Times) will blame the Republicans; if anything good happens in the economy, they will give Mr. Obama all the credit.

7.  The Democrats and their propaganda wing have long held that the Republicans are the party of the rich (conveniently ignoring the fact that tax provisions favoring the wealthy were passed mostly by Democratically-controlled Congresses over the last 50 years).

8.  The Democrats and their propaganda empire have claimed that the Republicans are holding the middle class hostage to protect the rich.

9.  Mr. Obama has stated that he will only accept a “fiscal cliff” deal if it raises tax rates on the wealthy.  He has claimed the wealthy are those with incomes over $250,000.

10.  The Republicans have thus far admitted that revenue increases are necessary and are willing to do so by removing some loopholes used by the wealthy and limiting some deductions.  They do not want to raise tax rates on the wealthy due to a “tax pledge” made some years ago.

Here are a few observations and applications.  First, consider the cuts in the “fiscal cliff” legislation.  The cuts are across-the-board, without the necessary and prudent prioritization that rational people would do.  However, let’s be realistic: it actually imposes spending cuts immediately, and for that reason alone is probably the best that our ruling elite can do as things stand presently.

Secondly, the wealthy already pay a large portion of income taxes.  So, if revenues are to be increased via the Republican preference (closing loopholes and limiting deductions), or increased by Mr. Obama’s preference (raising marginal rates), the wealthy are going to pay more either way.  In reality, the best thing for the nation is the Republican way, since it will do more to promote fairness in the tax code, and limits the ability of Congress to punish their enemies and reward their friends through the tax code.

Third, if we go over the “fiscal cliff”, taxes will go up for those of us in the middle class.  So taxes will go up — what else is new; and how will it matter all that much?  State and local taxes of all types have been going up all along.  Recall that the Social Security withholding reduction was intended to be temporary anyway (it was also a bad idea).  The increase in taxation via federal marginal rate increases is small compared to the already-occurring increases in the cost of living due to the Federal Reserve’s currency-printing machine.  If either side truly cared about the middle class, perhaps they would take action to restrain Mr. Bernanke.

Fourth, although most Republicans were dumb enough to sign “no-tax” pledges at the urging of Mr. Grover Norquist, the simple fact is that both the expiration of the Bush-era cuts and the repeal of the Social Security withholding reduction are already accomplished facts if a deal is not made.  They cannot be accused of raising taxes if they allow law per a vote already taken in 2011 to occur.  Only a moron would sign such a pledge anyway; since when did Mr. Norquist assume the authority to supersede the needs of the nation and the powers of Congress contained in the Constitution?  If Mr. Norquist wishes to be emperor, perhaps he should run for the office.

Fifth, the “smart money” has known for months that our ruling elites are incapable of anything better than the impending “fiscal cliff”.  As for the future of the stock market, the “smart money” managers have probably already priced-in the effects.

Sixth, if one is going to be accused of something, one may as well do it.

With these facts and observations in mind, it seems to me that the Republicans hold all the cards here, and it is possible to get true reform that actually helps the nation.  Mr. Obama needs to score political points by raising taxes on the wealthy (it won’t solve the fiscal problem, but he needs to score points).  He won re-election, so let him have his political points.  The increases on the wealthy are his most famous political need, but not his most important one.  Many of his supporters are middle-class.  He needs a tax cut for them much more than he needs a tax increase on the wealthy.  The Republicans in the House should immediately pass legislation that raises marginal rates on the wealthy to 50%, with no corresponding demands for spending cuts and no other conditions subject to objection.  This is far above the rates that prevailed in the Clinton era.  In fact, they should pass a series of bills that raise rates on the wealthy to 60, 70, 80, or 90%, and let the Senate Democrats and the President choose the one they want.  This turns the argument around while costing the Republicans nothing: taxes are going up on the wealthy either way.  If the Democrats think those marginal rates are too high, it will be incumbent on the Democrats to negotiate lower rates for the wealthy to protect their friends in the tall buildings in Manhattan.  If the Democrats do not really want higher rates on the wealthy, by all means they shall have their “fiscal cliff”.  If they settle on the new rates for the wealthy, Mr. Obama will have his political points, but leaves the Republicans in control of what he needs more (the middle class tax cut).  Then the Republicans can actually do what they’ve been accused of: hold the middle class tax cuts hostage — not to protect the rich, but to get spending under control and thus stabilize and secure the nation’s long-term financial health.  They should demand immediate spending cuts in return for an immediate reduction in tax rates for the middle class, thus forcing the Democrats to do what is necessary but have never done before.

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How Obama Gets Re-Elected in 2012, Part 5

HowObamaGetsReElectedIn2012_Part5   <== PDF version

Now that the respective nominating conventions are over, it is safe for the mainstream media to start the traditional mantra “the Democrats are running unopposed”.  Governor Romney’s odd rhetorical missteps haven‘t helped his cause.  While there continue to be debates about the merits of one poll as against others, the fact remains that media will continuously seek ways to help the Democrats get elected or re-elected.  This year is no different.

The next phase of the Presidential race is the series of joint press conferences, laughingly referred to as “debates”.   The paid Democratic operatives/moderators will of course make 90-second speeches about the evils of “predatory capitalism”, then follow up with a question to Governor Romney demanding he explain in 15 seconds why he hates the working class so much, and does he feel bad about all those defenseless foreign workers he exploited when Bain Capital invested in Chinese companies while laying off American workers.  President Obama, on the other hand will be faced with “tough” questions such as “Do you like ice cream, and if so, what is your favorite flavor?”  Mr. Obama can then re-assure us that he likes vanilla and chocolate equally, and that anyone who says differently is a right-wing race-baiter.

But that is not Mr. Romney’s biggest problem.  As I alluded to in an earlier edition of this series, Mr. Romney’s main problem is that he is unable or unwilling to lay out a consistent set of policies (translation: ones that do not directly contradict the policies announced during the nominating campaign).  His secondary problem is that he appears to be weak and vacillating in describing the things that differentiate him from Mr. Obama.  He will no doubt come fully armed with every variety of gentlemanly wet noodles to match up against Mr. Obama’s Chicago-style ideological gunfight.  It will be a hostile environment, but Mr. Romney should emphasize the significant differences between Mr. Obama and himself, and ignore the rudeness of the Democratic Party’s hand-picked audience.

The first of these is the basic difference in their experience.  The difference between Mr. Romney, businessman, and Mr. Obama, community organizer, that that a businessman can read numbers.  Mr. Obama seems unfazed by consistently high unemployment and the $6 trillion addition to the national debt.  Mr. Obama has claimed that the private sector is doing well; proving that he believes 8% unemployment (14% true unemployment) is evidence of a successful economic policy.  Mr. Romney can say that while he might be a dumb businessman, he at least knows that the present course cannot be sustained because the numbers suggest the middle class is shrinking and the debt will further reduce future economic opportunity.

Secondly, Mr. Romney, businessman, knows the importance of keeping track of the competition, which requires monitoring of trends and activities in the industries, looking out for both opportunities and risks.  On the other hand, one can prepare a daily Presidential Security Brief, but you can’t make Mr. Obama read it.  Perhaps if Mr. Obama had been paying attention, the fiasco in Libya could have been averted.  Mr. Romney can say that he may be another out-of-touch CEO, but he at least knows enough to listen to the advice and threat assessments made by his expert subordinates.

Speaking of the fiasco in Libya, Mr. Obama insisted for ten days that the killing of four American employees was the work of a mob angry about a video.  Let me get this straight: Mr. Obama, who claims to be familiar with the Moslem religion, and shows respect for all religions equally, believes that regular Moslems engaging in a peaceful protest will spontaneously invade a consulate, kill people, and burn it to the ground?  Peaceful Moslems went berserk over a video?  If Mr. Obama believes that, then he must also believe we are at war with all of Islam, not just the radical lunatic fringe.  Here is the third difference: Mr. Romney can say that he may be a white-guy Mormon, but he at least knows that we are in a shooting war with only a small contingent of Islamic retards, not the entire faith.

The Bolshevik communists ran a dictatorship in the Soviet Union for over seventy years.  During that time, the official price of bread was fixed at 10 kopecks (100 kopecks to a ruble).  The plan was that the dictatorship, founded on the centrally planned economic theory of Karl Marx, would provide bread for all citizens at 10 kopecks.  There was only one small problem: even with the entire agricultural workforce consigned to slave labor under collective top-down management, and with every other available resource (including the army) enlisted to aid with harvest and production, the dictatorship could not produce bread for 10 kopecks.  Hence, for over seventy years, the official price remained unchanged, but there was never any available to buy except on May Day, the dictator’s birthday, and other important economic milestone anniversaries.  Mr. Obama’s health care plan will turn into the same thing: health care is getting “cheaper”, except that premiums are actually going up now.  When Obamacare comes into its full fruition, health care will be “free”, except you won’t be able to get a doctor’s appointment because they’ve all been forced out of business, not being able to provide the service for the price the government dictates.  Here is the fourth difference: Mr. Romney can say that he might be a rich profit-taker, but he at least knows that everything of value must have a price, and that price is best regulated by free competition, not by top-down central planning as was bread in theSoviet Union.

Mr. Romney, even with all his other weaknesses, does have some significant advantages compared to Mr. Obama.  I am doubtful he will find the will to bring them up and defend them against the sneering media.  If he doesn’t, he will lose by allowing the Democrats and their media allies to frame the debate.

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The Extent of Election Fraud

TheExtentOfElectionFraud   <– pdf version

It’s election time again, and as usual the two main Parties are riling up their base by claiming the other Party is attempting to steal the election.  The Republicans are whimpering that too many voters are ineligible, and are passing laws in some states requiring voters to show an ID despite the fact that there is no evidence as yet that such fraud has tilted an election result.  If the Democrats were smart (which they’re not) they would use their large monetary assets to provide people with the means to obtain whatever legitimate ID is required; this would open up other doors to full participation in the society.

Meanwhile, the Democrats are whimpering about the manipulation of voting hours in some states, claiming that closing the polls early or regulating early voting somehow deprives poor people on welfare of their voting rights, even though the pressing schedule of a welfare recipient on the first Tuesday after the first Monday in November is no different than any other Tuesday. If the Republicans were smart (which they’re not), they would keep the polls open until midnight on Election Day and give the working people extra time to cast their ballot.

Those arguments are about being able to cast a ballot.  But I have a more fundamental problem with our election system, one that has bothered me for a long time, and which neither main Party has ever chosen to discuss.  That is: how do you, the voter, know that your vote has even been counted after you cast your ballot?   Every ballot is numbered and associated with a precinct.  Those ballots are supposedly collected and counted, usually by machine.  Although the ballots are numbered, and the list of those who voted is collected at the polling place, there is no feedback by which a voter can prove to themselves that their vote was actually counted.  The two main Parties, who control the counting of ballots, insist that we blindly trust them on this.

We now have the technology to implement a verification system to prove to every voter that his ballot was indeed counted.  We the people should demand that the ballots be re-engineered such that each voter obtains a numbered receipt for his ballot, and that within three days of the election, the entire vote tally shall be publicly accessible, and indexed by ballot receipt number (and precinct, district etc.).  Each voter should be able to enter in his receipt number, and verify that his ballot was accepted and that the preferences he chose were correctly interpreted.  Only then will each interested voter be able to ensure that his ballot was received; and any discrepancy may be challenged by presenting the original ballot receipt.  This is the first step required to gauge the true extent of any election fraud.

The preceding receipt method is necessary but not sufficient to demonstrate that a voter’s ballot was actually counted.  Although the voter may verify that his ballot was accepted, it would not in and of itself allow the voter to determine if his ballot was actually included in the vote totals.  The voter would require the capability to observe all the ballots in one place, and verify that the total thereof, including his, came to the same value as the reported total for each race (an example is for the election commission to arrange all the ballots in a spreadsheet and allow each user to independently verify the totals).  There is another way: every voter should vote for himself in at least one race on the ballot.  Surely, every ballot contains one race in which a candidate is running unopposed, or a race for an office that is unfamiliar, or one for which the voter does not care about the outcome.  Every voter should choose one such race on the ballot and vote for himself.  If every ballot is counted, as the Parties continue to tell us, and every vote accounted for, the official returns should reflect the names of every voter; granted, they would be spread around various races.  If the voter, armed with his receipt, found his name listed in the race for which he wrote in his own name, he may be reasonably certain that the rest of the votes he cast on that ballot were included in the other totals.  There is no way to guarantee it of course, but the probability that his other votes were counted is much higher than with any other simple system.

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How Obama Gets Re-Elected in 2012, Part 2

How_Obama_Gets_Re-Elected_2012_Part_2  <==  PDF version

I wrote in Part 1 of this series back on 15 Apr 2011 that the Republicans have several fundamental problems in their quest to replace President Obama with one of their own.  Among those problems is a choice of a suitable candidate.  The words I used then were, “one cannot beat Mickey Mouse [Obama] by running Donald Duck against him”.

Does anyone dispute that President Obama is the political equivalent of Mr. Disney’s cute little rodent?   He has, like his predecessor President Bush, encouraged Congress to spend money the people do not have to “buy” things the people do not want.  He has, like Mr. Bush, sought to protect and excuse the conduct of the financial elites and the politicians whom they own by bailing out the one and congratulating the other.  He continued the war in Iraq for which he criticized Mr. Bush, but announced with great fanfare (as if it were his idea) a withdrawal of U. S.troops in accordance with an agreement negotiated by Mr. Bush.  He has kept Guantanamo open for business as usual, as Mr. Bush would have done.  He has continued a policy of democratic nation-building in places where the locals neither know nor care about democracy or nationhood, as Mr. Bush would have done.  He is absent on the issue of illegal immigration, as was Mr. Bush.  He has protected and expanded the worse-than-useless security state that gives only the illusion of safety, just as Mr. Bush would have done.  He ignores the Constitution if he can get a few federal-employee lawyers to concur with it, as did Mr. Bush.  He refuses to permit his administration to publish the true unemployment rate, as did Mr. Bush.  There are some new innovations.  He believes the “Arab Spring” will usher in harmony and prosperity in places where only tyranny and poverty are respected.  He encouraged Congress to enact a national health care program and collect taxes for it now, which are being spent on other things now, which will require greater taxes in 2014 when the full scam is implemented.  He whines about the wealthy not paying enough taxes, but never submits a proposal that would have them pay an additional amount that would matter.  He complains about some corporations not paying taxes, but declines to mention that one of them (General Electric) is his greatest supporter and has benefited directly from subsidies that he favors.  He likewise fails to point out that these corporations are simply obeying the tax laws, and that his Party in Congress is equally culpable with the Republicans for those tax rules.  He refuses to consider that bailouts, benefits, and wishful thinking have only marginally boosted the economy, and that more of the same will have approximately the same results. He believes that the de-industrialization of America is good, so long as the union bosses can find enough clerical workers to pay dues.

Mr. Obama’s failures are evident enough.  What about the Donald-Duck alternatives being offered by the Republicans?  I will consider here only the ones that the Republican Establishment will permit to actually gain the nomination.

Mr. Cain is leading the polls at present.  Let’s forget for a second the anonymous sexual harassment allegations until such time as the actual complaints are made public, and focus instead on his proposed policies.  He has advocated a 9-9-9 tax system, which would reduce the federal personal income tax and corporate income tax rates to a flat 9% while imposing a 9% federal sales tax.  He claims it is revenue-neutral.  Suppose it is; how will that solve the nation’s financial problems, with the deficit continuing to grow?  That would require greater tax revenue, less spending, or an expanding economy, but he has left this question unanswered.  Why would any regular person want the government to create a whole new category of taxation (the federal sales tax) without a guaranteed abolition of the income tax?  Mr. Cain is a successful businessman to be sure.  He also became the Chairman of the board of directors at the Federal Reserve Bank in Kansas City. The Chairman of such a board is a designated Federal Reserve Agent answerable to the Board of Governors.  I have great reservations about the prospect of a former Federal Reserve Agent sitting in the Oval Office.  Hasn’t the Federal Reserve done enough damage already?

Governor Romney is second in the current polls, as he has been for a very long time.  His great strength is that he is familiar with all the important issues, having been a staunch advocate for every side of all of them at one time or another.  He was instrumental in establishing a health care plan in Massachusetts; it was used as a template for Mr. Obama’s plan, but Mr. Romney now disowns the whole thing.  He has performed well in those joint press conferences (called “debates”) against the other candidates; he has ready answers; he declines to give specifics; he is the oiliest Republican since Mr. Nixon.  Yet he has continued to do well in the polls despite attempts to bring in fresh faces.  You can say what you want about Ann Coulter, but two things you cannot deny.  First, she is an outstanding writer; secondly, she has considerable influence among conservatives.  Ms. Coulter attempted to induce Governor Chris Christie to seek the Republican Presidential nomination.  Her logic was that Mr. Christie could get the nomination and beat Mr. Obama; otherwise, the nominee would be Mr. Romney who would lose.  A very odd sentiment from Ms. Coulter the conservative — if you research Mr. Christie’s policies, you will find that he is another Long Island liberal.  Presumably Ms. Coulter preferred the Long Island liberalism of Mr. Christie over the Long Island liberalism of Mr. Romney because the former would actually get a chance to implement it.  But Mr. Christie announced he would not run and simultaneously endorsed Mr. Romney.

I must admit I am thoroughly confused by Governor Perry.  He did poorly in those joint press conferences, which he readily admits.  However, in my opinion, a person who does poorly in the tit-for-tat of a press conference is not disqualified.  After all, the office of the President does not require the ability to make snap decisions and explain difficult issues, with footnotes, in less than 60 seconds.  Policy is what matters; like I said, I am confused here because I can’t figure out what Mr. Perry believes, if he believes anything.  He has stated that he will order every federal agency to review every measure passed since 2008 to determine if it negatively affects jobs: “those measures that kill jobs will be repealed”.  He fails to admit that the vast majority of the regulations that injure the economy were passed prior to 2008; some date to the 1920’s — no mention of those.  He also said he would call out the National Guard to secure the border with Mexico.  He fails to admit that as Governor of Texas he already has authority to call out the National Guard, not to mention the state militia and the Texas Rangers.  If that is his policy, maybe he should have implemented it sometime in the past ten years.  He has said he will lay out a legislative plan to balance the federal budget by 2020.  Why so soon?

Speaker Gingrich once called Senator Robert Dole “a tax collector for the welfare state”.  But Mr. Gingrich was Speaker of the House with far greater power than Mr. Dole, and we still have the welfare state.  Speaker Gingrich is the intellectual heavyweight in this division; certainly Mr. Obama will not be able to out-do him on facts, figures, logic, or history.  Mr. Gingrich has listed numerous legislative plans in his new “Contract” that differ greatly from Mr. Obama’s in regard to domestic policies; many are designed to reduce the power of the federal government and lower taxes.  Some of them are sensible ideas.  Unfortunately, the foreign policies of Mr. Gingrich are nearly indistinguishable from those of Mr. Obama: he would greatly increase the power of the United Nations and continue to sacrifice America’s sovereignty to unelected and unaccountable non-government interest groups.  He believes in the man-made global pressure-cooker hoax, and his policies to deal with those would serve to undermine America’s economic goals.  We should also keep in mind that very little of his famous “Contract with America” of 1994 ultimately went into effect, and because most of his policies require legislative action, he will have the same problem if elected.

Which leads me to the most important point about the Presidential election, which is: the President has less power than Congress.  If we the people want real change, it has to come from Congress, not the Executive branch.  If it were otherwise, we would be electing kings, guaranteed to be far worse than either Mr. Obama or his Republican challengers.

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