Thursday, December 27, 2012

It's Déjà Vu All Over Again

Great ideas often receive violent opposition from mediocre minds.

“Insanity: doing the same thing over and over again and expecting different results.”

The quotes above have been widely attributed to Albert Einstein.  We knew he was a brilliant man, but it’s incredible to think that in the early 20th century he could so accurately describe politics in the 21st century. 

We were all set to write a piece on the current “fiscal cliff crisis” in Washington, but realized we wrote all that needs to be said last year when we faced essentially the same problem, but under different media labels – today’s “fiscal cliff” vs. 2010/11’s “debt ceiling debate”.

Apparently in Washington you can either be in the “spend too much” camp or the “tax to little” camp.  There is no middle ground, no rational thought, no compromise and an abundance of mediocre minds. 

So, we’re forced to wait for Congress and the President to agree on the least painful and most politically expedient legislation to avoid the “fiscal cliff.”  This legislation is likely to trade-in the moderate pain caused by the “debt ceiling debate” can-kicking exercise in 2011 for a debilitating pain to be incurred by young workers and our children and grandchildren sometime in the future. 

Instead of following the typical media outlet practice of regurgitating our good ideas in a new package, we decided to regurgitate our good ideas in their original packages. 

Each one of the articles below could have been written today and given the insanity in Washington, we have no doubt that we’ll be able to recycle them again in 2013/14. 


Government Doesn't Need A Raise (December 14th 2010) – A reminder that there are in fact two sides to the “deficit” equation.  Total revenue gets all the attention in Congress and the White House, but it’s really the Total Spending part of the equation that needs to be addressed.   

To Tax, or Not To Tax, That Is Not The Question (April 15th 2011) - Why taxing the rich isn’t as bad as Republicans think, but it’s laughable that Democrats believe this will materially reduce the deficit.

You Call That Compromise? (July 27th 2011) – Our commentary on the negotiations between Congress and the White House, plus our proposed Grand Bargain. 

The Grand Mistake (July 29th 2011) – We urged the Tea Party Republicans to not overestimate their mandate coming out of the 2010 elections, and to avoid a US debt default.  They obliged. 

But Americans Want It! (August 1st, 2011) – The fallacy of basing tax policy (i.e. spending cuts vs. tax increases) on poorly constructed public opinion polls.  

Desperate Times, Desperate Measures (August 9th, 2011) – Our analysis of the S&P downgrade of US debt, and our debunking of the “tea party downgrade” theory. 

Warren Buffett's Missing Facts and $3,000 Gallon of Milk (August 16th, 2011) – One of our favorite pieces, taking aim at the beginnings of the “Buffet Rule.” 

White House: Lower Taxes By Raising Taxes (December 6th, 2011) & Putrid Payroll Tax Politics (December 21st, 2011)  – We remind everyone of the original purpose of payroll taxes and why cutting payroll taxes now without cutting future benefits will be a disaster for our children and grandchildren.
Testing the Logic of "Fairness" in Taxes (January 26th, 2012) – Discussing the lazy populist sound bite used over and over again by the Obama Administration and Democrats in Congress. 
#Our2cents on #My2k (December 3rd, 2012) – Our latest piece on the absurd White House use Twitter to drum up populist support for extending the payroll tax holiday. 

Monday, December 3, 2012

#Our2cents on #My2k

The White House occasionally uses Twitter to build support for their policies, with the original effort being the shameful #40dollars campaign in February to generate support for the extension of the payroll tax holiday. 

Here they go again.

This time, it’s an equally shameful attempt to urge Congress to extend the Bush/Obama tax cuts for the middle class tax which are scheduled to expire on January 1st.  This time @whitehouse is urging Americans to tweet what $2,000 a year can do for them - $2,000 a year being the average increase in taxes for the middle class if the Bush/Obama tax cuts expire as required by current law.
Remember, in order to lower taxes when the government is running a deficit, one of three things has to happen to offset the lower revenue:
  1. We can borrow more money.  Given our current deficit, borrowing more is probably not the best idea.  Yes, money is cheap, but even if it’s free, it still needs to be paid back or refinanced in the future, and guess who’s paying for that through higher taxes and/or lower benefits?  Our children and grandchildren, and that’s despicable. 
  2. We can cut government spending.  Despite being the only real solution, neither party has shown any ability to cut spending, and as President Obama and Governor Brown in California like to say, the only way to cut spending is to fire teachers, firefighters and policemen.  There's also the elimination of all that government waste that for some reason hasn't already been eliminated.
  3. We can raise taxes on other Americans.  Pure and straight income redistribution.  Raise taxes on Peter, lower taxes for Paul.  It’s only fair.     
When reading the following tweets, please remember that all these things are more important to these Twitter users and the official White House twitter account than our children’s future, today’s teachers, firefighters, policemen and other people’s hard earned income.

Cue the madness…

So, to recap, Peter’s taxes should go up to pay for Caitlan's mother’s nursing home fees, Tewale's piano lessons, a new car for Melissa, vacations for Laura, car insurance for John and Joelle's swim team dues.

The last two are priceless.  Someone else (perhaps even their own kids and grandkids) should pay higher taxes because Robert and Sarah have decided to have 13 children between the two of them without adequately planning for them financially.  It’s pathetic, and the worst part about it is that all of these #My2k tweets were re-tweeted by the official White House twitter account, and are therefore a direct endorsement from the President on how government resources, primarily tax revenue, should be spent.

We’re not opposed to minor increase in tax rates to pay down the debt or fund useful and important government functions.  We are vehemently opposed to raising taxes so someone can go on more vacations and eat out at restaurants more frequently.