Nemo me impune lacessit

No one provokes me with impunity


No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

Article 1, Section 9, Constitution of the United States

If this is the law of the land...why in a republic (little r) and as republicans, do we allow mere POLITICIANS to the right to use a "title of office" for the rest of their lives as if it were de facto a patent of nobility. Because, as republicans, this should NOT be the case...just saying...

The Vail Spot's Amazon Store

Chris Muir's Day by Day

Friday, July 09, 2010

Nancy Pelosi Is An Idiot

Nancy Pelosi is an idiot...For 10 years I worked as a cabinetmaker. I wasn't a great one, but rather a pretty good one. Unfortunately, when the construction industry floundered in the summer of 2008, for the first time in my life, I had trouble looking for work. In October, 2008, the company I was working for laid me off.

I've spent the past year and a half working in restaurants for half of what I was making prior to the start of the recession. About the only good thing is that I've been given the time to re-educate myself on some basic economic theory. Stuff I've not taken a look at since college (many moons ago-and promptly forgot back then).

When you see stuff like this being spouted by the Speaker of the House of Representatives, you really begin to question the intelligence of our political leadership.

I originally posted this a few days ago...but just read an article that made me want to repost it, because it reminded me that our political "elite" basically know less about economic and economic theory than I do. That's a scary thought because these are the people who have control of the direction the country is going. If they know less than I do, why in the hell are they running things?

The Democratic party contains some pretty smart people. Many of them have studied economics...but like most people, they tend to ignore that which disagrees with their view on life. A recent study by the Harvard Business school shows that government spending actually DECREASES jobs. You'd think that this would have gotten greater notice in both the press and government didn't. Another study from UCLA concluded that FDR's Keynesian economic policies extended the Great Depression by nearly 7 years. There have been a number of other studies whose conclusions match these, but have been utterly ignored by the left leaning mainstream media complex since they don't support the conventional wisdom that massive government spending and increasing taxes are the key to ending economic decline.

But...if you take a look at the solutions that worked in previous period of economic decline, you come to realize that Mr. Obama's approach, like that of FDR is disastrous. In the early 1960's, JFK & Johnson used reductions in tax rates to quickly pull the country out of a short recession. Richard Nixon, on the other hand, tried price controls and spending...which didn't work. Jimmy Carter tried the same thing, and failed as well. Ronald Reagan, Bill Clinton and George W. Bush all used broad reductions in the general tax rates as well as (for the most part) cotrolling government spending (each to a greater or lesser degree). G. H. W. Bush attempted follow much the same path, but the short recession following the 1991 Gulf War, in which he felt forced to raise taxes, instead of controlling/reducing spending caused his loss in the 1992 election. (Read my lips "No New Taxes"...sank him).

They ushered in the longest period of economic growth this country has ever seen. What was the root cause of the current economic downturn is to be found in 1998 when Fanny May/Freddie Mac were forced by Congress to begin giving mortgages to those who...frankly, couldn't pay for them. In the early part of this century, this course was doubly encouraged when it was changed to "no down payment and 125% of the value of the property". This increased the pressure to loan money...which wasn't paid back...When George W. Bush along with Sen. John McCain attempted to end this practice 2003, their effort was lambasted by both the Democrats and their supporters in the mainstream press, thus failed.

Therefore, the credit/banking industry collapsed when the number of foreclosures exceeded their ability to withstand. That caused the "credit crunch." This was hugely exacerbated when Congress BORROWED almost $3,000,000,000,000.00 in order to bailout the banking industry, the domestic automobile industry and then the "stimulus package". That had the effect of literally sucking the life out of the loan market. That money would have, could have been used far more profitably in the private sector as loans, first to the manufacturing business, and then to the construction industry (both of whom literally thrive on easy credit). Both need credit to purchase materials/property in which to build/make things. Without easily obtainable credit, those sectors slow down...

The next basic concept in economics is that if you reduce taxes, broadly, all the way across the spectrum, you encourage not just investment, but you encourage businesses to begin producing goods and services. At the moment, with the Bush tax cuts set to expire at the end of this year, contrary to popular myth, more than just the wealthy will be affected. The expiration of those cuts will have an impact that will rebound across the economy. Already business who are leery of hiring more workers this year, have decided to wait until they know the impact of tax increases next year. Mr. Obama with Nancy Pelosi and Harry Reid, the Senate Majority leader, have consistently declared that they will raise taxes along with their vast increase in spending. This has had a decidedly chilling effect on the economy as a whole, and Walls Street investment in particular with the Dow Jones Industrial average dropping nearly 2000 points in the past several months.

By enacting a broad based tax cut, one that affects, not just the wealthy, but reducing the amount of the tax burden on business (The US whose business tax rate is 35% or so in this country, as opposed to Taiwan who just reduced theirs to 17% in order to compete with Singapore) would vastly encourage industry and small business to begin hiring new workers. BUT,  ObamaCare with it huge raft of taxes, fees and fines, must be repealed. Many companies are not hiring new workers because, despite Mr. Obama's repeated promises "If you like your health care, you can keep it", 51% of health insurance provided by companies doesn't meet ObamaCare guidelines (and thus, NO YOU CAN'T KEEP IT!). The State of Massachusetts model upon which ObamaCare is based is failing miserably to contain costs or provide more/better care. It has had the opposite effect, with rates raising roughly 33% since it was implemented. This is what we have in store...but that's an area for another post.

At this point, only by reducing government descretionary spending to that which is covered by taxes, and reducing taxes across the board will be end the current recession.  That's what the Germany and Sweden are doing (those paragons of Socialism are moving away from their historical economy models and turning to less regulation to encourage economic growth).  It works, but we have to change the political environment in Washington DC to do it.  That means we must elect Congressmen and Senators who will do what needs to be done...and not business as usual...

No comments: